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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY TRENTON DIVISION CIVIL ACTION No. 21-13726 JURY TRIAL DEMANDED A HUNTS MILLS ASSOCIATES LLC, a New Jersey Limited Liability Company, individually and on behalf of all others similarly situated, Plaintiff, v. HOLIDAY HOSPITALITY FRANCHISING, LLC, SIX CONTINENTS HOTELS, INC. d/b/a INTERCONTINENTAL HOTELS GROUP and IHG OWNERS ASSOCIATION, INC. Defendants. COMPLAINT – CLASS ACTION Plaintiff A HUNTS MILLS ASSOCIATES LLC, a New Jersey Limited Liability Company, individually and on behalf of all others similarly situated, brings this class action lawsuit against Holiday Hospitality Franchising, LLC, Six Continents Hotels, Inc. d/b/a Intercontinental Hotels Group and IHG Owners Association, Inc. and alleges as follows upon personal knowledge as to itself and its own acts and experience and as to all other matters upon information and belief, including investigation conducted by its attorneys. INTRODUCTION 1. Defendant Six Continents Hotels, Inc. (“SCH”) is the world’s largest hotel company by room count, and does business under the name InterContinental Hotels Group (“IHG”) (SCH and IHG may hereinafter be collectively referred to as “IHG”). 2. IHG operates approximately some 5,600 hotels across more than 15 brands. IHG takes an asset-light approach, owning, franchising and/or managing hotels for third parties, with 1 Holiday Inn as its mainstay chain, under such brands as Holiday Inn, Holiday Inn Express and Holiday Inn Resorts (collectively, the “Holiday Inn Brands”), each bearing the identification as “an IHG Hotel.” 3. IHG also owns, manages and/or franchises other hotel brands such as Crowne Plaza, InterContinental, Staybridge Suites, Candlewood Suites, Hotel Indigo, Regent and Kimpton. 4. IHG’s Holiday Inn Brands account for approximately 70% of its total hotel count. 5. IHG owns Defendant Holiday Hospitality Franchising, LLC (“HHF”), its affiliate which markets, offers and sells Holiday Inn Brand franchises including, but not limited to, Holiday Inn, Holiday Inn Express and Holiday Inn Resort. 6. Defendant IHG owns and acts through its franchising affiliate, HHF and its agent and representative IHG Owners Association, Inc. (“IHGOA”). 7. HHF enters into standardized franchise agreements entitled “Holiday Hospitality Franchising, LLC License Agreement(s)” (“License Agreement”) with its franchisees. 8. Plaintiff A HUNTS MILLS ASSOCIATES LLC, a New Jersey Limited Liability Company, is a franchisee that owns and operates a hotel located at 111 West Main Street in Clinton, New Jersey 08809 (the “Hotel”), that bears an HHF brand mark pursuant to a License Agreement. 9. Many HHF franchisees are individuals, single member limited liability companies or closely held corporations who are either immigrants or second-generation Americans of Indian or other South Asian origin. 10. Plaintiff is one such HHF franchisee. 11. The hotel franchise industry holds particular appeal and attraction to these 2 franchisees by providing investment and traditional family business ownership opportunities which they can build through diligence, dedication and hard work. 12. This class action lawsuit seeks to put an end to IHG/HHF’s unlawful, abusive, fraudulent, anticompetitive and unconscionable practices designed solely to benefit and to enrich IHG/HHF’s shareholders and to do so at the expense and to the detriment of Plaintiff and the class members, namely, similarly situated HHF franchisees in the State of New Jersey. 13. At the heart of IHG/HHF’s unlawful scheme is its requirement that its franchisees use certain mandated vendors and suppliers for the purchase of virtually all goods and services necessary to maintain and to operate a hotel. 14. IHG/HHF’s forced exclusive use of certain chosen vendors and suppliers imposes well above-market procurement costs on its franchisees which include, but are not limited to, those associated with its onerous and exorbitant Property Improvement Plan (“PIP”). 15. Under the guise of improving the franchisees’ hotels to maintain “brand standards,” IHG/HHF forces its franchisees to frequently undertake expensive renovations, remodeling and construction as part of a PIP. 16. And, in so doing, IHG/HHF manipulates and shortens the warranty periods on mandated products the franchisees must purchase, then disingenuously uses this to justify PIP requirements as purportedly necessary to meet “brand standards” when, in reality, IHG/HHF’s sole purpose is to maximize its kickbacks and unjustifiably run up costs and fees on their franchisees in bad faith. 17. IHG/HHF deceitfully represent to their franchisees that they select vendors with the laudable goal of using the franchisees’ collective bargaining power to secure a group discount and to ensure adequate quality and supply of products and services, and refer to these procurement 3 programs as the “IHG Marketplace.” 18. In fact, however, IHG/HHF’s primary goal in negotiating with vendors has little to nothing to do with the best interests of its franchisees. Rather, IHG/HHF’s primary and overriding interest is to secure the largest possible profit and kickback (or “rebates”) for itself, which the chosen vendors finance through the above-market rates charged to HHF franchisees in collusion with IHG/HHF. 19. Furthermore, the above-market priced products which IHG/HHF forces franchisees to purchase through the IHG Marketplace (and related programs) is overwhelmingly of inferior quality. 20. These low-quality “IHG Approved” purchases are forced upon franchisees and disingenuously characterized as meeting supposed brand standards of quality, when in truth the sole purpose is to maximize kickbacks for IHG/HHF and unjustifiably run up costs on their franchisees in bad faith. 21. Upon information and good faith belief, IHG/HHF have each netted tens of millions of ill-gotten dollars as a result of illicit vendor supply arrangements. 22. Additionally, IHG/HHF engages in other oppressive, bad-faith, fraudulent and unconscionable conduct as more fully described herein. For instance, IHG holds itself out to the public as offering discounts, travel benefits and other perks to repeat guests through its IHG Rewards Club loyalty program. 23. IHG has a mobile booking app as well as cloud-based hotel solutions which it represents as driving demand for its hotel owners and which ostensibly allows hotel owners to reach potential guests at a lower cost. Hotel guests can accumulate points per dollars spent which can be redeemed at IHG hotels. 4 24. When those points are then redeemed at a hotel, however, only a small fraction of the value is reimbursed to franchisees while IHG/HHF requires that Plaintiff and franchisees (and not IHG/HHF) pay taxes on the full value of the product or service obtained by the redeeming hotel guests. 25. Furthermore, in instances where hotel guests’ accumulated reward points from stays at Plaintiff’s (or other franchisees’) hotel expire, the points never return to Plaintiff or to any source-of-origin franchisees. 26. Whenever a guest calls IHG Guest Relations to complain about poor service, regardless of who is at fault, the hotel is penalized without appropriate investigations and charged case management fees of over $150, in addition to any other monetary reimbursements provided to the guest. In an attempt to appease guests, IHG Guest Relations representatives unjustly assess penalties to the hotels and rarely considers the franchisees’ perspective, depriving franchisees the right to address and to remedy the situation with minimal loss. 27. IHG/HHF also frequently introduces new marketing programs under the guise of providing franchisees with a “choice” as to whether they should participate or not. 28. In reality, however, all such marketing programs are forced upon the franchisees insofar as any and all decisions to “opt out” are met with vindictive, punitive and retaliatory action by IHG/HHF. 29. These programs are in addition to all marketing fees contracted and paid for by the franchisees further to the License Agreements, and serve as an additional revenue source by imposing additional fees and fines for the sole profit and benefit of IHG/HHF, and to do so without disclosure or agreement by deceit, implied threat and actual retribution rendering franchisees’ supposed “opt-out” choice completely illusory. 5 30. Furthermore, although the facts set forth herein predominantly existed before March 2020 and continuously thereafter, IHG/HHF has ceased all of its marketing since the imposition of Covid-19 related restrictions in early 2020 yet it has continued to collect marketing- related fees from Plaintiff and the Class Members. 31. That is, despite the fact that IHG/HHF has not been engaged in any marketing activities or efforts for approximately a year, it continues to require Plaintiff and the Class Members to pay significant marketing related fees for which they receive nothing in return. 32. Moreover, IHG/HHF routinely assesses additional fees and penalties against franchisees which are not authorized by the applicable License Agreement and are fundamentally excessive and unfair. These fees and penalties are disingenuously assessed as a means to intimidate franchisees, including to serve as bad faith bases for default notices and threatened termination, as well as to harm the economic viability, profitability and creditworthiness of the targeted franchisees. 33. For instance, IHG/HHF routinely requires its franchisees to pay multiple fees for the same product or service. And, IHG/HHF routinely assesses additional fees against franchisees for services and products that IHG/HHF either does not, in fact, provide or provides at an inferior 34. IHG/HHF imposes requirements on its franchisees to undergo hotel inspections any time there are conversions, construction, changes in ownership, brand changes or re-licensing. In conjunction with IHG/HHF’s unilaterally imposed mandates for any such hotel changes, IHG/HHF requires its franchisees to pay for the inspections, IHG/HHF’s written reports and any re-evaluations and re-inspections that IHG/HHF alone deems necessary. 35. In practice, IHG/HHF stages these inspections to maximize criticism of franchisee 6 hotels as a pretext for imposing additional inspections, reports and fines, all deliberately interposed for IHG/HHF’s own financial benefit and to the detriment of franchisees. 36. IHG/HHF arbitrarily imposes rules and regulations and/or unreasonably interprets rules and regulations in order to justify assessing monetary penalties against franchisees. 37. Quite egregiously, IHG/HHF routinely discriminates, demeans and is both explicitly and implicitly hostile and bigoted towards Plaintiff and towards other Indian-American and South Asian-American franchisees. 38. IHG/HHF corrupts its Owners Association, the IHGOA, the function of which IHG/HHF represents in the License Agreement is “to function in a manner consistent with the best interests of all persons using the System” but instead is staffed almost exclusively with IHG/HHF representatives to the exclusion of franchisees and operates to undermine and to harm the very hotel owners and franchisees it purports to represent. 39. HHF’s actions are unconscionable and outrageous, and have pushed franchisees to the financial breaking point. 40. This class action lawsuit, brought by Plaintiff on behalf of itself and all similarly situated IHG/HHF franchisees in the State of New Jersey, seeks an accounting (COUNT VI), declaratory (COUNT IV) and injunctive relief, monetary damages and other relief for breach of contract (COUNT I) and breach of fiduciary duty (COUNT II), as well as recovery for violations of the New Jersey Franchise Practices Act, N.J. Rev. Stat. § 56:10, et seq. (Count III), and the Sherman Act, 15 U.S.C. § 1 (COUNT V). 7 JURISDICTION AND VENUE 41. This Court has subject matter jurisdiction over the federal law claims asserted in this class action lawsuit pursuant to pursuant to 28 U.S.C. § 1331 as Plaintiff alleges violations of a federal statute, the Sherman Act, 15 U.S.C. § 1. 42. This Court has subject matter jurisdiction over this action pursuant to the Class Action Fairness Act of 2005, Pub. L. No. 109-2 Stat. 4 (“CAFA”), which, inter alia, amends 28 U.S.C. § 1332, at new subsection (d), conferring federal jurisdiction over class actions where, as here: (a) there are 100 or more members in the proposed class; (b) some members of the proposed Class have a different citizenship from Defendants and (c) the claims of the proposed class members exceed the sum or value of five million dollars ($5,000,000) in aggregate. See 28 U.S.C. § 1332(d)(2) & (6). 43. This Court has subject matter jurisdiction over the state law claims asserted in this action pursuant to 28 U.S.C. § 1367 because they arise from the same set of operative facts as the federal law claims. 44. This Court has personal jurisdiction over Defendants IHG, HHF and IHGOA because all Defendants regularly transact business within the geographic boundaries of this District by, inter alia, entering into franchising agreements with franchisees and engaging in routine, systematic and continuous contacts with franchisees in this District. 45. Venue is proper in this judicial district pursuant to 18 U.S.C. §§ 1965(a) and (b) because Defendants HHF, IHG and IHGOA regularly transact business within the geographic boundaries of this District by, inter alia, entering into franchising agreements with franchisees, collecting membership fees from franchisees and otherwise conducting and transacting business with franchisees. In sum and short, the ends of justice require said Defendants to be summoned 8 to this District. See, e.g., Kubis Perszyk Assoc., Inc. v. Sun Microsystems, Inc., 146 N.J. 176, 195 (N.J. 1996) (“The strongest single factor weighing against enforcement of forum-selection clauses in franchise agreements is the Legislature's avowed purpose, plainly expressed in the Franchise Act, to level the playing field for New Jersey franchisees and prevent their exploitation by franchisors with superior economic resources. The general enforcement of forum-selection clauses in franchise agreements would frustrate that legislative purpose, and substantially circumvent the public policy underlying the Franchise Act.”). 46. The business conducted by Plaintiff is pursuant to a certain license agreement with HHF, and Plaintiff’s business location is in Edison, New Jersey. THE PARTIES 47. Plaintiff A HUNTS MILLS ASSOCIATES LLC, a New Jersey Limited Liability Company, is a franchisee that owns and operates a hotel, located at 111 West Main Street in Clinton, New Jersey 08809 (the “Hotel”), that bears a HHF brand mark pursuant to a License Agreement. 48. Defendant HHF is a Delaware-registered limited liability company with its principal place of business located at Three Ravinia Drive, Suite 100 in Atlanta, Georgia 30346. 49. Defendant IHG is a Delaware-registered corporation with its principal place of business located at Three Ravinia Drive, Suite 100 in Atlanta, Georgia 30346. 50. Defendant IHGOA is a Georgia non-profit corporation with its principal place of business located at Three Ravinia Drive, Suite 100 in Atlanta, Georgia 30346. 9 COMMON FACTUAL ALLEGATIONS A. The Parties’ Relationship 51. IHG has been in operation since 2003. 52. Throughout its history, IHG has created and acquired hotel brands, including, but not limited to, Holiday Inn, Holiday Inn Express and Holiday Inn Resort. 53. IHG’s franchising affiliate, HHF, licenses the right to use these hotel brand marks to franchisees, including Plaintiff, by entering into franchise agreements with them, which in many cases are referred to as “License Agreements.” 54. IHG owns HHF and has developed relationships with various vendors and suppliers to IHG/HHF franchisees. 55. By virtue of its ownership of HHF and control over the IHG Marketplace, IHG is an intended third-party beneficiary of the License Agreements. 56. In connection with the License Agreements, HHF uses its superior bargaining power to coerce the franchisees into accepting onerous, unequal and unconscionable terms in its License Agreements. 57. These onerous terms put immense financial stress and strain on franchisees, threatening their economic viability. 58. HHF’S abuse of its position and unfair practices result in the imposition of needless and costly fees, above-market costs for necessary supplies and other goods and results in substantial impacts on franchisees’ ability—who manage and operate their properties commensurate with the highest standards—to operate their properties profitably. 59. Plaintiff A HUNTS MILLS ASSOCIATES LLC is an HHF Franchisee that entered into a franchise agreement with HHF dated June 28, 2011 entitled “Holiday Hospitality 10 Franchising, LLC License Agreement” (the “License Agreement,” a copy of which is attached hereto as Exhibit A) for a Holiday Inn Hotel to be developed and operated by Plaintiff and located at 111 West Main Street in Clinton, New Jersey 08809. (See License Agreement, §§ 1(a), 15(b).) 60. Pursuant to this License Agreement, Defendant HHF granted Plaintiff a non- exclusive license to use Defendant’s System (as defined therein) only at the Hotel and in accordance with the License Agreement. (See id., §§1(b), 2.) B. Vendor Mandates and Kickbacks – the IHG Marketplace Programs 61. A particular manner by which IHG/HHF undermines the viability and profitability of its franchisees is by mandating Plaintiff and the Class Members utilize only HHF approved third-party vendors, the purpose of which is for Defendants to reap a significant financial benefit at the direct expense and to the financial detriment of the franchisees. 62. IHG/HHF’s fraudulent and unconscionable scheme cannot operate without franchisees paying excessive, above-market rates for the goods and services necessary to run a hotel, including, but not limited to: a) its computerized credit card processing system, Secure Payment Solution (“SPS”) which all Hotels are required to use; b) high speed guest internet services, designated workstations and multi-function printers in Hotel business centers (“Public Access Computers”), and a designated communication service referred to as “SCH Merlin”; c) HHF’s approved Keycard System; d) televisions and in-room entertainment compatible with SCH Studio; e) an alert system that enables employees to notify hotel management of an emergency (“Employee Safety Devices”); f) equipment, software, and services for property-level 11 technology and telecommunications systems; g) equipment associated with the Defendants’ gift card program; h) mandated food and beverage programs; i) furniture, furnishing, linens, food products, utensils, and goods for guests’ consumption and j) additional advertising materials, products, services, equipment or supplies, from which IHG/HHF profits. 63. The above-market rate pricing charged by vendors and paid by Plaintiff and the Class Members provides the money necessary for those vendors to pay IHG/HHF’s unreasonable and unconscionable kickbacks. 64. IHG/HHF knowingly and willfully engage in conduct that ensures Plaintiff and the Class Members pay above-market prices for goods and services necessary in conjunction with operation of the hotels. 65. IHG/HHF requires that Plaintiff and HHF Franchisees strictly comply with its requirements for the types of services and products that may be used, promoted or offered at the hotel, and comply with all of HHF’s “standards and specifications for goods and services used in the operation of the Hotel and other reasonable requirements to protect the System and the hotel from unreliable sources of supply.” (See generally License Agreement.) 66. If IHG/HHF requires Plaintiff and the Class Members to purchase equipment, furnishings, supplies or other products for the hotels from a designated or approved supplier or service provider, whether pursuant to the License Agreement, Standards or any communication from HHF, then they must purchase the mandated product(s) from mandated vendors and cannot deviate from those vendor mandates without prior approval from IHG/HHF. 67. Defendants IHG and HHF run a program under the guise of being voluntary and 12 which they falsely represent as delivering value and lower cost purchasing opportunities to HHF franchisees, including Plaintiff and the Class Members. Nothing could be further from the truth. 68. Defendants refer to these procurement programs as the “IHG Marketplace.” Defendant IHG describes the IHG Marketplace as: an easy-to-use ordering platform that allows owners to take advantage of the buying power of IHG for operational and service needs. This not-for-profit platform is available to all IHG-branded hotels and gives access to globally negotiated contracts and optimal pricing from more than 200 suppliers and services, resulting in significant savings and value.1 69. Defendant IHG further represents that the IHG Marketplace is “[d]esigned to cut costs and streamline the hotel procurement process, the program provides owners with solutions to achieve unparalleled cost savings and efficiency…Rebates and discounts are passed directly to you, you earned them, you keep them!”2 70. In reality, IHG Marketplace operates on a cost recovery basis with fees for both procurement and technical ordering transaction services included in the supplier invoiced price. 71. HHF franchisees, including Plaintiff and the Class Members, purchase goods and services directly from suppliers at prices negotiated by HHF and/or IHG. 72. These prices are frequently above-market prices which do not permit the HHF franchisees, including Plaintiff and the Class Members, to seek competitive pricing for their own benefit. 73. Rather, these inflated prices allow for rebates that go to IHG and HHF directly by 1 https://development.ihg.com/en/americas/home/develop-a-hotel/support-for-owners (last visited July 7, 2021). 2 https://www.ihgmarketplace.net/marketplace/home.php (last visited July 7, 2021). 13 suppliers which generally range from approximately 1-5% of the amount of the invoice price for the goods and services purchased by franchisees, including Plaintiff and the Class Members. 74. These kickbacks to IHG and HHF are the primary—if not the sole—reason HHF franchisees, including Plaintiff and the Class Members, are forced to use expensive vendors and suppliers not of their own choosing at supra-competitive pricing. 75. Some primary examples of the IHG Marketplace sourced vendor mandates involve credit card processing and high speed internet agreements, with Defendants requiring franchisees, including Plaintiff and the Class Members, to execute these infrastructure related agreements. 76. Although IHG/HHF represent that franchisees, including Plaintiff and the Class Members, have a choice between vendors, it is usually only between no more than two or three vendors hand-picked by Defendants from whom they obtain significant rebates. 77. Although franchisees, including Plaintiff and the Class Members, are able to secure far more reasonable rates for, for example, credit card processing from alternate sources, IHG/HHF do not permit franchisees, including Plaintiff and the Class Members, to do so on the open market and instead require franchisees, including Plaintiff and the Class Members, to pay the higher rates of Defendants’ selected vendors. 78. This is similarly true in the case of hotel internet services which IHG/HHF does not permit franchisees, including Plaintiff and the Class Members, to purchase on the open market and instead requires franchisees, in most instances, to pay more than double the price for lower speeds than what franchisees could purchase independently from the same or alternate sources. 79. Under onerous mandates, Defendants require franchisees, including Plaintiff and the Class Members, to enroll in various services, including, but not limited to, grossly overpriced 14 internet bandwidth services and marketing programs, such as IHG Ignite, without obtaining their consent and under the guise of brand standard requirements. For a supposed voluntary program, opting out of the IHG Ignite program is met with threats of property listing suppression and other negative online search consequences despite franchisees, including Plaintiff and the Class Members, contributing tens of thousands of dollars annually for marketing expenditures per hotel. 80. This mandated lack of choice invariably increases franchisees’ costs and expenses, and benefits only IHG/HHF in the form of kickbacks. 81. The costs charged to franchisees, including Plaintiff and the Class Members, in the IHG/HHF procurement programs such as the IHG Marketplace are almost always higher than if the same product or service were purchased by an independent hotel outside of the HHF System. 82. Defendants frequently use the pretext that the vendor requirements imposed on franchisees are necessary for standardization or—more curiously—for security. 83. In fact, many products and services that HHF franchisees, including Plaintiff and the Class Members, are required to obtain based on Defendants’ vendor mandates are at an excessive cost but inferior quality. C. Franchisee Fees & Property Improvement Plans 84. As a prerequisite to becoming an HHF Franchisee, IHG/HHF charges (and Plaintiff actually paid) an initial application fee of $500 per guest room (sometimes referred to as a “key”) and up to $50,000 simply for the privilege of submitting an application for an HHF franchise or license. This application fee applies for new development, conversion, change of ownership or re-licensing. 85. Only then does IHG/HHF determine whether it will approve the application for a license, and in the case of unapproved applications, IHG/HHF retains $15,000 which is forfeited 15 by franchise/license applicants for absolutely no return benefit. 86. If IHG/HHF does approve an application, it still has the sole discretion to revoke its approval thereafter and to retain an applicant’s entire application fee and to deem it “non- refundable,” again providing applicants with no benefit in return for IHG/HHF taking an amount up to $50,000 and leaving applicants without recourse. 87. IHG/HHF also maintains what it calls its “Property Improvement Plan” (the 88. Before any HHF franchisee submits an application for conversion, change of ownership, brand change or re-licensing, franchisees, including Plaintiff and the Class Members, must arrange for HHF to conduct an inspection of the subject hotel so that IHG/HHF can prepare written specifications for the upgrading, construction and furnishing of the hotel in accordance with HHF’s “Standards.” 89. Under the PIP, HHF franchisees must pay a non-refundable $6,500 fee to have their Hotel inspected and for preparation of a PIP report. 90. In the case of conversion hotels, IHG/HHF will not authorize reopening unless and until it has determined that all PIP requirements have been completed, including the submission of plans before the start of construction in accordance with the dates specified in the License Agreement. 91. As part of PIP, IHG/HHF charges up to an additional $5,000 for each re- evaluation and re-inspection it may deem necessary in the event any hotel fails its opening inspection. IHG/HHF frequently uses this, and imposes further fines, as a means to enrich themselves to the detriment of the franchisees. 92. IHG/HHF neither requires nor imposes its inspections, re-inspections, re- 16 evaluations and/or written reports in good faith. To the contrary, IHG/HHF uses these inspections as a pretext to generate the aforesaid fees and fines, and prepares disingenuously negative reports in order to generate revenue for itself in the form of fines and unwarranted re-inspections, reports and impact studies, all intended to harm the economic viability and creditworthiness of its franchisees. 93. IHG/HHF suggests to its quality inspectors to fail franchisees in quality evaluations if those franchisees’ Medallia scores, customer and employee experience scores generated from surveys, social media and review websites, are below expectations, although Medallia scores are not to be taken into account in quality evaluations. 94. Any objections by an IHG/HHF franchisee to this process are disregarded and dismissed, and met with derision, threats, intimidation and retaliation. 95. The license that IHG/HHF grants to Plaintiff and the Class Members to “use the System only at the Hotel, but only in accordance with this License” (and during the License Term) defines the System broadly and with significant open-ended discretion for HHF. 96. This discretion allows IHG/HHF to put a stranglehold on franchisees and to impose onerous costs and obligations on franchisees: The System is composed of all elements which are designed to identify Holiday Inn, Holiday Inn Express and Holiday Inn Resort branded hotels to the consuming public or are designed to be associated with those hotels or to contribute to such identification or association and all elements which identify or reflect the quality standards and business practices of such hotels, all as specified in this License or as designated from time to time by Licensor. The System at present includes, but is not limited to, the service marks Holiday Inn®, Holiday Inn Express®, Holiday Inn Express® & Suites, Holiday Inn® & Suites and Holiday Inn® Resort, (as appropriate to the specific hotel operation to which it pertains), Holidex® and the other Marks (as defined in paragraph 7.B below), and intellectual property rights made available to licensees of the System by reason of a license; 17 all rights to domain names and other identifications or elements used in electronic commerce as may be designated from time to time by Licensor in accordance with Licensor's specifications to be part of the System; access to a reservation service operated in accordance with specifications established by Licensor from time to time; distribution of advertising, publicity and other marketing programs and materials; architectural drawings and architectural works; the furnishing of training programs and materials; confidential or proprietary information standards, specifications and policies for construction, furnishing, operation, appearance and service of the Hotel, and other requirements as stated or referred to in this License and from time to time in Licensor's brand standards for System hotels (the "Standards") or in other communications to Licensee; and programs for inspecting the Hotel, measuring and assessing service, quality and consumer opinion and consulting with Licensee. Licensor may add elements to the System or modify, alter or delete elements of the System in its sole judgment from time to time. (License Agreement, §1(B) (emphasis added).) 97. There is no limitation on the extent to which HHF can alter, modify or revise its “Standards” or impose costs and obligations on Plaintiff and the Class Members, which it does not disclose and have never been the subject of any arms’ length agreement. (See id., §§1(B), 4(E), 98. The IHG/HHF PIPs are designed with substandard products and designs, purposefully limit vendor choices for franchisees, inclunding Plaintiff and the Class Members, and impose above-market procurement costs. 99. For example, most furniture items that IHG/HHF require its franchisees, including Plaintiff and the Class Members, to purchase from required vendors are of such inferior quality that they break, disassemble and/or damage upon initial delivery and/or assembly and are rendered unusable or they have a limited use life and generally are substandard. 100. IHG/HHF then forces additional costs upon its franchisees, including Plaintiff and 18 the Class Members, to replace the mandated but damaged products, not to mention imposes additional costs to clean the resultant broken parts strewn and littered in the franchisees’ hotels. 101. Although the IHG Owners Association (IHGOA, defined below) purports to “consider and discuss, and make recommendations relating to the operation” of franchisees’ hotels, and “function in a manner consistent with the best interests of all persons using the System,” IHG/HHF and the IHGOA routinely dismiss and disregard franchisee concerns about its inferior mandated products and exorbitant costs. (See Franchise Agreement, §6(A)-(B).) 102. IHG/HHF forces its franchisees, including Plaintiff and the Class Members, to repeat these PIP multimillion dollar projects every 6-8 years irrespective of the actual condition of hotels purely to generate additional fees and vendor kickbacks for themselves to the detriment of its franchisees, including Plaintiff and the Class Members. 103. As part of PIP, IHG/HHF deliberately scales back and manipulates standard manufacturer furniture warranties as another means purely to fit their PIP cycles, cause harm to the franchisees and, ultimately, raise prices for hotel customers. 104. As such, HHF has imposed and continues to impose onerous PIP terms on HHF franchisees, including Plaintiff and the Class Members, which, in the sole discretion of HHF, forces HHF franchisees, including Plaintiff and the Class Members, to spend approximately $10,000 – $30,000 per guest room, which amounts to millions of dollars in forced renovation costs being foisted upon HHF franchisees, including Plaintiff and the Class Members. 105. HHF further does so under the constant threat of retaliation against its franchisees, including Plaintiff and the Class Members, in the event of noncompliance as determined subjectively by HHF in its sole discretion, which can result in termination of their franchise or other punitive measures. 19 D. IHG/HHF’s Double-Dipping on Commissions & Introduction of Supposedly Voluntary Programs under Pressure & Retaliation for Opt-Outs 106. HHF franchisees, including Plaintiff and the Class Members, pay initial marketing contributions and annual marketing fees which are represented as being applied to such things as marketing. 107. Not content with those fees, however, IHG/HHF frequently introduces “new programs” requiring franchisees, including Plaintiff and the Class Members, to pay additional fees, all of which go directly to said Defendants. 108. The fees set forth in the License Agreement are based on a fixed percentage of HHF franchisees’ revenue. (See License Agreement, §3(B).) 109. The License Agreement, however, also purports to give HHF the unfettered, unilateral and unspecified ability to impose additional fees, penalties, rules and regulations, namely “all fees due for travel agent commission programs . . . .” (See id. §3(B)(1)(d).) 110. One such program for booking and commissions is known as the Global Distribution System (“GDS”), which is a worldwide conduit between travel bookers and suppliers, such as hotels and other accommodation providers. 111. GDS communicates live product, price and availability data to travel agents and online booking engines and allows for automated transactions. 112. The concept of GDS is for hotels to increase their reach to attract more customers, to increase revenue and ultimately to generate additional profits. 113. A GDS passes on hotel inventory and rates to travel agents and travel sites that request it and also accepts reservations. 114. Today, the databases also include online travel agencies (“OTA”s) (such as Booking.com and Expedia). 20 115. IHG/HHF arbitrarily exercises this purported right to impose fees including, but not limited to, travel agent commission fees, in bad faith. 116. IHG/HHF does so in order to capture a continually increasing share the revenue of its franchisees, including those of Plaintiff and the Class Members. 117. HHF franchisees, including Plaintiff and the Class Members, are charged multiple additional fees such as transaction fees, booking fees, GDS fees and excess and additional commissions through marketing and other programs. 118. One example is IHG/HHF’s imposition of the BTI (Business Traveler International) program, under which IHG/HHF double-dips on its commissions by imposing an additional 2.5% commission on HHF franchisees, including Plaintiff and the Class Members, over and above the aforesaid traditional GDS bookings and commissions. 119. Another example is IHG/HHF’s “double-dip” on commissions for the aforesaid third-party OTA bookings, from which IHG/HHF, upon information and belief, receive kickbacks in sums unknown to HHF franchisees, including Plaintiff and the Class Members, since IHG/HHF keep their contractual arrangements confidential while charging the franchisees multiple fees for the same products or services that HHF is already contractually obligated to perform. 120. IHG/HHF have also allowed OTAs to share and misappropriate discounted booking codes with third party websites who impose substantial taxes, fees and costs on unsuspecting customers and, despite knowing that such misconduct is ongoing, IHG/HHF have failed to enjoin such misconduct on the part of OTAs to IHG/HHF’s benefit and the substantial detriment of franchisees, including Plaintiff and the Class Members. 121. IHG/HHF also sends sales leads to franchisees’, including Plaintiff’s and the Class Members’, the origin of which is unknown to the franchisees, through its Meeting Broker program. 21 122. These leads require franchisees, including Plaintiff and the Class Members, to pay 3% commissions if they actualize and franchisees, including Plaintiff and the Class Members, are billed based on revenue speculated by IHG/HHF unless franchisees, including Plaintiff and the Class Members, report updated actual numbers. 123. Franchisees, including Plaintiff and the Class Members, will frequently turn away these leads due to the fact that they have previously built their own relationships prior to the duplicate lead coming from Meeting Broker. 124. For instance, if a particular franchisee has, through its own efforts, obtained dedicated bookings from a local business, IHG/HHF still requires that franchisee to input those bookings into Meeting Broker and thereby imposes a 3% commission despite having done nothing to procure that business. 125. In short, IHG/HHF uses this tactic to charge additional commissions and to require that franchisees, including Plaintiff and the Class Members, prove the prior relationship thereby stealing sales leads and revenues developed by franchisees, including Plaintiff and the Class Members. 126. IHG/HHF further abuses its discretion by requiring franchisees, including Plaintiff and the Class Members, to provide bank account information to the OTAs that IHG/HHF contracts with. 127. These OTAs will then automatically debit HHF franchisees, including Plaintiff and the Class Members, accounts on a monthly basis for all reservations sent to a particular hotel. 128. The onus thus falls on the franchisees, including Plaintiff and the Class Members, to reconcile and to dispute commission charges for no-shows, cancellations or invalid credit cards, without any support from IHG/HHF. 22 129. The result is that funds are taken from the franchisees, including Plaintiff and the Class Members, without recourse, the OTAs collect unearned commissions, IHG/HHF receive kickbacks and franchisees, including Plaintiff and the Class Members, are damaged without recourse nor any franchisor support. 130. IHG/HHF further abuses its position by introducing marketing programs and other programs solely to its General Manager and Director of Sales, bypassing the HHF franchisees, including Plaintiff and the Class Members, entirely. 131. These programs are represented as voluntary and consensual programs which the franchisees can, in theory, choose whether to participate or not. 132. However, neither Plaintiff nor the Class Members have any direct access to the program information and can only gain access through IHG/HHF’s general manager or sales director, depriving them of any real choice or opt-out alternative. 133. Additionally, such programs purportedly offered by IHG/HHF to franchisees, including Plaintiff and the Class Members, as optional truly are not since IHG/HHF accompanies the presented “option” with threats of retaliation including, but not limited to, being told that franchisees’ hotels will be suppressed or removed from search engine results. 134. Faced with threats of retaliatory action from Defendants that further undermine the HHF franchisees, including Plaintiff and the Class Members, profitability and/or economic viability, the representation that franchisees, including Plaintiff and the Class Members, have any true choice is truly illusory. 135. In short and in sum, IHG/HHF introduces new or “additional” programs solely as a basis to create additional revenue streams and profit to the detriment and cost of Plaintiff and HHF franchisees. 23 E. IHG Rewards Program; Points Plus Cash 136. Defendants introduced, maintain and run an IHG Rewards Club Program by which hotel guests can earn points by staying at hotels within IHG’s network, as well as by purchasing goods and services with IHG partner vendors, including Groupon, Grubhub and OpenTable, provided these services are purchased through an SCH channel. 137. Points can also be earned for activities booked on the SCH Trip Extras page. For IHG Rewards Club Premier Credit Card holders or IHG Rewards Club Traveler Credit Card holders, additional points can be earned at IHG/HHF properties worldwide and on purchases made. 138. Defendants’ actual management of this program, however, is yet another bad faith means by which IHG and HHF profit off the backs of and to the detriment of their franchisees. 139. Participating members earn 10 reward points for every $1 spent. When those points are earned from staying in the hotel of Plaintiff or other HHF franchisees, including the Class Members, that hotel serves as the point of origination for the points. 140. In effect, when a customer redeems points to earn free hotel night(s), neither Plaintiff nor the Class Members receive payment (or, if they do, it is for a vastly insignificant amount and only when the overall occupancy of the hotel is below a specified percentage). 141. Specifically, If a franchisee hotel is at 96% occupancy, IHG/HHF reimburses the participating franchisee hotel for the average daily room for that particular night (which is less than the full room rate). 142. However, if a franchisee hotel is at less than 96% occupancy, IHG/HHF only reimburses the participating franchisee hotels $30 for the value of products or services that redeemed points were applied to, retaining the remainder for themselves and leaving IHG/HHF franchisees, including Plaintiff and the Class Members, to earn only a small fraction of such things 24 as nightly room rates to their economic detriment. 143. IHG/HHF also has a Points Plus Cash Program which it has never disclosed in its Franchise Disclosure Document (“FDD”) or License Agreement. 144. The Points Plus Cash Program operates such that if participating hotel guests do not have enough points to fully redeem a full night’s stay at a hotel or they do not desire to pay local sales tax, they have the option to combine rewards points with cash. 145. In this instance, the nightly hotel rate is lowered and all cash paid by the customer is retained by IHG/HHF and none goes to the HHF franchisee hotel. 146. This practice violates the License Agreement which provides that direct revenue from hotel guests goes to the HHF franchisee while IHG/HHF should only be entitled to collect fees from franchisees as provided therein. 147. There is no transparency by IHG/HHF regarding the IHG Rewards Club Hotel Rewards Program as franchisees have no access to financial information and data regarding all awards, redemptions or amounts reimbursed to any franchisee or collected, retained or funneled by or to IHG and/or HHF in conjunction with the IHG Rewards Club Hotel Rewards Program. F. HHF’s Fraudulent Representations Regarding the Nature of its Relationship with Approved Suppliers 148. Under the License Agreement, HHF requires that franchisees, including Plaintiff and the Class Members, purchase some or all of the products and services necessary (the “Mandatory Products and Services”) to operate a hotel from vendors and suppliers of its own choosing (the “Approved Suppliers”). 149. HHF represents to franchisees, including Plaintiff and the Class Members, that it will limit the number of Approved Suppliers for given products and services for the purposes of obtaining a group or volume discount and ensuring uniform quality and supply of those Mandatory 25 Products and Services. 150. However, upon information and belief, limiting the number of Approved Suppliers has very little to do with obtaining greater discounts or improving brand quality. 151. Rather, upon information and belief, HHF limits the number of Approved Suppliers as part of a scheme to reduce competition within the HHF Franchise System, which in turn, allows HHF to extract larger kickbacks from vendors. 152. HHF does not disclose to franchisees, including Plaintiff and the Class Members, when it receives a kickback (or “rebate”) or the amount of any such “rebate.” 153. The intended purpose and effect of HHF’s kickback scheme is that Approved Suppliers charge above-market rates for their goods and services. 154. HHF does not help franchisees, including Plaintiff and the Class Members, save time and money on their purchasing needs. 155. Upon information and belief, HHF does not obtain group or volume discounts on behalf of its franchisees, including Plaintiff and the Class Members. 156. Moreover, HHF does not ensure adequate brand quality and supply; rather, HHF at times forces franchisees, including Plaintiff and the Class Members, to purchase, often at inflated prices, inferior Mandatory Products and Services. 157. HHF is not attempting to promote brand quality, but is constantly auctioning off the right to sell Mandatory Products and Services to franchisees, including Plaintiff and the Class Members, to the highest bidding vendors. 158. HHF is leveraging its Franchise System to secure massive “rebates” from vendors. 159. Upon information and belief, to be approved as an Approved Supplier and to gain 26 access to HHF’s franchisees, , including Plaintiff and the Class Members, HHF requires a quid pro quo in the form of kickbacks. 160. The kickbacks include both fixed fees paid by Approved Suppliers to HHF and transactional fees based on a percentage of Approved Suppliers’ total sales to franchisees and their 161. The transactional fees are inextricably tied to the cost of the goods and services, meaning that as HHF’s revenue from transactional fees increases as the cost of goods and services increases. 162. HHF therefore has an inherent conflict of interest that it never discloses to franchisees. 163. Upon information and belief, HHF’s conflict of interest has led to abuse. 164. Upon information and belief, HHF has placed its interests and financial gain, as well as the interests of Approved Suppliers over those of its franchisees, including Plaintiff and the Class Members. 165. Upon information and belief, HHF has conspired with manufacturers and distributors to increase cost of goods and services that are sold to its franchisees, including Plaintiff and the Class Members. 166. Upon information and belief, HHF colludes with manufacturers and/or distributors to increase the wholesale price of products, which in turn, increases the retail prices Approved Suppliers must sell to franchisees, including Plaintiff and the Class Members. 167. Upon information and belief, HHF effectively fixes the retail pricing of goods and services sold to franchisees, including Plaintiff and the Class Members. 27 168. Upon information and belief, HHF knows that Approved Suppliers cannot sell goods and services to its franchisees at competitive prices. 169. Upon information and belief, HHF knows that Approved Suppliers must increase the cost of goods and services to account for the increased wholesale costs and as well the fixed and transactional fees that must be paid to HHF. 170. Upon information and belief, HHF knows that Approved Suppliers will pass these increased costs onto franchisees, including Plaintiff and the Class Members. 171. Upon information and belief, franchisees, including Plaintiff and the Class Members, ultimately are the ones harmed by HHF’s price fixing and kickback scheme. 172. While HHF purports to give franchisees, including Plaintiff and the Class Members, the right to, at HHF’s discretion, purchase Mandatory Products and Services from vendors other than the Approved Suppliers, in practice HHF rarely, if ever, grants franchisees, including Plaintiff and the Class Members, permission to do so. 173. Essentially, HHF offers franchisees, including Plaintiff and the Class Members, no meaningful choice in vendors. 174. HHF misrepresents to franchisees, including Plaintiff and the Class Members, and/or conceals the true nature of its relationship with Approved Suppliers, in order to lock them into the onerous License Agreements and to create excessive switching costs. G. HHF’s Imposition of Marketing Fees While Engaging in No Marketing 175. The License Agreement requires franchisees to pay HHF various fees, for which HHF promises to provide certain services in return. Among these required fees are marketing fees. (See License Agreement, §3(B)(1)(b), (d).) 28 176. The License Agreement provides that HHF franchisees shall make monthly fee payments to HHF for: (b) a “Services Contribution” equal to the percentage of Gross Rooms Revenue set forth in paragraph 15 below, to be used by Licensor for marketing, reservations, and other related activities which, in Licensor’s sole business judgment as to the long-term interests of the System, support marketing, reservations and other related functions. … Licensor may, in its sole judgment, upon 30 days’ prior notice, increase this Contribution by an amount not to exceed 1% of Gross Rooms Revenue and such increase shall be effective for a period no longer than 12 months … (d) all fees … due in connection with mandatory marketing … and other systems and programs established by the Licensor, its parents, subsidiaries or its affiliated entities relating to the System. (Id., §3(B)(1)(b), (d).) 177. The percentage of Gross Rooms Revenue that Plaintiff pays to HHF as the Services Contribution referenced in Section 3 of the License Agreement is 3%. (See id., §15(a)(2).) 178. Following the imposition of Covid-19 restrictions in or about March 2020, HHF ceased all marketing efforts and activities which the franchisees’ “Services Contribution” is contractually represented as being paid to support, and said HHF marketing is the explicit benefit of the bargain which franchisees, including Plaintiff and the Class Members, are entitled to receive in exchange for their payment to HHF. 179. In addition, IHG/HHF made a public statement that Medallia score requirements, customer and employee experience scores generated from surveys, social media and review websites, would be waived for the previous year but, nevertheless, sent violations to franchisees explaining that their scores had dropped too low and threatened to take away licenses. 180. HHF has continuously required, demanded payment of and collected marketing 29 fees from its franchisees, including Plaintiff and the Class Members, despite providing no marketing services or programs for nearly a year. H. IHG Owners Association: IHG/HHF Collusion with the IHGOA & its Illusory Provision of Franchisee Participation 181. The License Agreement provides for franchisee membership in the IHGOA, and states in relevant part that: The purposes of the IHG Owners Association will be to consider and discuss, and make recommendations on common problems relating to the operation of System Hotels. Licensor will seek the advice and counsel of the IHG Owners Association’s Board of Directors or, subject to the approval of Licensor, such committees, directors or officers of the IHG Owners Association to which or to whom the IHG Owners Association Board of Directors may delegate such responsibilities. (License Agreement, §6(A).) 182. The License Agreement provides further that HHF “recogniz[es] that the IHG Owners Association must function in a manner consistent with the best interests of all persons using the System . . . .” (Id., § 6(B).) 183. HHF represents to its franchisees, including Plaintiff and the Class Members, that it makes a good faith effort to protect the best interests of its franchisees. 184. Despite these representations, however, the IHGOA board members are essentially handpicked by IHG/HHF, and receive incentives in exchange for their loyalty and obedience to IHG/HHF’s agenda and interests. 185. While IHGOA’s board members are nominally elected by all franchise owners, it is essentially impossible for dissenting voices to gain seats on the board. 186. IHG/HHF controls the nominating process through the imposition of onerous and vague requirements for candidacy, which ensures that IHG/HHF can carefully select candidates 30 and thus the elections to the IHGOA are noncompetitive. 187. The collusion between the IHGOA and IHG/HHF is a fraudulent attempt to create the appearance of legitimacy to IHG/HHF’s exploitative practices, as detailed herein. 188. IHG/HHF scoffs at the stated purposes and functions of the Owners Association as set forth in the License Agreement, franchisees, including Plaintiff and the Class Members, only the illusory role of having a voice in the System, or discussing any operational recommendations for common problems at the hotels, with IHG/HHF instead acting in complete disregard for “the best interests of all persons using the System.” 189. In short, IHG/HHF pursues only its own self interest to the detriment of its franchisees, including Plaintiff and the Class Members. 190. The “committees, directors or officers of the IHG Owners Association” rarely include franchisees, but instead are populated by IHG and/or HHF employees in order to collude with said Defendants, utterly disregard genuine franchisee complaints and to instead implement, avoid accountability for and rubber stamp all matters decided unilaterally by and for these Defendants. I. IHG’s Racial Discrimination Against Indian-American & South Asian-American Franchisees 191. In its relations with its franchises, IHG/HHF is hostile to and routinely discriminates in favor of white, black and Latino franchisees and against Indian-American and South Asian-American franchisees, by offering preferential treatment to the former and engaging in derogatory and demeaning rhetoric and behavior and more strictly enforcing rules and regulations against the latter. 192. IHG/HHF applies PIP enforcement, inspections and fines unjustly and unequally, with unduly harsh and unequal application against its franchisees of Indian-American and South 31 Asian-American descent. 193. IHG/HHF applies its discretionary brand “standards” unjustly and unequally, with unduly harsh and unequal application against its franchisees of Indian-American and South Asian- American descent. 194. IHG/HHF applies its discretionary brand “standards” unjustly and unequally, with online manipulation of guest scores, reviews and ratings against its franchisees of Indian-American and South Asian-American descent. 195. IHG/HHF terminates franchises more frequently and arbitrarily against its franchisees of Indian-American and South Asian-American descent, and similarly denies the granting and transfer of franchises to Indian-Americans and South Asian-Americans. 196. IHG/HHF executives often make racially derogatory comments to and about their Indian-American and South Asian-American franchisees. CLASS ACTION ALLEGATIONS 197. Pursuant to Federal Rules of Civil Procedure 23(a) and (b), Plaintiff bring this action on behalf of itself and the Class (“Class”) of similarly situated persons defined as: All United States residents (including persons and business entities) that operate or have operated a hotel pursuant to a License Agreement with Holiday Hospitality Franchising LLC in the State of New Jersey from January 1, 2014 through the date of Class Certification. Excluded from the Class are the officers, directors and employees of Defendants and their respective legal representatives, heirs, successors and assigns. A. Rule 23(a) Requirements 198. Numerosity: Members of the Class are so numerous that their individual joinder is impractical. The precise identities, number and addresses of members of the Class are presently unknown to Plaintiff, but may and should be known with proper and full discovery of Defendants, 32 third-parties and all relevant records and documents. 199. Upon information and good faith belief, the Class has more than 40 members. 200. All members of the Class assert claims for violation of the law as set forth herein. 201. Existence of Common Questions of Fact and Law: There is a well-defined commonality and community of interest in the questions of fact and law affecting the members of the Class. Among other things, the common questions of fact and law include: a) Whether and to what extent Defendants’ practices, conduct and misrepresentations violate the covenant of good faith and fair dealing; b) Whether and to what extent Defendants’ practices, conduct and misrepresentations violate federal or state law; c) Whether HHF breached terms of the License Agreements; d) Whether and to what extent Defendants maintained a closed market vendor marketplace in order to derive illicit profits; e) Whether the Class sustained injury as a result of HHF’s breaches of the License Agreement; f) Whether any of the provisions of the subject HHF License Agreements are void and/or unenforceable; g) Whether Plaintiff and Class Members are entitled to recover compensatory, consequential, exemplary, treble, statutory or punitive damages based on Defendants’ fraudulent, illegal, anticompetitive conduct or practices and/or otherwise; h) Whether temporary and permanent injunctive relief is appropriate for all Class Members and i) Whether Plaintiff and Class Members are entitled to an award of reasonable attorneys’ fees, prejudgment interest and costs of suit. 202. Typicality: Plaintiff is a member of the Class. Plaintiff’s claims have a common origin and share common bases with the Class Members. They originate from the same illegal, 33 fraudulent and confiscatory practices of Defendants, and Defendants have acted in the same or substantially similar way toward Plaintiff and all other Class Members. If brought and prosecuted individually, the claims of each Class Member would necessarily require proof of the same material and substantive facts, rely upon the same remedial theories and seek the same or substantially similar relief. 203. Adequacy: Plaintiff is an adequate representative of the Class because its interests do not conflict with the interests of the members of the Class they seek to represent. Plaintiff has retained competent counsel and intends to prosecute this action vigorously. Plaintiff’s counsel will fairly and adequately protect the interests of the members of the Class. B. Rule 23(b)(2) & (3) Requirements 204. This lawsuit may be maintained as a class action pursuant to Federal Rule of Civil Procedure 23(b)(2) because Plaintiff and the Class Members seek declaratory and injunctive relief, and all of the above requirements of numerosity, common questions of fact and law, typicality and adequacy are satisfied. Moreover, Defendants have acted on grounds generally applicable to Plaintiff and the Class as a whole, thereby making declaratory and/or injunctive relief proper and suitable remedies. 205. This lawsuit may also be maintained as a class action under Federal Rule of Civil Procedure 23(b)(3) because questions of fact and law common to the Class predominate over the questions affecting only individual members of the Class, and a class action is superior to other available means for the fair and efficient adjudication of this dispute. The damages suffered by each individual class member may be disproportionate to the burden and expense of individual prosecution of complex and extensive litigation to address Defendants’ conduct and practices. 206. Additionally, effective redress for each and every class member against Defendants 34 may be limited or even impossible where serial, duplicate or concurrent litigation occurs arising from these disputes. Even if individual class members could afford or justify the prosecution of their separate claims, such an approach would compound judicial inefficiencies and could lead to incongruous and conflicting judgments against Defendants. COUNT I Breach of Contract (Against HHF, SCH & IHG) 207. Plaintiff incorporates by reference all of the foregoing allegations as if set forth at length herein. 208. At all times relevant to this litigation, Defendant HHF possessed individual contractual relationships with each franchisee, including Plaintiff and the Class Members, through the License Agreements. 209. By virtue of their ownership of HHF and control over the IHG Marketplace, IHG and SCH are intended third-party beneficiaries of the License Agreements. 210. Beyond the written terms of the License Agreement, HHF, IHG and SCH owe a duty of good faith and fair dealing to franchisees, including Plaintiff and the Class Members, in relation to its performance under the License Agreement and any related agreements. 211. HHF breached its obligations under the License Agreement by, inter alia: a) Without any limitation or stated parameters, to generally and arbitrarily alter, modify or revise its “Standards” or “System,” in its sole judgment, as a bad faith means to impose undisclosed costs and obligations on franchisees, including Plaintiff and the Class Members, without any franchisee input, agreement or recourse; b) Using its PIP program as a means to apply unfettered and open-ended discretion to extract otherwise undisclosed fees and fees not contracted for from franchisees, , including 35 Plaintiff and the Class Members, by mandating exorbitant construction and renovation mandates and costs upon franchisees, including Plaintiff and the Class Members; c) As part of the PIP program, forcing franchisees, including Plaintiff and the Class Members, to pay non-refundable fees for mandatory hotel inspections and preparation of PIP report(s), without any franchisee consent or agreement and charging additional undisclosed fees for re-inspections and re-evaluations solely as HHF deems necessary and mandates, and to arbitrarily require such re-inspections and also impose fines solely as a means of enriching HHF; d) Forcing franchisees, including Plaintiff and the Class Members, to utilize only HHF’s Approved Suppliers for the goods and services necessary to run the hotel(s) because such vendors and suppliers provide HHF with rebates and kickbacks; e) Falsely representing that the Approved Suppliers in HHF’s procurement programs, including, but not limited to, the “IHG Marketplace” allow for franchisee choice, and deliver value and lower cost purchasing opportunities to franchisees, including Plaintiff and the Class Members, when, in fact, franchisees, including Plaintiff and the Class Members, are involuntarily forced to use these Approved Suppliers, charging franchisees, including Plaintiff and the Class Members, above-market rates, rates which are higher than the same Approved Suppliers charge hotel operators not within the HHF System, and often the Mandatory Products and Services forced upon franchisees, including Plaintiff and the Class Members, are of inferior quality; f) HHF represents to franchisees, including Plaintiff and the Class Members, that its limited number of Approved Suppliers is for the purpose of obtaining group or volume discounts or to ensure uniform quality and supply, when it is instead engaged in a scheme to reduce competition within the HHF Franchise System and extract larger kickbacks from these vendors. HHF does not obtain group or volume discounts on behalf of its franchisees, including Plaintiff and the Class Members; g) HHF leverages its Franchise System as a means to secure massive fees from vendors, granting approval to Approved Suppliers who gain access to HHF’s franchisees as a quid pro 36 quo for kickbacks in the form of both fixed fees and percentage-based transactional fees, enriching HHF from increased costs borne by franchisees, including Plaintiff and the Class Members, for the Mandatory Products and Services. HHF never discloses to its franchisees, including Plaintiff and the Class Members, this inherent and abusive conflict of interest from its collusion with manufacturers and/or distributors to increase its own revenue on the backs of its franchisees, including Plaintiff and the Class Members; h) Despite the fact that franchisees, including Plaintiff and the Class Members, pay initial and annual fees associated with marketing, HHF introduces additional undisclosed marketing (and other) programs and fees as a means to generate additional revenue for itself to the detriment of franchisees, including Plaintiff and the Class Members, and without any prior disclosure to or agreement of the franchisees; i) HHF ceased and suspended all of its marketing efforts and activities during the time of the Covid pandemic, yet continues to charge franchisees, including Plaintiff and the Class Members, for services it is not providing; j) Use the threat and imposition of retaliation and retribution against franchisees, including Plaintiff and the Class Members, who in any way dispute or raise questions about HHF’s introduction of programs, fees or expenses forced on franchisees, including Plaintiff and the Class Members, without any prior disclosure or agreement or against franchisees who, when presented with HHF programs falsely represented as optional, opt-out of same; k) Using its customer rewards program as a means to allow customers to redeem points earned at point-of-origin franchisee hotels for free hotel stays, depriving the franchisees, including Plaintiff and the Class Members, of this direct revenue, but then reimbursing franchisees, including Plaintiff and the Class Members, only a small percentage of the redeemed points (usually less than 30%) and retaining the remainder for itself and l) Maintaining an IHG Owners Association, represented as a means for franchisees, including Plaintiff and the Class Members, to consider and discuss, and make recommendations on common problems relating to the operation of System Hotels which HHF will seek the advice 37 of and to promote the best interests of all persons using the System but, in reality, this representation is false and illusory. Franchisees, including Plaintiff and the Class Members, are afforded no voice, their recommendations are summarily disregarded and the Owners Association is populated almost entirely by IHG employees to serve the purpose of enriching IHG, HHF and SCH, avoiding accountability and imposing additional financial hardship on franchisees, including Plaintiff and the Class Members. 212. In its performance of the License Agreements, in addition to the misconduct set forth hereinabove, HHF, IHG and SCH routinely violate the duty of good faith and fair dealing with franchisees, including Plaintiff and the Class Members, by, inter alia: a) Instead of using the collective bargaining power of its franchisees, including Plaintiff and the Class Members, to negotiate discounted rates on products necessary to the operation of the hotels from Approved Suppliers, allowing – and effectively requiring – the Approved Suppliers to charge rates for Mandatory Products and Services well in excess of the market rate, by requiring the Approved Suppliers to pay large kickbacks (“rebates”) to HHF in order to earn the privilege of doing business with franchisees; b) In negotiations with Approved Suppliers, prioritizing the size of the kickback an Approved Supplier is willing to pay HHF over the securing of a group discount or ensuring high quality of Mandatory Products and Services; c) Forcing franchisees, including Plaintiff and the Class Members, to use a specific credit card processor, which charges higher fees and other chargebacks causing franchisees to lose significant monies; d) Forcing franchisees, including Plaintiff and the Class Members, to purchase other Mandatory Products and Services from Approved Suppliers, when the Mandatory Products and Services provided by certain Approved Suppliers are of low quality and priced above a fair market rate; e) Unfairly and wrongfully penalizing franchisees, including Plaintiff and the Class Members, who “opt out” of allegedly voluntary programs; 38 f) Refusing to negotiate in good faith with franchisees, including Plaintiff and the Class Members, in the wake of the Covid-19 pandemic; g) Otherwise imposing onerous and unnecessary fees, penalties and fines upon franchisees, including Plaintiff and the Class Members and h) Otherwise acting to profit at the expense of the financial health of HHF franchisees, including Plaintiff and the Class Members. 213. Due to HHF’s, IHG’s and SCH’s ongoing breaches of their express and implied contractual duties, franchisees, including Plaintiff and the Class Members, have suffered monetary damages. COUNT II Breach of Fiduciary Duty (Against IHGOA) 214. Plaintiff incorporates by reference all the foregoing allegations as if set forth at length herein. 215. Although franchisees are not required to be members of the IHGOA, and may voluntarily opt-in or opt-out, franchisees who opt-in become IHGOA members and are required to pay membership dues annually. 216. Irrespective of franchisee opt-ins (or opt-outs), however, the IHGOA holds itself out as, is required to, and purports to act and negotiate on behalf of all franchisees, including Plaintiff and the Class Members, as the ostensible “voice of the owners.” 217. IHGOA assumed a fiduciary duty to represent the interests of its member franchisees, including Plaintiff and the Class Members, in negotiations with HHF, because: a) IHGOA represents in its mission statement to the franchisees that its purposes is to “advocate responsibly for the greater good of the membership,” 39 b) IHGOA represents that it “instill[s] trust with open and honest communications,” c) IHGPA promotes that its “core values guide our everyday actions as we seek to fulfill our mission of helping members maximize their investment in IHG hotel brands,” d) In cooperation with HHF, the IHGOA accepts annual fees from franchisees, including Plaintiff and the Class Members, who opt-in, and does so with the implied and/or explicit representation that these fees are in exchange for IHGOA’s faithful representation of the interests of all franchisees, including Plaintiff and the Class Members as well as those who do not opt-in as IHGOA members. 218. IHGOA routinely violates its duty of loyalty to Franchisees, in that its board members accept preferential treatment and other benefits from HHF in exchange for their compliance with and approval of onerous measures proposed by HHF, including, but not limited to, the imposition of new or increased fees on franchisees (including Plaintiff and the Class Members), the imposition of new requirements and penalties through modification of the System, and the entry into new agreements with Approved Suppliers for Mandatory Products and Services that inure to the benefit of HHF while imposing onerous costs on franchisees, including Plaintiff and the Class Members. 219. Upon information and belief, the kickbacks received by IHGOA board members include, but are not limited to, algorithmic preferences in HHF’s reservation system such that their franchised properties appear higher in guests’ hotel search results than the properties of other franchisees, including Plaintiff and the Class Members. 220. The IHGOA board is utterly unresponsive to the concerns of HHF franchisees, including, but not limited to, Plaintiff and the Class Members. 221. Franchisees, including Plaintiff and the Class Members, have suffered damages due to IHGOA’s failure to loyally represent them in an amount to be determined at trial. 40 222. IHGOA’s actions and omissions were willful, outrageous, oppressive and wanton. COUNT III Violations of New Jersey Franchise Practices Act (Against HHF) 223. Plaintiff repeats and realleges each of the following paragraphs of the Complaint as if set forth at length herein. 224. The purpose of the NJFPA is to protect franchisees from the superior bargaining power of franchisors and to provide swift, effective judicial relief from those franchisors who violate its provisions. 225. Plaintiff and the Class Members are franchisees within the meaning of N.J.S.A. § 56:10-3(d). 226. HHF is a franchisor within the meaning of N.J.S.A. § 56:10-3(c). 227. Plaintiff and the Class Members are, by the terms of their License Agreements, required to perform business within the State of New Jersey. 228. Under the New Jersey Franchise Practices Act, N.J.S.A. § 56:10-7, et seq., a franchisor is prohibited from, inter alia: a) Requiring “a franchisee at time of entering into a franchise arrangement to assent to a release, assignment, novation, waiver or estoppel, which would relieve any person from liability imposed by this act.” b) Prohibiting “directly or indirectly the right of free association among franchisees for any lawful purpose.” c) Imposing “unreasonable standards of performance upon a franchisee.” 229. HHF has effectively prohibited the right of free association among franchisees, including Plaintiff and the Class Members, by requiring them to pay fees to IHGOA, which they 41 actively seek to corrupt and render ineffective as a purported representative of franchisees’ interests. 230. HHF has held Plaintiff and the Class Members to unreasonable standards of performance, by, inter alia: a) Requiring Plaintiff and the Class Members to pay above- market prices for Necessary Products from Qualified Vendors; b) Requiring Plaintiff and the Class Members to purchase Necessary Products from Qualified Vendors that are inferior in quality to similar products offered by their competitors; c) Requiring Plaintiff and the Class Members to pay undisclosed fees and penalties to IHG/HHF, such that the total fees and penalties paid by each individual franchisee, including Plaintiff and the Class Members, could approach, equal or even exceed 20% of monthly revenue; d) Adding onerous rules to HHF’s Rules and Regulations; e) Forcing Plaintiff and the Class Members to pay an “association fee” to IHGOA while actively working to undermine the efficacy of IHGOA as a purported representative of franchisees’ interests and f) Monetarily penalizing Plaintiff and the Class Members forIHG/HHF’s own mismanagement—for example, assessing penalties against franchisees, including Plaintiff and the Class Members, for guests’ negative reviews of their hospitality experience, when those negative reviews stem from failures related IHG/HHF’s reservation system. 231. As a direct and proximate result of IHG/HHf’s actions, Plaintiff and the Class Members have suffered actual damages in an amount to be determined at trial, request injunctive relief restraining IHG/HHF from continuing to perform acts in violation of the New Jersey Franchise Practices Act, as well as the award of reasonable and appropriate attorneys’ fees. 42 Count IV Declaratory Judgment (Against HHF) 232. Plaintiff incorporates by reference all the foregoing allegations as if set forth at length herein. 233. As a condition of receiving the benefits of operating a HHF franchise, HHF uses its vastly superior bargaining power to require all franchisees, including Plaintiff and the Class Members, to accept the grossly unequal terms of the License Agreements, which, as to many key provisions, is essentially a “take it or leave it” contract of adhesion. 234. The following provisions of the License Agreement (hereafter “the Unconscionable Provisions”) together and/or individually are substantively unconscionable: a) HHF’s open-ended right to impose mandates, fees and costs on franchisees, including Plaintiff and the Class Members, by adding, modifying, altering or deleting elements of its System or its Standards in its sole judgment and discretion, which extends to (but is not limited to): marketing programs and materials; specifications and policies for construction; programs for inspecting the Hotel; and vague, arbitrary and amorphous “other requirements as stated or referred to in this License and from time to time in Licensor’s brand standards for System Hotels” (defined as the “Standards”). (License Agreement, §1); b) HHF’s open-ended imposition upon Plaintiff as one of its responsibilities to “strictly comply in all respects with the Standards (as they may from time to time be modified or revised by [HHF]” which does no less than attempt to allow HHF to impose upon Plaintiff and the Class Members, and demand compliance with whatever it deems beyond any explicit contractual agreement. (Id., §3(A)(5)); c) HHF’s mandate that Plaintiff and the Class Members,strictly comply with its “standards and specifications for goods and services used in the operation of the Hotel and other reasonable requirements to protect the System and the Hotel from unreliable sources of supply,” and with all HHF’s requirements for services and products used in Hotels, which 43 serves as a pretext for HHF’s collusion and kickback scheme with vendors and suppliers. (Id., §3(A)(7)); d) HHF’s unlimited ability to maintain and alter its “Standards” imposed upon and required of franchisees, including Plaintiff and the Class Members, with “wide latitude,” and to modify or revise same at any time in its sole discretion and without franchisee knowledge or agreement. (Id., §4(D)-(E)); e) HHF’s illusory provision of a means by which franchisees, including Plaintiff and the Class Members, can approve its changes in the Standards only through HHF’s Franchise Committee, and by purporting to afford franchisees, including Plaintiff and the Class Members, a means to appeal such changes while at the same time severely restricting any appeal rights which cannot be “arbitrary, capricious or unreasonable” or not “for the purpose for which intended” vis-à-vis not only HHF changes in standards but also as to any other rights explicitly afforded by the agreement. (Id., §5(A)-(D)); f) HHF’s right to termination of the agreement for any violation thereof, when HHF has given itself the right to extra- contractually alter, modify or revise Plaintiffs’ and the Class Members’ obligations at any time and for any reason it may deem. (Id., §§1(B), 12(B)-(C)); g) HHF’s right to termination if Plaintiff and/or the Class Members “refuse[] to cooperate with” inspections or audits when, in fact, HHF charges Plaintiff and the Class Members for all inspections and can impose them for any reason at any time as a means to impose costs and fines on Plaintiff and the Class Members merely as a tool to enrich itself. (Id., §12(C)(13)); h) A provision providing for liquidated damages against franchisees, including Plaintiff and the Class Members, in the event of a franchisee’s early termination of the License Agreement or HHF’s termination of the License Agreement due to a franchisee’s alleged breach, but not providing for liquidated damages against HHF under any circumstances (Id., §12(E)); i) Provisions prohibiting franchisees,’ including Plaintiff’s and the Class Members,’ rights to pursue claims and damages against HHF for HHF’s breaches of the parties’ license 44 agreement. (Id., §§14(B)(3), 14(E), 14(H)); j) A requirement that franchisees, including Plaintiff and the Class Members, broadly reimburse HHF, its affiliates, subsidiaries, officers, directors, agents, partners and employees, for any litigation regardless of which party initiates same. (Id., §§14(J)) and k) A provision requiring affirmative advisement of any trier of fact that HHF has rights to make changes to the parties’ agreement “in the exercise of business judgment” and in every such instance those rights which are not explicitly contracted for are “adopted in good faith and is consistent with the long-term overall interests of the System,” and further prohibits any and all judges, mediators, and/or triers of fact from applying their own judgment as opposed to HHF’s. (Id., §14(N)). 235. The License Agreements are procedurally unconscionable because, at the inception of the License Agreements, HHF used its vastly superior bargaining position to require franchisees, including Plaintiff and the Class Members, to accept the grossly unequal Unconscionable Terms outlined above. 236. Specifically, as to the Unconscionable Terms, the License Agreements are contracts of adhesion provided on a “take it or leave it” basis. 237. The Unconscionable Terms are not subject to negotiation. 238. HHF drafts the Agreements in their entirety. 239. An actual, present, and justiciable controversy exists between Plaintiff and the Class Members, on the one hand, and HHF, on the other hand, regarding the enforceability of the Unconscionable Provisions. 240. Pursuant to the Uniform Declaratory Judgment Act, 28 U.S.C. § 2201, Plaintiff and the Class Members seek declaratory judgment from this Court that the Unconscionable Provisions listed above are unconscionable, illusory and/or unenforceable. 45 COUNT V Violation of the Sherman Act, 15 U.S.C. § 1 (Against HHF) 241. Plaintiff incorporates by reference all of the foregoing allegations as if set forth at length herein. 242. There exists markets for ownership interests in hospitality franchises, in which HHF maintains substantial market power. 243. A separate market exists for the related goods and services associated with the operations of hospitality franchises, including but not limited to services, software, physical furnishings, financial services, and food products (the “Mandatory Products and Services”). 244. HHF requires that franchisees purchase some or all of the Mandatory Products and Services from vendors of its own choosing (the “Approved Suppliers”). 245. In order to obtain HHF’s approval to sell Mandatory Products and Services to franchisees, HHF requires Approved Suppliers to pay substantial kickbacks to HHF, which it refers to euphemistically as “rebates.” 246. Although HHF represents to franchisees, including Plaintiff and the Class Members, that, in limiting the number of Approved Suppliers from which franchisees, including Plaintiff and the Class Members, may purchase Mandatory Products and Services, it seeks only to obtain group discounts for franchises and/or ensure consistent quality and adequate supplies for the franchise brand, in reality HHF chooses Approved Suppliers exclusively or primarily based upon how large a kickback those Approved Suppliers are willing to pay HHF. 247. In actuality, the Mandatory Products and Services purchased from Approved Suppliers are often of inferior quality and sold at above-market prices, relative to similar products sold by other vendors. 46 248. While HHF does purport to give franchisees, including Plaintiff and the Class Members, the right to, at HHF’s discretion, purchase Mandatory Products and Services from vendors other than the Approved Suppliers, in practice HHF rarely, if ever, grants franchisees permission to do so. 249. At the time they entered into the License Agreements, HHF concealed the nature of its relationship with Approved Supplier from franchisees, including Plaintiff and the Class Members, in order to lock them into the onerous Agreements and create excessive switching costs. 250. HHF also creates excessive switching costs through imposing onerous termination terms on franchisees, including Plaintiff and the Class Members, such that upon termination or expiration of the License Agreement, they may be liable to pay (i) liquidated damages and (ii) all outstanding fees and penalties in full, which, by virtue of HHF’s right under the License Agreements to unilaterally impose additional fees and penalties, may be sufficient to prevent franchisees from exercising their termination rights, locking them into the franchise system. 251. At all times relevant, HHF had monopoly power, market power and/or economic power in the relevant Hospitality Franchise market, sufficient to force franchisees, including Plaintiff and the Class Members, to purchase and to accept Mandatory Products and Services from Approved Suppliers. 252. By reason of the terms of the License Agreements and the investments franchisees, including Plaintiff and the Class Members, have made in their franchises, coupled with the difficulties franchisees face in leaving the franchise system, HHF has substantial power in the market for both Hospitality Franchises and the market for Mandatory Products and Services. 253. HHF manipulated its economic power in the Hospitality Franchise market to coerce franchisees, including Plaintiff and the Class Members, to purchase Mandatory Products and 47 Services solely from Approved Suppliers, through contractual provisions contained in the License Agreements, as well as exploitation of pre-contractual information deficiencies and post- contractual switching costs. 254. Through these and other means, HHF can and does coerce franchisees, including Plaintiff and the Class Members, to purchase nearly of the Mandatory Products and Services from Approved Suppliers. 255. Through the exercise of HHF’s economic power as alleged herein, HHF has conditioned the purchase by franchisees, including Plaintiff and the Class Members, of their franchises and their continued existence as franchises upon the purchase of Mandatory Products and Services from Approved Suppliers. 256. As a direct and proximate result of HHF’s anti-competitive tying activity, franchisees, including Plaintiff and the Class Members, have been injured by being forced to pay above-market rates for inferior Mandatory Products and Services. 257. A substantial amount of interstate commerce in Mandatory Products and Services has been adversely affected by HHF’s actions. 258. These actions impose an unreasonably negative effect on competition in the marketplace, because HHF’s policy of coercing and conditioning the purchase and operation of a franchise and on purchase by franchisees of Mandatory Products and Services from Approved Suppliers forecloses the ability of vendors unwilling to pay kickbacks to HHF from selling their Mandatory Products and Services to franchisees, including Plaintiff and the Class Members, even though the quality of such Mandatory Products and Services is equal to if not better than the quality of what is supplied by Approved Suppliers. 259. HHF’s tie of purchases of its franchises, including Plaintiff and the Class Members, 48 to purchase of Mandatory Products and Services from Approved Suppliers imposes an unreasonable restraint upon commerce and is therefore per se unlawful in violation of Section One of the Sherman Act, 15 U.S.C. § 1, and has caused damage to franchisees, including Plaintiff and the Class Members. 260. Alternatively, if HHF’s tying conduct is not per se unlawful, it is unlawful under the rule of reason, in that the anti-competitive consequences of HHF’s conduct outweigh any pro- competitive effects thereof. Not only does HHF’s conduct impose supra-competitive prices on franchisees, including Plaintiff and the Class Members, it impedes the ability of other vendors to engage in competition with Approved Suppliers to provide high quality Mandatory Products and Services at lower costs. 261. Moreover, consumers are injured in that they are forced to indirectly pay the kickbacks and excessive prices for products charged to franchises by Approved Suppliers. 262. There is no pro-business or efficiency justification for the kickbacks and supra- competitive pricing, nor does any legitimate business purpose require these practices. COUNT VI Accounting (Against HHF & IHGOA) 263. Plaintiff incorporates by reference the foregoing allegations as if set forth at length 264. HHF owed franchisees, including Plaintiff and the Class Members, express contractual duties not to charge fees which were not contractually proscribed but nevertheless charges direct and indirect fees to Plaintiff and the Class Members which were not authorized by the License Agreements. 49 265. Defendant IHGOA owed Plaintiff and the Class Members express and common law fiduciary duties of care, obedience, information and loyalty as a result of its special position of trust and confidence, including as agent of Plaintiff and the Class Members, to act in the best interests of all franchisees, including Plaintiff and the Class Members. 266. HHFs owes a duty to account for monies, including, but not limited to: a) An accounting of the rebates it has taken from Approved Suppliers; b) An accounting of all charges associated with the PIP program and all fees charged for Hotel inspections, re-inspections, evaluations, preparation of PIP reports and any and all fines; c) An accounting of all awards, redemptions, amounts reimbursed to any franchisee, including Plaintiff and the Class Members, to HHF, SCH and IHG associated with the IHG Rewards Club Hotel Rewards Program; d) An accounting of any and all IHG Marketplace programs; e) An accounting of the Secure Payment Solution credit card processing system; f) An accounting of all internet services and the SCH Merlin communication service; g) An accounting of HHF’s Keycard System; h) An accounting of all in-room entertainment, SCH Studio, Employee Safety Devices, reservation and all other equipment, software, and services for property-level technology and telecommunications; i) An accounting of the gift card program; j) An accounting of all mandated food and beverage programs; k) An accounting of all furniture, furnishings, linens, food products, utensils and goods for guests and l) An accounting of its use of all other fees and penalties imposed upon franchisees, including Plaintiff and the Class Members. 50 267. IHGOA owes a duty to account for monies, specifically its use of the association fee provided by franchisees, including Plaintiff and the Class Members, who have opted-in. 268. Upon information and good faith belief, a request for such an accounting from HHF or IHGOA would be futile. 269. Franchisees, including Plaintiff and the Class Members, are unable to determine the amounts due to them without an accounting and there is no adequate remedy at law without such an accounting or such legal remedies would be difficult, inadequate or incomplete. PRAYER FOR RELIEF WHEREFORE, Plaintiff A HUNTS MILLS ASSOCIATES LLC, on behalf of itself and all those similarly situated, respectfully requests that this Honorable Court: A. Enter an order certifying this case as a class action on behalf of the Class defined herein; B. Enter an order against HHF, IHG and SCH in favor of Plaintiff and the Class for consequential and/or compensatory damages in an amount to be proven at trial and specific performance of the License Agreements; C. Enter an order against HHF in favor of Plaintiff and the Class for actual damages and treble damages and reasonable attorney’s fees arising out of HHF’s violations of the Sherman Act; D. Enter a permanent injunction prohibiting HHF’s unlawful tying conduct; E. Enter a judgment against IHGOA in favor of Plaintiff and the Class for compensatory and punitive damages; F. Declare that the Unconscionable Provisions of the Agreements, specified above, are unconscionable, illusory and/or unenforceable against Plaintiff and the Class Members; G. Enter an order against HHF in favor of Plaintiff and the Class Members entitling Plaintiff and the Class Members to an accounting of all fees paid by them to SCH and HHF, and all 51 rebate payments made to HHF, IHG and SCH by Approved Suppliers and H. Award such other relief as this Court deems necessary and appropriate. JURY DEMAND Plaintiff demands a trial by jury on all issues properly so tried. Dated: July 16, 2021 Respectfully submitted, / Justin M. Klein Justin M. Klein Marks & Klein, LLP 63 Riverside Avenue Red Bank, New Jersey 07701 T: (732) 747-7100 F: (732) 219-0625 justin@marksklein.com Andrew P. Bleiman (pro hac vice forthcoming) Mark Fishbein (pro hac vice forthcoming) Marks & Klein, LLP 1363 Shermer Road, Suite 318 Northbrook, Illinois 60062 T: (312) 206-5162 F: (732) 219-0625 andrew@marksklein.com mark@ marksklein.com Justin E. Proper WHITE AND WILLIAMS LLP 1650 Market Street One Liberty Place, Suite 1800 Philadelphia, Pennsylvania 19103-7395 Phone: 215.864.7165 properj@whiteandwilliams.com Attorneys for Plaintiff & the Class 52

antitrust

rN6eEIcBD5gMZwczSHaL

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND (Northern District) PROFILES, INC., * 3000 Chestnut Avenue * Suite 201 * Baltimore, Maryland 21211, on behalf of * itself and all others similarly situated, * * PLAINTIFF, * * v. * CIVIL ACTION NO. * BANK OF AMERICA CORPORATION, * CLASS ACTION COMPLAINT 100 North Tryon Street * Charlotte, North Carolina 28255 * * Serve on: * The Corporation Trust, Inc. * 160 Mine Lake Ct., Suite 200 * Raleigh, NC 27615-6417 * * BANK OF AMERICA, N.A., * 100 North Tryon Street * Charlotte, North Carolina 28255 * * Serve on: * The Corporation Trust, Inc. * 2405 York Road, Suite 201 * Lutherville Timonium, Maryland 21093-2264 * * DEFENDANTS. * * * * * * * * * * * * * * * * * * * * * * * * * * * * CLASS ACTION COMPLAINT I. INTRODUCTION 1. At a time of severe national need, Defendants Bank of America Corporation (“Bank of America”) and Bank of America, N.A. (“BNA”) (collectively, “Defendants” or “BOA”) instead privileged discriminatory policies of corporate greed over the needs of America’s small businesses. 2. Authorized by Congress and the President under the Coronavirus Aid, Relief, and Economic Security Act, H.R. 748 (“CARES Act”) and its loan programs to administer billions of dollars in federal funding to small businesses in a fair, equitable and uniform manner, Defendants implemented a loan process that unlawfully prioritized their existing borrowing clients and barred their depository clients and other small businesses from even applying for funds from the governmental loan programs. Nothing in the CARES Act authorizes or permits Defendants to pick and choose who would gain access to or benefit from the federally backed lending program. And, the priority of access to these limited funds is material – the demand is overwhelming as America responds to the economic tsunami of COVID-19 upon small businesses. There is no justification for requiring depository clients and other small businesses to go to the end of the line. 3. Named Plaintiff Profiles, Inc. (“Named Plaintiff” or “Profiles”) brings this action, on behalf of itself and all others similarly situated, against BOA for violations of the CARES Act”, violations of the Small Business Administration’s (“SBA”) 7(A) loan program, 15 U.S.C. § 636(a), a declaratory judgment pursuant to 28 U.S.C. § 2201, and a preliminary and permanent injunction pursuant to 28 U.S.C. § 2202. 4. The Paycheck Protection Program (“PPP”), which is part of the $2 trillion stimulus package created by the CARES Act in response to the COVID-19 pandemic that was signed in to law on March 27, 2020, empowers lenders to make available as much as $349 billion in government-guaranteed loans to cover eight weeks of payroll and other expenses. 5. BOA – creating an improper and unlawful restriction on PPP loans – is refusing to accept PPP loan applications unless the small business is an active borrower with BOA. BOA is thus unlawfully prioritizing existing customers who are active borrowers as of February 2020. 6. Indeed, BOA has denied access to the PPP program to small businesses that do not 2 have a “lending” relationship with BOA. Profiles, which has a depository relationship with BOA, was prohibited by BOA from even applying for a PPP loan with BOA, despite meeting the statutory requirements for a PPP loan. 7. The purpose and motivation behind BOA’s discriminatory practice is transparent – it is prioritizing its balance sheet by supporting preexisting loans issued by BOA through the PPP program at the expense of small business customers who do not have a lending relationship with 8. Senators Marco Rubio (R.-Fla.) and Ben Cardin (D.-Md.) have already chastised BOA for imposing criteria not found in the law and selectively choosing who can apply. 9. BOA’s discriminatory practices are abhorrent and in violation of federal law. In this time of national need, BOA’s discriminatory practices can only be described as corporate greed. II. PARTIES 10. Named Plaintiff Profiles is a public relations firm incorporated in Maryland with its principal place of business located at 3000 Chestnut Avenue, Suite 201, Baltimore, Maryland 21211. Profiles is a small business that qualifies as an eligible applicant for a PPP loan under the CARES Act. 11. Defendant Bank of America is a corporation organized under the laws of Delaware, with its principal place of business in Charlotte, North Carolina. It is a diversified global financial services company and a bank holding company. It has transacted business in this district. 12. Defendant BNA is a national banking association headquartered in Charlotte, North Carolina. It has transacted business in this district. 13. Defendant Bank of America, as the corporate parent of BNA, which was involved 3 in the wrongful activities alleged herein, had the practical ability to direct and control the actions and operations of BNA and, in fact, did so through a variety of centralized policy and functions, and coordinated practices. III. JURISDICTION AND VENUE 14. The subject matter jurisdiction of this Court is invoked pursuant to 28 U.S.C. §§ 1331 and 1332(d). There are members of the Class who are citizens of states other than the states of citizenship of Defendants, and the amount in controversy exceeds five million ($5,000,000) dollars exclusive of interest and costs. 15. Venue lies in this District pursuant to 28 U.S.C. §§ 1391 (a) and (c), as BOA conducts a continuous course of business in the State of Maryland. IV. FACTS 16. The CARES Act is the largest economic relief bill in U.S. history and will allocate $2.2 trillion in support to individuals and businesses affected by the coronavirus pandemic and economic downturn. 17. As part of the relief provided, the CARES Act expands the eligibility criteria for borrowers to qualify for loans that are available through the SBA by adding the PPP to the SBA’s gamut of loan programs. 18. The PPP provides federally-guaranteed loans up to a maximum amount of $10 million to eligible businesses, which can be conditionally forgivable, to encourage businesses to retain employees through the COVID-19 crisis by assisting in the payment of certain operational costs. To accommodate for this SBA expansion, the CARES Act has authorized commitments to the SBA 7(a) loan program, as modified by the CARES Act, in the amount of $349 billion. 19. Eligible individuals and entities under the PPP include small businesses and eligible 4 nonprofit organization, Veterans organizations, and Tribal businesses described in the Small Business Act, as well as individuals who are self-employed or are independent contractors who meet program size standards. 20. The SBA’s interim final rule on the PPP provides the following information as to who is eligible for a PPP loan: You are eligible for a PPP loan if you have 500 or fewer employees whose principal place of residence is in the United States, or are a business that operates in a certain industry and meet the applicable SBA employee-based size standards for that industry, and: i. You are: A. A small business concern as defined in section 3 of the Small Business Act (15 USC 632), and subject to SBA’s affiliation rules under 13 CFR121.301(f) unless specifically waived in the Act; B. A tax-exempt nonprofit organization described in section 501(c)(3) of the Internal Revenue Code (IRC), a tax-exemptveterans organization described in section 501(c)(19) of the IRC, Tribal business concern described in section 31(b)(2)(C) of the Small Business Act, or any other business; and ii. You were in operation on February 15, 2020 and either had employees for whom you paid salaries and payroll taxes or paid independent contractors, as reported on a Form 1099-MISC. You are also eligible for a PPP loan if you are an individual who operates under a sole proprietorship or as an independent contractor or eligible self-employed individual, you were in operation on February 15, 2020. You must also submit such documentation as is necessary to establish eligibility such as payroll processor records, payroll tax filings, or Form 1099-MISC, or income and expenses from a sole proprietorship. For borrowers that do not have any such documentation, the borrower must provide other supporting documentation, such as bank records, sufficient to demonstrate the qualifying payroll amount. 13 CFR Part 120, pp. 5-6. 21. The “General Eligibility” section of the PPP loan lender application form lists only two requirements for a PPP loan to be approved: 5 • The Applicant has certified to the Lender that (1) it was in operation on February 15, 2020 and had employees for whom the Applicant paid salaries and payroll taxes or paid independent contractors, as reported on Form(s) 1099-MISC, (2) current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant, (3) the funds will be used to retain workers and maintain payroll or make mortgage interest payments, lease payments, and utility payments, and (4) the Applicant has not received another Paycheck Protection Program loan. • The Applicant has certified to the Lender that it (1) is an independent contractor, eligible self-employed individual, or sole proprietor or (2) employs no more than the greater of 500 or employees or, if applicable, meets the size standard in number of employees established by the SBA in 13 C.F.R. 121.201 for the Applicant’s industry. SBA Form 2484. 22. At 8:42 am on Friday, April 3, 2020 – the opening day of PPP loans – Treasury Secretary Steven Mnuchin tweeted that community banks “have already processed over 700 loans” for a total of $2.5 million. Hugh Son & Dawn Giel, Bank of America’s Small Business Loan Portal is Up, But Most Banks are having Trouble, CNBC (Apr. 3, 2020) [hereinafter “Hugh Son”], available at https://www.cnbc.com/2020/04/03/bank-of-americas-small-business-loan-portal-is- up-making-it-the-first-bank-to-accept-applications.html (last accessed Apr. 3, 2020). 23. BOA announced on the morning of April 3, 2020, that it was accepting online applications for the Government’s $349 billion PPP, becoming the first major bank to do so. See Hugh Son. 24. That same morning, BOA Chairman and CEO Brian Moynihan appeared on CNBC to tout BOA’s participation in the program and BOA’s claimed concern and interest for the welfare of small businesses in America. In fact, on BOA’s website, under the banner “We Are Here For Our Small Business Clients”, BOA proclaims that “Our Small Business Clients who may be eligible for financial relief through the federal Paycheck Protection Program can now apply online.” https://about.bankofamerica.com/promo/assistance/latest-updates-from-bank-of- 6 america-coronavirus/small-business-assistance?cm_sp=SBC-_-PPP-Thread-Redirect-_-PPP- Thread-Redirect (last accessed Apr. 3, 2020). 25. BOA’s PPP loan portal went live at about 9 am ET Friday. See Hugh Son. Within an hour, the bank had 10,000 applications for loans. Id. 26. Profiles is a “small business” as defined under the SBA guidelines, and qualifies as an eligible applicant for a PPP loan. 27. Profiles is a private banking client of BOA, maintaining a depository relationship with BOA, including Profiles’ primary checking account and other operational accounts. 28. Profiles is not a current borrower of funds from BOA. 29. In light of the COVID-19 pandemic and the current financial climate, Profiles attempted to apply for a PPP loan from BOA. 30. However, when Profiles tried to apply for a PPP loan from BOA on the morning of April 3, 2020, Profiles was electronically denied access to an application. The denial flagged the fact that Profiles did not have a preexisting lending relationship with BOA. 31. Confused and distraught, Amy Elias (“Ms. Elias”), owner of Profiles, immediately contacted Marie Conley (“Ms. Conley”), Vice President, Bank of America, Preferred & Small Business Banking, Baltimore Metro Market, via email about BOA refusing to even allow her to apply for a PPP loan. 32. Ms. Conley responded, “Amy, I’m so sorry!!!!! I just got the news today on my conference call. I can imagine how devasted you must be. I’m trying to find out where else you can go to get money. Get back to you later.” 33. Ms. Elias responded, “Are you serious? They are not going to make an exception for all of this!?”, to which Ms. Conley replied, “I asked a few minutes ago, thinking of you 7 specifically, and they said no.” 34. In disbelief, Ms. Elias wrote back, “I can not [sic] believe this.” Ms. Conley replied, “I know. . . . I’m very disappointed too.” 35. Nothing in the PPP federal law allows for the differentiation of a small business loan under the federal program between a bank’s depository clients and their lending clients. And, nothing in PPP federal law allows for BOA to determine who can participate in the federal program based on that improper criteria. 36. The purpose and motivation behind BOA’s discriminatory practice is transparent. In light of the fact that PPP is a limited funding program, BOA has decided to prioritize its balance sheet by supporting preexisting loans issued by BOA through the PPP program at the expense of small businesses that do not have a lending relationship with BOA. Had Congress intended to allow banks, like BOA, to limit access to the PPP funding program to only those small businesses that had a borrowing relationship with the bank, Congress would have said so. The purpose, however, of the PPP law is to assist all small business who qualify under the SBA rules and to provide equal access to those funds. 37. Nevertheless, BOA states on its website: Small Business clients with a business lending and a business deposit relationship at Bank of America are eligible to apply for a Paycheck Protection Program through our bank. A client’s pre- existing lending relationship with us may include small business, commercial or corporate credit cards, conventional business loan or lease, business lines of credit, business auto loans, practice solutions loans, trade and asset-based loans. Small Business owners who do not have a business lending and business deposit relationship with us should contact their current business loan provider as soon as possible, if they plan to apply for the federal Paycheck Protection Program. This is the best and fastest method for applying for federal relief, based on the U.S. Treasury requirements and guidance. 8 See https://about.bankofamerica.com/promo/assistance/latest-updates-from-bank-of-america- coronavirus/small-business-assistance?cm_sp=SBC-_-SBC-Link-_-SBC-Carousel (last accessed Apr. 3, 2020). 38. Indeed, Senator Marco Rubio criticized BOA for its decision, saying via Tweeter, “The requirement that a #SmallBusiness not just have a business account but also a loan or credit card is NOT in the law we wrote & passed or in the regulations.” See Hugh Son: 39. Likewise, Senator Ben Cardin issued the following Statement on Launch of Paycheck Protection Program: I am deeply troubled by reports of financial institutions turning away small businesses that desperately need capital through the Paycheck Protection Program. The small business provisions in the CARES Act were written to get funds into the hands of American small business owners as quickly as possible so they can keep employees on payroll and avoid financial ruin while we work to combat COVID-19. Creating artificial barriers that block businesses from 9 much-needed capital is redlining by another name. I will continue working with the administration to ensure that small businesses in every community have access to the programs created by the CARES Act, including the emergency EIDL grant program and the Paycheck Protection Program. V. CLASS ACTION ALLEGATIONS 40. Named Plaintiff incorporates each and every allegation contained in the preceding paragraphs by reference as if fully set forth herein. 41. Named Plaintiff, in accordance with Fed. R. Civ. P. 23(b)(1), (b)(2) and (b)(3), bring this action on behalf of themselves and as members of the Class defined below. 42. The Class consists of (a) all individuals or entities who qualify for a loan under the PPP and (b) who were prevented from even applying for a PPP loan by BOA solely because they do not have a pre-existing debt relationship with BOA. 43. The Class is so numerous that joinder of all members is impracticable. See Fed. R. Civ. P. 23(a)(1). The Class consists of individuals and companies, throughout the country. 44. There are questions of law and fact common to the Class. See Fed. R. Civ. P. 23(a)(2). These common questions include, but are not limited to: A. Whether Defendants wrongly imposed additional requirements for PPP loans for the purpose of protecting themselves for financial purposes; thereby, penalizing small businesses that the Government intended to benefit from PPP loans for not having a debt relationship with Defendants; B. Whether Defendants wrongly denied qualifying small businesses from applying to BOA for PPP loans; C. Whether the claims alleged herein can be stated against Defendants by this Class based on the facts alleged in this complaint; 10 45. The claims of Named Plaintiff, which arise out of BOA’s prohibition of qualifying small businesses to apply for PPP loans with BOA, are typical of the claims of the Class members. Likewise, Defendants’ defenses to the Named Plaintiff’s claims – both the myriad of legal defenses that can be anticipated, together with the factual defenses – are typical of the defenses to the Class claims. See Fed. R. Civ. P. 23(a)(3). 46. The Named Plaintiff will fairly and adequately represent and protect the interests of the Class. See Fed. R. Civ. P. 23(a)(4). The Named Plaintiff is articulate and knowledgeable about its claims, and fully able to describe them. There are no conflicts of interest between the Named Plaintiff with respect to the interests of the Class members. The Named Plaintiff, like the Class members, have suffered financial loss as a result of Defendants’ acts. Named Plaintiff has sufficient financial resources to litigate this case and further the interests of the Class without compromising them. 47. Counsel for the Named Plaintiff are well-suited to represent their interests and the interests of the Class at large. Counsel include M. Celeste Bruce, Esq., Alan M. Rifkin, Esq., Charles S. Fax, Esq., Liesel J. Schopler, Esq. and Barry L. Gogel, Esq. (Rifkin Weiner Livingston LLC). The combined experience and areas of professional concentration of these attorneys are well-suited to representation of the interests of the Class. All these lawyers practice complex civil litigation and are experienced in class action litigation. 48. Class certification is appropriate pursuant to Fed. R. Civ. P. 23(b)(1). Prosecuting separate actions would create a risk of adjudications with respect to individual Class members that, as a practical matter, would be dispositive of the interests of the other members not parties to the individual adjudications or would substantially impair or impede their ability to protect their interests. 11 49. Class certification is appropriate under Fed. R. Civ. P. 23(b)(2). BOA will continue to commit the violations alleged, and the members of the Classes and the general public will continue to be unfairly denied access to critical relief that they are entitled to under the CARES Act’s PPP. BOA has acted and refused to act on grounds that apply generally to the Class so that final injunctive relief and corresponding declaratory relief is appropriate respecting the Class as a whole. 50. Class certification is also appropriate under Fed. R. Civ. P. 23(b)(3). The questions of law or fact common to the members of the Class, described above, predominate over any questions affecting only individual members. 51. Due to the individual amount at issue as to each Class member, as well as the cost and difficulty in litigating each case separately, the Class members have insufficient interest in individually controlling the prosecution of separate actions. See Fed. R. Civ. P. 23(b)(3)(A). 52. The Class has not previously litigated the claims asserted in this complaint. See Fed. R. Civ. P. 23(b)(3)(B). 53. This Court is an appropriate forum for the litigation of the Class claims. 54. Any difficulties that might be incurred in the management of this class action are insubstantial. See Fed. R. Civ. P. 23(b)(3)(D). COUNT I Violations of the CARES Act, H.R. 748 (Against All Defendants) 55. Named Plaintiff incorporates each and every allegation contained in the preceding paragraphs by reference as if fully set forth herein. 56. The CARES Act, a $2 trillion stimulus package in response to the COVID-19 pandemic that was signed in to law on March 27, 2020, includes the PPP, which empowers lenders 12 to make available as much as $349 billion in government-guaranteed loans to cover eight weeks of payroll and other expenses. 57. There is an implied cause of action arising under the CARES Act. 58. The CARES Act, along with the SBA’s interim final rule on the PPP, provides the sole eligibility requirements to apply for a PPP loan. 59. The purpose of the CARES Act’s PPP is to assist all entities and individuals who qualify and to provide equal access to those funds. 60. In flagrant disregard for law, BOA has decided to protect itself through the PPP program – rather than intended entities and individuals – by creating an unnecessary requirement to apply for a PPP loan from it – a lending relationship with BOA. 61. Profiles met the eligibility requirements for a PPP loan. Nevertheless, BOA refused to allow Profiles to apply for a PPP loan because it did not have a lending relationship with BOA. 62. As a direct and proximate result of BOA’s wrongful actions, Profiles and Class members have suffered damages up to $10 million each due their inability to apply for a PPP loan with BOA despite being eligible therefor. COUNT II Violations of the SBA’s 7(a) Loan Program, 15 U.S.C. 636(a) (Against All Defendants) 63. Named Plaintiff incorporates each and every allegation contained in the preceding paragraphs by reference as if fully set forth herein. 64. The SBA’s 7(a) loan program is designed to help start-up and existing small businesses obtain financing when they might not otherwise be eligible for business loans. Under the program, a participating lender executes the loan with the borrower according to specific SBA requirements. 13 65. The PPP is part of the SBA’s 7(a) loan program. 66. There is an implied cause of action arising under the SBA’s 7(a) loan program. 67. In flagrant disregard for law, BOA has decided to protect itself through the SBA’s 7(a) PPP program – rather than intended entities and individuals – by creating an unnecessary requirement to apply for a PPP loan from it – a lending relationship with BOA. 68. Profiles met the eligibility requirements for a PPP loan. Nevertheless, BOA refused to allow Profiles to apply for a PPP loan because it did not have a lending relationship with BOA. 69. As a direct and proximate result of BOA’s wrongful actions, Profiles and Class members have suffered damages up to $10 million each due their inability to apply for a PPP loan with BOA despite being eligible therefor. COUNT III Declaratory Judgment and Preliminary and Permanent Injunction Pursuant to 28 U.S.C. §§ 2201 and 2202 (Against All Defendants) 70. Named Plaintiff incorporates each and every allegation contained in the preceding paragraphs by reference as if fully set forth herein. 71. There is an actual controversy between Defendants and the Class concerning the application of the PPP. 72. Pursuant to 28 U.S.C. § 2201 this Court may “declare the rights and legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought.” 73. BOA wrongfully prevented entities and individuals from applying for PPP loans from BOA, despite meeting all federally-imposed PPP loan eligibility requirements, for lack of a lending relationship with BOA. 74. Accordingly, Profiles and members of the Class seek a declaration that BOA’s requirement that applicants have a lending relationship with BOA in order to apply for a PPP loan 14 be declared void, invalid and unenforceable. 75. Named Plaintiff and the Class are likely to succeed on the merits of their causes of action set forth in Counts I-III. 76. Named Plaintiff and the Class have suffered and will continue to suffer irreparable harm in the absence of injunctive relief enjoining BOA from depriving Named Plaintiff and the Class from the rights and benefits bestowed by the CARES Act and its regulations, and do not have an adequate remedy at law. 77. BOA will suffer no injury if the preliminary injunctive relief sought by the Named Plaintiff and the Class is granted. 78. The public interest will be served by the granting preliminary injunctive relief sought by the Named Plaintiff and the Class. PRAYER FOR RELIEF WHEREFORE, Named Plaintiff and the Class pray as follows: A. Certify this action as a class action, pursuant to Fed. R. Civ. P. 23, designate Named Plaintiff as the Class representatives, and counsel for Named Plaintiff as Class Counsel; B. Preliminarily and permanently enjoin BOA from engaging in the wrongful and unlawful conduct alleged herein, viz., depriving Named Plaintiff and the Class from the rights and benefits bestowed by the CARES Act and its regulations; C. Direct BOA to make available to Named Plaintiff and the Class all of the rights and benefits under the CARES Act and its regulations; D. Award damages, including compensatory, exemplary, and statutory damages, to Named Plaintiff and the Class in an amount to be determined at trial, for the acts complained of 15 E. Award Named Plaintiff and the Class their expenses and costs of suit, including reasonable attorneys’ fees to the extent provided by law; F. Award Named Plaintiff and the Class pre-judgment and post-judgment interest at the highest legal rate to the extent provided by law; and G. Grant all other and further relief to which Named Plaintiff and the Class are entitled by law or in equity as may be determined by the Court to be just, equitable and proper. Respectfully submitted, /S/ M. Celeste Bruce M. Celeste Bruce, Maryland Federal Bar No. 10710 Charles S. Fax, Maryland Federal Bar No. 2490 Rifkin Weiner Livingston LLC 7979 Old Georgetown Road, Suite 400 Bethesda, Maryland 20814 Telephone: (301) 951-0150 Telecopier: (301) 951-0172 Cell Phone: (410) 274-1453 Email: cbruce@rwllaw.com; cfax@rwllaw.com Alan M. Rifkin, Maryland Federal Bar No. 11562 Liesel J. Schopler, Maryland Federal Bar No. 17280 Rifkin Weiner Livingston LLC 225 Duke of Gloucester Street Annapolis, Maryland 21401 Telephone: (410) 269-5066 Telecopier: (410) 269-1235 Email: arifkin@rwllaw.com; lschopler@rwlls.com Barry L. Gogel, Maryland Federal Bar No. 25495 2002 Clipper Park Road, Suite 108 Baltimore, Maryland 21211 Telephone: (410) 769-8080 Telecopier: (410) 769-8811 Email: bgogel@rwllaw.com April 3, 2020 16

healthcare

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IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS SAN ANTONIO DIVISION RYAN WALKER, On Behalf of Himself and All Others Similarly Situated, Plaintiff, CIVIL ACTION NO. 5:15-cv-169 V. TRINIDAD DRILLING, LP JURY TRIAL DEMANDED Defendant. COLLECTIVE ACTION § § § § § § § § § § § PLAINTIFF’S ORIGINAL COMPLAINT Plaintiff, RYAN WALKER (“Walker” or “Plaintiff”), on behalf of himself and all other similarly situated employees, files this Complaint against TRINIDAD DRILLING, LP (“Trinidad” or “Defendant”), showing in support as follows: I. NATURE OF THE CASE 1. This is a civil action brought by Plaintiff pursuant to the federal Fair Labor Standards Act, 29 U.S.C. §§ 201-219, and the federal Portal-to-Portal Pay Act, 29 U.S.C. §§ 251-262, (collectively “FLSA”) for Defendant’s failure to pay Plaintiff time and one-half his regular rate of pay for all hours worked over 40 during each seven day workweek. 2. Plaintiff files this lawsuit on behalf of himself and as a FLSA collective action on behalf of all other similarly situated individuals who worked for Defendant as oilfield workers, were paid an hourly rate of pay, and like Plaintiff, were not paid time and one-half their respective regular rates of pay for all hours worked over 40 in each seven day workweek in the time period of three years preceding the date this lawsuit was filed and forward. 3. Plaintiff and the collective action members seek all damages available under the FLSA, including back wages, liquidated damages, legal fees, costs and post-judgment interest. II. THE PARTIES, JURISDICTION AND VENUE A. Plaintiff Ryan Walker 4. Walker is a natural person who resides in Van Zandt County, Texas. He has standing to file this lawsuit. 5. Walker was employed by Defendant at./from/through Defendant’s yard/site of employment located at or near 4948 East Highway 199, Springtown, Texas. 6. Walker is a former employee of Defendant and was employed by Defendant for approximately one year and six months with his last date of employment with Defendant being on or about January 13, 2015. B. Collective Action Members 7. The putative collective action members are all current and/or former hourly oilfield worker employees of Defendant who are/were not paid time and one-half their respective regular rates of pay for all hours worked over 40 during each seven day workweek. While their precise job duties might vary somewhat as oilfield worker employees (i.e. driller, derrick hand, motor man, floor hand, etc.), those differences do not matter for purposes of determining their entitlement to overtime pay. Because Defendant did not pay overtime premium compensation to its hourly oilfield worker employees who routinely worked in excess of 40 hours per workweek, Plaintiff and the putative collective action members are all similarly situated within the meaning of Section 216(b) of the FLSA. 8. The relevant time period for the claims of the putative collective action members is three years preceding the date this lawsuit was filed and forward. C. Defendant Trinidad Drilling, LP 9. Defendant is a foreign limited partnership organized under the laws of the State of Delaware. 10. The general partner of Defendant is Trinidad Drilling, LLC. 11. During all times relevant to this lawsuit, Defendant has done business in the State of Texas. 12. Defendant maintains multiple district offices/yards in Texas from which drilling rig workers, support personnel, supplies and equipment are based and dispatched on a variety of work projects, including oil and/or gas exploration and production projects. Those district offices/yards include locations in San Antonio, Texas, Springtown, Texas and Midland, Texas. 13. Defendant has or had a fully operational district office/yard in Bexar County, Texas located at or near 3598 South WW White Road, San Antonio, Texas. Putative class members in this lawsuit work/worked at/from/through that yard/site of employment. 14. At all times relevant to this lawsuit, Defendant has been an “enterprise engaged in commerce" as defined by the FLSA. 15. At all times relevant to this lawsuit, Defendant employed, and continues to employ, two or more employees. 16. At all times relevant to this lawsuit, Defendant employed two or more employees who engaged in commerce and/or who handled, sold or otherwise worked on goods or materials that have been moved in or produced for commerce by any person. 17. For example, Defendant employed two or more employees who regularly engaged in commerce in their daily work. Examples of that commerce include drilling rig work offered/provided by Defendant to customers in Texas and states other than Texas and communications by phone, mail, and internet with customers/prospective customers in Texas and states other than Texas. 18. Furthermore, Defendant employed two or more employees who regularly handled, sold or otherwise worked on goods and/or materials in their daily work that were moved in and/or produced for commerce. Examples of such goods and/or materials include tools, vehicles, equipment and supplies/materials used in connection with drilling rig operations. 19. On information and belief, at all times relevant to this lawsuit, Defendant has had annual gross sales or business volume in excess of $500,000. 20. Defendant may be served with summons through its registered agent, Corporation Service Company d/b/a CSC – Lawyers Incorporating Service Company, 211 East 7th Street, Suite 620, Austin, TX 78701-3218. D. Jurisdiction and Venue 21. The Court has personal jurisdiction over Defendant based on both general and specific jurisdiction. 22. During all times relevant to this lawsuit, Defendant has done business in the State of Texas and continues to do business in the State of Texas. 23. The Court has subject matter jurisdiction over this case based on federal question jurisdiction, 28 U.S.C. § 1331, because Plaintiff bases his claims on federal law, namely the 24. Venue is proper in the United States District Court for the Western District of Texas because a substantial part of the events giving rise to the claims in this lawsuit occurred in this judicial district. As previously identified, Defendant has one or more district offices/yards within this District and putative class members work/worked out of a yard of Defendant located within this District. 25. Venue is proper in the San Antonio Division of the United States District Court for the Western District of Texas because, as previously identified, Defendant maintains business operations within the San Antonio Division and a substantial part of the events giving rise to the claims in this lawsuit occurred in the San Antonio Division. III. FACTUAL BACKGROUND 26. Plaintiff incorporates the preceding paragraphs by reference as if set forth fully in this section. 27. Defendant employs/employed numerous oilfield workers in connection with its drilling operations throughout locations in the United States. Those workers work/worked on and/or in support of Defendant’s drilling rigs which drill/drilled for oil and or natural gas in locations such as the Bakken Shale, Marcellus Shale, Permian Basin, Eagle Ford Shale and others. 28. Defendant’s drilling rigs operate/operated from numerous yards/sites of employment around the United States, including yards/sites of employment in or around San Antonio, Texas and Springtown, Texas. Oilfield workers worked at/from/through those yards/sites of employment. 29. Plaintiff was an hourly employee who worked on Defendant’s drilling rigs. Plaintiff routinely worked in excess of 40 hours in a seven day workweek when working hitches that were typically two weeks on and two weeks off. 30. Plaintiff was a non-exempt employee of Defendant pursuant to the FLSA. When he worked more than 40 hours per seven day workweek, he was entitled to receive overtime premium compensation at the rate of one and one-half times his regular rate of pay for all such hours worked over 40. 31. In addition to receiving hourly pay, Plaintiff also received additional remuneration, including oil base mud pay, safety incentive bonuses, and so-called per diem pay. 32. Although Defendant paid Plaintiff overtime premium compensation for on-the- clock work at one and one-half times his hourly rate of pay, Defendant failed to include all remuneration required by the FLSA in calculating Plaintiff’s regular rate of pay. This resulted in Plaintiff not being paid all overtime compensation owed by Defendant. 33. Plaintiff worked with numerous other hourly oilfield worker employees of Defendant. Like Plaintiff, those employees, before, during and after Plaintiff’s dates of employment, routinely work/worked in excess of 40 hours per workweek, are/were entitled to overtime premium compensation at one and one-half times their respective regular rates of pay for all overtime hours worked, are/were paid additional remuneration, such as oil base mud pay, safety incentive bonuses, and so-called per diem pay, in addition to their hourly pay, and did not/do not receive all overtime compensation owed by Defendant due to Defendant not including all remuneration required by the FLSA in their respective regular rates of pay. 34. During times relevant, Defendant operates/operated numerous other yards/sites of employment throughout the United States at/from/through which it conducted drilling rig operations other than the yards/sites of employment in and around San Antonio, Texas and Springtown, Texas. On information and belief, Defendant employed, and continues to employee, hourly oilfield workers at/from/through those yards/sites who are similarly situated to Plaintiff and who, despite being entitled to overtime premium compensation at one and one-half times their regular rates of pay for all hours worked over 40 in a workweek as FLSA non-exempt employees, were not paid all overtime compensation owed due to Defendant’s failure to include all remuneration required by the FLSA in their respective regular rates of pay. 35. Although Defendant has recently terminated many employees, on information and belief, it continues to employ hourly oilfield workers that are subject to the aforementioned practice/policy to not include all remuneration required by the FLSA in their respective regular rate of pay when calculating the overtime wages owed. IV. CONTROLLING LEGAL RULES 36. The FLSA generally requires that an employer employing an employee for a workweek exceeding 40 hours must compensate the employee for hours worked over 40 “at a rate not less than one and one-half times the regular rate of pay.” 29 U.S.C. § 207(a)(1). 37. “Employ” includes to suffer or permit work. 29 U.S.C. § 203(g). 38. “[I]t is the duty of the management to exercise its control and see that the work is not performed if it does not want it to be performed. It cannot sit back and accept the benefits without compensating for them. The mere promulgation of a rule against such work is not enough. Management has the power to enforce the rule and must make every effort to do so.” 29 C.F.R. § 785.13; accord Newton v. City of Henderson, 47 F.3d 746, 748 (5th Cir. 1995) (same). 39. Federal law requires employers to make and keep accurate and detailed payroll data for non-exempt employees. 29 U.S.C. § 211(c); 29 C.F.R. § 516.2. Amongst other things, the regulations require employers to make and keep payroll records showing data such as the employee’s name, social security number, occupation, time of day and day of week which the workweek begins, regular hourly rate of pay for any week in which overtime pay is due, hours worked each workday and total hours worked each workweek, total daily or weekly straight time earnings, total premium pay for overtime hours, total wages paid each pay period and date of payment and pay period covered by the payment, and records of remedial payments. 29 C.F.R. § 516.2(a)&(b). Employers are required to maintain the foregoing data for a minimum of three years. 29 C.F.R. § 516.5. 40. The FLSA defines the “regular rate” as including “all remuneration for employment paid to, or on behalf of, the employee … .” 29 U.S.C. § 207(e). 41. With a few limited exceptions, all remuneration given to an employee must be included in the employee’s regular rate calculation. 29 U.S.C. § 207(e); 29 C.F.R. § 778.108; accord Allen v. Board of Pub. Educ. For Bibb Cty., 495 F. 3d 1306, 1311 (11th Cir. 2007); see also Johnson v. Big Lots Stores, Inc., 604 F. Supp. 2d 903, 927 (E.D. La. 2009). 42. Failing to pay the required overtime premium for hours worked over 40 in a workweek is a violation of the FLSA. 29 U.S.C. § 216. V. FLSA CLAIMS 43. Plaintiff incorporates the preceding paragraphs by reference as if set forth fully in this section. 44. All conditions precedent to this suit, if any, have been fulfilled. 45. At relevant times, Defendant is/was an eligible and covered employer under the FLSA. 29 U.S.C. § 203(d). 46. At relevant times, Defendant is/has been an enterprise engaged in commerce under the FLSA. 29 U.S.C. § 203(s)(1)(A). 47. Plaintiff and putative collective action members are/were employees of Defendant pursuant to the FLSA. 29 U.S.C. § 203(e). 48. Plaintiff and the putative collective action members are/were paid an hourly rate of pay by Defendant. 49. At material times, Plaintiff and the putative collective action members regularly work/worked in excess of 40 hours per seven-day workweek as employees of Defendant. 50. Defendant is/was required to pay Plaintiff and the putative collective action members time and one-half their respective regular rates of pay for all hours worked over 40 in each relevant seven day workweek. 29 U.S.C. § 207(a)(1). 51. Defendant failed to pay Plaintiff and putative collective action members overtime compensation at one and one-half times their respective regular rates of pay for all hours worked over 40 in each and every seven-day workweek during the time period relevant to this lawsuit. 52. The putative collective action members are/were similarly situated to the Plaintiff and to each other under the FLSA. 29 U.S.C. § 203(e). 53. Defendant’s violations of the FLSA are/were willful within the meaning of 29 U.S.C. § 255(a). At all material times, Defendant was aware that Plaintiff and the putative collective action members were not paid time and one-half their respective regular rates of pay for all hours worked over 40 in a seven day workweek. Plaintiff and the putative collective action members specifically plead recovery for the time period of three years preceding the date this lawsuit was filed forward for their FLSA claims. 54. Plaintiff and the putative collective action members seek all damages available for Defendant’s failure to timely pay all overtime wages owed. VI. FLSA COLLECTIVE ACTION 55. Where, as here, the employer’s actions or policies were effectuated on a companywide basis, notice may be sent to all similarly situated persons on a companywide basis. See Ryan v. Staff Care, Inc., 497 F. Supp. 2d 820, 825 (N.D. Tex. 2007) (certifying nationwide collective action in FLSA case); see also, Jones v. SuperMedia Inc., 281 F.R.D. 282, 290 (N.D. Tex. 2012) (same). 56. Plaintiff seeks to represent a collective action under 29 U.S.C. § 216(b) on behalf of himself and all current and former hourly paid oilfield workers who are/were employed by Defendant and who are/were not paid all overtime compensation owed for all hours worked over 40 in each and every workweek due to Defendant’s failure to include all remuneration required by the FLSA in their respective regular rates of pay. The relevant time period for this collective action is three years preceding the date this lawsuit was filed and forward, or such other time period deemed appropriate by the Court. 57. Plaintiff reserves the right to establish sub-classes and/or modify class notice language as appropriate in any collective action certification motion or other proceeding. 58. Plaintiff further reserves the right to amend the definition of the putative class, or sub classes therein, if discovery and further investigation reveal that the putative class should be expanded or otherwise modified. VII. JURY DEMAND 59. Plaintiff demands a jury trial. VIII. DAMAGES AND PRAYER 60. Plaintiff asks that the Court issue a summons for Defendant to appear and answer, and that Plaintiff and the Collective Action Members be awarded a judgment against Defendant or order(s) from the Court for the following: a. An order conditionally certifying this case as a FLSA collective action and requiring notice to be issued to all putative collective action members; b. All damages allowed by the FLSA, including back overtime wages; c. Liquidated damages in an amount equal to back FLSA mandated wages; d. Legal fees; e. Costs; f. Post-judgment interest; g. All other relief to which Plaintiff and the Collective Action Members are entitled. Respectfully submitted, By: s/ Allen R. Vaught Allen R. Vaught Attorney-In-Charge TX Bar No. 24004966 MS Bar No. 101695 Baron & Budd, P.C. 3102 Oak Lawn Avenue, Suite 1100 Dallas, Texas 75219 (214) 521-3605 – Telephone (214) 520-1181 – Facsimile avaught@baronbudd.com ATTORNEYS FOR PLAINTIFF

employment & labor

u9GRQYoBcOMgZ5QmZt5I

RETURN DATE: AUGUST03, 2021 : SUPERIOR COURT KRYSZTOF KOSIERADZKI, ET AL. Plaintiffs JUDICIAL DISTRICT OF WATERBURY V. : AT WATERBURY THE CONNECTICUT LIGHT AND POWER D/B/A EVERSOURCE ENERGY JUNE 28, 2021 Defendant : COMPLAINT l. Theplaintiffs Krysztof Kosieradzki; Michael O’Neill; and Stan Baker d/b/a Acupuncture of Greater Hartford bring this class action on behalf of themselves and other domiciled Connecticut homeowners and domiciled Connecticut business owners who wereelectrical service customers of the defendant, The Connecticut Light and Power Companyd/b/a Eversource Energy (“CL&P”), and wholost their electrical power as described below. 2. Plaintiffs bring this action as a class action on behalf ofall primary residents and/or citizens domiciled solely in the State of Connecticut pursuant to Practice Book §9-7 et seq. PARTIES 3, Plaintiffs are homeowners, businessentities and/or individuals over the age of 18 and are residents and/orcitizens domiciled solely in Connecticut. They bring this action on their own behalf and on behalf of a class all primary residents of Connecticut domiciled solely in the state whoseprincipal residence and principal business are located in Connecticut and of others similarly situated. 4. Krysztof Kosieradzki (hereinafter “Krystof’”), is a homeowner domiciled in Connecticut whoseprimary residenceis located at 52 Littlebrook Xing in Farmington, Connecticut; and whoseresidence is poweredbyelectricity purchased from The Connecticut Light and Power Company d/b/a/ Eversource Energy (“CL&P”).; Michael O’Neill is a homeowner domiciled in Connecticut whose primary residenceis located at 20 Highland Terrace, New Britain, Connecticut; and whoseresidence is powered byelectricity purchased from The Connecticut Light and Power Company d/b/a/ Eversource Energy (““CL&P”’). 5. Acupuncture of Greater Hartford owned and operated by Stan Baker, (hereinafter “Baker’’) a domiciliary of the State of Connecticut and whose business is a company organized and existing under the laws of the State of Connecticut with a principal place of business in West Hartford, Connecticut; and whose business is powered byelectricity purchased from The Connecticut Light and Power Company d/b/a/ Eversource Energy (“CL&P”). Baker engages in the business of providing services of Acupuncture and Chineseherbalist. 6. The Connecticut Light and Power Companyd/b/a Eversource Energy (““CL&P”) is a specially chartered Connecticut public service company as defined by C.G.S. § 16-1(3), with its principal place ofbusiness located at 107 Selden Street, Berlin, Connecticut that provides electricity to much of Connecticut. The largest utility company in Connecticut, The Connecticut Light and Power Company d/b/a/ Eversource Energy (“CL&P”), according toits official website, provideselectricity to 1.2 million customers in 149 cities and townsin thestate. 7. The Connecticut Light and Power Company d/b/a/ Eversource Energy (“CL&P”) has an effective monopolyin the electricity markets it serves in Connecticut because there are few,if any, competing electricity providers from which customers can choose. THE TROPICAL STORM 8. On or about August 4, 2020, a tropical storm (hereinafter “tropical storm”or “the storm’), now known as Tropical Storm Isaias, made landfall and directly hit the State of Connecticut. This tropical storm led to massive power outages throughout the state. Most of those without power were customers of The Connecticut Light and Power Company d/b/a/ Eversource Energy (““CL&P”). PLAINTIFFS’ TRANSACTIONS Krysztof Kosieradzki 9. Since owning and domiciled at the residence at 52 Littlebrook Xing andall times mentioned herein, Krystof Kosieradzki (hereinafter “Krystof”) has purchasedits electricity solely from The Connecticut Light and Power Companyd/b/a/ Eversource Energy (““CL&P”). 10. Onor about August 4, 2020, Krysztof Kosieradzki lost their power. Krysztof Kosieradzki has not had their powerrestored fora time period no less than five days since losing power on August4, 2020. 11. Asaresult of being without electricity during the aforementioned time, Krysztof was unable to continue living underthe conditionsat that time in their primary residence. Unable to run its electrically-powered equipment, Krystof has been unable to maintain their daily life. In addition, the power outage shutoff the refrigerator causing a great deal of food to spoil. All other appliances operating on electrical power have not been able to work rendering Krystof’s residence undersaid living conditions uninhabitable. Acupuncture of Greater Hartford (Baker) 12. At all times mentioned herein, Baker purchasedits electricity solely from The Connecticut Light and Power Companyd/b/a/ Eversource Energy (““CL&P”)for usein its business, Acupuncture of Greater Hartford (hereinafter “Baker”) in West Hartford, Connecticut. 13. Onor about August 4, 2020, Bakerlost its power. Baker did not have its power restored for a time period noless than five days since losing power on August 4, 2020. 14. Asaresult of being without electricity during the aforementioned time, Baker was unable to conduct its regular business and operate Acupuncture of Greater Hartford. Unable to runits electrically-powered equipment, Baker had to remain closed and cancelled many appointments, causing it to suffer lost revenue, lost profits and economic damages. Michael O’Neill 15. Since owning and domiciled at the residence at 20 Highland Terrace, New Britain, Connecticut and all times mentioned herein, Michael O’Neill (hereinafter “O’Neill”) has purchasedits electricity solely from The Connecticut Light and Power Company d/b/a/ Eversource Energy (“CL&P”). 16. On or about August 4, 2020, Michael O’Neill lost their power. O’Neill has not hadtheir powerrestored for a time period no less than five days since losing power on August 4, 2020. 17. Asaresult of being without electricity during the aforementioned time, O’Neill was unable to continue living under the conditionsat that time in their primary residence. Unable to run its electrically-powered equipment, O’Neill has been unable to maintain their daily life. In addition, the power outage shutoff the refrigerator causing a great deal of food to spoil. All other appliances operating on electrical power have not been able to work rendering O’Neill’s residence undersaid living conditions uninhabitable. CLASS ALLEGATIONS 18. Plaintiffs bring this action as a class action. The class is comprised of Connecticut residents domiciled solely in Connecticut who are homeowners and business owners who are similarlysituated to the plaintiffs in that they: a. are domiciled homeowners in Connecticut; and b. Connecticut business owners who are domiciled in the State of Connecticut and operate their business in Connecticut; C. are customersof the defendant; and d. lost their electrical power following the tropical storm for an unreasonable period oftime. 19. Plaintiffs are unable to state the precise numberof potential class members, becausethat information is exclusively in the possession of The Connecticut Light and Power Company d/b/a/ Eversource Energy (“CL&P”) and readily available through discovery. Plaintiffs believe, and onthatbasis allege, that the potential class numberis likely in excess of one thousand Connecticut domiciled (home and business) owners based uponthe size of the area The Connecticut Light and Power Companyd/b/a/ Eversource Energy (“CL&P”) covers andits status as the largest electrical providerin thestate. 20. There is a unity of interest among the membersofthe proposedclassin that there are questions of law and fact commonto the proposed class that predominate over questions affecting only individual members. 21. Plaintiffs’ claims are typical of those of the class they seek to represent. 22. Plaintiffs and the proposedclass are represented by counsel experienced in both consumer protection andclass actionlitigation, and plaintiffs have no known conflicts with other members of the proposedclass. 23. The common questions of law and fact predominate over any individual questionsthat mayarise, and any individual questions are subordinate to the commonquestions concerning whether the defendant wasnegligent, reckless, and/or in breach of contract with respect to the class members. 24. Acclass action is superior to other methodsfor the fair and efficient adjudication of the controversy. Because the claims ofthe individual class membersare relatively small compared to the expense and burdenoflitigation, it would be impracticable and economically unfeasible for class membersto seek redress individually. The prosecution of separate actions by the individual class members, even if possible or likely, would create a risk of inconsistent or varying adjudications with respect to the claims asserted by individual class members, and could create incompatible standards of conduct for The Connecticut Light and Power Company d/b/a/ Eversource Energy (““CL&P”). FIRST COUNT (NEGLIGENCE) 25. The damages suffered by the plaintiffs were proximately caused by the defendant’s failure to supply the plaintiffs with electricity, which resulted from the defendant’s negligence. The defendant was negligent in one or more of the following ways: a. IN THATpriorto the storm it did not take appropriate and effective measures to prevent the interruption ofelectrical service caused by a storm; b. IN THATpriorto the storm it did not adequately trim trees to prevent trees and branches from falling on powerlines as a result of a storm; c. IN THATpriorto the storm it did not keepits electrical distribution equipmentin proper condition; d. IN THATpriorto the storm it did not take advantage of available technologies and safeguards, in use by otherutility companies, that can prevent and/or reduce the incidence and/or severity of power outages caused by storms and otherwise; e. IN THATprior to the storm, despite being aware ofthe risk of inclement weather due to weather forecasts as well as it being close to winter in Connecticut,in which The Connecticut Light and Power Companyd/b/a/ Eversource Energy (“CL&P”) has operated for over 90 years, it did not take appropriate and effective measures to have adequate personnel, equipment and other resources ready and prepared to effectively deal with weather-related emergencies on a timely basis; f. IN THATprior to the storm it did not have backup and/or supplemental work crews ready and available to be deployed for electrical power outage restoration efforts; g. IN THATpriorto the storm it did not have adequate backup powersources ready and available to be deployed in connection with power outages; h. IN THATpriorto the storm it did not have in place an overall and/or comprehensive plan to prevent and/or minimizethe risk of power outage emergencies and/or to respond to power outage emergencies; i. IN THATit did not comply with regulations promulgated by the Connecticut Public Utilities Regulation Authority (PURA); j. IN THATafter the power outages caused by the storm occurred,it failed to take timely and effective action to restore power, including but not limited to failing to deploy sufficient manpower and equipmentto restore poweron a timely basis; and k. IN THATit had notfully paid outside companies which were neededto assist in the powerrestoration efforts and as a result those companies refused to assist in the powerrestoration efforts and/or were delayed in assisting in the power restoration efforts. SECOND COUNT (BREACH OF CONTRACT) 1-25. Paragraphs 1-25 of the First Count are hereby made corresponding and incorporated Paragraphs | through 25 ofthis, the Second Count, as fully set forth hereinafter. 26. — Atall times mentioned herein, the plaintiffs and defendant were parties to a contract the terms of which included that the defendant would supply the plaintiffs with continuous electricity and the plaintiffs would pay the defendantfor that electricity. 27. Byfailing to provide electricity to the plaintiffs for the aforementioned period, the defendant breached its contract with the plaintiffs. 28. Asa result of the defendant’s aforementioned breach of contract, the plaintiffs were unable to run their residences as well as their businesses and suffered lost revenue and economic damages. THIRD COUNT (RECKLESSNESS) 1-25. Paragraphs 1-25 of the First Count are hereby made corresponding and incorporated Paragraphs | through 25 ofthis, the Third Count, as fully set forth hereinafter. 26.| The damagessuffered by the plaintiffs were proximately caused by the defendant’s recklessness in one or moreof the following ways: a. IN THATwell in advance of the subject storm it knew it was unprepared to deal with a large-scale power outage emergency that would cause it customers, including but not limited to the plaintiffs, to suffer losses and damages, yet despite that knowledge failed to take appropriate and effective action to correct that unpreparedness; and b. IN THATafter the storm and the massive poweroutages, it made a conscious and fully informed decision not to undertake all reasonable measures to restore powerto all of its customers, including but not limited to the plaintiff, as soon as possible, despite knowing full well the losses and damagesthat its customers would be caused to suffer by that decision. FOURTH COUNT (VIOLATION OF CONNECTICUT UNFAIR TRADE PRACTICES ACT) 1-25. Paragraphs 1-25 of the First Count are hereby made corresponding and incorporated Paragraphs 1-25 of the Forth Count, as fully set forth hereinafter. 26. The actions of the defendant were donein the course of“trade” and “commerce”as defined in Sec. 42-110a(4) of the Connecticut General Statutes, the Connecticut Unfair Trade Practices Act. 27. The defendant’s, The Connecticut Light and Power Company’s d/b/a/ Eversource Energy’s (“CL&P’s”) failure to provide electricity and/or proper and timely remediation and restoration of power and/or non compliance with PURA regulations from this tropical storm and prior tropical storms in Connecticut, as well as artificially inflate wholesale and retail delivery powerprices as a consequenceofthe tropical storms constituted unfair trade practices and thereby violated Sec.42-110b of the Connecticut General Statutes. 28. The aforesaid conduct of The Connecticut Light and Power Company d/b/a/ Eversource Energy’s (“CL&P”) inadequate storm response, prior to and subsequentto this tropical storm and from prior tropical storms that have made landfall in Connecticut, offends public policy and was immoral and/or unethical and/or oppressive and/or unscrupulous and caused substantial injury to the plaintiffs and as such constitutes unfair practices in violation ofthe Connecticut Unfair Trade Practices Act, C.G.S. section 42-110aet seq. WHEREFORE, THE PLAINTIFFS CLAIM: A. MONETARY DAMAGES(AS TO COUNTS1-4); B. PUNITIVE DAMAGES, ATTORNEY FEES AND COSTS OF SUIT (AS TO COUNTS3 AND4). C. SUCH OTHER RELIEF AS THE COURT MAYIN ITS DISCRETION DEEM EQUITABLE AND PROPER. Dated in Forestville, Connecticut this 28" day of June 2021. THE PLAINTIFFS By: (s/Edward A. Jazlowiecki Edward A. Jazlowiecki Jazlowiecki & Jazlowiecki 11 Lincoln Ave., Suite 6 Forestville, CT 06010 Tel: (860) 674-8000 Fax: (860) 585-1561 Juris No. 419440 Please enter the Appearance of: Jazlowiecki & Jazlowiecki E A. Jazlowi Edward A. Jazlowiecki Asattorney for the plaintiffs in the above matter. SUPERIOR COURT RETURN DATE: AUGUST03,2021 KRYSZTOF KOSIERADZKI, ET AL. Plaintiffs JUDICIAL DISTRICT OF WATERBURY AT WATERBURY THE CONNECTICUT LIGHT AND JUNE 28, 2021 POWER D/B/A EVERSOURCE ENERGY Defendant NTIN AN TATEMENT OFA The amount in demand is more than $1.5 billion dollars, exclusive of interest and costs. THE PLAINTIFFS ls/ Edward A, Jazloweicki By: Edward A. Jazlowiecki Jazlowiecki & Jazlowiecki 11 Lincoln Ave., Suite 6 Forestville, CT 06010 Tel: (860) 674-8000 Fax: (860) 585-1561 Juris No. 419440

products liability and mass tort

NtRjD4cBD5gMZwczVpLo

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x EUGENE DUNCAN AND ON BEHALF OF ALL OTHER PERSONS SIMILARLY SITUATED, 1:19-cv-3333 Plaintiffs, v. ECF CASE No.: _________________ CLASS ACTION COMPLAINT JURY TRIAL DEMANDED THE FARM ENTERPRISES, LLC, Defendant. : : : : : : : : : : : : - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x INTRODUCTION 1. Plaintiff, EUGENE DUNCAN, on behalf of himself and others similarly situated, asserts the following claims against Defendant, THE FARM ENTERPRISES, LLC, as follows. 2. Plaintiff is a visually-impaired and legally blind person who requires screen-reading software to read website content using his computer. Plaintiff uses the terms “blind” or “visually-impaired” to refer to all people with visual impairments who meet the legal definition of blindness in that they have a visual acuity with correction of less than or equal to 20 x 200. Some blind people who meet their definition have limited vision. Others have no vision. 3. Based on a 2010 U.S. Census Bureau report, approximately 8.1 million people in the United States are visually impaired, including 2.0 million who are blind, and according to the American Foundation for the Blind’s 2015 report, approximately 400,000 visually impaired persons live in the State of New York. 4. Plaintiff brings his civil rights action against THE FARM ENTERPRISES, LLC, (“Defendant” or “Company”) for its failure to design, construct, maintain, and operate its website to be fully accessible to and independently usable by Plaintiff and other blind or visually-impaired people. Defendant’s denial of full and equal access to its website, and therefore denial of its products and services offered thereby and in conjunction with its physical locations, is a violation of Plaintiff’s rights under the Americans with Disabilities Act (“ADA”). 5. Plaintiff is being deterred from patronizing the Defendant’s physical locations due to Defendant’s discrimination by failing to maintain access to the Website for visually-impaired consumers. Plaintiff intends to return to Defendant’s Website and rental space location once Defendant ceases its on-going discriminatory practices. 6. Because Defendant’s website, WWW.THEFARMSOHO.COM (the “Website” or “Defendant’s website”), is not equally accessible to blind and visually- impaired consumers, it violates the ADA. Plaintiff seeks a permanent injunction to cause a change in Defendant’s corporate policies, practices, and procedures so that Defendant’s website will become and remain accessible to blind and visually-impaired consumers. JURISDICTION AND VENUE 7. The Court has subject-matter jurisdiction over this action under 28 U.S.C. § 1331 and 42 U.S.C. § 12181, as Plaintiff’s claims arise under Title III of the ADA, 42 U.S.C. § 12181, et seq., and 28 U.S.C. § 1332. 8. The Court has supplemental jurisdiction under 28 U.S.C. § 1367 over Plaintiff’s New York State Human Rights Law, N.Y. Exec. Law Article 15, -2- (“NYSHRL”) and New York City Human Rights Law, N.Y.C. Admin. Code § 8-101 et seq., (“NYCHRL”) claims. 9. Venue is proper in this district under 28 U.S.C. §1391(b)(1) and (2) because Defendant is subject to personal jurisdiction in this District and a substantial portion of the conduct complained of herein occurred in this District. 10. Defendant is subject to personal jurisdiction in this District. Defendant has been and is committing the acts or omissions alleged herein in the Southern District of New York that caused injury, and violated rights the ADA prescribes to Plaintiff and to other blind and other visually impaired-consumers. A substantial part of the acts and omissions giving rise to Plaintiff’s claims occurred in the in this District: on several separate occasions, Plaintiff has been denied the full use and enjoyment of the facilities, goods, and services of Defendant’s Website while attempting to access the Defendant’s website from his home. These access barriers that Plaintiff encountered have caused a denial of Plaintiff’s full and equal access multiple times in the past, and now deter Plaintiff on a regular basis from visiting or returning to Defendant’s brick-and mortar locations and Website. This includes, the ability to view pricing and purchase day passes, details about membership options and benefits online and in Defendant’s locations, to obtain information about the workspace locations, view event layout and options, book tours and review frequently asked questions, access to floor plans and building photos, participate in other social interactive experiences and to learn about other important information. 11. The Court is empowered to issue a declaratory judgment under 28 U.S.C. §§ 2201 and 2202. -3- THE PARTIES 12. Plaintiff, EUGENE DUNCAN, at all relevant times, is a resident of Queens, New York. Plaintiff is a blind, visually-impaired handicapped person and a member of member of a protected class of individuals under the ADA, under 42 U.S.C. § 12102(1)-(2), and the regulations implementing the ADA set forth at 28 CFR §§ 36.101 et seq., the NYSHRL and NYCHRL. 13. On information and belief, Defendant, THE FARM ENTERPRISES, LLC, is and was, at all relevant times herein a Domestic Limited Liability Company organized under the laws of New York with its principal executive offices in New York, NY. Defendant operates multiple rental spaces as well as its website, and those affiliated or directly linked, and advertises, markets, offers and sells its services and workspaces within the State of New York and throughout the United States. 14. Defendant operates their website across the United States, and also owns and operates different rental spaces in New York, New York. These locations constitute a place of public accommodation. Defendant’s locations provide to the public important goods and services. Defendant’s Website provides consumers with access to an array of goods and services including its rental space locations, the ability to view pricing and purchase day passes, details about membership options and benefits online and in Defendant’s locations, view event layout and options, book tours and review frequently asked questions, access to floor plans and building photos, participate in other social interactive experiences and to learn about other important information. 15. Defendant’s rental space locations are a place of public accommodation within the definition of Title III of the ADA, 42 U.S.C. § 12181(7). Defendant’s Website -4- is a service, privilege, or advantage that is heavily integrated with Defendant’s physical locations and operates as a gateway thereto. NATURE OF ACTION 16. The Internet has become a significant source of information, a portal, and a tool for conducting business, doing everyday activities such as shopping, learning, banking, researching, as well as many other activities for sighted, blind and visually- impaired persons alike. 17. In today’s tech-savvy world, blind and visually-impaired people have the ability to access websites using keyboards in conjunction with screen access software that vocalizes the visual information found on a computer screen or displays the content on a refreshable Braille display. Their technology is known as screen-reading software. Screen-reading software is currently the only method a blind or visually-impaired person may independently access the internet. Unless websites are designed to be read by screen- reading software, blind and visually-impaired persons are unable to fully access websites, and the information, products, and services contained thereon. 18. Blind and visually-impaired users of Windows operating system-enabled computers and devices have several screen reading software programs available to them. Some of these programs are available for purchase and other programs are available without the user having to purchase the program separately. Job Access With Speech, otherwise known as “JAWS” is currently the most popular, separately purchased and downloaded screen-reading software program available for a Windows computer. -5- 19. For screen-reading software to function, the information on a website must be capable of being rendered into text. If the website content is not capable of being rendered into text, the blind or visually-impaired user is unable to access the same content available to sighted users. 20. The international website standards organization, the World Wide Web Consortium, known throughout the world as W3C, has published version 2.0 of the Web Content Accessibility Guidelines (“WCAG 2.0”). WCAG 2.0 are well-established guidelines for making websites accessible to blind and visually-impaired people. These guidelines are universally followed by most large business entities and government agencies to ensure their websites are accessible. 21. Non-compliant websites pose common access barriers to blind and visually-impaired persons. Common barriers encountered by blind and visually impaired persons include, but are not limited to, the following: a. A text equivalent for every non-text element is not provided; b. Title frames with text are not provided for identification and navigation; c. Equivalent text is not provided when using scripts; d. Forms with the same information and functionality as for sighted persons are not provided; e. Information about the meaning and structure of content is not conveyed by more than the visual presentation of content; f. Text cannot be resized without assistive technology up to 200% without losing content or functionality; -6- g. If the content enforces a time limit, the user is not able to extend, adjust or disable it; h. Web pages do not have titles that describe the topic or purpose; i. The purpose of each link cannot be determined from the link text alone or from the link text and its programmatically determined link context; j. One or more keyboard operable user interface lacks a mode of operation where the keyboard focus indicator is discernible; k. The default human language of each web page cannot be programmatically determined; l. When a component receives focus, it may initiate a change in context; m. Changing the setting of a user interface component may automatically cause a change of context where the user has not been advised before using the component; n. Labels or instructions are not provided when content requires user input, which include captcha prompts that require the user to verify that he or she is not a robot; o. In content which is implemented by using markup languages, elements do not have complete start and end tags, elements are not nested according to their specifications, elements may contain duplicate attributes and/or any IDs are not unique; p. Inaccessible Portable Document Format (PDFs); and, -7- q. The name and role of all User Interface elements cannot be programmatically determined; items that can be set by the user cannot be programmatically set; and/or notification of changes to these items is not available to user agents, including assistive technology. STATEMENT OF FACTS Defendant’s Barriers on Its Website 22. Defendant offers the commercial website, WWW.THEFARMSOHO.COM, to the public. The website offers features which should allow all consumers to access the goods and services which Defendant offers in connection with their physical location. The goods and services offered by Defendant include, but are not limited to the following, which allow consumers to: find information about the physical locations, the ability to view pricing and purchase day passes, details about membership options and benefits online and in Defendant’s locations, view event layout and options, book tours and review frequently asked questions, access to floor plans and building photos, participate in other social interactive experiences and to learn about other important information. 23. It is, upon information and belief, Defendant’s policy and practice to deny Plaintiff, along with other blind or visually-impaired users, access to Defendant’s website, and to therefore specifically deny the goods and services that are offered and integrated with Defendant’s locations. Due to Defendant’s failure and refusal to remove access barriers to its website, Plaintiff and visually-impaired persons have been and are -8- still being denied equal access to Defendant’s physical locations and the numerous goods, services, and benefits offered to the public through the Website. 24. Plaintiff is a visually-impaired and legally blind person, who cannot use a computer without the assistance of screen-reading software. Plaintiff is, however, a proficient JAWS screen-reader user and uses it to access the Internet. Plaintiff has visited the Website on separate occasions using the JAWS screen-reader. 25. During Plaintiff’s visits to the Website, the last occurring in March, 2019, Plaintiff encountered multiple access barriers that denied Plaintiff full and equal access to the facilities, goods and services offered to the public and made available to the public; and that denied Plaintiff the full enjoyment of the facilities, goods, and services of the Website, as well as to the facilities, goods, and services of Defendant’s physical locations in New York by being unable to learn more information about the Defendant’s rental space locations, the ability to view pricing and purchase day passes, details about membership options and benefits online and in Defendant’s locations, view event layout and options, book tours and review frequently asked questions, access to floor plans and building photos, participate in other social interactive experiences and to learn about other important information. 26. While attempting to navigate the Website, Plaintiff encountered multiple accessibility barriers for blind or visually-impaired people that include, but are not limited to, the following: a. Lack of Alternative Text (“alt-text”), or a text equivalent. Alt-text is an invisible code embedded beneath a graphical image on a website. Web accessibility requires that alt-text be coded with each picture so that screen-reading software can speak -9- the alt-text where a sighted user sees pictures, which includes captcha prompts. Alt-text does not change the visual presentation, but instead a text box shows when the mouse moves over the picture. The lack of alt-text on these graphics prevents screen readers from accurately vocalizing a description of the graphics. As a result, visually-impaired THE FARM customers are unable to determine what is on the website, browse, look for the rental space locations, check out Defendant’s events and programs, or make any purchases; b. Empty Links That Contain No Text causing the function or purpose of the link to not be presented to the user. They can introduce confusion for keyboard and screen-reader users; c. Redundant Links where adjacent links go to the same URL address which results in additional navigation and repetition for keyboard and screen-reader users; and d. Linked Images Missing Alt-text, which causes problems if an image within a link contains no text and that image does not provide alt-text. A screen reader then has no content to present the user as to the function of the link, including information contained in PDFs. e. Defendant’s website requires the use of a mouse to complete a transaction. Yet, it is a fundamental tenet of web accessibility that for a web page to be accessible to Plaintiff and blind people, it must be possible for the user to interact with the page using only the keyboard. Indeed, Plaintiff and blind users cannot use a mouse because manipulating the mouse is a visual activity of moving the mouse pointer from one visual spot on the page to another. Thus, Defendant’s website’s inaccessible design, -10- which requires the use of a mouse to complete a transaction, denies Plaintiff and blind customers the ability to independently navigate and/or make purchases. Defendant Must Remove Barriers To Its Website 27. Due to the inaccessibility of Defendant’s Website, blind and visually- impaired customers such as Plaintiff, who need screen-readers, cannot fully and equally use or enjoy the facilities, goods, and services Defendant offers to the public on its Website. The access barriers Plaintiff encountered have caused a denial of Plaintiff’s full and equal access in the past, and now deter Plaintiff on a regular basis from accessing the Website. 28. These access barriers on Defendant’s Website have deterred Plaintiff from visiting or returning to Defendant’s physical locations and Website, and enjoying them equal to sighted individuals because: Plaintiff was unable to find the location and hours of operation of Defendant’s physical locations on its Website and other important information, preventing Plaintiff from visiting or returning to the locations and Website to purchase items and to view the items. 29. If the Website was equally accessible to all, Plaintiff could independently navigate the Website and complete a desired transaction as sighted individuals do. 30. Through his attempts to use the Website, Plaintiff has actual knowledge of the access barriers that make these services inaccessible and independently unusable by blind and visually-impaired people. 31. Because simple compliance with the WCAG 2.0 Guidelines would provide Plaintiff and other visually-impaired consumers with equal access to the Website, -11- Plaintiff alleges that Defendant has engaged in acts of intentional discrimination, including but not limited to the following policies or practices: a. Constructing and maintaining a website that is inaccessible to visually-impaired individuals, including Plaintiff; b. Failure to construct and maintain a website that is sufficiently intuitive so as to be equally accessible to visually-impaired individuals, including Plaintiff; and, c. Failing to take actions to correct these access barriers in the face of substantial harm and discrimination to blind and visually-impaired consumers, such as Plaintiff, as a member of a protected class. 32. Defendant therefore uses standards, criteria or methods of administration that have the effect of discriminating or perpetuating the discrimination of others, as alleged herein. 33. The ADA expressly contemplates the injunctive relief that Plaintiff seeks in this action. In relevant part, the ADA requires: In the case of violations of . . . their title, injunctive relief shall include an order to alter facilities to make such facilities readily accessible to and usable by individuals with disabilities . . . Where appropriate, injunctive relief shall also include requiring the . . . modification of a policy . . . 42 U.S.C. § 12188(a)(2). 34. Because Defendant’s Website has never been equally accessible, and because Defendant lacks a corporate policy that is reasonably calculated to cause its Website to become and remain accessible, Plaintiff invokes 42 U.S.C. § 12188(a)(2) and seeks a permanent injunction requiring Defendant to retain a qualified consultant acceptable to Plaintiff (“Agreed Upon Consultant”) to assist Defendant to comply with -12- WCAG 2.0 guidelines for Defendant’s Website. Plaintiff seeks that their permanent injunction requires Defendant to cooperate with the Agreed Upon Consultant to: a. Train Defendant’s employees and agents who develop the Website on accessibility compliance under the WCAG 2.0 guidelines; b. Regularly check the accessibility of the Website under the WCAG 2.0 guidelines; c. Regularly test user accessibility by blind or vision-impaired persons to ensure that Defendant’s Website complies under the WCAG 2.0 guidelines; and, d. Develop an accessibility policy that is clearly disclosed on Defendant’s Websites, with contact information for users to report accessibility-related problems. 35. If the Website was accessible, Plaintiff and similarly situated blind and visually-impaired people could independently view service items, locate Defendant’s rental space locations, purchase day passes and otherwise research related products and services via the Website. 36. Although Defendant may currently have centralized policies regarding maintaining and operating its Website, Defendant lacks a plan and policy reasonably calculated to make them fully and equally accessible to, and independently usable by, blind and other visually-impaired consumers. 37. Defendant has, upon information and belief, invested substantial sums in developing and maintaining their Website and has generated significant revenue from the -13- Website. These amounts are far greater than the associated cost of making their Website equally accessible to visually impaired customers. 38. Without injunctive relief, Plaintiff and other visually-impaired consumers will continue to be unable to independently use the Website, violating their rights. CLASS ACTION ALLEGATIONS 39. Plaintiff, on behalf of himself and all others similarly situated, seeks to certify a nationwide class under Fed. R. Civ. P. 23(a) and 23(b)(2): all legally blind individuals in the United States who have attempted to access Defendant’s Website and as a result have been denied access to the equal enjoyment of goods and services offered in Defendant’s physical locations, during the relevant statutory period. 40. Plaintiff, on behalf of himself and all others similarly situated, seeks certify a New York State subclass under Fed. R. Civ. P. 23(a) and 23(b)(2): all legally blind individuals in the State of New York who have attempted to access Defendant’s Website and as a result have been denied access to the equal enjoyment of goods and services offered in Defendant’s physical locations, during the relevant statutory period. 41. Plaintiff, on behalf of himself and all others similarly situated, seeks certify a New York City subclass under Fed. R. Civ. P. 23(a) and 23(b)(2): all legally blind individuals in the City of New York who have attempted to access Defendant’s Website and as a result have been denied access to the equal enjoyment of goods and services offered in Defendant’s physical locations, during the relevant statutory period. 42. Common questions of law and fact exist amongst Class, including: -14- a. Whether Defendant’s Website is a “public accommodation” under the ADA; b. Whether Defendant’s Website is a “place or provider of public accommodation” under the NYSHRL or NYCHRL; c. Whether Defendant’s Website denies the full and equal enjoyment of its goods, services, facilities, privileges, advantages, or accommodations to people with visual disabilities, violating the ADA; and d. Whether Defendant’s Website denies the full and equal enjoyment of its goods, services, facilities, privileges, advantages, or accommodations to people with visual disabilities, violating the NYSHRL or NYCHRL. 43. Plaintiff’s claims are typical of the Class. The Class, similarly to the Plaintiff, are severely visually impaired or otherwise blind, and claim that Defendant has violated the ADA, NYSYRHL or NYCHRL by failing to update or remove access barriers on its Website so either can be independently accessible to the Class. 44. Plaintiff will fairly and adequately represent and protect the interests of the Class Members because Plaintiff has retained and is represented by counsel competent and experienced in complex class action litigation, and because Plaintiff has no interests antagonistic to the Class Members. Class certification of the claims is appropriate under Fed. R. Civ. P. 23(b)(2) because Defendant has acted or refused to act on grounds generally applicable to the Class, making appropriate both declaratory and injunctive relief with respect to Plaintiff and the Class as a whole. 45. Alternatively, class certification is appropriate under Fed. R. Civ. P. 23(b)(3) because fact and legal questions common to Class Members predominate over -15- questions affecting only individual Class Members, and because a class action is superior to other available methods for the fair and efficient adjudication of their litigation. 46. Judicial economy will be served by maintaining their lawsuit as a class action in that it is likely to avoid the burden that would be otherwise placed upon the judicial system by the filing of numerous similar suits by people with visual disabilities throughout the United States. FIRST CAUSE OF ACTION VIOLATIONS OF THE ADA, 42 U.S.C. § 12181 et seq. 47. Plaintiff, on behalf of himself and the Class Members, repeats and realleges every allegation of the preceding paragraphs as if fully set forth herein. 48. Section 302(a) of Title III of the ADA, 42 U.S.C. § 12101 et seq., provides: No individual shall be discriminated against on the basis of disability in the full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations of any place of public accommodation by any person who owns, leases (or leases to), or operates a place of public accommodation. 42 U.S.C. § 12182(a). 49. Defendant’s rental spaces are a place of public accommodations within the definition of Title III of the ADA, 42 U.S.C. § 12181(7). Defendant’s Website is a service, privilege, or advantage of Defendant’s rental spaces. The Website is a service that is integrated with this location. 50. Under Section 302(b)(1) of Title III of the ADA, it is unlawful discrimination to deny individuals with disabilities the opportunity to participate in or -16- benefit from the goods, services, facilities, privileges, advantages, or accommodations of an entity. 42 U.S.C. § 12182(b)(1)(A)(i). 51. Under Section 302(b)(1) of Title III of the ADA, it is unlawful discrimination to deny individuals with disabilities an opportunity to participate in or benefit from the goods, services, facilities, privileges, advantages, or accommodation, which is equal to the opportunities afforded to other individuals. 42 U.S.C. § 12182(b)(1)(A)(ii). 52. Under Section 302(b)(2) of Title III of the ADA, unlawful discrimination also includes, among other things: [A] failure to make reasonable modifications in policies, practices, or procedures, when such modifications are necessary to afford such goods, services, facilities, privileges, advantages, or accommodations to individuals with disabilities, unless the entity can demonstrate that making such modifications would fundamentally alter the nature of such goods, services, facilities, privileges, advantages or accommodations; and a failure to take such steps as may be necessary to ensure that no individual with a disability is excluded, denied services, segregated or otherwise treated differently than other individuals because of the absence of auxiliary aids and services, unless the entity can demonstrate that taking such steps would fundamentally alter the nature of the good, service, facility, privilege, advantage, or accommodation being offered or would result in an undue burden. 42 U.S.C. § 12182(b)(2)(A)(ii)-(iii). 53. The acts alleged herein constitute violations of Title III of the ADA, and the regulations promulgated thereunder. Plaintiff, who is a member of a protected class of persons under the ADA, has a physical disability that substantially limits the major life activity of sight within the meaning of 42 U.S.C. §§ 12102(1)(A)-(2)(A). Furthermore, Plaintiff has been denied full and equal access to the Website, has not been provided services that are provided to other patrons who are not disabled, and has been provided services that are inferior to the services provided to non-disabled persons. Defendant has -17- failed to take any prompt and equitable steps to remedy its discriminatory conduct. These violations are ongoing. 54. Under 42 U.S.C. § 12188 and the remedies, procedures, and rights set forth and incorporated therein, Plaintiff, requests relief as set forth below. SECOND CAUSE OF ACTION VIOLATIONS OF THE NYSHRL 55. Plaintiff, on behalf of himself and the New York State Sub-Class Members, repeats and realleges every allegation of the preceding paragraphs as if fully set forth herein. 56. N.Y. Exec. Law § 296(2)(a) provides that it is “an unlawful discriminatory practice for any person, being the owner, lessee, proprietor, manager, superintendent, agent or employee of any place of public accommodation . . . because of the . . . disability of any person, directly or indirectly, to refuse, withhold from or deny to such person any of the accommodations, advantages, facilities or privileges thereof.” 57. Defendant’s physical location is located in State of New York and throughout the United States and constitute a sales establishment and place of public accommodation within the definition of N.Y. Exec. Law § 292(9). Defendant’s Website is a service, privilege or advantage of Defendant. Defendant’s Website is a service that is by and integrated with these physical locations. 58. Defendant is subject to New York Human Rights Law because it owns and operates its physical locations and Website. Defendant is a person within the meaning of N.Y. Exec. Law § 292(1). -18- 59. Defendant is violating N.Y. Exec. Law § 296(2)(a) in refusing to update or remove access barriers to its Website, causing its Website and the services integrated with Defendant’s physical locations to be completely inaccessible to the blind. Their inaccessibility denies blind patrons full and equal access to the facilities, goods and services that Defendant makes available to the non-disabled public. 60. Under N.Y. Exec. Law § 296(2)(c)(i), unlawful discriminatory practice includes, among other things, “a refusal to make reasonable modifications in policies, practices, or procedures, when such modifications are necessary to afford facilities, privileges, advantages or accommodations to individuals with disabilities, unless such person can demonstrate that making such modifications would fundamentally alter the nature of such facilities, privileges, advantages or accommodations being offered or would result in an undue burden". 61. Under N.Y. Exec. Law § 296(2)(c)(ii), unlawful discriminatory practice also includes, “a refusal to take such steps as may be necessary to ensure that no individual with a disability is excluded or denied services because of the absence of auxiliary aids and services, unless such person can demonstrate that taking such steps would fundamentally alter the nature of the facility, privilege, advantage or accommodation being offered or would result in an undue burden.” 62. Readily available, well-established guidelines exist on the Internet for making websites accessible to the blind and visually impaired. These guidelines have been followed by other large business entities and government agencies in making their website accessible, including but not limited to: adding alt-text to graphics and ensuring that all functions can be performed using a keyboard. Incorporating the basic components -19- to make its Website accessible would neither fundamentally alter the nature of Defendant’s business nor result in an undue burden to Defendant. 63. Defendant’s actions constitute willful intentional discrimination against the class on the basis of a disability in violation of the NYSHRL, N.Y. Exec. Law § 296(2) in that Defendant has: a. constructed and maintained a website that is inaccessible to blind class members with knowledge of the discrimination; and/or b. constructed and maintained a website that is sufficiently intuitive and/or obvious that is inaccessible to blind class members; and/or c. failed to take actions to correct these access barriers in the face of substantial harm and discrimination to blind class members. 64. Defendant has failed to take any prompt and equitable steps to remedy their discriminatory conduct. These violations are ongoing. 65. Defendant discriminates, and will continue in the future to discriminate against Plaintiff and New York State Sub-Class Members on the basis of disability in the full and equal enjoyment of the goods, services, facilities, privileges, advantages, accommodations and/or opportunities of Defendant’s Website and its physical locations under § 296(2) et seq. and/or its implementing regulations. Unless the Court enjoins Defendant from continuing to engage in these unlawful practices, Plaintiff and the Sub- Class Members will continue to suffer irreparable harm. 66. Defendant’s actions were and are in violation of New York State Human Rights Law and therefore Plaintiff invokes his right to injunctive relief to remedy the discrimination. -20- 67. Plaintiff is also entitled to compensatory damages, as well as civil penalties and fines under N.Y. Exec. Law § 297(4)(c) et seq. for each and every offense. 68. Plaintiff is also entitled to reasonable attorneys’ fees and costs. 69. Under N.Y. Exec. Law § 297 and the remedies, procedures, and rights set forth and incorporated therein Plaintiff prays for judgment as set forth below. THIRD CAUSE OF ACTION VIOLATION OF THE NEW YORK STATE CIVIL RIGHTS LAW 70. Plaintiff, on behalf of himself and the New York State Sub-Class Members, repeats and realleges every allegation of the preceding paragraphs as if fully set forth herein. 71. Plaintiff served notice thereof upon the attorney general as required by N.Y. Civil Rights Law § 41. 72. N.Y. Civil Rights Law § 40 provides that “all persons within the jurisdiction of this state shall be entitled to the full and equal accommodations, advantages, facilities and privileges of any places of public accommodations, resort or amusement, subject only to the conditions and limitations established by law and applicable alike to all persons. No persons, being the owner, lessee, proprietor, manager, superintendent, agent, or employee of any such place shall directly or indirectly refuse, withhold from, or deny to any person any of the accommodations, advantages, facilities and privileges thereof . . .” 73. N.Y. Civil Rights Law § 40-c(2) provides that “no person because of . . . disability, as such term is defined in section two hundred ninety-two of executive law, be subjected to any discrimination in his or her civil rights, or to any harassment, as defined -21- in section 240.25 of the penal law, in the exercise thereof, by any other person or by any firm, corporation or institution, or by the state or any agency or subdivision.” 74. Defendant’s New York State physical location is a sales establishment and place of public accommodation within the definition of N.Y. Civil Rights Law § 40-c(2). Defendant’s Website is a service, privilege or advantage of Defendant and its Website is a service that is by and integrated with these establishments. 75. Defendant is subject to New York Civil Rights Law because it advertises, owns and operates its physical location and Website. Defendant is a person within the meaning of N.Y. Civil Law § 40-c(2). 76. Defendant is violating N.Y. Civil Rights Law § 40-c(2) in refusing to update or remove access barriers to its Website, causing its Website and the services integrated with Defendant’s physical locations to be completely inaccessible to the blind. Their inaccessibility denies blind patrons full and equal access to the facilities, goods and services that Defendant makes available to the non-disabled public. 77. N.Y. Civil Rights Law § 41 states that “any corporation which shall violate any of the provisions of sections forty, forty-a, forty-b or forty two . . . shall for each and every violation thereof be liable to a penalty of not less than one hundred dollars nor more than five hundred dollars, to be recovered by the person aggrieved thereby . . .” 78. Under NY Civil Rights Law § 40-d, “any person who shall violate any of the provisions of the foregoing section, or subdivision three of section 240.30 or section 240.31 of the penal law, or who shall aid or incite the violation of any of said provisions shall for each and every violation thereof be liable to a penalty of not less than one hundred dollars nor more than five hundred dollars, to be recovered by the person -22- aggrieved thereby in any court of competent jurisdiction in the county in which the defendant shall reside ...” 79. Defendant has failed to take any prompt and equitable steps to remedy its discriminatory conduct. These violations are ongoing. 80. Defendant discriminates, and will continue in the future to discriminate against Plaintiff and New York State Sub-Class Members on the basis of disability are being directly or indirectly refused, withheld from, or denied the accommodations, advantages, facilities and privileges thereof in § 40 et seq. and/or its implementing regulations. 81. Plaintiff is entitled to compensatory damages of five hundred dollars per instance, as well as civil penalties and fines under N.Y. Civil Law § 40 et seq. for each and every offense. FOURTH CAUSE OF ACTION VIOLATIONS OF THE NYCHRL 82. Plaintiff, on behalf of himself and the New York City Sub-Class Members, repeats and realleges every allegation of the preceding paragraphs as if fully set forth herein. 83. N.Y.C. Administrative Code § 8-107(4)(a) provides that “It shall be an unlawful discriminatory practice for any person, being the owner, lessee, proprietor, manager, superintendent, agent or employee of any place or provider of public accommodation, because of . . . disability . . . directly or indirectly, to refuse, withhold from or deny to such person, any of the accommodations, advantages, facilities or privileges thereof.” -23- 84. Defendant’s location is a sales establishment and a place of public accommodation within the definition of N.Y.C. Admin. Code § 8-102(9), and its Website is a service that is integrated with its establishment. 85. Defendant is subject to NYCHRL because it advertises, owns and operates its physical location and its Website in the City of New York, making it a person within the meaning of N.Y.C. Admin. Code § 8-102(1). 86. Defendant is violating N.Y.C. Administrative Code § 8-107(4)(a) in refusing to update or remove access barriers to Website, causing its Website and the services integrated with its physical location to be completely inaccessible to the blind. The inaccessibility denies blind patrons full and equal access to the facilities, goods, and services that Defendant makes available to the non-disabled public. 87. Defendant is required to “make reasonable accommodation to the needs of persons with disabilities . . . any person prohibited by the provisions of [§ 8-107 et seq.] from discriminating on the basis of disability shall make reasonable accommodation to enable a person with a disability to . . . enjoy the right or rights in question provided that the disability is known or should have been known by the covered entity.” N.Y.C. Admin. Code § 8-107(15)(a). 88. Defendant’s actions constitute willful intentional discrimination against the Sub-Class on the basis of a disability in violation of the N.Y.C. Administrative Code § 8-107(4)(a) and § 8-107(15)(a) in that Defendant has: a. constructed and maintained a website that is inaccessible to blind class members with knowledge of the discrimination; and/or -24- b. constructed and maintained a website that is sufficiently intuitive and/or obvious that is inaccessible to blind class members; and/or c. failed to take actions to correct these access barriers in the face of substantial harm and discrimination to blind class members. 89. Defendant has failed to take any prompt and equitable steps to remedy their discriminatory conduct. These violations are ongoing. 90. As such, Defendant discriminates, and will continue in the future to discriminate against Plaintiff and members of the proposed class and subclass on the basis of disability in the full and equal enjoyment of the goods, services, facilities, privileges, advantages, accommodations and/or opportunities of its Website and its establishments under § 8-107(4)(a) and/or its implementing regulations. Unless the Court enjoins Defendant from continuing to engage in these unlawful practices, Plaintiff and members of the class will continue to suffer irreparable harm. 91. Defendant’s actions were and are in violation of the NYCHRL and therefore Plaintiff invokes his right to injunctive relief to remedy the discrimination. 92. Plaintiff is also entitled to compensatory damages, as well as civil penalties and fines under N.Y.C. Administrative Code § 8-120(8) and § 8-126(a) for each offense as well as punitive damages pursuant to § 8-502. 93. Plaintiff is also entitled to reasonable attorneys’ fees and costs. 94. Under N.Y.C. Administrative Code § 8-120 and § 8-126 and the remedies, procedures, and rights set forth and incorporated therein Plaintiff prays for judgment as set forth below. -25- FIFTH CAUSE OF ACTION DECLARATORY RELIEF 95. Plaintiff, on behalf of himself and the Class and New York State and City Sub-Classes Members, repeats and realleges every allegation of the preceding paragraphs as if fully set forth herein. 96. An actual controversy has arisen and now exists between the parties in that Plaintiff contends, and is informed and believes that Defendant denies, that its Website contains access barriers denying blind customers the full and equal access to the goods, services and facilities of its Website and by extension its physical location, which Defendant owns, operates and controls, fails to comply with applicable laws including, but not limited to, Title III of the Americans with Disabilities Act, 42 U.S.C. §§ 12182, et seq., N.Y. Exec. Law § 296, et seq., and N.Y.C. Admin. Code § 8-107, et seq. prohibiting discrimination against the blind. 97. A judicial declaration is necessary and appropriate at this time in order that each of the parties may know their respective rights and duties and act accordingly. PRAYER FOR RELIEF WHEREFORE, Plaintiff respectfully requests the Court grant the following relief: a. A preliminary and permanent injunction to prohibit Defendant from violating the Americans with Disabilities Act, 42 U.S.C. §§ 12182, et seq., N.Y. Exec. Law § 296, et seq., N.Y.C. Administrative Code § 8-107, et seq., and the laws of New York; b. A preliminary and permanent injunction requiring Defendant to take all the steps necessary to make its Website into full compliance with the -26- requirements set forth in the ADA, and its implementing regulations, so that the Website is readily accessible to and usable by blind individuals; c. A declaration that Defendant owns, maintains and/or operates its Website in a manner that discriminates against the blind and which fails to provide access for persons with disabilities as required by Americans with Disabilities Act, 42 U.S.C. §§ 12182, et seq., N.Y. Exec. Law § 296, et seq., N.Y.C. Administrative Code § 8-107, et seq., and the laws of New York d. An order certifying the Class and Sub-Classes under Fed. R. Civ. P. 23(a) & (b)(2) and/or (b)(3), appointing Plaintiff as Class Representative, and his attorneys as Class Counsel; e. Compensatory damages in an amount to be determined by proof, including all applicable statutory and punitive damages and fines, to Plaintiff and the proposed class and subclasses for violations of their civil rights under New York State Human Rights Law and City Law; f. Pre- and post-judgment interest; g. An award of costs and expenses of the action together with reasonable attorneys’ and expert fees; and h. Such other and further relief as this Court deems just and proper. DEMAND FOR TRIAL BY JURY Pursuant to Fed. R. Civ. P. 38(b), Plaintiff demands a trial by jury on all questions of fact the Complaint raises. -27- Dated: New York, New York April 15, 2019 THE MARKS LAW FIRM, PC __________________________ Bradly G. Marks 175 Varick St., 3rd Floor New York, New York 10014 Tel: (646) 770-3775 Fax: (646) 867-2639 brad@markslawpc.com Jeffrey M. Gottlieb (JG-7905) Dana L. Gottlieb (DG-6151) GOTTLIEB & ASSOCIATES 150 East 18th Street, Suite PHR New York, New York 10003 Tel: 212.228.9795 Fax: 212.982.6284 nyjg@aol.com danalgottlieb@aol.com -28-

civil rights, immigration, family

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UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF TENNESSEE J. PAUL MCHENRY, individually and on behalf of all others similarly situated, Plaintiff, v. Case No.: ADVENT HEALTH PARTNERS, INC., Defendant. ________________________________________ ) ) ) ) ) ) ) ) ) ) ) CLASS ACTION COMPLAINT Plaintiff J. Paul McHenry (“McHenry” or “Plaintiff McHenry”), individually and on behalf of all others similarly situated, through undersigned counsel, hereby alleges the following against Defendant Advent Health Partners, Inc. (“AHP” or “Defendant”). Facts pertaining to Plaintiff and his personal experiences and circumstances are alleged based upon personal knowledge, and all other facts herein are alleged based upon information and belief, inter alia, the investigation of Plaintiff’s counsel. NATURE OF THE ACTION 1. This is a class action for damages with respect to Advent Health Partners for its failure to exercise reasonable care in securing and safeguarding its customers’ sensitive personal data—including first and last names, Social Security numbers, drivers’ license information, dates of birth, health insurance information, medical treatment information, and financial account information, collectively known as personally identifiable information (“PII” or “Private Information”). 2. This class action is brought on behalf of patients whose sensitive PII was stolen by cybercriminals in a cyber-attack on Advent Health Partner’s systems that took place in or around September of 2021 and which resulted in the access and exfiltration of sensitive patient information (the “Data Breach”). 3. Advent Health Partners reported to Plaintiff and members of the putative “Class” (defined below) that information compromised in the Data Breach included their PII. 4. Plaintiff and Class members were not notified of the data breach until, at the earliest, the end of March 2022 – more than six months after their Private Information was first accessed. 5. As a result of the Data Breach and Defendant’s failure to promptly notify Plaintiff and Class members of the Data Breach, Plaintiff and Class members have and will continue to experience various types of misuse of their PII in the coming months and years, including but not limited to, unauthorized credit card charges, unauthorized access to email accounts, identity theft, and other fraudulent use of their Private Information. 6. There has been no assurance offered by Advent Health Partners that all personal data or copies of data have been recovered or destroyed. 7. Accordingly, Plaintiff asserts claims for negligence, breach of contract, breach of implied contract, breach of fiduciary duty, and declaratory and injunctive relief. PARTIES A. Plaintiff J. Paul McHenry 8. Plaintiff J. Paul McHenry is a resident and citizen of Oklahoma and brings this action in his individual capacity and on behalf of all others similarly situated. McHenry was a patient at Saint Francis Health in Tulsa, Oklahoma where he went for doctor’s visits several times before the Data Breach. To receive services at Advent Health Partners, Plaintiff was required to disclose his PII, which was then entered into Advent Health Partners’ database and maintained by Defendant without his knowledge. In maintaining his Private Information, Defendant expressly and impliedly promised to safeguard Plaintiff McHenry’s PII. Defendant, however, did not take proper care of Plaintiff McHenry’s PII, leading to its exposure to, and exfiltration by, cybercriminals as a direct result of Defendant’s inadequate security measures. 9. In March of 2022, Plaintiff McHenry received a notification letter from Defendant stating that his Private Information was compromised by cybercriminals. 10. The letter also offered one year of credit monitoring through Transunion, which was and continues to be ineffective for Plaintiff McHenry and other Class members. In order to receive the free credit monitoring services from, Transunion, Plaintiff McHenry would have had to share additional sensitive private information with third parties connected to Advent Health. 11. In or around February of 2022, Plaintiff McHenry was sent a notification letter informing him that he had been denied healthcare benefits under SoonerCare, a state-sponsored healthcare program in Oklahoma. Mr. McHenry has no knowledge of ever applying for SoonerCare benefits. The notice that Mr. McHenry received informing him of his rejection from the program without his knowledge is likely the result of a fraudulent application for benefits under his name using the Private Information compromised in the Data Breach. 12. Plaintiff McHenry and Class members have faced and will continue to face a certainly impending and substantial risk of a slew of future harms as a result of Defendant’s ineffective data security measures, as further set forth herein. Some of these harms will include fraudulent charges, medical procedures ordered in patients’ names without their permission, and targeted advertising without patient consent. These harms will also include fraudulent applications for benefits in their names, similar to what Plaintiff McHenry has already experienced. 13. Plaintiff McHenry greatly values his privacy, especially while receiving medical services, and would not have paid the amount that he did to receive medical services had he known that Saint Francis Health’s data processor, Advent Health, would negligently maintain his Private Information as it did. B. Defendant Advent Health 14. Defendant Advent Health Partners is an outsourced healthcare claims review vendor. Advent Health Partners offers a number of medical claims review services, including billing, records review solutions, and medical record retrieval. Advent Health Partners has a principal place of business at 301 Plus Park Boulevard, Suite 500 in Nashville, Tennessee. Advent Health Partners’ corporate policies and practices, including those used for data privacy, are established in, and emanate from Tennessee. JURISDICTION AND VENUE 15. The Court has jurisdiction over Plaintiff’s claims under 28 U.S.C. § 1332(d)(2), because (a) there are 100 or more Class members, (b) at least one Class member is a citizen of a state that is diverse from Defendant’s citizenship, and (c) the matter in controversy exceeds $5,000,000, exclusive of interest and costs. 16. The Court has personal jurisdiction over Defendant because Defendant’s principal place of business is located in this District. 17. Venue is proper in this district under 28 U.S.C. § 1391(b)(1) because Defendant maintains its principal place of business in this District and therefore resides in this District pursuant to 28 U.S.C. § 1391(c)(2). A substantial part of the events or omissions giving rise to the Class’s claims also occurred in this District. FACTS 18. Defendant provides a wide variety of healthcare billing claims review services to hospitals and medical offices across the country, including in Tennessee and Oklahoma. As part of its business, Defendant was entrusted with, and obligated to safeguard and protect the Private Information of, Plaintiff and the Class in accordance with all applicable laws. 19. In September of 2021, Defendant first learned of an unauthorized activity on its employees’ email accounts, which contained customers’ Private Information including first and last names, Social Security numbers, drivers’ license information, dates of birth, health insurance information, medical treatment information, and financial account information. Defendant posted the following notice on its website:1 Advent Health Partners is providing notice of a recent incident that may affect the security of some information pertaining to individuals. The confidentiality, privacy, and security of information in Advent Health Partners’ care is one of the highest priorities and Advent Health Partners takes this incident very seriously. Please note, we have no indication that anyone’s information has been subject to actual or attempted misuse in relation to this incident. What Happened? In early September 2021, Advent Health Partners detected suspicious activity on employee email accounts involving data provided to Advent Health Partners. Advent Health Partners immediately commenced an investigation to determine the nature and scope of the incident. While the investigation is ongoing, on December 2, 2021, Advent Health Partners determined that certain files containing information of individuals were potentially accessed by an unauthorized third party. Advent Health Partners started providing notice of this incident on January 6, 2022. 1 Advent Health Partners Provides Notice of Security Incident, https://adventhp.com/security-incident-notice/ (last visited Apr. 14, 2022) [hereinafter Data Breach Notice]. What Information Was Involved? The potentially accessed information varies by individual, but may include first and last names, Social Security numbers, drivers’ license information, dates of birth, health insurance information, medical treatment information, and financial account information. What Are We Doing? We take this incident and the security of personal information in our care very seriously. Upon learning of this incident, we moved quickly to investigate and respond to this incident, assess the security of our systems, and notify potentially affected individuals. As part of our ongoing commitment to the security of information, we are reviewing and enhancing existing policies and procedures to reduce the likelihood of a similar future event. We will also be notifying state and federal regulators, as required. For More Information. We understand that you may have questions that are not addressed. If you have additional questions, please call the dedicated assistance line at (855)-604-1735, which is available Monday through Friday, between the hours of 8:00 a.m. and 8:00 p.m. Central Time, or write to Advent Health Partners at 301 Plus Park Boulevard, Suite 500, Nashville, TN 37217. Advent Health Partners recommends that potentially impacted individuals follow the recommendations in the letter they received and contact the call center with any questions. What You Can Do. Advent Health Partners sincerely regrets any inconvenience this incident may have caused. Advent Health Partners encourages you to remain vigilant against incidents of identity theft and fraud, to review your account statements, and to monitor your credit reports for suspicious activity. Under U.S. law you are entitled to one free credit report annually from each of the three major credit reporting bureaus. To order your free credit report, visit www.annualcreditreport.com or call, toll-free, 1-877- 322-8228. You may also contact the three major credit bureaus directly to request a free copy of your credit report. You have the right to place a “security freeze” on your credit report, which will prohibit a consumer reporting agency from releasing information in your credit report without your express authorization. The security freeze is designed to prevent credit, loans, and services from being approved in your name without your consent. However, you should be aware that using a security freeze to take control over who gets access to the personal and financial information in your credit report may delay, interfere with, or prohibit the timely approval of any subsequent request or application you make regarding a new loan, credit, mortgage, or any other account involving the extension of credit. Pursuant to federal law, you cannot be charged to place or lift a security freeze on your credit report. Should you wish to place a security freeze, please contact the major consumer reporting agencies listed below: 20. Upon learning of the Data Breach that occurred in September of 2021, Defendant investigated and began sending notification of the incident to its hospital and medical provider customers.2 Plaintiff was not notified that his information was affected in the Data Breach until late March of 2022. 21. In February of 2022, nearly five (5) months after the Data Breach, Defendant first announced that it learned of suspicious activity that allowed one or more cybercriminals to access its employees’ email accounts containing patient information.3 The February 2022 Notice disclosed that an attack enabled a threat actor to access AHP employees’ email accounts. 22. Defendant offered no explanation for the delay between the initial discovery of the Breach and the belated notification to affected customers, which resulted in Plaintiff and Class members suffering harm they otherwise could have avoided had a timely disclosure been made. 23. Defendant’s delay in notifying its customers affected by the Data Breach violated the provisions of Tennessee Code Annotated, § 47-18-2107 and, in particular, the reporting provisions of § 47-18-2107(b) requiring Defendant to provide prompt and direct notice of a data security breach to any affected Tennessee residents once it knew or had reason to know of any such breach involving personal information and affecting Tennessee residents. 2 The total number of affected patients still has not been reported to the Health and Human Services Healthcare Data Breach Portal. See Cases Currently Under Investigation, U.S. DEP’T OF HEALTH & HUMAN SERVS.: BREACH PORTAL, https://ocrportal.hhs.gov/ocr/breach/breach_report.jsf [hereinafter Breach Portal] (last visited Apr. 14, 2021). 3 Defendant’s Data Breach notice is not dated. The earliest record of this page being posted on Defendant’s website through internet archive records, however, is on February 8, 2022. 24. AHP’s notice of the Data Breach was not just untimely but woefully deficient, failing to provide basic details, including but not limited to, how unauthorized parties accessed its networks, whether the information was encrypted or otherwise protected, how it learned of the Data Breach, whether the breach occurred system-wide, whether servers storing information were accessed, and how many customers were affected by the Data Breach. Even worse, AHP offered only one year of identity monitoring to Plaintiff and Class members, which required the disclosure of additional PII that AHP had just demonstrated it could not be trusted with. 25. In light of the types of personal information at issue, and the fact that the Private Information was specifically targeted by cybercriminals with the intent to steal and misuse it, it can be determined that Plaintiff’s and Class members’ PII is being sold on the dark web, meaning that unauthorized parties have accessed, viewed, and exfiltrated Plaintiff’s and Class members’ unencrypted, unredacted, sensitive personal information, including names, addresses, email addresses, dates of birth, Social Security numbers, member ID numbers, policyholder names, employer names, policy numbers, and more. 26. The Breach occurred because Defendant failed to take reasonable measures to protect the PII it collected and stored. Among other things, Defendant failed to implement data security measures designed to prevent this attack, despite repeated warnings to the healthcare industry, insurance companies, and associated entities about the risk of cyberattacks and the highly publicized occurrence of many similar attacks in the recent past on other healthcare providers. 27. Defendant disregarded the rights of Plaintiff and Class members by intentionally, willfully, recklessly, or negligently failing to take and implement adequate and reasonable measures to ensure that Plaintiff’s and Class members’ PII was safeguarded, failing to take available steps to prevent an unauthorized disclosure of data, and failing to follow applicable, required and appropriate protocols, policies and procedures regarding the encryption of data, even for internal use. As a result, the PII of Plaintiff and Class members was compromised through unauthorized access by an unknown third party and has already been fraudulently misused. Plaintiff and Class members have a continuing interest in ensuring that their information is and remains safe. A. Defendant’s Privacy Promises 28. Advent Health Partners made, and continues to make, various promises to its customers, including Plaintiff, that it will maintain the security and privacy of their Private Information. 29. In its Notice of Privacy Practices, which was applicable to Plaintiff, Defendant stated under a section bolded and titled “Personal Information,” the following: “Personally Identifiable Information” (PII), as described in United States privacy law and information security, is information that can be used on its own or with other information to identify, contact, or locate a single person, or to identify an individual in context. Please read Advent Health Partner’s Privacy Policy below carefully to understand how we collect, use, protect, and handle your PII in accordance with our website. Personal Information What personal information do we collect from the people that visit our website(s)? When registering on our site, as appropriate, we may request your name, email address, company name, job title, phone number, or other details. When do we collect information? We collect information from you when you complete a website form, utilize our live chat functionality, or otherwise provide information on our site. How do we use your information? We may use the information we collect when you respond to a marketing communication, visit pages of our website, or use specific site features in the following ways: • To improve our website in order to better serve you, • To send periodic emails regarding relevant technologies and services, and • To follow up after correspondence (live chat, email, or phone inquiries). How do we protect your information? • We do not use vulnerability scanning and/or scanning to Payment Card Industry (PCI) standards. • We only provide articles and information. We never ask for credit card numbers. • We use regular malware scanning. • Your PII is contained behind secured networks and is only accessible by a limited number of persons who have special access rights to such systems and are required to keep the information confidential. In addition, all sensitive information you supply is encrypted via Secure Socket Layer (SSL) technology. • We implement a variety of security measures when a user enters, submits, or accesses their information to maintain the safety of your personal information. • All transactions are processed through a gateway provider and are not stored or processed on our servers. Do we use “cookies”? Yes. Cookies are small files that a site or its service provider transfers to your computer’s hard drive through your web browser (if you allow) that enables the site’s or service provider’s systems to recognize your browser and capture and remember certain information (e.g., information you submit through a form). They are also used to help us understand your preferences based on previous or current site activity, which enables us to provide you with improved services. Advent Health Partners uses cookies to: • Keep track of advertisements. • Compile aggregate data about site traffic and interactions to offer improved future site experiences. We may also use trusted third- party services that track this information on our behalf. Through your browser settings, you can choose to have your computer warn you each time a cookie is sent, or you can turn off all cookies. Since each browser is a little different, look at your browser’s Help Menu to learn the correct way to modify your cookies. If you turn cookies off, some of the features that make your site experience more efficient may not function properly. 30. AHP describes how it may use and disclose medical information for each category of uses or disclosures, none of which provide it a right to expose customers’ Private Information in the manner in which it was exposed to unauthorized third parties in the Data Breach. 31. By failing to protect Plaintiff’s and Class members’ Private Information, and by allowing the Data Breach to occur, Advent Health Partners broke these promises to Plaintiff and Class members. B. Defendant Failed to Maintain Reasonable and Adequate Security Measures to Safeguard Customers’ Private Information 32. AHP acquires, collects, and stores a massive amount of its customers’ protected PII, including health information and other personally identifiable data. 33. As a condition of engaging in health-related services, AHP requires that its customers entrust them with their patients’ highly confidential Private Information. 34. By obtaining, collecting, using, and deriving a benefit from Plaintiff and Class members’ Private Information, AHP assumed legal and equitable duties and knew or should have known that it was responsible for protecting Plaintiff and Class members’ Private Information from disclosure. 35. Defendant had obligations created by the Health Insurance Portability and Accountability Act (42 U.S.C. § 1320d et seq.) (“HIPAA”), Tennessee law (Tenn. Code Ann. § 47-18-2107, et seq.), industry standards, common law, and representations made to Class members, to keep Class members’ Private Information confidential and to protect it from unauthorized access and disclosure. 36. As evidenced by Defendant’s failure to comply with its legal obligations established by HIPAA and Tennessee law, Defendant failed to properly safeguard Class members’ Private Information, allowing hackers to access their Private Information. 37. Plaintiff and Class members provided their Private Information to Defendant with the reasonable expectation and mutual understanding that Defendant and any of its affiliates would comply with their obligation to keep such information confidential and secure from unauthorized 38. Prior to and during the Data Breach, Defendant promised customers that their Private Information would be kept confidential. 39. Defendant’s failure to provide adequate security measures to safeguard customers’ Private Information is especially egregious because Defendant operates in a field which has recently been a frequent target of scammers attempting to fraudulently gain access to customers’ highly confidential Private Information. 40. In fact, Defendant has been on notice for years that the healthcare industry and health insurance companies are a prime target for scammers because of the amount of confidential customer information maintained. 41. Defendant was also on notice that the FBI has been concerned about data security in the healthcare industry. In August 2014, after a cyberattack on Community Health Systems, Inc., the FBI warned companies within the healthcare industry that hackers were targeting them. The warning stated that “[t]he FBI has observed malicious actors targeting healthcare related systems, perhaps for the purpose of obtaining the Protected Healthcare Information (PHI) and/or Personally Identifiable Information (PII).”4 42. The American Medical Association (“AMA”) has also warned healthcare companies about the important of protecting their patients’ confidential information: Cybersecurity is not just a technical issue; it’s a patient safety issue. AMA research has revealed that 83% of physicians work in a practice that has experienced some kind of cyberattack. Unfortunately, practices are learning that cyberattacks not only threaten the privacy and security of patients’ health and financial information, but also patient access to care.5 43. The number of US data breaches surpassed 1,000 in 2016, a record high and a forty percent increase in the number of data breaches from the previous year.6 In 2017, a new record high of 1,579 breaches were reported—representing a 44.7 percent increase.7 That trend continues. 44. The healthcare sector reported the second largest number of breaches among all measured sectors in 2018, with the highest rate of exposure per breach.8 Indeed, when compromised, healthcare related data is among the most sensitive and personally consequential. A report focusing on healthcare breaches found that the “average total cost to resolve an identity theft-related incident . . . came to about $20,000,” and that the victims were often forced to pay 4 Jim Finkle, FBI Warns Healthcare Firms that they are Targeted by Hackers, REUTERS (Aug. 2014), https://www.reuters.com/article/us-cybersecurity-healthcare-fbi/fbi-warnshealthcare-firms-they-are-targeted-by- hackers-idUSKBN0GK24U20140820. 5 Andis Robeznieks, Cybersecurity: Ransomware attacks shut down clinics, hospitals, AM. MED. ASS’N (Oct. 4, 2019), https://www.ama-assn.org/practice-management/sustainability/cybersecurity-ransomware-attacks-shut-down- clinics-hospitals. 6 Identity Theft Resource Center, Data Breaches Increase 40 Percent in 2016, Finds New Report From Identity Theft Resource Center and CyberScout (Jan. 19, 2017), https://www.idtheftcenter.org/surveys-studys. 7 Identity Theft Resource Center, 2017 Annual Data Breach Year-End Review, https://www.idtheftcenter.org/2017- data-breaches/. 8 Identity Theft Resource Center, 2018 End -of-Year Data Breach Report, https://www.idtheftcenter.org/2018-data- breaches/. out-of-pocket costs for healthcare they did not receive in order to restore coverage.9 Almost 50 percent of the victims lost their healthcare coverage as a result of the incident, while nearly 30 percent said their insurance premiums went up after the event. Forty percent of the customers were never able to resolve their identity theft at all. Data breaches and identity theft have a crippling effect on individuals and detrimentally impact the economy as a whole.10 45. A 2017 study conducted by HIMSS Analytics showed that email was the most likely cause of a data breach, with 78 percent of providers stating that they experienced a healthcare ransomware or malware attack in the past 12 months. 46. Healthcare related data breaches continued to rapidly increase into 2021 when AHP was breached.11 47. In the Healthcare industry, the number one threat vector from a cyber security standpoint is phishing. Cybersecurity firm Proofpoint reports that “phishing is the initial point of compromise in most significant [healthcare] security incidents, according to a recent report from the Healthcare Information and Management Systems Society (HIMSS). And yet, 18% of healthcare organizations fail to conduct phishing tests, a finding HIMSS describes as “incredible.”12 48. As explained by the Federal Bureau of Investigation, “[p]revention is the most effective defense against ransomware and it is critical to take precaution for protection.”13 9 Elinor Mills, Study: Medical identity theft is costly for victims, CNET (March 3, 2010), https://www.cnet.com/news/study-medical-identity-theft-is-costly-for- victims/. 10 Id. 11 2019 HIMSS Cybersecurity Survey, https://www.himss.org/2019-himsscybersecurity-survey. 12 Aaron Jensen, Healthcare Phishing Statistics: 2019 HIMSS Survey Results, PROOFPOINT (Mar. 27, 2019), https://www.proofpoint.com/us/security-awareness/post/healthcare-phishingstatistics-2019-himss-survey-results. 13 See How to Protect Your Networks from RANSOMWARE, FBI (2016) https ://www. fbi.gov/file- repository/ransomware-prevention-and-response-for-cisos.pdf/view. 49. To prevent and detect ransomware attacks, including the ransomware attack that resulted in the Data Breach, Defendant could and should have implemented, as recommended by the United States Government, the following measures: • Implement an awareness and training program. Because end users are targets, employees and individuals should be aware of the threat of ransomware and how it is delivered. • Enable strong spam filters to prevent phishing emails from reaching the end users and authenticate inbound email using technologies like Sender Policy Framework (SPF), Domain Message Authentication Reporting and Conformance (DMARC), and DomainKeys Identified Mail (DKIM) to prevent email spoofing. • Scan all incoming and outgoing emails to detect threats and filter executable files from reaching end users. • Configure firewalls to block access to known malicious IP addresses. • Patch operating systems, software, and firmware on devices. Consider using a centralized patch management system. • Set anti-virus and anti-malware programs to conduct regular scans automatically. • Manage the use of privileged accounts based on the principle of least privilege; no users should be assigned administrative access unless absolutely needed; and those with a need for administrator accounts should only use them when necessary. • Configure access controls—including file, directory, and network share permissions—with least privilege in mind. If a user only needs to read specific files, the user should not have write access to those files, directories, or shares. • Disable macro scripts from office files transmitted via email. Consider using Office Viewer software to open Microsoft Office files transmitted via email instead of full office suite applications. • Implement Software Restriction Policies (SRP) or other controls to prevent programs from executing from common ransomware locations, such as temporary folders supporting popular Internet browsers or compression/decompression programs, including the AppData/LocalAppData folder. • Consider disabling Remote Desktop protocol (RDP) if it is not being used. • Use application whitelisting, which only allows systems to execute programs known and permitted by security policy. • Execute operating system environments or specific programs in a virtualized environment. • Categorize data based on organizational value and implement physical and logical separation of networks and data for different organizational units. 50. To prevent and detect ransomware attacks, including the ransomware attack that resulted in the Data Breach, Defendants could and should have implemented, as recommended by the United States Government, the following measures: • Update and patch your computer. Ensure your applications and operating systems (OSs) have been updated with the latest patches. Vulnerable applications and OSs are the target of most ransomware attacks . . . • Use caution with links and when entering website addresses. Be careful when clicking directly on links in emails, even if the sender appears to be someone you know. Attempt to independently verify website addresses (e.g., contact your organization's helpdesk, search the internet for the sender organization's website or the topic mentioned in the email). Pay attention to the website addresses you click on, as well as those you enter yourself. Malicious website addresses often appear almost identical to legitimate sites, often using a slight variation in spelling or a different domain (e.g., .com instead of .net) . . . • Open email attachments with caution. Be wary of opening email attachments, even from senders you think you know, particularly when attachments are compressed files or ZIP files. • Keep your personal information safe. Check a website's security to ensure the information you submit is encrypted before you provide it . . . • Verify email senders. If you are unsure whether or not an email is legitimate, try to verify the email's legitimacy by contacting the sender directly. Do not click on any links in the email. If possible, use a previous (legitimate) email to ensure the contact information you have for the sender is authentic before you contact them. • Inform yourself. Keep yourself informed about recent cybersecurity threats and up to date on ransomware techniques. You can find information about known phishing attacks on the Anti-Phishing Working Group website. You may also want to sign up for CISA product notifications, which will alert you when a new Alert, Analysis Report, Bulletin, Current Activity, or Tip has been published. • Use and maintain preventative software programs. Install antivirus software, firewalls, and email filters—and keep them updated—to reduce malicious network traffic . . .14 51. To prevent and detect ransomware attacks, including the ransomware attack that resulted in the Data Breach, Defendant could and should have implemented, as recommended by the Microsoft Threat Protection Intelligence Team, the following measures: - Secure internet-facing assets • Apply the latest security updates • Use threat and vulnerability management • Perform regular audit; remove privilege credentials; - Thoroughly investigate and remediate alerts • Prioritize and treat commodity malware infections as potential full compromise - Include IT Pros in security discussions • Ensure collaboration among [security operations], [security admins], and [information technology] admins to configure servers and other endpoints securely; - Build credential hygiene 14 See Security Tip (ST19-001) Protecting Against Ransomware, CYBERSECURITY & INFRASTRUCTURE SECURITY AGENCY (Apr. 11, 2019), https://us-cert.cisa.gov/ncas/tips/ST19-001. • use [multifactor authentication] or [network level authentication] and use strong, randomized, just- in-time local admin passwords - Apply principle of least-privilege • Monitor for adversarial activities • Hunt for brute force attempts • Monitor for cleanup of Event Logs • Analyze logon events - Harden infrastructure • Use Windows Defender Firewall • Enable tamper protection • Enable cloud-delivered protection • Turn on attack surface reduction rules and [Antimalware Scan Interface] for Office [Visual Basic for Applications].15 52. These are basic, common-sense email security measures that every business, not only healthcare businesses, should be doing. Advent Health Partners, with its heightened standard of care should be doing even more. But by adequately taking these common-sense measures, AHP could have prevented this Data Breach from occurring. 53. Charged with handling sensitive PII including healthcare information, AHP knew, or should have known, the importance of safeguarding its customers’ Private Information that was entrusted to it and of the foreseeable consequences if its data security systems were breached. This includes the significant costs that would be imposed on AHP’s customers as a result of a breach. AHP failed, however, to take adequate cybersecurity measures to prevent the Data Breach from occurring. 54. With respect to training, AHP specifically failed to: • Implement a variety of anti-ransomware training tools, in combination, such as computer-based training, classroom 15 See Human-operated ransomware attacks: A preventable disaster, MICROSOFT (Mar. 5, 2020), https://www.microsoft.com/security/blog/2020/03/05/human-operated-ransomware-attacks-apreventable- disaster/. training, monthly newsletters, posters, login alerts, email alerts, and team-based discussions; • Perform regular training at defined intervals such as bi-annual training and/or monthly security updates; and • Craft and tailor different approaches to different employees based on their base knowledge about technology and cybersecurity. 55. The PII was also maintained on AHP’s computer system in a condition vulnerable to cyberattacks such as through the infiltration of Defendant’s systems through ransomware attacks. The mechanism of the cyberattack and the potential for improper disclosure of Plaintiff and Class members’ PII was a known risk to AHP, and thus AHP was on notice that failing to take reasonable steps necessary to secure the PII from those risks left the PII in a vulnerable position. C. The Monetary Value of Privacy Protections and Private Information 56. The fact that Plaintiff and Class members’ Private Information was stolen means that Class members’ information is likely for sale by cybercriminals and will be misused in additional instances in the future. 57. At all relevant times, Defendant was well aware that Private Information it collects from Plaintiff and Class members is highly sensitive and of significant value to those who would use it for wrongful purposes. 58. Private Information is a valuable commodity to identity thieves. As the FTC recognizes, identity thieves can use this information to commit an array of crimes including identify theft, and medical and financial fraud.16 Indeed, a robust “cyber black market” exists in which criminals openly post stolen PII including sensitive health information on multiple underground Internet websites, commonly referred to as the dark web. 16 Federal Trade Commission, Warning Signs of Identity Theft (Sept. 2018), https://www.consumer.ftc.gov/articles/0271-warning-signs-identity-theft . 59. At an FTC public workshop in 2001, then-Commissioner Orson Swindle described the value of a consumer’s personal information: The use of third-party information from public records, information aggregators and even competitors for marketing has become a major facilitator of our retail economy. Even [Federal Reserve] Chairman [Alan] Greenspan suggested here some time ago that it’s something on the order of the life blood, the free flow of information.17 60. Commissioner Swindle’s 2001 remarks are even more relevant today, as consumers’ personal data functions as a “new form of currency” that supports a $26 Billion per year online advertising industry in the United States.18 61. The FTC has also recognized that consumer data is a new (and valuable) form of currency. In an FTC roundtable presentation, another former Commissioner, Pamela Jones Harbour, underscored this point: Most consumers cannot begin to comprehend the types and amount of information collected by businesses, or why their information may be commercially valuable. Data is currency. The larger the data set, the greater potential for analysis—and profit.19 62. Recognizing the high value that consumers place on their Private Information, many companies now offer consumers an opportunity to sell this information.20 The idea is to give consumers more power and control over the type of information that they share and who ultimately receives that information. And, by making the transaction transparent, consumers will 17 Public Workshop: The Information Marketplace: Merging and Exchanging Consumer Data, FED. TRADE COMM’N Tr. at 8:2-8 (Mar. 13, 2001), https://www.ftc.gov/sites/default/files/documents/public_events/information- marketplace-merging-and-exchanging-consumer-data/transcript.pdf. 18 See Julia Angwin & Emily Steel, Web’s Hot New Commodity: Privacy, The Wall Street Journal (Feb. 28, 2011), http://online.wsj.com/article/SB100014240527487035290 [hereinafter Web’s New Hot Commodity]. 19 Statement of FTC Commissioner Pamela Jones Harbour—Remarks Before FTC Exploring Privacy Roundtable, FED. TRADE COMM’N (Dec. 7, 2009), https://www.ftc.gov/sites/default/files/documents/public_ statements/remarks-ftc-exploring-privacy-roundtable/091207privacyroundtable.pdf. 20 Web’s Hot New Commodity, supra note 17. make a profit from their Private Information. This business has created a new market for the sale and purchase of this valuable data. 63. Consumers place a high value not only on their Private Information, but also on the privacy of that data. Researchers have begun to shed light on how much consumers value their data privacy, and the amount is considerable. Indeed, studies confirm that the average direct financial loss for victims of identity theft in 2014 was $1,349.21 64. The value of Plaintiff and Class members’ Private Information on the black market is substantial. Sensitive health information can sell for as much as $363.22 This information is particularly valuable because criminals can use it to target victims with frauds and scams that take advantage of the victim’s medical conditions or victim settlements. It can be used to create fake insurance claims, allowing for the purchase and resale of medical equipment, or gain access to prescriptions for illegal use or resale. 65. Medical identity theft can result in inaccuracies in medical records and costly false claims. It can also have life-threatening consequences. If a victim’s health information is mixed with other records, it can lead to misdiagnosis or mistreatment. “Medical identity theft is a growing and dangerous crime that leaves its victims with little to no recourse for recovery,” reported Pam Dixon, executive director of World Privacy Forum. “Victims often experience financial repercussions and worse yet, they frequently discover erroneous information has been added to their personal medical files due to the thief’s activities.”23 21 See U.S. Dep’t of Justice, Victims of Identity Theft, OFFICE OF JUSTICE PROGRAMS: BUREAU OF JUSTICE STATISTICS 1 (Nov. 13, 2017), https://www.bjs.gov/content/pub/pdf/vit14.pdf [hereinafter Victims of Identity Theft]. 22 Center for Internet Security, Data Breaches: In the Healthcare Sector, https://www.cisecurity.org/blog/data- breaches-in-the-healthcare-sector/. 23 Michael Ollove, The Rise of Medical Identity Theft in Healthcare, KAISER (Feb. 7, 2014) https://khn.org/news/rise- of-indentity-theft/. 66. The ramifications of AHP’s failure to keep its customers’ Private Information secure are long-lasting and severe. Once Private Information is stolen, fraudulent use of that information and damage to victims may continue for years. Fraudulent activity might not show up for 6 to 12 months or even longer. 67. Approximately 21% of victims do not realize their identify has been compromised until more than two years after it has happened.24 This gives thieves ample time to seek multiple treatments under the victim’s name. Forty percent of consumers found out they were a victim of medical identity theft only when they received collection letters from creditors for expenses that were incurred in their names.25 68. Breaches are particularly serious in healthcare industries. The healthcare sector reported the second largest number of breaches among all measured sectors in 2018, with the highest rate of exposure per breach.26 Indeed, when compromised, healthcare related data is among the most private and personally consequential. A report focusing on healthcare breaches found that the “average total cost to resolve an identity theft-related incident . . . came to about $20,000,” and that the victims were often forced to pay out-of-pocket costs for healthcare they did not receive in order to restore coverage.27 Almost 50% of the surveyed victims lost their healthcare coverage as a result of the incident, while nearly 30% said their insurance premiums went up after the event. Forty percent of the victims were never able to resolve their identity theft at all. Seventy-four percent said that the effort to resolve the crime and restore their identity was significant or very 24 See Medical ID Theft Checklist, IDENTITYFORCE https://www.identityforce.com/blog/medical-id-theft-checklist-2. 25 The Potential Damages and Consequences of Medical Identify Theft and Healthcare Data Breaches, EXPERIAN, (Apr. 2010), https://www.experian.com/assets/data-breach/white-papers/consequences-medical-id-theft- healthcare.pdf. 26 Identity Theft Resource Center, 2018 End-of-Year Data Breach Report, (2019) https://www.idtheftcenter.org/wp- content/uploads/2019/02/ITRC_2018-End-of-Year-Aftermath_FINAL_V2_combinedWEB.pdf. 27 Elinor Mills, Study: Medical identity theft is costly for victims, CNET (March 3, 2010), https://www.cnet.com/news/study-medical-identity-theft-is-costly-for- victims/. significant. Data breaches and identity theft have a crippling effect on individuals and detrimentally impact the economy as a whole.28 69. At all relevant times, Defendant was well-aware, or reasonably should have been aware, that the Private Information it maintains is highly sensitive and could be used for wrongful purposes by third parties, such as identity theft and fraud. Defendant should have particularly been aware of these risks, given the significant number of data breaches affecting the health care industry and related industries. 70. Had Defendant remedied the deficiencies in its security systems, followed industry guidelines, and adopted security measures recommended by experts in the field, Defendant would have prevented the ransomware attack into its systems and, ultimately, the theft of its customers’ Private Information. 71. The compromised Private Information in the Data Breach is of great value to hackers and thieves and can be used in a variety of ways. Information about, or related to, an individual for which there is a possibility of logical association with other information is of great value to hackers and thieves. Indeed, “there is significant evidence demonstrating that technological advances and the ability to combine disparate pieces of data can lead to identification of a consumer, computer or device even if the individual pieces of data do not constitute PII.”29 For example, different PII elements from various sources may be able to be linked in order to identify an individual, or access additional information about or relating to the individual.30 Based upon information and belief, the unauthorized parties utilized the Private Information they 28 Id. 29 Protecting Consumer Privacy in an Era of Rapid Change: A Proposed Framework for Businesses and Policymakers, Preliminary FTC Staff Report, FED. TRADE COMM’N 35-38 (Dec. 2010), https://www.ftc.gov/reports/preliminary-ftc-staff-report-protecting-consumer-privacy-era-rapid-change- proposed-framework. 30 See id. (evaluating privacy framework for entities collecting or using consumer data with can be “reasonably linked to a specific consumer, computer, or other device”). obtained through the Data Breach to obtain additional information from Plaintiff and Class members that was misused. 72. In addition, as technology advances, computer programs may scan the Internet with wider scope to create a mosaic of information that may be used to link information to an individual in ways that were not previously possible. This is known as the “mosaic effect.” 73. Names and dates of birth, combined with contact information like telephone numbers and email addresses, are very valuable to hackers and identity thieves as it allows them to access users’ other accounts. Thus, even if payment card information were not involved in the Data Breach, the unauthorized parties could use Plaintiff and Class members’ Private Information to access accounts, including, but not limited to email accounts and financial accounts, to engage in the fraudulent activity identified by Plaintiff. 74. Given these facts, any company that transacts business with customers and then compromises the privacy of customers’ Private Information has thus deprived customers of the full monetary value of their transaction with the company. 75. Acknowledging the damage to Plaintiff and Class members, Defendant instructed customers like Plaintiff to “remain vigilant by reviewing account statements and monitoring your credit report for unauthorized activity, especially activity that may indicate fraud and identity theft.” Plaintiff and the other Class members now face a greater risk of identity theft. 76. In short, the Private Information exposed is of great value to hackers and cyber criminals and the data compromised in the Data Breach can be used in a variety of unlawful manners, including opening new credit and financial accounts in users’ names. D. Advent Health Partners’ Conduct violated HIPPA 77. HIPAA requires covered entities like AHP protect against reasonably anticipated threats to the security of PHI. Covered entities must implement safeguards to ensure the confidentiality, integrity, and availability of PHI. Safeguards must include physical, technical, and administrative components.31 78. Title II of HIPAA contains what are known as the Administrative Simplification provisions. 42 U.S.C. §§ 1301, et seq. These provisions require, among other things, that the Department of Health and Human Services (“HHS”) create rules to streamline the standards for handling Private Information like the data Defendant left unguarded. The HHS has subsequently promulgated five rules under authority of the Administrative Simplification provisions of HIPAA. 79. The HIPAA Breach Notification Rule, 45 CFR §§ 164.400-414, also required Defendant to provide notice of the breach to each affected individual “without unreasonable delay and in no case later than 60 days following discovery of the breach.”32 80. Defendant’s Data Breach resulted from a combination of insufficiencies that demonstrate Defendant failed to comply with safeguards mandated by HIPAA regulations. AHP’s security failures include, but are not limited to, the following: • Failing to ensure the confidentiality and integrity of electronic protected health information that Defendant creates, receives, maintains, and transmits in violation of 45 C.F.R. §164.306(a)(1); • Failing to implement technical policies and procedures for electronic information systems that maintain electronic protected health information to allow access only to those persons or software programs that have been granted access rights in violation of 45 C.F.R. §164.312(a)(1); 31 What is Considered Protected Health Information Under HIPAA?, HIPPA JOURNAL, https://www.hipaajournal.com/what-is-considered-protected-health-information-under-hipaa/. 32 Breach Notification Rule, U.S. DEP’T HEALTH & HUMAN SERVS., https://www.hhs.gov/hipaa/for- professionals/breach-notification/index.html. • Failing to implement policies and procedures to prevent, detect, contain, and correct security violations in violation of 45 C.F.R. §164.308(a)(1); • Failing to identify and respond to suspected or known security incidents; mitigate, to the extent practicable, harmful effects of security incidents that are known to the covered entity in violation of 45 C.F.R. §164.308(a)(6)(ii); • Failing to protect against any reasonably-anticipated threats or hazards to the security or integrity of electronic protected health information in violation of 45 C.F.R. §164.306(a)(2); • Failing to protect against any reasonably anticipated uses or disclosures of electronically protected health information that are not permitted under the privacy rules regarding individually identifiable health information in violation of 45 C.F.R. §164.306(a)(3); • Failing to ensure compliance with HIPAA security standard rules by their workforce in violation of 45 C.F.R. §164.306(a)(94); • Impermissibly and improperly using and disclosing protected health information that is and remains accessible to unauthorized persons in violation of 45 C.F.R. §164.502, et seq.; • Failing to effectively train all members of their workforce (including independent contractors) on the policies and procedures with respect to protected health information as necessary and appropriate for the members of their workforce to carry out their functions and to maintain security of protected health information in violation of 45 C.F.R. §164.530(b) and 45 C.F.R. §164.308(a)(5); and • Failing to design, implement, and enforce policies and procedures establishing physical and administrative safeguards to reasonably safeguard protected health information, in compliance with 45 C.F.R. §164.530(c). E. Advent Health Partners Failed to Comply with FTC Guidelines 81. AHP was also prohibited by the Federal Trade Commission Act (“FTC Act”) (15 U.S.C. §45) from engaging in “unfair or deceptive acts or practices in or affecting commerce.” The Federal Trade Commission (“FTC”) has concluded that a company’s failure to maintain reasonable and appropriate data security for consumers’ sensitive personal information is an “unfair practice” in violation of the FTC Act. See, e.g., FTC v. Wyndham Worldwide Corp., 799 F.3d 236 (3d Cir. 2015). 82. The FTC has promulgated numerous guides for businesses that highlight the importance of implementing reasonable data security practices. According to the FTC, the need for data security should be factored into all business decision-making.33 83. In 2016, the FTC updated its publication, Protecting Personal Information: A Guide for Business, which established cybersecurity guidelines for businesses.34 The guidelines note that businesses should protect the personal customer information that they keep; properly dispose of personal information that is no longer needed; encrypt information stored on computer networks; understand their network’s vulnerabilities; and implement policies to correct any security problems. 84. The FTC further recommends that companies not maintain Private Information longer than is needed for authorization of a transaction; limit access to private data; require complex passwords to be used on networks; use industry-tested methods for security; monitor for suspicious activity on the network; and verify that third-party service providers have implemented reasonable security measures.35 85. The FTC has brought enforcement actions against businesses for failing to adequately and reasonably protect customer data, treating the failure to employ reasonable and 33 Start With Security: A Guide for Business, FED. TRADE. COMM’N (June 2015), https://www.ftc.gov/system/files/documents/plain-language/pdf0205-startwithsecurity.pdf [hereinafter Start with Security]. 34 Protecting Personal Information: A Guide for Business, FED. TRADE. COMM’M (Oct. 2016), https://www.ftc.gov/system/files/documents/plain-language/pdf- 0136_proteting-personal-information.pdf. 35 Start with Security, supra note 32. appropriate measures to protect against unauthorized access to confidential consumer data as an unfair act or practice prohibited by Section 5 of the Federal Trade Commission Act (“FTCA”), 15 U.S.C. § 45. Orders resulting from these actions further clarify the measures businesses must take to meet their data security obligations. 86. AHP was at all times fully aware of its obligation to protect the Private Information of patients because of its position as a trusted healthcare provider. AHP was also aware of the significant repercussions that would result from its failure to do so. 87. As evidenced by Defendant’s failure to comply with its legal obligations established by the FTC Act, Defendant failed to properly safeguard Class members’ Private Information, allowing hackers to access their Private Information F. AHP Failed to Comply with Healthcare Industry Standards 88. HHS’s Office for Civil Rights has stated: While all organizations need to implement policies, procedures, and technical solutions to make it harder for hackers to gain access to their systems and data, this is especially important in the healthcare industry. Hackers are actively targeting healthcare organizations, as they store large quantities of highly Private and valuable data.36 89. HHS highlights several basic cybersecurity safeguards that can be implemented to improve cyber resilience that require a relatively small financial investment yet can have a major impact on an organization’s cybersecurity posture including: (a) the proper encryption of Private Information; (b) educating and training healthcare employees on how to protect Private Information; and (c) correcting the configuration of software and network devices. 36 Cybersecurity Best Practices for Healthcare Organizations, HIPAA JOURNAL (Nov. 1, 2018), https://www.hipaajournal.com/important-cybersecurity-best-practices-for-healthcare-organizations/. 90. Private cybersecurity firms have also identified the healthcare sector as being particularly vulnerable to cyber-attacks, both because the of the value of the Private Information which they maintain and because as an industry they have been slow to adapt and respond to cybersecurity threats.37 They too have promulgated similar best practices for bolstering cybersecurity and protecting against the unauthorized disclosure of Private Information. 91. Despite the abundance and availability of information regarding cybersecurity best practices for the healthcare industry, AHP chose to ignore them. These best practices were known, or should have been known by AHP, whose failure to heed and properly implement them directly led to the Data Breach and the unlawful exposure of Private Information. G. Damages to Plaintiff and the Class 92. Plaintiff and the Class have been damaged by the compromise of their Private Information in the Data Breach. 93. The ramifications of AHP’s failure to keep patients’ Private Information secure are long lasting and severe. Once Private Information is stolen, fraudulent use of that information and damage to the victims may continue for years. Consumer victims of data breaches are more likely to become victims of identity fraud.38 94. In addition to their obligations under state and federal laws and regulations, Defendant owed a common law duty to Plaintiff and Class members to protect Private Information entrusted to it, including to exercise reasonable care in obtaining, retaining, securing, safeguarding, deleting, and protecting the Private Information in its possession from being compromised, lost, stolen, accessed, and misused by unauthorized parties. 37 See, e.g., 10 Best Practices For Healthcare Security, INFOSEC, https://resources.infosecinstitute.com/topics/healthcare-information-security/#gref. 38 2014 LexisNexis True Cost of Fraud Study, LEXISNEXIS (Aug. 2014), https://www.lexisnexis.com/risk/downloads/assets/true-cost-fraud-2014.pdf. 95. Defendant further owed and breached its duty to Plaintiff and Class members to implement processes and specifications that would detect a breach of its security systems in a timely manner and to timely act upon warnings and alerts, including those generated by its own security systems. 96. As a direct result of Defendant’s intentional, willful, reckless, and negligent conduct which resulted in the Data Breach, unauthorized parties were able to access, acquire, view, publicize, and/or otherwise commit the identity theft and misuse of Plaintiff and Class members’ Private Information as detailed above, and Plaintiff and members of the Class have already suffered, and are at a heightened and increased substantial risk of suffering, identity theft and fraud. 97. The risks associated with identity theft are serious. While some identity theft victims can resolve their problems quickly, others spend hundreds to thousands of dollars and many days repairing damage to their good name and credit record. Some consumers victimized by identity theft may lose out on job opportunities, or be denied loans for education, housing or cars because of negative information on their credit reports. In rare cases, they may even be arrested for crimes they did not commit. 98. Some of the injuries and risks associated with the loss of personal information have already manifested themselves in Plaintiff and other Class members’ lives. Plaintiff McHenry received a cryptically written notice letter from Defendant stating that his information was released, and that he should remain vigilant for fraudulent activity on his accounts, with no other explanation of where this information could have gone, or who might have access to it. He was subsequently denied benefits he never applied for, has already spent hours on the phone trying to determine what additional negative effects may occur from the loss of his personal information, and now faces a certainly impending and substantial risk of a slew of future harms. 99. Plaintiff and the Class have suffered or face a substantial risk of suffering out-of- pocket fraud losses such as fraudulent charges on online accounts, credit card fraud, applications for benefits made fraudulent in their names, loans opened in their names, medical services billed in their names, and identity theft. 100. Plaintiff and Class members have, may have, and/or will have incurred out of pocket costs for protective measures such as credit monitoring fees, credit report fees, credit freeze fees, and similar costs directly or indirectly related to the Data Breach. 101. Plaintiff and Class members did not receive the full benefit of their bargain when paying for medical services, and instead received services that were of a diminished value to those described in their agreements with their respective healthcare institutions, which healthcare institutions entered into agreements with AHP that were made solely for the benefit of Plaintiff and Class members. Plaintiff and Class members were damaged in an amount at least equal to the difference in the value between the services they thought they paid for (which would have included adequate data security protection) and the services they actually received. 102. Plaintiff and Class members would not have obtained services from their medical providers had they known that Defendant failed to properly train its employees, lacked safety controls over its computer network, and did not have proper data security practices to safeguard their Private Information from criminal theft and misuse. 103. Plaintiff and the Class will continue to spend significant amounts of time to monitor their financial and medical accounts for misuse. 104. The theft of Social Security Numbers, which were purloined as part of the Data Breach, is particularly detrimental to victims. The U.S. Social Security Administration (“SSA”) warns that “[i]dentity theft is one of the fastest growing crimes in America.”39 The SSA has stated that “[i]dentity thieves can use your number and your good credit to apply for more credit in your name. Then, they use the credit cards and don’t pay the bills, it damages your credit. You may not find out that someone is using your number until you’re turned down for credit, or you begin to get calls from unknown creditors demanding payment for items you never bought.”40 In short, “[s]omeone illegally using your Social Security number and assuming your identity can cause a lot of problems.”41 105. In fact, a new Social Security number is substantially less effective where “other personal information, such as [the victim’s] name and address, remains the same” and for some victims, “a new number actually creates new problems. If the old credit information is not associated with your new number, the absence of any credit history under your new number may make it more difficult for you to get credit.”42 106. Identity thieves can use the victim’s Private Information to commit any number of frauds, such as obtaining a job, procuring housing, or even giving false information to police during an arrest. In the healthcare industry context, Private Information can be used to submit false insurance claims. As a result, Plaintiff and Class members now face a real and continuing immediate risk of identity theft and other problems associated with the disclosure of their Social Security numbers and will need to monitor their credit for an indefinite duration. For Plaintiff and Class members, this risk creates unending feelings of fear and annoyance. Private information is especially valuable to identity thieves. Defendant knew or should have known this and 39 Identity Theft And Your Social Security Number, SOCIAL SECURITY ADMIN. (Dec. 2013), http://www.ssa.gov/pubs/EN-05-10064.pdf. 40 Id. 41 Id. 42 Id. strengthened its data systems accordingly. Defendant was put on notice of the substantial and foreseeable risk of harm from a data breach, yet it failed to properly prepare for that risk. 107. As a result of the Data Breach, Plaintiff and Class members’ Private Information has diminished in value. 108. The Private Information belonging to Plaintiff and Class members is private and was left inadequately protected by Defendant who did not obtain Plaintiff or Class members’ consent to disclose such Private Information to any other person as required by applicable law and industry standards. Defendant disclosed information about Plaintiff and the Class that was of an extremely personal and sensitive nature as a direct result of its inadequate security measures. 109. The Data Breach was a direct and proximate result of Defendant’s failure to: (a) properly safeguard and protect Plaintiff and Class members’ Private Information from unauthorized access, use, and disclosure, as required by various state and federal regulations, industry practices, and common law; (b) establish and implement appropriate administrative, technical, and physical safeguards to ensure the security and confidentiality of Plaintiff and Class members’ Private Information; and (c) protect against reasonably foreseeable threats to the security or integrity of such information. 110. Defendant had the resources necessary to prevent the Data Breach, but neglected to adequately implement data security measures, despite its obligation to protect customer data. 111. Defendant did not properly train its employees, particularly its information technology department, to timely identify and/or avoid ransomware attacks. 112. Had Defendant remedied the deficiencies in its data security systems and adopted security measures recommended by experts in the field, it would have prevented the intrusions into its systems and, ultimately, the theft of Plaintiff and Class members’ Private Information. 113. As a direct and proximate result of Defendant’s wrongful actions and inactions, Plaintiff and Class members have been placed at an imminent, immediate, and continuing increased risk of harm from identity theft and fraud, requiring them to take the time which they otherwise would have dedicated to other life demands such as work and family in an effort to mitigate the actual and potential impact of the Data Breach on their lives. 114. The U.S. Department of Justice’s Bureau of Justice Statistics found that “among victims who had personal information used for fraudulent purposes, twenty-nine percent spent a month or more resolving problems” and that “resolving the problems caused by identity theft [could] take more than a year for some victims.”43 115. Other than offering 12 months of credit monitoring, Defendant did not take any measures to assist Plaintiff and Class members other than telling them to simply do the following: • remain vigilant for incidents of fraud and identity theft; • review account statements and monitor credit reports for unauthorized activity; • obtain a copy of free credit reports; • contact the FTC and/or the state Attorney General’s office; • enact a security freeze on credit files; and • create a fraud alert. None of these recommendations, however, require Defendant to expend any effort to protect Plaintiff and Class members’ Private Information. 116. Defendant’s failure to adequately protect Plaintiff and Class members’ Private Information has resulted in Plaintiff and Class members having to undertake these tasks, which 43 See U.S. Dep’t of Justice, Victims of Identity Theft, OFFICE OF JUSTICE PROGRAMS: BUREAU OF JUSTICE STATISTICS 1 (Nov. 13, 2017), https://www.bjs.gov/content/pub/pdf/vit14.pdf [hereinafter Victims of Identity Theft]. require extensive amounts of time, calls, and, for many of the credit and fraud protection services, payment of money–while Defendant sits by and does nothing to assist those affected by the incident. Instead, as AHP’s Data Breach Notice indicates, it is putting the burden on Plaintiff and Class members to discover possible fraudulent activity and identity theft. 117. While Defendant offered one year of credit monitoring, the credit monitoring offered from Transunion does not guarantee privacy or data security for Plaintiff. Thus, to mitigate harm, Plaintiff and Class members are now burdened with indefinite monitoring and vigilance of their accounts. 118. Moreover, the offer of 12 months of identity monitoring to Plaintiff and Class members is woefully inadequate. While some harm has already taken place, the worst is yet to come. There may be a time lag between when harm occurs versus when it is discovered, and between when Private Information is acquired and when it is used. Furthermore, identity theft monitoring only alerts someone to the fact that they have already been the victim of identity theft (i.e., fraudulent acquisition and use of another person’s Private Information) – it does not prevent identity theft.44 This is especially true for many kinds of medical identity theft, for which most credit monitoring plans provide little or no monitoring or protection. 119. Plaintiff and Class members have been damaged in several other ways as well. Plaintiff and Class members have been exposed to an impending, imminent, and ongoing increased risk of fraud, identity theft, and other misuse of their Private Information. Plaintiff and Class members must now and indefinitely closely monitor their financial and other accounts to guard against fraud. This is a burdensome and time-consuming task. Plaintiff and Class members have 44 See, e.g., Kayleigh Kulp, Credit Monitoring Services May Not Be Worth the Cost, CNBC (Nov. 30, 2017), https://www.cnbc.com/2017/11/29/credit-monitoring-services-may-not-beworth-the-cost.html. also been forced to purchase adequate credit reports, credit monitoring and other identity protection services, and have placed credit freezes and fraud alerts on their credit reports, while also spending significant time investigating and disputing fraudulent or suspicious activity on their accounts. Plaintiff and Class members also suffered a loss of the inherent value of their Private Information. 120. The Private Information stolen in the Data Breach can be misused on its own or can be combined with personal information from other sources such as publicly available information, social media, etc. to create a package of information capable of being used to commit further identity theft. Thieves can also use the stolen Private Information to send spear-phishing emails to Class members to trick them into revealing sensitive information. Lulled by a false sense of trust and familiarity from a seemingly valid sender (for example Wells Fargo, Amazon, or a government entity), the individual agrees to provide sensitive information requested in the email, such as login credentials, account numbers, and the like. 121. As a result of Defendant’s failures to prevent the Data Breach, Plaintiff and Class members have suffered, will suffer, and are at increased risk of suffering: • The compromise, publication, theft and/or unauthorized use of their Private Information; • Out-of-pocket costs associated with the prevention, detection, recovery and remediation from identity theft or fraud; • Lost opportunity costs and lost wages associated with efforts expended and the loss of productivity from addressing and attempting to mitigate the actual and future consequences of the Data Breach, including but not limited to efforts spent researching how to prevent, detect, contest and recover from identity theft and fraud; • The continued risk to their Private Information, which remains in the possession of Defendant and is subject to further breaches so long as Defendant fails to undertake appropriate measures to protect the Private Information in its possession; • Current and future costs in terms of time, effort and money that will be expended to prevent, detect, contest, remediate and repair the impact of the Data Breach for the remainder of the lives of Plaintiff and Class members; and • Anxiety and distress resulting fear of misuse of their Private Information. 122. In addition to a remedy for the economic harm, Plaintiff and Class members maintain an undeniable interest in ensuring that their Private Information remains secure and is not subject to further misappropriation and theft. CLASS ACTION ALLEGATIONS 123. Plaintiff brings this action individually and on behalf of all other persons similarly situated, pursuant to Federal Rule of Civil Procedure 23(a), 23(b)(1), 23(b)(2), 23(b)(3), and/or 23(c)(4). 124. Specifically, Plaintiff proposes the following Nationwide Class and Oklahoma Subclass (collectively, the “Class”) definitions: Nationwide Class All persons residing in the United States whose Private Information was compromised as a result of the Data Breach discovered on or about September of 2021 and who were sent notice of the Data Breach. Oklahoma Subclass All persons residing in Oklahoma whose Private Information was compromised as a result of the Data Breach discovered on or about September 2021 and who were sent notice of the Data Breach. Excluded from the Class are Defendant and Defendant’s affiliates, parents, subsidiaries, employees, officers, agents, and directors. Also excluded are any judicial officers presiding over this matter and the members of their immediate families and judicial staff. 125. Plaintiff reserves the right to modify, change, amend, or expand the definitions of the Nationwide Class and Oklahoma Subclass based upon discovery and further investigation. 126. Certification of Plaintiff’s claims for class-wide treatment is appropriate because Plaintiff can prove the elements of the claims on a class-wide basis using the same evidence as would be used to prove those elements in individual actions alleging the same claims. 127. Numerosity—Federal Rule of Civil Procedure 23(a)(1). The members of the Class are so numerous that joinder of all Class members would be impracticable. On information and belief, the Class numbers in the thousands. Moreover, the Class and Oklahoma Subclass are composed of an easily ascertainable set of individuals and entities who were patients of Defendant and who were impacted by the Data Breach. The precise number of Class members can be further confirmed through discovery, which includes Defendant’s records. The disposition of Plaintiff’s and Class members’ claims through a class action will benefit the parties and this Court. 128. Commonality and Predominance—Federal Rule of Civil Procedure 23(a)(2) and 23(b)(3). Common questions of law and fact exist as to all members of the Class and predominate over questions affecting only individual members of the Class. Such common questions of law or fact include, inter alia: • Whether Defendant’s data security systems prior to and during the Data Breach complied with applicable data security laws and regulations; • Whether Defendant’s data security systems prior to and during the Data Breach were consistent with industry standards; • Whether Defendant properly implemented its purported security measures to protect Plaintiff’s and the Class’s Private Information from unauthorized capture, dissemination, and misuse; • Whether Defendant took reasonable measures to determine the extent of the Data Breach after it first learned of same; • Whether Defendant disclosed Plaintiff’s and the Class’s Private Information in violation of the understanding that the Private Information was being disclosed in confidence and should be maintained; • Whether Defendant willfully, recklessly, or negligently failed to maintain and execute reasonable procedures designed to prevent unauthorized access to Plaintiff’s and the Class’s Private Information; • Whether Defendant was negligent in failing to properly secure and protect Plaintiff’s and the Class’s Private Information; • Whether Defendant was unjustly enriched by its actions; and • Whether Plaintiff and the other members of the Class are entitled to damages, injunctive relief, or other equitable relief, and the measure of such damages and relief. 129. Defendant engaged in a common course of conduct giving rise to the legal rights sought to be enforced by Plaintiff, on behalf of himself and other members of the Class. Similar or identical common law violations, business practices, and injuries are involved. Individual questions, if any, pale by comparison, in both quality and quantity, to the numerous common questions that predominate in this action. 130. Typicality—Federal Rule of Civil Procedure 23(a)(3). Plaintiff’s claims are typical of the claims of the other members of the Class because, among other things, all Class members were similarly injured and sustained similar monetary and economic injuries as a result of Defendant’s uniform misconduct described above and were thus all subject to the Data Breach alleged herein. Further, there are no defenses available to Defendant that are unique to Plaintiff. 131. Adequacy of Representation—Federal Rule of Civil Procedure 23(a)(4). Plaintiff is an adequate representative of the Class because his interests do not conflict with the interests of the Class he seeks to represent, he has retained counsel competent and experienced in complex class action litigation, and Plaintiff will prosecute this action vigorously. The Class’s interests will be fairly and adequately protected by Plaintiff and his counsel. 132. Injunctive Relief—Federal Rule of Civil Procedure 23(b)(2). Defendant has acted and/or refused to act on grounds that apply generally to the Class, making injunctive and/or declaratory relief appropriate with respect to the Class under Fed. Civ. P. 23 (b)(2). 133. Superiority—Federal Rule of Civil Procedure 23(b)(3). A class action is superior to any other available means for the fair and efficient adjudication of this controversy, and no unusual difficulties are likely to be encountered in the management of this class action. The damages or other financial detriment suffered by Plaintiff and the other members of the Class are relatively small compared to the burden and expense that would be required to individually litigate their claims against Defendant, so it would be impracticable for members of the Class to individually seek redress for Defendant’s wrongful conduct. Even if members of the Class could afford individual litigation, the court system could not. Individualized litigation creates a potential for inconsistent or contradictory judgments and increases the delay and expense to all parties and the court system. By contrast, the class action device presents far fewer management difficulties and provides the benefits of a single adjudication, economy of scale, and comprehensive supervision by a single court. 134. Class certification is also appropriate under Rules 23(b)(1) and/or (b)(2) because: a. The prosecution of separate actions by the individual members of the Class would create a risk of inconsistent or varying adjudications establishing incompatible standards of conduct for Defendant; b. The prosecution of separate actions by individual Class members would create a risk of adjudication that would, as a practical matter, be dispositive of the interests of other Class members not parties to the adjudications, or would substantially impair or impede their ability to protect their interests; and c. Defendant has acted and refused to act on grounds generally applicable to the Class, thereby making appropriate final injunctive relief with respect to the members of the Class as a whole. 135. Class certification is also appropriate because this Court can designate particular claims or issues for class-wide treatment and may designate multiple subclasses pursuant to Fed. R. Civ. P. 23(c)(4). 136. No unusual difficulties are likely to be encountered in the management of this action as a class action. COUNT I NEGLIGENCE (On Behalf of Plaintiff and the Nationwide Class or, Alternatively, the State Subclass) 137. Plaintiff fully incorporates by reference all of the above paragraphs, as though fully set forth herein. 138. Upon Defendant’s accepting and storing the Private Information of Plaintiff and the Class in its computer systems and on its networks, Defendant undertook and owed a duty to Plaintiff and the Class to exercise reasonable care to secure and safeguard that information and to use commercially reasonable methods to do so. Defendant knew that the Private Information was private and confidential and should be protected as private and confidential. 139. Defendant owed a duty of care not to subject Plaintiff and the Class’s Private Information to an unreasonable risk of exposure and theft because Plaintiff and the Class were foreseeable and probable victims of any inadequate security practices. 140. Defendant owed numerous duties to Plaintiff and the Class, including the following: • to exercise reasonable care in obtaining, retaining, securing, safeguarding, deleting and protecting Private Information in its possession; • to protect Private Information using reasonable and adequate security procedures and systems that are compliant with industry-standard practices; and • to implement processes to quickly detect a data breach and to timely act on warnings about data breaches. 141. Defendant also breached its duty to Plaintiff and Class members to adequately protect and safeguard Private Information by disregarding standard information security principles, despite obvious risks, and by allowing unmonitored and unrestricted access to unsecured Private Information. Furthering its dilatory practices, Defendant failed to provide adequate supervision and oversight of the Private Information with which it was and is entrusted, in spite of the known risk and foreseeable likelihood of breach and misuse, which permitted a malicious third party to gather Plaintiff and Class members’ Private Information and potentially misuse the Private Information and intentionally disclose it to others without consent. 142. Defendant knew, or should have known, of the risks inherent in collecting and storing Private Information and the importance of adequate security. Defendant knew or should have known about numerous well-publicized data breaches within the medical industry. 143. Defendant knew, or should have known, that its data systems and networks did not adequately safeguard Plaintiff and Class members’ Private Information. 144. Defendant breached its duties to Plaintiff and Class members by failing to provide fair, reasonable, or adequate computer systems and data security practices to safeguard Plaintiff and Class members’ Private Information. 145. Because Defendant knew that a breach of its systems would damage thousands of its customers’ patients, including Plaintiff and Class members, Defendant had a duty to adequately protect its data systems and the Private Information contained thereon. 146. Defendant’s duty of care to use reasonable security measures arose as a result of the special relationship that existed between Defendant and Plaintiff and Class members, which is recognized by laws and regulations including but not limited to common law. Defendant was in a position to ensure that its systems were sufficient to protect against the foreseeable risk of harm to Class members from a data breach. 147. In addition, Defendant had a duty to employ reasonable security measures under Section 5 of the Federal Trade Commission Act, 15 U.S.C. § 45, which prohibits “unfair . . . practices in or affecting commerce,” including, as interpreted and enforced by the FTC, the unfair practice of failing to use reasonable measures to protect confidential data. 148. Defendant also had a duty under HIPAA privacy laws, which were enacted with the objective of protecting the confidentiality of clients’ healthcare information and set forth the conditions under which such information can be used, and to whom it can be disclosed. HIPAA privacy laws not only apply to healthcare providers and the organizations they work for, but to any entity that may have access to healthcare information about a patient that—if it were to fall into the wrong hands—could present a risk of harm to the patient’s finances or reputation. 149. Furthermore, Defendant had a duty under Tenn. Code Ann. § 47-18-101, et seq to ensure that all customers’ medical records and communications were kept confidential. 150. Defendant’s duty to use reasonable care in protecting confidential data arose not only as a result of the statutes and regulations described above, but also because Defendant is bound by industry standards to protect confidential Private Information. 151. Defendant’s own conduct also created a foreseeable risk of harm to Plaintiff and Class members and their Private Information. Defendant’s misconduct included failing to: (1) secure Plaintiff and Class member’s Private Information; (2) comply with industry standard security practices; (3) implement adequate system and event monitoring; and (4) implement the systems, policies, and procedures necessary to prevent this type of data breach. 152. Defendant breached its duties, and thus was negligent, by failing to use reasonable measures to protect Class members’ Private Information, and by failing to provide timely notice of the Data Breach. The specific negligent acts and omissions committed by Defendant include, but are not limited to, the following: a. Failing to adopt, implement, and maintain adequate security measures to safeguard Class members’ Private Information; b. Failing to adequately monitor the security of Defendant’s networks and systems; c. Allowing unauthorized access to Class members’ Private Information; d. Failing to detect in a timely manner that Class members’ Private Information had been compromised; and e. Failing to timely notify Class members about the Data Breach so that they could take appropriate steps to mitigate the potential for identity theft and other damages 153. Through Defendant’s acts and omissions described in this Complaint, including its failure to provide adequate security and failure to protect Plaintiff and Class members’ Private Information from being foreseeably captured, accessed, disseminated, stolen and misused, Defendant unlawfully breached its duty to use reasonable care to adequately protect and secure Plaintiff and Class members’ Private Information during the time it was within Defendant’s possession or control. 154. Defendant’s conduct was grossly negligent and departed from all reasonable standards of care, including, but not limited to failing to adequately protect the Private Information and failing to provide Plaintiff and Class members with timely notice that their sensitive Private Information had been compromised. 155. Neither Plaintiff nor the other Class members contributed to the Data Breach and subsequent misuse of their Private Information as described in this Complaint. 156. As a direct and proximate result of Defendant’s conduct, Plaintiff and Class members suffered damages as alleged above. 157. Plaintiff and Class members are also entitled to injunctive relief requiring Defendant to, e.g., (i) strengthen data security systems and monitoring procedures; (ii) submit to future annual audits of those systems and monitoring procedures; and (iii) immediately provide lifetime free credit monitoring to all Class members. COUNT II BREACH OF THID PARTY BENEFICIARY CONTRACT (On Behalf of Plaintiff and the Nationwide Class or, Alternatively, the State Subclass) 158. Plaintiff fully incorporates by reference all of the above paragraphs, as though fully set forth herein. 159. Plaintiff brings this claim for breach of third-party beneficiary contract against AHP in the alternative to Plaintiff’s claim for breach of implied contract 160. Advent Health Partners entered into a contract to provide medical claims and billing review services to Saint Frances Health. Upon information and belief, this contract is virtually identity to the contracts entered into between Advent Health Partners and its other medical provider customers around the country whose patients were affected by the Data Breach. 161. The contracts were made expressly for the benefit of Plaintiff and the Class, as it was their confidential medical information that AHP agreed to collect and protect through its services. Thus, the benefit of collection and protection of the Private Information belonging to Plaintiff and the Class was the direct and primary objective of the contracting parties. 162. AHP knew that if it were to breach these contracts with its customers, the customers’ patients, including Plaintiff and the Class, would be harmed by, among other harms, fraudulent transactions. 163. AHP breached its contracts with the medical providers affected by this Data Breach when it failed to use reasonable data security measures that could have prevented the Data Breach. 164. As foreseen, Plaintiff and the Class were harmed by AHP’s failure to use reasonable security measures to store patient information, including but not limited to the risk of harm through the loss of their personal information. 165. Accordingly, Plaintiff and the Class are entitled to damages in an amount to be determined at trial, along with their costs and attorney fees incurred in this action. THIRD CAUSE OF ACTION Unjust Enrichment (On Behalf of Plaintiff and the Nationwide Class) 166. Plaintiff fully incorporates by reference all of the above paragraphs, as though fully set forth herein. 167. Plaintiff and Class Members conferred a monetary benefit on Defendant in the form of their PII. 168. Defendant collected, maintained, and stored the PII of Plaintiff and Class Members and, as such, Defendant had knowledge of the monetary benefits conferred by them. 169. The money that Defendant received from Plaintiff’s and Class Members’ PII should have been used to pay, at least in part, for the administrative costs and implementation of data security adequate to safeguard and protect the confidentiality of Plaintiff’s and Class Members’ 170. Defendant failed to implement—or adequately implement—those data security practices, procedures, and programs to secure sensitive PII, as evidenced by the Data Breach. 171. As a result of Defendant’s failure to implement data security practices, procedures, and programs to secure sensitive PII, Plaintiff and Class Members suffered actual damages in an amount of the savings and costs Defendant reasonably and contractually should have expended on data security measures to secure Plaintiffs’ PII. 172. Under principles of equity and good conscience, Defendant should not be permitted to retain the money it received from Plaintiff’s and Class Members’ PII that should have been used to implement the data security measures necessary to safeguard and protect the confidentiality of Plaintiff’s and Class Members’ PII. 173. As a direct and proximate result of Defendant’s decision to profit rather than provide adequate security, and Defendant’s resultant disclosures of Plaintiff’s and Class Members’ PII, Plaintiff and Class Members suffered and continue to suffer considerable injuries in the forms of time and expenses mitigating harms, diminished value of PII, loss of privacy, and a present increased risk of harm. COUNT IV DECLARATORY RELIEF (On Behalf of Plaintiff and the Nationwide Class or, Alternatively, the Oklahoma Subclass) 174. Plaintiff fully incorporates by reference all of the above paragraphs, as though fully set forth herein. 175. Under the Declaratory Judgment Act, 28 U.S.C. §§ 2201, et seq., this Court is authorized to enter a judgment declaring the rights and legal relations of the parties and granting further necessary relief. Furthermore, the Court has broad authority to restrain acts, such as here, that are tortious and violate the terms of the federal statutes described in this Complaint. 176. An actual controversy has arisen in the wake of the Data Breach regarding Defendant’s present and prospective common law and other duties to reasonably safeguard Plaintiff and Class members’ PII, and whether Defendant is currently maintaining data security measures adequate to protect Plaintiff and Class members from future data breaches that compromise their Private Information. Plaintiff and the Class remain at imminent risk that further compromises of their PII will occur in the future. 177. The Court should also issue prospective injunctive relief requiring Defendant to employ adequate security practices consistent with law and industry standards to protect consumers’ PII. 178. Defendant still possesses the PII of Plaintiff and the Class. 179. To Plaintiff’s knowledge, Defendant has made no announcement that it has changed its data storage or security practices relating to the PII. 180. To Plaintiff’s knowledge, Defendant has made no announcement or notification that it has remedied the vulnerabilities and negligent data security practices that led to the Data Breach. 181. If an injunction is not issued, Plaintiff and the Class will suffer irreparable injury and lack an adequate legal remedy in the event of another data breach at AHP. The risk of another such breach is real, immediate, and substantial. 182. The hardship to Plaintiff and Class members if an injunction does not issue exceeds the hardship to Defendant if an injunction is issued. Among other things, if another data breach occurs at AHP, Plaintiff and Class members will likely continue to be subjected to fraud, identify theft, and other harms described herein. On the other hand, the cost to Defendant of complying with an injunction by employing reasonable prospective data security measures is relatively minimal, and Defendant has a pre-existing legal obligation to employ such measures. 183. Issuance of the requested injunction will not disserve the public interest. To the contrary, such an injunction would benefit the public by preventing another data breach at AHP, thus eliminating the additional injuries that would result to Plaintiff and Class members, along with other consumers whose PII would be further compromised. 184. Pursuant to its authority under the Declaratory Judgment Act, this Court should enter a judgment declaring that Advent Health Partners implement and maintain reasonable security measures, including but not limited to the following: a. Engaging third-party security auditors/penetration testers, as well as internal security personnel, to conduct testing that includes simulated attacks, penetration tests, and audits on AHP’s systems on a periodic basis, and ordering AHP to promptly correct any problems or issues detected by such third-party security auditors; b. engaging third-party security auditors and internal personnel to run automated security monitoring; c. auditing, testing, and training its security personnel regarding any new or modified procedures; d. purging, deleting, and destroying Private Information not necessary for its provisions of services in a reasonably secure manner; e. conducting regular database scans and security checks; and f. routinely and continually conducting internal training and education to inform internal security personnel how to identify and contain a breach when it occurs and what to do in response to a breach. PRAYER FOR RELIEF WHEREFORE, Plaintiff, individually and on behalf of the other members of the Class proposed in this Complaint, respectfully requests that the Court enter judgment in favor of Plaintiff and the Class and against Defendant, as follows: A. For an Order certifying this action as a class action and appointing Plaintiff and his counsel to represent the Class; B. For equitable relief enjoining Defendant from engaging in the wrongful conduct complained of herein pertaining to the misuse and/or disclosure of Plaintiff and Class members’ Private Information, and from failing to issue prompt, complete and accurate disclosures to Plaintiff and Class members; C. For equitable relief compelling Defendant to utilize appropriate methods and policies with respect to consumer data collection, storage, and safety, and to disclose with specificity the type of PII compromised during the Data Breach; D. For equitable relief requiring restitution and disgorgement of the revenues wrongfully retained as a result of Defendant’s wrongful conduct; E. Ordering Defendant to pay for no less than three (3) years of credit monitoring services for Plaintiff and the Class; F. For an award of actual damages, compensatory damages, statutory damages, and statutory penalties, in an amount to be determined, as allowable by law; G. For an award of punitive damages, as allowable by law; H. For an award of attorneys’ fees and costs, and any other expense, including expert witness fees; I. Pre- and post-judgment interest on any amounts awarded; and J. Such other and further relief as this court may deem just and proper. JURY DEMAND Plaintiff demands a trial by jury on all issues so triable. Dated: April 20, 2022 Respectfully submitted, /s/Adam A. Edwards Adam. A. Edwards (BPR No. 23253) MILBERG COLEMAN BRYSON PHILLIPS GROSSMAN, PLLC 800 S. Gay Street, Suite 1100 Knoxville, TN 37929 Telephone: (865) 247-0080 Facsimile: (865) 522-0049 aedwards@milberg.com Gary M. Klinger* MILBERG COLEMAN BRYSON PHILLIPS GROSSMAN, PLLC 227 W. Monroe Street, Suite 2100 Chicago, IL 60606 Telephone: (866) 252-0878 gklinger@milberg.com David K. Lietz* MILBERG COLEMAN BRYSON PHILLIPS GROSSMAN, PLLC 5335 Wisconsin Avenue NW Suite 440 Washington, D.C. 20015-2052 Telephone: (866) 252-0878 Facsimile: (202) 686-2877 dlietz@milberg.com Nicholas A. Migliaccio* Jason S. Rathod, Esquire* MIGLIACCIO & RATHOD, LLP 412 H Street, NE, Suite 302 Washington, DC 20002 Phone: 202-470-520 Fax: 202-800-2730 Email: nmigliaccio@classlawdc.com *Pro Hac Vice forthcoming ADVENT HEALTH PARTNERS, INC. J. PAUL McHENRY individually and on behalf of all others similarly situated Davidson County, TN (b) County of Residence of First Listed Plaintiff County of Residence of First Listed Defendant (EXCEPT IN U.S. PLAINTIFF CASES) (IN U.S. PLAINTIFF CASES ONLY) NOTE: IN LAND CONDEMNATION CASES, USE THE LOCATION OF THE TRACT OF LAND INVOLVED. (c) Attorneys (Firm Name, Address, and Telephone Number) Attorneys (If Known) not known Adam A. Edwards, Milberg, 800 S. Gay Street, Suite 1100, Knoxville, TN 37929 II. BASIS OF JURISDICTION (Place an “X” in One Box Only) III. CITIZENSHIP OF PRINCIPAL PARTIES (Place an “X” in One Box for Plaintiff and One Box for Defendant) (For Diversity Cases Only) 1 U.S. Government 3 Federal Question PTF DEF PTF DEF Plaintiff (U.S. Government Not a Party) Citizen of This State 1 1 Incorporated or Principal Place 4 4 of Business In This State ✖ ✖ 2 U.S. Government 4 Diversity Citizen of Another State 2 2 Incorporated and Principal Place 5 5 Defendant (Indicate Citizenship of Parties in Item III) of Business In Another State Citizen or Subject of a 3 3 Foreign Nation 6 6 Foreign Country IV. NATURE OF SUIT (Place an “X” in One Box Only) Click here for: Nature of Suit Code Descriptions. CONTRACT TORTS FORFEITURE/PENALTY BANKRUPTCY OTHER STATUTES INTELLECTUAL ✖ 110 Insurance PERSONAL INJURY PERSONAL INJURY 625 Drug Related Seizure 422 Appeal 28 USC 158 375 False Claims Act 120 Marine 310 Airplane 365 Personal Injury - of Property 21 USC 881 423 Withdrawal 376 Qui Tam (31 USC 130 Miller Act 315 Airplane Product Product Liability 690 Other 28 USC 157 3729(a)) 140 Negotiable Instrument Liability 367 Health Care/ 400 State Reapportionment 150 Recovery of Overpayment 320 Assault, Libel & Pharmaceutical PROPERTY RIGHTS 410 Antitrust & Enforcement of Judgment Slander Personal Injury 820 Copyrights 430 Banks and Banking 151 Medicare Act 330 Federal Employers’ Product Liability 830 Patent 450 Commerce 152 Recovery of Defaulted Liability 368 Asbestos Personal 835 Patent - Abbreviated 460 Deportation Student Loans 340 Marine Injury Product New Drug Application 470 Racketeer Influenced and (Excludes Veterans) 345 Marine Product Liability 840 Trademark Corrupt Organizations 153 Recovery of Overpayment Liability PERSONAL PROPERTY LABOR 880 Defend Trade Secrets 480 Consumer Credit of Veteran’s Benefits 350 Motor Vehicle 370 Other Fraud 710 Fair Labor Standards Act of 2016 (15 USC 1681 or 1692) 160 Stockholders’ Suits 355 Motor Vehicle 371 Truth in Lending Act 485 Telephone Consumer 190 Other Contract Product Liability 380 Other Personal 720 Labor/Management SOCIAL SECURITY Protection Act 195 Contract Product Liability 360 Other Personal Property Damage Relations 861 HIA (1395ff) 490 Cable/Sat TV 196 Franchise Injury 385 Property Damage 740 Railway Labor Act 862 Black Lung (923) 850 Securities/Commodities/ 362 Personal Injury - Product Liability 751 Family and Medical 863 DIWC/DIWW (405(g)) Exchange Medical Malpractice Leave Act 864 SSID Title XVI 890 Other Statutory Actions REAL PROPERTY CIVIL RIGHTS PRISONER PETITIONS 790 Other Labor Litigation 865 RSI (405(g)) 891 Agricultural Acts 26 USC 7609 210 Land Condemnation 440 Other Civil Rights Habeas Corpus: 791 Employee Retirement 893 Environmental Matters 220 Foreclosure 441 Voting 463 Alien Detainee Income Security Act FEDERAL TAX SUITS 895 Freedom of Information 230 Rent Lease & Ejectment 442 Employment 510 Motions to Vacate 870 Taxes (U.S. Plaintiff Act 240 Torts to Land 443 Housing/ Sentence or Defendant) 896 Arbitration 245 Tort Product Liability Accommodations 530 General 871 IRS—Third Party 899 Administrative Procedure 290 All Other Real Property 445 Amer. w/Disabilities - 535 Death Penalty IMMIGRATION Act/Review or Appeal of Employment Other: 462 Naturalization Application Agency Decision 446 Amer. w/Disabilities - 540 Mandamus & Other 465 Other Immigration 950 Constitutionality of Other 550 Civil Rights Actions State Statutes 448 Education 555 Prison Condition 560 Civil Detainee - Conditions of Confinement V. ORIGIN (Place an “X” in One Box Only) 1 Original Proceeding 2 Removed from State Court 3 Remanded from Appellate Court 4 Reinstated or Reopened 5 Transferred from Another District (specify) 6 Multidistrict Litigation - Transfer 8 Multidistrict Litigation - Direct File Cite the U.S. Civil Statute under which you are filing (Do not cite jurisdictional statutes unless diversity): Class Action Fairness Act, 28 U.S.C. § 1332(d)(2); 28 U.S.C. §1391(b)(1) VI. CAUSE OF ACTION Brief description of cause: Data Breach of defendant's computer system ✖ ✖ JURY DEMAND: Yes No VII. REQUESTED IN COMPLAINT: CHECK IF THIS IS A CLASS ACTION UNDER RULE 23, F.R.Cv.P. DEMAND $ CHECK YES only if demanded in complaint: VIII. RELATED CASE(S) IF ANY (See instructions): JUDGE DOCKET NUMBER DATE SIGNATURE OF ATTORNEY OF RECORD Apr 20, 2022 /s/Adam A. Edwards The JS 44 civil cover sheet and the information contained herein neither replaces nor supplements the filings and service of pleading or other papers as required by law, except as provided by local rules of court. This form, approved by the Judicial Conference of the United States in September 1974, is required for the use of the Clerk of Court for the purpose of initiating the civil docket sheet. Consequently, a civil cover sheet is submitted to the Clerk of Court for each civil complaint filed. The attorney filing a case should complete the form as follows: I.(a) Plaintiffs-Defendants. Enter names (last, first, middle initial) of plaintiff and defendant. If the plaintiff or defendant is a government agency, use only the full name or standard abbreviations. If the plaintiff or defendant is an official within a government agency, identify first the agency and then the official, giving both name and title. (b) County of Residence. For each civil case filed, except U.S. plaintiff cases, enter the name of the county where the first listed plaintiff resides at the time of filing. In U.S. plaintiff cases, enter the name of the county in which the first listed defendant resides at the time of filing. (NOTE: In land condemnation cases, the county of residence of the "defendant" is the location of the tract of land involved.) (c) Attorneys. Enter the firm name, address, telephone number, and attorney of record. If there are several attorneys, list them on an attachment, noting in this section "(see attachment)". II. Jurisdiction. The basis of jurisdiction is set forth under Rule 8(a), F.R.Cv.P., which requires that jurisdictions be shown in pleadings. Place an "X" in one of the boxes. If there is more than one basis of jurisdiction, precedence is given in the order shown below. United States plaintiff. (1) Jurisdiction based on 28 U.S.C. 1345 and 1348. Suits by agencies and officers of the United States are included here. United States defendant. (2) When the plaintiff is suing the United States, its officers or agencies, place an "X" in this box. Federal question. (3) This refers to suits under 28 U.S.C. 1331, where jurisdiction arises under the Constitution of the United States, an amendment to the Constitution, an act of Congress or a treaty of the United States. In cases where the U.S. is a party, the U.S. plaintiff or defendant code takes precedence, and box 1 or 2 should be marked. Diversity of citizenship. (4) This refers to suits under 28 U.S.C. 1332, where parties are citizens of different states. When Box 4 is checked, the citizenship of the different parties must be checked. (See Section III below; NOTE: federal question actions take precedence over diversity cases.) III. Residence (citizenship) of Principal Parties. This section of the JS 44 is to be completed if diversity of citizenship was indicated above. Mark this section for each principal party. IV. Nature of Suit. Place an "X" in the appropriate box. If there are multiple nature of suit codes associated with the case, pick the nature of suit code that is most applicable. Click here for: Nature of Suit Code Descriptions. V. Origin. Place an "X" in one of the seven boxes. Original Proceedings. (1) Cases which originate in the United States district courts. Removed from State Court. (2) Proceedings initiated in state courts may be removed to the district courts under Title 28 U.S.C., Section 1441. Remanded from Appellate Court. (3) Check this box for cases remanded to the district court for further action. Use the date of remand as the filing date. Reinstated or Reopened. (4) Check this box for cases reinstated or reopened in the district court. Use the reopening date as the filing date. Transferred from Another District. (5) For cases transferred under Title 28 U.S.C. Section 1404(a). Do not use this for within district transfers or multidistrict litigation transfers. Multidistrict Litigation – Transfer. (6) Check this box when a multidistrict case is transferred into the district under authority of Title 28 U.S.C. Section 1407. Multidistrict Litigation – Direct File. (8) Check this box when a multidistrict case is filed in the same district as the Master MDL docket. PLEASE NOTE THAT THERE IS NOT AN ORIGIN CODE 7. Origin Code 7 was used for historical records and is no longer relevant due to changes in statute. VI. Cause of Action. Report the civil statute directly related to the cause of action and give a brief description of the cause. Do not cite jurisdictional statutes unless diversity. Example: U.S. Civil Statute: 47 USC 553 Brief Description: Unauthorized reception of cable service. VII. Requested in Complaint. Class Action. Place an "X" in this box if you are filing a class action under Rule 23, F.R.Cv.P. Demand. In this space enter the actual dollar amount being demanded or indicate other demand, such as a preliminary injunction. Jury Demand. Check the appropriate box to indicate whether or not a jury is being demanded. VIII. Related Cases. This section of the JS 44 is used to reference related pending cases, if any. If there are related pending cases, insert the docket numbers and the corresponding judge names for such cases. Date and Attorney Signature. Date and sign the civil cover sheet.

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UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY Case No.: Plaintiff, COMPLAINT Defendant. CLASS ACTION COMPLAINT 1. A.Y. Strauss ("Plaintiff"), brings this Complaint for damages, injunctive relief, and 2. As Judge Easterbrook of the Seventh Circuit explained in a TCPA case, "The is well known for its provisions limiting junk-fax 1 JURISDICTION AND VENUE 3. This Court has federal question jurisdiction because this case arises out of violation 4. Venue is proper in the United States District Court for the District of New Jersey PARTIES 5. Plaintiff is, and at all times mentioned herein was, located in Roseland, New Jersey. 6. Plaintiff is, and at all times mentioned herein was, a "person" as defined by 47 7. Defendant is located in Clifton, New Jersey. 8. Defendant is, and at all times mentioned herein were, corporations and each was a 9. At all times relevant, Defendant conducted business in Roseland, New Jersey, FACTUAL ALLEGATIONS 10. On October 3, 2019, Defendant used Defendant's telephone facsimile machine to 11. Defendant's telephone facsimile machine has the capacity (A) to transcribe text or 2 12. Defendant's October 3, 2019 advertisement attempted to solicit Plaintiff to 13. This October 3, 2019 facsimile transmission was advertising insurance to Plaintiff 14. Prior to October 3, 2019, Plaintiff did not have an established business relationship 15. Prior to October 3, 2019, Plaintiff did not voluntarily communicate Plaintiff's 16. Prior to October 3, 2019, Plaintiff did not advertise its facsimile number for public 17. Defendant did not provide a notice on the first page of the advertisement pursuant 18. Defendant's facsimile forced Plaintiff and class members to pay for the costs of 19. The facsimiles from Defendant's telephone facsimile machine to Plaintiff's 20. Plaintiff is informed and believes and hereupon alleges, that these facsimiles were 21. The unsolicited advertisements by Defendant, or its agent(s), violated 47 U.S.C. § 3 CLASS ACTION ALLEGATIONS 22. Plaintiff brings this action on behalf of itself and on behalf of all others similarly 23. Plaintiff represents, and is a member of the Class, consisting of: All persons within the United States who did not have an established business relationship with Defendant and who received any unsolicited advertisement from Defendant's telephone facsimile machine or its agent/s and/or employee/s to said person's telephone facsimile machine, within the four years prior to the filing of the Complaint. 24. Defendant and its employees or agents are excluded from the Class. Plaintiff does 25. Plaintiff and members of the Class were harmed by the acts of Defendant in at least 26. This suit seeks only damages and injunctive relief for recovery of economic injury 427. The joinder of the Class members is impractical and the disposition of their claims 28. There is a well-defined community of interest in the questions of law and fact a. Whether, within the four years prior to the filing of the Complaint, Defendant or its agents sent any unsolicited advertisements to the Class (other than to class members who had an established business relationship with Defendant) using a telephone facsimile machine; b. Whether Plaintiff and the Class members were damaged thereby, and the extent of damages for such violation; and c. Whether Defendant and its agents should be enjoined from engaging in such conduct in the future. 29. As a person who received at least one unsolicited advertisement from Defendant's 30. Plaintiff and the members of the Class have all suffered irreparable harm as a result 5 31. Plaintiff has retained counsel experienced in handling class action claims and 32. A class action is a superior method for the fair and efficient adjudication of this 33. Defendant has acted on grounds generally applicable to the Class, thereby making FIRST COUNT NEGLIGENT VIOLATIONS OF THE TELEPHONE CONSUMER PROTECTION ACT (TCPA) 47 U.S.C. 227 34. Plaintiff incorporates by reference all of the above paragraphs of this Complaint as 35. The foregoing acts and omissions of Defendant constitute numerous and multiple 36. As a result of Defendant's negligent violations of 47 U.S.C. § 227 et seq., Plaintiff 37. Plaintiff is also entitled to and seeks injunctive relief prohibiting such conduct in 6 SECOND COUNT KNOWING AND/OR WILLFUL OF THE TCPA 47 U.S.C. 227 38. Plaintiff incorporates by reference all of the above paragraphs of this Complaint as 39. It is clear this message sent by Defendant is an unsolicited advertisement 40. The foregoing acts and omissions of Defendant constitute numerous and multiple 41. As a result of Defendant's knowing and/or willful violations of 47 U.S.C. § 227 et 42. Plaintiff is also entitled to and seeks injunctive relief prohibiting such conduct in PRAYER FOR RELIEF WHEREFORE, Plaintiff and members of the class respectfully pray for the following A. Certification of the class under Fed. R. Civ. P. 23; B. On the First Count, as a result of Defendant's negligent violations of 47 U.S.C. § 227(b)(1), Plaintiff seeks: (i) $500.00 in statutory damages, for each and every violation, pursuant to 47 U.S.C. § 227(b)(3)(B); and (ii) pursuant to 47 U.S.C. § 227(b)(3)(A), injunctive relief prohibiting such conduct in the future; C. On the Second Count, as a result of Defendant's knowing and/or willful violations of 47 U.S.C. § 227(b)(1), Plaintiff seeks: (i) $1,500.00 in statutory damages, for each and 7every violation, pursuant to 47 U.S.C. § 227(b)(3)(B); and (ii) pursuant to 47 U.S.C. § 227(b)(3)(A), injunctive relief prohibiting such conduct in the future; D. Attorney's fees and costs; and E. Such other and further relief as the Court may deem just and proper. DEMAND FOR JURY TRIAL Pursuant to Rule 38(b) of the Federal Rules of Civil Procedure, Plaintiff, on behalf of DeNITTIS OSEFCHEN PRINCE, P.C. By: s/ Ross H. Schmierer Ross H. Schmierer, Esq. 525 Route 73 North, Suite 410 Marlton, New Jersey 08053 (T): (856) 797-9951 rschmierer@denittislaw.com Attorney for Plaintiff 8 CERTIFICATION PURSUANT TO L. CIV. R. 11.2 I certify that, to the best of my knowledge, this matter is not the subject of any other DeNITTIS OSEFCHEN PRINCE, P.C. By: s/ Ross H. Schmierer Ross H. Schmierer, Esq. 525 Route 73 North, Suite 410 Marlton, New Jersey 08053 (T): (856) 797-9951 rschmierer@denittislaw.com Attorney for Plaintiff 9 51 Main Street, Suite 2 Clinton, NJ 08809 Tel: 732-247-6111 Fax 732-247-6119 victorbary@gmail.com www.theprolineagency.com Year Established: City: State: Zip: Contact: County: ( ) Fax: ( ) dollars during the past year derived from the following: Category A Category B Category C(1) Administrative Civil Rights Admiralty Appellate Foreign Law Anti-trust Arbitration Government Law Banking Criminal Guardianships Commercial Law Immigration International Corporate Formation Juvenile Labor/Management Lobbying Mediation Municipal (not bonds) Foreclosures Traffic Title/Residential General/Corporate Advice Title/Commercial Copyright/Patent/Trademark Litigation Tax Preparation % Subtotal Category B % Subtotal Category C(1) Category C(2) Category D Category E BI/PI Bankruptcy Corporate Mergers & Acquisitions Medical Malpractice Collections Entertainment "Other Litigation" Construction Law Fiduciary Insurance Estate Planning Investment Counseling/ Estate/Trust/Probate/Wills Money Management Medical Malpractice Family Law Labor/Unions "Class Action" Copyright/Patent/Trademark Copyright/Patent/Trademark Searches "Other" BI/PI Prosecution Purchase or sale by Client of business "Other" Litigation Tax Opinions Real estate Closings/General % Subtotal Category D % Subtotal Category E Category F Adoptions Oil/Gas Mining Savings and Loan Bonds Opinion Letters Securities Environmental Copyright/Patent/ Real Estate Syndications Trademark - Foreign Limited Partnership Formation High Profile Divorces Real Estate Development Subtotal Category F TOTAL OF CATEGORIES MUST EQUAL 100% / / Retroactive date: / / # of attorneys last year: Limit of liability: $ Premium: $ Average # of hours worked Years in Date Joined Attorney Name D/C* Date Admitted to Bar per week Practice Firm (if Of Council) / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / S = Sole Proprietor P = Partners of a partnership NO TOTAL NUMBER: YES NO TOTAL NUMBER: YES NO YES NO YES NO YES NO YES NO Engagement letters Non-engagement letters Disengagement letters Retainer agreementsYES NO YES NO YES NO YES NO YES NO

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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK Case No.: CLASS ACTION COMPLAINT FOR VIOLATIONS OF FEDERAL SECURITIES LAWS JURY TRIAL DEMANDED DAVID M. LANZET, on behalf of himself and all others similarly situated, Plaintiff, v. VICAL INCORPORATED, VIJAY B. SAMANT, ROBER C. MERTON, R. GORDON DOUGLAS, RICHARD M. BELESON, GEORGE J. MORROW, GARY A. LYONS, and THOMAS E. SHENK, Defendants. Plaintiff David M. Lanzet (“Plaintiff”), by his undersigned counsel, on behalf of himself and all others similarly situated, alleges upon personal knowledge with respect to himself, and upon information and belief based upon, inter alia, the investigation of counsel as to all other allegations herein, as follows: NATURE OF THE ACTION 1. This is a class action brought by Plaintiff, on behalf of himself and all other similarly situated public stockholders of Vical Incorporated (“Vical” or the “Company”) against the above-captioned Defendants, including Vical and the members of the Company’s Board of Directors (referred to as the “Board” or the “Individual Defendants,” and, together with Vical, the “Defendants”) for violations of Sections 14(a) and 20(a) of the Securities Exchange Act of 1934 (“Exchange Act”), 15 U.S.C. §§ 78n(a), 78t(a) respectively, and United States Securities and Exchange Commission (“SEC”) Rule 14a-9, 17 C.F.R. § 240.14a-9, in connection with the proposed merger (“Proposed Transaction”) under which Vical will be acquired by Brickell Biotech, Inc. (“Brickell”). 2. On June 2, 2019, Vical, Brickell, and Victory Subsidiary, Inc., a wholly owned subsidiary of Vical (“Merger Sub”) entered into an Agreement and Plan of Merger (“Merger Agreement”). 3. Pursuant to the Merger Agreement, Merger Sub, a wholly owned subsidiary of Vical formed in connection with the Proposed Transaction, will merge with and into Brickell, with Brickell surviving as a wholly owned subsidiary of Vical. 4. On July 12, 2019, in order to convince Vical’s public common stockholders to vote in favor of the Proposed Transaction, Defendants filed a materially incomplete and misleading proxy statement (the “Proxy”) with the SEC in violation of Sections 14(a) and 20(a) of the Exchange Act. 5. As stated in the Proxy, following consummation of the Proposed Transaction, Vical stockholders will own 40% of the combined company and Brickell shareholders will own 60% of the combined company (the “Merger Consideration”). 6. The Proxy contains materially incomplete and misleading information concerning (a) financial projections for the Company and Brickell; (b) the valuation analyses prepared by MTS Health Partners, L.P.’s (“MTS”), in support of its fairness opinion; (c) potential conflicts of interest faced by MTS; and (d) the background process leading up to the Proposed Transaction. 7. In addition, the Proxy disclosed that a special meeting of Vical’s stockholders will be held on August 30, 2019 to vote on the Proposed Transaction (the “Stockholder Vote”). It is therefore imperative that the material information that has been omitted from the Proxy is disclosed prior to the Stockholder Vote so Vical stockholders can properly exercise their corporate voting rights. JURISDICTION AND VENUE 8. This Court has subject matter jurisdiction pursuant to Section 27 of the Exchange Act (15 U.S.C. § 78aa) and 28 U.S.C. § 1331 as Plaintiff alleges violations of Sections 14(a) and 20(a) of the Exchange Act. 9. Personal jurisdiction exists over each Defendant either because each Defendant conducts business in or maintains operations in this District or is an individual who is either present in this District for jurisdictional purposes or has sufficient minimum contacts with this District as to render the exercise of jurisdiction over each Defendant by this Court permissible under traditional notions of fair play and substantial justice. 10. Venue is proper in this District under Section 27 of the Exchange Act, 15 U.S.C. § 78aa, as well as under 28 U.S.C. § 1391, because, among other things: (a) the conduct at issue will have an effect in this District; (b) a substantial portion of the transactions and wrongs complained of herein, occurred in this District; and (c) certain Defendants have received substantial compensation in this District by doing business here and engaging in numerous activities that had an effect in this District. Additionally, the Company’s common stock trades on the NASDAQ, which is headquartered in this District. THE PARTIES 11. Plaintiff is, and has been, at all times relevant times, A Vical stockholder. 12. Defendant Vical is a Delaware corporation and maintains its principal executive offices at 10390 Pacific Center Court, San Diego, California 92121. Vical’s common stock is traded on the NASDAQ Capital Market under the ticker symbol “VICL.” 13. Defendant Vijay B. Samant is Chief Executive Officer, President, and a director of Vical. 14. Defendant Robert C. Merton is a director of Vical. 15. Defendant R. Gordon Douglas is Chairman of the Board of Vical. 16. Defendant Richard M. Beleson is a director of Vical. 17. Defendant George J. Morrow is a director of Vical. 18. Defendant Gary A. Lyons is a director of Vical. 19. Defendant Thomas E. Shenk is a director of Vical. 20. The defendants identified in paragraphs 13 through 19 are collectively referred to herein as the “Board” or the “Individual Defendants,” and together with the Company, the “Defendants.” OTHER RELEVANT ENTITIES 21. Brickell is a Delaware corporation based in Boulder, Colorado. Brickell is focused on developing prescription therapeutics for the treatment of debilitating skin diseases. 22. Merger Sub is a Delaware corporation and a wholly-owned subsidiary of Vical. CLASS ACTION ALLEGATIONS 23. Plaintiff brings this class action pursuant to Fed. R. Civ. P. 23 on behalf of themselves and the other public stockholders of Vical (the “Class”). Excluded from the Class are Defendants herein and any person, firm, trust, corporation, or other entity related to or affiliated with any Defendant. 24. This action is properly maintainable as a class action because: (a) the Class is so numerous that joinder of all members is impracticable. As of June 2, 2019, there were 22,822,716 shares of Vical common stock outstanding, held by hundreds to thousands of individuals and entities scattered throughout the country. The actual number of public stockholders of the Company will be ascertained through discovery; (b) there are questions of law and fact that are common to the Class that predominate over any questions affecting only individual members, including the following: (i) whether Defendants have misrepresented or omitted material information concerning the Proposed Transaction in the Proxy, in violation of Section 14(a) of the Exchange Act; (ii) whether the Individual Defendants have violated Section 20(a) of the Exchange Act; and (iv) whether Plaintiff and other members of the Class will suffer irreparable harm if compelled to vote their shares regarding the Proposed Transaction based on the materially incomplete and misleading Proxy. (c) Plaintiff is an adequate representative of the Class, has retained competent counsel experienced in litigation of this nature, and will fairly and adequately protect the interests of the Class; (d) Plaintiff’s claims are typical of the claims of the other members of the Class and Plaintiff does not have any interests adverse to the Class; (e) the prosecution of separate actions by individual members of the Class would create a risk of inconsistent or varying adjudications with respect to individual members of the Class, which would establish incompatible standards of conduct for the party opposing the Class; (f) Defendants have acted on grounds generally applicable to the Class with respect to the matters complained of herein, thereby making appropriate the relief sought herein with respect to the Class as a whole; and (g) a class action is superior to other available methods for fairly and efficiently adjudicating the controversy. SUBSTANTIVE ALLEGATIONS 25. Vical is a company historically focused on research and development of biopharmaceutical products for prevention and treatment of chronic or life-threatening infectious diseases, including antiviral and antifungal candidates in clinical development. 26. Brickell is a clinical-stage pharmaceutical company focused on developing innovative and differentiated prescription therapeutics for treatment of skin diseases. The company’s pipeline consists of potential novel therapeutics for hyperhidrosis, cutaneous T-cell lymphoma, psoriasis, and other prevalent severe skin diseases. The Proposed Transaction 27. On June 3, 2019, the Company and Brickell issued a joint press release announcing the Proposed Transaction. The press releases stated in relevant part: Vical and Brickell Announce Merger Agreement • Combined Company Well-Capitalized with Approximately $35 Million in Cash and up to $25 Million in Near-Term R&D Funding • Pivotal Phase 3 Clinical Trials for Brickell’s Lead Product Candidate, Sofpironium Bromide, in Patients with Axillary Hyperhidrosis Planned for Q4 2019 • Companies to Host Conference Call/Webcast at 8:30 a.m., Eastern Time, Monday June 3, 2019 SAN DIEGO, CA and BOULDER, CO — June 3, 2019 — Vical Incorporated (“Vical”) (Nasdaq:VICL) and Brickell Biotech, Inc. (“Brickell”), a privately-held clinical-stage medical dermatology company, today announced they entered into a definitive merger agreement (the “Merger”) under which Brickell would merge with a wholly-owned subsidiary of Vical in an all-stock transaction. The Merger would create a pharmaceutical company focused on developing novel and differentiated prescription therapies addressing unmet patient needs in hyperhidrosis, cutaneous T-cell lymphoma, psoriasis, and other debilitating dermatologic disorders. Brickell’s lead pipeline asset, sofpironium bromide, is a pivotal Phase 3-ready topical soft anticholinergic intended for axillary hyperhidrosis. Brickell’s development partner, Kaken Pharmaceutical, Co, LTD (“Kaken”), has reported positive Phase 3 results in a clinical trial conducted in Japan. Upon closing of the transaction, the combined company would operate under the name, Brickell Biotech, Inc. and trade on the Nasdaq Capital Market under a new ticker symbol still to be determined. Proposed Transaction Details Under the terms of the Merger, it is anticipated that existing Vical stockholders will own 40% of the combined company and Brickell stockholders will own 60% of the combined company, in each case upon completion of the Merger and subject to assumptions regarding the calculation of the fully diluted shares of the parties. The ownership split is based on a $60 million valuation for Brickell and a $40 million valuation for Vical, a premium to the 30-day volume weighted average share price of Vical. The actual allocation between the two groups of stockholders is subject to adjustment based on Vical’s and Brickell’s respective net cash and net working capital balances prior to the completion of the Merger. The transaction has been approved by the boards of directors of both companies and the required percentage of stockholders of Brickell needed to approve the transaction. The Merger is anticipated to close in the third quarter of 2019, subject to customary closing conditions, including approval of the Merger by the stockholders of Vical, and the satisfaction of the closing conditions to the Funding Agreement (described below). “Following an extensive review of many strategic alternatives, we decided that the proposed Merger with Brickell provides the best opportunity for Vical’s stockholders,” said Vijay B. Samant, President and Chief Executive Officer of Vical. “We believe that Brickell’s lead compound, sofpironium bromide, based upon all of the clinical data generated to-date, has the potential to be a best-in-class treatment for axillary hyperhidrosis. We are optimistic that the strength of the Brickell executive leadership team, which has experience launching several drugs with other pharmaceutical companies, coupled with an innovative pipeline of new chemical entities for impactful skin diseases, will enable the combined company to reach significant value inflection points.” An affiliate of NovaQuest Capital Management, LLC (“NovaQuest”) has committed up to $25 million in near-term research and development funding to Brickell following the closing of the Merger (the “Funding Agreement”). Immediately following the closing of the Funding Agreement, the combined company will issue a warrant to NovaQuest to purchase shares of Vical common stock in an amount based on 10% warrant coverage on the $25 million funding commitment and the exchange ratio for the Merger. The combined company intends to use proceeds from NovaQuest, in addition to Vical’s cash balance expected to be approximately $35 million at the closing of the Merger, to primarily fund the development of sofpironium bromide through Phase 3 clinical trials in axillary hyperhidrosis. “We are excited about the opportunities created by this Merger as we expect it to provide us with the funding to complete our two planned pivotal Phase 3 trials of sofpironium bromide in patients axillary hyperhidrosis, with topline data expected in Q4 2020,” explained Robert B. Brown, Chief Executive Officer of Brickell. “In addition, the strong closing balance sheet would allow Brickell to further develop our key pipeline assets for the treatment of other skin diseases.” For this transaction: MTS Health Partners, L.P. served as financial advisor, and Cooley LLP served as legal counsel to Vical, and BMO Capital Markets served as financial advisor, and Mayer Brown LLP served as legal counsel to Brickell. Wyrick Robbins Yates & Ponton LLP served as legal counsel to NovaQuest. Management and Board of Directors Following the Merger, the combined company will be led by the current Brickell management team, including, Robert Brown as Chief Executive Officer, Andy Sklawer, Co-Founder and Chief Operating Officer, Deepak Chadha, Chief R&D Officer, R. Michael Carruthers, Chief Financial Officer, Gary Walker, Chief Marketing Officer, and David McAvoy, General Counsel. The corporate headquarters will be located in Boulder, Colorado. The board of directors of the combined company will be comprised of seven directors, including five current directors of Brickell: Reginald Hardy, Chairman, Robert Brown, Dennison Veru, Dr. William Ju and George Abercrombie, and two current directors of Vical. Charles Stiefel will serve as the Chairman of the combined company’s Dermatology Advisory Board. 28. The Merger Consideration is unfair because, among other things, the intrinsic value of the Company is in excess of the amount the Company’s stockholders will receive in connection with the Proposed Transaction. 29. It is therefore imperative that the Company common stockholders receive the material information that Defendants have omitted from the Proxy so that they can meaningfully assess whether the Proposed Transaction is in their best interests prior to the vote. The Merger Agreement 30. Section 4.4 of the Merger Agreement provides for a “no solicitation” clause that prevents Vical from soliciting alternative proposals and constraints its ability to negotiate with potential buyers: 4.4 Parent Non-Solicitation. (a) Parent agrees that, during the Pre-Closing Period, it shall not, and shall not authorize any of its Representatives to, directly or indirectly: (i) solicit, initiate or knowingly encourage, induce or facilitate the communication, making, submission or announcement of any Acquisition Proposal or Acquisition Inquiry or take any action that could reasonably be expected to lead to an Acquisition Proposal or Acquisition Inquiry; (ii) furnish any non-public information regarding Parent to any Person in connection with or in response to an Acquisition Proposal or Acquisition Inquiry; (iii) engage in discussions (other than to inform any Person of the existence of the provisions in this Section 4.4) or negotiations with any Person with respect to any Acquisition Proposal or Acquisition Inquiry; (iv) approve, endorse or recommend any Acquisition Proposal (subject to Section 5.3); (v) execute or enter into any letter of intent or any Contract contemplating or otherwise relating to any Acquisition Transaction (other than a confidentiality agreement permitted under this Section 4.4); or (vi) publicly propose to do any of the foregoing; provided, however, that, notwithstanding anything contained in this Section 4.4 and subject to compliance with this Section 4.4, prior to obtaining the Required Parent Stockholder Vote, Parent may furnish non-public information regarding Parent to, and enter into discussions or negotiations with, any Person in response to a bona fide Acquisition Proposal by such Person, which the Parent Board determines in good faith, after consultation with Parent’s outside financial advisors and outside legal counsel, constitutes, or could be reasonably likely to result in, a Superior Offer (and is not withdrawn) if: (A) neither Parent nor any of its Representatives shall have breached this Section 4.4 in any material respect, (B) the Parent Board concludes in good faith based on the advice of outside legal counsel, that the failure to take such action could be reasonably likely to be inconsistent with the fiduciary duties of the Parent Board under applicable Law; (C) Parent receives from such Person an executed confidentiality agreement containing provisions, in the aggregate, at least as favorable to Parent as those contained in the Confidentiality Agreement; and (D) substantially contemporaneously with furnishing any such nonpublic information to such Person, Parent furnishes such nonpublic information to the Company (to the extent such information has not been previously furnished by Parent to the Company). Without limiting the generality of the foregoing, Parent acknowledges and agrees that, in the event any Representative of Parent (whether or not such Representative is purporting to act on behalf of Parent) takes any action that, if taken by Parent, would constitute a breach of this Section 4.4, the taking of such action by such Representative shall be deemed to constitute a breach of this Section 4.4 by Parent for purposes of this Agreement. (b) If Parent or any Representative of Parent receives an Acquisition Proposal or Acquisition Inquiry at any time during the Pre-Closing Period, then Parent shall promptly (and in no event later than one Business Day after Parent becomes aware of such Acquisition Proposal or Acquisition Inquiry) advise the Company orally and in writing of such Acquisition Proposal or Acquisition Inquiry (including the identity of the Person making or submitting such Acquisition Proposal or Acquisition Inquiry, and the material terms thereof). Parent shall keep the Company reasonably informed with respect to the status and material terms of any such Acquisition Proposal or Acquisition Inquiry and any material modification or proposed material modification thereto. (c) Parent shall immediately cease and cause to be terminated any existing discussions, negotiations and communications with any Person that relate to any Acquisition Proposal or Acquisition Inquiry that has not already been terminated as of the date of this Agreement and request the destruction or return of any nonpublic information of Parent provided to such Person. 31. In addition, Section 9.3(c) of the Merger Agreement requires Vical to pay a $1,000,000 “termination fee” to Brickell in the event this agreement is terminated by Vical and improperly constrains Vical from obtaining a superior offer. The Materially Incomplete and Misleading Proxy 32. On July 12, 2019, Defendants filed an incomplete and misleading Proxy with the SEC and disseminated it to the Company’s stockholders. The Proxy solicits the Company’s stockholders to vote in favor of the Proposed Transaction, which scheduled a stockholder vote on the Proposed Transaction for August 30, 2019. 33. Defendants were obligated to carefully review the Proxy before it was filed with the SEC and disseminated to the Company’s stockholders to ensure that it did not contain any material misrepresentations or omissions. Material Omissions Concerning Financial Projections 34. The Proxy is materially deficient because it fails to disclose material information relating to Vical and Brickell’s intrinsic value and prospects going forward. 35. First, the Proxy omits entirely Vical’s financial projections. 36. With respect to Brickell’s financial projections, the Proxy fails to disclose, for each set of projections: (i) all line items used to calculate gross profit; and (ii) all line items used to calculate operating income. 37. The disclosure of projected financial information is material because it provides stockholders with a basis to project the future financial performance of a company and allows stockholders to better understand the financial analyses performed by the company’s financial advisor in support of its fairness opinion. Material Omissions Concerning MTS’s Financial Analyses 38. The Proxy describes the fairness opinion of the Company’s financial advisor, MTS, and the various valuation analyses each performed in support of its opinion. However, the description of MTS’s fairness opinion and analyses fails to include key inputs and assumptions underlying these analyses. Without this information, the Company’s stockholders are unable to fully understand these analyses and, thus, are unable to determine what weight, if any, to place on MTS’s fairness opinion in determining whether to vote their shares in favor of the Proposed Transaction. This omitted information, if disclosed, would significantly alter the total mix of information available to the Company’s common stockholders. 39. With respect to MTS’s Discounted Cash Flow analysis, the Proxy fails to disclose: (i) Brickell’s net operating losses; (ii) the individual inputs and assumptions underlying the range of discount rates of 12% to 14%; (iii) MTS’s basis for applying revenue achievement factors of 75% to 125% and United States probabilities of success of 60% to 80%; and (iv) Brickell’s projected capitalization at closing. This information must be disclosed to make the Proxy not materially misleading to Vical stockholders. 40. With respect to MTS’s Public Trading Comparable Companies analysis, the Proxy fails to disclose: (i) the individual multiples and metrics for the companies observed by MTS in the analysis; (ii) which set of projections MTS relied upon; and (iii) net debt, preferred stock, and minority interest. This information must be disclosed to make the Proxy not materially misleading to Vical stockholders. 41. With respect to MTS’s IPO Comparables Analysis, the Proxy Statement fails to disclose: (i) the individual multiples and metrics for the companies observed by MTS in the analysis; (ii) which set of projections MTS relied upon; and (iii) net debt, preferred stock, and minority interest. 42. When a banker’s endorsement of the fairness of a transaction is touted to stockholders, the valuation methods used to arrive at that opinion as well as the key inputs and range of ultimate values generated by those analyses must also be fairly disclosed. Moreover, the disclosure of projected financial information is material because it provides stockholders with a basis to project the future financial performance of a company and allows stockholders to better understand the financial analyses performed by the company’s financial advisor in support of its fairness opinion. Material Omissions Concerning MTS’s Potential Conflicts of Interest 43. The Proxy provides: As permitted by the terms of the engagement letter and pursuant to MTS’s internal policies, MTS Securities rather than MTS, delivered the MTS Opinion. As compensation for MTS Securities’ and its affiliates’ financial advisory services, Vical paid a non-refundable retainer fee of $100,000 and paid a fee of $300,000 to MTS Securities for rendering the MTS Opinion in connection with the Vical board of directors’ consideration of the proposed transaction with Brickell, which fee was not contingent upon the successful completion of the Merger or the conclusion reached within the MTS Opinion. Upon consummation of the Merger, Vical will be obligated to pay to MTS a transaction fee equal to approximately $2,000,000, of which up to $500,000 of such fee may be payable in shares of the combined company’s common stock based upon the closing price of Vical common stock on the day of the consummation of the Merger. Proxy at 89. The Proxy, however, fails to disclose the circumstances under which $500,000 of MTS’s fee may be payable in shares of the combined company’s common stock, as well as the details with respect to such payment. 44. Full disclosure of investment banker compensation and all potential conflicts is required due to the central role played by investment banks in the evaluation, exploration, selection, and implementation of strategic alternatives. Material Omissions Concerning Insiders’ Conflicts of Interest 45. The Proxy fails to disclose material information concerning potential conflicts of interest faced by the Board. 46. According to the June 3, 2019 joint press release two current Vical directors will serve on the board of the combined company. The Proxy discloses that these directors are Vical CEO Vijay Samant and Gary Lyons. However, the Proxy fails to disclose the timing and nature of any communications regarding the retention of defendants Samant and Lyons, including who participated in such communications and when Brickell first expressed its interest in retaining members of Vical’s Board. 47. Communications regarding the potential for Board members to sit on the combined company’s board of directors during the negotiation of the underlying transaction must be disclosed to stockholders. This information is necessary for stockholders to understand potential conflicts of interest of management and the Board, as that information provides illumination concerning motivations that would prevent fiduciaries from acting solely in the best interests of the Company’s stockholders. 48. The omission of the above-referenced material information renders the Proxy false and misleading, including, inter alia, the following sections of the Proxy: (i) Background of the Merger; (ii) Reasons for the Merger; (iii) Certain Vical Management Unaudited Prospective Financial Information; (iv) Opinion of MTS Securities, LLC; and (v) Interests of the Vical Directors and Executive Officers in the Merger. 49. The above-referenced omitted information, if disclosed, would significantly alter the total mix of information available to Vical’s stockholders. COUNT I (AGAINST ALL DEFENDANTS FOR VIOLATIONS OF SECTION 14(a) OF THE EXCHANGE ACT AND RULE 14a-9 PROMULGATED THEREUNDER 50. Plaintiff incorporates each and every allegation set forth above as if fully set forth 51. Section 14(a)(1) of the Exchange Act makes it “unlawful for any person, by the use of the mails or by any means or instrumentality of interstate commerce or of any facility of a national securities exchange or otherwise, in contravention of such rules and regulations as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors, to solicit or to permit the use of his name to solicit any proxy or consent or authorization in respect of any security (other than an exempted security) registered pursuant to section 78l of this title.” 15 U.S.C. § 78n(a)(1). 52. Rule 14a-9, promulgated by the SEC pursuant to Section 14(a) of the Exchange Act, provides that communications with shareholders in a recommendation statement shall not contain “any statement which, at the time and in the light of the circumstances under which it is made, is false or misleading with respect to any material fact, or which omits to state any material fact necessary in order to make the statements therein not false or misleading.” 17 C.F.R. § 240.14a-9. 53. Defendants have issued the Proxy with the intention of soliciting support of stockholders for the Proposed Transaction. Each Defendant reviewed and authorized the dissemination of the Proxy, which fails to provide critical information detailed above. 54. In so doing, Defendants made untrue statements of material fact and/or omitted material facts necessary to make the statements made not misleading. Each Defendant, by virtue of their roles as officers and/or directors, were aware of the omitted material information but failed to disclose such information, in violation of Section 14(a). Defendants therefore had reasonable grounds to believe material facts existed that were misstated or omitted from the Proxy, but nonetheless failed to obtain and disclose such information to shareholders although they could have done so without extraordinary effort. 55. The Proxy is materially misleading and omits material facts that are necessary to render it not misleading. Defendants undoubtedly reviewed and relied upon the omitted information identified above in connection with their decision to approve and recommend the Proposed Transaction. 56. Defendants knew or should have known that the material information identified above has been omitted from the Proxy, rendering the sections of the Proxy identified above to be materially incomplete and misleading. Indeed, Defendants were required to be particularly attentive to the procedures followed in preparing the Proxy and review it carefully before it was disseminated, to corroborate that there are no material misstatements or omissions. 57. Defendants violated securities laws in preparing and reviewing the Proxy. Defendants chose to omit material information from the Proxy or failed to notice the material omissions in the Proxy upon reviewing it, which they were required to do carefully. 58. The misrepresentations and omissions in the Proxy are material to Plaintiff and the Company’s other stockholders, each of whom will be deprived of their right to cast an informed vote if such misrepresentations and omissions are not corrected prior to the vote on the Proposed Transaction. 59. Plaintiff and the Company’s other shareholders have no adequate remedy at law. Only through the exercise of this Court’s equitable powers can Plaintiff and the Company’s other shareholders be fully protected from the immediate and irreparable injury that Defendants’ actions threaten to inflict. COUNT II (AGAINST THE INDIVIDUAL DEFENDANTS FOR VIOLATIONS OF SECTION 20(a) OF THE EXCHANGE ACT) 60. Plaintiff incorporates each and every allegation set forth above as if fully set forth herein. 61. The Individual Defendants acted as controlling persons of the Company within the meaning of Section 20(a) of the Exchange Act as alleged herein. By virtue of their positions as officers and/or directors of the Company, and participation in and/or awareness of the Company’s operations and/or intimate knowledge of the incomplete and misleading statements contained in the Proxy filed with the SEC, they had the power to influence and control and did influence and control, directly or indirectly, the decision making of the Company, including the content and dissemination of the various statements that Plaintiff contends are materially incomplete and misleading. 62. Each of the Individual Defendants was provided with, or had unlimited access to, copies of the Proxy and other statements alleged by Plaintiff to be misleading prior to and/or shortly after these statements were issued and had the ability to prevent the issuance of the statements or cause the statements to be corrected. 63. In particular, each of the Individual Defendants had direct and supervisory involvement in the day-to-day operations of the Company, and, therefore, is presumed to have had the power to control or influence the particular transactions giving rise to the Exchange Act violations alleged herein and exercised the same. The Proxy at issue contains the unanimous recommendation of each of the Individual Defendants to approve the Proposed Transaction. They were thus directly involved in preparing this document. 64. In addition, as set forth in the Proxy sets forth at length and described herein, the Individual Defendants were involved in negotiating, reviewing, and approving the Merger Agreement. The Proxy purports to describe the various issues and information that the Individual Defendants reviewed and considered. The Individual Defendants participated in drafting and/or gave their input on the content of those descriptions. 65. By virtue of the foregoing, the Individual Defendants have violated Section 20(a) of the Exchange Act. 66. As set forth above, the Individual Defendants had the ability to exercise control over and did control a person or persons who have each violated Section 14(a) and Rule 14a-9 by their acts and omissions as alleged herein. By virtue of their positions as controlling persons, these Defendants are liable pursuant to Section 20(a) of the Exchange Act. As a direct and proximate result of Individual Defendants’ conduct, Plaintiff will be irreparably harmed. 67. Plaintiff has no adequate remedy at law. Only through the exercise of this Court’s equitable powers can Plaintiff and the Company’s other shareholder be fully protected from the immediate and irreparable injury that Defendants’ actions threaten to inflict. PRAYER FOR RELIEF WHEREFORE, Plaintiff prays for judgment and relief as follows: (A) ordering that this action may be maintained as a class action and certifying Plaintiff as the Class representative and Plaintiff’s counsel as Class counsel; (B) declaring that the Proxy is materially false and/or misleading; (C) enjoining, preliminarily and permanently, the Proposed Transaction until the Proxy is cured; (D) in the event that the transaction is consummated before the entry of this Court’s final judgment, rescinding it or awarding Plaintiff rescissory damages; (E) directing that Defendants account to Plaintiff for all damages caused by them and account for all profits and any special benefits obtained as a result of their breaches of their fiduciary duties. (F) awarding Plaintiff the costs of this action, including a reasonable allowance for the fees and expenses of Plaintiff’s attorneys and experts; and (G) granting Plaintiff such further relief as the Court deems just and proper. JURY DEMAND Plaintiff demands trial by jury. Dated: August 12, 2019 MOORE KUEHN, PLLC /s/Justin Kuehn Justin A. Kuehn Fletcher W. Moore 30 Wall Street, 8th floor New York, New York 10005 Tel: (212) 709-8245 jkuehn@moorekuehn.com fmoore@moorekuehn.com Attorneys for Plaintiff and the Classes

securities

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GLANCY PRONGAY & MURRAY LLP Lionel Z. Glancy (#134180) Robert V. Prongay (#270796) Lesley F. Portnoy (#304851) Charles H. Linehan (#307439) Pavithra Rajesh (#323055) 1925 Century Park East, Suite 2100 Los Angeles, California 90067 Telephone: (310) 201-9150 Facsimile: (310) 201-9160 Email: info@glancylaw.com Attorneys for Plaintiff UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA Case No. CLASS ACTION COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS AJAY MALHOTRA, Individually and on Behalf of All Others Similarly Situated, Plaintiff, v. SONIM TECHNOLOGIES, INC., ROBERT PLASCHKE, JAMES WALKER, MAURICE HOCHSCHILD, ALAN HOWE, KENNY YOUNG, SUSAN G. SWENSON, JOHN KNEUER, JEFFREY D. JOHNSON, OPPENHEIMER & CO., INC., LAKE STREET CAPITAL MARKETS, LLC, and NATIONAL SECURITIES CORPORATION, Defendants. Plaintiff Ajay Malhotra (“Plaintiff”), individually and on behalf of all others similarly situated, by and through his attorneys, alleges the following upon information and belief, except as to those allegations concerning Plaintiff, which are alleged upon personal knowledge. Plaintiff’s information and belief is based upon, among other things, his counsel’s investigation, which includes without limitation: (a) review and analysis of regulatory filings made by Sonim Technologies, Inc. (“Sonim” or the “Company”) with the United States (“U.S.”) Securities and Exchange Commission (“SEC”); (b) review and analysis of press releases and media reports issued by and disseminated by Sonim; and (c) review of other publicly available information concerning Sonim. NATURE OF THE ACTION AND OVERVIEW 1. This is a class action on behalf of persons and entities that purchased or otherwise acquired Sonim common stock pursuant and/or traceable to the registration statement and prospectus (collectively, the “Registration Statement”) issued in connection with the Company’s May 2019 initial public offering (“IPO” or the “Offering”). Plaintiff pursues claims against the Defendants under the Securities Act of 1933 (the “Securities Act”). 2. Sonim provides ultra-rugged mobile phones and accessories for task workers who are physically engaged in their work environments. The Company’s phones and accessories connect workers with voice, data and workflow applications in two end markets: industrial enterprise and public sector. 3. On May 13, 2019, the Company filed its prospectus on Form 424B4 with the SEC, which forms part of the Registration Statement. In the IPO, the Company sold approximately 4.07 million shares of common stock at a price of $11.00 per share. The Company received proceeds of approximately $37.5 million from the Offering, net of underwriting discounts and commissions. The proceeds from the IPO were purportedly to be used for general corporate purposes, including working capital, expanded sales and marketing activities, increased research and development expenditures and funding the Company’s growth strategies. 4. On September 10, 2019, Sonim stated that it expected fiscal 2019 net revenues to be flat or slightly below 2018 net revenues of $135.7 million, citing “significant delays” in the launch of new products as well as software issues related to these new introductions. Moreover, the Company disclosed that James Walker “will cease serving as the Company’s Chief Financial Officer.” 5. On this news, the Company’s share price fell $3.30, or nearly 47%, to close at $3.76 per share on September 10, 2019, on unusually heavy trading volume. 6. By the commencement of this action, Sonim stock was trading as low as $3.39 per share, a nearly 70% decline from the $11 per share IPO price. 7. The Registration Statement was false and misleading and omitted to state material adverse facts. Specifically, Defendants failed to disclose to investors: (1) that the Company’s XP8 was experiencing material software challenges; (2) that these software issues adversely affected how the device’s Qualcomm chipset, which supported Band 14 access, connected to AT&T’s carrier network configuration; (3) that the Company’s XP5 and XP3 devices were experiencing material software defects that adversely affected their optimization with certain accessories; (4) that, as a result, the Company was reasonably likely to delay the launch of new products; (5) that, as a result of the foregoing, the Company’s financial results would be materially and adversely impacted; and (6) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects, were materially misleading and/or lacked a reasonable basis. 8. As a result of Defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the Company’s securities, Plaintiff and other Class members have suffered significant losses and damages. JURISDICTION AND VENUE 9. The claims asserted herein arise under and pursuant to Sections 11 and 15 of the Securities Act (15 U.S.C. §§ 77k and 77o). 10. This Court has jurisdiction over the subject matter of this action pursuant to 28 U.S.C. § 1331 and Section 22 of the Securities Act (15 U.S.C. § 77v). 11. Venue is proper in this Judicial District pursuant to 28 U.S.C. § 1391(b). 12. In connection with the acts, transactions, and conduct alleged herein, Defendants directly and indirectly used the means and instrumentalities of interstate commerce, including the United States mail, interstate telephone communications, and the facilities of a national securities exchange. PARTIES 13. Plaintiff Ajay Malhotra, as set forth in the accompanying certification, incorporated by reference herein, purchased or otherwise acquired Sonim common stock pursuant and/or traceable to the Registration Statement issued in connection with the Company’s IPO, and suffered damages as a result of the federal securities law violations and false and/or misleading statements and/or material omissions alleged herein. 14. Defendant Sonim is incorporated under the laws of Delaware with its principal executive offices located in San Mateo, California. Sonim’s common stock trades on the NASDAQ exchange under the symbol “SONM.” 15. Defendant Robert Plaschke (“Plaschke”) was, at all relevant times, the Chief Executive Officer and a Director of the Company, and signed or authorized the signing of the Company’s Registration Statement filed with the SEC. 16. Defendant James Walker (“Walker”) was, at all relevant times, the Chief Financial Officer of the Company, and signed or authorized the signing of the Company’s Registration Statement filed with the SEC. 17. Defendant Maurice Hochschild (“Hochschild”) was a director of the Company and signed or authorized the signing of the Company’s Registration Statement filed with the SEC. 18. Defendant Alan Howe (“Howe”) was a director of the Company and signed or authorized the signing of the Company’s Registration Statement filed with the SEC. 19. Defendant Kenny Young (“Young”) was a director of the Company and signed or authorized the signing of the Company’s Registration Statement filed with the SEC. 20. Defendant Susan G. Swenson (“Swenson”) was a director of the Company and signed or authorized the signing of the Company’s Registration Statement filed with the SEC. 21. Defendant John Kneuer (“Kneuer”) was a director of the Company and signed or authorized the signing of the Company’s Registration Statement filed with the SEC. 22. Defendant Jeffrey D. Johnson (“Johnson”) was a director of the Company and signed or authorized the signing of the Company’s Registration Statement filed with the SEC. 23. Defendants Plaschke, Walker, Hochschild, Howe, Young, Swenson, Kneuer, and Johnson are collectively referred to hereinafter as the “Individual Defendants.” 24. Defendant Oppenheimer & Co. Inc. (“Oppenheimer”) served as an underwriter for the Company’s IPO. 25. Defendant Lake Street Capital Markets, LLC (“Lake Street”) served as an underwriter for the Company’s IPO. 26. Defendant National Securities Corporation (“National Securities”) served as an underwriter for the Company’s IPO. 27. Defendants Oppenheimer, Lake Street, and National Securities are collectively referred to hereinafter as the “Underwriter Defendants.” CLASS ACTION ALLEGATIONS 28. Plaintiff brings this action as a class action pursuant to Federal Rule of Civil Procedure 23(a) and (b)(3) on behalf of a class, consisting of all persons and entities that purchased or otherwise acquired Sonim common stock issued in connection with the Company’s IPO. Excluded from the Class are Defendants, the officers and directors of the Company, at all relevant times, members of their immediate families and their legal representatives, heirs, successors, or assigns, and any entity in which Defendants have or had a controlling interest. 29. The members of the Class are so numerous that joinder of all members is impracticable. Throughout the Class Period, Sonim’s shares actively traded on the NASDAQ. While the exact number of Class members is unknown to Plaintiff at this time and can only be ascertained through appropriate discovery, Plaintiff believes that there are at least hundreds or thousands of members in the proposed Class. Millions of Sonim shares were traded publicly during the Class Period on the NASDAQ. Record owners and other members of the Class may be identified from records maintained by Sonim or its transfer agent and may be notified of the pendency of this action by mail, using the form of notice similar to that customarily used in securities class actions. 30. Plaintiff’s claims are typical of the claims of the members of the Class as all members of the Class are similarly affected by Defendants’ wrongful conduct in violation of federal law that is complained of herein. 31. Plaintiff will fairly and adequately protect the interests of the members of the Class and has retained counsel competent and experienced in class and securities litigation. 32. Common questions of law and fact exist as to all members of the Class and predominate over any questions solely affecting individual members of the Class. Among the questions of law and fact common to the Class are: (a) whether the federal securities laws were violated by Defendants’ acts as alleged herein; (b) whether statements made by Defendants to the investing public during the Class Period omitted and/or misrepresented material facts about the business, operations, and prospects of Sonim; and (c) to what extent the members of the Class have sustained damages and the proper measure of damages. 33. A class action is superior to all other available methods for the fair and efficient adjudication of this controversy since joinder of all members is impracticable. Furthermore, as the damages suffered by individual Class members may be relatively small, the expense and burden of individual litigation makes it impossible for members of the Class to individually redress the wrongs done to them. There will be no difficulty in the management of this action as a class action. SUBSTANTIVE ALLEGATIONS Background 34. Sonim provides ultra-rugged mobile phones and accessories for task workers who are physically engaged in their work environments. The Company’s phones and accessories connect workers with voice, data and workflow applications in two end markets: industrial enterprise and public sector. The Company’s False and/or Misleading Registration Statement and Prospectus 35. On May 9, 2019, the Company filed its final amendment to the Registration Statement with the SEC on Form S-1/A, which forms part of the Registration Statement. The Registration Statement was declared effective the same day. 36. On May 13, 2019, the Company filed its prospectus on Form 424B4 with the SEC, which forms part of the Registration Statement. In the IPO, the Company sold approximately 4.07 million shares of common stock at a price of $11.00 per share. The Company received proceeds of approximately $37.5 million from the Offering, net of underwriting discounts and commissions. The proceeds from the IPO were purportedly to be used for general corporate purposes, including working capital, expanded sales and marketing activities, increased research and development expenditures and funding the Company’s growth strategies. 37. The Registration Statement was negligently prepared and, as a result, contained untrue statements of material facts or omitted to state other facts necessary to make the statements made not misleading, and was not prepared in accordance with the rules and regulations governing its preparation. 38. Under applicable SEC rules and regulations, the Registration Statement was required to disclose known trends, events or uncertainties that were having, and were reasonably likely to have, an impact on the Company’s continuing operations. 39. According to the Registration Statement, the Company’s revenue growth relied on the launch of its XP5 and XP8 phones in March 2018, stating: Total revenues. Total revenues increased by $76.7 million, or 129.8%, from $59.0 million for the year ended December 31, 2017 to $135.7 million for the year ended December 31, 2018. The increase in revenues can be attributed to (i) the introduction of two new phone products in the first quarter of 2018, the XP8 smartphone and the XP5s feature phone, comprising $98.3 million of revenues for the year ended December 3 1 , 2018, and (ii) the acceptance of those two products as stocked phones at several of the major Wireless carriers in both the United States and Canada, including AT&T, comprising $95.9 million of revenues for the year ended December 31, 2018. Total revenues from mobile phone sales to AT&T and Group O, a provider for AT&T, were $14.5 million and $54.4 million for the years ended December 31, 2017 and December 31, 2018, respectively. While we do not have access to specific end customer data from our wireless carriers, we believe that the 275% year-over-year growth in revenues derived from sales of mobile phones to AT&T was primarily attributable to the launch of our XP5s feature phone and XP8 smartphone as stocked products at AT&T as well as AT&T’S recent sales activities in the public sector with FirstNet. 40. The XP5 and XP8 models were “certified to work on multiple mobile network operators and come equipped with LTE Band 14 to support FirstNet,” according to the Registration Statement. 41. Under “Risks Related to Our Business,” as to product defects, the Registration Statement stated: Defects in our products could reduce demand for our products and result in a loss of sales, delay in market acceptance and injury to our reputation, which would adversely impact our business. Complex software, components and assemblies used in our products may contain undetected defects that are subsequently discovered at any point in the life of the product. For example, in 2018, we recalled one batch of our XP8 devices from two wireless carriers due to manufacturing defects. Defects in our products may result in a loss of sales, delay in market acceptance and injury to our reputation and increased warranty costs. Additionally, our software may contain undetected errors, defects or bugs. Although we have not suffered significant harm from any errors, defects or bugs to date, we may discover significant errors, defects, or bugs in the future that we may not be able to correct or correct in a timely manner. It is possible that errors, defects or bugs will be found in our existing or future software products and related services with the potential for delays in, or loss of market acceptance of, our products and services, diversion of our resources, injury to our reputation, increased service and warranty expenses, and payment of damages. Further, errors, defects or bugs in our solutions could be exploited by hackers or could otherwise result in an actual or perceived breach of our information systems. Alleviating any of these problems could require significant expense and could cause interruptions, delays or cessation of our product licensing, which would reduce demand for our products and result in a loss of sales, delay in market acceptance and injure our reputation and could adversely impact our business, results of operations and financial condition. 42. The Registration Statement claimed that certain risks impacted the Company’s launch of the XP5 and XP8 phones in March 2018 in the public safety market: [I]n March 2018, we launched our XP5s and XP8 phones in the public safety market and also have limited operating history in the industrial enterprise market. Because of this limited operating history, we face challenges in predicting our business and evaluating its prospects. These challenges present risks and uncertainties relating to our ability to implement our business plan successfully. Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by newly-public companies that have recently launched a new product into a new market. If we are unsuccessful in addressing these risks and uncertainties, our business, results of operations and financial condition will be significantly harmed. 43. The Registration Statement was materially false and misleading and omitted to state: (1) that the Company’s XP8 was experiencing material software challenges; (2) that these software issues adversely affected how the device’s Qualcomm chipset, which supported Band 14 access, connected to AT&T’s carrier network configuration; (3) that the Company’s XP5 and XP3 devices were experiencing material software defects that adversely affected their optimization with certain accessories; (4) that, as a result, the Company was reasonably likely to delay the launch of new products; (5) that, as a result of the foregoing, the Company’s financial results would be materially and adversely impacted; and (6) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects, were materially misleading and/or lacked a reasonable basis. The Subsequent Disclosures 44. On September 10, 2019, Sonim stated that it expected fiscal 2019 net revenues to be flat or slightly below 2018 net revenues of $135.7 million, citing “significant delays” in the launch of new products as well as software issues related to these new introductions. In a press release, the Company stated, in relevant part: Fiscal 2019 Financial Outlook Based on current expectations, Sonim management has updated its financial guidance for the fiscal year ending December 31, 2019: • Net revenues are expected to be flat or slightly below 2018 net revenues of $135.7 million reported in fiscal 2018; • GAAP net loss, defined as net revenues less cost of goods sold, selling, general and administrative expenses, operating expenses, depreciation, interest, taxes and other expenses, is expected to be up to $15 million; • Adjusted EBITDA, a non-GAAP metric, is expected to be a loss of up to $5 million. * * * [T]he company has experienced technical challenges related to its XP8 smartphone and other general non-systemic, accessory-related issues in its feature phones, which cumulatively resulted in lost sales momentum. These challenges have diverted resources away from launching smaller Tier 2 carrier customers and, as such, delayed the launch of Sonim devices to their customer base. The company believes that these issues are being remediated, and Sonim expects the bulk of the Tier 2 carriers to launch Sonim products in the latter part of 2019. 45. Moreover, the Company disclosed that James Walker “will cease serving as the Company’s Chief Financial Officer.” In a Form 8-K filed with the SEC on September 10, 2019, the Company stated: On September 9, 2019, the Company and Mr. James Walker determined that Mr. Walker will cease serving as the Company’s Chief Financial Officer, effective immediately, and that Mr. Walker will be leaving the Company following a brief period to ensure a smooth transition of his duties to the Company’s newly appointed interim Chief Financial Officer. 46. The same day, during a conference call with investors, defendant Plaschke stated: [W]e did experience some software challenges related to our XP8 smartphone and some other general non-systemic accessory-related issues With our feature phones. As a result, we’d experienced lost sales momentum in the second and third quarter. These challenges have diverted resources away from launching smaller tier 2 carrier customers and as such, delayed the launch of Sonim devices to their customer bases. 47. Defendant Plaschke further disclosed material software issues concerning Sonim products, stating: Sure. On the XP8, we picked a chipset that explicitly because it supported band class 14. It was the first chipset available What’s called a kind of mid-tier that Qualcomm provides that support band class 14, and so we in conjunction working with AT&T, to get the products out. We picked the first available -— the chipset that was most -— earliest available to get band class 14 up and running. This chipset that Qualcomm when it releases chipsets, they don’t really yet — don’t really have a -- and again I don’t want to speak for Qualcomm, but the -- you take a gamble on Whether you’re going to be the first chipset in a particular region of the world. It turns out that the chipset that we launched, we were the first to launch it in -- at least from our -- from what we understand, the first t0 launch at North America. And when you do that, you unintentionally take -— you unintentionally become the kind of the beta customer for that chipset and then you face a number of what I’d called network-related issues in terms of how the chipset works with the network configurations in the carriers in that particular region and they differ region to region. So we -- that has -- that has been a unexpected kind of drag coefficient for us. A number of corner cases emerged in terms of what would -- how the phone operate in different parts of the country based off the different network configurations. And we have finally I think gotten over the hump in terms of getting that -- those fixes made. Those are software changes happily, so that they can be communicated over the air but it's taken us a number of maintenance releases and a number of -- a lot of work with Qualcomm to kind of get there. It’s not a -- so it’s -- you wouldn’t -- I don’t know if you’d called it quality issue, just call it basically a new product introduction issue that we happen to be first. Typically, we try to, to your point or your question, we try not to be the first OEM to release a chipset in a particular region. But because of the importance of getting band class 14 out, we unintentionally took that risk, so that’s the XP8. On the XP5s and the XP3, the phones are used in a number of scenarios that are not necessarily easy to test. These are used in mission critical or what we called business critical scenarios where they are -- they are put in combination with other accessories and put in unusual situations. So, I’ll give you an example. You have a school bus company who has a certain wiring configuration to the little, the kind of a holder Where you put the phone in, and that wiring configuration as it turns out if it’s not -- if it’s not, I don’t know what the right word is, if it’s not optimized can created feedback that can affect the noise cancellation software on the phone. These are as you might expect not easy things to debug before you launch and frankly we just -- we kind of have to take on the chin to get these problems fixed. The silver lining is that and there’s multiple examples in this context of these what I would call very industrialized use cases, the silver lining is that once we figured this stuff out, we become the de facto answer for carriers to solve these tough industrial use cases where they’re not going to put a normal consumer cell phone into that scenario. 48. On this news, the Company’s share price fell $3.30, or nearly 47%, to close at $3.76 per share on September 10, 2019, on unusually heavy trading volume. 49. By the commencement of this action, Sonim stock was trading as low as $3.39 per share, a nearly 70% decline from the $11 per share IPO price. FIRST CLAIM Violation of Section 11 of the Securities Act (Against All Defendants) 50. Plaintiff repeats and re-alleges each and every allegation contained above as if fully set forth herein, except any allegation of fraud, recklessness or intentional misconduct. 51. This Count is brought pursuant to Section 11 of the Securities Act, 15 U.S.C. § 77k, on behalf of the Class, against the Defendants. 52. The Registration Statement for the IPO was inaccurate and misleading, contained untrue statements of material facts, omitted to state other facts necessary to make the statements made not misleading, and omitted to state material facts required to be stated therein. 53. Sonim is the registrant for the IPO. The Defendants named herein were responsible for the contents and dissemination of the Registration Statement. 54. As issuer of the shares, Sonim is strictly liable to Plaintiff and the Class for the misstatements and omissions. 55. None of the Defendants named herein made a reasonable investigation or possessed reasonable grounds for the belief that the statements contained in the Registration Statement was true and without omissions of any material facts and were not misleading. 56. By reasons of the conduct herein alleged, each Defendant violated, and/or controlled a person who violated Section 11 of the Securities Act. 57. Plaintiff acquired Sonim shares pursuant and/or traceable to the Registration Statement for the IPO. 58. Plaintiff and the Class have sustained damages. The value of Sonim common stock has declined substantially subsequent to and due to the Defendants’ violations. SECOND CLAIM Violation of Section 15 of the Securities Act (Against the Individual Defendants) 59. Plaintiff repeats and re-alleges each and every allegation contained above as if fully set forth herein, except any allegation of fraud, recklessness or intentional misconduct. 60. This count is asserted against the Individual Defendants and is based upon Section 15 of the Securities Act. 61. The Individual Defendants, by virtue of their offices, directorship, and specific acts were, at the time of the wrongs alleged herein and as set forth herein, controlling persons of Sonim within the meaning of Section 15 of the Securities Act. The Individual Defendants had the power and influence and exercised the same to cause Sonim to engage in the acts described herein. 62. The Individual Defendants’ positions made them privy to and provided them with actual knowledge of the material facts concealed from Plaintiff and the Class. 63. By virtue of the conduct alleged herein, the Individual Defendants are liable for the aforesaid wrongful conduct and are liable to Plaintiff and the Class for damages suffered. PRAYER FOR RELIEF WHEREFORE, Plaintiff prays for relief and judgment, as follows: a) Determining that this action is a proper class action under Rule 23 of the Federal Rules of Civil Procedure; b) Awarding compensatory damages in favor of Plaintiff and the other Class members against all defendants, jointly and severally, for all damages sustained as a result of Defendants’ wrongdoing, in an amount to be proven at trial, including interest thereon; c) Awarding Plaintiff and the Class their reasonable costs and expenses incurred in this action, including counsel fees and expert fees; and d) Such other and further relief as the Court may deem just and proper. JURY TRIAL DEMANDED Plaintiff hereby demands a trial by jury. DATED: October 7, 2019 GLANCY PRONGAY & MURRAY LLP By: s/ Lesley F. Portnoy Lionel Z. Glancy Robert V. Prongay Lesley F. Portnoy Charles H. Linehan Pavithra Rajesh 1925 Century Park East, Suite 2100 Los Angeles, CA 90067 Telephone: (310) 201-9150 Facsimile: (310) 201-9160 Email: info@glancylaw.com Attorneys for Ajay Malhotra ��������� SWORN CERTIFICATION OF PLAINTIFF SONIM TECHNOLOGIES, INC. SECURITIES LITIGATION I, Ajay Malhotra, certify that: 1. I have reviewed the Complaint and authorize its filing and/or the filing of a Lead Plaintiff motion on my behalf. 2. I did not purchase the Sonim Technologies, Inc. securities that are the subject of this action at the direction of plaintiff’s counsel or in order to participate in any private action arising under this title. 3. I am willing to serve as a representative party on behalf of a class and will testify at deposition and trial, if necessary. 4. My transactions in Sonim Technologies, Inc. securities during the Class Period set forth in the Complaint are as follows: (See attached transactions) 5. I have not sought to serve, nor served, as a representative party on behalf of a class under this title during the last three years. 6. I will not accept any payment for serving as a representative party, except to receive my pro rata share of any recovery or as ordered or approved by the court, including the award to a representative plaintiff of reasonable costs and expenses (including lost wages) directly relating to the representation of the class. I declare under penalty of perjury that the foregoing are true and correct statements. ________________ _________________________________________ Date Ajay Malhotra Ajay Malhotra's Transactions in Sonim Technologies, Inc. (SONM) Date Transaction Type Quantity Unit Price 6/28/2019 Bought 82 $12.8000

securities

rtIWD4cBD5gMZwcz-Cmv

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS ____________________________________ ) KENNETH CHAPMAN, individually and ) behalf of all others similarly situated ) ) ) Plaintiff, ) ) C.A. No. ___________ v. ) JURY DEMANDED ) MAINE DRILLING AND BLASTING, ) INC. ) Defendant. ) ___________________________________ ) COLLECTIVE ACTION COMPLAINT INTRODUCTION The plaintiff, Kenneth Chapman, brings this collective action under the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. (“FLSA”), individually and on behalf of all others similarly situated, against the defendant, Maine Drilling and Blasting, Inc., for unpaid overtime. The plaintiff and other employees of the defendant regularly and customarily work in excess of 40 hours per week. However, these employees are wrongfully classified as exempt and not paid overtime for hours worked in excess of 40 per week. PARTIES 1. Plaintiff Kenneth Chapman (“Mr. Chapman” or the “plaintiff”) is an individual who resides in Uxbridge, Massachusetts. 2. Pursuant to 29 U.S.C. §216(b), Mr. Chapman has given his written consent to become a plaintiff in this collective action, and that consent is attached hereto and marked as Exhibit A. 3. The defendant Maine Drilling and Blasting, Inc. ( “Maine Drilling and Blasting” or the “defendant”) is a corporation organized under the laws of Maine. 4. Maine Drilling and Blasting has a principal place of business in Gardiner, Maine. 5. Maine Drilling and Blasting conducts business in Massachusetts, and its registered agent in the Commonwealth is Roger N. Leboeuf, Esq., 42 Andrew Court, Swansea, MA 02777. 6. Maine Drilling and Blasting is and at all times material hereto has been an "enterprise," within the meaning of the FLSA, 29 U.S.C. §203(r), and an "enterprise engaged in commerce or in production of goods for commerce," within the meaning of 29 U.S.C. §203(s). 7. Maine Drilling and Blasting is and at all times material hereto has been an employer of the plaintiff for purposes of the FLSA. JURISDICTION 8. Jurisdiction is conferred upon this Court by 29 U.S.C. §216(b) of the Fair Labor Standards Act (“FLSA”) and by 28 U.S.C. §1331, as this action arises under the laws of the United States. Jurisdiction over the plaintiff’s claims for declaratory relief is conferred by 28 U.S.C. §§2201 and 2202. 9. Venue for this action properly lies in the District of Massachusetts, pursuant to 28 U.S.C. §1391(b) because the claim arose in this judicial district. FACTS 10. The defendant is a company engaged in the business of rock blasting and drilling at construction, energy, quarry and other sites. 11. The defendant employs various individuals whose primary function is to perform manual labor at its job sites (collectively “blasting employees”). 12. Blasting employees’ duties include blasting, drilling, transporting equipment and materials, and receiving and storing explosives. 13. These employees all regularly work in excess of 40 hours per week. 14. Although all blasting employees work together performing manual labor at the defendant’s job sites, the defendant has a policy by which some blasting employees, namely blasters and inventory personnel, are arbitrarily and wrongly classified as “exempt” from the overtime protections of the FLSA. 15. These employees do not fall under the FLSA’s administrative, executive, or professional exemptions to overtime coverage. Their primary function, similar to all other blasting employees, is to perform manual labor at the defendant’s job sites, and their duties include proper handling, storage, and care of blasting materials, and performing blasting services by placing explosives in rocks. 16. No blasting employees have any managerial duties or authority. 17. These blasting employees regularly work in excess of 40 hours per week, but are not paid one and one half times their regular rate of pay for their hours worked in excess of 40 per week. 18. The plaintiff, Kenneth Chapman, was employed by the defendant starting in October 2007 until April 2013. 19. The plaintiff’s duties included taking physical possession of explosives at a job site, ensuring that these explosives were stored properly, and working together with other blasting employees. 20. The plaintiff was not exempt from the overtime or minimum wage protections under the FLSA. 21. The plaintiff regularly worked in excess of 40 hours per week; however, he, like other blasting employees who were unlawfully classified as exempt from overtime, was not paid time and a half for any hours worked in excess of 40 per week. COLLECTIVE ACTION ALLEGATIONS 22. The preceding paragraphs are incorporated by reference as if the same were fully set forth herein. 23. The plaintiff brings this FLSA collective action on behalf of himself and all other persons similarly situated pursuant to 29 U.S.C. §§ 207 and 216(b), specifically, as follows: All persons employed by the defendant within the three years preceding the filing of this action, whose duties were to receive blasting materials, store blasting materials and to place explosives in rocks, who were classified by the defendant as exempt from the overtime provisions of the FLSA. 24. The defendant has engaged in a continuing violation of the FLSA. The plaintiff, as well as the individuals he seeks to represent, have been denied overtime wages as a result of the defendant’s pay practices. 25. This violation was intended by the defendant and was willfully done. 26. The defendant’s action in denying overtime wages to the plaintiff and other blasters and inventory personnel has been intentional and constitutes a willful violation of the FLSA. FLSA OVERTIME VIOLATION 27. The allegations set forth in the preceding paragraphs are incorporated herein. 28. At all relevant times, the defendant has been an employer engaged in interstate commerce consistent with 29 U.S.C. §§206(a) and 207(a). 29. At all relevant times, the defendant employed the plaintiff and each member of the collective action class consistent with the terms of the FLSA. 30. At all relevant times, the defendant has had annual gross revenues in excess of $500,000. 31. As a consequence of the defendant’s employment practices whereby it misclassified non-exempt employees as exempt from overtime, the plaintiff and other blasting employees were denied statutory overtime wages. 32. The plaintiff and other blasting employees were employees of Defendant within the meaning of the FLSA and, as such, were entitled to the benefits of the FLSA’s overtime wage requirements. 33. The defendant has failed to pay appropriate overtime wages under the FLSA. WHEREFORE, the plaintiff respectfully requests: A. All applicable statutory damages, including compensatory and liquidated damages; B. A Declaration that the defendant violated the FLSA; C. An Order designating this action as a collective action and directing the issuance of notice pursuant to 29 U.S.C. §216(b); D. An Order appointing the plaintiff and his counsel to represent those individuals opting in to the collective action; E. An Order awarding counsel for the plaintiff reasonable attorneys’ fees and costs; and F. Any further relief which the Court deems just and appropriate. PLAINTIFF DEMANDS A TRIAL BY JURY KENNETH CHAPMAN, by his attorneys, __/s/ Shannon Liss-Riordan________ Shannon Liss-Riordan, BBO #640716 Elizabeth Tully, BBO #685855 LICHTEN & LISS-RIORDAN, P.C. 100 Cambridge Street – 20th Floor Boston, MA 02114 (617) 994 – 5800 Emails: sliss@llrlaw.com, etully@llrlaw.com Nicholas F. Ortiz (BBO#: 655135) 29 Commonwealth Ave., Suite 700 Boston, MA 02116 Phone: (617) 716-0282 Fax: (617) 507-3456 Email: nfo@mass-legal.com Elizabeth Ryan, BBO #549632 BAILEY & GLASSER, LLP 125 Summer Street, Suite 1030 Boston MA 02110 (617) 439.6730 Email: ERyan@baileyglasser.com DATE: August 26, 2013

employment & labor

ba2ACocBD5gMZwczCitG

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MILWAUKEE Milwaukee Division BAUMANN FARMS, LLP, a Wisconsin limited liability partnership; GLENN HEIER; and AARON KAISER, Plaintiffs, vs. YIN WALL CITY, INC., an Illinois corporation; SUT I. FONG; CHOENG SAT O; YIN WALL CITY, INC., a Texas corporation; and YIN WALL CITY, DALLAS, INC., a Texas Corporation, Defendants. ] ] ] ] ] Case No: 2:16-cv-605 ] ] Judge: ] Magistrate: ] ] ] ] ] ] ] CLASS ACTION COMPLAINT THE PLAINTIFFS, Baumann Farms, LLP; Glenn Heier; and Aaron Kaiser, individually and on behalf of all others similarly situated, by their attorney, Michael T. Hopkins, as and for a complaint against the Defendants, Yin Wall City, Inc.; Sut I. Fong; Cheong Sat O; Yin Wall City, Inc.; and Yin Wall City, Dallas Inc., allege and show to the Court as follows, to wit: INTRODUCTION 1. The consumption of ginseng, a root cultivated in Asia and North America, among other locales, has long been attributed with certain medicinal effects, including lowering blood pressure, lowering blood sugar levels, boosting energy levels, and generally calming and soothing the recipient. 1 2. Ginseng root is normally consumed raw (in small slices), powdered and placed in capsules to be taken orally, or grated and used to make tea. It has also been used in the manufacture of certain candies. 3. A recent scientific study undertaken by Mayo Clinic found that the regular ingestion of pure Panax quinquefolius variety of ginseng (commonly referred to as “American Ginseng”), which is the type grown in Wisconsin, reduced fatigue in cancer patients. 2 4. Ginseng root grown in Wisconsin is sold at a premium on the world market of two and one-half to three and one-half times the price of ginseng root grown elsewhere, due to its purity and relative high levels of ginsenocide, the medicinal active ingredient found in ginseng root. 5. Due to the popularity of and premium price paid domestically for Wisconsin grown ginseng, some U.S. wholesalers and retailers of ginseng root will import, in bulk, inferior (and less expensive) ginseng root from Canada, Mexico, or Asia, and package it in boxes and containers describing the root as having been grown in Wisconsin, so that the mislabeled packages can thereinafter be resold at a premium. 3 Vuksan V, Stavro MP, Sievenpiper JL, Beljan-Zdravkovic U, Leiter LA, Josse RG, Xu Z. Similar 1 postprandial glycemic reductions with escalation of dose and administration time of American Ginseng in Type 2 Diabetes. Diabetes Care 23(9); 1221-1225, 2000; and http://www.ncbi.nlm.nih.gov/pmc/articles/ PMC2952762/ See: http://www.mayo.edu/research/forefront/ginseng-fights-fatigue-cancer-patients? 2 _ga=1.243697349.1544764240.1439469256 http://www.latimes.com/local/california/la-me-adv-ginseng-american-20150301-story.html#page=1 3 6. Based upon certain scientific and statistical analysis undertaken at the request of Ginseng Board of Wisconsin, Inc., it has been conclusively established that the Defendants have sold and offered to sell Chinese grown ginseng root which has been identified and/or labeled by Defendants as having been grown in Wisconsin. JURISDICTION 7. The Court has original subject matter jurisdiction in this action pursuant to 28 U.S.C. §1331 and 15 U.S.C. §1121(a) as this action arises under the Federal Trademark Act, 15 U.S.C. §1051, et seq. The Court also has subject matter jurisdiction over this putative class action pursuant to 28 U.S.C. §1332(d), as the matter in controversy exceeds FIVE MILLION ($5,000,000.00) DOLLARS, exclusive of interest and costs, and this matter is a class action in which the putative class members are all citizens of states other than Defendants’ states of citizenship. 8. The Court has personal jurisdiction over the Defendants pursuant to Wis. Stats. §801.05(1)(d) and (4)(a) and (b), as the Defendants are engaged in substantial and not isolated activities within this state; this is an action claiming injury to property within this state arising out of an act or omission outside this state by the defendants, who, at the time of injury, carried out solicitation activities within this state; and products processed, serviced or manufactured by the Defendants were used or consumed within this state in the ordinary course of trade, all as more fully alleged below. VENUE 9. Venue is proper in this Court pursuant to 28 U.S.C. §1391(b)(2) and (3), as a substantial part of the events giving rise to this claim arose within this District, and one or more of the corporate Defendants are subject to the court’s personal jurisdiction with respect to this PARTIES 10. The Plaintiff, Baumann Farms, LLP (hereinafter “Baumann”), is a Wisconsin limited liability partnership with its principal office and place of business located in Marathon County, Wisconsin, and which, as its principal business activity, is engaged in the cultivation, harvesting and sale of ginseng root within the State of Wisconsin. 11. The Plaintiff, Glenn Heier (hereinafter “Heier”), is an adult individual residing in Marathon County, Wisconsin, who is engaged in the cultivation, harvesting and sale of ginseng root within the State of Wisconsin. 12. The Plaintiff, Aaron Kaiser (hereinafter “Kaiser”), is an adult individual residing in Marathon County, Wisconsin, who is engaged in the cultivation, harvesting and sale of ginseng root within the State of Wisconsin. 13. The Defendant, Yin Wall City, Inc. is an Illinois corporation having its principal corporate office located in Chicago, Illinois, and which, as its principal corporate activity, is engaged in the sale of food, food stuffs and other related goods, including ginseng root and other consumable products containing ginseng, at wholesale and retail. 14. The Defendant, Yin Wall City, Inc. is a Texas corporation having its principal corporate office located in Houston, Texas, and which, as its principal corporate activity, is engaged in the sale of food, food stuffs and other related goods, including ginseng root and other consumable products containing ginseng, at wholesale and retail. 15. The Defendant, Yin Wall City, Dallas Inc. is aTexas corporation having its principal corporate office located in Houston, Texas, and which, as its principal corporate activity, is engaged in the sale of food, food stuffs and other related goods, including ginseng root and other consumable products containing ginseng, at wholesale and retail. 16. The Defendant, Sut I. Fong, is an adult individual whose principal residence is located in Chicago, Illinois, and is a principal officer, director and shareholder of each of the corporate Defendants. 17. The Defendant, Cheong Sat O, is an adult individual whose principal residence is located in Chicago, Illinois, and is a principal officer, director and shareholder of each of the corporate Defendants. FACTS 18. By virtue of Wis. Stats. §94.50(2) and the Wisconsin Administrative Code, Chapter ATCP 148, each and every ginseng farmer in the State of Wisconsin must register annually with Wisconsin’s Department of Agriculture, Trade and Consumer Protection, and is by virtue of said registration a member of Ginseng Board of Wisconsin, Inc. (hereinafter “GBW”), a trade association whose creation was authorized and mandated by the State of Wisconsin. 19. Baumann has registered as a ginseng grower with Wisconsin’s Department of Agriculture, Trade and Consumer Protection. 20. Heier has registered as a ginseng grower with Wisconsin’s Department of Agriculture, Trade and Consumer Protection. 21. Kaiser has registered as a ginseng grower with Wisconsin’s Department of Agriculture, Trade and Consumer Protection. 22. Baumann, Heier and Kaiser will hereinafter be collectively referred to as “Growers.” 23. Wisconsin currently has 180 ginseng growers registered with Wisconsin’s Department of Agriculture, Trade and Consumer Protection (hereinafter “ATCP”), which includes all legally operating ginseng growers in Wisconsin. 4 24. Ginseng root grown in Wisconsin is sold at a premium on the world market of two and one-half to three and one-half times the price of ginseng root grown elsewhere, due to its purity and relative high levels of ginsenocide, the medicinal active ingredient found in ginseng 25. The corporate Defendants identified in paragraphs 13-15, supra (hereinafter collectively referred to as YWC) operate retail stores in Illinois and Texas where they sell, inter alia, ginseng root and other dietary supplements and foods. 26. YWC advertises its retail locations and the products sold thereat via various websites accessible by consumers in Wisconsin, and engages in substantial and not isolated business activity within the State of Wisconsin, including the purchase of bulk-unprocessed and processed-prepackaged ginseng root from one or more wholesalers located within the State of Wisconsin. 27. On December 7, 2014, a representative of GBW purchased six packages of ginseng root at YWC’s retail location(s) in Chicago, Illinois, which bore the YWC trademark. 28. The packages of ginseng root purchased by the GBW representative from YWC on December 7, 2014, were clearly marked as containing ginseng grown in Wisconsin. 5 See Exhibit 1 attached hereto and incorporated herein, which is a screen capture from ATCP’s website. 4 See a photograph of the packages attached hereto as Exhibit 2. 5 29. After purchasing the packages of ginseng root from YWC, GBW forwarded four of them, intact and unopened, to Covance Laboratories, Inc. (hereinafter “Covance”), a commercial laboratory located in Madison, Wisconsin, for scientific trace metals analysis. 30. Covance thereinafter conducted a trace metals analysis of said ginseng root using its established scientific protocols, and issued Certificates of Analysis on January 30, 2015. 6 31. The Certificates of Analysis were then forwarded by Covance to the Department of Medical Sciences, School of Veterinary Medicine, University of Wisconsin-Madison, for statistical analysis of the trace metals found in the ginseng root which GBW purchased from YWC, as compared to known data base sets of trace metals found in ginseng root grown in Wisconsin, China, and Canada. 32. The statistical analysis conducted at the University of Wisconsin of the trace metals found in YWC’s ginseng root established, to a probability of 92%, that YWC’s ginseng root which was being sold and packaged as Wisconsin grown ginseng, was actually grown in China. 7 33. YWC, and each of them, have conspired and agreed to falsely designate and describe the origin and nature of the ginseng root they sell, so as to cause mistake and deceive the consuming public and others regarding its origin and nature, thereby enabling them to sell the inferior ginseng root imported from foreign locations at a premium, as described above. 34. YWC, and each of them, have conspired and agreed to utilize commercial advertising which misrepresents the nature, characteristics and origin of the ginseng root they sell so that See copies of the Certificates attached hereto as Exhibits 3-6. 6 See the February 2015 Report by E. Amene, and D. Döpfer, Department of Medical Sciences, School of 7 Veterinary Medicine, UW-Madison, attached hereto as Exhibit 7. YWC may sell the inferior ginseng root imported from foreign locations at a premium, as described above. 35. The conduct of YWC, described above, was performed and accomplished through the direction, control, conduct and instructions of the Defendants, Fong and Sat O, personally and as directors, shareholders and principal officers of YWC. Fong and Sat O had the ability to prevent YWC from engaging in the tortious conduct referred to above and/or to stop said conduct once it began. Further, Fong and Sat O have received pecuniary benefit from YWC’s tortious conduct. Accordingly, Fong and Sat O are personally liable to Plaintiffs for the tortious conduct of YWC, described above. CLASS ALLEGATIONS 36. This action may properly be maintained as a class action pursuant to Rule 23, Fed. R. 37. Plaintiffs bring this action as a class action on behalf of themselves and the following All individuals and entities engaged in the business of cultivating ginseng in the State of Wisconsin who have registered, as mandated by Wis. Stats. §94.50(2), as ginseng growers with Wisconsin’s Department of Agriculture, Trade and Consumer Protection between January 2011 and the date of judgment herein. 38. Excluded from the Class are Defendants, and all officers, directors, employees and agents of Defendants.. 39. The Class is composed of at least 180 individuals or entities, in the aggregate. Members of the Classes are so numerous that joinder of all members would be impracticable. 40. There are common questions of law or fact among the Class members, including: a. The nature, scope and duration of the wrongful practices of Defendants; b. Whether Defendants’ advertising, marketing, product packaging, and other promotional materials constituted false advertising and/or unfair competition; c. Whether Defendants knew that their representations regarding the source of the ginseng root sold were false or misleading, but continued to make them; d. Whether, by the misconduct as set forth in this Complaint, Defendants engaged in false advertising and/or unfair competition in violation of §43(a) of the U.S. Lanham Act, 15 U.S.C. §1125(a); e. The amount of profit realized by Defendants associated with their wrongful conduct, as alleged in this Complaint; and f. Whether, as a result of Defendants’ misconduct as set forth in this Complaint, Plaintiffs and the Class are entitled to damages, equitable relief, and the amount and nature thereof. 41. Plaintiffs’ claims are typical of the members of the Class because Plaintiffs and all members of the Class were injured by the same wrongful practices of Defendants as described in this Complaint. Plaintiffs’ claims arise from the same practices and course of conduct that give rise to the claims of the Class members, and are based on the same legal theories. Plaintiffs have no interests that are contrary to or in conflict with those of the Class they seek to represent. 42. Plaintiffs will fairly and adequately represent the interests of the members of the Class. Plaintiffs’ interests are the same as, and not in conflict with, the other members of the Classes. Plaintiffs’ counsel is experienced in complex litigation. 43. Questions of law or fact common to the members of the Class predominate and a class action is superior to other available methods for the fair and efficient adjudication of this lawsuit, because individual litigation of the claims of all members of the Class is economically unfeasible and procedurally impracticable. While any individual grower has standing to sue Defendants for violation of §43(a) of the U.S. Lanham Act, and to recover Defendants’ profit arising from said violation, pursuant to §35(a) thereof, the recovery of Defendants’ profits by one or two growers would necessarily diminish the assets available to Defendants to compensate other members of the class who may later bring suit. Further, the likelihood of individual members of the Class prosecuting separate claims is remote and, even if every Class member could afford individual litigation, the court system would be unduly burdened by individual litigation of such cases. Individualized litigation would also present the potential for varying, inconsistent, or contradictory judgments and would magnify the delay and expense to all parties and to the court system resulting from multiple trials of the same factual issues. Plaintiffs know of no difficulty to be encountered in the management of this action that would preclude its maintenance as a class action, and certification of the Class is proper. 44. Relief concerning Plaintiffs’ rights under the laws herein alleged and with respect to the Class would be proper on the additional ground that Defendants have acted on grounds generally applicable to the Class, thereby making appropriate final injunctive relief or corresponding declaratory relief with regard to members of the Class as a whole. CAUSE OF ACTION - VIOLATION OF 15 U.S.C. §1125(a) 45. Plaintiffs reallege and incorporate, as if fully set forth herein, each and every allegation contained in paragraphs 1 through 44, supra. 46. The conduct of the Defendants, and each of them, described above, is likely to cause injury and damage to Plaintiffs and the Class by: a) introducing ginseng root into the U.S. market which purports to be grown in Wisconsin, thereby depressing the price at which ginseng root actually grown in Wisconsin may be sold; and b) selling ginseng root of poor and deficient quality identified as Wisconsin ginseng root, thereby eroding the status and desirability of Wisconsin ginseng in the mind of the consuming public, decreasing overall market demand for Wisconsin grown ginseng. 47. By engaging in the false and misleading conduct identified above, the Defendants have engaged in false advertising and unfair competition in violation of §43(a) of the U.S. Lanham Act, 15 U.S.C. §1125(a). 48. Pursuant to §35(a) of the U.S. Lanham Act, 15 U.S.C. §1117(a), Plaintiffs are entitled to recover of the Defendants, jointly and severally, the profits Defendants obtained from selling the ginseng root described above, trebled, together with their actual attorney fees and costs, as an exceptional case. 49. Pursuant to §36 of the U.S. Lanham Act, 15 U.S.C. §1118, Plaintiffs request that an order be entered instructing the U.S. Marshall to seize and thereinafter destroy all packages of ginseng root described above, and all like packaging materials in Defendants’ possession and control. WHEREFORE, Plaintiffs hereby demand that judgment be entered in their favor and against Defendants, jointly and severally, as follows: A. That this matter be certified as a class action with the Class defined as set forth above pursuant to Rule 23, Fed. R. Civ. P.; that the Plaintiffs be appointed Class Representatives; and that Plaintiffs’ attorney be appointed Class Counsel. B. That the Court enter an order requiring Defendants to immediately cease the wrongful conduct described above; enjoining Defendants from continuing to conduct business via the unlawful and unfair business acts and practices complained of herein; and ordering Defendant to engage in a corrective notice campaign; C. Awarding Plaintiffs treble the profits obtained by Defendants from the sale of ginseng root described above, pursuant to 15 U.S.C. §1117(a); D. Awarding Plaintiffs the actual costs and attorney fees incurred in prosecution of this matter as an exceptional case, pursuant to 15 U.S.C. §1117(a); E. Ordering the U.S. Marshall to seize and thereinafter destroy all packages of ginseng root described above, and all like packaging materials in Defendants’ possession and control; and F. Such other relief as the Court may deem just and equitable. PLAINTIFFS HEREBY DEMAND A TRIAL BY JURY Dated this 22nd day of May, 2016. /s/ Michael T. Hopkins . Michael T. Hopkins, LEAD COUNSEL mth@ip-lit.us WI Bar No: 1014792 IP-Litigation.US, LLC 757 N. Broadway, Suite 201 Milwaukee, WI 53202 Tel/Fax: 888-227-1655 attorney for Plaintiffs

intellectual property & communication

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF KANSAS NATHAN C. JONES and ) LYN J. BUCHMILLER, individually, and ) on behalf of all others similarly situated, ) ) Plaintiffs, ) ) Case No.: 2:19-cv-02534-CM-JPO v. ) ) USHEALTH GROUP, INC. and ) USHEALTH ADVISORS, LLC, ) ) Defendants. ) FIRST AMENDED COMPLAINT COME NOW Plaintiffs Nathan C. Jones and Lyn J. Buchmiller, individually, and on behalf of all others similarly situated, and for their First Amended Complaint against Defendants USHEALTH Group, Inc. and USHEALTH Advisors, LLC, state: Parties and Jurisdiction 1. Nathan C. Jones (“Jones”) is an individual who resides in Johnson County, Kansas. 2. Lyn J. Buchmiller (“Buchmiller”) is an individual who resides in St. Louis County, Missouri. 3. Jones and Buchmiller bring this action on behalf of themselves and all others similarly situated. 4. Defendant USHEALTH Group, Inc. (“USHEALTH”) is a Delaware corporation in good standing. 5. USHEALTH’s principal place of business is in the State of Texas. 6. Defendant USHEALTH Advisors, LLC (“Advisors”) is a Texas limited liability company good standing. 7. Advisors is a wholly owned subsidiary of USHEALTH. 8. Defendants’ website states that it is dedicated to providing various types of insurance, including health insurance, to “self-employed individuals, families, business owners and their employees.” 9. Defendants sell insurance products to persons in the State of Kansas and nationwide. 10. This Court has personal jurisdiction over Defendants because they have solicited business in the State of Kansas, conduct business in the State of Kansas, have committed some of the acts described below in the State of Kansas and otherwise have sufficient minimum contacts with the State of Kansas, and such contacts are continuous and systematic. Background 11. Defendants sell insurance products through its agents. 12. Defendants’ website states that its agents must “meet specific product training and certification standards before being authorized to represent our products.” 13. Defendants’ senior vice president stated, “our agents must pass a rigorous examination process to certify their full knowledge of our products.” 14. Defendants’ agents are captive agents who are only permitted to sell Defendants’ insurance products. 15. A press release on Defendants’ website states that Defendants are “focused on serving America’s self-employed, small business and individual insurance market through its captive Agent sales force.” 16. USHEALTH Advisors has an office located at 10540 Barkley Street in Overland Park, Kansas. 2 17. USHEALTH Advisors provides its agents various marketing materials displaying its name and logo. 18. One of Defendant’s agents is Chad Beisel (“Beisel”). 19. Beisel has an agent profile on Defendants’ website, which includes Beisel’s photograph and contact information. The profile identifies Beisel as a “USHEALTH Advisors Agent.” The top of the website containing Beisel’s profile states “USHEALTH Group.” 20. The website containing Beisel’s profile includes a link that can be clicked to obtain a quote from USHEALTH. The website states above the link that “USHEALTH Group offers quality coverage to policy holders” for various types of insurance. 21. Beisel identifies himself on his LinkedIn profile as a “Field Sales Leader” for USHEALTH Advisors. 22. USHEALTH Advisors requires that all advertising that directly or indirectly identifies the “USHEALTH” brand, such as text message advertisements, be approved prior to use by its agents. Such advertisements must be submitted to USHEALTH Advisors for approval at marketing@ushadvisors.com. 23. Defendants market their products and services, in part, through sending text messages to prospective customers’ cellular phones. Texts to Jones 24. Jones is the owner of a cell phone and pays the bill for his cell phone account. His cell phone number is 913-XXX-4213. 25. Jones previously owned a landscaping business called “Prariescapes.” 26. Jones did not provide his cell phone number to Defendants. 27. Jones had no prior business relationship with Defendants. 3 28. Jones did not grant Defendants prior express written consent to be contacted on his cell phone. 29. On or about March 13, 2019, Jones received a text message from Defendants on his cell phone in Johnson County, Kansas. The text message stated: Hello. My name is Chad and I’m a licensed health insurance agent in KS and MO. Call me at 913-562-6134 to discuss your options for affordable health coverage. I look forward to helping you. Thanks. 30. On or about March 18, 2019, Jones received a second text message from Defendants on his cell phone in Johnson County, Kansas. The text message stated: Hey Prariescapes, are you still looking for health coverage? If we get an application in today I can still have coverage start on the 1st. Call me at 913-562-6134. 31. Both text messages appeared on Jones’s cell phone as having been received from phone number 913-562-6134. 32. Upon information and belief, phone number 913-562-6134 is a number used by Defendants to conduct business. 33. The text messages placed to Jones by Defendants were made for the purpose of selling insurance products. Texts to Buchmiller 34. One of Defendants’ agents is Gerald Hunter (“Hunter”). 35. Hunter has an agent profile on Defendants’ website, which includes Hunter’s photograph and contact information. The profile identifies Hunter as a “USHEALTH Advisors Agent.” The top of the website containing Hunter’s profile states “USHEALTH Group.” 36. The website containing Hunter’s profile includes a link that can be clicked to obtain a quote from USHEALTH. The website states above the link that “USHEALTH Group offers quality coverage to policy holders” for various types of insurance. 4 37. On information and belief, Hunter’s e-mail address is Gerald.Hunter@USHAdvisors.com. 38. Hunter identifies himself on his LinkedIn profile as a “Licensed Insurance Agent” for USHEALTH Group. 39. Buchmiller is the owner of a cell phone and pays the bill for her cell phone account. Her cell phone number is 636-XXX-9693. 40. Buchmiller is a real estate agent. 41. Buchmiller did not provide her cell phone number to Defendants. 42. Buchmiller had no prior business relationship with Defendants. 43. Buchmiller did not grant Defendants prior express written consent to be contacted on her cell phone. 44. Buchmiller had, in fact , placed her number on a do not call registry. 45. On or about July 16, 2019, Buchmiller received a text message from Defendants on her cell phone. The text message stated that it was sent from short code 484848. The text message Lyn, New Health Insurance available with CIGNA (30% less than Obamacare). PPOs designed for realtors. Get a plans (sic) specific to your needs. Reply Yes. 46. On information and belief, Hunter subsequently contacted Buchmiller about the text message sent to her. 47. The text message sent to Buchmiller by Defendants was sent for the purpose of selling insurance products. 48. Defendants’ conduct injured Jones, Buchmiller and the putative class members because their privacy has been violated, and they were subject to annoying and harassing text messages that constituted a nuisance. Defendants’ text messages intruded upon the rights of Jones, 5 Buchmiller and the putative class members to be free from invasion of their interest in seclusion. 49. Defendants’ conduct injured Jones, Buchmiller and the putative class members because they wasted time addressing or otherwise responding to the unwanted text messages to their cellular phones. 50. On information and belief, Defendants placed text messages en masse to cellular phones for the purpose of selling its products and services. Defendants placed those calls to Jones, Buchmiller and putative class members without first obtaining their prior express written consent. Count I - Violation of the Telephone Consumer Protection Act ("TCPA"), 47 U.S.C. § 227 et seq. 51. Jones and Buchmiller incorporate by reference the allegations of the previous paragraphs as if fully stated in this count. 52. The TCPA states, in part: It shall be unlawful . . . (A) to make any call (other than a call made for emergency purposes or made with the prior express consent of the called party) using [a] prerecorded voice . . . (iii) to any telephone number assigned to a . . . cellular telephone . . . . 47 U.S.C. § 227(b)(1). 53. The TCPA defines a "telephone solicitation" as a "call or message for the purpose of encouraging the purchase of goods, or services which is transmitted to any person." 47 U.S.C. § 227(a)(4). 54. The Federal Communications Commission's regulations implementing the TCPA provide that telephone solicitations cannot be made to a recipient without the recipient's "prior express written consent." See FCC 12-21, CG Docket 02-278 (effective October 16, 2013); 47 C.F.R. § 64.1200(a)(2) 6 55. The term "prior express written consent" as defined by the Code of Federal Regulations means "an agreement, in writing, bearing the signature of the person called that clearly authorizes the seller to deliver or cause to be delivered to the person called advertisements or telemarketing messages using an automatic telephone dialing system or an artificial or prerecorded voice, and the telephone number to which the signatory authorizes such advertisements or telemarketing messages to be delivered." 47 C.F.R. § 64.1200(f)(8)(i). 56. The TCPA provides for a private right of action and statutory damages of at least $500, and up to $1,500.00 per violation. 47 U.S.C. § 227(b)(3). Class Allegations 57. Pursuant to Federal Rule of Civil Procedure 23, Jones and Buchmiller bring this lawsuit as a class action on behalf of themselves and all others similarly situated. This action satisfies the requirements of numerosity, commonality, typicality, adequacy of representation, predominance and superiority. 58. Jones and Buchmiller seek to represent the following class: All persons in the United States who, from August 2, 2015 to the present, who received a text message on their cell phone from Defendants or someone acting on their behalf and did not provide Defendants their prior express written consent to receive such text messages. 59. On information and belief, Defendants used an automatic telephone dialing system to send text messages to Jones’s cellular phone and to the putative class members’ cellular phones. The device or devices Defendants used to place the telephone calls to cellular numbers had the capacity to store or produce telephone numbers to be called using a random or sequential number generator and to dial such numbers. 60. On information and belief, Defendants sent text messages to the cell phones of Jones, Buchmiller, and the putative class members without first obtaining the recipients' prior 7 express written consent to send them such text messages. 61. On information and belief, Defendants sent text messages en masse to hundreds, if not thousands, of cellular telephone numbers using an automatic telephone dialing system. 62. On information and belief, Jones, Buchmiller, and the putative class members’ cell phone numbers were included on lists stored in the device or devices of the system or systems used by Defendants to send the text messages and Defendants used the device or devices to send text messages to the lists of numbers. 63. On information and belief, the text messages sent to Jones, Buchmiller and the class members were sent by a system with the capability to send text messages at automatically scheduled intervals. 64. On information and belief, the device or devices used by Defendants to send text messages to Jones, Buchmiller and the putative class members had the ability to automatically insert the name of the text message recipient from a list so as to make the text messages appear to be personalized. 65. On information and belief, the content of the text messages received by Jones and Buchmiller is generic and identical or substantially similar to the text messages received by many of the putative class members. 66. Defendants’ conduct as described in this suit violated the express provisions of the TCPA, including, but not limited to, 47 U.S.C. § 227(b)(l) and the TCPA’s corresponding statutes and regulations. 67. Jones, Buchmiller and the putative class members are entitled to damages of $500.00 per text message sent by Defendants and up to $1,500.00 per call if the Court finds that Defendants willfully violated the TCPA. 8 68. On information and belief, there are hundreds or thousands of people in the proposed class, and the class is so geographically diverse that joinder of all members is impracticable. 69. Jones and Buchmiller’s claims are typical of the class they seek to represent. Jones, Buchmiller and the putative class members were sent text messages by Defendants through an automatic telephone dialing system and did not provide prior express written consent to be called on their cellular phones. Jones and Buchmiller’s claims and the claims of the putative class members are based on the same legal theories and arise from the same unlawful conduct thereby resulting in the same injury to Jones, Buchmiller and the putative class members. 70. There are questions of law and fact common to the class. Common questions include, but are not limited to: a. Whether Defendants sent text messages to the cellular phones of Jones and the putative class members without first obtaining the recipients’ prior express written consent; b. Whether Defendants sent text messages to the cellular phones of Jones and the putative class members using an automatic telephone dialing system; c. Whether Defendants’ conduct violates the provisions of the TCPA, 47 U.S.C. § 227, et seq.; d. Whether Defendants’ conduct violates the rules and regulations implementing the TCPA; and, e. Whether Jones, Buchmiller and putative class members are entitled to increased damages based on the willfulness of Defendants’ conduct. 71. Jones and Buchmiller will fairly and adequately represent the putative class members. Jones and Buchmiller have retained counsel experienced in the prosecution of class 9 actions. Jones and Buchmiller are committed to vigorously prosecuting the claims presented in this petition. Neither Jones and Buchmiller nor their counsel have any interests adverse or in conflict with the absent class members. 72. The questions of law and fact common to the members of the proposed class predominate over any questions of fact affecting any individual member of the proposed class. 73. A class action is superior to other methods for the fair and efficient adjudication of this controversy. Because the damages suffered by the individual class members may be relatively small compared to the expense and burden of litigation, it is impracticable and economically infeasible for class members to seek redress individually. Demand for Judgment WHEREFORE Plaintiffs Nathan C. Jones and Lyn J. Buchmiller, individually, and on behalf of all others similarly situated, requests the Court enter judgment against the Defendants in excess of $75,000.00 and grant the following relief: a. Enter an order against Defendants pursuant to Federal Rule of Civil Procedure 23, certifying this action as a class action and appointing Nathan C. Jones and Lyn J. Buchmiller as representatives of the class; b. Enter an order appointing Butsch Roberts & Associates LLC and Molner Law Group, LLC as counsel for the class; c. Enter judgment in favor of Jones and the putative class for all damages available under the TCPA, including statutory damages of $500 per violation, or up to $1,500 per violation if Defendants willfully violated the TCPA; d. Award Jones and Buchmiller and the class all expenses of this action, and requiring defendant to pay the costs and expenses of class notice and claims administration; and, 10 e. Award Jones and Buchmiller and the class such further and other relief the Court deems just and appropriate. Jury Trial Demanded BUTSCH ROBERTS & ASSOCIATES LLC By: /s/ Christopher E. Roberts Christopher E. Roberts KS #24528 231 South Bemiston Ave., Suite 260 Clayton, MO 63105 (314) 863-5700 (telephone) (314) 863-5711 (fax) croberts@butschroberts.com MOLNER LAW GROUP, LLC Mark D. Molner KS #24493 300 E. 39th Street, Suite 1G Kansas City, MO 64113 (816) 281-8549 (telephone) (816) 817-1473 (fax) mark@molnerlaw.com Attorneys for Plaintiffs CERTIFICATE OF SERVICE I hereby certify that on September 16, 2019, a copy of the foregoing was filed electronically with the Clerk of the Court to be served by operation of the Court’s electronic filing system upon all counsel of record. /s/ Christopher E. Roberts 11

privacy

OREAF4cBD5gMZwcz9NdC

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF ILLINOIS ALTAVIA MATTHEWS, on behalf of ) The Bradford Hammacher Group, Inc. ) Employee Stock Ownership Plan, and on ) behalf of a class of all other persons ) similarly situated, ) ) Plaintiff, ) Case No. ) v. ) ) Judge: RELIANCE TRUST COMPANY, ) a Delaware Corporation, ) Magistrate Judge: ) Defendant. ) ) ___________________________________ ) COMPLAINT Plaintiff Altavia Matthews (“Plaintiff”), by her undersigned attorneys, on behalf of The Bradford Hammacher Group, Inc. Employee Stock Ownership Plan (“ESOP”) and similarly situated participants in the ESOP, alleges upon personal knowledge, the investigation of her counsel, and upon information and belief as to all other matters, as follows: 1. Plaintiff brings this suit against Reliance Trust Company (“Reliance”) under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), § 502(a)(2), 29 U.S.C. § 1132(a)(2), for losses suffered by the ESOP and other relief under ERISA § 409, 29 U.S.C. § 1109, caused by Reliance, which was the Trustee for the ESOP when the ESOP acquired shares of The Bradford Hammacher Group, Inc. (“Bradford”) in 2013 (the “ESOP Transaction”). 2. Plaintiff is employed by Bradford, participates in the ESOP and is vested in the Bradford stock held in her account in the ESOP. FACTUAL ALLEGATIONS 3. Bradford is headquartered at 9333 N. Milwaukee Avenue, Niles, Illinois 60714. 4. Bradford bills itself as “a world leader in direct to consumer marketing and product development.” 5. The ESOP was established by Bradford effective January 1, 2013. 6. The ESOP is a retirement plan governed by ERISA. 7. Bradford is the sponsor of the ESOP within the meaning of ERISA § 3(16)(B), 29 U.S.C. § 1002(16)(B). 8. The ESOP was administered by Bradford. 9. Bradford appointed Reliance as Trustee of the ESOP in or about September 2013 for the purpose of representing the ESOP in the proposed ESOP Transaction. 10. As Trustee for the ESOP, Reliance had the exclusive duty to ensure that any transactions between the ESOP, Bradford and Bradford shareholders, including loans to the ESOP, acquisitions of Bradford stock by the ESOP, and subsequent transactions between them, were fair and reasonable and to ensure that the ESOP paid no more than fair market value for Bradford stock. 11. On September 30, 2013, Reliance caused the ESOP to purchase all of the Class A Common Stock of Bradford, 600,000 shares, from Bradford (and/or its principal shareholders) in exchange for a note payable in the amount of $100,000,000 (“the ESOP Transaction”). 12. Pursuant to the ESOP Transaction, Reliance caused the ESOP to pay $166.67 per share for the Bradford stock, for a total payment of approximately $100,000,000 for all of the shares. 13. Pursuant to the ESOP Transaction, Reliance caused the ESOP to issue a note payable to Bradford in the amount of $100,000,000 to purchase Bradford stock from Bradford. 14. Reliance resorted to seller-financing because it was presumably unable to arrange bank financing for the ESOP Transaction. Any prospective commercial lender would have been troubled by the fact that the proposed ESOP Transaction would be 100% leveraged. Moreover, no reasonably prudent commercial lender would have financed the transaction at the $100- million-dollar amount without conducting robust due diligence on the loan to ensure that the collateral pledged, the stock, was actually worth $100 million. 15. The ESOP now owns all or substantially all of Bradford, along with its sister company, Hammacher Schlemmer & Company, Inc. 16. Although the ESOP acquired 100% of Bradford, it did not control Bradford. Instead, Reliance was subject to the direction of an ESOP Voting Committee. The ESOP Voting Committee was controlled by so-called Required Security Holders. On information and belief, the Required Security Holders were among the parties in interest that sold Bradford stock to the ESOP. 17. After the ESOP acquired Bradford, Reliance caused or allowed Bradford to buy Bradford’s 172,000-square-foot headquarters at 9333 N. Milwaukee Avenue in Niles, Illinois, from shareholders of Bradford for $8 million. These shareholders were the children (or their trusts) of one of the company’s founders. Thus, although the ESOP owned 100% of Bradford, Reliance did not obtain control of Bradford and allowed Bradford to undertake million dollar transactions with parties in interest. 18. Indeed, the $8 million building purchase represented almost 20% of Bradford’s value based on a subsequent valuation on December 31, 2013. 19. On December 31, 2013, just 92 days after the ESOP bought Bradford, the ESOP’s investment in Bradford common stock was worth $43,410,000.00, or just $72.35 per share—a difference in value of approximately $56.5 million, or about 56%. JURISDICTION AND VENUE 20. This action arises under Title I of ERISA, 29 U.S.C. §§ 1001 et seq., and is brought by Plaintiff under 29 U.S.C. § 1132(a) to enjoin acts and practices that violate the provisions of Title I of ERISA, to require Reliance to make good to the ESOP losses resulting from its violations of ERISA, and to restore to the ESOP any profits and fees made and received by Reliance, and to obtain other appropriate equitable and legal remedies in order to redress violations and enforce the provisions of Title I of ERISA. 21. This Court has subject matter jurisdiction over this action pursuant to ERISA § 502(e)(1), 29 U.S.C. § 1132(e)(1). 22. Venue is proper in this District pursuant to ERISA § 502(e)(2), 29 U.S.C. § 1132(e)(2), because some or all of the events or omissions giving rise to the claims occurred in this District, the ESOP was administered in this District, Bradford is headquartered in this District, and Plaintiff lives in this district. PARTIES 23. Plaintiff Altavia Matthews is a resident of Chicago, IL. At all relevant times, Matthews has been a Plan participant, as defined in ERISA § 3(7), 29 U.S.C. § 1002(7), and has been vested in Bradford common stock shares in her account in the ESOP. 24. Defendant Reliance Trust Company is a trust company chartered in Georgia. Reliance was the Trustee of the ESOP during the 2013 ESOP Transaction. Reliance at all relevant times was a “fiduciary” under ERISA because it was named as the Trustee. As the Trustee, Reliance had exclusive authority to manage and control the assets of the ESOP and had sole and exclusive discretion to authorize the 2013 ESOP Transaction. CLAIMS FOR RELIEF COUNT ONE Engaging in Prohibited Transactions Forbidden by ERISA §§ 406(a)-(b), 29 U.S.C. §§ 1106(a)-(b) 25. Plaintiff incorporates the preceding paragraphs as though set forth herein. 26. Bradford was a party in interest to the ESOP because it is the employer whose employees are covered by the ESOP. ERISA § 3(14)(C), 29 U.S.C. § 1002(14)(C). 27. Reliance was a fiduciary for the ESOP because it was the Trustee responsible for deciding on behalf of the ESOP whether to engage in the ESOP transaction, the price to pay for Bradford stock, and the terms of the note payable to Bradford. 28. ERISA § 406(a)(1)(B), 29 U.S.C. § 1106(a)(1)(B), prohibited a plan fiduciary, here Reliance, from causing a plan, here the ESOP, to borrow money from a party in interest, here Bradford (the plan sponsor). 29. ERISA § 406(a)(1)(E), 29 U.S.C. § 1106(a)(1)(E), prohibited Reliance from causing the ESOP to acquire Bradford securities from Bradford and its principal shareholders and transacting with Bradford. 30. ERISA § 406(b)(2), (3), 29 U.S.C. § 1106(b)(2), (3), provides that a fiduciary for a plan shall not— (2) in his individual or in any other capacity act in any transaction involving the plan on behalf of a party (or represent a party) whose interests are adverse to the interests of the plan or the interests of its participants or beneficiaries, or (3) receive any consideration for his own personal account from any party dealing with such plan in connection with a transaction involving the assets of the plan. 31. In violation of ERISA § 406(b)(2), 29 U.S.C. § 1106(b)(2), in approving the ESOP transaction, Reliance acted for the benefit of Bradford in a transaction in which Bradford was adverse to the ESOP by approving a purchase price for Bradford stock that vastly exceeded its value. 32. In violation of ERISA § 406(b)(3), 29 U.S.C. § 1106(b)(3), in the course of the ESOP transaction, Reliance received payment from Bradford for serving as the Trustee on behalf of the ESOP with respect to the ESOP transaction. 33. The loan and stock transactions between the ESOP and parties in interest, namely Bradford and its principal shareholders, were prohibited transactions. 34. The loan and Bradford stock transactions between the ESOP and parties in interest were caused by Reliance in its capacity as trustee for the ESOP. 35. ERISA § 408(e), 29 U.S.C. § 1108(e), provides a conditional exemption from the prohibited transaction rules for sale of employer securities to or from a plan if a sale is made for adequate consideration. ERISA § 3(18)(B), 29 U.S.C. § 1002(18)(B), defines adequate consideration as “the fair market value of the asset as determined in good faith by the trustee or named fiduciary.” ERISA’s legislative history and existing case law make clear that ERISA § 3(18)(B) requires that the price paid must reflect the fair market value of the asset, and the fiduciary must conduct a prudent investigation to determine the fair market value of the asset. 36. The statutory exemptions to ERISA’s prohibited transaction provisions are affirmative defenses. See, e.g., Braden v. Walmart Stores, Inc., 588 F.3d 585, 601 (8th Cir. 2009); Howard v. Shay, 100 F.3d 1484, 1489 (9th Cir. 1996); Lowen v. Tower Asset Mgmt., Inc., 829 F.2d 1209, 1215 (2d Cir. 1987); Donovan v. Cunningham, 716 F.2d 1455, 1567-68 (5th Cir. 37. ERISA § 409, 29 U.S.C. § 1109, provides, inter alia, that any person who is a fiduciary with respect to a plan and who breaches any of the responsibilities, obligations, or duties imposed on fiduciaries by Title I of ERISA shall be personally liable to make good to the plan any losses to the plan resulting from each such breach, and additionally is subject to such other equitable or remedial relief as the court may deem appropriate, including removal of the fiduciary. 38. ERISA § 502(a)(2), 29 U.S.C. § 1132(a)(2), permits a plan participant to bring a suit for relief under ERISA § 409. 39. Reliance caused and is liable for millions of dollars of losses suffered by the ESOP as a result of the prohibited transactions in an amount to be proven more specifically at CLASS ACTION ALLEGATIONS 40. Plaintiff brings this action as a class action pursuant to Fed. R. Civ. P. 23(a) and (b), on behalf of the following class: All persons who were participants in The Bradford Hammacher Group, Inc. Employee Stock Ownership Plan. Excluded from the Plaintiff Class are the officers and directors of The Bradford Hammacher Group, Inc. and legal representatives, successors, and assigns of any such excluded persons. 41. The Plaintiff Class is so numerous that joinder of all members is impracticable. Although the exact number and identities of Class Members are unknown to Plaintiff at this time, the ESOP’s Form 5500 filing for 2014 indicates that there were 656 active participants in the ESOP as of December 31, 2014. 42. Questions of law and fact common to the Plaintiff Class as a whole include, but are not limited to, the following: i. Whether Reliance was a fiduciary under ERISA for the ESOP; ii. Whether Reliance’s fiduciary duties under ERISA included serving as Trustee for the ESOP in the ESOP’s acquisition of Bradford stock; iii. Whether Reliance engaged in a prohibited transaction under ERISA by permitting the ESOP to purchase Bradford stock for more than adequate consideration; iv. Whether Reliance engaged in a good faith valuation of the Bradford stock in connection with the ESOP transaction; v. Whether Reliance engaged in a prudent valuation of the Bradford stock in connection with the ESOP transaction; and vi. The amount of losses suffered by the ESOP and its participants as a result of Reliance’s ERISA violations. 43. Plaintiff’s claims are typical of those of the Plaintiff class. For example, Plaintiff, like other ESOP participants in the Plaintiff Class, suffered a diminution in the value of her ESOP account because the ESOP plunged in value after purchasing Bradford stock for more than fair market value, and she continues to suffer such losses in the present because Reliance failed to correct the overpayment by the ESOP in its time as trustee. 44. Plaintiff will fairly and adequately represent and protect the interests of the Plaintiff class. Plaintiff has retained counsel competent and experienced in complex class actions, ERISA, and employee benefits litigation. 45. Class certification of Plaintiff’s Claims for Relief for violations of ERISA is appropriate pursuant to Fed. R. Civ. P. 23(b)(1) because the prosecution of separate actions by individual Class members would create a risk of inconsistent or varying adjudications which would establish incompatible standards of conduct for Reliance, and/or because adjudications with respect to individual Class members would as a practical matter be dispositive of the interests of non-party Class members. 46. In addition, Class certification of Plaintiff’s Claims for Relief for violations of ERISA is appropriate pursuant to Fed. R. Civ. P. 23(b)(2) because Reliance has acted or refused to act on grounds generally applicable to the Class, making appropriate declaratory and injunctive relief with respect to Plaintiff and the Class as a whole. The members of the Class are entitled to declaratory and injunctive relief to remedy Reliance’s violations of ERISA. 47. The names and addresses of the Plaintiff Class are available from the ESOP. Notice will be provided to all members of the Plaintiff Class to the extent required by Fed. R. Civ. P. 23. PRAYER FOR RELIF Wherefore, Plaintiff prays for judgment against Defendant and the following relief: A. Declare that Reliance breached its fiduciary duties and caused the ESOP to engage in prohibited transactions; B. Order that Reliance make good to the ESOP and/or to any successor trust(s) the losses resulting from its breaches and restore any profits it has made through use of assets of the ESOP; C. Order that Reliance provide other appropriate equitable relief to the ESOP, including but not limited to surcharge, providing an accounting for profits, and imposing a constructive trust and/or equitable lien on any funds wrongfully held by Reliance; D. Award Plaintiff reasonable attorneys’ fees and costs of suit incurred herein pursuant to ERISA § 502(g), 29 U.S.C. § 1132(g), and/or for the benefit obtained for the common fund; E. Order Reliance to disgorge any fees it received in conjunction with its services as Trustee for the ESOP as well as any earnings and profits thereon; F. Order Reliance to pay prejudgment interest; G. Enter an order certifying this lawsuit as a class action; and H. Award such other and further relief as the Court deems equitable and just. Dated: April 28, 2016 Respectfully submitted, _/s/ Patrick O. Muench___________ Patrick O. Muench (IL #6290298) Gregory Y. Porter Ryan T. Jenny BAILEY & GLASSER LLP 1054 31st Street, NW, Washington, DC 20007 Telephone: (202) 463-2101 Facsimile: (202) 463-2103 gporter@baileyglasser.com rjenny@baileyglasser.com Robert A. Izard Mark P. Kindall IZARD NOBEL LLP 29 South Main Street, Suite 305 West Hartford, CT 06107 Telephone: (860) 493-6292 Facsimile: (860) 493-6290 rizard@izardnobel.com mkindall@izardnobel.com Attorneys for Plaintiff

securities

59xdEIcBD5gMZwczdG2n

Joel E. Elkins (SBN 256020) jelkins@weisslawllp.com WEISSLAW LLP 9107 Wilshire Blvd., Suite 450 Beverly Hills, CA 90210 Telephone: 310/208-2800 Facsimile: 310/209-2348 Attorneys for Plaintiff UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA ANDY CHEUNG, On Behalf of Himself and All Others Similarly Situated, Case No. CLASS ACTION COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS JURY TRIAL DEMANDED Plaintiff, vs. SHUTTERFLY, INC., RYAN O’HARA, THOMAS D. HUGHES, WILL LANSING, EVA MANOLIS, ANN MATHER, ELIZABETH RAFAEL, ELIZABETH SARTAIN, H. TAYLOE STANSBURY, BRIAN SWETTE, and MICHAEL ZEISSER, Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Plaintiff Andy Cheung (“Plaintiff”), by and through his undersigned counsel, alleges the following upon information and belief, including an examination and inquiry conducted by and through his counsel, except as to those allegations pertaining to Plaintiff, which are alleged upon personal knowledge, as follows: NATURE OF THE ACTION 1. This is a class action brought by Plaintiff on behalf of himself and the public stockholders of Shutterfly, Inc. (“Shutterfly” or the “Company”) against Shutterfly and the members of its Board of Directors (the “Board” or the “Individual Defendants”) for their violations of Sections 14(a) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”), 15 U.S.C. §§ 78n(a), 78t(a), and U.S. Securities and Exchange Commission (“SEC”) Rule 14a-9, 17 C.F.R. 240.14a-9, and to enjoin the vote on a proposed transaction, pursuant to which Shutterfly will be acquired by affiliates of Apollo Global Management, LLC, Photo Holdings, LLC and Photo Holdings Merger Sub, Inc. (collectively, “Apollo”) (the “Proposed Transaction”). 2. On June 10, 2019, Shutterfly and Apollo issued a joint press release announcing they had entered into an Agreement and Plan of Merger (the “Merger Agreement”) to sell Shutterfly to Apollo. Under the terms of the Merger Agreement, Shutterfly stockholders will be entitled to receive $51.00 per share in cash for each Shutterfly share they own (the “Merger Consideration”). The Proposed Transaction is valued at approximately $2.7 billion. 3. On July 30, 2019, Shutterfly filed a Definitive Proxy Statement on Schedule 14A (the “Proxy Statement”) with the SEC. The Proxy Statement, which recommends that Shutterfly stockholders vote in favor of the Proposed Transaction, omits and/or misrepresents material information concerning, among other things: (i) Shutterfly’s financial projections, relied upon by the Company’s financial advisor, Morgan Stanley & Co. LLC (“Morgan Stanley”), in its valuation analyses; (ii) the valuation analyses prepared by Morgan Stanley in connection with the rendering of its fairness opinion; and (ii) Company insiders’ potential conflicts of interest. The failure to adequately disclose such material information constitutes a violation of Sections 14(a) and 20(a) of the Exchange Act as Shutterfly stockholders need such material information in order to cast a fully- informed vote or seek appraisal in connection with the Proposed Transaction. 4. In short, unless remedied, Shutterfly’s public stockholders will be forced to make a voting or appraisal decision on the Proposed Transaction without full disclosure of all material information concerning the Proposed Transaction being provided to them. Plaintiff seeks to enjoin the stockholder vote on the Proposed Transaction unless and until such Exchange Act violations are cured. JURISDICTION AND VENUE 5. This Court has jurisdiction over the claims asserted herein for violations of Sections 14(a) and 20(a) of the Exchange Act and Rule 14a-9 promulgated thereunder pursuant to Section 27 of the Exchange Act, 15 U.S.C. § 78aa, and 28 U.S.C. §1331 (federal question jurisdiction). 6. The Court has jurisdiction over defendants because each defendant is either a corporation that conducts business in and maintains operations in this District, or is an individual who has sufficient minimum contacts with this District so as to render the exercise of jurisdiction by this Court permissible under traditional notions of fair play and substantial justice. 7. Venue is proper in this District pursuant to 28 U.S.C. § 1391 because Plaintiff’s claims arose in this District, where a substantial portion of the actionable conduct took place, where most of the documents are electronically stored, and where the evidence exists. Shutterfly is incorporated in Delaware and is headquartered in this District. Moreover, each of the Individual Defendants, as Company officers or directors, either resides in this District or has extensive contacts within this District. THE PARTIES 8. Plaintiff is, and has been at all times relevant hereto, a continuous stockholder of Shutterfly. 9. Defendant Shutterfly is a Delaware corporation with its principal executive offices located at 2800 Bridge Parkway, Redwood City, California 94065. Shutterfly’s common stock is traded on the NASDAQ Global Select Market under the ticker symbol “SFLY.” 10. Defendant Ryan O’Hara (“O’Hara”) is President, Chief Executive Officer (“CEO”), and a director of the Company effective June 24, 2019. 11. Defendant Thomas D. Hughes (“Hughes”) has served as a director of the Company since 2015. 12. Defendant Will Lansing (“Lansing”) is Chairman of the Board and has served as a director of the Company since 2017. 13. Defendant Eva Manolis (“Manolis”) has served as a director of the Company since 2016. 14. Defendant Ann Mather (“Mather”) has served as a director of the Company since 2013. 15. Defendant Elizabeth Rafael (“Rafael”) has served as a director of the Company since 2016. 16. Defendant Elizabeth Sartain (“Sartain”) has served as a director of the Company since 2016. 17. Defendant H. Tayloe Stansbury (“Stansbury”) has served as a director of the Company since 2016. 18. Defendant Brian Swette (“Swette”) has served as a director of the Company since 2009. 19. Defendant Michael Zeisser (“Zeisser”) has served as a director of the Company since 2013. 20. Defendants identified in paragraphs 10-19 are collectively referred to herein as the “Board” or the “Individual Defendants.” OTHER RELEVANT ENTITIES 21. Apollo is a is a leading global alternative investment manager with offices in New York, Los Angeles, San Diego, Houston, Bethesda, London, Frankfurt, Madrid, Luxembourg, Mumbai, Delhi, Singapore, Hong Kong, Shanghai and Tokyo. As of March 31, 2019, Apollo had assets under management of approximately $303 billion in private equity, credit and real assets funds. CLASS ACTION ALLEGATIONS 22. Plaintiff brings this action as a class action pursuant to Rule 23 of the Federal Rules of Civil Procedure on behalf of all persons and entities that own Shutterfly common stock (the “Class”). Excluded from the Class are defendants and their affiliates, immediate families, legal representatives, heirs, successors or assigns and any entity in which defendants have or had a controlling interest. 23. This action is properly maintainable as a class action under Rule 23 of the Federal Rules of Civil Procedure. The Class is so numerous that joinder of all members is impracticable. While the exact number of Class members is unknown to Plaintiff at this time and can only be ascertained through discovery, Plaintiff believes that there are thousands of members in the Class. As of July 26, 2019, there were 34,396,897 shares of Shutterfly common stock outstanding. All members of the Class may be identified from records maintained by Shutterfly or its transfer agent and may be notified of the pendency of this action by mail, using forms of notice similar to that customarily used in securities class actions. 24. Questions of law and fact are common to the Class and predominate over questions affecting any individual Class member, including, inter alia: (a) Whether defendants have violated Section 14(a) of the Exchange Act and Rule 14a-9 promulgated thereunder; (b) Whether the Individual Defendants have violated Section 20(a) of the Exchange Act; and (c) Whether Plaintiff and the other members of the Class would suffer irreparable injury were the Proposed Transaction consummated. 25. Plaintiff will fairly and adequately protect the interests of the Class, and has no interests contrary to or in conflict with those of the Class that Plaintiff seeks to represent. Plaintiff has retained competent counsel experienced in litigation of this nature. 26. A class action is superior to all other available methods for the fair and efficient adjudication of this controversy. Plaintiff knows of no difficulty to be encountered in the management of this action that would preclude its maintenance as a class action. 27. Defendants have acted, or refused to act, on grounds generally applicable to the Class as a whole, and are causing injury to the entire Class. Therefore, final injunctive relief on behalf of the Class is appropriate. SUBSTANTIVE ALLEGATIONS Background of the Company and the Proposed Transaction 28. Founded in 1999, Shutterfly is a leading retailer and manufacturing platform for personalized products and communications. The Company focuses on helping consumers manage their memories through the medium of photography. 29. The Company has three divisions: Shutterfly Consumer, Lifetouch, and Shutterfly Business Solutions. The Shutterfly Consumer segment provides products, such as portraits, cards and stationery items, professionally-bound photo books and year books, personalized gifts and home décor products, and calendars and prints, as well as mugs, ornaments, candles, pillows, and blankets through the Shutterfly, Tiny Prints, and Groovebook domains. The Shutterfly Consumer segment also rents photographic and video equipment under the BorrowLenses brand. The Lifetouch segment offers photography services for schools, preschools, and retail stores under the JCPenney portrait brand at approximately 400 retail studios, as well as churches and other groups. The Shutterfly Business Solutions provides direct marketing and other end-consumer communications, as well as just-in-time and inventory free printing services. 30. On June 10, 2019, Shutterfly and Apollo executed the Merger Agreement. 31. Following execution of the Merger Agreement, Shutterfly and Apollo issued a joint press release announcing the Proposed Transaction, which stated, in relevant part: REDWOOD CITY, Calif.--(BUSINESS WIRE)--Jun. 10, 2019-- Shutterfly, Inc. (Nasdaq: SFLY) (“Shutterfly” or the “Company”), a leading retailer and manufacturing platform dedicated to helping capture, preserve, and share life’s important moments, today announced that it has entered into a definitive agreement with affiliates of certain funds (the “Apollo Funds”) managed by affiliates of Apollo Global Management, LLC (together with its consolidated subsidiaries, “Apollo”) (NYSE: APO), a leading global alternative investment manager, pursuant to which the Apollo Funds will acquire all the outstanding shares of Shutterfly for $51.00 per share in cash, or enterprise value of approximately $2.7 billion. The $51.00 per share cash consideration represents a premium of 31% when compared to Shutterfly’s unaffected closing stock price of $38.91 on April 23, 2019, the last trading day before a media report was published speculating that Apollo Funds were considering a bid for the Company. The Shutterfly Board of Directors unanimously approved the agreement with the Apollo Funds and recommends that Shutterfly stockholders vote in favor of the transaction. “Earlier this year, Shutterfly announced the formation of a Strategic Review Committee to continue the Board of Directors’ ongoing review of strategic alternatives for the Company,” said William Lansing, Shutterfly’s Chairman of the Board. “We ran a broad and comprehensive process, engaging with a significant number of potential buyers, and are pleased that the process culminated in a transaction that maximizes value for Shutterfly stockholders. We look forward to working closely with Apollo as we continue to build a compelling service that enables deeper, more personal relationships for our customers, and to advance our digital and manufacturing capabilities to support sustainable growth.” “Shutterfly has cultivated a deep connection with customers through its three divisions, Shutterfly Consumer, Shutterfly Business Solutions and Lifetouch, each of which we view as exceptional platforms with leading positions in their respective segments,” said David Sambur, Senior Partner at Apollo. “At a time when billions of photos are taken every day, Shutterfly has led the charge as a pioneer of personalized photo products and school photography, helping consumers capture, preserve and share life’s most important moments. We are excited to work with Shutterfly’s leadership and talented team of dedicated employees to grow each of the businesses and further enhance customer relationships across both Shutterfly and Lifetouch.” Lansing continued, “This transaction is a testament to our outstanding team of talented employees and the company they have built. What began as a digital photo printing company is now a large and diversified business that has successfully evolved with our customers. As we enter this exciting new chapter for Shutterfly, Apollo is an ideal strategic partner, as they will provide additional resources and industry knowledge while we continue to work on our important business initiatives.” In a separate press release issued today, Shutterfly announced the appointment of Ryan O’Hara as its President and Chief Executive Officer, effective June 24, 2019. Insiders’ Interests in the Proposed Transaction 32. Shutterfly insiders are the primary beneficiaries of the Proposed Transaction, not the Company’s public stockholders. The Board and the Company’s executive officers are conflicted because they will have secured unique benefits for themselves from the Proposed Transaction not available to Plaintiff and the public stockholders of Shutterfly. 33. Notably, Shutterfly directors and executive officers stand to reap substantial financial benefits for securing the deal with Apollo. According to the Merger Agreement, outstanding and unvested restricted stock units (“RSUs”) held by non-employee directors will accelerate and become fully vested. Upon completion of the Proposed Transaction, Shutterfly’s non-employee directors will collectively receive approximately $9.5 million in connection with their outstanding Company RSUs. 34. Shutterfly’s executives similarly stand to benefit from the Proposed Transaction. Each of Shutterfly’s named executive officers’ Company Options will accelerate and be converted into cash payments. In addition, their performance-based share units (“PSUs”) and market-based restricted stock units (“MSUs”) are subject to partial acceleration and will vest and convert into the right to receive cash payments. Further, defendant O’Hara’s RSUs with an approximate value of $3.0 million will accelerate and become vested upon completion of the Proposed Transaction. The following tables set forth the value of the Company Options, RSUs, PSUs, and MSUs the Company’s executive officers stand to receive: The Proxy Statement Contains Material Misstatements and Omissions 35. The defendants filed a materially incomplete and misleading Proxy Statement with the SEC and disseminated it to Shutterfly’s stockholders. The Proxy Statement misrepresents or omits material information that is necessary for the Company’s stockholders to make an informed decision whether to vote their shares in favor of the Proposed Transaction or seek appraisal. 36. Specifically, as set forth below, the Proxy Statement fails to provide Company stockholders with material information or provides them with materially misleading information concerning: (i) Shutterfly’s financial projections, relied upon by the Company’s financial advisor, Morgan Stanley, in its valuation analyses; (ii) the valuation analyses prepared by Morgan Stanley in connection with the rendering of its fairness opinion; and (iii) Company insiders’ potential conflicts of interest. Accordingly, Shutterfly stockholders are being asked to make a voting or appraisal decision in connection with the Proposed Transaction without all material information at their disposal. Material Omissions Concerning Shutterfly’s Financial Projections 37. The Proxy Statement omits material information regarding the Company’s financial projections provided by Shutterfly management and relied upon by Morgan Stanley for its analyses. 38. The Proxy Statement sets forth that at the April 23, 2019 Board meeting, the Board, members of Shutterfly senior management and representatives of Morgan Stanley reviewed Shutterfly’s financial projections through 2021 under both a base case scenario (“Management Case”) and a sensitivity case scenario (“Sensitivity Case,” and together with the Management Case, the “Management Projections”) with the Board directing representatives of Morgan Stanley to utilize both the Management Case projections and the Sensitivity Case projections in connection with its financial analyses. 39. The Proxy Statement misleads the Company’s stockholders as to the reasonableness and reliability of the Management Projections. With respect to the Management Projections, the Proxy Statement states that the Board considered: certain forecasts prepared by and on bases reflecting the best currently available estimates and judgements of our senior management, including both the “base case” and “sensitivity case” projections, which projections (the “Management Projections”) were also made available to representatives of Morgan Stanley for purposes of rendering its fairness opinion to our Board and performing its related financial analyses. . . . Proxy Statement at 39 (emphasis added). The Proxy Statement further states that: In the view of our management, the [Management Projections were] prepared on a reasonable basis, reflected the best estimates and judgments available to our management at the time and presented, to the best of our management’s knowledge and belief, the expected course of action and our expected future financial performance as of the date such information was prepared. Id. at 53 (emphasis added). 40. These statements give Shutterfly stockholders at least two false impressions. First, these statements assert that both the “Management Case” and “Sensitivity Case” projections reflected the best “estimates and judgments available to [Shutterfly’s] management at the time and presented, to the best of [Shutterfly] management’s knowledge and belief, the expected course of action and [Shutterfly’s] expected future financial performance as of the date such information was prepared.” See Id. This is impossible given the immense discrepancy in the projection sets. A comparison of the Management Case and Sensitivity Case projections, including the respective unlevered free cash flow (“UFCF”) projections, reveals two drastically different pictures of Shutterfly’s future prospects ($ in millions): Management Case Projected Unlevered Free Cash Flow—Management Case Management Sensitivity Case Projected Unlevered Free Cash Flow—Sensitivity Case 41. The implied values resulting from Morgan Stanley’s Discounted Cash Flow Analysis (“DCF”) of Shutterfly further highlight the two drastically different pictures of Shutterfly’s future prospects under the Management Case and Sensitivity Case as set forth below: Id. at 49. Notably, the Merger Consideration of $51.00 falls completely below the implied range of values, $55.89 - $90.54, Morgan Stanley calculated using the Management Case projections. 42. The Proxy Statement further fails to adequately disclose the assumptions underlying the Sensitivity Case. With respect to the Sensitivity Case, the Proxy Statement sets forth: [Shutterfly] management also prepared “sensitivity case” forecasts that represented a downside view that gave greater weighting to the risk and challenges facing Shutterfly as an independent company in order to facilitate scenario planning discussions with our Board at its meeting on May 29, 2019. The sensitivity case forecast assumed declines in our Consumer and Lifetouch revenue beginning in 2021, reflecting more intense competition in our Consumer business than we presently anticipate, and reduced demand for our Lifetouch products due to lower participation among schools than we presently anticipate. Id. at 55 (emphasis added). These statements are false and/or misleading as the Sensitivity Case forecast did not solely assume declines in Shutterfly’s Consumer and Lifetouch revenue beginning in 2021. As shown in the Sensitivity Case table set forth above, Consumer and Lifetouch revenue for the Sensitivity Case is lower in both 2019 and 2020 as compared to the Management Case. 43. The Proxy Statement must correct the false and misleading statements concerning the Sensitivity Case and disclose the reasons the Sensitivity Case has lower forecasted revenues for 2019 and 2020. 44. The Proxy Statement also fails to and must disclose (i) who requested that Shutterfly management create a Sensitivity Case; (ii) the reasons for the creation of a Sensitivity Case; (iii) when the request to create a Sensitivity Case was made; and (iv) why the Board directed Morgan Stanley to utilize both the Management Case projections and the Sensitivity Case projections in connection with its financial analysis. 45. The omission of this information renders the statements in the “Background of the Merger” and “Financial Projections” sections of the Proxy Statement false and/or materially misleading in contravention of the Exchange Act. Material Omissions Concerning Morgan Stanley’s Financial Analyses 46. The Proxy Statement describes Morgan Stanley’s fairness opinion and the various valuation analyses it performed in support of its opinion. However, the description of Morgan Stanley’s fairness opinion and analyses fails to include key inputs and assumptions underlying these analyses. Without this information, as described below, Shutterfly’s public stockholders are unable to fully understand these analyses and, thus, are unable to determine what weight, if any, to place on Morgan Stanley’s fairness opinion in determining whether to vote in favor of the Proposed Transaction or seek appraisal. This omitted information, if disclosed, would significantly alter the total mix of information available to Shutterfly’s stockholders. 47. With respect to Morgan Stanley’s Discounted Cash Flow Analysis, the Proxy Statement fails to disclose: (i) quantification of the inputs and the assumptions underlying the discount rate range of 7.3% to 8.6%; (ii) the terminal values for the Company; and (iii) the outstanding shares of Shutterfly common stock on a fully-diluted basis, as provided by Company management. 48. With respect to Morgan Stanley’s Discounted Equity Value Analysis, the Proxy Statement fails to disclose: (i) Morgan Stanley’s basis for applying the range of aggregate value to Adjusted EBITDA multiples and the range of stock price to free cash flow per share multiples used in the analysis; (ii) net debt; and (iii) quantification of the inputs and assumptions underlying the discount rate of 10.0%. 49. With respect to Morgan Stanley’s Precedent Transactions Analysis, the Proxy Statement fails to disclose the individual multiples and financial metrics for the transactions observed by Morgan Stanley. 50. With respect to Morgan Stanley’s Public Trading Comparables Analysis, the Proxy Statement fails to disclose: (i) the “Street Case” projections; and (ii) the estimated outstanding shares of the Company’s common stock on a fully diluted basis, as provided by Company management. 51. With respect to Morgan Stanley’s Equity Research Analysts’ Future Price Targets analysis, the Proxy Statement fails to disclose the price targets for Shutterfly common stock and the sources thereof. 52. When a banker’s endorsement of the fairness of a transaction is touted to stockholders, the valuation methods used to arrive at that opinion as well as the key inputs and range of ultimate values generated by those analyses must also be fairly disclosed. 53. The omission of this information renders the statements in the “Fairness Opinion of Morgan Stanley & Co. LLC” and “Financial Projections” sections of the Proxy Statement false and/or materially misleading in contravention of the Exchange Act. Material Omissions Concerning Company Insiders’ Potential Conflicts of Interest 54. The Proxy Statement fails to disclose material information concerning the conflicts of interest faced by Shutterfly insiders. 55. In the June 10, 2019 press release announcing the Proposed Transaction, David Sambur, Senior Partner at Apollo, is quoted as stating, “[w]e are excited to work with Shutterfly’s leadership and talented team of dedicated employees to grow each of the businesses and further enhance customer relationships across both Shutterfly and Lifetouch.” According to the Proxy Statement: As of the date of this proxy statement none of our executive officers has entered into, or committed to enter to into, any arrangements or other understandings regarding continued employment with or service to Apollo or its subsidiaries or affiliates following the Merger. While it is possible that Apollo may enter into such arrangements in the future, at this time there can be no assurance that Apollo will enter into any employment or other arrangements with our management, or if so, of the terms and conditions of any such arrangements. Id. at 61. Yet, the Proxy Statement further fails to disclose whether any of Apollo’s prior proposals or indications of interest mentioned management retention or equity participation in the combined company. 56. Communications regarding post-transaction employment and merger-related benefits during the negotiation of the underlying transaction must be disclosed to stockholders. This information is necessary for stockholders to understand potential conflicts of interest of management and the Board, as that information provides illumination concerning motivations that would prevent fiduciaries from acting solely in the best interests of the Company’s stockholders. 57. The omission of this information renders the statements in the “Background of the Merger” section of the Proxy Statement false and/or materially misleading in contravention of the Exchange Act. 58. The Individual Defendants were aware of their duty to disclose this information and acted negligently (if not deliberately) in failing to include this information in the Proxy Statement. Absent disclosure of the foregoing material information prior to the stockholder vote on the Proposed Transaction, Plaintiff and the other members of the Class will be unable to make a fully-informed decision whether to vote in favor of the Proposed Transaction or seek appraisal and are thus threatened with irreparable harm warranting the injunctive relief sought herein. CLAIMS FOR RELIEF COUNT I Class Claims Against All Defendants for Violations of Section 14(a) of the Exchange Act And SEC Rule 14a-9 Promulgated Thereunder 59. Plaintiff repeats all previous allegations as if set forth in full. 44. SEC Rule 14a-9, 17 C.F.R. §240.14a-9, promulgated pursuant to Section 14(a) of the Exchange Act, provides: No solicitation subject to this regulation shall be made by means of any proxy statement, form of proxy, notice of meeting or other communication, written or oral, containing any statement which, at the time and in light of the circumstances under which it is made, is false or misleading with respect to any material fact, or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to the solicitation of a proxy for the same meeting or subject matter which has become false or misleading. 45. During the relevant period, defendants disseminated the false and misleading Proxy Statement specified above, which failed to disclose material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading in violation of Section 14(a) of the Exchange Act and SEC Rule 14a-9 promulgated thereunder. 46. By virtue of their positions within the Company, the defendants were aware of this information and of their duty to disclose this information in the Proxy Statement. The Proxy Statement was prepared, reviewed, and/or disseminated by the defendants. The Proxy Statement misrepresented and/or omitted material facts, including material information about the Company’s financial projections, the data and inputs underlying the financial valuation analyses that support the fairness opinion provided by the Company’s financial advisor and Company insiders’ potential conflicts of interest. The defendants were at least negligent in filing the Proxy Statement with these materially false and misleading statements. 47. The omissions and false and misleading statements in the Proxy Statement are material in that a reasonable stockholder would consider them important in deciding how to vote on the Proposed Transaction or whether to seek appraisal. In addition, a reasonable investor would view a full and accurate disclosure as significantly altering the “total mix” of information made available in the Proxy Statement and in other information reasonably available to stockholders. 48. By reason of the foregoing, the defendants have violated Section 14(a) of the Exchange Act and SEC Rule 14a-9(a) promulgated thereunder. 49. Because of the false and misleading statements in the Proxy Statement, Plaintiff and the Class are threatened with irreparable harm, rendering money damages inadequate. Therefore, injunctive relief is appropriate to ensure defendants’ misconduct is corrected. COUNT II Class Claims Against the Individual Defendants for Violation of Section 20(a) of the Exchange Act 50. Plaintiff repeats all previous allegations as if set forth in full. 51. The Individual Defendants acted as controlling persons of Shutterfly within the meaning of Section 20(a) of the Exchange Act as alleged herein. By virtue of their positions as officers or directors of Shutterfly and participation in or awareness of the Company’s operations or intimate knowledge of the false statements contained in the Proxy Statement filed with the SEC, they had the power to influence and control and did influence and control, directly or indirectly, the decision-making of the Company, including the content and dissemination of the various statements which Plaintiff contends are false and misleading. 52. Each of the Individual Defendants was provided with or had unlimited access to copies of the Proxy Statement and other statements alleged by Plaintiff to be misleading prior to or shortly after these statements were issued and had the ability to prevent the issuance of the statements or cause the statements to be corrected. 53. In particular, each of the Individual Defendants had direct and supervisory involvement in the day-to-day operations of the Company, and, therefore, is presumed to have had the power to control or influence the particular transactions giving rise to the securities violations as alleged herein, and exercised the same. The Proxy Statement at issue contains the unanimous recommendation of each of the Individual Defendants to approve the Proposed Transaction. They were, thus, directly involved in the making of this document. 54. In addition, as the Proxy Statement sets forth at length, and as described herein, the Individual Defendants were each involved in negotiating, reviewing, and approving the Proposed Transaction. The Proxy Statement purports to describe the various issues and information that they reviewed and considered — descriptions which had input from the Individual Defendants. 55. By virtue of the foregoing, the Individual Defendants have violated Section 20(a) of the Exchange Act. 56. Plaintiff and the Class have no adequate remedy at law. Only through the exercise of this Court’s equitable powers can Plaintiff and the Class be fully protected from the immediate and irreparable injury that defendants’ actions threaten to inflict. PRAYER FOR RELIEF WHEREFORE, Plaintiff demands judgment and preliminary and permanent relief, including injunctive relief, in his favor on behalf of Shutterfly, and against defendants, as follows: A. Ordering that this action may be maintained as a class action and certifying Plaintiff as the Class representative and Plaintiff’s counsel as Class counsel; B. Preliminarily and permanently enjoining defendants and all persons acting in concert with them from proceeding with, consummating, or closing the Proposed Transaction and any vote on the Proposed Transaction, unless and until defendants disclose and disseminate the material information identified above to Shutterfly stockholders; C. In the event defendants consummate the Proposed Transaction, rescinding it and setting it aside or awarding rescissory damages to Plaintiff; D. Awarding Plaintiff the costs of this action, including reasonable allowance for Plaintiff’s attorneys’ and experts’ fees; and E. Granting such other and further relief as this Court may deem just and proper. JURY DEMAND Plaintiff demands a trial by jury on all claims and issues so triable. Dated: August 5, 2019 WEISSLAW LLP Joel E. Elkins By: /s/ Joel E. Elkins Joel E. Elkins 9107 Wilshire Blvd., Suite 450 Beverly Hills, CA 90210 Telephone: 310/208-2800 Facsimile: 310/209-2348 -and- Richard A. Acocelli 1500 Broadway, 16th Floor New York, NY 10036 Telephone: 212/682-3025 Facsimile: 212/682-3010 Attorneys for Plaintiff OF COUNSEL: BRAGAR EAGEL & SQUIRE, P.C. Melissa A. Fortunato (SBN 319767) 885 Third Avenue, Suite 3040 New York, New York 10022 Tel: (212) 308-5858 Fax: (212) 486-0462 Email: fortunato@bespc.com Attorneys for Plaintiff

securities

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UNITED STATES DISTRICT COURT EASTERN DISTRICT OF PENNSYLVANIA Case No. COMPLAINT - CLASS ACTION Plaintiff, V. JURY TRIAL DEMANDED Defendant. CLASS ACTION COMPLAINT 1. Plaintiff, David Cornelsen, by and through his attorneys, alleges the 2. Plaintiff seeks injunctive relief, attorneys' fees and costs pursuant to the 3. Additionally, Plaintiff seeks injunctive relief, attorneys' fees and costs, STATUTORY BACKGROUND 4. On July 26, 1990, Congress enacted the ADA establishing important civil 5. Congress explicitly stated that among the purposes of the ADA were: (a) to provide a clear and comprehensive national mandate for the elimination of discrimination against individuals with disabilities; (b) to provide clear, strong, consistent, enforceable standards addressing discrimination against individuals with disabilities; and (c) to invoke the sweep of congressional authority, including the power to enforce the Fourteenth Amendment and to regulate commerce, in order to address the major areas of discrimination faced day-to-day by people with disabilities. 6. Pursuant to 42 U.S.C. § 12182 and 28 C.F.R. 36.201(a) no place of 7. The effective date of Title III of the ADA was January 26, 1992 (or 8. Despite an extended period of time in which to become compliant with the PARTIES AND STANDING 9. Plaintiff, David Cornelsen ("Cornelsen") is a Pennsylvania resident, is sui 10. Plaintiff has been, and continues to be, adversely affected by Defendant's 11. Plaintiff has reasonable grounds to believe that Defendant will continue to 12. Defendant Modell's maintains a corporate address at 498 Seventh Ave., JURISDICTION AND VENUE 13. The action primarily arises from violations of Title III of the Americans 14. Venue lies in this district as Defendant are found and/or do substantial CLASS ACTION ALLEGATIONS 15. Plaintiff seeks to maintain the action as a class action under Rule 23(b)(2)16. The Class is believed to consist of thousands of members. The members 17. Common questions of law and fact exist as to all members of the Class, (a) Whether Defendant's stores are "public accommodations" under the ADA; (b) Whether Defendant's stores deny the full and equal enjoyment of its goods, services, programs, facilities, privileges, advantages, or accommodations, and full and equal access to its facilities to individuals with disabilities in violation of ADA; (c) Whether Defendant provides goods, services, programs, facilities, privileges, advantages, or accommodations to individuals with disabilities in an integrated setting; (d) Whether Defendant's stores have made reasonable modifications in policies, practices, and procedures when such modifications are necessary to afford such goods, services, programs, facilities, privileges, advantages, or accommodations to individuals with disabilities; (e) Whether Defendant failed to take steps to ensure that individuals with disabilities are not excluded, denied services, segregated, or otherwise treated differently than other individuals because of the absence of auxiliary aids and services; (f) Whether Defendant has failed to remove architectural and communication barriers in existing stores, where such removal is readily achievable and technically feasible, or have failed to make such goods, services, programs, facilities, privileges, advantages, or accommodations available through alternative methods, if removal of the barriers is not readily achievable or technically feasible; (g) Whether violations of the ADA also constitute per se violations of the New Jersey anti-discrimination statute. N.J.S.A. 10: 5-4; (h) Whether Defendant has violated and/or continue to violate the state anti-discrimination statute identified above by denying equal access to disabled persons at places of public accommodation; (i) Whether the state anti-discrimination statue identified above provides for a private right of action; (j) Whether the state anti-discrimination statue identified above provides for injunctive relief; and (k) Whether the state anti-discrimination statute identified above provides for minimum statutory damages. 18. Plaintiff's claims are typical of the claims of the members of the Class, as 19. Plaintiff will fairly and adequately protect the interests of the members of 20. The action may be maintained as a class action pursuant to Rule 23(b)(2), 21. A class action is superior to other available methods for the fair and 22. There will be no difficulty in the management of this action as a class 23. Plaintiff has personally encountered both discrimination and barriers to24. Plaintiff has retained Brodsky & Smith, LLC to prosecute the claims 25. Additionally, Plaintiff received the results of the investigations provided 1. 962 West Street Road, Warminster, PA; 2. 122 Park Avenue, Willow Grove, PA; 3. 101 East Olney Avenue, Philadelphia, PA; 4. 2329 Cottman Avenue, Philadelphia, PA; 5. 3400 Aramingo Avenue, Philadelphia, PA; 6. 15th St. & Snyder Avenue, Philadelphia, PA; 7. 24th & Oregon Avenue, Philadelphia, PA; 8. 1067 West Baltimore Pike, Clifton Heights, PA; 9. 1710 U.S. 46, Little Falls, NJ; 10. 463 Green Street, Woodbridge, NJ; 11. 1065 Bloomfield Avenue, Clifton, NJ; 12. 2454 U.S. 22, Union, NJ; 13. 1515 U.S. 22, Watchung, NJ; 14. 2501 U.S. 130, Riverton, NJ; 15. 1100 Nixon Drive, Mt. Laurel, NJ; 16. 200 Route 73, West Berlin, NJ; 17. 1900 Highway 70, Lakewood, NJ; and 18. 1 Route 37, Toms River, NJ. COUNT I VIOLATION OF THE AMERICANS WITH DISABILITIES ACT 26. Plaintiff repeats and re-alleges each and every allegation contained in the 27. Pursuant to 42 U.S.C. Section 12181(7) and 28 C.F.R. Section 36.104, 28. The ADA defines illegal discrimination to include, in pertinent part: (a) Failure to remove architectural barriers that are structural in nature, in Existing facilities where such removal is readily achievable; (b) With respect to a facility or part thereof that is altered in a manner that affects or could affect the usability of the facility or part thereof, a failure to make alterations in such a manner that, to the maximum extent feasible, the altered portions of the facility are readily accessible to and usable by individuals with disabilities, including individuals who use wheelchairs. Where the entity is undertaking an alteration that affect or could affect usability of or access to an area of the facility containing a primary function, the entity shall also make the alterations in such a manner that, to the maximum extent feasible, the path or travel to the altered area [is] readily accessible to and usable by individuals with disabilities where such alterations to the path or travel are not disproportionate to the overall alterations in terms of cost and scope (as determined under criteria established by the Attorney General); and (c) failure to design and construct facilities for first occupancy later than 30 months after July 26, 1990 that are readily accessible to and usable by individuals with disabilities. 29. Defendant has been and continues to be required to remove architectural30. Appendix A to Part 36-Standards for Accessible Design (28 C.F.R. pt. 36, 31. Defendant has discriminated against Plaintiff, and others who are similarly 32. Defendant has discriminated and is discriminating against Plaintiff and 1. 962 West Street Road Warminster, PA Violation 1 The men's restroom door force is 10 lbs. and is not accessible. This is in violation of ADAAG - Section 4.13.11(2)(b) Violation 2 The men's restroom door closer is not adjusted to allow the bathroom door to remain open for at least three (3) seconds. This is in violation of ADAAG - Section 4.13.10. Violation 3 The men's restroom signage is not compliant. This is in violation of ADAAG - Section 4.1.2. Violation 4 The soap dispenser in the men's restroom is 54" above the floor and is not compliant. This is in violation of ADAAG - Section 4.23.7. 2. 122 Park Avenue Willow Grove, PA Violation 1 There is no van accessible parking signage. This is in violation of ADAAG- Section 4.6.4. Violation 2 The pipes under the men's lavatory are not covered. This is in violation of ADAAG - Section 4.19.4. Violation 3 The men's restroom door force is 11 lbs. and is not accessible. This is in violation of ADAAG - Section 4.13.11(2)(b) Violation 4 The height of the urinal rim in the men's restroom is 24" from the floor and is not accessible. This is a violation of ADAAG - Section 4.18.2. Violation 5 The restroom door closer is not adjusted to allow the door to remain open for at least three (3) seconds. This is a violation of ADAAG - Section 4.13.10. Violation 6 The men's restroom signage is not compliant. This is in violation of ADAAG - Section 4.1.2. Violation 7 The paper towel dispenser in the men's restroom is 54" above the floor and is not compliant. This is in violation of ADAAG - Section 4.23.7. 3. 101 East Olney Avenue Philadelphia, PA Violation 1 There is not the required number of van accessible parking spaces. This is in violation of ADAAG - Section 4.1.2.(5)(b). Violation 2 There is no van accessible parking signage. This is in violation of ADAAG- Section 4.6.4. Violation 3 The van accessible parking spaces do not have accessible aisles. This is in violation of ADAAG - Section 4.6.3. Violation 4 The center of the toilet or water closet is 15" from the wall and is not accessible. This is in violation of ADAAG - Section 4.17.3. Violation 5 The men's room toilet paper dispenser is not located on the side wall below the grab bar. This is in violation of ADAAG - Sections 4.22.4, 4.23.4, 4.16.6, and 4.17.3. Violation 6 The restroom door force is 14 lbs. and is not accessible. This is in violation of ADAAG 1 Section 4.13.11(2)(b). Violation 7 The restroom does not provide proper floor space and is not accessible. This is in violation of ADAAG - Section 4.23.3. Violation 8 The men's restroom stall does not provide proper floor space and is not accessible. This is in violation of ADAAG - Section 4.17.3. Violation 9 The restroom door closer is not adjusted to allow the door to remain open for at least three (3) seconds. This is a violation of ADAAG - Section 4.13.10. Violation 10 The men's restroom signage is not compliant. This is in violation of ADAAG - Section 4.1.2. 4. 2329 Cottman Avenue Philadelphia, PA Violation 1 In the parking area there is no van accessible parking signage. This is a violation of ADAAG - Section 4.6.4. Violation 2 The men's room toilet paper dispenser is not located on the side wall below the grab bar. This is in violation of ADAAG - Sections 4.22.4, 4.23.4, 4.16.6, and 4.17.3. Violation 3 The men's restroom door force is 9 lbs. and is not accessible. This is in violation of ADAAG - Section 4.13.11(2)(b). Violation 4 The restroom door closer is not adjusted to allow the door to remain open for at least three (3) seconds. This is a violation of ADAAG - Section 4.13.10. Violation 5 The men's restroom signage is not compliant. This is in violation of ADAAG - Section 4.1.2. Violation 6 The auto dryer in the men's restroom is 52 1/2" above the floor and is not compliant. This is in violation of ADAAG - Section 4.23.7.5. 3400 Aramingo Avenue Philadelphia, PA Violation 1 The pipes under the lavatory in the men's restroom are not covered. This is a violation of ADAAG - Section 4.19.4. Violation 2 The toilet paper dispenser in the men's restroom is not located on the side wall below the grab bar. This is in violation of ADAAG - Sections 4.22.4, 4.23.4, 4.16.6, and 4.17.3. Violation 3 The toilet paper dispenser is not located on the side wall within 12" from the front edge of the toilet seat. This is in violation of ADAAG - Sections 4.22.4, 4.23.4, 4.16.6, and 4.17.3. Violation 4 The men's restroom door force is 9 lbs. and is not accessible. this is in violation of ADAAG - Section 4.13.11(2)(b). Violation 5 There are not the required grab bars in the restroom. This is in violation of ADAAG - Section 4.17.6. Violation 6 The mirror in the men's restroom is 50" above the floor and is not accessible. This is in violation of ADAAG - Section 4.22.6. Violation 7 The restroom door closer is not adjusted to allow the door to remain open for at least three (3) seconds. This is a violation of ADAAG - Section 4.13.10. Violation 8 The men's restroom signage is not compliant. This is in violation of ADAAG - Section 4.1.2. 6. 15th St. & Snyder Avenue Philadelphia, PA Violation 1 There is no van accessible parking signage. This is in violation of ADAAG - Section 4.5.4. Violation 2 The pipes under the lavatory are not covered. This is in violation of ADAAG - Section 4.19.4. Violation 3 The toilet paper dispenser in the men's restroom is not located on the side wall within 12" from the front edge of the toilet seat. This is in violation of ADAAG - Sections 4.22.4, 4.23.4, 4.16.6, and 4.17.3. Violation 4 The men's restroom door force is 9 lbs. and is not accessible. This is in violation of ADAAG - Section 4.13.11(2)(b). Violation 5 The mirror in the men's restroom is 50" from the floor and is not accessible. This is in violation of ADAAG - Section 4.22.6. Violation 6 The restroom door closer is not adjusted to allow the door to remain open for at least three (3) seconds. This is a violation of ADAAG - Section 4.13.10. Violation 7 The restroom signage is not compliant. This is in violation of ADAAG - Section 4.1.2. 7. 24th & Oregon Avenue Philadelphia, PA Violation 1 There is not the required number of accessible parking spaces. This is in violation of ADAAG - Section 4.1.2(5)(a). Violation 2 There is not the required number of van accessible parking spaces. This is in violation of ADAAG - Section 4.1.2(5)(b). Violation 3 There is no accessible parking signage. This is in violation of ADAAG - Section 4.6.4. Violation 4 There is no van accessible parking signage. This is in violation of ADAAG - Section 4.6.4. Violation 5 The accessible parking spaces do not have accessible aisles. This is in violation of ADAAG - Section 4.6.3 Violation 6 The van accessible parking spaces do not have accessible aisles. This is in violation of ADAAG - Section 4.6.3. Violation 7 The toilet paper dispenser in the men's restroom is not located on the side wall below the grab bar. This is in violation of ADAAG - Sections 4.22.4, 4.23.4,4.16.6, and 4.17.3. Violation 8 The men's restroom door force is 9 lbs. and is not accessible. This is in violation of ADAAG - Section 4.13.11(2)(b). Violation 9 The mirror in the men's restroom is 50" above the floor and is not accessible. This is in violation of ADAAG - Section 4,22.6. Violation 10 The men's restroom door closer is not adjusted to allow the bathroom door to remain open for at least three (3) seconds. This is in violation of ADAAG - Section 4.13.10. Violation 11 The men's restroom signage is not compliant. This is in violation of ADAAG - Section 4.1.2. Violation 12 The aisles are blocked with merchandise and do not provide minimum clear width for single wheelchair passage of 32" at a point and 36" continuously. This is in violation of ADAAG - Section 4.2.1. 8. 1067 West Baltimore Pike Clifton Heights, PA Violation 1 There is no van accessible parking signage. This is in violation of ADAAG - Section 4.6.4. Violation 2 The pipes under the lavatory in the men's restroom are not covered. This is a violation of ADAAG - Section 4.19.4. Violation 3 The toilet paper dispenser in the men's restroom is not located on the side wall within 12" from the front edge of the toilet seat. This is in violation of ADAAG - Sections 4.22.4, 4.23.4, 4.16.6, and 4.17.3. Violation 4 The men's restroom door hardware is not compliant. This is in violation of ADAAG - Section 4.13.9. Violation 5 The men's restroom door force is 10 lbs. and is not accessible. This is in violation of ADAAG - Section 4.13.11(2)(b). Violation 6 The mirror in the men's restroom is 48" from the floor and is not compliant. This is in violation of ADAAG - Section 4.22.6. Violation 7 The men's restroom door closer is not adjusted to allow the bathroom door to remain open for at least three (3) seconds. This is in violation of ADAAG - Section 4.13.10.Violation 8 The auto-dryer in the men's restroom is 483/4" from the floor and is not accessible. This is in violation of ADAAG - Section 4.23. 9. 1710 U.S. 46 Little Falls, NJ Violation 1 There is not van accessible parking signage. This is in violation of ADAAG - Section 4.6.4. Violation 2 The pipes under the lavatory are not covered. This is in violation of ADAAG - Section 4.19.4. Violation 3 The toilet paper dispenser is not located on the side wall within 12" from the front edge of the toilet seat. This is in violation of ADAAG - Sections 4.22.4, 4.23.4, 4.16.6, and 4.17.3. Violation 4 The men's restroom door force is 11 lbs. and is not accessible. This is in violation of ADAAG - Section 4.13.11(2)(b). Violation 5 The toilet stall door hardware is not compliant. This is in violation of ADAAG - Section 4.13.9. Violation 6 The mirror in the men's restroom is 50" from the floor and is not accessible. This is in violation of ADAAG - Section 4.22.6. Violation 7 The men's restroom door closer is not adjusted to allow the bathroom door to remain open for at least three (3) seconds. This is in violation of ADAAG - Section 4.13.10. Violation 8 The men's restroom signage is not compliant. This is in violation of ADAAG - Section 4.1.2. Violation 9 The paper towel dispenser in the men's restroom is 50" from the floor and is not accessible. This is in violation of ADAAG - Section 4.2. 10. 463 Green Street Woodbridge, NJ Violation 1 The toilet paper dispenser is not located on the side wall within 12" from the front edge of the toilet seat. This is in violation of ADAAG - Sections 4.22.4, 4.23.4, 4.16.6, and 4.17.3. Violation 2 The men's restroom door force is 10 lbs. and is not accessible. This is in violation of ADAAG - Section 4.13.11(2)(b). Violation 3 The lavatory hardware is not complaint. This is in violation of ADAAG - Section 419.5. Violation 4 The men's restroom is not on an accessible route and is not accessible to wheelchairs. This is in violation of ADAAG - Sections 4.1.2(6) and 4.1.3(11). Violation 5 The men's restroom door closer is not adjusted to allow the bathroom door to remain open for at least three (3) seconds. This is in violation of ADAAG - Section 4.13.10. Violation 6 The men's restroom signage is not compliant. This is in violation of ADAAG - Section 4.1.2. 11. 1065 Bloomfield Avenue Clifton, NJ Violation 1 There is no van accessible parking signage. This is in violation of ADAAG - Section 4.6, 4. Violation 2 The center of the toilet or water closet is 161/2" from the wall and is not accessible. This is in violation of ADAAG - Section 4.17.3. Violation 3 The toilet paper dispenser is not located on the side wall within 12" from the front edge of the toilet seat. This is in violation of ADAAG - Sections 4.22.4, 4.23.4, 4.16.6, and 4.17.3. Violation 4 The men's restroom door force is 9 lbs. and is not accessible. This is in violation of ADAAG - Section 4.13.11(2)(b). Violation 5 The men's restroom door closer is not adjusted to allow the bathroom door to remain open for at least three (3) seconds. This is in violation of ADAAG - Section 4.13.10. Violation 6 The men's restroom signage is not compliant. This is in violation of ADAAG - Section 4.1.2. 12. 2454 U.S. 22 Union, NJ Violation 1 There is no van accessible parking signage. This is in violation of ADAAG - Section 4.6,4. Violation 2 The center of the toilet or water closet is 21" from the wall and is not accessible. This is in violation of ADAAG - Section 4.17.3. Violation 3 The toilet paper dispenser is not located on the side wall below the grab bar. This is in violation of ADAAG - Sections 4.22.4, 4.23.4. 4.16.6 and 4.17.3. Violation 4 The toilet paper dispenser is not located on the side wall within 12" from the front edge of the toilet seat. This is in violation of ADAAG - Sections 4.22.4, 4.23.4, 4.16.6, and 4.17.3. Violation 5 The men's restroom door force is 9 lbs. and is not accessible. This is in violation of ADAAG - Section 4.13.11(2)(b). Violation 6 There are no required grab bars in the men's restroom. This is in violation of ADAAG - Section 4.17.6. Violation 7 The mirror in the men's restroom is 55" from the floor and is not accessible. This is in violation of ADAAG - Section 4.22.6. Violation 8 The rim of the urinal is 31" from the floor and is not accessible. This is in violation of ADAAG - Section 4.18.2. Violation 9 The men's restroom door closer is not adjusted to allow the bathroom door to remain open for at least three (3) seconds. This is in violation of ADAAG - Section 4.13.10. Violation 10 The men's restroom signage is not compliant. This is in violation of ADAAG - Section 4.1.2. Violation 11 The light switch is located 50" from the finished floor and is not accessible. This is in violation of ADAAG - Section 4.27. 13. 1515 U.S. 22 Watchung, NJ Violation 1 There is no van accessible parking signage. This is in violation of ADAAG - Section 4.6,4. Violation 2The center of the toilet or water closet is 16" from the wall and is not accessible. This is in violation of ADAAG - Section 4.17.3. Violation 3 The toilet paper dispenser in the men's restroom is not located on the side wall within 12" from the front edge of the toilet seat. This is in violation of ADAAG - Sections 4.22.4, 4.23.4, 4.16.6, and 4.17.3. Violation 4 The men's restroom door force is 10 lbs. and is not accessible. This is in violation of ADAAG - Section 4.13.11(2)(b) Violation 5 The mirror in the men's restroom is 45" from the floor and is not accessible. This is in violation of ADAAG - Section 4.22.6. Violation 6 The lavatory hardware is not complaint. This is in violation of ADAAG - Section 4.19.5. Violation 7 The men's restroom door closer is not adjusted to allow the bathroom door to remain open for at least three (3) seconds. This is in violation of ADAAG - Section 4.13.10. Violation 8 The men's restroom signage is not compliant. This is in violation of ADAAG - Section 4.1.2. Violation 9 The soap dispenser in the men's restroom is 58" above the floor and is not compliant. This is in violation of ADAAG - Section 4.23.7. 14. 2501 U.S. 130 Riverton, NJ Violation 1 The toilet paper dispenser in the men's restroom is not located on the side wall below the grab bar. This is in violation of ADAAG - Sections 4.22.4, 4.23.4, 4.16.6, and 4.17.3. Violation 2 The men's restroom door force is 12 lbs. and is not accessible. This is in violation of ADAAG - Section 4.13.11(2)(b) Violation 3 The men's restroom door closer is not adjusted to allow the bathroom door to remain open for at least three (3) seconds. This is in violation of ADAAG - Section 4.13.10. Violation 4 The men's restroom signage is not compliant. This is in violation of ADAAG - Section 4.1.2. Violation 5 The soap dispenser in the men's restroom is 50" above the floor and is not accessible. This is in violation of ADAAG - Section 4.23.7. 15. 1100 Nixon Drive Mt. Laurel, NJ Violation 1 The men's restroom door force is 10 lbs. and is not accessible. This is in violation of ADAAG - Section 4.13.11(2)(b) Violation 2 The men's restroom door closer is not adjusted to allow the bathroom door to remain open for at least three (3) seconds. This is in violation of Title 24 Code 1115B.7.1.4; ADAAG - Section 4.13.10. Violation 3 The men's restroom signage is not compliant. This is in violation of ADAAG - Section 4.1.2. Violation 4 The paper towel dispenser in the men's restroom is 62" above the floor and is not accessible. This is in violation of ADAAG - Section 4.23.7. 16. 200 Route 73 West Berlin, NJ Violation 1 The toilet paper dispenser in the men's restroom is not located on the side wall below the grab bar. This is in violation of ADAAG - Sections 4.22.4, 4.23.4, 4.16.6, and 4.17.3. Violation 2 The men's restroom door force is 10 lbs. and is not accessible. This is in violation of ADAAG - Section 4.13.11(2)(b) Violation 3 The restroom door hardware is not compliant. This is in violation of ADAAG - Section 4.13.9. Violation 4 The mirror in the men's restroom is 50" from the floor and is not compliant. This is in violation of ADAAG - Section 4.22.6. Violation 5 The men's restroom door closer is not adjusted to allow the bathroom door to remain open for at least three (3) seconds. This is in violation of ADAAG - Section 4.13.10. Violation 6 The men's restroom signage is not compliant. This is in violation of ADAAG - Section 4.1.2. Violation 7 The soap dispenser in the men's restroom is 50" above the floor and is notcompliant. This is in violation of ADAAG - Section 4.23.7. 17. 1900 Highway 70 Lakewood, NJ Violation 1 There is no van accessible parking signage. This is in violation of ADAAG - Section 4.6.4. Violation 2 The men's restroom door force is 10 lbs. and is not accessible. This is in violation of ADAAG - Section 4.13.11(2)(b) Violation 3 The mirror in the men's restroom is 48" from the floor and is not compliant. This is in violation of ADAAG - Section 4.22.6. Violation 4 The height of the urinal in the men's restroom is 48" from the floor and is not accessible. This is in violation of ADAAG - Section 4.18.2 Violation 5 The men's restroom door closer is not adjusted to allow the bathroom door to remain open for at least three (3) seconds. This is in violation of ADAAG - Section 4.13.10. Violation 6 The men's restroom signage is not compliant. This is in violation of ADAAG - Section 4.1.2. 18. 1 Route 37 Toms River, NJ Violation 1 The men's restroom door force is 9 lbs. and is not accessible. This is in violation of ADAAG - Section 4.13.11(2)(b) Violation 2 The men's restroom door closer is not adjusted to allow the bathroom door to remain open for at least three (3) seconds. This is in violation of ADAAG - Section 4.13.10. Violation 3 The men's restroom signage is not compliant. This is in violation of ADAAG - Section 4.1.2. 33. The discriminatory violations described above are not an exclusive or 34. The correction of these violations of the ADA is readily achievable, or 35. To date, barriers and other violations of the ADA still exist and have not 36. As a result of the failure to remedy existing barriers to accessibility, 37. Plaintiff and others similarly situated either regularly enter and/or use 38. In addition, the discriminatory features of Defendant's stores are generally 39. Plaintiff, and others similarly situated were injured by the discrimination 40. Plaintiff's injuries are traceable to Defendant's discriminatory conduct 41. Plaintiff has retained the undersigned counsel. Plaintiff is entitled to 42. Notice to Defendant is not required as a result of Defendant's failure to 43. Plaintiff is without adequate remedy at law and is suffering irreparable 44. Pursuant to 42 U.S.C. Section 12188, this Court is provided authority to COUNT II (NEW JERSEY LAW AGAINST DISCRIMINATION) 45. Plaintiff realleges and incorporates by reference the remainder of the 46. Defendant operates business establishments within the jurisdiction of the 47. The conduct alleged herein violates the LAD § 10:5-4, et seq. 48. The LAD guarantees, inter alia, that all persons shall have the opportunity 49. Defendant has violated the LAD by, inter alia, denying Plaintiff and 50. Defendant has violated the LAD, by inter alia, failing to operate its 51. In doing the acts and/or omissions alleged herein, Defendant wrongfully and unlawfully denied access to its stores and facilities to individuals with disabilities and acted with knowledge of the effect its conduct was having on physically disabled persons.52. The LAD is accorded broad construction in regard to its prohibition of 53. Further, in determining a violation of LAD, New Jersey Courts look to the 54. Pursuant to the remedies, procedures, and rights set forth in the LAD. PRAYER FOR RELIEF WHEREFORE, Plaintiff demands judgment against Defendant and requests the a. That this Court assume jurisdiction. b That this Court certify the Class identified above. c. That this Court certify Plaintiff as the representative of the Class. d. That this Court declare Defendant to be in violation of Title III of the Americans with Disabilities Act, 42 U.S.C. § 12181, and the New Jersey Disabled Persons Act, N.J.S.A., § 10:5-4, et seq. e. That this Court issue an injunction ordering Defendant to comply with the statutes set forth herein. f. That this Court award minimum statutory damages to the named Plaintiff and members of the proposed class for violations of their civil rights under state law. g. That this Court award reasonable attorneys' fees and costs pursuant to federal and New Jersey law. h. That this Court award such additional or alternative relief as may be just, proper and equitable. DEMAND FOR JURY TRIAL Plaintiff hereby demands a jury on all issues which can be heard by a jury. By: Jordan BRODSKY Schatz, they & SMITH, Esquire LLC Jason L. Brodsky, Esquire Two Bala Plaza, Suite 602 Bala Cynwyd, PA 19004 Tel: 610 667 6200 Fax: 610 667 9029 Attorneys for Plaintiff UNITED STATES DISTRICT COURT EASTERN DISTRICT OF PENNSYLVANIA ) ) ) CIVIL ACTION NO. Plaintiff, ) ) V. ) ) CLASS ACTION COMPLAINT ) ) ) Defendant. ) JURY TRIAL DEMANDED L.R. 7.1 DISCLOSURE STATEMENT Pursuant to L.R. 7.1, plaintiff, David Cornelsen, hereby states that there are no such BRODSKY SMITH, LLC By: Jason L. Brodsky Jordan AV Schatz Two Bala Plaza, Suite 602 Bala Cynwyd, PA 19004 Tel: (610) 667-6200 Fax: (610) 667-9029 Attorneys for Plaintiff

civil rights, immigration, family

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UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN No. 2:19-cv-12371 Marisella Gutierrez, Jimmy Harman, Mark Kidd, and James Norvell, on behalf of all others similarly situated, Plaintiffs, COMPLAINT—CLASS ACTION DEMAND FOR JURY TRIAL General Motors, LLC, Defendants. Table of Contents I. INTRODUCTION ......................................................................................... 4 II. PARTIES ..................................................................................................... 10 A. Plaintiffs ............................................................................................ 10 B. Defendant .......................................................................................... 11 III. JURISDICTION AND VENUE .................................................................. 12 IV. FACTUAL ALLEGATIONS ...................................................................... 13 A. Plaintiffs’ Experiences with GM’s Defective Transmissions .................................................................................... 13 B. GM’s Defective Transmissions (GM Hydra-Matic 8L90 and 8L45) .......................................................................................... 15 C. GM’s Knowledge of the Defective Transmissions ........................... 18 1. Consumer Complaints Demonstrate that GM Was or Should Have Been Aware of the Defective Transmissions. ......................................................................... 20 2. GM’s Service Bulletins Demonstrate that GM Had Knowledge of the Defective Transmissions as Early as September 1, 2014. ................................................... 37 3. GM Knew or Should Have Known of the Defect as a Result of Trade Publications’ Well-Publicized Criticisms of the Defective Transmissions ............................. 50 D. GM Instructed Dealership Employees and Technicians to Inform Class Members that Symptoms of the Defective Transmissions Were “Normal” ......................................................... 52 E. The Defective Transmissions Are Covered by GM’s Warranty ............................................................................................ 53 COMPLAINT—CLASS ACTION- 1 KELLER ROHRBACK L.L.P. 1201 THIRD AVENUE, SUITE 3200 V. CLASS ACTION ALLEGATIONS ............................................................ 57 A. Class Definitions ............................................................................... 57 B. Class Certification Requirements ...................................................... 58 VI. EQUITABLE TOLLING ............................................................................ 62 A. Discovery Rule .................................................................................. 62 B. Tolling Due to GM’s Fraudulent Concealment ................................ 63 C. Estoppel ............................................................................................. 63 VII. CLAIMS FOR RELIEF ............................................................................... 64 A. Claims Asserted on Behalf of the Nationwide Class ........................ 64 COUNT I .......................................................................................... 64 COUNT II ......................................................................................... 68 COUNT III ....................................................................................... 71 COUNT IV ....................................................................................... 72 COUNT V ......................................................................................... 74 B. Claims Brought on Behalf of the State Class(es) .............................. 75 COUNT VI ....................................................................................... 75 COUNT VII ...................................................................................... 79 COUNT VIII .................................................................................... 82 COUNT IX ....................................................................................... 85 COUNT X ......................................................................................... 87 COUNT IX ....................................................................................... 91 COMPLAINT—CLASS ACTION- 2 KELLER ROHRBACK L.L.P. VIII. PRAYER FOR RELIEF .............................................................................. 95 IX. DEMAND FOR JURY TRIAL ................................................................... 95 COMPLAINT—CLASS ACTION- 3 KELLER ROHRBACK L.L.P. Plaintiffs bring this action on behalf of themselves and all others similarly situated against Defendant General Motors, LLC (“GM” or “Defendant”). Plaintiffs allege the following based upon information and belief, the investigation of counsel, and personal knowledge of the factual allegations pertaining to themselves. I. INTRODUCTION 1. Jolting, lurching, and jerking are not desirable operating conditions for any automobile, but they are frequent experiences for Plaintiffs Marisella Gutierrez, Jimmy Harman, Mark Kidd, James Norvell, and members of the Class who purchased or leased vehicles manufactured by General Motors, LLC, equipped with dangerously defective transmissions (“Class Vehicles”). These defective transmissions—GM’s Hydra-Matic 8L90 or 8L45—create safety hazards that are unacceptable and unreasonably dangerous to Plaintiffs, Class members, as well as their families, friends, and the other drivers and passengers with whom they share the roads. As detailed below, despite numerous service bulletins and attempts, GM has not repaired the defective transmissions or remedied the danger they pose. 2. On information and belief, the Class Vehicles include the Model Year GM vehicles listed below. The list of Class Vehicles may expand or change on the basis of discovery as this case progresses. COMPLAINT—CLASS ACTION- 4 KELLER ROHRBACK L.L.P. Model Years Make & Model 2015-2019 Chevrolet Silverado 2017-2019 Chevrolet Colorado 2015-2019 Chevrolet Corvette 2016-2019 Chevrolet Camaro 2015-2017 Cadillac Escalade 2015-2017 Cadillac Escalade ESV 2016-2019 Cadillac ATS 2016-2019 Cadillac ATS-V 2016-2019 Cadillac CTS 2016-2019 Cadillac CTS-V 2016-2019 Cadillac CT6 2015-2019 GMC Sierra 2015-2019 GMC Yukon 2015-2019 GMC Yukon XL 2017-2019 GMC Canyon 3. GM’s 8L90 and 8L45 transmissions are defective because they cause Class Vehicles to shudder, jerk, suddenly accelerate, fail to accelerate, fail to downshift, and delay stopping despite the application of brakes. These dangerous COMPLAINT—CLASS ACTION- 5 KELLER ROHRBACK L.L.P. occurrences are symptomatic of the defective transmissions’ internal issues, including but not limited to defective torque converters. The defective transmissions suffer from excessive friction between components, which grinds off transmission parts and results in the circulation of metal shavings throughout the transmissions’ hydraulic systems. These circulating metal shavings cause further damage that impairs the proper functioning of the transmissions’ hydraulic systems and gears. This defect, the resulting damage, and GM’s inability or unwillingness to fully repair the defect force consumers to pay additional repair costs over time. Meanwhile, the Class Vehicles equipped with these transmissions shudder, jerk, suddenly accelerate, fail to accelerate, fail to downshift, and don’t stop promptly because they remain in gear too long. GM has known about the defect for years, has failed to adequately remedy the problem, and worse, has tried to convince consumers that the defect’s symptomatic “surging” or “unexpected acceleration”—and perhaps other symptoms of the defect—were “normal.” 4. GM has known about these defective transmissions since 2014, if not earlier. Consumers have repeatedly filed complaints about driving GM automobiles with these defective transmissions with the National Highway Traffic Safety Administration and on internet forums, many of them noting that GM or dealership service technicians told them that what they experienced was “normal.” COMPLAINT—CLASS ACTION- 6 KELLER ROHRBACK L.L.P. 5. The widespread misrepresentation that this defective performance was “normal” was based on GM’s service bulletins, such as June 2016’s PIP5405, which explicitly told GM dealers and service technicians that, despite numerous complaints related to “surging” or “unexpected acceleration,” the vehicles were “operating as [d]esigned” and, further, that if the problem was found to be widespread it “should be considered a ‘normal’ characteristic of the vehicle.”1 6. As a result of these instructions from GM, numerous consumer complaints about GM’s defective transmissions note that someone—including “GM,” a “dealer,” or a “service manager”—told the consumer that whatever issue they had experienced was “normal.” 7. Not surprisingly, numerous trade publications have also criticized the operation of these transmissions and the GM automobiles equipped with them. Despite these complaints, GM has never fully fixed the defective transmissions and never ceased selling vehicles equipped with them. As a result, GM continues to be unjustly enriched by the sale of Class Vehicles, while consumers continue to be endangered by vehicles equipped with defective transmissions and to pay excessive costs to maintain and repair defective vehicles. 1 Service Bulletin No. PIP5405, GM, Surge Misfire Feeling Sensation During Highway Steady State Driving (June 2016), https://static.nhtsa.gov/odi/tsbs/2016/SB-10080566-2280.pdf (last visited Aug. 8, 2019). COMPLAINT—CLASS ACTION- 7 KELLER ROHRBACK L.L.P. 8. To the extent that GM and its dealers have attempted to repair these defective transmissions, the repairs were ineffective, consisting of patchwork software updates, parts replacements, and other insufficient procedures. These transmission repairs are also expensive, often requiring consumers to pay hundreds, if not thousands, of dollars to repair or replace the transmissions, related components, or other parts that become damaged because of the defective transmissions. Worst of all, the repairs don’t work—the defect persists. 9. Plaintiff Gutierrez has already had her transmission serviced under her warranty, but the defect persists, and Plaintiff Gutierrez fears that her warranty will no longer cover service or repairs. Plaintiff Harman has had his transmission serviced multiple times under warranty and fears that his warranty will no longer cover service or repairs. Additionally, Plaintiff Norvell has also visited a dealership for repairs that have not resolved the problem, and staff informed him that the problem was “normal” and would “resolve itself” after a “break-in period.” The problem persists and Norvell fears that ongoing repairs will not be covered by his warranty after it expires. Plaintiff Kidd shares the same fear that ongoing repair attempts will not be covered by warranties. In short, GM has been unable to fix Plaintiffs’ defective transmissions despite multiple attempts, and once their warranties expire, Plaintiffs will be forced to pay out of pocket for future repair COMPLAINT—CLASS ACTION- 8 KELLER ROHRBACK L.L.P. efforts as a result of the defect. Meanwhile, they are stuck with Class Vehicles that are both unsafe and unpleasant to drive due to their defective transmissions. 10. GM has received complaints related to these defective transmissions consistently since 2014, across dozens of makes and models. Despite being unable to adequately repair the defective transmissions, GM has not yet redesigned them, instituted a recall that would permanently repair the defective transmissions, replaced them with a functional design, or offered any other form of permanent resolution or compensation to consumers. 11. By failing to repair the defective transmissions, GM has allowed the dangers of the defective transmissions to persist and unfairly shifted the costs of repairing the defective transmissions onto Class Members. 12. This action arises from GM’s failure, despite its longstanding knowledge of the transmission defects, to disclose, adequately repair, or recall Class Vehicles’ defective transmissions. Moreover, GM took the affirmative step of telling GM dealers and service technicians to tell consumers that “surging” or “unexpected acceleration” should be considered “normal,” misinformation which dealers and technicians—on information and belief and based on numerous consumer complaints to NHTSA and in online forums—regularly passed on to consumers. Plaintiff Norvell, for example, when visiting his GM dealership for a repair related to his vehicle’s jolting, lurching, and jerking, was told the issue was “normal” and COMPLAINT—CLASS ACTION- 9 KELLER ROHRBACK L.L.P. that it would “resolve itself” after a break-in period. But this problem is abnormal and remains unresolved. 13. GM’s conduct means that Plaintiffs, Class members, and their passengers continue to face unreasonably dangerous driving conditions that are a product of GM’s defective transmissions. II. PARTIES A. Plaintiffs 14. Plaintiff Marisella Gutierrez is a Georgia citizen who resides in Marietta, Georgia. She purchased a 2017 Chevrolet Silverado equipped with a defective transmission in November 2017 from All American Chevrolet of San Angelo, Texas. 15. Plaintiff Jimmy Harman is a North Carolina citizen who resides in High Point, North Carolina. He purchased a 2017 GMC Yukon Denali equipped with a defective transmission in April 2017 from Vann York Auto Group in High Point, North Carolina. 16. Plaintiff Mark Kidd is a Tennessee citizen who resides in Knoxville, Tennessee. He purchased a 2016 GMC Sierra equipped with a defective transmission in June 2017 from Rusty Wallace Cadillac, GMC and Kia in Morristown, Tennessee. COMPLAINT—CLASS ACTION- 10 KELLER ROHRBACK L.L.P. 17. Plaintiff James Norvell is a Kentucky citizen who resides in Hopkinsville, Kentucky. He purchased a 2018 Chevrolet Colorado with a defective transmission in July 2018 from Patriot Chevrolet in Hopkinsville, Kentucky. B. Defendant 18. Defendant General Motors, LLC, designs, manufactures, markets, distributes, and leases passenger vehicles, including the Class Vehicles, in all fifty states and the District of Columbia. General Motors LLC is the warrantor and distributor of the Class Vehicles in the United States. 19. General Motors, LLC, has its principal place of business at 300 Renaissance Center, Detroit, Michigan 48265. The sole member and owner of General Motors, LLC, is General Motors Holdings LLC. General Motors Holdings LLC’s only member is General Motors Company, which has a 100% ownership interest in General Motors Holdings LLC. 20. General Motors, LLC, General Motors Holdings LLC, and General Motors Company are all Delaware limited liability companies with their principal places of business in the State of Michigan. 21. At all relevant times, Defendant was and is engaged in the business of designing, manufacturing, constructing, assembling, marketing, distributing, selling, and leasing Class Vehicles and component parts thereof and therefor throughout the United States. COMPLAINT—CLASS ACTION- 11 KELLER ROHRBACK L.L.P. III. JURISDICTION AND VENUE 22. This Court has subject matter jurisdiction over this action under the Class Action Fairness Act. 28 U.S.C. § 1332(d)(2). At least one member of the proposed class is a citizen of a different state than GM, the number of proposed class members exceeds 100, and the amount in controversy exceeds $5,000,000.00, exclusive of interests and costs. 23. This Court has personal jurisdiction over Defendant because it has conducted substantial business in this District, is properly at home in this District, and intentionally and purposefully placed Class Vehicles into the stream of commerce within this District and throughout Michigan and the United States. 24. Venue properly lies in this District pursuant to 28 U.S.C. § 1391 (a)– (c) because: (1) Defendant maintains operational facilities in this District; (2) a substantial part of the events or omissions giving rise to Plaintiffs’ claims occurred in this District; (3) Defendant conducts a substantial amount of business in this District; and (4) Defendant is headquartered in this District. Accordingly, Defendant has sufficient contacts with this District to subject Defendant to personal jurisdiction in the District and venue is proper. 25. Under 28 U.S.C. § 1367, this Court may exercise supplemental jurisdiction over the various state law claims in this Complaint because all of the COMPLAINT—CLASS ACTION- 12 KELLER ROHRBACK L.L.P. claims are derived from a common nucleus of operative facts and are such that Plaintiffs would ordinarily expect to try them in one judicial proceeding. IV. FACTUAL ALLEGATIONS A. Plaintiffs’ Experiences with GM’s Defective Transmissions 26. Plaintiff Marisella Gutierrez purchased her 2017 Chevrolet Silverado in November 2017 from All American Chevrolet of San Angelo, Texas. This truck came equipped with the defective 8-speed transmission. While driving, Plaintiff has repeatedly felt her Silverado truck jolt forward and witnessed her engine speed (in revolutions per minute, or “RPM”) increasing and decreasing erratically. Plaintiff has had the vehicle serviced multiple times while under warranty, but the problem persists and the repairs have not remedied the defect or its symptoms. Plaintiff fears that ongoing repairs will soon no longer be covered under her warranty and that she will have to pay out-of-pocket expenses to service or repair the defective transmission that her truck came equipped with from the factory and that GM and its dealers have been unable or unwilling to repair. 27. Plaintiff Jimmy Harmon purchased his 2017 GMC Yukon Denali in April 2017 from Vann York Auto Group in High Point, North Carolina. This vehicle came equipped with the defective 8-speed transmission. While driving, Plaintiff has repeatedly felt his Denali shake, jolt, and jerk—once so violently that it caused the vehicle to jump forward and over a curb, and multiple times so violently that he has COMPLAINT—CLASS ACTION- 13 KELLER ROHRBACK L.L.P. nearly rear-ended other vehicles. Plaintiff has had the vehicle serviced multiple times while under warranty, but the problem persists. Replacing tires, the torque converter, valve body, and transmission fluid changes have not resolved the defect or its symptoms. Plaintiff fears that ongoing repairs will soon no longer be covered under the warranty and that he will have to pay out-of-pocket expenses to service or repair the defective transmission in his vehicle. 28. Plaintiff Mark Kidd purchased his 2016 GMC Sierra in June 2017 from Rusty Wallace Cadillac, GMC and Kia in Morristown, Tennessee. This truck came equipped with the defective 8-speed transmission. While driving, Plaintiff has repeatedly felt his Silverado truck jolt forward, as if struck from behind. These problems persist. Plaintiff fears that ongoing repairs will soon no longer be covered under his warranty and that he will have to pay out-of-pocket expenses to service or repair the defective transmission in her truck. 29. Plaintiff James Norvell purchased his 2018 Chevrolet Colorado in July 2018 from Patriot Chevrolet in Hopkinsville, Kentucky. This truck came equipped with the defective 8-speed transmission. While driving, Plaintiff has repeatedly felt his Colorado truck jolt, lurch, and jerk. Plaintiff has visited the dealership for repair, but staff informed Plaintiff that the problem was “normal” and would “resolve itself” after a break-in period rather than offering or performing any repair of the defect. The problem has not “resolved itself.” Plaintiff COMPLAINT—CLASS ACTION- 14 KELLER ROHRBACK L.L.P. fears that ongoing repairs will soon no longer be covered under his warranty and that he will have to pay out-of-pocket expenses to service or repair the defective transmission in his truck. B. GM’s Defective Transmissions (GM Hydra-Matic 8L90 and 8L45) 30. Prior to 2015, GM vehicles had automatic transmissions of six or fewer speeds. But in January 2014, GM and its subsidiary brands began marketing new, 8-speed automatic transmissions. GM intended for these new transmissions, the Hydra-Matic 8L90 and 8L45, to be included in certain GM-brand vehicles for model year 2015 and beyond. GM marketed and sold its new 8-speed automatic transmissions as having “world-class performance” that would rival top performance vehicles with lightning-fast and smooth shifting and improved fuel efficiency, among other qualities.2 31. These advanced, computer-controlled automatic transmissions automate gear changes by using multi-plate clutches and engage and disengage gears based on constant monitoring of the amount of power that the engine is producing and the speed at which the vehicle is traveling. Based on power and speed, the transmission engages and disengages gears using pressurized hydraulic fluid. When 2 New 8-Speed Enables Quicker, More Efficient Corvette, Chevrolet Pressroom (Aug. 20, 2014), https://media.chevrolet.com/media/us/en/chevrolet/news.detail.html/content/Page s/news/us/en/2014/Aug/0820-8speed/0820-corvette-8-speed-lead.html (last visited Aug. 8, 2019). COMPLAINT—CLASS ACTION- 15 KELLER ROHRBACK L.L.P. GM introduced the new 8-speed 8L90 and 8L45 transmissions in 2014, they purported to offer several advances on earlier automatic transmission technology. One benefit was more and closer gear ratios: with eight gears instead of six, the gear selected can better match the engine speed and travel velocity of the vehicle to maximize fuel economy. However, more gears, and thus more frequent shifts, would be unpleasant and potentially unsafe if the shifts were not actuated quickly and smoothly and felt harsh or sudden. 32. In a January 13, 2014 GM press release, GM introduced the new 8L90 transmission as “tuned for world-class shift-response times,” and claimed that it could “deliver shift performance that rivals the dual-clutch/semi-automatic transmissions found in many supercars—but with the smoothness and refinement that comes with a conventional automatic fitted with a torque converter.”3 Further, according to GM, the technology and design of the new 8L90 transmission “help make the new [Corvette] Z06 surprisingly fuel efficient.”4 GM touted similar 3 2015 Chevrolet Corvette Z06 is Most Capable, Ever, GM Corporate Newsroom (Jan. 13, 2014), https://media.gm.com/media/us/en/gm/autoshows/detroit.detail.html/content/Page s/news/us/en/2014/Jan/14naias/Corvettes/Z06-corvette/0113-z06.html (last visited Aug. 8, 2019). COMPLAINT—CLASS ACTION- 16 KELLER ROHRBACK L.L.P. characteristics for its 8L45 transmission in press releases in 2015.5 Unfortunately, GM’s claims about the 8L90 and 8L45 transmissions were untrue. 33. The defects in the 8L90 and 8L45 transmissions cause dangerous conditions in Class Vehicles, including sudden “surging” or “unexpected acceleration,” or, alternatively, a loss of forward momentum or delayed acceleration. These conditions present a safety hazard because they can severely affect a driver’s ability to control his or her vehicle: for example, Plaintiffs have repeatedly experienced their Class Vehicles suddenly jolt forward, as if struck from behind by another vehicle. Such an occurrence is not only startling, but also potentially injurious to Plaintiffs, their passengers, and their fellow drivers. Despite numerous service bulletins and apparent repair attempts, GM has not repaired the defective transmissions or remedied the danger they pose. 34. On information and belief, the defective transmissions also suffer from premature wear and tear. This wear and tear precipitates more dangerous 5 See, e.g., 2016 Camaro’s Driving Fun Rooted in New Powertrains, GM Corporate Newsroom (May 16, 2015), https://media.gm.com/media/us/en/gm/news.detail.html/content/Pages/news/us/en /2015/may/2016-camaro/0516-camaro-powertrains.html (last visited Aug. 8, 2019); Cadillac CT6 to Debut Next Generation Powertrain, Cadillac Pressroom (Mar. 23, 2015), https://media.gm.com/media/me/en/cadillac/news.detail.html/content/Pages/news/ me/en/2015/cadillac/Cadillac-CT6-to-Debut-Next-Generation-Powertrain.html (last visited Aug. 8, 2019). COMPLAINT—CLASS ACTION- 17 KELLER ROHRBACK L.L.P. occurrences and also damages the transmission and related parts. This can lead to repeated and/or expensive repairs, including replacement of the transmission and other vehicle parts. Unfortunately for Class Plaintiffs, not only did GM make false representations about its defective transmissions’ ability to deliver “comfort and drivability,” “lightning-fast shifts,” and “enhanc[ed] refinement, particularly during low-speed gear changes,” but GM knew that its transmissions were defective.6 C. GM’s Knowledge of the Defective Transmissions 35. As early as September 2014, GM knew or should have known that the 8L90 and 8L45 transmissions were defective in design and/or manufacture and that the defective transmissions would adversely affect the drivability of the Class Vehicles and cause dangerous driving conditions for purchasers and lessees. 36. Plaintiffs, based on information and belief, allege that prior to the sale of Plaintiffs’ vehicles and the other Class Vehicles, GM knew or should have known about the defective transmissions through GM’s access to both public and non- public data, including: (1) internal development and engineering information, (2) presale testing data, (3) consumer complaints about the defective transmissions to the National Highway Traffic Safety Administration, to dealers, and on internet 6 New 8-Speed Enables Quicker, More Efficient Corvette, Chevrolet Pressroom (Aug. 20, 2014), https://media.chevrolet.com/media/us/en/chevrolet/news.detail.html/content/Page s/news/us/en/2014/Aug/0820-8speed/0820-corvette-8-speed-lead.html (last visited Aug. 8, 2019). COMPLAINT—CLASS ACTION- 18 KELLER ROHRBACK L.L.P. forums; (4) internal GM service bulletins regarding the defective transmissions; and (5) well-publicized criticisms of the defective transmissions in various trade publications. 37. Furthermore, because GM’s warranty terms cover the defective transmissions and the dangers that they created for Class Plaintiffs and other Class Members, GM knew or should have known about the defects in the transmission through its dealers’ warranty-covered service of the defective transmissions. On information and belief, GM knew or should have known about the defective transmissions based on the following: pre-release testing data, early consumer complaints to GM dealers who were and/or are their agents for vehicle repairs, warranty claim data related to the defect, aggregate data from GM’s dealers, dealership repair orders, testing conducted in response to owner or lessee complaints, and other internal sources of information. 38. Nevertheless, GM actively concealed and failed to disclose the defective transmissions to Plaintiffs and Class Members, both at the time of purchase or lease and throughout the ownership period or the lease term. This is evidenced by GM’s June 2016 service bulletin, PIP5405, which told GM dealers and service technicians that regardless of customers’ complaints about “surging” or “unexpected acceleration,” the vehicles were “operating as [d]esigned,” and that if the problem was found to be widespread enough, it should be considered a “‘normal’ COMPLAINT—CLASS ACTION- 19 KELLER ROHRBACK L.L.P. characteristic of the vehicle.”7 GM’s dealers and technicians apparently passed this misinformation onto various customers—numerous NHTSA complaints mention that someone (“GM,” a “dealer,” or a “service manager”) told them that the defect’s various symptoms were “normal.” When Plaintiff Norvell, for example, visited a GM dealership for repairs related to his truck’s jolting, lurching, and jerking, he was told that the problem was “normal” and would “resolve itself” after a break-in period. 39. Even if GM learned of the defects after Class Vehicles initially went on sale, it was under an ongoing duty to remedy the problem and has not done so. 1. Consumer Complaints Demonstrate that GM Was or Should Have Been Aware of the Defective Transmissions. 40. Consumer complaints (a) filed with the NHTSA and (b) posted on internet forums demonstrate that GM knew or should have known about its defective transmissions and the dangers they caused for Plaintiffs and Class members. a. Consumer Complaints to the National Highway Transportation and Safety Administration 41. The National Highway Transportation and Safety Administration (“NHTSA”) has received hundreds of complaints about GM’s defective 7 Service Bulletin No. PIP5405, GM, Surge Misfire Feeling Sensation During Highway Steady State Driving (June 2016), https://static.nhtsa.gov/odi/tsbs/2016/SB-10080566-2280.pdf (last visited Aug. 8, 2019). COMPLAINT—CLASS ACTION- 20 KELLER ROHRBACK L.L.P. transmissions. Upon information and belief, GM regularly monitors NHTSA complaints to track potential defects and safety issues, which, under federal law, must be reported within five days. Based on the high number of NHTSA complaints consumers have filed regarding vehicles with GM’s defective transmissions, GM was effectively put on notice and made aware of the defective transmissions. Unfortunately for Class Members, GM refused to diagnose and adequately repair the defective transmissions, let alone recall Class Vehicles. The consumer complaints below make it abundantly clear that GM knew—or certainly should have known— that there were serious, dangerous problems with its transmissions, and that GM was unable to ultimately fix the problem, with consumers reporting, for example, that “the shudder . . . return[ed],” or that their vehicle “continu[ed] to shift hard” even after GM attempted to repair it. Additionally, that GM dealers and technicians repeatedly told consumers that the defect’s symptoms were “normal.”8 2015 Chevy Silverado 1500. Complaint Filed: June 20, 2019. NHTSA ID Number: 11221558. Consumer Location: Sitka, AK. (1) Summary of Complaint: When in motion harsh shifting between gears, sometimes so violent it feels like another car hit me. When accelerating 8 The following complaints appear in the online NHTSA database and concern class vehicles. Safety Issues & Recalls, NHTSA, https://www.nhtsa.gov/recalls (last visited Aug. 8, 2019). NHTSA complaints are recorded and published in all- caps. This formatting has been changed to sentence case for readability. The substance, including grammar and spelling, of each complaint is otherwise unaltered. COMPLAINT—CLASS ACTION- 21 KELLER ROHRBACK L.L.P. the transmission seems to search for gears, and is sluggish for a high horsepower vehicle. Concerning when trying to accelerate in traffic, transmission hesitates and does not immediately apply power. Had transmission serviced 5 months ago due to shudder and shake between 20-35MPH. Transmission fluid flush helped for a few months, but shudder is returning as well. 2016 Chevy Silverado 1500. Complaint Filed: April 5, 2019. NHTSA ID Number: 11194127. Consumer Location: Wappingers Falls, NY. (1) Summary of Complaint: Transmission has hard shifting from starting position, while driving and slowing down. 50% of the time you can hear a clunking when hard down shifting. I have had the dealer look into this over 6 times already, and on one occasion it had been “reprogrammed” and on one occasion a part had been changed. It still continues to shift hard as noted above. Odometer as of 4/5/19 is 17,093. Have service scheduled for April 8, 2019 for shifting issues and motor oil change. 2017 Chevy Silverado 1500. Complaint Filed: June 22, 2019. NHTSA ID Number: 11221832. Consumer Location: Roscoe, IL. (1) Summary of Complaint: Shortly after purchasing my truck, I began experiencing hard shifts, gear searching, clunking, and hanging between gears. Occasionally the shift would be so hard it would feel as though the truck was struck from behind by another vehicle or object. Multiple trips to the dealer has resulted in numerous attempted fixes with no relief of the problem. Currently the truck is back at the dealership, having the entire transmission replaced. This is causing a depreciation of the value of the truck as well as an COMPLAINT—CLASS ACTION- 22 KELLER ROHRBACK L.L.P. unsafe condition while driving. 2018 Chevy Silverado 1500. Complaint Filed: November 20, 2018. NHTSA ID Number: 11193583. Consumer Location: Gig Harbor, WA. (1) Summary of Complaint: The transmission slips or shudders, also has free wheeled when going down hill at slow speeds, also occurs in reverse, usually about 1 to 2 car lengths. Have returned to the dealer several times and been told that GM does not have a remedy. Had the service recommendation of a transmission flued flush done twice with different fluid installed with no change. Has been in the dealers shop for 3 weeks with GM looking at the problem, no solution in sight. No confidence that GM can fix the problem. This could develop into a serious safety issue. 2017 Chevy Silverado. Complaint Filed: May 21, 2019. NHTSA ID Number: 11208961. Consumer Location: Whitefish, MT. (1) Summary of Complaint: Hard shifting & slipping of the transmission started at about 10,000 miles. Dealer unable to repair even though they tried 4 times including a remanufactured transmission. Not sure what type of damage is occurring to the transmission with this hard shifting. 2018 Chevy Colorado. Complaint Filed: March 25, 2019. NHTSA ID Number: 11191298. Consumer Location: Shepherdsville, KY. (1) Summary of Complaint: The contact owns a 2018 Chevrolet Colorado. While approaching a stop, the vehicle downshifted without warning. The failure occurred intermittently. Bob Hook Chevrolet (4144 Bardstown Rd., Louisville, KY 40218, (844) 212-4818) diagnosed and repaired the torque converter and changed the fluid, but the COMPLAINT—CLASS ACTION- 23 KELLER ROHRBACK L.L.P. failure persisted. The manufacturer was made aware of the failure. The failure mileage was 15,000. 2019 Chevy Colorado. Complaint Filed: March 21, 2019. NHTSA ID Number: 11190618. Consumer Location: New Lebanon, OH. (1) Summary of Complaint: Vehicle transmission seems to late down shift when slowing, causing the vehicle to jump forward once shifting has completed. 2015 Chevy Corvette. Complaint Filed: July 26, 2018. NHTSA ID Number: 11113946. Consumer Location: Wellington, FL. (1) Summary of Complaint: 2017 Corvette Stingray Z51 – 8-speed automatic transmission torque converter. With only 7,500 miles on it started to run jerky and RPMs would fluctuate for no reason (especially at highway speeds when fully warmed up). Often felt like driving on a washboard dirt road. After a cold start, there was a delay after shifting into drive. When it engaged after several seconds it would do so violently, lurching the car forward suddenly. Dealer diagnosed faulty torque converter as defective and a known problem with these transmissions. After less than 2,000 miles the symptoms returned and the dealer again replaced the torque converter. So now I’m on my 3rd defective TC. After 1,700 miles, symptoms returned again! Dealer said that Chevrolet and GM have ordered a stop on replacing the TC’s since no fix was available. GM advised to drain and flush tranny, refilling with Mobil1 transmission fluid. This seemed to work (only for a little longer) but is worrisome because in the future service, a technician will likely refill COMPLAINT—CLASS ACTION- 24 KELLER ROHRBACK L.L.P. with GM fluid, not Mobil1. Especially if a second owner. Now at 16,100 miles the symptoms are returning! Jerkiness, slamming into gear after a delay on cold starts. GM seems to have turned their back on Stingray owners by kicking the can down the road beyond warrantee (with the Mobil1 “band-aid fix”). On the forums there are so many owner complaining about this same issue. I am amazed that there is no official investigation resulting in a recall. This Z51 LT3 Stingray was $75,000 OTD! For this cost we should be able to expect a quality vehicle and a motor company that stands behind it! Can somebody please help us with this serious and potentially dangerious problem? 2016 Chevy Corvette. Complaint Filed: November 1, 2018. NHTSA ID Number: 11144655. Consumer Location: Orlando, FL. (1) Summary of Complaint: Known issues with a sub standard torgue converter causing a shudder and jerky motion the car starts demonstrating accompanied by fluctuating engine RPMs. This Corvette is equipped with a 8I90 8-speed automatic transmission. Its especially noticeable when cruising at highway speed with the cruise control engaged, however it displays this problem whether the cruise control is engaged or not. This issue seems to have affected about 20,000 Corvettes until about the end of October 2016 production dates. Internet research shows tha this is a wide spread problem and there should be a recall on these vehicles that requires GM to replaces the transmission and torque converter. COMPLAINT—CLASS ACTION- 25 KELLER ROHRBACK L.L.P. 2018 Chevy Corvette. Complaint Filed: May 7, 2019. NHTSA ID Number: 11206102. Consumer Location: Diamondhead, MS. (1) Summary of Complaint: 8-speed automatic transmission “bucks” and “clunks” during acceleration or during up shifting. It does this either in full automatic or manual shifting mode. 2015 Cadillac Escalade. Complaint Filed: April 8, 2019. NHTSA ID Number: 11194815. Consumer Location: Bay Minette, AL. (1) Summary of Complaint: I’ve had this vehicle since 3-28-2019 and I’m already having shifting problems with the vehicle. After doing some research, I’ve discovered that this is a common issue with Cadillac. My Escalade has 45,000 miles on it, so this shouldn’t be a problem. I’m worried about this hesitation problem during driving, which may led to a potential accident or worse. 2016 Cadillac Escalade. Complaint Filed: June 21, 2019. NHTSA ID Number: 11221758. Consumer Location: Upland, CA. (1) Summary of Complaint: The 8-speed transmission has been jerky at slow speeds from almost day one. But after 30,000 miles it has become worse. At time after starting the vehicle and placing into gear it will suddenly and violently lung forward and reverse, when accelerating from a slow speed it will stall abruptly, twice causing an engine code. Two dealers have tried to fix it, but haven’ been able to. This seems to be a much bigger problem related to the 8-speed transmission in general. 2016 Cadillac Escalade. Complaint Filed: June 6, 2019. NHTSA ID Number: 11218272. Consumer Location: Vista, CA. COMPLAINT—CLASS ACTION- 26 KELLER ROHRBACK L.L.P. (1) Summary of Complaint: The transmission has multiple malfunctions. Delayed shifts, hard shifts both when shifting up or down, very large clunk or hard shift when going from 2nd to first. Very unpleasant transmission and multiple ways. Dealer keeps telling me that the transmission is adaptive to the driver and it needs to learn habits. I have had the vehicle for over a year. Sounds like a cop out to me. Not very happy with GM! 2017 Cadillac Escalade. Complaint Filed: March 18, 2019. NHTSA ID Number: 11189745. Consumer Location: Houston, TX. (1) Summary of Complaint: When I am driving on smooth surface streets sometime there a feel of intermittent juttery ride which feels like you are riding over very small speed bumps very close together. I was told by two (2) mechanics that there is a problem with the transmission that is causing this. I started about two (2) months ago and continue daily. 2016 Cadillac ATS. Complaint Filed: October 24, 2018. NHTSA ID Number: 11142383. Consumer Location: Philadelphia, PA. (1) Summary of Complaint: While driving vehicle slowly or in stop and go traffic, the transmission shifts very rough between the lower gears on upshifts and downshifts and will hold a gear hanging while trying to brake or accelerate and cause the vehicle to rapidly lunge forward and cause a potential accident as it becomes hard to apply more pressure to the brakes suddenly. 2017 Cadillac CTS-V. Complaint Filed: June 25, 2019. NHTSA ID Number: 11222338. Consumer Location: Williamson, NY. (1) Summary of Complaint: Car has locked in 2nd or COMPLAINT—CLASS ACTION- 27 KELLER ROHRBACK L.L.P. 3rd gear two different times, both after long drives (2+ hours at highway speeds) and would not downshift into 1st to stop movement. The first time was a stop light and almost caused an accident, the second time was in my driveway and almost hit the house. Good brakes are the only thing that saved me. Both times, the vehicle shifted to 1st with a loud bang. Transmission also jerks the car forward from the stopped position when engine starts at a stop sign or light (when auto-start/stop is enabled). 2015 GMC Sierra. Complaint Filed: April 26, 2019. NHTSA ID Number: 11203899. Consumer Location: Fayetteville, AR. (1) Summary of Complaint: Transmission shifted hard, delayed acceleration at times, shuddered and jerked. This was usually slowing down to turn around 30 or 40 MPH as the truck was in motion. After only two years the entire transmission had to be rebuilt. The transmission was shifting poorly the moment I drove it off the lot even if it “adaptive learning” you could tell there was something wrong. 2016 GMC Sierra. Complaint Filed: April 25, 2019. NHTSA ID Number: 11203727. Consumer Location: Arnold, MO. (1) Summary of Complaint: Transmission shifts hard going from 1st to 2nd gear with no fix from GM. Complained to dealer they said it’s normal and there’s no fix for the issue. Issue also persist when going from drive to reverse, a hard shift that I’ve never experienced before in several previous GM products I owned or currently own. Happens every COMPLAINT—CLASS ACTION- 28 KELLER ROHRBACK L.L.P. time I drive the vehicle. 2017 GMC Sierra. Complaint Filed: March 15, 2019. NHTSA ID Number: 11203759. Consumer Location: Bossier City, LA. (1) Summary of Complaint: “Have taken my 2017 GMC Sierra into the dealership twice for transmission issues, the last time was a month ago. Both times I was told that there wasn’t anything wrong but that the transmission software was “re- flashed” and that the transmission would have to “re-learn my driving habits”. My truck is still having problems. While upshifting from 1st to 2nd gear, the transmission sometimes hesitates before it engages and then causes the truck to lunge forward with a huge slam. While downshifting from 2nd to 1st gear, the transmission will make a very noticeable “clunk”. I’m about to take it back a 3rd time. This is extremely frustrating my bought my truck less than 2 years ago and it only has 25,000 miles.” 2018 GMC Sierra. Complaint Filed: May 11, 2019. NHTSA ID Number: 11206941. Consumer Location: Ogden, UT. (1) Summary of Complaint: Daily the transmission has a hard shift from 1st to 2nd gear. Potentially causing me to loose control of the vehicle. Ive had it in the GMC shop 3 times and GMC is unable to fix the problem. After the vehicle sits for periods of 4 hrs or more the problem reoccurs. This is a serious political safety hazard in the 8speed transmission and needs to be recalled and fixed with a new transmission. 2019 GMC Sierra. Complaint Filed: April 25, 2019. NHTSA ID Number: 11203684. Consumer Location: Lenoir, NC. COMPLAINT—CLASS ACTION- 29 KELLER ROHRBACK L.L.P. (1) Summary of Complaint: Transmission jerks into gear when slowing down. When speeding up truck will jerk. Service manager said it was normal. Truck feels like it the rear end falls out when stopping. 2015 GMC Yukon Denali. Complaint Filed: April 5, 2019. NHTSA ID Number: 11194224. Consumer Location: Blythewood, SC. (1) Summary of Complaint: The 8-speed automatic transmission on my GMC Yukon Denali has a slippage issue that has persisted in our vehicle for a while unresolved. GM has replaced torque converter, module and now they are claiming through dealer that the issue resides with AT fluid. This slippage is bad because car jerks and sometimes hard. This issue needs to be addressed by GM as they know they have issues with this 8- speed AT. The issue happens at stops and at slow speeds. 2015 GMC Yukon Denali. Complaint Filed: September 18, 2018. NHTSA ID Number: 11130274. Consumer Location: Vancleave, MS. (1) Summary of Complaint: Vehicle clunks or hard shift while shifting vehicle from park to drive, or park to reverse. Happens every morning or while transmission has cooled down. Dealer indicates there’s no fix for this condition, not even a update to transmission software. 2016 GMC Yukon. Complaint Filed: February 20, 2019. NHTSA ID Number: 11181454. Consumer Location: Encinitas, CA. (1) Summary of Complaint: TL* The contact owns a 2016 GMC Yukon. While the vehicle was accelerating from a stop, the transmission shuddered and failed to respond appropriately. The COMPLAINT—CLASS ACTION- 30 KELLER ROHRBACK L.L.P. RPM gauge was erratic and flashed. The vehicle was towed to Marvin K. Brown Auto Center (1441 Camino Del Rio South, Auto Cir, San Diego, CA 92108) where it was determined that a power train warranty provision was not an available option and the manufacturer had not issued a power train recall. The dealer diagnosed that the transmission needed to be replaced. The vehicle remained at the dealer and had not been repaired. The manufacturer was notified of the failure. The VIN was not available. The approximate failure mileage was 130, 268. 2017 GMC Yukon. Complaint Filed: May 15, 2018. NHTSA ID Number: 11093948. Consumer Location: Broken Arrow, OK. (1) Summary of Complaint: Transmission shifts are very rough in slow traffic with as much as one to two second delays in shifting into gear with a loud thump. It is so rough that it feels like someone may have ran into the your back bumper. It is also bad enough that it startles the driver and could be a safety issue. GM is saying that this is normal for this eight speed transmission. If my car, the one I’m driving now, had this same problem I would definitely replace the transmission. This is a 2017 Denali with less than 5000 miles on it. Online there are many complaints about this and it seems that GM is trying to wait the public out now that the new vehicles have a new ten speed transmission. The dealer told me they could not fix the problem and we would have to live with it. Again, this to me is a major safety issue. 2017 GMC Canyon. Complaint Filed: August 1, 2018. NHTSA ID Number: 11066975. Consumer Location: Norman, OK. (1) Summary of Complaint: The GMC 2017 Canyon COMPLAINT—CLASS ACTION- 31 KELLER ROHRBACK L.L.P. vibrates at highway speed 60MPH to 70MPH. The 2nd day after I bought it took it on long trip found it had vibration problems. After taking it to the dealership for tire balance twice replaced front wheel bearing then transmission flush. Then after transmission flush had vibration between 40-45 they said it was normal that there was nothing else they could do. Due to vibrations over time this concerns me. For being stranded or worse causing an accident from something coming loose. I’ve already had to tighten up my spare tire. I bought this pickup for long trips since I’ve retired. Like the one my wife and I are going on in June of this year. I also feel if there going to sell crap like this they need to put the vibration issues on the accessory ‘list so buyers will have the option whether to buy or not. I would have not bought a $40,000.00 vibrator!!! 2018 GMC Canyon. Complaint Filed: December 14, 2018. NHTSA ID Number: 11161458. Consumer Location: New Hill, NC. (1) Summary of Complaint: Rumbling of transmission. Clucky start. GM dealer acknowledges the problem and has tried to repair vehicle. GM says at this time the truck 8 speed transmissions are not fixable b. Consumer Complaints on Internet Forums 42. In addition to NHTSA complaints, consumers have also complained about GM’s defective transmissions on websites dedicated to discussing GM vehicles. On information and belief, GM monitors major forums dedicated to its products and was or should have been aware of these complaints. The complaints below highlight GM’s inability to repair the defect, with one complaint noting that COMPLAINT—CLASS ACTION- 32 KELLER ROHRBACK L.L.P. the “MAIN issue is still not fixed after many many trips to service.” Additionally, one of the consumer complaints below notes that they were told the issues they had with the defective transmission were “NORMAL,” while another says that the dealer told him/her “that all the 8 speed trans act that way.” a. 2015 Cadillac Escalade. September 2016 complaint: We have owned our vehicle since August 2015. We have had problems since the first day. Bad airbags, steering wheel had to be replaced 3 times, steering column replaced, torque converter replaced, front camera replaced. The MAIN issue is still not fixed after many many many trips to Service. There is a rough idle at any stop. The engine idle is so rough that the RPM's bar is moving up and down while the car is stopped. At times it feels like the car is going to shut off. Cadillac is not accepting responsibility and is saying this is NORMAL. So...if you like a rough idle in a $100,000 Luxury vehicle go ahead and buy this SUV. Otherwise, I would suggest you go down the road and find a different luxury vehicle.9 b. 2015 GMC Sierra Denali. March 2016 complaint: I too have a 2015 Denali with the 6.2/8 speed. I brought it into the dealer Monday with a check engine light and 14,140 miles. I bought it new exactly a year ago. It has had some hesitation issues, but otherwise, no major mechanical complaints. The dealer told me they had to reprogram the transmission, which would take an hour 9 Melissa S., Stay Away From This Vehicle, Posting to 2015 Cadillac Escalade – Consumer Review, Edmunds.Com (Sept. 29, 2016, 2:24 PM), https://www.edmunds.com/cadillac/escalade/2015/consumer-reviews/review- 991415092109737984/ (last visited Aug. 8, 2019). COMPLAINT—CLASS ACTION- 33 KELLER ROHRBACK L.L.P. and a half “and if that didn’t fix it you need a new transmission” Are you F inf kidding me? * * * My Denali, since the reflash Monday, suc+s to drive. It makes a lot of noise downshifting between 20 mph and a stop. It clunks, it hesitates, it lunges occasionally, and at 35mph it wants to shift, but it doesn’t. It sputters. F Ing GREAT for 70 thousand bucks. * * *10 c. 2016 Chevrolet Silverado. May 2018 complaint: Well hate to say this, but my 2016 LTZ 6.2L 8spd tranny is at the dealer with an early diagnosis of a transmission failure. I have 34,000 on the ODO. Honestly the transmission when new shifted like butter, and then around 10,000 I started experiencing some hard shifts. Dealer reflashed. Then around 24,000 miles the symptoms re-appeared, they supposedly did the updated re-flash. Took in yesterday at 34,000 miles for routine service, and the transmission was still experiencing hard shifting AND delayed engagement in D or R AND some erratic RPM bounce. It wasn’t all the time, but it was noticeable.11 d. 2016 GMC 1500. September 2017 complaint: Does anybody know if the 2018 model GMC 1500 trucks have upgraded -improved the 8 speed transmissions? My 2016 has only 10000 miles and at the lower speeds it has 10 GinoD, GM 8 speed transmission problems, they are real- lemon law, GM- trucks.com (Mar. 31, 2016), https://www.gm-trucks.com/forums/topic/185580- gm-8-speed-transmission-problems-they-are-real-lemon-law/ (last visited Aug. 8, 2019). 11 Threerun, Comment to Comprehensive 8 speed transmission thread, SILVERADOSIERRA (May 24, 2018, 5:29 PM), https://www.silveradosierra.com/transmission/comprehensive-8-speed- transmission-thread-t488418-20.html (last visited Aug. 8, 2019). COMPLAINT—CLASS ACTION- 34 KELLER ROHRBACK L.L.P. always shifted funny and sometimes hard. Out on the highway it shifts good in the higher gears. I have to let it warm up alittle or it jumps into gear. I was going up the driveway the other day and the transmission just quit for a second and jumped back into gear. I have contacted the dealer but he says that all the 8 speed trans act that way. Wish now that I would have stayed with the 6 speed trans as my 2014 Tahoe has never given me a problem and shifts smooth.12 e. 2016 Chevrolet Corvette. October 2016 complaint: Many owners of 2016 Chevrolet Corvettes (some 2015’s) are reporting on various internet sites IE: Corvette Forum. Stingray Forum, that their new Corvettes, primarily base models with automatic transmissions produce a ‘WARBLE’ type noise at exactly 1500 RPM under light throttle load , as when going up a slight grade. I am one of said owners. Go to these internet sites and look up 'WARBLE' and even view the video / audio of the issue / complaint. Currently I understand that owners are invoking the lemon law process; GM ‘supposedly’ has taken back vehicle (s). Basically there is no proven correction at this time. I too have contacted GM and like many others, I was given a “case number”. It's been awhile; GM has been involved deeply; taken cars back in exchange...under pretense of studying them. However; GM IS REMAINING VERY QUIET about this serious issue. WHY ? Dealing with this corporation; their possibly covert approach to this serious matter will make GM owners uncomfortable...if they care to listen. Meanwhile, my C7 Stingray, auto has had the differential 12 johnnyo, Comment to Thread: 2018 8 speed transmissions, GM INSIDE NEWS (Sept. 12, 2017, 8:41 AM), https://www.gminsidenews.com/forums/f22/2018-8- speed-transmissions-278401/ (last visited Aug. 8, 2019). COMPLAINT—CLASS ACTION- 35 KELLER ROHRBACK L.L.P. changed; a improvement is noted but the “WARBLE” goes on.................. and on.....................!13 f. 2017 GMC Canyon. September 2018 complaint: Save your money and buy something else. The seriously flawed 8 speed transmission will leave shuddering and vibrating due to a faulty torque convertor design. It feels like you are driving over rumble strips. Worse yet, when you accelerate the transmission bogs down and is a serious safety issue. GM is clueless. I understand they may have a new design torque convertor but you are put on a waiting list. Meanwhile, makes you wonder what all in the transmission is being damaged as they will not pay for a loaner vehicle until the parts come in, even under their own warranty. So you simply drive the piece of junk and hope for the best.14 g. 2017 Chevrolet Silverado 1500. September 2017 complaint: I found hundreds of complaints about a transmission slip, bump feeling when starting to drive or slowing to a stop with no solutions or suggestions. Took it in last week for the third time and after hearing the previous 2 times that it was a “programming issue” they told me it might be the drive shaft. When I went to pick it up at Chevy they told me the drive shaft was fine and gave me the following bulletin (#PIT5161F). Basically states that if you do not have a full or empty tank - the shifting in fuel can cause these 13 Devildog, It’s another “WARBLER”, Posting to 2016 Chevrolet Corvette – Consumer Review, Edmunds.Com (Oct. 21, 2016, 12:09 PM), https://www.edmunds.com/chevrolet/corvette/2016/consumer-reviews/review- 1007291984319881216/ (last visited Aug. 8, 2019). 14 Jim Hendersonville, Flawed 8 speed transmission design, Comment to Consumer Reviews: 2017 GMC Canyon, Cars.com (Sept. 13, 2018), https://www.cars.com/research/gmc-canyon-2017/consumer-reviews/ (last visited Aug. 8, 2019). COMPLAINT—CLASS ACTION- 36 KELLER ROHRBACK L.L.P. characteristics. So here I am thinking that I have a $56,000 truck (high country 4x4) with no rear a/c and now I have to deal with a feeling of getting rear ended if I do not have a full tank of gas. Rear AC - my fault for not noticing...but not sure how GM thinks this gas tank issue is acceptable. Its a truck that weighs over 5,000 lbs and a couple hundred pounds of gas “shifting” can make it feel like it has transmission issues. Owned it about a year and has 15,000 miles on it. Wish I could just return it at this point.15 2. GM’s Service Bulletins Demonstrate that GM Had Knowledge of the Defective Transmissions as Early as September 1, 2014. 43. As early as 2014, GM knew or should have known that the 8L90 and 8L45 transmissions were defective. That is evidenced by GM’s issuing of numerous “service bulletins” related to the defective transmissions, at least one of which— PIP5405, issued in June 2016—noted that the vehicles were “operating as [d]esigned.”16 Service bulletins, or “technical service bulletins” (“TSB”), are issued by manufacturers to vehicle dealers, but not to customers. 44. GM’s first service bulletin relating to its defective transmissions was issued in September 2014. It wouldn’t be the last: from September 2014 through 15 Brian S., Silverado High Countrys V8, Comment to Surges and Jerks: 2017 Chevrolet Silverado 1500, CarComplaints.com (Sep. 1, 2017), https://www.carcomplaints.com/Chevrolet/Silverado_1500/2017/transmission/sur ges_and_jerks.shtml (last visited Aug. 8, 2019). 16 Service Bulletin No. PIP5405, GM, Surge Misfire Feeling Sensation During Highway Steady State Driving (June 2016), https://static.nhtsa.gov/odi/tsbs/2016/SB-10080566-2280.pdf (last visited Aug. 8, 2019). COMPLAINT—CLASS ACTION- 37 KELLER ROHRBACK L.L.P. February 2019, GM issued over 60 service bulletins relating to these defective transmissions. These bulletins attempted to address various consumer complaints regarding the dangerous problems of shuddering, jerking, hard shifting, and delays in acceleration or deceleration in models equipped with GM’s defective transmissions. These bulletins attempted piecemeal fixes to the defective transmissions. Some bulletins were themselves “updated” over 10 times. Unfortunately for Class members, none of GM’s proposed “fixes” actually or permanently fixed the defective transmissions. 45. GM’s extensive knowledge of the defective transmissions, and multiple failed efforts to “fix” them, is captured in the following table. The table includes numerous GM service bulletins and their numbers, the GM models to which they applied, the likely date of issue, and the issues/complaints, recommended repairs (if any), relevant updates, and warranty information.17 It also notes GM’s directions in June 2016’s PIP5405, that complaints related to “surging” and “unexpected 17 Relevant GM service bulletin acronyms and codes include: • RPO: Stands for Regular Production Option and is GM’s standard coding for vehicle configuration options. • M5U, M5X, or M5E: GM’s service bulletins refer to the 8L90 transmission at issue by name (8L90), by RPO code (M5U, M5X, or M5E), or by both name and RPO code(s). • M5T or M5N: GM’s service bulletins refer to the 8L45 transmission at issue by name (8L45), by RPO code (M5T or M5N), or by both name and RPO code(s). COMPLAINT—CLASS ACTION- 38 KELLER ROHRBACK L.L.P. acceleration” meant that the vehicles were “operating as [d]esigned,” and that, if the problem was widespread enough, it should be considered “normal”18: Service Bulletin Number and Issue(s)/Complaint(s), Recommended Applicable GM Models Likely Date GM Issued Repair (if any), Relevant Updates, Bulletin and Warranty Information PIP5200 July 21, 2014 Defective Transmission Part Restriction: “The 8L90 8 Speed Automatic Transmission is on restriction through GM PQC as part of our ongoing quality improvement efforts to assist Engineering with product concern identification effective on 07/01/2014.” 11 Updates: GM issued 11 updates to this bulletin from July 2014 through April 2016. 14-07-30-001 September 1, 2014 • 2015 Cadillac Escalade, 2015 Cadillac Escalade ESV, 2015 Chevrolet Corvette, and 2015 GMC Yukon Harsh Shifting: Noted that “[s]ome customers may comment on low mileage vehicles with automatic transmission that shift feel to be too firm (harsh) or may slip or flare. Customers should be advised that the transmission makes use of an adaptive function that will help to refine the shift feel while driving and improve shift quality.” Recommended Repair: Included description of transmission’s “adaptive learning functions” and a section titled “How to Adapt Your Transmission,” which contained GM’s instructions to train the adaptive learning process to deal with “a concern with a 1-2 upshift” and “a concern with a 3-1 coastdown (closed throttle) shift.” 18 Service Bulletin No. PIP5405, GM, Surge Misfire Feeling Sensation During Highway Steady State Driving (June 2016), https://static.nhtsa.gov/odi/tsbs/2016/SB-10080566-2280.pdf (last visited Aug. 8, 2019). COMPLAINT—CLASS ACTION- 39 KELLER ROHRBACK L.L.P. Service Bulletin Number and Issue(s)/Complaint(s), Recommended Applicable GM Models Likely Date GM Issued Repair (if any), Relevant Updates, Bulletin and Warranty Information Seven Updates: GM issued seven updates to this bulletin from October 2014 through October 2018. 14876 December 2014 • 2015 Cadillac Escalade, Cadillac Escalade ESV, 2015 Chevrolet Corvette, 2015 Chevrolet Silverado Double Cab and Crew Cab, 2015 GMC Sierra Double Cab and Crew Cab, 2015 GMC Yukon and 2015 GMC Yukon XL Hard Shifting: Regarded customer complaints related to “hard shifting,” stating that “the customer may complain about harsh shifting. This can occur if the vehicle experienced multiple transmission reprogramming events during manufacturing, causing the calibration to over-adjust the shift parameters. This bulletin provides a service adaptive learn procedure that should be run to reset the calibration to the baseline parameters.” 15178 • Vehicles equipped with the April 2015 Recommended Repair: Directed dealers to perform service updates for inventory vehicles. 8-speed transmission (M5U) 15216 • Vehicles equipped with May 2015 Announced “Customer Satisfaction Program” “to replace two u-joint retainers and four u-joint retainer bolts with new bolts that include an adhesive patch”. 6.2L Engine (RPO L86) and 8-speed Automatic Transmission (RPO M5U), including the 2015 Cadillac Escalade, Escalade ESV, 2015 Chevrolet Silverado LD Crew and Double Cab, 2015 GMC Sierra LD Crew and Double Cab, Yukon, and Yukon XL 15-NA-007 September 15, 2015 • 2015 Cadillac Escalade, 2015 Chevrolet Silverado, 2015 GMC Sierra, and 2015 GMC Yukon Multiple Issues: Noted that “[f]irm garage shifts, Park to Drive or Park to Reverse after the vehicle has be [sic] sitting for several hours with the engine off,” a clunking noise when the engine starts, and/or an illuminated malfunction COMPLAINT—CLASS ACTION- 40 KELLER ROHRBACK L.L.P. Service Bulletin Number and Issue(s)/Complaint(s), Recommended Applicable GM Models Likely Date GM Issued Repair (if any), Relevant Updates, Bulletin and Warranty Information lamp relating to diagnostic transmission code P16F3. Three Updates: GM issued three updates to this bulletin from September 2015 through January 2016. PIP5337 October 13, 2015 • 2015-2016 Cadillac Escalade, 2015-2016 Cadillac Escalade ESV, 2015-2016 Chevrolet Silverado, 2015-2016 GMC Sierra, 2015-2016 GMC Yukon, and 2015- 2016 GMC Yukon XL Shuddering: Advised service technicians that customers may report “[e]xcessive engine RPM fluctuation” and “[a] shudder feeling that may be described as driving over rumble strips or rough pavement.” No Recommended Repair: GM’s bulletin included no diagnostic or repair procedures, but merely stated, “These conditions may be caused by an internal torque converter issue. A revised torque converter that addresses these conditions will be available soon.” 11 Updates: GM issued 11 updates to this bulletin from January 2016 through October 2018, which added more vehicles and recommended various procedures, e.g., including flushing or replacing transmission fluid. PIE0353 February 11, 2016 • 2016 Chevrolet Silverado Shaking or Shuddering: Addressed consumer complaints reporting “a shake or shudder on light acceleration or steady state cruise.” Recommended Repair: Contained instructions to perform different procedures to allow technicians to observe the torque converter clutch slip during the shudder, and explicitly directed the technicians to contact GM engineers listed on the bulletin. COMPLAINT—CLASS ACTION- 41 KELLER ROHRBACK L.L.P. Service Bulletin Number and Issue(s)/Complaint(s), Recommended Applicable GM Models Likely Date GM Issued Repair (if any), Relevant Updates, Bulletin and Warranty Information GM stated that “GM Engineering is attempting to determine the root cause of the above condition. Engineering has a need to gather information on vehicles PRIOR to repair that may exhibit this condition. As a result, this information will be used to ‘root cause’ the customer’s concern and develop/validate a field fix.” Warranty Info: The bulletin also included a “Warranty Information” section with Labor Operation code 8480428. 16-NA-014 January 21, 2016 • 2015-2016 Cadillac Escalade, 2016 Cadillac Escalade ESV, 2016 Cadillac ATS, 2016 Cadillac CTS, 2015-2016 Chevrolet Corvette, 2015- 2016 Chevrolet Silverado, 2015-2016 GMC Sierra, 2015-2016 GMC Yukon and 2015-2016 GMC Yukon XL Delayed Engagement: Stated that “[s]ome customers may comment on a condition of delayed engagement when the transmission is shifted from Park to Reverse or Park to Drive after the vehicle has been sitting with the engine off. This condition may typically occur after several hours or more commonly overnight.” Recommended Repair: GM recommended technicians “[i]nstall a new stator shaft support assembly.” Three Updates: GM issued at least three updates to this bulletin from April 2016 through November 2016, adding additional parts, complaint types, vehicles, and recommended fixes. 16-NA-019 January 25, 2016 • All 2016 passenger cars and trucks under the Buick, Cadillac, Chevrolet, or GMC brands equipped with 8L90 or 8L45 automatic transmissions Harsh Shifting, Slips, or Flares: Stated “[s]ome may comment on low mileage vehicles with an automatic transmissions [sic] that they shifting may feel too firm (harsh), slips, or flares. Customers should be advised that the transmission makes use of an adaptive function that will help to refine COMPLAINT—CLASS ACTION- 42 KELLER ROHRBACK L.L.P. Service Bulletin Number and Issue(s)/Complaint(s), Recommended Applicable GM Models Likely Date GM Issued Repair (if any), Relevant Updates, Bulletin and Warranty Information the shift feel while driving and improve shift quality.” Recommended Repair: Bulletin also included description of transmission’s adaptive learning functions and instructions for resetting and “relearning” transmission adapts. Update: GM updated this bulletin August 2016 to add 2017 model year information and additional instruction to technicians. Warranty Info: Like PIE0353 and later versions of 14-07-30-001, this bulletin update included a “Warranty Information” section with a specific Labor Operation code. 16-NA-175 • Models built after November 1, 2015, that were equipped with a 5.3L or 6.2L engine and equipped with 8L90 transmissions, including the 2016 Cadillac Escalade, 2016 Chevrolet Silverado, 2016 GMC Sierra, and 2016 GMC Yukon May 31, 2016 Shudder: Advised service technicians that customer may report a “shudder feeling” akin to driving over rumble strips. Recommended Repair: Included procedures to diagnose and service the shudder issue, including detailed instructions for flushing the transmission several times and cleaning “the pan/magnet if any metallic particles present and replac[ing] filter if debris is found[.]” 13 Updates: GM issued 13 updates to this bulletin from June 2016 through February 2019. Warranty Info: Like PIE0353 and later versions of 14-07-30-001, this bulletin update included a “Warranty COMPLAINT—CLASS ACTION- 43 KELLER ROHRBACK L.L.P. Service Bulletin Number and Issue(s)/Complaint(s), Recommended Applicable GM Models Likely Date GM Issued Repair (if any), Relevant Updates, Bulletin and Warranty Information Information” section with a specific Labor Operation code. PIP5405 • 2015-2016 Cadillac Escalade, 2016 Cadillac CTS-V, 2014-2016 Chevrolet Corvette, 2014- 2016 Chevrolet Silverado, 2016 Chevrolet Camaro, 2015-2016 Chevrolet Tahoe, 2015-2016 Chevrolet Suburban, 2014- 2016 GMC Sierra, 2015- 2016 GMC Yukon, and 2015-2016 GMC Yukon XL June 2, 2016 Surge or Unexpected Acceleration: Advised technicians that customers may report: “[a] concern of surge misfire feeling sensation during highway steady state driving in manual mode or automatic, typically 6th, 7th, 8th gear accelerating 1000 to 2500 rpm under load. TCC engaged, no misfire data or P0300 codes present.” No Recommended Repair: GM stated that if these symptoms are presented, the vehicle “is operating as [d]esigned.” GM further advised that “[t]he normal operation of engines and transmissions generate various vibrations and engine and transmission mounts try to isolate those vibrations from the rest of the vehicle. While the mounts do a great job of isolating most vibrations there may still be certain engine loads and rpm's that generate vibrations that customers may feel in the vehicle. Changes in engine load or rpm will change the vibrations produced making it more or less apparent to occupants in the vehicle. When issues of this nature are encountered, like equipped vehicles should be compared, and if consistent results are identified, this should be considered a ‘normal’ characteristic of the vehicle.” Update(s): GM updated this bulletin twice: First on June 6, 2016, adding additional vehicle models: 2014-2016 Chevrolet Corvette, 2016 Chevrolet Camaro, and 2016 Cadillac CTS-V; COMPLAINT—CLASS ACTION- 44 KELLER ROHRBACK L.L.P. Service Bulletin Number and Issue(s)/Complaint(s), Recommended Applicable GM Models Likely Date GM Issued Repair (if any), Relevant Updates, Bulletin and Warranty Information second on December 12, 2016, expanding the bulletin to 2017 models for the Corvette, Camaro, and Cadillac CTS-V. 16-NA-213 • Vehicles built between June 28, 2016 Harsh Shifting: Noted “there may be more than one shift that is harsh” and that transmissions with “a suspect Clutch Control Solenoid” should have the valve body replaced. July 1, 2015 to September 14, 2015, including the 2015-2016 Cadillac Escalade, 2015-2016 Cadillac ATS, ATS V, CTS, CTS V, 2015-2016 Chevrolet Corvette, 2015- 2016 Chevrolet Silverado, and 2015-2016 GMC Sierra PIP5437 November 8, 2016 • 2015-2016 Cadillac Escalade, 2016 Cadillac Escalade ESV, 2016 Cadillac ATS, ATS-V, CTS, and CTS-V, 2015- 2017 Chevrolet Corvette, 2015-2017 Chevrolet Silverado, 2016-2017 Chevrolet Camaro, 2015- 2017 GMC Sierra, and 2015-2017 GMC Yukon Shift Problems and Transmission Debris Recommended Repair: Directed technicians to use software to identify the shift problems and to perform a drive learn procedure on low-mileage vehicles. On higher mileage vehicles, the bulletin instructed technicians to remove the transmission fluid pan and inspect for debris. Technicians were further instructed, “if debris is found the transmission should be disassembled for root cause and repairs. If excessive debris is not found the valve body should be replaced.” Update: GM updated the bulletin in November 2016, to cover additional vehicles. 16-NA-411 January 20, 2017 Multiple Issues: Addressed consumer comments on the following conditions: • 2015-2016 Cadillac • Harsh 1-2 upshift (except for the Escalade, 2015-2016 Chevrolet Silverado, 2015- first 1-2 upshift of the day) COMPLAINT—CLASS ACTION- 45 KELLER ROHRBACK L.L.P. Service Bulletin Number and Issue(s)/Complaint(s), Recommended Applicable GM Models Likely Date GM Issued Repair (if any), Relevant Updates, Bulletin and Warranty Information • Harsh 3-1 downshift when de- 2016 GMC Sierra, and 2015-2016 GMC Yukon accelerating to a stop • Harsh downshift under heavy throttle apply • Active Fuel Management (AFM) V4 to V8 transmission harshness • Coast down downshifts No Recommended Repair: Acknowledged that “[t]he new ECM and TCM software will not improve the following conditions and should not be installed for any of the following conditions”, including: • Shift quality of the first 1-2shift of the day • Power-On lift foot upshifts (Heavy throttle application followed by a closed throttle application which results in a transmission up shift) • Delayed/slow engagement (Refer to Bulletins 16-NA-014 and 16-NA-364) • TCC Shudder (Refer to PIP5337 and Bulletin 16-NA-175) • Engine or Chassis induced vibrations • Fuel Economy 16-NA-404 April 7, 2017 Multiple Issues: Addressed consumer complaints reporting: • 2017 Cadillacs ATS and • Harsh shift • Delayed shift • Unwanted downshift • Transmission stuck in one gear • Erratic shifting • Hesitation between shifts CTS built before December 6, 2016; 2017 Cadillacs CT6 (Excluding RPO I16) built before November 17, 2016; 2017 Cadillacs Escalade built before December 16, 2016; COMPLAINT—CLASS ACTION- 46 KELLER ROHRBACK L.L.P. Service Bulletin Number and Issue(s)/Complaint(s), Recommended Applicable GM Models Likely Date GM Issued Repair (if any), Relevant Updates, Bulletin and Warranty Information • MIL illuminated Recommended Repair: Contained instructions to dealers to reprogram the Transmission Control Module with another software update. 2017 Chevrolet Camaro built before December 6, 2016; 2017 Chevrolet Corvette built before December 8, 2016; 2017 Chevrolet Silverado built before December 16, 2016; 2017 Chevrolet Suburban (excluding RPO I16) built before December 16, 2016; 2017 Chevrolet Tahoe (Excluding RPO I16) built before December 16, 2016 • Vehicles built before December 16, 2016 and equipped with automatic 8L90 transmissions, including the: 2017 GMC Sierra and 2017 GMC Yukon (excluding RPO I16) PIE0405 • Vehicle models equipped with transmissions 8L90 (M5U, M5X) and 8L45 (M5T, M5N), for model years 2017 with VINs beginning on March 1, 2017, including the Cadillac ATS, CT6, CTS, Cadillac Escalade, Chevrolet Camaro, Chevrolet Colorado, Chevrolet Corvette, Chevrolet Silverado, GMC Canyon, GMC Sierra, and GMC Yukon April 7, 2017 Shudder Recommended Repair: Contained instructions for technicians to perform different procedures to observe the torque converter clutch slip during the shudder, explicitly directing the technicians to contact GM engineers listed on the bulletin. GM stated that “GM Engineering is attempting to determine the root cause of the above condition. Engineering has a need to gather information on vehicles PRIOR to repair that may exhibit this condition. As a result, this information will be used to ‘root cause’ the customer's concern and develop/validate a field fix.” COMPLAINT—CLASS ACTION- 47 KELLER ROHRBACK L.L.P. Service Bulletin Number and Issue(s)/Complaint(s), Recommended Applicable GM Models Likely Date GM Issued Repair (if any), Relevant Updates, Bulletin and Warranty Information Three Updates: GM updated the bulletin three times from September 2017 through January 2018. Warranty Info: The bulletin included a “Warranty Information” section with Labor Operation code 8480428. 16-NA-361 • 2016-2017 Cadillac ATS and CTS, 2016-2017 Cadillac CT6, 2016-2017 Cadillacs Escalade models, 2016-2017 Chevrolet Camaro, 2016-2017 Chevrolet Colorado (VIN S, T), 2015-2017 Chevrolet Corvette, 2017 Chevrolet Silverado, 2017 Chevrolet Express, 2017 GMC Canyon, 2017 GMC Savana, 2015-2017 GMC Sierra and 2015-2017 GMC Yukon July 21, 2017 Harsh Shifting: Addressed consumer complaints reporting “that the transmission exhibits a harsh 1-2 shift on the first shift of the day, typically under light throttle.” No Repair Recommended: Identified the cause of these reported conditions as “due to the initial clutch fill time of the 2-3-4-6-8 (C4) clutch.” GM did not include a diagnostic or repair procedure. Instead, it advised: “Important: Replacing transmission components or complete assemblies will not improve the condition.” GM alleged that “[t]his condition will not impact the designed performance or reliability of the vehicle.” PIP5526 October 16, 2017 Defective Transmissions Part Restrictions: Part restriction on the 8L45 and 8L90 8-Speed Transmission Park Pawl Actuator Rod. Restriction ended in March 2018. 18-NA-177 • Vehicle models built June 5, 2018 Shudder Recommended Repair: Directed technicians to determine whether the vibration was “TCC [torque converter clutch] Shudder” using picoscope and NVH software. If the cause of the vibration was TCC shudder, technicians before June 1, 2018 equipped with 8L45 transmissions (M5T), including the 2017-2018 Chevrolet Colorado and 2017-2018 GMC Canyon COMPLAINT—CLASS ACTION- 48 KELLER ROHRBACK L.L.P. Service Bulletin Number and Issue(s)/Complaint(s), Recommended Applicable GM Models Likely Date GM Issued Repair (if any), Relevant Updates, Bulletin and Warranty Information were directed to replace the torque converter assembly, as well as the transmission pan and filter. Warranty Info: like PIE0353 and later versions of 14-07-30-001, this bulletin update included a “Warranty Information” section with a specific Labor Operation code. 18-NA-235 September 11, 2018 • 2015-2017 Cadillac Surge, Chuggle, Misfire, Fishbite, and Shudder: Addressed customer complaints of a surge, chuggle, misfire, fishbite, and shudder while driving at a steady sped between 35 and 55 MPH with light steady throttle conditions. No Repair Recommended: GM stated that “[i]f TCC slip is steady and there are no misfires, the condition should be considered characteristic of the vehicle and no repairs should be attempted.” Escalade with 6.2L engines and 8L90 (M5U) transmissions; 2015-2018 Chevrolet Silverado with 5.3 (L83) and 6.2 (L86) engines and 8L90 (M5U, M5X) transmissions; 2019 Silverado 1500 (new models) with 5.3 (L84) engines and 8L90 (MQE) transmissions; 2019 Chevrolet Suburban with 5.3 (L83) and 6.2 (L86) engines and 8L90 (M5U) transmissions; 2018-2019 Chevrolet Tahoe with 5.3 (L83) and 6.2 (L86) engines and 8L90 (M5U) transmissions; 2015-2018 GMC 18-NA-356 November 20, 2018 • 2015-2018 Chevrolet Recommended Repair: Recommended correction was to “install a tapered shim between the axle and leaf spring to adjust the angle” using the procedure in the bulletin. Colorado and 2015-2018 GMC Canyon with 3.6L (RPO LGZ) engines and 8L45 (RPO M5T) transmissions COMPLAINT—CLASS ACTION- 49 KELLER ROHRBACK L.L.P. 3. GM Knew or Should Have Known of the Defect as a Result of Trade Publications’ Well-Publicized Criticisms of the Defective Transmissions 46. Trade publications that criticized GM’s defective transmissions also put GM on notice about the problem. Both Motortrend.com and GMauthority.com published pieces criticizing GM’s defective transmissions: a. Motor Trend: Motortrend.com reported the following issues regarding the Chevrolet Silverado: And now’s about the time we get to the part where I tell you why the Silverado could do with another 10 minutes in the oven, so to speak. Simply put, test numbers aside, we were unimpressed by how the Silverado’s volume 5.3-liter DFM V-8 and its eight-speed automatic performed. We’re disappointed to find that GM didn’t fix the old 5.3’s biggest flaws: its sloppy throttle response at low speeds and its transmission’s overeagerness to get to its top gear. The truck feels powerful enough once it’s moving, but getting there is frustrating. “The engine has power, but it’s being tag-teamed by the unholy GM duo of a lazy throttle pedal and a transmission that hates to downshift,” features editor Scott Evans said. “Every time you want to move, you’ve got to get deep into the throttle before anything useful happens. The shifts aren’t as smooth as the 10-speed automatic, either, so you notice every time it’s forced to drop two gears to maintain speed up a hill.” The 6.2-liter V-8 and its 10-speed auto, which is only available as an option on the top-level Silverado LTZ and Silverado High Country, improves things immensely. The big V-8 has plenty of power on tap, and it sounds especially great when you bury your foot into the throttle. The 10-speed automatic is worlds better than the eight-speed, too. It feels modern and well sorted—basically the polar opposite of the eight-speed automatic. Its shifts are seamless and nearly unnoticeable, and it COMPLAINT—CLASS ACTION- 50 KELLER ROHRBACK L.L.P. doesn’t display the hunting behavior of the other transmission, either.19 b. GM Authority: GMauthority.com also noted the longstanding issues related to the defective transmissions GM used in the Silverado and Sierra models: In prior-generation, K2 platform Silverado and Sierra, the GM 8-speed was often criticized for its jerky and unexpected shifting behavior that ultimately worsened the satisfaction of driving and/or riding in the pickup. Whether the improvements made to the 8-speed gearbox in the all-new T1 platform 2019 Sierra and Silverado will address these issues is unknown.20 47. Based on the above trade publications, GM knew or should have known about its defective transmissions. GM’s knowledge, or the knowledge GM should have had about its defective transmissions, is even more apparent when you consider the extensive customer complaints with the NHTSA and on internet forums and the long history of GM’s service bulletins detailing customer complaints and proposing fixes that never actually fixed the issues with GM’s defective transmissions. 19 Christian Seabaugh, 2019 Chevrolet Silverado First Test: Pencils Down, MotorTrend.com (Sept. 14, 2018), https://www.motortrend.com/cars/chevrolet/silverado-1500/2019/2019-chevrolet- silverado-first-test-review/ (last visited Aug. 8, 2019) (emphases added). 20 Alex Luft, GM 8-Speed Automatic Enhanced For 2019 Silverado, Sierra, GMauthority.com (July 18, 2018), http://gmauthority.com/blog/2018/07/gm-8- speed-automatic-enhanced-for-2019-silverado-sierra/ (last visited Aug. 8, 2019) (emphasis added). COMPLAINT—CLASS ACTION- 51 KELLER ROHRBACK L.L.P. D. GM Instructed Dealership Employees and Technicians to Inform Class Members that Symptoms of the Defective Transmissions Were “Normal” 48. In June 2016, GM issued service bulletin PIP5405.21 This service bulletin told GM technicians that the defective transmissions were “operating as design[ed]” and that “surges” and “unexpected accelerations” should be considered “normal” if they were found to be widespread.22 This was in response to customer reports of a “surge” or “misfire feeling sensation during highway steady state driving in manual mode or automatic, typically 6th, 7th, 8th gear accelerating 1000 to 2500 rpm under load.”23 49. This service bulletin explains why so many consumer complaints make it clear that someone—GM dealers or “service managers”—was telling consumers that their experiences were “normal”: • “Complained to dealer they said it’s normal and there’s no fix for the issue.” 2016 GMC Sierra. Complaint Filed: April 25, 2019. NHTSA ID Number: 11203727. Consumer Location: Arnold, MO.24 21 Service Bulletin No. PIP5405, GM, Surge Misfire Feeling Sensation During Highway Steady State Driving (June 2016), https://static.nhtsa.gov/odi/tsbs/2016/SB-10080566-2280.pdf (last visited Aug. 8, 2019). 22 Id. 23 Id. 24 Safety Issues & Recalls, NHTSA, https://www.nhtsa.gov/recalls (last visited Aug. 8, 2019). COMPLAINT—CLASS ACTION- 52 KELLER ROHRBACK L.L.P. • “Service manager said it was normal.” 2019 GMC Sierra. Complaint Filed: April 25, 2019. NHTSA ID Number: 11203684. Consumer Location: Lenoir, NC.25 • “GM is saying that this is normal for this eight speed transmission.” 2017 GMC Yukon. Complaint Filed: May 15, 2018. NHTSA ID Number: 11093948. Consumer Location: Broken Arrow, OK.26 • “Then after transmission flush had vibration between 40-45 they said it was normal that there was nothing else they could do.” 2017 GMC Canyon. Complaint Filed: August 1, 2018. NHTSA ID Number: 11066975. Consumer Location: Norman, OK.27 • “Cadillac is not accepting responsibility and is saying this is NORMAL.”28 50. Service bulletin PIP5405 also explains why Plaintiff Norvell was told by a GM employee or service technician that his truck’s jolting, lurching, and jerking were “normal” and that the problem would “resolve itself” after a break-in period. E. The Defective Transmissions Are Covered by GM’s Warranty 51. Class Vehicles that were newly purchased were covered by both GM’s New Vehicle Limited Warranty and Powertrain Component Warranty,29 which 25 Id. 26 Id. 27 Id. 28 Melissa S., Stay Away From This Vehicle, Posting to 2015 Cadillac Escalade – Consumer Review, Edmunds.Com (Sept. 29, 2016, 2:24 PM), https://www.edmunds.com/cadillac/escalade/2015/consumer-reviews/review- 991415092109737984/ (last visited Aug. 8, 2019). 29 Complete warranty terms can be found at 2018 Limited Warranty and Owner Assistance Information, chevrolet.com (2017), COMPLAINT—CLASS ACTION- 53 KELLER ROHRBACK L.L.P. covered the defective transmissions in Class Vehicles because they extended to things like “vehicle defects,” numerous transmission-related repairs, and purported to define the duration and terms of the “implied warranty of merchantability or fitness for a particular purpose applicable to this vehicle.” 52. The relevant terms of the New Vehicle Limited Warranty include: Bumper-to-Bumper (Includes Tires): Coverage is for the first 3 years or 36,000 miles, whichever comes first.30 Warranty Applies: This warranty is for [GM] vehicles registered in the United States and normally operated in the United States, and is provided to the original and any subsequent owners of the vehicle during the warranty period.31 Repairs Covered: The warranty covers repairs to correct any vehicle defect, not slight noise, vibrations, or other normal characteristics of the vehicle due to materials or workmanship occurring during the warranty period. Needed repairs will be performed using new, remanufactured, or refurbished parts.32 No Charge: Warranty repairs, including towing, parts, and labor, will be made at no charge.33 Obtaining Repairs: To obtain warranty repairs, take the vehicle to a Chevrolet dealer facility within the warranty period and request the needed repairs. Reasonable time https://www.chevrolet.com/content/dam/chevrolet/na/us/english/index/owners/war ranty/02-pdfs/2018-chevrolet-limited-warranty-and-owner-assistance- information.pdf (last visited Aug. 8, 2019). 30 Id. at 4. 31 Id. 32 Id. 33 Id. COMPLAINT—CLASS ACTION- 54 KELLER ROHRBACK L.L.P. must be allowed for the dealer to perform necessary repairs.34 Warranty Period: The warranty period for all coverages begins on the date the vehicle is first delivered or put in use and ends at the expiration of the coverage period.35 53. This warranty states that it does not cover “slight noise, vibrations, or other normal characteristics of the vehicle.”36 This may explain why GM service bulletins characterized the defect’s symptoms as “operating as [d]esigned” and “normal,” because such a characterization would allow GM to avoid covering the repairs under the warranty.37 But the symptoms of the defective transmissions as described by Plaintiffs and in the numerous complaints from other Class members are anything but normal. Moreover, if the operation that these Class members experienced and continue to experience—despite numerous attempts to “fix” them—is as designed, the transmission design is clearly defective. 54. The relevant terms of the Powertrain Component Warranty include: 34 Id. 35 Id. 36 Id. 37 See, e.g., Service Bulletin No. PIP5405, GM, Surge Misfire Feeling Sensation During Highway Steady State Driving (June 2016), https://static.nhtsa.gov/odi/tsbs/2016/SB-10080566-2280.pdf (last visited Aug. 8, 2019). COMPLAINT—CLASS ACTION- 55 KELLER ROHRBACK L.L.P. Powertrain Component Warranty Coverage: Coverage is provided for 5 years or 60,000 miles, whichever comes first.38 Transmission/Transaxle Coverage includes: All internally lubricated parts, case, torque converter, mounts, seals, and gaskets as well as any electrical components internal to the transmission/transaxle. Also covered are any actuators directly connected to the transmission (slave cylinder, etc.). Exclusions: Excluded from the powertrain coverage are transmission cooling lines, hoses, radiator, sensors, wiring, and electrical connectors. Also excluded are the clutch and pressure plate as well as any Transmission Control Module and/or module programming.39 Other Terms: This warranty gives you specific legal rights and you may also have other rights which vary from state to state. GM does not authorize any person to create for it any other obligation or liability in connection with these vehicles. Any implied warranty of merchantability or fitness for a particular purpose applicable to this vehicle is limited in duration to the duration of this written warranty. Performance of repairs and needed adjustments is the exclusive remedy under this written warranty or any implied warranty. GM shall not be liable for incidental or consequential damages, such as, but not limited to, lost wages or vehicle rental expenses, resulting from breach of this written warranty.40 38 2018 Limited Warranty and Owner Assistance Information, chevrolet.com 4 (2017), https://www.chevrolet.com/content/dam/chevrolet/na/us/english/index/owners/wa rranty/02-pdfs/2018-chevrolet-limited-warranty-and-owner-assistance- information.pdf (last visited Aug. 8, 2019). 39 Id. at 5. 40 Id. at 13. COMPLAINT—CLASS ACTION- 56 KELLER ROHRBACK L.L.P. 55. GM’s warranty terms thus cover the defective transmissions in Class Vehicles. V. CLASS ACTION ALLEGATIONS A. Class Definitions 56. Pursuant to Rules 23(a), (b)(2), and (b)(3) of the Federal Rules of Civil Procedure, Plaintiffs brings this action on behalf of themselves and the Nationwide Class, defined as: All persons or entities in the United States (including its territories and the District of Columbia) who purchased or leased a Class Vehicle. 57. In addition to the Nationwide class, and pursuant to Federal Rules of Civil Procedure Rule 23(c)(5), Plaintiffs seeks to represent the following State Classes as well as any subclasses or issue classes as Plaintiffs may propose and/or the Court may designate at the time of class certification: Georgia: All persons or entities in the state of Georgia who purchased or leased a Class Vehicle. Kentucky: All persons or entities in the state of Kentucky who purchased or leased a Class Vehicle. North Carolina: All persons or entities in the state of North Carolina who purchased or leased a Class Vehicle. Tennessee: All persons or entities in the state of Tennessee who purchased or leased a Class Vehicle. Texas: All persons or entities in the state of Texas who purchased or leased a Class Vehicle. COMPLAINT—CLASS ACTION- 57 KELLER ROHRBACK L.L.P. 58. The following persons and entities are excluded from the Nationwide and State Classes: Defendant; any entity or division in which Defendant has a controlling interest; Defendant’s—or any entity or division in which Defendant has a controlling interest’s—legal representatives, officers, directors, assigns, and successors; the judge to whom this case is assigned and the judge’s staff; (5) any judge sitting in the presiding state and/or federal court system who may hear an appeal of any judgment entered; and (6) any persons who have suffered personal injuries as a result of the facts alleged herein. Plaintiffs reserve the right to amend the Nationwide and State Class definitions if discovery and further investigation reveal that the Classes should be expanded or otherwise modified. 59. This action has been brought and may be properly maintained on behalf of each of the Classes proposed herein under Federal Rule of Civil Procedure 23. B. Class Certification Requirements 60. Certification of Plaintiffs’ claims for classwide treatment is appropriate because Plaintiffs and Class members were injured by GM’s defective transmissions as detailed above. 61. Numerosity: Rule 23(a)(1). The members of the Classes are so numerous and geographically dispersed that individual joinder of all Class members is impracticable. While Plaintiffs are informed and believe that there are hundreds of thousands, if not millions, of members of the Class, the precise number of Class COMPLAINT—CLASS ACTION- 58 KELLER ROHRBACK L.L.P. members is unknown to Plaintiffs. However, the precise number of Class members may be ascertained from the Defendant’s books and records. Class members may be notified of the pendency of this action by recognized, Court-approved notice dissemination methods, which may include U.S. Mail, electronic mail, internet postings, and/or published notice. 62. Commonality and Predominance: Rules 23(a)(2) and 23(b)(3). This action involves common questions of law and fact that predominate over any questions affecting individual Class members, including without limitation: a. Whether GM designed, advertised, marketed, distributed, leased, sold, or otherwise placed Class Vehicles into the stream of commerce in the United States; b. Whether the Class Vehicles’ transmissions—the GM 8L45 and 8L90—are defective; c. Whether these defective transmissions created an unreasonable safety risk for Class members who purchased or leased Class Vehicles; d. Whether and when GM knew or reasonably should have known of Class Vehicles’ defective transmissions and the unreasonable safety risk they created; e. Whether GM had and has a duty to disclose the defective nature of the Class Vehicles’ transmissions; COMPLAINT—CLASS ACTION- 59 KELLER ROHRBACK L.L.P. f. Whether GM fraudulently concealed the defective nature of the Class Vehicles’ transmissions; g. Whether GM’s conduct violates consumer protection statutes of the various states alleged hereinunder; h. Whether GM’s conduct breached its express and implied warranties; i. Whether GM was unjustly enriched as a result of the conduct alleged herein; j. Whether Plaintiffs and Class members are entitled to injunctive or other equitable relief; k. Whether Plaintiffs and Class members overpaid for their Class Vehicles; and l. Whether Plaintiffs and Class members are entitled to damages and/or other monetary relief and, if so, in what amount. 63. Typicality: Rule 23(a)(3). Plaintiffs’ claims are typical of the other Class members’ claims because, among other things, all Class members were comparably injured through GM’s wrongful conduct as described above. 64. Adequacy: Rule 23(a)(4). Plaintiffs are adequate Class representatives because their interests do not conflict with the interests of the other members of the Classes that Plaintiffs seeks to represent; Plaintiffs have retained counsel competent COMPLAINT—CLASS ACTION- 60 KELLER ROHRBACK L.L.P. and experienced in complex class action litigation of this kind; and Plaintiffs intend to prosecute this action vigorously. The Classes’ interests will be fairly and adequately protected by Plaintiffs and their counsel. 65. Declaratory and Injunctive Relief: Rule 23(b)(2). GM has acted or refused to act on grounds generally applicable to Plaintiffs and the other members of the Classes, thereby making appropriate declaratory or injunctive relief with respect to each Class as a whole. 66. Superiority: Rule 23(b)(3). A class action is superior to any other available means for the fair and efficient adjudication of this controversy, and no unusual difficulties are likely to be encountered in the management of this class action. The damages or other financial detriment suffered by Plaintiffs and the other Class members individually are relatively small compared to the burden and expense that would be required to individually litigate their claims against GM, so it would be impracticable for the members of the Classes to individually seek redress for GM’s wrongful conduct. Even if Class members could afford individual litigation, the court system could not. Individualized litigation creates a potential for inconsistent or contradictory judgments and increases the delay and expense to all parties and the court system. By contrast, the class action device presents far fewer management difficulties, and provides the benefits of single adjudication, economy of scale, and comprehensive supervision by a single court. COMPLAINT—CLASS ACTION- 61 KELLER ROHRBACK L.L.P. VI. EQUITABLE TOLLING A. Discovery Rule 67. Plaintiffs and Class members did not discover, and could not have discovered through the exercise of reasonable diligence, GM’s deception. 68. Plaintiffs and Class members could not have discovered, through the exercise of reasonable diligence, that GM was concealing the true nature of the Class Vehicles because the defect is undetectable until it manifests, and GM did not disclose, or intentionally concealed, the true nature of the defective transmissions until after Class members had purchased or leased Class Vehicles. 69. Further, on information and belief, GM told its authorized dealership employees and technicians to inform Class Members that their vehicles were operating “as [d]esigned” and that the symptoms of the defective transmissions were “normal,” if widespread enough, and therefore not a defect as alleged herein. At least one Plaintiff, James Norvell, was told by a GM dealership that his vehicle’s jolting, lurching, and jerking were “normal.” 70. Plaintiffs and Class members therefore did not discover, and did not know of, facts that would have caused a reasonable person to suspect that GM had concealed information about the Class Vehicles until shortly before this action was COMPLAINT—CLASS ACTION- 62 KELLER ROHRBACK L.L.P. 71. For these reasons, all applicable statutes of limitation have been tolled by operation of the discovery rule. B. Tolling Due to GM’s Fraudulent Concealment 72. All applicable statutes of limitation have also been tolled by GM’s knowing, active, and ongoing fraudulent concealment of the facts alleged herein. GM concealed the true nature of the Class Vehicles from the outset. 73. GM knew or had reason to know that its transmissions were defective beginning as early as September 2014 but concealed the true nature of the Class Vehicles. Further, on information and belief, GM told its authorized dealership employees and technicians to inform Class Members that their vehicles were operating “as [d]esigned” and that the symptoms of the defective transmissions were “normal,” if widespread enough, and therefore not a defect as alleged herein. At least one Plaintiff, James Norvell, was told by a GM dealership that his vehicle’s jolting, lurching, and jerking were “normal.” Thus, all applicable statutes of limitation have been tolled as result of Defendant’s knowing concealment of the defect alleged herein. C. Estoppel 74. Defendant was and is under a continuous duty to disclose to Plaintiffs and Class members the true nature of the Class Vehicles. Instead, GM actively concealed the true character of the Class Vehicles. Plaintiffs and Class members COMPLAINT—CLASS ACTION- 63 KELLER ROHRBACK L.L.P. reasonably relied on Defendant’s misrepresentations and omissions of the material facts about the vehicles’ functioning, and Defendant is therefore estopped from relying on any statutes of limitation in defense of this action. VII. CLAIMS FOR RELIEF A. Claims Asserted on Behalf of the Nationwide Class COUNT I Breach of Implied and Written Warranty Magnuson - Moss Warranty Act (15 U.S.C. §§ 2301, et seq.) 75. Plaintiffs reallege and incorporate by reference all preceding paragraphs as though fully set forth herein. 76. Plaintiffs assert this cause of action on behalf of themselves and the other members of the Nationwide Class. In the alternative, Plaintiff Gutierrez asserts this cause of action on behalf of the Texas and Georgia State Classes; Plaintiff Norvell asserts this cause of action on behalf of the Kentucky State Class; Plaintiff Harman asserts this cause of action on behalf of the North Carolina State Class; and Plaintiff Kidd asserts this cause of action on behalf of the Tennessee State Class. 77. This Court has jurisdiction to decide claims brought under 15 U.S.C. § 2301 by virtue of 15 U.S.C. § 2310(d). 78. GM’s Class Vehicles are a “consumer product,” as that term is defined in 15 U.S.C. § 2301(1). COMPLAINT—CLASS ACTION- 64 KELLER ROHRBACK L.L.P. 79. Plaintiffs and Class members are “consumers,” as that term is defined in 15 U.S.C. § 2301(3). 80. GM is a “warrantor” and “supplier” as those terms are defined in 15 U.S.C. §§ 2301(4) and (5). 81. 15 U.S.C. § 2310(d)(1) provides a cause of action for any consumer who is damaged by the failure of a warrantor to comply with an implied or written warranty. 82. As described herein, GM provided Plaintiffs and Class members with “implied warranties” and “written warranties” as those terms are defined in 15 U.S.C. § 2301. 83. GM implicitly warranted that the Class Vehicles were of merchantable quality and fit for such use. This implied warranty included warranties that: (i) the Class Vehicles and their transmissions were manufactured, supplied, distributed, and/or sold by GM were safe and reliable for providing transportation; and (ii) the Class Vehicles and their transmissions would be fit for their intended use while the Class Vehicles were being operated. 84. GM breached these warranties as described in more detail above with respect to the functioning of the Class Vehicles’ transmissions. 85. Under the written warranties, GM expressly warranted the following: “The warranty covers repairs to correct any vehicle defect, not slight noise, COMPLAINT—CLASS ACTION- 65 KELLER ROHRBACK L.L.P. vibrations, or other normal characteristics of the vehicle due to materials or workmanship occurring during the warranty period.” This means the warranty covered all defects except for “slight noise, vibrations, or other normal characteristics of the vehicle due to materials or workmanship occurring during the warranty period.” The defective transmissions and the symptoms they create are not slight and should not be considered normal, despite their reported frequency and GM’s efforts to convince people otherwise. Therefore, it is covered by GM’s warranty and GM agreed to provide such repairs “including towing, parts, and labor . . . at no charge” for up to 3 years or 36,000 miles, whichever comes first, for Chevrolet or GM-branded Class Vehicles, and for up to 4 years or 50,000 miles, whichever comes first, for Cadillac-branded Class Vehicles (the “Bumper-to- Bumper Limited Warranties”). 86. Additionally, under the Powertrain Component of the Warranties, GM expressly warranted that the powertrain components listed therein, including the transmission and “all internally lubricated parts, case, torque converter, mounts, seals, and gaskets as well as any electrical components internal to the transmission/transaxle” and “any actuators directly connected to the transmission (slave cylinder, etc.)” are covered under the Warranties for up to 5 years or 60,000 miles, whichever comes first, for Chevrolet or GM-branded Class Vehicles, and for COMPLAINT—CLASS ACTION- 66 KELLER ROHRBACK L.L.P. up to 6 years or 70,000 miles, whichever comes first, for Cadillac-branded Class Vehicles (the “Powertrain Warranties”). 87. GM breached these warranties as described in more detail above with respect to the functioning of the Class Vehicles’ transmissions. 88. By GM’s conduct as described herein, including knowledge of the defective transmissions and inaction in the face of the knowledge, GM has failed to comply with its obligations under its written and implied promises, warranties, and representations. 89. In its capacity as warrantor, and by the conduct described herein, any attempts by GM to limit the implied warranties in a manner that would exclude coverage is unconscionable and any such effort to disclaim, or otherwise limit, liability is null and void. 90. All jurisdictional prerequisites have been satisfied. 91. Plaintiffs and Class members are in privity with GM in that they purchased the Class Vehicles from GM or its agents. 92. As a result of GM’s breach of warranties, Plaintiffs and Class members are entitled to revoke their acceptance of the Class Vehicles, obtain damages and equitable relief, and obtain costs pursuant to 15 U.S.C. § 2310. COMPLAINT—CLASS ACTION- 67 KELLER ROHRBACK L.L.P. COUNT II Breach of Express Warranty 93. Plaintiffs reallege and incorporate by reference all preceding paragraphs as though fully set forth herein. 94. Plaintiffs assert this cause of action on behalf of themselves and the other members of the Nationwide Class. In the alternative, Plaintiff Gutierrez asserts this cause of action on behalf of the Texas and Georgia State Classes; Plaintiff Norvell asserts this cause of action on behalf of the Kentucky State Class; Plaintiff Harman asserts this cause of action on behalf of the North Carolina State Class; and Plaintiff Kidd asserts this cause of action on behalf of the Tennessee State Class. 95. Uniform Commercial Code § 2-313 provides that an affirmation of fact or promise made by the seller to the buyer, which relates to the goods and becomes part of the basis of the bargain, creates an express warranty that the goods shall conform to the promise. 96. GM was a merchant or seller with respect to motor vehicles. In selling its Class Vehicles, GM expressly warranted in advertisements, including in various press releases, that the 8-speed automatic transmissions in the Class Vehicles would “enhance[] performance and efficiency,” “particularly during low-speed gear changes.”41 41 See supra, notes 2 and 5. COMPLAINT—CLASS ACTION- 68 KELLER ROHRBACK L.L.P. 97. Plaintiffs and Class members formed contracts with GM at the time Plaintiffs and Class members purchased or leased their Class Vehicles. The terms of the contracts include the promises and affirmations of fact and express warranties made by GM in its New Vehicle Limited Warranty and Powertrain Warranty. 98. These affirmations and promises were part of the basis of the bargain between the parties. 99. GM’s marketing and advertising constitute express warranties, which served as part of the basis of the bargain and are part of a standardized contract between Plaintiffs and the other members of the Class, on the one hand, and GM on the other. 100. These warranties were not true, as the Class Vehicles did not provide transmissions that performed as promised. 101. GM breached these warranties arising from its advertisements, including window stickers, because the Class Vehicles did not perform as advertised, as described in more detail above with respect to the functioning of Class Vehicles’ transmissions. 102. At all times, the 49 states listed below (Louisiana is excluded), and the District of Columbia, have codified and adopted the provisions of the Uniform Commercial Code governing the express warranty of merchantability: ALA. CODE § 7-2-313; ALASKA STAT. § 45.02.313; ARIZ. REV. STAT. §§ 47-2313 and 47- COMPLAINT—CLASS ACTION- 69 KELLER ROHRBACK L.L.P. 2A103; ARK. CODE ANN. § 4-2-313; CAL. COM. CODE §§ 2313 and 10210; COLO. REV. STAT. § 4-2-313; CONN. GEN. STAT. § 42a-2-313; DEL. CODE ANN. TIT. 6, § 2-313; D.C. CODE § 28:2-313; FLA. STAT. § 672.313; GA. CODE ANN. § 11-2-313; HAW. REV. STAT. ANN. § 490:2-313; IDAHO CODE ANN. § 28-2-313; 810 ILL. COMP. STAT. ANN. §§ 5/2-313; IND. CODE ANN. § 26-1-2- 313; IOWA CODE § 554.2313; KAN. STAT. ANN. § 84-2-313; KY. REV. STAT. ANN. § 355.2-313; ME. REV. STAT. TIT. 11, § 2-313; MD. CODE ANN.COM. LAW § 2-313; MASS. GEN. LAWS. CH. 106, § 2-313; MICH. COMP. LAWS § 440.2313; MINN. STAT. § 336.2-313; MISS. CODE ANN. § 75-2-313; MO. REV. STAT. § 400.2-313; MONT. CODE ANN. § 30-2-313; NEB. REV. STAT. U.C.C. § 2-313; Nev. Rev. Stat. § 104.2313; N.H. REV. STAT. ANN. § 382-A:2-313; N.J. STAT. ANN. § 12A:2- 313; N.M. STAT. ANN. § 55-2-313; N.Y. U.C.C. LAW § 2-313; N.C. GEN. STAT. § 25-2-313; N.D. CENT. CODE § 41-02-30; OHIO REV. CODE ANN. § 1302.26; OKLA. STAT. TIT. 12A, § 2-313; OR. REV. STAT. § 72.3130; 13 PA. CONS. STAT. § 2313; R.I. GEN. LAWS § 6A-2-313; S.C. CODE ANN. § 36-2-313; S.D. CODIFIED LAWS § 5 7A-2-313; TENN. CODE ANN. § 47-2-313; TEX. BUS. & COM. CODE ANN. § 2.313; UTAH CODE ANN. § 70A- 2-313; VT. STAT. ANN. TIT. 9A, § 2-313; VA. CODE ANN. § 8.2-313; WASH. REV. CODE ANN. § 62A.2-313; W. VA. CODE ANN. § 46-2-313; WIS. STAT. § 402.313; and WYO. STAT. ANN. § 34.1-2-313. COMPLAINT—CLASS ACTION- 70 KELLER ROHRBACK L.L.P. 103. As a direct and proximate result of GM’s breach of express warranties, Plaintiffs and members of the Class have been damaged in an amount to be determined at trial. COUNT III Breach of Implied Warranty 104. Plaintiffs reallege and incorporate by reference all preceding paragraphs as though fully set forth herein. 105. Plaintiffs assert this cause of action on behalf of themselves and the other members of the Nationwide Class. In the alternative, Plaintiff Gutierrez asserts this cause of action on behalf of the Texas and Georgia State Classes; Plaintiff Norvell asserts this cause of action on behalf of the Kentucky State Class; Plaintiff Harman asserts this cause of action on behalf of the North Carolina State Class; and Plaintiff Kidd asserts this cause of action on behalf of the Tennessee State Class. 106. GM is and was at all relevant times a “merchant,” “seller,” and “lessor” with respect to motor vehicles, including the Class Vehicles. 107. The Class Vehicles are and were at all relevant times “goods.” 108. A warranty that the Class Vehicles were in merchantable condition and fit for the ordinary purpose for which vehicles are used is implied by law. 109. The Class Vehicles, when sold or leased, and at all times thereafter were not fit for the ordinary purpose of providing safe transportation. Specifically, as described in this Complaint, the Class Vehicles’ transmissions were defective. COMPLAINT—CLASS ACTION- 71 KELLER ROHRBACK L.L.P. 110. As a direct and proximate result of GM’s breach of implied warranties, Plaintiffs and members of the Class have been damaged in an amount to be determined at trial. COUNT IV Fraud by Concealment 111. Plaintiffs reallege and incorporate by reference all paragraphs as though fully set forth herein. 112. Plaintiffs assert this cause of action on behalf of themselves and the other members of the Nationwide Class. In the alternative, Plaintiff Gutierrez asserts this cause of action on behalf of the Texas and Georgia State Classes; Plaintiff Norvell asserts this cause of action on behalf of the Kentucky State Class; Plaintiff Harman asserts this cause of action on behalf of the North Carolina State Class; and Plaintiff Kidd asserts this cause of action on behalf of the Tennessee State Class. 113. GM intentionally concealed the defective transmissions from Plaintiffs and Class Members, including the safety issues described above, acted with reckless disregard for the truth, and denied Plaintiffs and Class members information that is highly relevant to their purchasing and leasing decisions, namely, the nature of the defective transmissions. 114. GM affirmatively concealed the defective transmissions from Plaintiffs and Class Members, allowing reasonable consumers to conclude that the Class Vehicles had no significant defects and would perform and operate properly when COMPLAINT—CLASS ACTION- 72 KELLER ROHRBACK L.L.P. driven normally. GM knew, at all relevant times, that this information was material and false. 115. GM also affirmatively concealed the defective transmissions from Plaintiffs and Class Members by issuing service bulletins that told GM dealers and service technicians that the vehicles were operating “as [d]esigned” and that the problems should be considered “normal.”42 GM dealers and service technicians—on information and belief—passed this information on to consumers, telling them that the symptoms they experienced were “normal,” as evidenced by various consumer complaints that mention someone—whether a GM “dealer” or “service manager”— telling them the symptoms were “normal.” At least one Plaintiff, James Norvell, was told by a GM dealership that his vehicle’s jolting, lurching, and jerking were “normal.” 116. The Class Vehicles purchased or leased by Plaintiffs and Class members were, in fact, defective and unsafe because the Class Vehicles contained defective transmissions. 117. GM owed Plaintiffs and Class members a duty to disclose the true character of the Class Vehicles and the defective transmissions because Plaintiffs 42 See, e.g., Service Bulletin No. PIP5405, GM, Surge Misfire Feeling Sensation During Highway Steady State Driving (June 2016), https://static.nhtsa.gov/odi/tsbs/2016/SB-10080566-2280.pdf (last visited Aug. 8, 2019). COMPLAINT—CLASS ACTION- 73 KELLER ROHRBACK L.L.P. and the other Class members relied on GM’s material representations that the Class Vehicles that they were purchasing were safe and free from defects. 118. The concealed facts were material because if the truth had been disclosed, Plaintiffs and the other Class members would not have purchased or leased the Class Vehicles or would have paid less for them. 119. As a result of GM’s fraudulent concealment, Plaintiffs and the other Class members have been injured in an amount to be proven at trial, including but not limited to actual damages, lost benefit of the bargain, overpayment at the time of purchase or lease, out-of-pocket expenses related to repairs or the cost of seeking repairs, and the diminished value of their Class Vehicles. COUNT V Unjust Enrichment 120. Plaintiffs reallege and incorporate by reference all preceding paragraphs as though fully set forth herein. 121. Plaintiffs assert this cause of action on behalf of themselves and the other members of the Nationwide Class. In the alternative, Plaintiff Gutierrez asserts this cause of action on behalf of the Texas and Georgia State Classes; Plaintiff Norvell asserts this cause of action on behalf of the Kentucky State Class; Plaintiff Harman asserts this cause of action on behalf of the North Carolina State Class; and Plaintiff Kidd asserts this cause of action on behalf of the Tennessee State Class. COMPLAINT—CLASS ACTION- 74 KELLER ROHRBACK L.L.P. 122. Because of its wrongful acts and omissions, GM charged a higher price for the Class Vehicles than the Class Vehicles’ true value. 123. GM has benefited and been enriched by its conduct as described in this Complaint and by Plaintiffs and Class members’ purchase or lease of Class Vehicles. 124. GM has knowledge of this benefit. 125. GM has voluntarily accepted and retained this benefit. 126. GM has been unjustly enriched at the expense of Plaintiffs and Class members, and the retention of this benefit under the circumstances would be inequitable. 127. Plaintiffs seeks an order requiring GM to make restitution to Plaintiffs and Class Members. B. Claims Brought on Behalf of the State Class(es) COUNT VI Violation of The Georgia Fair Business Practices Act (GA. CODE. ANN. § 10-1-390, et seq.) 128. Plaintiff Gutierrez (“Georgia Plaintiff”) realleges and incorporates by reference all preceding paragraphs as though fully set forth herein. 129. This claim is brought pursuant to the Georgia Fair Business Practices Act (the “Georgia FBPA”), GA. CODE. ANN. § 10-1-390, et seq. COMPLAINT—CLASS ACTION- 75 KELLER ROHRBACK L.L.P. 130. This claim is included here for notice purposes only. Once the statutory notice period has expired, the Georgia Plaintiff will amend her complaint to bring this claim on behalf of the Georgia State Class. 131. Georgia Plaintiff and Class members are “consumers” within the meaning of GA. CODE. ANN. § 10-1-393(b). 132. GM engaged in “trade or commerce” within the meaning of GA. CODE. ANN. § 10-1-393(b). 133. The Georgia FBPA prohibits declares “[u]nfair or deceptive acts or practices in the conduct of consumer transactions and consumer acts or practices in trade or commerce” to be unlawful, Ga. Code. Ann. § 10-1-393(a), including but not limited to “representing that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities that they do not have,” “[r]epresenting that goods or services are of a particular standard, quality, or grade … if they are of another,” and “[a]dvertising goods or services with intent not to sell them as advertised.” GA. CODE. ANN. § 10-1-393(b). 134. GM concealed the fact that Class Vehicles had defective transmissions that made them unsafe to drive and told various GM dealers and service technicians that the vehicles were operating “as [d]esigned” and that the symptoms were “normal” (if widespread enough). These GM dealers and service technicians passed this misinformation onto Class members, as evidenced by the COMPLAINT—CLASS ACTION- 76 KELLER ROHRBACK L.L.P. various consumer complaints alleging that someone—such as a GM “dealer” or “service manager”—told them the defect’s symptoms were “normal.” 135. GM violated the Georgia FBPA by, at minimum, representing that the Class Vehicles have characteristics, uses, benefits, and qualities which they do not have; representing that the Class Vehicles are of a particular standard and quality when they are not; advertising the Class Vehicles with the intent not to sell them as advertised; and omitting material facts in describing the Class Vehicles. 136. GM’s acts and practices, as discussed throughout this Complaint, constitute “unfair or deceptive acts or practices in the conduct of trade or commerce” that are unlawful, as prohibited by GA. CODE. ANN. § 10-1-393(b). 137. GM intentionally and knowingly misrepresented and/or concealed material facts regarding the Class Vehicles with the intent to mislead the Georgia Plaintiff and the Class. 138. GM knew or should have known that its conducted violated the Georgia FBPA. 139. GM’s fraudulent concealment of the true characteristics of the defective transmissions in Class Vehicles were material to the Georgia Plaintiff and Class members. COMPLAINT—CLASS ACTION- 77 KELLER ROHRBACK L.L.P. 140. GM’s violations present a continuing risk to the Georgia Plaintiff as well as to the general public. GM’s unlawful acts and practices complained of herein affect the public interest. 141. GM had an ongoing duty to its customers to refrain from unfair and deceptive practices under the Georgia FBPA. All owners of Class Vehicles suffered ascertainable loss in the form of the diminished value of their vehicles as a result of GM’s deceptive and unfair acts and practices made in the course of GM’s business. 142. As a direct and proximate result of GM’s violations of the Georgia FBPA, the Georgia Plaintiff and the Class have suffered injury-in-fact and/or actual damage. 143. The Georgia Plaintiff requests, and is entitled to recover, damages and exemplary damages for GM’s intentional violations, pursuant to GA. CODE. ANN. § 10-1-399(a). 144. The Georgia Plaintiff also seeks an order enjoining GM’s unfair, unlawful, and deceptive practices, attorneys’ fees, and any other just relief available under the Georgia FBPA that the Court deems proper. 145. On August 9, 2019, Georgia Plaintiff sent a letter complying with GA. CODE ANN. § 10-1-399(b) to GM. COMPLAINT—CLASS ACTION- 78 KELLER ROHRBACK L.L.P. 146. In compliance with GA. CODE ANN. § 10-1-399(g), Georgia Plaintiff will send a copy of this Complaint to the Administrator of the Georgia Department of Law’s Consumer Protection Division within 20 days of filing. COUNT VII Violation of The Georgia Uniform Deceptive Trade Practices Act (GA. CODE. ANN. § 10-1-370, et seq.) 147. Plaintiff Gutierrez (“Georgia Plaintiff”) realleges and incorporates by reference all preceding paragraphs as though fully set forth herein. 148. This claim is brought pursuant to the Georgia Uniform Deceptive Trade Practices Act (the “Georgia UDTPA”), GA. CODE ANN. § 10-1-370, et seq., on behalf of the Georgia State Class. 149. GM, the Georgia Plaintiff, and Class members are “persons” within the meaning of GA. CODE ANN. § 10-1-371(5). 150. The Georgia UDTPA prohibits “deceptive trade practices,” which include “(7) represent[ing] that goods or services are of a particular standard, quality, or grade or that goods are of a particular style or model, if they are of another;” “(9) advertis[ing] goods or services with intent not to sell them as advertised;” and (2) engaging in any other conduct which “causes a likelihood of confusion or of misunderstanding.” GA. CODE ANN. § 10-1-372(a). 151. GM concealed the fact that the Class Vehicles had defective transmissions that made them unsafe to drive and told various GM dealers and COMPLAINT—CLASS ACTION- 79 KELLER ROHRBACK L.L.P. service technicians that the vehicles were operating “as [d]esigned” and that the symptoms were “normal” (if widespread enough). These GM dealers and service technicians passed this misinformation onto Class Members, as evidenced by the various consumer complaints alleging that someone—such as a GM “dealer” or “service manager”—told them the defect’s symptoms were “normal.” 152. GM violated the Georgia UDTPA by, at minimum, representing that the Class Vehicles have characteristics, uses, benefits, and qualities which they do not have; representing that the Class Vehicles are of a particular standard and quality when they are not; advertising the Class Vehicles with the intent not to sell them as advertised; and omitting material facts in describing the Class Vehicles. 153. GM’s acts and practices, as discussed throughout this Complaint, constitute “unconscionable, false, misleading, or deceptive acts or practices in the conduct of trade or commerce” by GM, that are unlawful, as enumerated GA. CODE ANN. § 10-1-372(a). 154. GM intentionally and knowingly misrepresented material facts regarding the Class Vehicles with the intent to mislead the Georgia Plaintiff and the Class. 155. GM knew or should have known that its conducted violated the Georgia UDTPA. COMPLAINT—CLASS ACTION- 80 KELLER ROHRBACK L.L.P. 156. GM’s fraudulent concealment of the true characteristics of the defective transmissions in the Class Vehicles was material to the Georgia Plaintiff and Class members. 157. GM’s violations present a continuing risk to the Georgia Plaintiff as well as to the general public. GM’s unlawful acts and practices complained of herein affect the public interest. 158. GM had an ongoing duty to its customers to refrain from unfair and deceptive practices under the Georgia UDTPA. All owners of Class Vehicles suffered ascertainable loss in the form of the diminished value of their vehicles as a result of GM’s deceptive and unfair acts and practices made in the course of GM’s business. 159. As a direct and proximate result of GM’s violations of the Georgia UDTPA, the Georgia Plaintiff and the Class have suffered injury-in-fact and/or actual damage. 160. Georgia Plaintiff seeks an order enjoining Defendants’ unfair, unlawful, and/or deceptive practices, attorneys’ fees, and any other just and proper relief available under the Georgia UDTPA per GA. CODE ANN. § 10-1-373. COMPLAINT—CLASS ACTION- 81 KELLER ROHRBACK L.L.P. COUNT VIII Violation Of The Kentucky Consumer Protection Act (KY. REV. STAT. § 367.110, et seq.) 161. Plaintiff Norvell (“Kentucky Plaintiff”) realleges and incorporates by reference all preceding paragraphs as though fully set forth herein. 162. This claim is brought pursuant to the Kentucky Consumer Protection Act (the “Kentucky CPA”), KY. REV. STAT. § 367.110, et seq., on behalf of the Kentucky State Class. 163. GM, the Kentucky Plaintiff, and Class members are “persons” within the meaning of KY. REV. STAT. § 367.110(1). 164. GM is engaged in “trade” or “commerce” within the meaning of KY. REV. STAT. § 367.110(2). 165. The Kentucky CPA prohibits “[u]nfair, false, misleading, or deceptive acts or practices in the conduct of any trade or commerce . . . .” KY. REV. STAT. § 367.170(1). The Kentucky CPA has defined “unfair” to “be construed to mean unconscionable.” KY. REV. STAT. § 367.170(2). 166. GM concealed the fact that Class Vehicles had defective transmissions that made them unsafe to drive and told various GM dealers and service technicians that the vehicles were operating “as [d]esigned” and that the symptoms were “normal” (if widespread enough). These GM dealers and service technicians passed this mis-information onto Class Members, as evidenced by the COMPLAINT—CLASS ACTION- 82 KELLER ROHRBACK L.L.P. various consumer complaints alleging that someone—such as a GM “dealer” or “service manager”—told them the defect’s symptoms were “normal.” Additionally, Kentucky Plaintiff was told that his vehicle’s jolting, lurching, and jerking were “normal” and that the problem would “resolve itself” after a break-in period. 167. GM violated the Kentucky CPA by, at minimum, representing that the Class Vehicles have characteristics, uses, benefits, and qualities which they do not have; representing that the Class Vehicles are of a particular standard and quality when they are not; advertising the Class Vehicles with the intent not to sell them as advertised; and omitting material facts in describing the Class Vehicles. 168. GM’s acts and practices, as described throughout this Complaint, constitute “unfair, false, misleading, or deceptive acts or practices in the conduct of trade or commerce” that are unlawful, as enumerated in KY. REV. STAT. § 367.170(2). 169. GM intentionally and knowingly misrepresented material facts regarding the Class Vehicles with the intent to mislead the Kentucky Plaintiff and the Class. 170. GM knew or should have known that its conducted violated the Kentucky CPA. COMPLAINT—CLASS ACTION- 83 KELLER ROHRBACK L.L.P. 171. GM’s fraudulent concealment of the true characteristics of the defective transmissions in the Class Vehicles were material to the Kentucky Plaintiff and Class members. 172. GM’s violations present a continuing risk to Plaintiffs as well as to the general public. GM’s unlawful acts and practices complained of herein affect the public interest. 173. GM had an ongoing duty to its customers to refrain from unfair and deceptive practices under the Kentucky CPA. All owners of Class Vehicles suffered ascertainable loss in the form of the diminished value of their vehicles as a result of GM’s deceptive and unfair acts and practices made in the course of GM’s business. 174. As a direct and proximate result of GM’s violations of the Kentucky CPA, the Kentucky Plaintiff and the Class have suffered injury-in-fact and/or actual damage. 175. Pursuant to KY. REV. STAT. ANN. § 367.220, Plaintiffs seek to recover actual damages in an amount to be determined at trial; an order enjoining GM’s unfair, unlawful, and/or deceptive practices; declaratory relief; attorneys’ fees; and any other relief available under KY. REV. STAT. ANN. § 367.220 that the Court deems just and proper. COMPLAINT—CLASS ACTION- 84 KELLER ROHRBACK L.L.P. COUNT IX Violation of The North Carolina Unfair And Deceptive Trade Practices Act (N.C. GEN. STAT. § 75-1.1, et seq.) 176. Plaintiff Harmon (“North Carolina Plaintiff”) realleges and incorporates by reference all preceding paragraphs as though fully set forth herein. 177. This claim is brought pursuant to the North Carolina Unfair and Deceptive Trade Practices Act (the “North Carolina UDTPA”), N.C. GEN. STAT. § 75-1.1, et seq., on behalf of the North Carolina State Class. 178. GM engaged in “commerce” within the meaning of N.C. GEN. STAT. § 75-1.1(b). 179. The North Carolina UDTPA declares as unlawful “unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce.” N.C. GEN. STAT. § 75-1.1(a). 180. GM concealed the fact that Class Vehicles had defective transmissions that made them unsafe to drive and told various GM dealers and service technicians that the vehicles were operating “as [d]esigned” and that the symptoms were “normal” (if widespread enough). These GM dealers and service technicians passed this mis-information onto Class Members, as evidenced by the various consumer complaints alleging that someone—such as a GM “dealer” or “service manager”—told them the defect’s symptoms were “normal.” COMPLAINT—CLASS ACTION- 85 KELLER ROHRBACK L.L.P. 181. GM violated the North Carolina UDTPA by, at minimum, representing that the Class Vehicles have characteristics, uses, benefits, and qualities which they do not have; representing that the Class Vehicles are of a particular standard and quality when they are not; advertising the Class Vehicles with the intent not to sell them as advertised; and omitting material facts in describing the Class Vehicles. 182. GM’s acts and practices, as described throughout this Complaint, violate the North Carolina UDTPA and therefore are unlawful pursuant to N.C. GEN. STAT. § 75-1.1. 183. GM intentionally and knowingly misrepresented material facts regarding the Class Vehicles with the intent to mislead the North Carolina Plaintiff and the Class. 184. GM knew or should have known that its conducted violated the North Carolina UDTPA. 185. GM’s fraudulent concealment of the true characteristics of the fuel efficiency of its Class Vehicles were material to the North Carolina Plaintiff and Class members. 186. GM’s violations present a continuing risk to Plaintiffs as well as to the general public. GM’s unlawful acts and practices complained of herein affect the public interest. COMPLAINT—CLASS ACTION- 86 KELLER ROHRBACK L.L.P. 187. GM had an ongoing duty to its customers to refrain from unfair and deceptive practices under the North Carolina UDTPA. All owners of Class Vehicles suffered ascertainable loss in the form of the diminished value of their vehicles as a result of GM’s deceptive and unfair acts and practices made in the course of GM’s business. 188. As a direct and proximate result of GM’s violations of the North Carolina UDTPA, the North Carolina Plaintiff and the Class have suffered injury- in-fact and/or actual damage. 189. Pursuant to N.C. GEN. STAT. § 75-16, Plaintiffs seek monetary damages in an amount to be proven at trial, treble damages, an order enjoining GM’s deceptive and unfair conduct, attorneys’ fees and costs, and any other relief available under the North Carolina UDTPA that the Court deems just and proper. COUNT X Violation of The Tennessee Consumer Protection Act (TENN. CODE ANN. § 47-18-101, et seq.) 190. Plaintiff Kidd (“Tennessee Plaintiff”) realleges and incorporates by reference all preceding paragraphs as though fully set forth herein. 191. This claim is brought pursuant to the Tennessee Consumer Protection Act (the “Tennessee CPA”), TENN. CODE ANN. § 47-18-101, et seq., on behalf of the Tennessee State Class. COMPLAINT—CLASS ACTION- 87 KELLER ROHRBACK L.L.P. 192. The Tennessee Plaintiff and Class members are “consumer[s]” within the meaning of TENN. CODE ANN. § 47-18-103(2). 193. The Tennessee Plaintiff, Class members, and GM are “person[s]” within the meaning of TENN. CODE ANN. § 47-18-103(9). 194. The Class Vehicles constitute “goods” within the meaning of TENN. CODE ANN. § 47-18-103(5). 195. GM engaged in “trade,” “commerce,” and/or “consumer transaction[s]” within the meaning of TENN. CODE ANN. § 47-18-103(11). 196. The Tennessee CPA provides that, “[u]nfair or deceptive acts or practices affecting the conduct of any trade or commerce constitute unlawful acts or practices”, including but not limited to, “(2) causing likelihood of confusion or misunderstanding as to the certification of goods . . . ;” “(5) representing that goods . . . have . . . characteristics . . . uses, benefits . . . that they do not have;” “(7) representing that goods . . . are of a particular standard, quality or grade, or that goods are of a particular style or model, if they are of another;” “(9) advertising goods or services with intent not to sell them as advertised;” “(22) using any advertisement containing an offer to sell goods . . . when the offer is not a bona fide effort to sell the advertised goods . . . ;” “(27) engaging in any other act or practice which is deceptive to the consumer or any other person…” TENN. CODE ANN. § 47-18-104(a), (b). COMPLAINT—CLASS ACTION- 88 KELLER ROHRBACK L.L.P. 197. GM concealed the fact that Class Vehicles had defective transmissions that made them unsafe to drive and told various GM dealers and service technicians that the vehicles were operating “as [d]esigned” and that the symptoms were “normal” (if widespread enough). These GM dealers and service technicians passed this misinformation onto Class Members, as evidenced by the various consumer complaints alleging that someone—such as a GM “dealer” or “service manager”—told them that the defect’s symptoms were “normal.” 198. GM violated the Tennessee CPA by, at minimum, representing that the Class Vehicles have characteristics, uses, benefits, and qualities which they do not have; representing that the Class Vehicles are of a particular standard and quality when they are not; advertising the Class Vehicles with the intent not to sell them as advertised; and omitting material facts in describing the Class Vehicles. 199. GM’s acts and practices, as described throughout this Complaint, constitute “unfair or deceptive acts or practices affecting the conduct of any trade or commerce constitute unlawful acts or practices” by GM, that are unlawful, as enumerated in TENN. CODE ANN. § 47-18-104. 200. GM intentionally and knowingly misrepresented material facts regarding the Class Vehicles with the intent to mislead the Tennessee Plaintiff and the Class. COMPLAINT—CLASS ACTION- 89 KELLER ROHRBACK L.L.P. 201. GM knew or should have known that its conducted violated the Tennessee CPA. 202. GM’s fraudulent concealment of the true characteristics of the defective transmissions in the Class Vehicles were material to the Tennessee Plaintiff and Class members. 203. GM’s violations present a continuing risk to Plaintiffs as well as to the general public. GM’s unlawful acts and practices complained of herein affect the public interest. 204. GM had an ongoing duty to its customers to refrain from unfair and deceptive practices under the Tennessee CPA. All owners of Class Vehicles suffered ascertainable loss in the form of the diminished value of their vehicles as a result of GM’s deceptive and unfair acts and practices made in the course of GM’s business. 205. As a direct and proximate result of GM’s violations of the Tennessee CPA, the Tennessee Plaintiff and the Class have suffered injury-in-fact and/or actual damage. 206. Pursuant to TENN. CODE ANN. § 47-18-109, Tennessee Plaintiff seeks an order enjoining GM’s unfair and/or deceptive acts or practices, damages, treble damages for willful and knowing violations, pursuant to § 47-18-109(a)(3), COMPLAINT—CLASS ACTION- 90 KELLER ROHRBACK L.L.P. punitive damages, and attorneys’ fees, costs, and any relief available under the Tennessee CPA that the Court deems just and proper. COUNT IX Violation of The Texas Deceptive Trade Practices And Consumer Protection Act (TEX. BUS. & COM. CODE. § 17.41, et seq.) 207. Plaintiff Gutierrez (“Texas Plaintiff”) realleges and incorporates by reference all preceding paragraphs as though fully set forth herein. 208. This claim is brought pursuant to the Texas Deceptive Trade Practices and Consumer Protection Act (the “Texas DTPA”), TEX. BUS. & COM. CODE § 17.41, et seq. 209. This claim is included here for notice purposes only. Once the statutory notice period has expired, the Texas Plaintiff will amend her complaint to bring this claim on behalf of the Texas State Class. 210. The Class Vehicles constitute “goods” within the meaning of TEX. BUS. & COM. CODE § 17.45(1). 211. The Texas Plaintiff, Class members, and GM are “person[s]” within the meaning of TEX. BUS. & COM. CODE § 17.45(3). 212. The Texas Plaintiff and Class members are also “consumer[s]” within the meaning of TEX. BUS. & COM. CODE § 17.45(4). 213. GM was engaged in “trade” and/or “commerce” within the meaning of TEX. BUS. & COM. CODE § 17.45(6). COMPLAINT—CLASS ACTION- 91 KELLER ROHRBACK L.L.P. 214. The Texas DTPA defines “unconscionable action or course of action” to mean “an act or practice which, to a consumer’s detriment, takes advantage of the lack of knowledge, ability, experience, or capacity of the consumer to a grossly unfair degree.” TEX. BUS. & COM. CODE § 17.45(5). 215. The Texas DTPA prohibits as unlawful, “false, misleading, or deceptive acts or practices in the conduct of trade or commerce” TEX. BUS. & COM. CODE § 17.46(a). Such false, misleading, or deceptive acts or practices include but are not limited to: “(2) causing confusion or misunderstanding as to the …certification of goods…”; “(5) representing that goods Representing that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or qualities that they do not have”; “(7) Representing that goods or services are of a particular standard, quality, or grade, or that goods are of a particular style or model, if they are of another”; and “(9) advertising goods or services with intent not to sell them as advertised.” TEX. BUS. & COM. CODE § 17.46(b). 216. GM concealed the fact that Class Vehicles had defective transmissions that made them unsafe to drive and told various GM dealers and service technicians that the vehicles were operating “as [d]esigned” and that the symptoms were “normal” (if widespread enough). These GM dealers and service technicians passed this misinformation onto Class Members, as evidenced by the COMPLAINT—CLASS ACTION- 92 KELLER ROHRBACK L.L.P. various consumer complaints alleging that someone—such as a GM “dealer” or “service manager”—told them the defect’s symptoms were “normal.” 217. GM violated the Texas DTPA by, at minimum, representing that the Class Vehicles have characteristics, uses, benefits, and qualities which they do not have; representing that the Class Vehicles are of a particular standard and quality when they are not; advertising the Class Vehicles with the intent not to sell them as advertised; and omitting material facts in describing the Class Vehicles. 218. GM’s acts and practices, as described throughout this Complaint, constitute “unconscionable,” and “false, misleading, or deceptive acts or practices in the conduct of trade or commerce” that are unlawful, as enumerated in TEX. BUS. & COM. CODE §§ 17.45(5) and 17.46(a), (b). 219. GM intentionally and knowingly misrepresented material facts regarding the Class Vehicles with the intent to mislead the Texas Plaintiff and the Class. 220. GM knew or should have known that its conducted violated the Texas DTPA. 221. GM’s fraudulent concealment of the true characteristics of the defective transmissions in its Class Vehicles was material to the Texas Plaintiff and Class members. COMPLAINT—CLASS ACTION- 93 KELLER ROHRBACK L.L.P. 222. GM’s violations present a continuing risk to Texas Plaintiff and Class members as well as to the general public. GM’s unlawful acts and practices complained of herein affect the public interest. 223. GM had an ongoing duty to its customers to refrain from unfair and deceptive practices under the Texas DTPA. All owners of Class Vehicles suffered ascertainable loss in the form of the diminished value of their vehicles as a result of GM’s deceptive and unfair acts and practices made in the course of GM’s business. 224. As a direct and proximate result of GM’s violations of the Texas DTPA, the Texas Plaintiff and the Class have suffered injury-in-fact and/or actual damage. 225. Pursuant to TEX. BUS. & COM. CODE § 17.50, Plaintiffs seek actual damages in an amount to be proved a trial; an order enjoining GM’s unconscionable and/or deceptive and/or unfair trade practices; treble and punitive damages; reasonable attorneys’ fees and costs, and any other relief available under the Texas DTPA that the Court deems just and proper. Plaintiffs are also entitled to disgorgement or to rescission or to any other relief necessary to restore any money or property that was acquired from them based on violations of the Texas DTPA. 226. On August 9, 2019, Texas Plaintiff sent a letter complying with TEX. BUS. & COM. CODE § 17.505 to GM and a copy to the Texas Office of the Attorney General in compliance with TEX. BUS. & COM. CODE § 17.501, and COMPLAINT—CLASS ACTION- 94 KELLER ROHRBACK L.L.P. shall mail a copy of this Complaint to the Office of the Attorney General within 30 days of filing. VIII. PRAYER FOR RELIEF WHEREFORE, Plaintiffs, individually and on behalf of the members of the Nationwide Class and State Classes, respectfully request that the Court enter judgment against GM as follows: a. awarding actual, general, incidental, compensatory, consequential, and statutory damages on the claims asserted above as applicable and in an amount to be proven at trial; b. awarding exemplary and punitive damages in an amount to be proven at trial; c. awarding reasonable attorneys’ fees and costs; d. awarding interest on the foregoing; e. enjoining the wrongful conduct alleged herein, ordering GM to immediately recall and/or replace the defective transmissions; f. providing all equitable relief the Court deems appropriate, including rescission, restitution, and disgorgement of unjust enrichment; and g. providing any other relief the Court deems just and proper. IX. DEMAND FOR JURY TRIAL Plaintiffs hereby demand a jury trial for all claims so triable. COMPLAINT—CLASS ACTION- 95 KELLER ROHRBACK L.L.P. DATED: August 9, 2019 Respectfully submitted by /s/ Lynn Lincoln Sarko Lynn Lincoln Sarko Gretchen Freeman Cappio Tana Lin, MI #P63125 Ryan McDevitt Max Goins (admission forthcoming) KELLER ROHRBACK L.L.P. 1201 Third Avenue, Suite 3200 Seattle, WA 98101 Telephone: (206) 623-1900 Fax: (206) 623-3384 lsarko@kellerrohrback.com gcappio@kellerrohrback.com tlin@kellerrohrback.com rmcdevitt@kellerrorhback.com mgoins@kellerrohrback.com COMPLAINT—CLASS ACTION- 96 KELLER ROHRBACK L.L.P.

environmental & natural resources

udkFEIcBD5gMZwcz7a3F

HYDE & SWIGART, APC Yana A. Hart, Esq. (SBN: 306499) yana@westcoastlitigation.com 2221 Camino Del Rio South, Suite 101 San Diego, CA 92108-3609 Telephone: (619) 233-7770 Fax: (619) 297-1022 LAW OFFICE OF DANIEL G. SHAY Daniel G. Shay, Esq. (SBN: 250548) danielshay@tcpafdcpa.com 2221 Camino Del Rio South, Suite 308 San Diego, CA 92108 Telephone: (619) 222-7429 Fax: (866) 431-3292 Attorneys for Plaintiff UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA '19CV0966 LL AJB DOUGLAS TUCKER, Individually and on behalf of others similarly situated, Plaintiff, SYNCHRONY BANK, Case No: CLASS ACTION COMPLAINT FOR DAMAGES AND INJUNCTIVE RELIEF FOR VIOLATION OF THE FAIR CREDIT REPORTING ACT, 15 U.S.C. § 1681, ET SEQ. JURY TRIAL DEMANDED Defendant. 1. The United States Congress has also found the banking system is dependent upon fair and accurate credit reporting. Inaccurate credit reports directly impair the efficiency of the banking system, and unfair credit reporting methods undermine the public confidence, which is essential to the continued functioning of the banking system. Congress enacted the Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq. (“FCRA”), to insure fair and accurate reporting, promote efficiency in the banking system, and protect consumer privacy. The FCRA seeks that consumer reporting agencies exercise their grave responsibilities with fairness, impartiality, and a respect for the consumer’s right to privacy because consumer reporting agencies have assumed such a vital role in assembling and evaluating consumer credit and other information on consumers. The FCRA also imposes duties on the sources that provide credit information to credit reporting agencies, called “furnishers.” 2. Douglas Tucker (“Plaintiff”), through his attorneys, brings this class action complaint for damages and to enjoin the deceptive business practices of Synchrony Bank (“Defendant”). 3. Specifically, Plaintiff brings this complaint, through his attorneys, for damages arising out of Defendant’s systematic unauthorized credit inquiries. 4. Plaintiff makes these allegations on information and belief, with the exception of those allegations that pertain to a Plaintiff, or to Plaintiff’s counsel, which Plaintiff alleges on personal knowledge. 5. While many violations are described below with specificity, this Complaint alleges violations of the statutes cited in their entirety. 6. Unless otherwise stated, all the conduct engaged in by Defendant took place in the State of California. Defendant did not maintain procedures reasonably adapted to avoid any such violations. 8. Unless otherwise indicated, the use of Defendant’s name in this Complaint includes all agents, employees, officers, members, directors, heirs, successors, assigns, principals, trustees, sureties, subrogees, representatives, and insurers of Defendant. 9. Plaintiff is informed and believes, and thereon alleges, that Defendant acquired Plaintiff’s credit information through an unauthorized inquiry of Plaintiff’s “consumer report[s]” as that term is defined by 15 U.S.C. 1681a(d)(1). JURISDICTION & VENUE 10. Jurisdiction of this Court proper pursuant to 28 U.S.C. § 1331. 11. This action arises out of Defendant’s violations of the Fair Credit Reporting Act, 15 U.S.C. §§ 1681 et seq. (“FCRA”). 12. Defendant is authorized to and regularly conducts business within the State of California, thus personal jurisdiction is established. 13. Venue is proper pursuant to 28 U.S.C. § 1391 for the following reasons: (i) Plaintiff resides in the County of San Diego, State of California which is within this judicial district; (ii) the conduct complained of herein occurred within this judicial district; and (iii) Defendant conducted business within this judicial district at all times relevant. PARTIES & VENUE 14. Plaintiff is a natural person who resides in the County of San Diego, State of California, whose credit report(s) were affected by at least one unauthorized inquiry by Defendant. In addition, Plaintiff is a “consumer[s]” as that term is defined by 15 U.S.C. § 1681a(c). Draper, Utah. Because Defendant is a partnership, corporation, association, or other entity, it is therefore a "person" as that term is defined by 15 U.S.C. § 1681a(b). 16. Plaintiff alleges Defendant is a credit furnisher subject to the FCRA because Defendant furnishes information to the credit reporting agencies and pulls credit reports. 17. The cause of action herein pertains to Plaintiff’s “consumer report” as that term is defined by15 U.S.C § 1681(d), in that inaccurate representations of Plaintiff’s credit worthiness, credit standing, and credit capacity were made via written, oral, or other communication of information by a consumer credit reporting agency, which is used or is expected to be used, or collected in whole or in part, for the purposes of serving as a factor in establishing Plaintiff’s eligibility for, among other things, credit to be used primarily for personal, family, household and employment purposes. STATUTORY BACKGROUND 18. The FCRA is a consumer protection statute which regulates the activities of credit reporting agencies and users of credit reports, and which provides certain rights to consumers affected by use of the collected information about them. 19. Congress designed the FCRA to preserve the consumer’s right to privacy by safeguarding the confidentiality of the information maintained by the consumer reporting agencies. Congress stated in the opening section of the FCRA that “[t]here is a need to insure that consumer reporting agencies exercise their grave responsibilities with fairness, impartiality, and a respect for the consumer’s right to privacy.” 15 U.S.C. § 1681(a)(4). other communication of any information by a consumer reporting agency bearing on a consumer’s creditworthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in the underwriting of credit transactions involving the consumer. 21. Congress has chosen to protect the consumer’s right to privacy by prohibiting any release of consumer reports unless the release is for one of the permissible purposes listed in 15 U.S.C. § 1681b. 22. 15 U.S.C. § 1681b(f) in turn provides “[a] person shall not use or obtain a consumer report for any purpose unless – (1) the consumer report is obtained for a purpose for which the consumer report is authorized to be furnished under this section.” 23. The permissible purposes listed in 1681b usually arise only in connection with transactions initiated by the consumer. See 15 U.S.C. § 1681b(a)(3)(A)- (F). FACTUAL ALLEGATIONS 24. At no point prior to or after March 4, 2017, did Plaintiff have an account with Defendant. 25. At no point prior to or after March 4, 2017, did Plaintiff inquire about Defendant’s services. 26. Nonetheless, on March 4, 2017, Defendant pulled Plaintiff’s Trans Union credit report without a permissible purpose. 27. Despite the fact that Plaintiff did not have an account with Defendant, Defendant performed an unauthorized regular or ”hard” credit report inquiry with Trans Union. 28. Upon review of Plaintiff’s Trans Union credit report dated September 24, 4, 2017. 29. Defendant’s inquiry was unauthorized and illegal and was an invasion of privacy. 30. Plaintiff did not seek out nor inquire about Defendant’s services or credit extensions. Therefore, its inquiry was not promotional. 31. Further, Plaintiff did not have an account with Defendant and thus, had no reason to pull Plaintiff’s credit report or collect on a debt. 32. 15 U.S.C. § 1681b delineates the only permissible uses of, or access to, consumer reports. 33. Defendant’s inquiries for Plaintiff’s consumer report information, without Plaintiff’s consent, falls outside the scope of any permissible use or access included in 15 U.S.C. § 1681b. 34. Defendant accessed Plaintiff’s private and confidential information without Plaintiff’s consent or a permissible purpose. Much like trespassing on real property, an invasion of privacy may not cause monetary damages, but it is an invasion nonetheless. Privacy is a long-protected right in the United States and Plaintiff has suffered concrete harm resulting from Defendant’s willful invasion of privacy. CLASS ACTION ALLEGATIONS 35. Plaintiff brings this action on behalf of himself and on behalf of all others similarly situated (the “Class”). 36. Plaintiff represents, and is a member of the Class, consisting of: All persons with an address within the United States whose consumer credit report was obtained by Defendant within the past five (5) years from any of the three major credit reporting agencies (Transunion, Equifax, and Experian), without a permissible purpose. 37. Defendant and its employees or agents are excluded from the Class. Plaintiff does not know the number of members in the Class, but believe the Class members number in the hundreds, if not more. This matter should therefore be certified as a Class action to assist in the expeditious litigation of this matter. 38. Plaintiff reserves the right to redefine the Class and to add subclasses as appropriate based on discovery and specific theories of liability. 39. Plaintiff and members of the Class were harmed by the acts of Defendant in at least the following ways: Defendant, either directly or through its agents, engaged in illegal and deceptive practices, when it submitted an unauthorized consumer report inquiry under 15 U.S.C. § 1681 et seq. Plaintiff and the Class members were damaged thereby. 40. This suit seeks only recovery of actual and statutory damages on behalf of the Class, and it expressly is not intended to request any recovery for personal injury and claims related thereto. Plaintiff reserves the right to expand the Class definition to seek recovery on behalf of additional persons as warranted as facts are learned in further investigation and discovery. 41. The joinder of the Class members is impractical and the disposition of their claims in the Class action will provide substantial benefits both to the parties and to the court. The Class can be identified through Defendant’s records or Defendant’s agents’ records. 42. There is a well-defined community of interest in the questions of law and fact involved affecting the parties to be represented. The questions of law and fact to the Class predominate over questions which may affect individual Class members, including the following: a. Whether, within the five years prior to the filing of this Complaint, inquiries without the consent of members of the Class; b. Whether Plaintiff and the Class members were damaged thereby, and the extent of damages for such violations; c. Whether Plaintiff and the Class members are entitled to statutory damages as a result of Defendant’s conduct; d. Whether Plaintiff and the Class members are entitled to injunctive relief; e. Whether Plaintiff and the Class members are entitled to an award of reasonable attorneys’ fees and costs; f. Whether Plaintiff will fairly and adequately protect the interest of the Class; and, g. Whether Plaintiff’s counsel will fairly and adequately protect the interest of the Class. 43. As a person that suffered an unauthorized consumer credit report inquiry by Defendant on his credit report(s), Plaintiff is asserting claims that are typical of the Class. Plaintiff will fairly and adequately represent and protect the interest of the Class in that Plaintiff has no interests antagonistic to any member of the Class. 44. Plaintiff and the members of the Class have all suffered irreparable harm as a result of the Defendant’s unlawful and wrongful conduct. Absent a class action, the Class will continue to face the potential for irreparable harm. In addition, these violations of law will be allowed to proceed without remedy and Defendant will likely continue such illegal conduct. Because of the size of the individual Class member’s claims, few, if any, Class members could afford to seek legal redress for the wrongs complained of herein. 45. Plaintiff has retained counsel experienced in handling class action claims and claims involving violations of the FCRA. this controversy. Class-wide damages are essential to induce Defendant to comply with state and federal law. The interest of Class members in individually controlling the prosecution of separate claims against Defendant is small because the maximum statutory damages in an individual action for FCRA violations are minimal. Management of these claims is likely to present significantly fewer difficulties than those presented in many class claims. 47. Defendant has acted on grounds generally applicable to the Class, thereby making appropriate declaratory relief with respect to the Class as a whole. FIRST CAUSE OF ACTION THE FAIR CREDIT REPORTING ACT 15 U.S.C. §§ 1681-1692X (FCRA) 48. Plaintiff incorporates by reference all of the above paragraphs of this Complaint as though fully stated herein. 49. The foregoing acts and omissions constitute numerous and multiple violations of the FCRA. 50. As a result of each and every negligent violation of the FCRA, Plaintiff is entitled to statutory damages, pursuant to 15 U.S.C. § 1681o(a)(1); and reasonable attorneys’ fees and costs pursuant to 15 U.S.C. § 1681o(a)(2), from Defendant. 51. As a result of each and every willful violation of the FCRA, Plaintiff is entitled to statutory damages of not less than $100 and not more than $1,000 and such amount as the court may allowed for all other class members, pursuant to 15 U.S.C. § 1681n(a)(1)(A); punitive damages as the court may allow, pursuant to 15 U.S.C. § 1681n(a)(2); and reasonable attorneys’ fees and costs pursuant to 15 U.S.C. § 1681n(a)(3) from Defendant. WHEREFORE, Plaintiff and the Class Members pray for judgment as follows: • Certifying the Class as requested herein; • Finding Plaintiff is the proper Class representative; and • Appointing Plaintiff’s Counsel as Class Counsel; • Special, general, compensatory and punitive damages; • An award of statutory damages pursuant to 15 U.S.C. § 1681n(a)(1); • An award of punitive damages as the Court may allow pursuant to 15 U.S.C. § 1681n(a)(2); • An award of costs of litigation and reasonable attorney’s fees, pursuant to 15 U.S.C. § 1681n(a)(3), and 15 U.S.C. § 1681(o)(a)(1) against Defendant for each incident of negligent noncompliance of the FCRA; and, • Any other relief the Court may deem just and proper. TRIAL BY JURY 57. Pursuant to the Seventh Amendment to the Constitution of the United States of America, Plaintiff is entitled to, and demands, a trial by jury. Dated: May 22, 2019 Hyde & Swigart, APC By: s/ Joshua B. Swigart Joshua B. Swigart, Esq. josh@westcoastlitigation.com Attorneys for Plaintiff

consumer fraud

VEOiAokBRpLueGJZi8Xe

THE ROSEN LAW FIRM, P.A. Phillip Kim, Esq. (PK 9384) Laurence M. Rosen, Esq. (LR 5733) 275 Madison Ave., 34th Floor New York, New York 10016 Telephone: (212) 686-1060 Fax: (212) 202-3827 Email: pkim@rosenlegal.com lrosen@rosenlegal.com Counsel for Plaintiff UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK THEODORE LACHMAN, Individually and on behalf of all others similarly situated, Plaintiff, v. Case No: CLASS ACTION COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS JURY TRIAL DEMANDED REVLON, INC., PAUL MEISTER, DEBRA PERELMAN, VICTORIA DOLAN, WENDEL F. KRALOVICH, LORENZO DELPANI, ROBERTO SIMON, SIOBHAN ANDERSON, FABIAN T. GARCIA, and JUAN R. FIGUEREO, Defendants. Plaintiff Theodore Lachman (“Plaintiff”), individually and on behalf of all other persons similarly situated, by Plaintiff’s undersigned attorneys, for Plaintiff’s complaint against Defendants (defined below), alleges the following based upon personal knowledge as to Plaintiff and Plaintiff’s own acts, and information and belief as to all other matters, based upon, inter alia, the investigation conducted by and through his attorneys, which included, among other things, a review of the Defendants’ public documents, conference calls and announcements made by Defendants, United States Securities and Exchange Commission (“SEC”) filings, wire and press releases published by and regarding Revlon, Inc. (“Revlon” or the “Company”), and information readily obtainable on the Internet. Plaintiff believes that substantial evidentiary support will exist for the allegations set forth herein after a reasonable opportunity for discovery. NATURE OF THE ACTION 1. This is a class action on behalf of persons or entities who purchased or otherwise acquired publicly traded Revlon securities from March 12, 2015 through March 28, 2019, inclusive (the “Class Period”). Plaintiff seeks to recover compensable damages caused by Defendants’ violations of the federal securities laws under the Securities Exchange Act of 1934 (the “Exchange Act”). JURISDICTION AND VENUE 2. The claims asserted herein arise under and pursuant to Sections 10(b) and 20(a) of the Exchange Act (15 U.S.C. §§ 78j(b) and 78t(a)) and Rule 10b-5 promulgated thereunder by the SEC (17 C.F.R. § 240.10b-5). 3. This Court has jurisdiction over the subject matter of this action pursuant to 28 U.S.C. § 1331, and Section 27 of the Exchange Act (15 U.S.C. §78aa). 4. Venue is proper in this judicial district pursuant to 28 U.S.C. § 1391(b) and Section 27 of the Exchange Act (15 U.S.C. § 78aa(c)) as the alleged misstatements entered and the subsequent damages took place in this judicial district, and the Company conducts substantial business in this district. 5. In connection with the acts, conduct and other wrongs alleged in this complaint, Defendants, directly or indirectly, used the means and instrumentalities of interstate commerce, including but not limited to, the United States mails, interstate telephone communications and the facilities of the national securities exchange. PARTIES 6. Plaintiff, as set forth in the accompanying certification, incorporated by reference herein, purchased Revlon securities during the Class Period and was economically damaged thereby. 7. Defendant Revlon purports to manufacture, market, distribute, and sell beauty and personal care products worldwide. Revlon is incorporated in Delaware and with headquarters in New York City. The Company’s stock trades on the New York Stock Exchange (“NYSE”) under the ticker symbol “REV.” 8. Defendant Paul Meister (“Meister”) served as Executive Vice Chairman from January 2018 until November 2018, a Director since 2016, and the Company’s interim Principal Executive Officer from January 2018 until May 22, 2018. 9. Defendant Debra Perelman (“Perelman”) has served as the Company’s President and Chief Executive Officer (“CEO”) since May 22, 2018. She served as the Company’s Chief Operating Officer (“COO”) from January 2018 until November 2018, and as a Director of Revlon since June 2015. 10. Defendant Victoria Dolan (“Dolan”) has served as the Company’s Chief Financial Officer (“CFO”) since March 12, 2018. 11. Defendant Wendel F. Kralovich (“Kralovich”) served as the Company’s Senior Vice President, Chief Accounting Officer & Controller from October 2017 to December 2018. 12. Defendant Lorenzo Delpani (“Delpani”) served as the Company’s President and CEO from the beginning of the Class Period until March 1, 2016. 13. Defendant Roberto Simon (“Simon”) served as the Company’s Executive Vice President and CFO from the beginning of the Class Period until February 2016. 14. Defendant Siobhan Anderson (“Anderson”) served as the Company’s Vice President, Chief Accounting Officer, Corporate Controller, and Treasure from October 2014 until August 31, 2017. 15. Defendant Fabian T. Garcia (“Garcia”) served as the Company’s President and CEO from April 15, 2016 until January 28, 2018. 16. Defendant Juan R. Figuereo (“Figuereo”) served as the Company’s CFO from April 2016 until June 6, 2017. 17. Defendants Meister, Perelman, Dolan, Kralovich, Delpani, Simon, Anderson, Garcia, and Figuereo are collectively referred to herein as the “Individual Defendants.” 18. Each of the Individual Defendants: (a) directly participated in the management of the Company; (b) was directly involved in the day-to-day operations of the Company at the highest levels; (c) was privy to confidential proprietary information concerning the Company and its business and operations; (d) was directly or indirectly involved in drafting, producing, reviewing and/or disseminating the false and misleading statements and information alleged herein; (e) was directly or indirectly involved in the oversight or implementation of the Company’s internal controls; (f) was aware of or recklessly disregarded the fact that the false and misleading statements were being issued concerning the Company; and/or (g) approved or ratified these statements in violation of the federal securities laws. 19. Revlon is liable for the acts of the Individual Defendants and its employees under the doctrine of respondeat superior and common law principles of agency because all of the wrongful acts complained of herein were carried out within the scope of their employment. 20. The scienter of the Individual Defendants and other employees and agents of the Company is similarly imputed to Revlon under respondeat superior and agency principles. 21. Defendants Revlon and the Individual Defendants are collectively referred to herein as “Defendants.” SUBSTANTIVE ALLEGATIONS Materially False and Misleading Statements 22. On March 12, 2015, Revlon filed its annual report on Form 10-K for the year ended December 31, 2014 with the SEC (the “2014 10-K”). The 2014 10-K was signed by Defendants Delpani, Simon, and Anderson. The 2014 10-K contained signed certifications pursuant to the Sarbanes-Oxley Act of 2002 (“SOX”) by Defendants Delpani and Simon attesting to the accuracy of financial reporting, the disclosure of any material changes to the Company’s internal controls over financial reporting, and the disclosure of all fraud. 23. The 2014 10-K stated the following risk regarding Revlon’s enterprise resource planning (“ERP”) system in relevant part: The failure of the Company’s information technology systems and/or difficulties or delays in implementing new information technology systems could disrupt the Company’s business operations which could have a material adverse effect on the Company’s business, financial condition and/or results of operations. * * * The Company is currently implementing a company-wide SAP enterprise resource planning (“ERP”) system. The Company’s anticipated implementation of this SAP ERP system may not result in improvements that outweigh its costs and may disrupt the Company’s operations. This system implementation subjects the Company to substantial costs, the majority of which are capital expenditures, and inherent risks associated with migrating from the Company’s legacy systems. These costs and risks could include, but are not limited to: •inability to fill customer orders accurately or on a timely basis, or at all; •inability to process payments to vendors accurately or in a timely manner; •disruption of the Company’s internal control structure; •inability to fulfill the Company’s SEC or other governmental reporting requirements in a timely or accurate manner; •inability to fulfill federal, state and local tax filing requirements in a timely or accurate manner; •increased demands on management and staff time to the detriment of other corporate initiatives; and •significant capital and operating expenditures. If the Company is unable to successfully plan, design or implement this new SAP ERP system, in whole or in part, or experience unanticipated difficulties or delays in doing so, it could have a material adverse effect on the Company’s business, financial condition and/or results of operations. 24. As to Revlon’s internal controls, the 2014 10-K stated “Revlon, Inc.’s management determined that the Company’s internal control over financial reporting was effective as of December 31, 2014.” 25. On February 26, 2016, Revlon filed its annual report on Form 10-K for the year ended December 31, 2015 with the SEC (the “2015 10-K”). The 2015 10-K was signed by Defendants Delpani, Simon, and Anderson. The 2015 10-K contained signed SOX certifications by Defendants Delpani and Simon attesting to the accuracy of financial reporting, the disclosure of any material changes to the Company’s internal controls over financial reporting, and the disclosure of all fraud. 26. The 2015 10-K stated the following risk regarding Revlon’s ERP system in relevant The failure of the Company’s information technology systems and/or difficulties or delays in implementing new information technology systems could disrupt the Company’s business operations which could have a material adverse effect on the Company’s business, financial condition and/or results of operations. * * * The Company is in the process of implementing a company-wide SAP enterprise resource planning (“ERP”) system. The Company’s anticipated company-wide implementation of this SAP ERP system may not result in improvements that outweigh its costs and may disrupt the Company’s operations. This system implementation subjects the Company to substantial costs, the majority of which are capital expenditures, and inherent risks associated with migrating from the Company’s legacy systems. These costs and risks could include, but are not limited to: •inability to fill customer orders accurately or on a timely basis, or at all; •inability to process payments to vendors accurately or in a timely manner; •disruption of the Company’s internal control structure; •inability to fulfill the Company’s SEC or other governmental reporting requirements in a timely or accurate manner; •inability to fulfill federal, state and local tax filing requirements in a timely or accurate manner; •increased demands on management and staff time to the detriment of other corporate initiatives; and •significant capital and operating expenditures. If the Company is unable to successfully plan, design or implement this new SAP ERP system, in whole or in part, or experience unanticipated difficulties or delays in doing so, it could have a material adverse effect on the Company’s business, financial condition and/or results of operations. 27. As to Revlon’s internal controls, the 2015 10-K stated “Revlon, Inc.’s management determined that the Company’s internal control over financial reporting was effective as of December 31, 2015.” 28. On March 3, 2017, Revlon filed its annual report on Form 10-K for the year ended December 31, 2016 with the SEC (the “2016 10-K”). The 2016 10-K was signed by Defendants Garcia, Figuereo, and Anderson. The 2016 10-K contained signed SOX certifications by Defendants Garcia and Figuereo attesting to the accuracy of financial reporting, the disclosure of any material changes to the Company’s internal controls over financial reporting, and the disclosure of all fraud. 29. The 2016 10-K stated the following risk regarding Revlon’s ERP system in relevant The failure of the Company’s information technology systems and/or difficulties or delays in implementing new information technology systems could disrupt the Company’s business operations which could have a material adverse effect on the Company’s business, prospects, results of operations, financial condition and/or cash flows. * * * The Company is currently implementing a company-wide SAP enterprise resource planning (“ERP”) system. The Company’s anticipated implementation of this SAP ERP system may not result in improvements that outweigh its costs and may disrupt the Company’s operations. This system implementation subjects the Company to substantial costs, the majority of which are capital expenditures, and inherent risks associated with migrating from the Company’s legacy systems. These costs and risks could include, but are not limited to: • inability to fill customer orders accurately or on a timely basis, or at all; • inability to process payments to vendors accurately or in a timely manner; • disruption of the Company’s internal control structure; • inability to fulfill the Company’s SEC or other governmental reporting requirements in a timely or accurate manner; • inability to fulfill federal, state and local tax filing requirements in a timely or accurate manner; • increased demands on management and staff time to the detriment of other corporate initiatives; and • significant capital and operating expenditures. If the Company is unable to successfully plan, design or implement this new SAP ERP system, in whole or in part, or experience unanticipated difficulties or delays in doing so, it could have a material adverse effect on the Company’s business, prospects, results of operations, financial condition and/or cash flows. 30. As to Revlon’s internal controls, the 2016 10-K stated “Revlon’s management determined that the Company’s internal control over financial reporting was effective as of December 31, 2016.” 31. On March 15, 2018, Revlon filed its annual report on Form 10-K for the year ended December 31, 2017 with the SEC (the “2017 10-K”). The 2017 10-K was signed by Defendants Meister, Peterson, and Kralovich. The 2017 10-K contained signed SOX certifications by Defendants Meister and Peterson attesting to the accuracy of financial reporting, the disclosure of any material changes to the Company’s internal controls over financial reporting, and the disclosure of all fraud. 32. The 2017 10-K stated the following risk regarding Revlon’s ERP system in relevant Difficulties in implementing the Company’s new ERP system have disrupted the Company’s business operations and ongoing disruptions with such implementation could have a material adverse effect on the Company’s business, prospects, results of operations, financial condition and/or cash flows. The Company is implementing a new company-wide SAP enterprise resource planning ("ERP") system, which subjects the Company to inherent risks associated with migrating from the Company’s legacy systems to a new IT platform, including, without limitation: •the inability to fill customer orders accurately or on a timely basis, or at all; •increased demands on management and staff time to the detriment of other corporate initiatives; •significant capital and operating expenditures; •the inability to process payments to vendors accurately or in a timely manner; •disruption of the Company’s internal control structure; and/or •the inability to fulfill federal, state and local reporting and filing requirements in a timely or accurate manner. During February 2018, the Company launched the new ERP system in the U.S., which caused its Oxford, N.C. manufacturing facility to experience service level disruptions that have impacted the Company’s ability to manufacture certain quantities of finished goods and fulfill shipments to several large retail customers in the U.S. The Company cannot provide assurances that it will remedy the ERP systems issues in time to fully recover these sales and/or that the ERP implementation will not continue to disrupt the Company’s operations and its ability to fulfill customer orders. Also, these ERP-related disruptions have caused the Company to incur expedited shipping fees and other unanticipated expenses in connection with actions that the Company has implemented to remediate the decline in customer service levels, which could continue until the ERP systems issues are resolved. To the extent that these disruptions occur in larger magnitudes or continue to persist over time, it could negatively impact the Company’s competitive position and its relationships with its customers and thus could have a material adverse effect on the Company’s business, prospects, results of operations, financial condition and/or cash flows. 33. As to Revlon’s internal controls, the 2017 10-K stated “Revlon’s management determined that the Company’s internal control over financial reporting was effective as of December 31, 2017.” 34. On May 10, 2018, the Company filed its quarterly report with the SEC for the quarter ended March 31, 2018 (the “1Q 2018 10-Q”). The 1Q 2018 10-Q was signed by Defendants Meister, Dolan, and Kralovich. The 1Q 2018 10-Q contained signed SOX certifications by Defendants Meister and Dolan attesting to the accuracy of financial reporting, the disclosure of any material changes to the Company’s internal controls over financial reporting, and the disclosure of all fraud. 35. In the 1Q 2018 10-Q, Defendants stated the following concerning the Company’s internal controls relating to its new, ERP system: (b) Changes in Internal Control Over Financial Reporting (“ICFR”). During February 2018, the Company implemented its new ERP system that supports a significant portion of the Company’s business in North America, which resulted in certain changes to the Company’s processes and procedures. While this new ERP implementation has resulted in service level disruptions in the Company’s Oxford, N.C. manufacturing facility, the ERP implementation has not materially affected, nor is it reasonably likely to materially affect, the Company’s ICFR. 36. On August 9, 2018, the Company filed its quarterly report with the SEC for the quarter ended June 30, 2018 (the “2Q 2018 10-Q”). The 2Q 2018 10-Q was signed by Defendants Perelman, Dolan, and Kralovich. The 2Q 2018 10-Q contained signed SOX certifications by Defendants Perelman and Dolan attesting to the accuracy of financial reporting, the disclosure of any material changes to the Company’s internal controls over financial reporting, and the disclosure of all fraud. 37. In the 2Q 2018 10-Q, Defendants stated the following concerning the Company’s internal controls relating to its new, ERP system: (b) Changes in Internal Control Over Financial Reporting (“ICFR”). There have not been any changes in the Company’s internal control over financial reporting during the quarter ended June 30, 2018 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. During February 2018, the Company implemented its new ERP system that supports a significant portion of the Company’s business in North America, which resulted in certain changes to the Company’s processes and procedures. While this new ERP implementation has resulted in service level disruptions in the Company’s Oxford, N.C. manufacturing facility, the ERP implementation has not materially affected, nor is it reasonably likely to materially affect, the Company’s ICFR. 38. On November 9, 2018, the Company filed its quarterly report with the SEC for the quarter ended September 30, 2018 (the “3Q 2018 10-Q”). The 3Q 2018 10-Q was signed by Defendants Perelman, Dolan, and Kralovich. The 3Q 2018 10-Q contained signed SOX certifications by Defendants Perelman and Dolan attesting to the accuracy of financial reporting, the disclosure of any material changes to the Company’s internal controls over financial reporting, and the disclosure of all fraud. 39. In the 3Q 2018 10-Q, Defendants stated the following concerning the Company’s internal controls relating to its new, ERP system: (b) Changes in Internal Control Over Financial Reporting (“ICFR”). There have not been any changes in the Company’s internal control over financial reporting during the quarter ended September 30, 2018 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. During February 2018, the Company implemented its new ERP system that supports a significant portion of the Company’s business in North America, which resulted in certain changes to the Company’s processes and procedures. While this new ERP implementation has resulted in service level disruptions in the Company’s Oxford, N.C. manufacturing facility, the ERP implementation has not materially affected, nor is it reasonably likely to materially affect, the Company’s ICFR. 40. The statements contained in ¶¶22-39 were materially false and/or misleading because they misrepresented and failed to disclose the following adverse facts pertaining to the Company’s business, operations and prospects, which were known to Defendants or recklessly disregarded by them. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (1) Revlon failed to create measures to monitor the ERP system appropriately once implemented; (2) Revlon failed to design, implement and consistently operate effective process-level controls to ensure that it appropriately (a) recorded and accounted for inventory, accounts receivable, net sales and cost of goods sold, (b) reconciled balance sheet accounts, (c) reviewed and approved the complete population of manual journal entries, and (d) used complete and accurate information in performing manual control, which constituted a material weakness in its internal controls over financial reporting; (3) as a result of the poor preparation and planning of the implementation of the ERP system, Revlon was unable to fulfill product shipments of approximately $64 million of net sales and the Company incurred $53.6 million of incremental charges to remediate the decline in customer services levels; and (4) as a result, Defendants’ statements about Revlon’s business, operations, and prospects were materially false and/or misleading and/or lacked a reasonable basis at all relevant times. THE TRUTH BEGINS TO EMERGE 41. On March 18, 2019, after market hours, Revlon filed a Form 12b-25, disclosing it was unable to timely file its annual report for the fiscal year ended December 31, 2018 due to the identification of a material weakness in its internal controls relating to its ERP system. The SEC filing states, in relevant part: Revlon, Inc. (the “Company”) is unable to file, without unreasonable effort and expense, its Annual Report on Form 10-K for the fiscal year ended December 31, 2018 (the “2018 Form 10-K”) by the prescribed filing date. The principal reason for the delay is the recent identification of a material weakness, which has created the need for additional time to finalize management’s assessment and the audits of the effectiveness of internal control over financial reporting as of December 31, 2018. The Company expects to disclose in its 2018 Form 10-K that it identified a material weakness in its internal control over financial reporting as of year-end 2018, primarily related to the lack of design and maintenance of effective controls in connection with the previously-disclosed implementation of its enterprise resource planning (“ERP”) system in the U.S. The Company does not expect any changes to its previously-reported preliminary financial results, including the financial results that it previously reported in its press release furnished as Exhibit 99.1 to the Company’s Current Report on Form 8-K filed with the SEC on March 18, 2019. Upon completion of the audits, the Company expects to file its 2018 Form 10-K within the extension period of 15 calendar days as provided under Rule 12b-25 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company is working diligently along with its external auditor to complete its work and audit and expects to file the 2018 Form 10-K within the grace period prescribed by Rule 12b-25 under the Exchange Act. (Emphasis added). 42. On this news, shares of Revlon fell $1.33 per share, or nearly 6.87%, to close at $18.02 per share on March 19, 2019, damaging investors. 43. On March 28, 2019, after the market closed, Revlon filed its annual report on Form 10-K for the year ending December 31, 2018 with the SEC (the “2018 10-K”). The 2018 10-K revealed further details about Revlon’s the problems with the ERP system, internal control weaknesses, and the reasons for these weaknesses, stating in relevant part: During February 2018, the Company launched the new ERP system in the U.S., which caused its Oxford, N.C. manufacturing facility to experience service level disruptions that impacted the Company’s ability to manufacture certain quantities of finished goods and fulfill shipments to several large retail customers in the U.S. Also, these ERP-related disruptions caused the Company to incur expedited shipping fees and other unanticipated expenses in connection with actions that the Company implemented to remediate the decline in customer service levels. The Company estimates that this ERP launch resulted in the Company being unable to fulfill product shipments representing approximately $64 million of net sales during 2018 and incurring $53.6 million of incremental charges in 2018, mainly related to actions that the Company implemented to remediate the decline in customer service levels. As of December 31, 2018, the Company’s Oxford, N.C. manufacturing facility was operating at pre-SAP levels and the Company was continuing to re-fill inventories across its retail partners, particularly internationally. If these disruptions occur in larger magnitudes or continue to persist over time, it would continue to negatively impact the Company’s ability to fulfill product shipments to customers and cause the Company to incur additional remediation costs, which in turn would continue to negatively impact the Company’s competitive position and its relationships with its customers. * * * The Company’s management, under the oversight of the Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2018 and in making this assessment used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission Internal Control-Integrated Framework (2013). In connection with this assessment, the Company’s management identified the following deficiencies in its internal control over financial reporting: (i) the Company did not perform an effective continuous risk assessment process that adequately identified and assessed risks affecting the Company’s internal controls over financial reporting associated with the implementation of its new ERP system in the U.S.; (ii) the Company did not maintain a sufficient number of knowledgeable, trained personnel in the U.S. operations impacted by the ERP system implementation and in various other operations across the Company who understood and were held accountable for their assigned responsibilities for the design, implementation and operation of internal controls over financial reporting; and (iii) as a result, the Company did not design, implement and consistently operate effective process-level controls to ensure that it appropriately (a) recorded and accounted for inventory, accounts receivable, net sales and cost of goods sold, (b) reconciled balance sheet accounts, (c) reviewed and approved the complete population of manual journal entries and (d) used complete and accurate information in performing manual controls. While these control deficiencies did not result in any material misstatement of the Company’s 2018 Consolidated Financial Statements, the Company’s management concluded that these deficiencies represented a material weakness, and that the Company’s internal control over financial reporting was not effective as of December 31, 2018. The Company’s independent registered public accounting firm, KPMG LLP, who audited the 2018 Consolidated Financial Statements included in this 2018 Form 10- K issued an adverse report on the Company’s internal control over financial reporting reflecting this material weakness as of December 31, 2018, which report appears on page F-3 of the 2018 Consolidated Financial Statements. * * * (d) Management’s Remediation Plan. To remediate this material weakness, the Company will: (i) implement enhancements to company-wide risk assessment processes; (ii) enhance the Company’s review and sign-off procedures for IT implementations; (iii) train responsible staff and supplement staff; (iv) supplement internal resources with third-party consultants; (v) enhance its process and control documentation; (vi) implement new processes and controls relative to the execution and oversight of inventory, accounts receivable, net sales and cost of goods sold; (vii) enhance and reinforce policies around account reconciliations and manual journal entries; (viii) clearly identify and communicate individual employee responsibilities; and (ix) implement controls and new reporting tools to ensure the completeness and accuracy of information used in performing manual controls. The Company is also continuing to evaluate additional controls and procedures that may be required to remediate the material weakness. (Emphasis added). 44. On this news, shares of Revlon fell $1.33 per share or over 6.4% to close at $19.38 per share on March 29, 2019, further damaging investors. 45. As a result of Defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the Company’s common shares, Plaintiff and other Class members have suffered significant losses and damages. PLAINTIFF’S CLASS ACTION ALLEGATIONS 46. Plaintiff brings this action as a class action pursuant to Federal Rule of Civil Procedure 23(a) and (b)(3) on behalf of a class consisting of all persons other than defendants who acquired Revlon securities publicly traded on the NYSE during the Class Period, and who were damaged thereby (the “Class”). Excluded from the Class are Defendants, the officers and directors of Revlon, members of the Individual Defendants’ immediate families and their legal representatives, heirs, successors or assigns and any entity in which Officer or Director Defendants have or had a controlling interest. 47. The members of the Class are so numerous that joinder of all members is impracticable. Throughout the Class Period, Revlon securities were actively traded on the NYSE. While the exact number of Class members is unknown to Plaintiff at this time and can be ascertained only through appropriate discovery, Plaintiff believes that there are hundreds, if not thousands of members in the proposed Class. 48. Plaintiff’s claims are typical of the claims of the members of the Class as all members of the Class are similarly affected by defendants’ wrongful conduct in violation of federal law that is complained of herein. 49. Plaintiff will fairly and adequately protect the interests of the members of the Class and has retained counsel competent and experienced in class and securities litigation. Plaintiff has no interests antagonistic to or in conflict with those of the Class. 50. Common questions of law and fact exist as to all members of the Class and predominate over any questions solely affecting individual members of the Class. Among the questions of law and fact common to the Class are: • whether the Exchange Act were violated by Defendants’ acts as alleged herein; • whether statements made by Defendants to the investing public during the Class Period misrepresented material facts about the financial condition and business Revlon; • whether Defendants’ public statements to the investing public during the Class Period omitted material facts necessary to make the statements made, in light of the circumstances under which they were made, not misleading; • whether the Defendants caused Revlon to issue false and misleading SEC filings during the Class Period; • whether Defendants acted knowingly or recklessly in issuing false and SEC filing • whether the prices of Revlon’ securities during the Class Period were artificially inflated because of the Defendants’ conduct complained of herein; and • whether the members of the Class have sustained damages and, if so, what is the proper measure of damages. 51. A class action is superior to all other available methods for the fair and efficient adjudication of this controversy since joinder of all members is impracticable. Furthermore, as the damages suffered by individual Class members may be relatively small, the expense and burden of individual litigation make it impossible for members of the Class to individually redress the wrongs done to them. There will be no difficulty in the management of this action as a class 52. Plaintiff will rely, in part, upon the presumption of reliance established by the fraud-on-the-market doctrine in that: • Revlon shares met the requirements for listing, and were listed and actively traded on the NYSE, a highly efficient and automated market; • As a public issuer, Revlon filed periodic public reports with the SEC6; • Revlon regularly communicated with public investors via established market communication mechanisms, including through the regular dissemination of press releases via major newswire services and through other wide-ranging public disclosures, such as communications with the financial press and other similar reporting services; and • Revlon was followed by a number of securities analysts employed by major brokerage firms who wrote reports that were widely distributed and publicly available. 53. Based on the foregoing, the market for Revlon securities promptly digested current information regarding Revlon from all publicly available sources and reflected such information in the prices of the shares, and Plaintiff and the members of the Class are entitled to a presumption of reliance upon the integrity of the market. 54. Alternatively, Plaintiff and the members of the Class are entitled to the presumption of reliance established by the Supreme Court in Affiliated Ute Citizens of the State of Utah v. United States, 406 U.S. 128 (1972), as Defendants omitted material information in their Class Period statements in violation of a duty to disclose such information as detailed above. COUNT I For Violations of Section 10(b) And Rule 10b-5 Promulgated Thereunder Against All Defendants 55. Plaintiff repeats and realleges each and every allegation contained above as if fully set forth herein. 56. This Count is asserted against Defendants is based upon Section 10(b) of the Exchange Act, 15 U.S.C. § 78j(b), and Rule 10b-5 promulgated thereunder by the SEC. 57. During the Class Period, Defendants, individually and in concert, directly or indirectly, disseminated or approved the false statements specified above, which they knew or deliberately disregarded were misleading in that they contained misrepresentations and failed to disclose material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading. 58. Defendants violated §10(b) of the 1934 Act and Rule 10b-5 in that they: • employed devices, schemes and artifices to defraud; • made untrue statements of material facts or omitted to state material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; or • engaged in acts, practices and a course of business that operated as a fraud or deceit upon plaintiff and others similarly situated in connection with their purchases of Revlon securities during the Class Period. 59. Defendants acted with scienter in that they knew that the public documents and statements issued or disseminated in the name of Revlon were materially false and misleading; knew that such statements or documents would be issued or disseminated to the investing public; and knowingly and substantially participated, or acquiesced in the issuance or dissemination of such statements or documents as primary violations of the securities laws. These defendants by virtue of their receipt of information reflecting the true facts of Revlon, their control over, and/or receipt and/or modification of Revlon’s allegedly materially misleading statements, and/or their associations with the Company which made them privy to confidential proprietary information concerning Revlon, participated in the fraudulent scheme alleged herein. 60. Individual Defendants, who are the senior officers and/or directors of the Company, had actual knowledge of the material omissions and/or the falsity of the material statements set forth above, and intended to deceive Plaintiff and the other members of the Class, or, in the alternative, acted with reckless disregard for the truth when they failed to ascertain and disclose the true facts in the statements made by them or other Revlon personnel to members of the investing public, including Plaintiff and the Class. 61. As a result of the foregoing, the market price of Revlon securities was artificially inflated during the Class Period. In ignorance of the falsity of Defendants’ statements, Plaintiff and the other members of the Class relied on the statements described above and/or the integrity of the market price of Revlon securities during the Class Period in purchasing Revlon securities at prices that were artificially inflated as a result of Defendants’ false and misleading statements. 62. Had Plaintiff and the other members of the Class been aware that the market price of Revlon securities had been artificially and falsely inflated by Defendants’ misleading statements and by the material adverse information which Defendants did not disclose, they would not have purchased Revlon securities at the artificially inflated prices that they did, or at all. 63. As a result of the wrongful conduct alleged herein, Plaintiff and other members of the Class have suffered damages in an amount to be established at trial. 64. By reason of the foregoing, Defendants have violated Section 10(b) of the 1934 Act and Rule 10b-5 promulgated thereunder and are liable to the plaintiff and the other members of the Class for substantial damages which they suffered in connection with their purchase of Revlon securities during the Class Period. COUNT II Violations of Section 20(a) of the Exchange Act Against the Individual Defendants 65. Plaintiff repeats and realleges each and every allegation contained in the foregoing paragraphs as if fully set forth herein. 66. During the Class Period, the Individual Defendants participated in the operation and management of Revlon, and conducted and participated, directly and indirectly, in the conduct of Revlon’s business affairs. Because of their senior positions, they knew the adverse non-public information about Revlon’s misstatement of revenue and profit and false financial statements. 67. As officers and/or directors of a publicly owned company, the Individual Defendants had a duty to disseminate accurate and truthful information with respect to Revlon’s financial condition and results of operations, and to correct promptly any public statements issued by Revlon which had become materially false or misleading. 68. Because of their positions of control and authority as senior officers, the Individual Defendants were able to, and did, control the contents of the various reports, press releases and public filings which Revlon disseminated in the marketplace during the Class Period concerning Revlon’s results of operations. Throughout the Class Period, the Individual Defendants exercised their power and authority to cause Revlon to engage in the wrongful acts complained of herein. The Individual Defendants therefore, were “controlling persons” of Revlon within the meaning of Section 20(a) of the Exchange Act. In this capacity, they participated in the unlawful conduct alleged which artificially inflated the market price of Revlon securities. 69. By reason of the above conduct, the Individual Defendants are liable pursuant to Section 20(a) of the Exchange Act for the violations committed by Revlon. PRAYER FOR RELIEF WHEREFORE, plaintiff, on behalf of himself and the Class, prays for judgment and relief as follows: (a) declaring this action to be a proper class action, designating plaintiff as Lead Plaintiff and certifying plaintiff as a class representative under Rule 23 of the Federal Rules of Civil Procedure and designating plaintiff’s counsel as Lead Counsel; (b) awarding damages in favor of plaintiff and the other Class members against all defendants, jointly and severally, together with interest thereon; awarding plaintiff and the Class reasonable costs and expenses incurred in this action, including counsel fees and expert fees; and (d) awarding plaintiff and other members of the Class such other and further relief as the Court may deem just and proper. JURY TRIAL DEMANDED Plaintiff hereby demands a trial by jury. Dated: May 14, 2019 Respectfully submitted, THE ROSEN LAW FIRM, P.A. By: /s/Phillip Kim Phillip Kim, Esq. (PK 9384) Laurence M. Rosen, Esq. (LR 5733) 275 Madison Avenue, 34th Floor New York, NY 10016 Telephone: (212) 686-1060 Fax: (212) 202-3827 Email: pkim@rosenlegal.com lrosen@rosenlegal.com Counsel for Plaintiff

securities

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Joseph W. Cotchett (36324) Steven N. Williams (175489) Demetrius X. Lambrinos (246027) Elizabeth T. Tran (280502) Joyce Chang (300780) COTCHETT, PITRE & McCARTHY, LLP 840 Malcolm Road, Suite 200 Burlingame, CA 94010 Telephone: 650-697-6000 Facsimile: 650-697-0577 jcotchett@cpmlegal.com swilliams@cpmlegal.com dlambrinos@cpmlegal.com etran@cpmlegal.com jchang@cpmlegal.com Attorneys for the Putative Indirect Purchaser Class UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA Case No.: Microsystems Development Technologies, Inc. on behalf of itself and all others similarly situated, Plaintiffs, CLASS ACTION COMPLAINT vs. JURY DEMAND Panasonic Corporation, Panasonic Corporation of North America, Panasonic Industrial Devices Sales Company of America, KOA Corporation, KOA Speer Electronics, Inc., Murata Manufacturing Co., Ltd., Murata Electronics North America, Inc. ROHM Co. Ltd., ROHM Semiconductor U.S.A., LLC, Vishay Intertechnology, Inc., Yageo Corporation, and Yageo America Corporation Defendants TABLE OF CONTENTS Page I. NATURE OF ACTION ..................................................................................................1 II. GOVERNMENT INVESTIGATIONS INTO THE RESISTORS INDUSTRY .......6 A. U.S. Investigations ................................................................................................6 B. Foreign Investigations ...........................................................................................6 III. THE DEFENDANTS CONCEALED THEIR UNLAWFUL CONDUCT ................7 A. The Statute of Limitations Did Not Begin to Run Because Plaintiffs Did Not and Could Not Discover Their Claims..................................................................7 B. Defendants’ Fraudulent Concealment Tolled the Statute of Limitations. ............8 IV. JURISDICTION AND VENUE .....................................................................................9 V. INTRADISTRICT ASSIGNMENT ............................................................................11 VI. PARTIES .......................................................................................................................12 A. Indirect Purchaser Plaintiff .................................................................................12 B. Defendants ..........................................................................................................12 VII. AGENTS AND CO-CONSPIRATORS ......................................................................15 VIII. FACTUAL ALLEGATIONS .......................................................................................16 A. The Characteristics of the Resistors Market Render Collusion Plausible Based on Activities. ............................................................................................16 1. The Resistors Industry Has High Barriers to Entry. ...............................16 2. The Demand for Resistors Is Inelastic. ...................................................17 3. The Resistors Industry Is Highly Concentrated. .....................................19 4. Resistors Are Homogenous and Commoditized Products. .....................20 5. Sales of Resistors ....................................................................................21 B. Ability in Industry to Conspire ...........................................................................23 1. Defendants Have Ample Opportunities to Conspire. .............................23 2. Resistor Manufacturers Had Relationships in Other Price-Fixed Markets. ...............................................................................................23 C. Motive to Conspire .............................................................................................24 1. Defendants Had a Common Motive to Conspire. ...................................24 IX. INDIRECT PURCHASERS OF RESISTORS LACKED BUYING POWER. ......24 X. DEFENDANTS COLLUDED TO KEEP THE PRICE OF RESISTORS ELEVATED DURING THE CLASS PERIOD. ........................................................26 XI. ANTITRUST INJURY .................................................................................................27 XII. AFFECTED TRADE AND COMMERCE .................................................................27 A. Defendants’ Conduct Involved Import Trade or Import Commerce and Had a Direct, Substantial and Reasonably Foreseeable Effect on U.S. Domestic and Import Trade or Commerce that Gave Rise to Plaintiffs’ Antitrust Claims .................................................................................28 B. The Defendants Targeted the United States. .......................................................29 XIII. CLASS ACTION ALLEGATIONS ............................................................................30 XIV. GUILTY PLEAS IN PRIOR CASES ..........................................................................33 XV. VIOLATIONS ALLEGED ..........................................................................................34 FIRST CLAIM FOR RELIEF (Violations of Sherman Act, 15 U.S.C. § 1) (On Behalf of All Plaintiffs Against All Defendants) ................................................................34 SECOND CLAIM FOR RELIEF (Violations of California’s Cartwright Act, Cal. Bus. & Prof. Code §§ 16720, et seq.) (On Behalf of All Plaintiffs Against All Defendants) ................................................................36 THIRD CLAIM FOR RELIEF (Violations of California’s Unfair Competition Law, Cal. Bus. & Prof. Code §§ 17200, et seq.) (On Behalf of All Plaintiffs Against All Defendants) ................................................................38 XVI. REQUEST FOR RELIEF ............................................................................................38 JURY DEMAND .......................................................................................................................41 Miscrosystems Development Technologies, Inc. (“MDT” or “Plaintiff”) brings this action on behalf of itself and all others similarly situated (the “Indirect Purchaser Classes” defined below, infra at §§ 125-127, collectively “Plaintiffs”). Plaintiffs’ allegations in this Complaint are based upon personal knowledge as to the facts pertaining to MDT, and upon information and belief as to all other matters. These allegations are also based on the investigation of counsel. Plaintiffs seek damages, injunctive relief, and all other relief available under the federal antitrust laws and the antitrust, unfair competition and consumer protection laws of California. Plaintiffs demand a trial by jury, and allege as follows: I. NATURE OF ACTION 1. Resistors are one of the most common electronic components in the world today. They are designed to provide a specific amount of resistance to an electronic circuit. They are “passive” components in the sense that they regulate, as opposed to generate, electrical currents. Since many electronic components have capacity for more electrical current than is necessary, and additional electrical current may be harmful, resistors serve a regulatory function by assuring that appropriate levels of voltage go to specific parts of an electronic circuit. Almost all electronic products—from cellphones to personal computers— contain resistors, often hundreds of them. See images below. 2. Resistors are widely used in a range of industries, including the telecommunications, audiovisual, automotive, and server computing markets. The overall resistor market can be separated into two categories: linear resistors and non-linear resistors, the former of which are the subject of this Complaint. In basic terms, a linear resistor is a resistor “in which current produced is directly proportional to the applied voltage.” See http://jabelufiroz.hubpages.com/hub/Linear-and-Non-Linear-Resistors (last visited on August 18, 2015). A non-linear resistor is a resistor “whose current does not change linearly with changes in applied voltage.” Id. In contrast to non-linear resistors, which are used in specialized products, linear resistors are highly standardized. These two categories can be further broken down by the technology and materials used in the manufacturing process as illustrated in the diagrams below.1 Source: http://www.electricaltechnology.org/2015/01/resistor-types-resistors-fixed- variable-linear-non-linear.html (last visited August 10, 2015) 3. Linear resistors represent the largest category of resistors. The thick film chip resistor is considered to be the workhorse of the resistor industry. These so-called chip resistors are used in cellular phones, computer motherboards, disc drives, monitors, automotive electronic assemblies, television sets, stereo amplifiers, and many other components. Given 1 Many manufacturers compete in both the capacitor and resistor markets (e.g. Panasonic, Vishay, and Yageo). See Dennis M. Zogbi, Resistors: World Markets, Technologies & Opportunities: 2014-2019 (Paumanok Publications, September 2014). the high level of standardization of chip resistors, prices naturally fall over time. As a result, manufacturing has migrated from the western countries to Asia. 4. Plaintiffs purchased resistors as stand-alone products from distributors that had previously purchased them from Defendants. When purchased as stand-alone products, resistors are directly traceable to the specific manufacturer, because they either bear the Defendants’ markings (e.g., name, logo, series) or they marked with a chemical that permits a “chemical trace” back to the manufacturer. 5. Defendants—the worlds’ largest manufacturers of linear resistors— along with other co-conspirators (as yet unknown) agreed, combined, and conspired to inflate, fix, raise, maintain or artificially stabilize prices of linear resistors sold in the United Sates.2 Defendants’ conspiracy successfully targeted various individuals and entities that purchased linear resistors from distributors, and those purchasers—i.e. the Plaintiffs—paid artificially inflated prices for linear resistors as a result. 6. Defendants’ conduct violated, and continues to violate, Section One of the Sherman Act and the antitrust, consumer protection, and unfair competition laws of the State of California. Plaintiffs and the Classes paid artificially inflated prices for resistors, and have 2 “Defendants,” refers collectively to the following entities: Panasonic Corporation, Panasonic Corporation of North America, Panasonic Industrial Devices Sales Company of America, KOA Corporation,KOA Speer Electronics, Inc., Murata Manufacturing Co., Ltd., Murata Electronics North America, Inc., ROHM Co. Ltd., ROHM Semiconductor U.S.A., LLC, Vishay Intertechnology, Inc., Yageo Corporation, and Yageo America Corporation. thereby suffered antitrust injury to their business or property as a direct result of the anticompetitive and unlawful conduct alleged herein. II. GOVERNMENT INVESTIGATIONS INTO THE RESISTORS INDUSTRY A. U.S. Investigations 7. It has been widely reported that the Department of Justice (DOJ) initiated an investigation of price fixing in the resistors industry in June of 2015. 8. It has also been reported that the DOJ’s investigation in the resistors industry is an “offshoot” of its price-fixing investigation into the capacitors industry. According to reports, there is significant overlap in companies under investigation, though there are some companies in the resistors case that do not appear in the capacitors case. It has been reported that these two cases are part of a probe into the larger market for passive electronic components, and that it is widely expected that the DOJ’s inquiry will continue to expand. 9. So far, eight companies, including Panasonic Corporation (“Panasonic”), have acknowledged being contacted by US or other antitrust authorities in connection with the capacitors probe. Panasonic—one of the world’s leading manufacturers of both resistors and capacitors—cooperated with the DOJ in the capacitors investigation, and is also believed to be cooperating with the DOJ in its investigation into price-fixing in the resistors market. B. Foreign Investigations 10. In addition to the DOJ investigation, there have also been investigations by foreign antitrust authorities. For example, it is reported that the Korean Fair Trade Commission (“KFTC”) recently conducted an on-site investigation of suspected price fixing in the market for resistors. It is also reported that the Japanese Fair Trade Commission (“JFTC”) conducted raids at some of the Defendants’ offices. III. THE DEFENDANTS CONCEALED THEIR UNLAWFUL CONDUCT A. The Statute of Limitations Did Not Begin to Run Because Plaintiffs Did Not and Could Not Discover Their Claims. 11. Plaintiffs and Members of the Classes had no knowledge of the combination or conspiracy alleged herein, or of facts sufficient to place them on inquiry notice of the claims set forth herein, until (at the earliest) June 2015, when reports of the investigations into anticompetitive conduct concerning resistors were first publicly disseminated. 12. Plaintiffs and Members of the Classes are purchasers who purchased resistors manufactured by a Defendant from a distributor. They had no direct contact or interaction with any of the Defendants in this case and had no means from which they could have discovered the combination and conspiracy described in this Complaint before June 2015, when reports of the investigations into anticompetitive conduct concerning resistors were first publicly disseminated. 13. No information in the public domain was available to Plaintiffs and the Members of the Classes prior to the public announcements of the government investigations beginning in June 2015 that revealed sufficient information to suggest that any one of the Defendants was involved in a criminal conspiracy to fix prices for resistors. 14. Publicly, some Defendants repeatedly and expressly stated throughout the Class Period, including on their public Internet websites, that they maintained antitrust/fair competition policies which prohibited the type of collusion seen in this litigation. See Appendix A. 15. It was reasonable for members of the Classes who may have been exposed to these public policies to believe that the Defendants were enforcing the policies. 16. For these reasons, the statute of limitations as to Plaintiffs and the Classes’ claims did not begin to run, and has been tolled with respect to the claims that Plaintiffs and Members of the Classes have alleged in this Complaint. B. Defendants’ Fraudulent Concealment Tolled the Statute of Limitations. 17. In the alternative, application of the doctrine of fraudulent concealment tolled the statute of limitations on the claims asserted herein by Plaintiffs and the Classes. Plaintiffs and the members of the Classes had no knowledge of the combination or conspiracy alleged in this Complaint, or of facts sufficient to place them on inquiry notice of their claims, until news sources first reported in June 2015 that the DOJ was conducting a probe into anticompetitive conduct among resistors manufacturers. Prior to that date, no information in the public domain or available to the Plaintiffs and the Classes suggested that any Defendant was involved in a criminal conspiracy to fix prices for resistors. 18. Plaintiffs exercised reasonable diligence. Plaintiffs and the Classes could not have discovered the alleged conspiracy at an earlier date by the exercise of reasonable diligence because of the deceptive practices and techniques of secrecy employed by Defendants and their co-conspirators to conceal their combination. 19. Before that time, Plaintiffs and Members of the Classes were unaware of Defendants’ unlawful conduct, and did not know that they were paying supracompetitive prices for resistors throughout the United States during the Class Period. No information, actual or constructive, was ever made available to Plaintiffs that even hinted to Plaintiffs that they were being injured by Defendants’ unlawful conduct. 20. The affirmative acts of Defendants alleged herein, including acts in furtherance of the conspiracy, were wrongfully concealed and carried out in a manner that precluded detection. 21. Defendants used mechanisms designed to conceal their collusion, such as covert meetings, use of code words or terms to refer to competitors and/or customers, use of pretexts to mask the true purpose of collusive communications, use of non-company phones, and instructions to destroy emails evidencing collusive activities. 22. By its very nature, Defendants’ anticompetitive conspiracy was inherently self- concealing. Resistors are not exempt from antitrust regulation, and thus, before June 2015, Plaintiffs reasonably considered it to be a competitive industry. Accordingly, a reasonable person under the circumstances would not have been alerted to begin to investigate the legitimacy of Defendants’ resistors prices before June 2015. 23. Plaintiffs and Members of the Classes could not have discovered the alleged contract, conspiracy or combination at an earlier date by the exercise of reasonable diligence because of the deceptive practices and techniques of secrecy employed by Defendants and their co-conspirators to avoid detection of, and fraudulently conceal, their contract, combination, or conspiracy. 24. Because the alleged conspiracy was both self-concealing and affirmatively concealed by Defendants and their co-conspirators, Plaintiffs and Members of the Classes had no knowledge of the alleged conspiracy, or of any facts or information that would have caused a reasonably diligent person to investigate whether a conspiracy existed, until June 2015, when reports of the investigations into anticompetitive conduct concerning resistors were first publicly disseminated. 25. For these reasons, the statute of limitations applicable to the claims of Plaintiffs’ and Members of the Classes was tolled and did not begin to run until, at the earliest, June 2015. IV. JURISDICTION AND VENUE 26. Plaintiffs bring this action under Section 16 of the Clayton Act (15 U.S.C. § 26) to secure equitable and injunctive relief against Defendants for violating the Sherman Act (15 U.S.C. § 1). Plaintiffs also assert claims for actual and exemplary damages and injunctive relief pursuant to California’s antitrust, unfair competition, and consumer protection laws, and seek to obtain restitution, recover damages, and secure all other available relief against Defendants for violation of those state laws. Plaintiffs and the Classes also seek attorneys’ fees, costs, and other expenses under these laws. 27. This Court has subject matter jurisdiction pursuant to Section 16 of the Clayton Act (15 U.S.C. § 26), Section 1 of the Sherman Act (15 U.S.C. § 1), and 28 U.S.C. §§ 1331 and 1137. This Court also has subject matter jurisdiction of the state law claims pursuant to 28 U.S.C. § 1332(d) and 1367, in that: (i) this is a class action in which the matter or controversy exceeds the sum of $5,000,000, exclusive of interest and costs, and in which some members of the proposed Classes are citizens of a state different from some Defendants; and (ii) Plaintiffs’ state law claims form part of the same case or controversy as their federal claims under Article III of the United States Constitution. 28. Venue is proper in this District pursuant to Section 12 of the Clayton Act (15 U.S.C. § 22), and 28 U.S.C. §§ 1391(b)-(d) because a substantial part of the events giving rise to Plaintiffs’ claims occurred in this District, a substantial portion of the affected interstate trade and commerce discussed below has been carried out in this District, and one or more of the Defendants reside, are licensed to do business in, are doing business in, had agents in, or are found or transact business in this District. 29. This Court has in personam jurisdiction over each of the Defendants because each Defendant, either directly or through the ownership and/or control of its United States subsidiaries, inter alia: (a) transacted business in the United States, including in this District; (b) directly or indirectly sold or marketed substantial quantities of resistors throughout the United States, including in this District; (c) had substantial aggregate contacts with the United States as a whole, including in this District; or (d) were engaged in an illegal price-fixing conspiracy that was directed at, and had a direct, substantial, reasonably foreseeable and intended effect of causing injury to, the business or property of persons and entities residing in, located in, or doing business throughout the United States, including in this District. Defendants also conduct business throughout the United States, including in this District, and they have purposefully availed themselves of the laws of the United States. 30. Defendants engaged in conduct both inside and outside of the United States that caused direct, substantial, and reasonably foreseeable and intended anticompetitive effects upon interstate commerce within the United States. 31. The activities of Defendants and their co-conspirators were within the flow of, were intended to, and did have, a substantial effect on interstate commerce in the United States. Defendants’ products are sold in the flow of interstate commerce. 32. Resistors manufactured abroad by Defendants and sold as stand-alone products that were either manufactured in the United States or manufactured abroad and sold in the United States, are goods brought into the United States for sale and therefore constitute import commerce. To the extent any resistors are purchased in the United States, and such resistors do not constitute import commerce, Defendants’ unlawful conduct with respect thereto, as more fully alleged herein during the respective Class Periods, had and continues to have a direct, substantial, and reasonably foreseeable effect on United States commerce. The anticompetitive conduct, and its effect on United States commerce described herein, caused antitrust injury to Plaintiffs and members of the Classes in the United States. 33. By reason of the unlawful activities hereinafter alleged, Defendants substantially affected commerce throughout the United States, causing injury to Plaintiffs and members of the Classes. Defendants, directly and through their agents, engaged in activities affecting all states, to fix, raise, maintain and/or stabilize prices, and allocate market shares for resistors, which conspiracies unreasonably restrained trade and adversely affected the market for such resistors. 34. Defendants’ anticompetitive conduct adversely affected individuals and entities in the United States, including Plaintiffs and members of the Classes, who indirectly purchased resistors as stand-alone products. V. INTRADISTRICT ASSIGNMENT 35. Intradistrict assignment to the San Jose Division is appropriate. Plaintiff Microsystems Development Technologies, Inc. has its principal place of business in San Jose. In addition, Defendants ROHM Semiconductor U.S.A., LLC and Yageo America Corporation have offices in San Jose. Moreover, the conduct at issue adversely the technology industry, the heart of which is in Silicon Valley in and around San Jose. For these reasons, assignment to the San Jose Division is appropriate. VI. PARTIES A. Indirect Purchaser Plaintiff 36. Microsystems Development Technologies, Inc. purchased a resistor(s) as a stand-alone product(s) made by one or more Defendants from a distributor during the Class Period. Microsystems Development Technology, Inc. is a California Corporation with its principal place of business in San Jose, California. Microsystems Development Technology, Inc. has been injured and is threatened with further injury as a result of the violations alleged in this Complaint. B. Defendants 37. Defendant Panasonic Corporation (“Panasonic”) is a Japanese corporation with its principal place of business located at 1006 Oaza Kadoma, Kadoma-shi, Osaka 571- 8501, Japan. Panasonic is one of the world’s leading manufacturers of resistors. Panasonic— directly and/or through its subsidiaries, which it wholly owned and/or controlled— manufactured, marketed, and/or sold resistors that were purchased throughout the United States, including in this District, during the Class Period. 38. Defendant Panasonic Corporation of North America (“PNA”), a wholly owned subsidiary of Panasonic, is a Delaware corporation with its principal place of business located at Two Riverfront Plaza, Newark, New Jersey 07102. PNA is one of the world’s leading manufacturers of resistors. PNA—directly and/or through its subsidiaries, which it wholly owned and/or controlled—manufactured, marketed, and/or sold resistors that were purchased throughout the United States, including in this District, during the Class Period. 39. Defendant Panasonic Industrial Devices Sales Company of America (“PIDS”), a wholly owned subsidiary of Panasonic, a Delaware corporation with its principal place of business located at Two Riverfront Plaza, Newark, New Jersey 07102. (Panasonic, PNA and PIDS are collectively referred to as the “Panasonic Defendants”.) PIDS is one of the world’s leading manufacturers of resistors. PIDS—directly and/or through its subsidiaries, which it wholly owned and/or controlled—manufactured, marketed, and/or sold resistors that were purchased throughout the United States, including in this District, during the Class Period. MDT purchased esistors made by the Panasonic Defendants, or one of their subsidiaries, as a stand-alone product from a distributor during the Class Period. 40. Defendant KOA Corporation (“KOA”) is a Japanese corporation with its principal place of business located at 2-17-2 Midori-Cho, Fuchu-Shi, Tokyo 183-0006, Japan. KOA is one of the world’s leading manufacturers of resistors. KOA—directly and/or through its subsidiaries, which it wholly owned and/or controlled—manufactured, marketed, and/or sold resistors that were purchased throughout the United States, including in this District, during the Class Period. 41. Defendant KOA Speer Electronics, Inc. (“KOA Speer”) is a Delaware corporation with its principal place of business located at 199 Bolivar Drive, Bradford, Pennsylvania 16701. KOA Speer is one of the world’s leading manufacturers of resistors and is a wholly owned subsidiary of KOA (Collectively, the “KOA Defendants”). KOA Speer— directly and/or through its subsidiaries, which it wholly owned and/or controlled— manufactured, marketed, and/or sold resistors that were purchased throughout the United States, including in this District, during the Class Period. MDT purchased linear resistors made by the KOA Defendants, or one of their subsidiaries, as a stand-alone product from a distributor during the Class Period. 42. Defendant Murata Manufacturing Co., Ltd. (“Murata”) is a Japanese corporation with its principal place of business located at 10-1, Higashikotari 1-chome, Nagaokakyo-shi, Kyoto 617-8555, Japan. Murata is one of the world’s leading manufacturers of resistors. Murata—directly and/or through its subsidiaries, which it wholly owned and/or controlled—manufactured, marketed, and/or sold resistors that were purchased throughout the United States, including in this District, during the Class Period. MDT purchased linear resistors made by Murata, or one of its subsidiaries, as a stand-alone product from a distributor during the Class Period. 43. Defendant Murata Electronics North America, Inc. (“MNA”) is a wholly owned subsidiary of Murata Manufacturing Co., Ltd. (collectively “Murata Defendants”), a Texas corporation with its principal place of business located at 2200 Lake Park Drive SE, Smyrna, Georgia 30080-7604. MNA is one of the world’s leading manufacturers of resistors. MNA—directly and/or through its subsidiaries, which it wholly owned and/or controlled— manufactured, marketed, and/or sold resistors that were purchased throughout the United States, including in this District, during the Class Period. 44. Defendant ROHM Co., Ltd. (“ROHM”) is a Japanese corporation with its principal place of business located at 21 Saiin Mizosaki-cho, Ukyo-Ku, Kyoto 615-8585, Japan. ROHM is one of the world’s leading manufacturers of resistors. ROHM—directly and/or through its subsidiaries, which it wholly owned and/or controlled—manufactured, marketed, and/or sold resistors that were purchased throughout the United States, including in this District, during the Class Period. 45. Defendant ROHM Semiconductor U.S.A., LLC (“ROHM USA”) is a Delaware limited liability corporation with its principal place of business located at 2323 Owen Street, Suite 150, Santa Clara, California 95054. ROHM USA is one of the world’s leading manufacturers of resistors, and is a wholly owned subsidiary of ROHM (collectively, the “ROHM Defendants”). ROHM USA—directly and/or through its subsidiaries, which it wholly owned and/or controlled—manufactured, marketed, and/or sold resistors that were purchased throughout the United States, including in this District, during the Class Period. MDT purchased linear resistors made by the ROHM Defendants, or one of their subsidiaries, as a stand-alone product from a distributor during the Class Period. 46. Defendant Vishay Intertechnology, Inc. (“Vishay”) is a Delaware corporation with its principal place of business located at 63 Lancaster Avenue, Malvern, Pennsylvania 19355. Vishay is one of the world’s leading manufacturers of resistors. Vishay—directly and/or through its subsidiaries, which it wholly owned and/or controlled—manufactured, marketed, and/or sold resistors that were purchased throughout the United States, including in this District, during the Class Period. MDT purchased linear resistors made by Vishay, or one of its subsidiaries, as a stand-alone product from a distributor during the Class Period. 47. Defendant Yageo Corporation (“Yageo”) is a Taiwanese corporation with its principal place of business located at 3F, 233-1, Baoqiao Rd. Xindian Dist., New Taipei City 23145, Taiwan. Yageo is one of the world’s leading manufacturers of resistors. Yageo— directly and/or through its subsidiaries, which it wholly owned and/or controlled— manufactured, marketed, and/or sold resistors that were purchased throughout the United States, including in this District, during the Class Period. 48. Defendant Yageo America Corporation is a Delaware corporation with its principal place of business located at 2550 North First St., Suite 480, San Jose, CA 95131. Yageo America Corporation is one of the world’s leading manufacturers of resistors, and is a wholly owned subsidiary of Yageo (collectively, the “Yageo Defendants”). Yageo America Corporation—directly and/or through its subsidiaries, which it wholly owned and/or controlled—manufactured, marketed, and/or sold resistors that were purchased throughout the United States, including in this District, during the Class Period. MDT purchased linear resistors made by the Yagoe Defendants, or one of their subsidiaries, as a stand-alone product from a distributor during the Class Period. VII. AGENTS AND CO-CONSPIRATORS 49. Each Defendant acted as the principal of or agent for the other Defendants with respect to the acts, violations, and common course of conduct alleged herein. 50. Various persons, partnerships, sole proprietors, firms, corporations, and individuals not named as Defendants in this lawsuit, the identities of which are presently unknown, have participated as co-conspirators with the Defendants in the offenses alleged in this Complaint, and have performed acts and made statements in furtherance of the conspiracy, or in furtherance of the anticompetitive conduct. Plaintiffs reserve the right to name some or all of these persons and entities as Defendants at a later date. 51. Whenever in this Complaint reference is made to any act, deed, or transaction of any corporation or limited liability entity, the allegation means that the corporation or limited liability entity engaged in the act, deed or transaction by or through its officers, directors, agents, employees, or representatives while they were actively engaged in the management, direction, control, or transaction of the corporation’s or limited liability entity’s business or VIII. FACTUAL ALLEGATIONS A. The Characteristics of the Resistors Market Render Collusion Plausible Based on Activities. 52. The characteristics of the resistors industry in the United States are conducive to price-fixing and have rendered collusion plausible. Industry characteristics are critically important to determining the likelihood of collusion in that industry. Collusion is more plausible in industries where: (1) high barriers to entry exist; (2) demand is inelastic; (3) the market is highly concentrated; (4) the products are homogenous; (5) there are ample opportunities to conspire; (6) purchasers lack buying power; and (7) there is a history of collusive behavior. 1. The Resistors Industry Has High Barriers to Entry. 53. The resistors industry has high barriers to entry that facilitate the formation and maintenance of a cartel. Collusion between manufacturers that effectively increases product prices above competitive levels would attract new entrants seeking to benefit from supra- competitive pricing. New entrants are less likely, however, where there are significant barriers to entry. 54. There are substantial barriers that preclude, reduce, or make more difficult entry into the resistors market. Industry analysts state that “[o]nly through massive economics of scale is it possible to achieve profitability in the thick film chip resistor markets….” 55. A potential new entrant faces costly and lengthy start-up costs, including multi- million dollar costs associated with research and development, manufacturing plants and equipment, energy, distribution infrastructure, skilled labor, and long-standing customer relationships with existing manufacturers. 56. Resistors are expensive to manufacture. The cost to create the appropriate manufacturing facilities for resistor manufacturing are also very high and prohibitive to new entrants breaking into the market. For instance, in 2011, KOA Corporation planned to invest 2.3 billion JPY into the construction of a new resistors facility, a figure that does not even account for expenses associated with land acquisition and production. 2. The Demand for Resistors Is Inelastic. 57. “Elasticity” is a term used to describe the sensitivity of supply and demand to changes in one or the other. For example, demand is said to be “inelastic” if an increase in the price of a product results in only a small decline in the quantity sold of that product, if any. 58. For a cartel to profit from raising prices above competitive levels, demand must be relatively inelastic at competitive prices. Otherwise, increased prices would result in declining sales, revenues, and profits, as customers purchased substitute products or declined to buy altogether. Inelastic demand is a market characteristic that facilitates collusion, allowing producers to raise their prices without triggering customer substitution and lost sales revenue. 59. Demand for resistors is highly inelastic because there are no close substitutes for these products. The demand for resistors will continue to rise due to increasing use of PCs, notebooks, ultrabooks, smartphones, and other consumer and electronic products that meet basic requirements in day-to-day life. No other type of passive electrical component (e.g., inductors and capacitors) can serve as a substitute or a functional equivalent to a resistor in an electric circuit. Accordingly, a purchaser that is either an OEM or an Electronic Manufacturing Services (“EMS”) provider cannot design quickly an electric circuit to bypass its need for a resistor with a certain resistance. 60. The pricing of linear resistors as a whole has experienced a dramatic rise since 2002, but was relatively flat between 2007 and 2011. During this time period, demand for linear resistors has generally increased, and has thus been relatively inelastic. Demand for resistors also did not fluctuate in response the recession of 2008 or the earthquake and flooding in Asia in 2011. Change in Prices, 2000-15 (Quarterly) 140 130 120 110 100 90 Price Index (Base = 2010) 80 70 60 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 3. The Resistors Industry Is Highly Concentrated. 61. Market concentration facilitates collusion. Collusive agreements are easier to implement and sustain when there are few firms controlling a large portion of the market. Practical matters such as coordinating cartel meetings and exchanging information are much simpler with a small number of players. If the participants can coordinate pricing decisions, their control over total industry output may result in prices that are elevated across the industry. Moreover, their high degree of control also simplifies their coordination issues because there is little outside competitive presence to undermine the cartel. With fewer firms in the market, the transitory bump in profits that could be achieved by undercutting the cartel price and gaining a transitory increase in market share would be outweighed by the greater long-term market share for a colluding firm in a concentrated industry. 62. By contrast, if an industry is divided into a large number of small firms, the current gain from cheating on a cartel (profits from sales captured from other cartel members through undercutting of the cartel-fixed price in the current time period, which risks causing the cartel to fall apart in the future) is large relative to the firm’s possible gains from the cartel’s continuing future success (the firm’s future share of the total cartel profits if collusion were to continue successfully). 63. As the resistors market is dominated by a few companies who control the lion’s share of these markets, the continuing agreements, understandings, combinations or conspiracies to fix, raise, maintain and/or stabilize prices, and to allocate market shares for resistors are effective at setting the prices of resistors at artificially high, supra-competitive Source: (Paumanok Report). 64. A concentrated market is more susceptible to collusion and other anticompetitive practices. The resistors market was concentrated during the respective Class Periods. In fact, throughout the Class Period, Defendants collectively maintained high market shares. 4. Resistors Are Homogenous and Commoditized Products. 65. Homogenous products enhance collusion because they enable manufacturers to more easily negotiate agreement on prices and/or quantities and facilitate monitoring. Resistors are homogenous products or commodities because their characteristics and qualities are essentially uniform across different manufacturers. Although different sub-types of resistors are not interchangeable, within each category, resistors are designed to be interchangeable. 66. The homogenization of resistors is aided by industry-standard product specifications. The principal dimensions of product differentiation in resistors are well known and easily quantifiable. Therefore, resistors can be purchased and sold in large volume quantities by manufacturers and distributors based on common size and technology characteristics. Indeed, manufacturers and distributors maintain very detailed product catalogs and substitution guides that outline rules for swapping out resistors made by other Defendants based on their common characteristics. 67. In economics, a commodity is a basic item or goods used in commerce that is interchangeable with other commodities of the same type. Commodities are most often used as inputs in the production of other goods or services. Product homogeneity facilitates collusion more than product differentiation. Examples of traditional commodities are sugar, wheat, and rubber. As technologies and markets for goods mature, it is more likely to be considered a commodity, at least in its more basic implementations. 68. While there are various forms of linear resistors, the product for which each linear resistor type is used (e.g. cell phones, personal computers, and home appliances) are highly standardized. Such standardization allows the production of thick film resistors (the largest category of linear resistors) to be highly automated to yield large amounts of output. 5. Sales of Resistors 69. Once a resistor is manufactured by a vendor, it must be distributed to the customer. Resistor sales are made either directly to an OEM or to an EMS, or they are sold through an authorized distributor (e.g. TTI, Digi-Key, Future, Arrow, Avnet, or WPG). In the Americas and Europe, distributors now account for slightly more than half of regional sales. This type of distribution network is made possible by the fact that resistors are highly standardized. This further enables resistors to be purchased in large quantities by distributors and then sold by those distributors based on common size and characteristics. 70. Resistors straddle the line between traditional commodities and emerging commodities because the resistors market is still developing. As resistors are in almost every electronic device—and as the electronic device market is expanding due to the exponential growth in computing technology—the established resistors market is still evolving. 71. The United Nations (“UN”) Commodity Trade Statistics Database, the largest depository of international trade data, includes resistors on its Commodity List. Over 170 reporter countries provide the UN Statistics Division with their annual international trade statistics data detailed by commodities and partner countries. The UN and UN member countries therefore consider resistors as commodities. Source: http://comtrade.un.org/db/mr/rfCommoditiesList.aspx?px=H1&cc=8533 (last visited August 2, 2015). 72. Further, according to some market analysts, the ubiquity of smartphones and personal computers and the consistency of features from one brand to another means that the products are becoming commodities. The commoditization of smartphones and personal computers has increased the commoditization of resistors. 73. Markets for commodity products are conducive to collusion. Typically, when a product is characterized as a commodity, competition is based principally on price, as opposed to other attributes such as product quality or customer service. This factor facilitates coordination because firms wishing to form a cartel can more easily monitor and detect defections from a price-fixing agreement where any observed differences in prices are more likely to reflect cheating on the conspiracy than any other factor which might affect pricing, such as special product characteristics, service or other aspects of the transaction. B. Ability in Industry to Conspire 1. Defendants Have Ample Opportunities to Conspire. 74. Trade associations provided opportunities for Defendants to meet frequently and exchange information to facilitate collusion. Defendants are members of a number of trade associations in the United States, Asia and Europe. Their overlapping membership in various trade associations also provided incentive for cartel members to stay within the illegally agreed upon price framework, as they could monitor one another’s activities in the capacitor market and punish non-compliance. Defendants’ participation in trade associations, as described above, helped facilitate their collusion. 75. One such organization is the Electronic Components Industry Association (“ECIA”), which is located in Alpharetta, Georgia. Several of the Defendants are members of this organization, including KOA SE, PIDs, ROHM USA, TT Electronics, Vishay and Yageo America Corporation. They regularly meet to discuss matters of mutual concern. 76. By virtue of their membership in such organizations, Defendants have the opportunity to meet, have improper discussions under the guise of legitimate business contacts, and perform acts necessary for the operation and furtherance of the conspiracy. ECIA, for example, hosts an annual “Executive Conference.” The 2014 conference was held in Chicago, Illinois, and the 2015 conference is also scheduled to be held in Chicago. 77. Trade associations and other common forums facilitated Defendants’ collusion. Trade association meetings provide an excellent cover for meeting and communicating about the pricing of resistors and to conspire to fix, raise, maintain and/or stabilize prices, and to allocate market shares for resistors. 2. Resistor Manufacturers Had Relationships in Other Price-Fixed Markets. 78. Most of the resistor manufacturers also produce several other types of components, not just resistors. For instance, Panasonic produced lithium ion batteries, cathode ray tubes, capacitors and optical disk drives. Capacitors, optical disk drives, cathode ray tubes, lithium ion batteries, and now resistors, have each been the subject of price-fixing investigations. C. Motive to Conspire 1. Defendants Had a Common Motive to Conspire. 79. As resistors are commodities, price is the most obvious differentiation among them for purchasers. In a market of this nature, with trillions of components being manufactured and sold a year at relatively inexpensive individual prices, there is a huge incentive to fix, stabilize, maintain and raise the prices of the components to supra-competitive levels through illegal conspiratorial agreements. By foregoing competition, each manufacturer could still guarantee themselves massive profits in such a high volume market. This anticompetitive conspiracy causes substantial harm to consumers, to competition, and to United States commerce. IX. INDIRECT PURCHASERS OF RESISTORS LACKED BUYING POWER. 80. Standard economics holds that when there are many buyers in a market for a particular good, that good is more susceptible to effective cartel behavior. The incentive for cartel members to undercut the conspiracy is lower when there are many smaller purchasers because while each potential sale is small, disrupting the cartel can carry large penalties. A cartel member, thus, is incentivized to avoid the collapse of the entire price-setting agreement, and the loss of the supra-competitive profits on all sales in that market when there are many buyers. Conversely, a cartel’s ability to raise prices can be thwarted in markets where buyers have significant negotiating power with sellers. 81. Resistors manufacturers sell their products to companies in audio-visual, communications, computers, peripherals, and home electronics businesses. The largest consumer of resistors is the telecommunications industry (29 percent), followed by the Computers and Consumer Audio-Visual Industry. 82. Direct purchasers of resistors are generally distributors. Except for a few tier 1 OEMs, most OEMs and EMS providers that make equipment for OEMs generally buy resistors from distributors. There are very few large OEMs who possess buying power and as to those companies, Defendants were motivated to conspire amongst themselves to keep bid prices high to avoid cutthroat price competition that would harm them all. Plaintiffs here are indirect purchasers that bought resistors from distributors and incorporated those resistors into other products. Large numbers of buyers with little buying power, both at the primary level (i.e. distributors) and the secondary level (i.e. individuals and entities that purchased from distributors) is the general rule in the resistors industry. 83. As set forth above, both direct and indirect purchasers in the resistor market lacked buying power. Since there were many purchasers of resistors, it would have been easier to form and maintain the cartel. This is because a large number of buyers would have made it less likely that Defendant manufacturers would have cheated on the agreement to artificially inflate prices, because the loss of supra-competitive profits on their sales of resistors outweighed the potential additional profits of raising sales to a handful of modestly-sized customers. 84. The market for resistors in the United States accounts for a significant portion of the global capacitor market. It is currently estimated at about $959 million. The Americas therefore account for about 23 percent of the global market at present. Resistors: Import Values, 2003-13 $1,200 $959 $938 $1,000 $879 $787 $816 $777 $771 $800 $677 $668 $617 $600 $524 $400 In Millions of USD $200 $- 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: United States International Trade Commission (USITC) X. DEFENDANTS COLLUDED TO KEEP THE PRICE OF RESISTORS ELEVATED DURING THE CLASS PERIOD. 85. As alleged in this Complaint, Defendants engaged in a conspiracy to fix, raise, stabilize, and maintain the price of resistors throughout the Class Period. Defendants’ acts, practices, and course of conduct in furtherance of their conspiracy evolved over time and included, but were not limited to the following: coordinating prices for specific customers and products; engaging in continuous communications on confidential and proprietary business matters to eliminate price competition; allocating market shares; restricting supply of resistors; using input costs as a pretext for industry-wide pricing formulas; and concocting mechanisms to nullify competitive sales processes to their customers. 86. Defendants effectively moderated and even negated the downward pressure on resistor prices caused by price competition, oversupply, technological advancements, and demand reduction. XI. ANTITRUST INJURY 87. Defendants’ price-fixing conspiracy had the following effects, among others: (a) Price competition has been restrained or eliminated with respect to resistors; (b) The prices of resistors have been fixed, raised, maintained, or stabilized at artificially inflated levels; (c) Indirect purchasers of resistors have been deprived of free and open competition; and (d) Indirect purchasers of resistors, including Plaintiffs, paid artificially inflated prices. 88. During the respective Class Periods, Plaintiffs and the Classes paid supra- competitive prices for resistors. 89. By reason of the alleged violations of the antitrust laws, Plaintiffs and the Classes have sustained injury to their businesses or property, having paid higher prices for resistors than they would have paid in the absence of Defendants’ illegal contract, combination, or conspiracy, and as a result have suffered damages. This is an antitrust injury of the type that the antitrust laws were meant to punish and prevent. XII. AFFECTED TRADE AND COMMERCE 90. During the Class Period, Defendants collectively controlled the vast majority of the market for resistors, both globally and in the United States. 91. Defendants, directly and indirectly, sold resistors to manufacturers and consumers located in numerous states in the United States other than states in which Defendants are located. Substantial quantities of resistors containing resistors are shipped from outside the United States into the United States, and are shipped interstate in a continuous and uninterrupted flow of interstate and foreign trade and commerce. 92. In addition, substantial quantities of equipment and supplies necessary to the production and distribution of resistors, as well as payments for resistors and related products sold by Defendants, traveled in interstate and foreign trade and commerce. The business activities of Defendants in connection with the production and sale of resistors that were the subject of the charged conspiracy were within the flow of, and substantially affected, interstate and foreign trade and commerce. A. Defendants’ Conduct Involved Import Trade or Import Commerce and Had a Direct, Substantial and Reasonably Foreseeable Effect on U.S. Domestic and Import Trade or Commerce that Gave Rise to Plaintiffs’ Antitrust Claims 93. Defendants’ illegal conduct involved U.S. import trade or import commerce. Defendants knowingly and intentionally sent price-fixed resistors into a stream of commerce that they knew led directly into the United States, one of their most important markets and a major source of their revenues. In this respect, they directed their anticompetitive conduct at imports into the United States with the intent of causing price-fixed resistors to enter the United States market and inflating the prices of resistors destined for the United States. Such conduct was meant to produce and did in fact produce a substantial effect in the United States in the form of higher prices. 94. The United States resistors market is enormous. Defendants and others shipped millions of resistors, including those incorporated into finished products, into the United States during the respective Class Periods for ultimate resale to U.S. consumers. As a result, a substantial portion of Defendants’ revenues were derived from the U.S. market. Defendants spent hundreds of millions of dollars on advertising their products in the United States. 95. Because of the importance of the U.S. market to Defendants and their co- conspirators, resistors intended for importation into and ultimate consumption in the United States were a focus of Defendants’ illegal conduct. Defendants knowingly and intentionally sent price-fixed resistors into a stream of commerce that led directly into the United States. This conduct by Defendants was meant to produce and did in fact produce a substantial effect in the United States in the form of artificially-inflated prices for resistors. 96. During the Class Period, every Defendant shipped resistors directly into the United States. 97. When high-level executives within Defendants’ companies agreed on prices, they knew that their price-fixed resistors would be sold in the United States. 98. For the reasons set forth above, Defendants’ illegal conduct involved import trade or import commerce into the United States. 99. Defendants’ illegal conduct had a direct, substantial, and reasonably foreseeable effect on U.S. domestic and import trade or commerce in the form of higher prices for resistors and electronic products containing resistors that Plaintiffs and Members of the Classes paid. These prices, tainted by collusion, directly and immediately impacted Plaintiffs and Members of the Classes in the United States. In this respect, the U.S. effects of Defendants’ illegal conduct gave rise to Plaintiffs’ and Members of the Classes’ antitrust claims and were the proximate cause of the injury that Plaintiffs and Members of the Classes suffered. 100. A number of facts demonstrate that Defendants’ price-fixing conspiracy had a direct, substantial and reasonably foreseeable effect on domestic commerce. B. The Defendants Targeted the United States. 101. Because of the small size of resistors, transportation costs are relatively minor and there is substantial international trade in these electronic components. 102. During the Class Period, Defendants manufactured and sold substantial quantities of resistors shipped from outside the United States and from other states in a continuous and uninterrupted flow of interstate and foreign trade and commerce. In addition, substantial quantities of equipment and supplies necessary to the production and distribution of resistors, as well as payments for resistors and related products sold by Defendants, traveled in interstate and foreign trade and commerce. The business activities of Defendants in connection with the production and sale of resistors that were the subject of the charged conspiracy were within the flow of, and affected substantially, interstate and foreign trade and commerce. 103. Defendants engaged in conduct both inside and outside the United States that caused direct, substantial, and reasonably foreseeable and intended anticompetitive effects upon interstate commerce within the United States. 104. Defendants, directly and through their agents, engaged in a conspiracy to fix or inflate prices of resistors that restrained trade unreasonably and affected adversely the market for resistors. Defendants affected commerce, including import commerce, substantially throughout the United States, proximately causing injury to Plaintiffs and members of the Classes. XIII. CLASS ACTION ALLEGATIONS 105. Plaintiffs bring this action on behalf of themselves and as a class action pursuant to Federal Rules of Civil Procedure (“Rules”) 23(a) and (b)(2), seeking equitable and injunctive relief on the following classes (“Nationwide Injunctive Class”): All persons and entities in the United States who purchased one or more linear resistor(s) from a resistor distributor not for resale which a Defendant, its current or former subsidiary, or any of its co-conspirators from a date presently unknown to Plaintiffs and going through such time as the anticompetitive effects of Defendants’ conduct ceased (“Class Period”). 106. Plaintiffs will seek certification of a nationwide class of purchasers under California law pursuant to Rules 23(a) and (b)(3) as follows (“California Nationwide Damages Class): All persons and entities in the United States who purchased one or more linear resistor(s) from a resistor distributor not for resale which a Defendant, its current or former subsidiary, or any of its co-conspirators from a date presently unknown to Plaintiffs and going through such time as the anticompetitive effects of Defendants’ conduct ceased (“Class Period”). 107. Plaintiffs will also seek certification of statewide linear resistor damages classes, asserting claims of damages under the antitrust and restraint of trade laws of California (“California Statewide Damages Classes”) pursuant to Rule 23, as follows: All persons and entities in California who purchased one or more linear resistor(s) from a resistor distributor not for resale which a Defendant, its current or former subsidiary, or any of its co-conspirators from a date presently unknown to Plaintiffs and going through such time as the anticompetitive effects of Defendants’ conduct ceased (“Class Period”). (“California Damages Classes”). 108. The Injunctive Class, California Nationwide Damages Class, and the California Statewide Damages Classes are collectively referred as the “Classes” unless otherwise indicated. Excluded from the Classes are Defendants, their parent companies, subsidiaries and affiliates, any co-conspirators, Defendants’ attorneys in this case, federal government entities and instrumentalities, states and their subdivisions, all judges assigned to this case, all jurors in this case, and all persons and entities who directly purchased linear resistors from Defendants. 109. While Plaintiffs do not know the exact number of the members of the Classes, Plaintiffs believe there are thousands of members in each of the Classes. 110. Common questions of law and fact exist as to all members of the Classes. This is particularly true given the nature of Defendants’ conspiracy, which was applicable to all of the members of the Classes, thereby making appropriate relief with respect to the Classes as a whole. Such questions of law and fact common to the Classes include, but are not limited to: a. Whether Defendants engaged in a combination and conspiracies among themselves to fix, raise, maintain, and/or stabilize the prices of linear resistors sold in the United States; b. The identity of the participants of the alleged conspiracies; c. The duration of the alleged conspiracies and the acts carried out by Defendants in furtherance of the conspiracies; d. Whether the alleged conspiracies violated the Sherman Act; e. Whether the alleged conspiracies violated the antitrust and restraint of trade laws of California; f. Whether the alleged conspiracies violated the unfair competition and consumer protection laws of California; g. Whether the conduct of Defendants, as alleged in this Complaint, caused injury to the business or property of Plaintiffs and members of the Classes; h. The effect of the alleged conspiracy on the prices of linear resistors sold in the United States during the respective Class Periods; i. The appropriate injunctive and related equitable relief for the Injunctive Classes; and j. The appropriate class-wide measure of damages for the State Damages Classes. 111. Plaintiffs’ claims are typical of the claims of the members of the Classes, and Plaintiffs will fairly and adequately protect the interests of the Classes. Plaintiffs and all members of the Classes are similarly affected by Defendants’ wrongful conduct in that they paid artificially inflated prices for linear resistors purchased indirectly from Defendants. 112. Plaintiffs’ claims arise out of the same common course of conduct giving rise to the claims of the other members of the Classes. Plaintiffs’ interests are coincident with, and not antagonistic to, those of the other members of the Classes. Plaintiffs are represented by counsel who are competent and experienced in the prosecution of antitrust, unfair competition, and class action litigation. 113. The questions of law and fact common to the members of the Classes predominate over any questions affecting only individual members, including legal and factual issues relating to liability and damages. 114. Class action treatment is a superior method for the fair and efficient adjudication of the controversy, in that, among other things, such treatment will permit a large number of similarly situated persons to prosecute their common claims in a single forum simultaneously, efficiently and without the unnecessary duplication of evidence, effort and expense that numerous individual actions would engender. The benefits of proceeding through the class mechanism, including providing injured persons or entities with a method for obtaining redress for claims that it might not be practicable to pursue individually, substantially outweigh any difficulties that may arise in management of this class action. 115. The prosecution of separate actions by individual members of the Classes would create a risk of inconsistent or varying adjudications, establishing incompatible standards of conduct for Defendants. 116. Plaintiffs bring the Damages Classes on behalf of all persons similarly situated pursuant to Rule 23, on behalf of all persons and entities that, as residents of various states, indirectly purchased one or more linear resistors that a Defendant or co-conspirator manufactured during the respective Class Periods. XIV. GUILTY PLEAS IN PRIOR CASES 117. Significantly Panasonic, one of the world’s leading manufacturers of resistors, has pled guilty in numerous price-fixing cases, including electronic products. 118. On September 30, 2010, Panasonic agreed to plead guilty and to pay a large criminal fine for its participation in a conspiracy to price-fix refrigerant compressors from October 14, 2004 through December 31, 2007. 119. On July 18, 2013, Panasonic agreed to plead guilty and to pay a $45.8 million criminal fine for its participation in a conspiracy to price-fix switches, steering angle sensors and automotive high intensity discharge ballasts installed in cars sold in the United States and elsewhere from at least as early as September 2003 until at least February 2010. 120. That same day, Panasonic’s subsidiary, SANYO Electric Co., Ltd., agreed to plead guilty and to pay a large criminal fine for its participation in a conspiracy to fix the prices of cylindrical lithium-ion battery cells sold worldwide for use in notebook computer battery packs from about April 2007 until about September 2008. The production and sale of both lithium ion batteries and resistors were often overseen by the same departments and personnel that were involved in fixing lithium ion battery prices. 121. The foregoing pattern of anticompetitive practices in various technology-related markets is illustrative of Defendants’ corporate conduct, which has included illegal activity aimed at generating profits at the expense of their customers. XV. VIOLATIONS ALLEGED FIRST CLAIM FOR RELIEF (Violations of Sherman Act, 15 U.S.C. § 1) (On Behalf of All Plaintiffs Against All Defendants) 122. Plaintiffs incorporate and reallege, as though fully set forth herein, each of the paragraphs set forth above. 123. Defendants and unnamed coconspirators entered into and engaged in a contract, combination, or conspiracy in unreasonable restraint of trade in violation of Section One of the Sherman Act (15 U.S.C. § 1). 124. Beginning at a date presently unknown to Plaintiffs and continuing through the present, the exact starting date being unknown to Plaintiffs and exclusively within the knowledge of Defendants, Defendants and their co-conspirators entered into a continuing contract, combination, or conspiracy to unreasonably restrain trade and commerce in violation of Section 1 of the Sherman Act (15 U.S.C. § 1) by artificially reducing or eliminating competition in the United States. 125. In particular, Defendants have combined and conspired to raise, fix, maintain, or stabilize the prices of linear resistors 126. As a result of Defendants’ unlawful conduct, prices for linear resistors were raised, fixed, maintained, and stabilized in the United States. 127. The contract, combination or conspiracy among Defendants consisted of a continuing agreement, understanding, and concerted action among Defendants and their co- conspirators. 128. For purposes of formulating and effectuating their contract, combination, or conspiracy, Defendants and their co-conspirators did those things they contracted, combined, or conspired to do, including: a. Participating in meetings and conversations to discuss the prices and supply of linear resistors. b. Communicating in writing and orally to fix prices of linear resistors. c. Agreeing to manipulate prices and supply of linear resistors sold in the United States in a manner that deprived purchasers of free and open competition. d. Issuing price announcements and price quotations in accordance with the agreements reached. e. Selling linear resistors to customers in the United States at non- competitive prices. f. Providing false statements to the public to explain increased prices for linear resistors. 129. As a result of Defendants’ unlawful conduct, Plaintiffs and the other members of the Classes have been injured in their businesses and property in that they have paid more for resistors than they otherwise would have paid in the absence of Defendants’ unlawful conduct. 130. The alleged contract, combination or conspiracy is a per se violation of the federal antitrust laws. 131. These violations are continuing and will continue unless enjoined by this Court. 132. Pursuant to Section 16 of the Clayton Act, 15 U.S.C. § 26, Plaintiffs and the Classes seek the issuance of an injunction against Defendants, preventing and restraining the violations alleged herein. SECOND CLAIM FOR RELIEF (Violations of California’s Cartwright Act, Cal. Bus. & Prof. Code §§ 16720, et seq.) (On Behalf of All Plaintiffs Against All Defendants) 133. Plaintiffs incorporate by reference all the above allegations as if fully set forth herein. 134. By reason of the foregoing, Defendants have violated California Business and Professions Code, §§ 16700, et seq. Plaintiffs on behalf of a nationwide class of Indirect Purchasers allege as follows. 135. Beginning at a time currently unknown to Plaintiffs and continuing thereafter through the present, Defendants and their co-conspirators entered into and engaged in a continuing unlawful trust in restraint of the trade and commerce described above in violation of section 16720, California Business and Professions Code. Defendants, and each of them, have acted in violation of section 16720 to fix, raise, stabilize, and maintain prices of, and allocate markets for linear resistors. 136. As a result of Defendants’ unlawful conduct, prices for linear resistors were raised, fixed, maintained, and stabilized in the United States. 137. The contract, combination or conspiracy among Defendants consisted of a continuing agreement, understanding, and concerted action among Defendants and their co- conspirators. 138. For purposes of formulating and effectuating their contract, combination, or conspiracy, Defendants and their co-conspirators did those things they contracted, combined, or conspired to do, including: a. Participating in meetings and conversations to discuss the prices and supply of linear resistors. b. Communicating in writing and orally to fix prices of linear resistors. c. Agreeing to manipulate prices and supply of linear resistors sold in the United States in a manner that deprived purchasers of free and open competition. d. Issuing price announcements and price quotations in accordance with the agreements reached. e. Selling linear resistors to customers in the United States at non- competitive prices. f. Providing false statements to the public to explain increased prices for linear resistors. 139. As a direct and proximate result of Defendants’ unlawful conduct, Plaintiffs and the members of the California Damages Classes have been injured in their business and property in that they paid more for linear resistors than they otherwise would have paid in the absence of Defendants’ unlawful conduct. As a result of Defendants’ violation of Section 16720 of the California Business and Professions Code, California Plaintiffs and the California Indirect Purchaser Classes seek treble damages and their cost of suit, including a reasonable attorney’s fee, pursuant to section 16750(a) of the California Business and Professions Code. 140. It is appropriate to apply California antitrust law to purchasers of linear resistors and/or electronic products containing linear resistors in all fifty states—that is, nationwide. Nationwide application of California law is proper because conspiratorial acts occurred in California, and the conspirators targeted their price-fixing activities at large purchasers of linear resistors and/or electronic products containing linear resistors in California, such as Apple Inc., Intel Corp., and Hewlett Packard Co. 141. Some Defendants maintained sales and marketing arms in the United States to conduct business with major customers. These Defendants are incorporated, located, and headquartered in the United States, and each does substantial business in domestic interstate commerce throughout the United States. 142. The foreign-based Defendants have no reasonable expectation as to the application of different state laws. Based on Plaintiffs’ information and belief, California law applies to contracts with California-based companies, such as Apple Inc., Intel Corp., and Hewlett Packard Co. THIRD CLAIM FOR RELIEF (Violations of California’s Unfair Competition Law, Cal. Bus. & Prof. Code §§ 17200, et seq.) (On Behalf of All Plaintiffs Against All Defendants) 143. Plaintiffs incorporate by reference the allegations in the above paragraphs as if fully set forth herein. 144. By reason of the foregoing, Defendants have violated California’s Unfair Competition Law, Cal. Bus. & Prof. Code §§ 17200, et seq. 145. Defendants committed acts of unfair competition, as defined by section 17200, et seq., by engaging in a conspiracy to fix and stabilize the price of linear resistors as described 146. The acts, omissions, misrepresentations, practices and non-disclosures of Defendants, as described above, constitute a common and continuing course of conduct of unfair competition by means of unfair, unlawful and/or fraudulent business acts or practices with the meaning of Section 17200, et seq., including, but not limited to (1) violations of Section 1 of the Sherman Act; and (2) violations of the Cartwright Act. 147. Defendants’ acts, omissions, misrepresentations, practices and nondisclosures are unfair, unconscionable, unlawful and/or fraudulent independently of whether they constitute a violation of the Sherman Act or the Cartwright Act. 148. Defendants’ acts or practices are fraudulent or deceptive within the meaning of section 17200, et seq. 149. Defendants’ conduct was carried out, effectuated, and perfected within the state of California. Defendants maintained offices in California where their employees engaged in communications, meetings and other activities in furtherance of Defendants’ conspiracy. 150. By reason of the foregoing, the Classes are entitled to application of California law to a nationwide class and are entitled to an injunction to require Defendants to stop the conduct alleged in this Complaint. XVI. REQUEST FOR RELIEF WHEREFORE, Indirect Purchaser Plaintiffs respectfully request that: 151. The Court determine that this action may be maintained as a class action under Rule 23(a), (b)(2), and (b)(3) of the Federal Rules of Civil Procedure, and direct that reasonable notice of this action, as provided by Rule 23(c)(2) of the Federal Rules of Civil Procedure, be given to each and every member of the Classes; 152. The unlawful conduct, conspiracy or combination alleged herein be adjudged and decreed: (a) An unreasonable restraint of trade or commerce in violation of Section 1 of the Sherman Act; (b) A per se violation of Section 1 of the Sherman Act; (c) An unlawful combination, trust, agreement, understanding, and/or concert of action in violation of the California’s antitrust, unfair competition, and consumer protection laws as set forth herein; and (d) Acts of unjust enrichment by Defendants as set forth herein. 153. Plaintiffs and the members of the Damages Classes recover damages, to the maximum extent allowed under such laws, and that a joint and several judgment in favor of Plaintiffs and the members of the Damages Classes be entered against Defendants in an amount to be trebled to the extent such laws permit; 154. Plaintiffs and the members of the Damages Classes recover damages, to the maximum extent allowed by such laws, in the form of restitution and/or disgorgement of profits unlawfully gained from them; 155. Defendants, their affiliates, successors, transferees, assignees and other officers, directors, partners, agents and employees thereof, and all other persons acting or claiming to act on their behalf or in concert with them, be permanently enjoined and restrained from in any manner continuing, maintaining or renewing the conduct, conspiracy, or combination alleged herein, or from entering into any other conspiracy or combination having a similar purpose or effect, and from adopting or following any practice, plan, program, or device having a similar purpose or effect. 156. Plaintiffs and the members of the Damages Classes be awarded restitution, including disgorgement of profits Defendants obtained as a result of their acts of unfair competition and acts of unjust enrichment; Dated: August 20, 2015 COTCHETT, PITRE & McCARTHY, LLP By: /s/ Joseph W.Cotchett Joseph W. Cotchett (36324) Steven N. Williams (175489) Demetrius Lambrinos (246027) Elizabeth T. Tran (28052) Joyce Chang (300780) 840 Malcolm Road, Suite 200 Burlingame, CA 94010 Telephone: 650-697-6000 Facsimile: 650-697-0577 jcotchett@cpmlegal.com swilliams@cpmlegal.com dlambrinos@cpmlegal.com etran@cpmlegal.com jchang@cpmlegal.com Attorneys for Plaintiff JURY DEMAND Pursuant to Federal Rule of Civil Procedure 38(b), Plaintiff demands a trial by jury of all of the claims asserted in this Complaint so triable. Dated: August 20, 2015 COTCHETT, PITRE & McCARTHY, LLP By: /s/ Joseph W.Cotchett Joseph W. Cotchett (36324) Steven N. Williams (175489) Demetrius Lambrinos (246027) Elizabeth T. Tran (28052) Joyce Chang (300780) 840 Malcolm Road, Suite 200 Burlingame, CA 94010 Telephone: 650-697-6000 Facsimile: 650-697-0577 jcotchett@cpmlegal.com swilliams@cpmlegal.com dlambrinos@cpmlegal.com etran@cpmlegal.com jchang@cpmlegal.com Attorneys for Plaintiff APPENDIX A Defendant Statement Re. Antitrust Compliance Fujitsu Media Devices, Ltd. Fujitsu Way Code of Conduct http://www.fujitsu.com/uk/Images/fujitsu-way-code-of-conduct-2013.pdf Hokuriku Electric Industry Co., Ltd Kamaya Electric Co., Ltd. Compliance and Risk Management: Conduct Guidelines “Kamaya regards compliance and risk management as the most important issues of our business, complies with the laws as well and promotes fair and equitable business activities that are based on corporate ethics.” http://www.kamaya.co.jp/rel_en/compliancet.html KOA Corporation KOA Speer Electronics Inc. Kyocera International Inc. “The Kyocera Group complies with anti-monopoly laws and related legislation, and we are working to promote fair and free competition. For example, guidelines on compliance with anti-monopoly legislation were prepared and are already being used in employee training in Group companies in Japan, the U.S.A. and Europe.” http://global.kyocera.com/ecology/risk.html#d Murata Manufacturing Co., Ltd Nichicon Corporation Nichicon America Corporation Panasonic Corporation Panasonic Corporation of North America Panasonic Industrial Devices Sales Company of America Compliance with Laws, Regulations and Business Ethics “We will conduct business with integrity, a law-abiding spirit, and the highest ethical standards. We will fulfill our tasks by always observing not only applicable laws and regulations, but also the highest standards of business ethics. Compliance with laws, regulations, and business ethics in all our business activities is essential to the survival of our business.” http://www.panasonic.com/global/corporate/management/code-of- conduct/chapter-2.html#section2-3 ROHM Co., Ltd ROHM USA “The ROHM Group will always conduct its business faithfully in strict compliance with the laws and business ethics. The Group will continuously work to collect, manage, and understand the laws and regulations of each country that are relevant to its business.” http://www.rohm.com/web/global/csr1/csr-ethics TDK-EPC Corporation TDK U.S.A. Corporation TDK Code of Conduct “The TDK Group shall take part in fair, transparent, and free competition and appropriate corporate activities. The TDK Group shall maintain a sound relationship with political bodies and governmental agencies.” http://www.global.tdk.com/about_tdk/code_of_conduct/chapter_one.htm TT Electronics PLC Vishay Intertechnology, Inc. Holy Stone Polytechnic Co., Ltd. Vishay Ethics Code of Business Conduct “The company seeks to excel and outperform its competitors honestly and fairly. Competitive advantage must result from superior performance, not unethical or illegal business deals” http://www.vishay.com/ir-documents/codeofbusiness.pdf Walsin Technology Corporation Yageo Corporation Yageo America Electronic Industry Citizenship Coalition Code of Conduct (EICC) “Fundamental to adopting the Code is the understanding that a business, in all of its activities, must operate in full compliance with the laws, rules and regulations of the countries in which it operates.” “Business Integrity – the highest standards of integrity are to be upheld in all business interactions. Participants shall have a zero tolerance policy to prohibit any and all forms of bribery, corruption, extortion and embezzlement (covering promising, offering, giving or accepting any bribes). All business dealings should be transparently performed and accurately reflects on Participant’s business books and records. Monitoring and enforcement procedures shall be implemented to ensure compliance with anti-corruption laws.” http://www.yageo.com/exep/pages/download/EICC_English%20v4.pdf

antitrust

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UNITED STATES DISTRICT COURT EASTERN DISTRICT OF PENNSYLVANIA Case No. 2:16-cv-00990-CMR International Union of Operating Engineers Local 30 Benefits Fund, on behalf of itself and all others similarly situated, Plaintiffs, v. AMENDED CLASS ACTION COMPLAINT DEMAND FOR JURY TRIAL Lannett Company, Inc., Impax Laboratories, Inc., West-Ward Pharmaceuticals Corporation, Actavis plc, Mylan Pharmaceuticals, Inc., Endo International plc, Sun Pharmaceutical Industries, Inc., and Par Pharmaceutical Companies, Inc., Defendants. INTRODUCTION 1. Plaintiff International Union of Operating Engineers Local 30 Benefits Fund (“IUOE 30” or “Plaintiff”) brings this action both individually and on behalf of (a) a national injunctive class of persons or entities in the United States and its territories who purchased, paid and/or provided reimbursement for some or all of the purchase price of generic digoxin or doxycycline products manufactured by Defendants during the period from October 1, 2012 to the present and (b) a damage class of persons or entities in the purchased, paid and/or provided reimbursement for some or all of the purchase price of generic digoxin or doxycycline products manufactured by Defendants during the period from October 1, 2012 to the present in the 31 states identified herein and the District of Columbia. Defendants are accused of engaging in a conspiracy to fix, maintain, and/or stabilize the prices of these generic drug products. All allegations herein are based on information and belief, except for those relating to the Plaintiff. 2. The claims in this case arise from a broad conspiracy among manufacturers of generic drugs to fix the prices charged for those drugs in recent years. The conspiracy appears to have been effectuated by direct company-to-company contacts among generic drug manufacturers, as well as joint activities undertaken through trade associations such as the Generic Pharmaceutical Association (“GPHA”). The unlawful acts undertaken with respect to generic digoxin and doxycycline are merely two manifestations of that overall conspiracy. The Antitrust Division of the United States Department of Justice (“DOJ”) commenced in 2014 a wide-ranging criminal investigation of this broad conspiracy and has caused grand jury subpoenas to be issued to various Defendants in connection with this investigation. The investigation encompasses generic drugs other than digoxin and doxycycline and, as the scope of the DOJ’s investigation is further clarified, Plaintiff reserves the right to amend its complaint to add more parties and/or claims. According to a June 26, 2015 report by the service Policy and Regulatory Report (“PaRR Report”) (available at http://www.mergermarket.com/pdf/DoJ- Collusion-Generic-Drug-Prices-2015.pdf): A PaRR source says prosecutors see the case much like its antitrust probe of the auto parts industry, which has gone on for years and morphed into the department's largest criminal antitrust probe ever. Like in that case, prosecutors expect "to move from one drug to another in a similar cascading fashion." 3. The entire purpose of permitting a generic drug industry in the United States was to encourage the manufacture of less expensive, non-branded substitutes for branded prescription drugs that either had no patent exclusivity or for which the patent exclusivity was expiring. According to a March 12, 2015 Powerpoint presentation by Defendant Lannett Company, Inc., eight out of ten prescriptions are filled for generic drugs. According to that presentation, this is because the United States healthcare system focuses on “cost saving”, thereby “increasing demand for cheaper generic drugs.”1 In a January 2012 report, the Government Accounting Office noted that “[o]n average, the retail price of a generic drug is 75 percent lower than the retail price of a brand-name drug.”2 4. As reflected in a chart compiled by Representative Elijah E. Cummings (“Cummings”), Ranking Member of the House Committee on Oversight and Government Reform and Senator Bernie Sanders (“Sanders”), Chairman of the Subcommittee on Primary Health and Aging of the Senate Committee on Health, Education, Labor and Pensions, prices for certain generic drugs, including digoxin and doxycycline, increased dramatically in 1 https://www.business.illinois.edu/finance/rcmp/research/LCI2015-3.pptx. 2 http://www.gao.gov/assets/590/588064.pdf. 3 http://www.sanders.senate.gov/download/face-sheet-on-generic-drug-price- increases?inline=file 5. Digoxin is used to treat mild to moderate heart failure in adults, increase the heart contracting functions for pediatric patients with heart failure, and control the resting heart rate in adult patients with chronic atrial fibrillation.4 It is derived from the leaves of a digitalis (or foxglove) plant and was first described in medical literature around 1785. Digoxin helps an injured or weakened heart pump blood more efficiently and strengthens the force of the heart muscle, which helps to restore a normal, steady heart rhythm. It is on the World Health 4 As used herein, the term “digoxin” is intended to refer to doses of digoxin taken orally in the form of a tablet or capsule. Organization’s (“WHO”) list of essential medicines.5 Digoxin must be taken daily and exactly as prescribed to be effective. Failure to take digoxin as prescribed can have catastrophic consequences. According to data from IMS Health, annual sales of digoxin in the United States are approximately $44 million as of the beginning of 2014. As indicated in the discussion below, those sales numbers increased dramatically in 2014 and 2015. 6. Doxycycline monohydrate is an antibiotic used in treating humans and animals. It is useful for bacterial pneumonia, acne, chlamydia infections, Clostridium difficile colitis, early Lyme disease, cholera and syphilis. It is also useful for the treatment of malaria when used with quinine and for the prevention of malaria. It came into use in 1967 and is also on WHO’s list of essential medicines referenced above. Doxycycline hyclate is a variation of doxycycline monohydrate that entered the market in 1985. As used herein, the term “doxycycline” refers to both doxycycline monohydrate and doxycycline hyclate in tablet or capsule form, unless otherwise indicated. 7. The price increases described above endanger human lives. Many patients with cardiovascular conditions need to take digoxin daily in order to survive. Likewise, people with serious infections or other life-threatening diseases need access to a ready, affordable supply of doxycycline. Many have limited ability to cope with these types of price hikes. 8. Defendants Lannett Company, Inc. (“Lannett”), Impax Laboratories, Inc. (“Impax”), West-Ward Pharmaceuticals Corp. (“West-Ward”), Mylan Pharmaceuticals, Inc. 5 See http://www.who.int/selection_medicines/committees/expert/20/EML_2015_FINAL_amended_A UG2015.pdf?ua=1. (“Mylan”), Sun Pharmaceutical Industries, Inc. (“Sun”),6 and Par Pharmaceutical Companies, Inc. (“Par”) are manufacturers and/or distributors of generic digoxin. These Defendants collectively sell tens of millions of dollars worth of digoxin every year in the United States. Lannett, Impax, West-Ward, Par, Sun, Mylan, and Endo International plc (“Endo”) are also manufacturers and/or distributors of generic doxycycline. Another major supplier of generic doxycycline has been Actavis plc (“Actavis”).7 On March 17, 2015, Actavis completed its acquisition of Allergan, Inc. (“Allergan”) in a cash and equity transaction valued at approximately $70.5 billion. 9. The markets for generic digoxin and generic doxycycline are oligopolies. Thus, in the generic digoxin market, mergers and withdrawals from the market caused the number of competitors to shrink drastically. By October of 2013, the generic digoxin market was essentially a duopoly controlled by Lannett and Impax. Defendant West-Ward, a subsidiary of Hikma Pharmaceuticals PLC (“Hikma”), is also a competitor, but it had to suspend operations in November of 2012 in the wake of an investigation by the United States Food & Drug Administration (“FDA”) into production problems at its manufacturing facility. It resumed participation in the generic digoxin market in July of 2013. Similarly, Sun’s subsidiary Caraco 6 Digoxin supplied by Sun was manufactured in the Detroit facility of Sun’s subsidiary, Caraco Pharmaceutical Laboratories, Ltd. (“Caraco”), until approximately June of 2014 when Caraco shut down its Detroit facility. See http://www.crainsdetroit.com/article/20140502/NEWS/140509962/caraco-pharmaceutical-to- lay-off-178-close-its-detroit-plant-this. Upon information and belief, Sun resumed production and distribution of generic digoxin starting in the latter half of 2015. http://www.sunpharma.com/node/120501. 7 http://www.allergan.com/Actavis/media/PDFDocuments/2013 US Rx Product Catalog.pdf. The predecessor to Actavis also manufactured a generic form of digoxin at plants in New Jersey, but in December of 2008, it agreed to cease doing so after the DOJ sued it for violating the FDA’a manufacturing regulations. See http://www.law360.com/articles/81363/correction- actavis-to-halt-production-at-3-plants. The company no longer sells generic digoxin in the United States. also suspended operations of its Michigan facilities around June of 2009 due to manufacturing problems. 8 Production resumed in August of 2012. 9 Mylan and Par entered that market in 2014 and 2015, respectively. Arthur Bedrosian (“Bedrosian”), the CEO of Lannett, calls these companies “rational” competitors. Similarly, Par, West-Ward, Mylan, Sun, Endo, Actavis and Lannett are also major players in the market for generic doxycycline. 10. Defendants’ dramatic and unexplained price hikes have engendered extensive scrutiny by the United States Congress and by federal and state antitrust regulators. In a January 8, 2014 letter to members of key committees of the United States House of Representatives and Senate, Douglas P. Hoey, Chief Executive Officer of the National Community Pharmacists’ Association, asked Congress to conduct an investigation of generic drug price increases.10 On October 2, 2014, Sanders and Cummings sent letters to Actavis, Endo, Lannett, Par, Sun, Impax, Mylan, and West-Ward (“October Letters”) asking for detailed information on the generic digoxin and/or generic doxycycline hyclate price hikes, among others.11 11. On November 20, 2014, Sanders’s committee held a hearing entitled “Why Are Some Generic Drugs Skyrocketing In Price?” (“Senate Hearing”). Various witnesses discussed the price hikes for generic drugs. Although Bedrosian, the CEO of Lannett, was invited to testify, neither he nor any other chief executive of a generic drug manufacturer did so.12 8 See https://www.ihs.com/country-industry-forecasting.html?ID=106595376 9 See http://www.bloomberg.com/news/articles/2013-10-28/sun-says-it-addressed-fda- observations-at-caraco-factory-1- 10https://www.ncpanet.org/pdf/leg/jan14/letter-generic-spikes.pdf. 11 The October Letters may be found at http://www.sanders.senate.gov/newsroom/press- releases/congress-investigating-why-generic-drug-prices-are-skyrocketing. 12http://www.sanders.senate.gov/newsroom/press-releases/drugmakers-mum-on-huge-price- hikes. 12. Industry analysts have also questioned manufacturers’ claims that price increases are due to supply disruptions. Indeed, Richard Evans at Sector & Sovereign Research recently wrote: “[a] plausible explanation [for price increases of generic drugs, including generic digoxin] is that generic manufacturers, having fallen to near historic low levels of financial performance are cooperating to raise the prices of products whose characteristics – low sales due to either very low prices or very low volumes – accommodate price inflation.” 13 13. Antitrust regulators have also been actively investigating the price hikes. In August of 2014, the Connecticut Attorney General (“AG”) opened an antitrust investigation into digoxin pricing. Lannett, Impax and Par were subpoenaed concerning a conspiracy to restrain trade by fixing the price of digoxin or allocating and dividing customers or territories. A copy of the subpoena issued to Lannett is attached hereto as Exhibit A and confirms that digoxin pricing is at the heart of the investigation. Par reported that it completed its “response” to the Connecticut AG on October 28, 2014. More recently, Endo also disclosed that in December of 2016, it received a subpoena and interrogatories from the Connecticut AG that requested information concerning the pricing of its generic products, including doxycycline. 14. By November 3, 2014, as noted above, the DOJ opened a criminal grand jury investigation into the pricing of various generic drugs, including generic digoxin and generic doxycycline. To date, according to statements in public filings with the Securities & Exchange Commission (“SEC”) discussed below, the grand jury has issued subpoenas to Lannett and Lannett’s Vice-President of Sales and Marketing (believed to be Kevin Smith (“Smith”), 13 http://blogs.wsj.com/pharmalot/2015/04/22/generic-drug-prices-keep-rising-but-is-a- slowdown-coming/. according to Lannett’s website (http://www.lannett.com/about-lannett-management.php); Impax and an unidentified sales representative of Impax; Actavis; Par; Sun; and Mylan. 15. Plaintiffs allege that during the Class Period, Defendants conspired, combined and contracted to fix, raise, maintain and stabilize prices at which generic digoxin and generic doxycycline would be sold. As a result of Defendants’ unlawful conduct, Plaintiffs and the other members of the proposed Classes paid artificially inflated prices that exceeded the amount they would have paid if a competitive market had determined prices for generic digoxin and generic doxycycline. JURISDICTION AND VENUE 16. Plaintiff brings this action under Section 16 of the Clayton Act (15 U.S.C. § 26), for injunctive relief and costs of suit, including reasonable attorneys’ fees, against Defendants for the injuries sustained by Plaintiff and the members of the Class by reason of the violations of Sections 1 and 3 of the Sherman Act (15 U.S.C. § 1, 3). 17. This action is also instituted under the antitrust, consumer protection, and common laws of various states for damages and equitable relief, as described in Counts Two through Four below. 18. Jurisdiction is conferred upon this Court by 28 U.S.C. §§ 1331 and 1337 and by Section 16 of the Clayton Act (15 U.S.C. §26). In addition, jurisdiction is also conferred upon this Court by 28 U.S.C. §§ 1367. 19. Venue is proper in this judicial district pursuant to 15 U.S.C. §§ 15(a) and 22 and 28 U.S.C § 1391(b), (c) and (d) because during the Class Period, Defendants resided, transacted business, were found, or had agents in this District, and a substantial portion of the affected interstate trade and commerce described below has been carried out in this District. Venue is also proper in this District because the federal grand jury investigating the pricing of generic drugs is empaneled here and therefore it is likely that acts in furtherance of the alleged conspiracy took place here, where Lannett, Endo and Mylan are headquartered and where Impax’s generics division, Global Pharmaceuticals (“Global”), is located. 20. This Court has personal jurisdiction over each Defendant because, inter alia, each Defendant: (a) transacted business throughout the United States, including in this District; (b) sold digoxin throughout the United States, including in this District; (c) had substantial contacts with the United States, including in this District; and/or (d) was engaged in an illegal scheme and price-fixing conspiracy that was directed at and had the intended effect of causing injury to persons residing in, located in, or doing business throughout the United States, including in this District. PLAINTIFF 21. Plaintiff IUOE 30 is a local union that has served the interests of operating engineers and facilities maintenance workers for over a century. It is headquartered in Richmond Hill, New York. IUOE 30 provides health care, retirement and other benefits to both private sector and municipal employees through a series of not-for-profit trust funds. Retired private sector and municipal employees, who reside in numerous locations in the United States, can obtain benefits under either IUOE 30 Private Industry Retiree Benefit Plans or the IUOE 30 Municipal Retired Employees Welfare Trust Fund. For prescriptions of generic drugs, such as generic digoxin and generic doxycycline manufactured by one or more Defendants, the employee plan participant typically pays 30% of the cost of the prescription, with a $10 minimum co-payment. Participating pharmacies collect the co-payment from the employee plan participant and bill IUOE 30 for the remaining cost of the generic digoxin and generic doxycycline purchases. As a result of the alleged conspiracy, Plaintiff was injured in its business or property by reason of the violations of law alleged herein. DEFENDANTS 22. Lannett is a Delaware corporation that has its principal place of business in Philadelphia, Pennsylvania. Lannett is a distributor of generic digoxin and generic doxycycline. During the Class Period, Lannett sold generic digoxin and generic doxycycline to customers in this District and other locations in the United States. 23. Impax is a Delaware corporation that has its principal place of business in Hayward, California. As noted above, Impax’s generics division is called Global Pharmaceuticals (“Global”) and is a manufacturer and distributor of generic digoxin. During the Class Period, Global sold generic digoxin to customers in this District and other locations in the United States. 24. Par is a Delaware corporation with its principal place of business in Chestnut Ridge, New York. In January of 2014, Par announced that it had entered into an exclusive United States supply and distribution agreement with Covis Pharma S.à.r.l. (“Covis”) to distribute the authorized generic version of Covis’s Lanoxin® (digoxin) tablets. At that time, Par began selling and shipping 0.125 mg and 0.250 mg strengths of digoxin tablets in this country. Par also manufactures generic doxycycline. During the Class Period, Par sold generic digoxin and generic doxycycline to customers in this District and other locations in the United States. 25. West-Ward is a Delaware corporation with its principal place of business in Eatontown, New Jersey. West-Ward is the United States agent and subsidiary of Hikma Pharmaceuticals PLC (“Hikma”), a London-based global pharmaceutical company and is a manufacturer and distributor of generic digoxin. During the Class Period, West-Ward sold generic digoxin and generic doxycycline to customers in this District and other locations in the United States. 26. Actavis is an Irish corporation that has its global headquarters in Dublin, Ireland and its administrative headquarters in Parsippany-Troy Hills, New Jersey. During the Class Period, Actavis sold generic digoxin and generic doxycycline to customers in this District and other locations in the United States. 27. Mylan is a Delaware corporation with its principal place of business in Canonsburg, Pennsylvania. During the Class Period, Mylan sold generic digoxin and generic doxycycline to customers in this District and other locations in the United States. 28. Sun is a Delaware corporation with its principal place of business in Cranbury, New Jersey. Sun is the United States agent and subsidiary of Sun Pharmaceutical Industrial, Ltd., a global pharmaceutical company based in India. During the Class Period, Sun sold generic digoxin and generic doxycycline to customers in this District and other locations in the United 29. Endo is an Irish corporation with its global headquarters in Dublin, Ireland and its administrative headquarters in Malvern, Pennsylvania. During the Class Period, Endo sold generic doxycycline to customers in this District and other locations in the United States. 30. Whenever in this Complaint reference is made to any act, deed or transaction of any corporation, the allegation means that the corporation engaged in the act, deed or transaction by or through its officers, directors, agents, employees or representatives while they were actively engaged in the management, direction, control or transaction of the corporation’s business or affairs. 31. All acts alleged in this Complaint to have been done by Defendants were performed by their officers, directors, agents, employees or representatives while engaged in the management, direction, control or transaction of Defendants’ business affairs. CO-CONSPIRATORS 32. Various other persons, firms, corporations and entities have participated as unnamed co-conspirators with Defendants in the violations and conspiracy alleged herein. In order to engage in the offenses charged and violations alleged herein, these co-conspirators have performed acts and made statements in furtherance of the antitrust violations and conspiracies alleged herein. 33. At all relevant times, each Defendant was an agent of each of the remaining Defendants, and in doing the acts alleged herein, was acting within the course and scope of such agency. Each Defendant ratified and/or authorized the wrongful acts of each of the Defendants. Defendants, and each of them, are individually sued as participants and as aiders and abettors in the improper acts and transactions that are the subject of this action. INTERSTATE TRADE AND COMMERCE 34. The business activities of Defendants that are the subject of this action were within the flow of, and substantially affected, interstate trade and commerce. 35. During the Class Period, Defendants sold substantial quantities of generic digoxin and/or generic doxycycline in a continuous and uninterrupted flow of interstate commerce to customers throughout the United States. FACTUAL ALLEGATIONS The Industry 36. Defendants manufacture and sell, inter alia, generic versions of a branded drug once the patent on the branded drug expires. 37. According to the FDA’s Glossary, a generic drug is “the same as a brand name drug in dosage, safety, strength, how it is taken, quality, performance, and intended use.” 14 Once the FDA approves a generic drug as “therapeutically equivalent” to a brand drug, the generic version “can be expected to have equal effect and no difference when substituted for the brand name product.” Id. According to a Powerpoint presentation given by Lannett at the 2014 Bank of America/Merrill Lynch Healthcare Conference, the cost of generics is “[o]ften 80-85% less than the brand.” 38. Due to the price differentials between branded and generic drugs, as well as other institutional features of the pharmaceutical industry, pharmacists liberally and substantially substitute the generic drug when presented with a prescription for the branded drug. Since passage of the Hatch-Waxman Act (Pub. L. No. 98-417, 98 Stat. 1585 (codified at 15 U.S.C. §§ 68b-68c, 70b; 21 U.S.C. §§ 301 note, 355, 360cc; 28 U.S.C. § 2201; 35 U.S.C. §§ 156, 271, 282)), every state has adopted substitution laws requiring or permitting pharmacies to substitute generic drug equivalents for branded drug prescriptions (unless the prescribing physician specifically orders otherwise by writing “dispense as written” or similar language on the prescription). Market for Generic Digoxin 39. The market for generic digoxin is mature and the Defendants in that market can only gain market share by competing on price. 40. Lanoxin® is a branded version of digoxin. It was formerly a registered trademark of GlaxoSmithKline (“GSK”), which in December of 2011 sold its commercial rights in Lanoxin to Covis. Currently, Lanoxin® is manufactured by DSM Pharmaceuticals, Inc. and distributed 14 http://www.fda.gov/Drugs/InformationOnDrugs/ucm079436.htm#G. by Covis. As noted above, in January of 2014, Par contracted with Covis for distribution rights for an authorized generic version of Lanoxin® in the United States. 41. According to the 2015 edition of the FDA’s Orange Book, the .250 mg strength of Lanoxin® is a reference listed drug (“RLD”). An RLD is an “approved drug product to which new generic versions are compared to show that they are bioequivalent,” that is, the generic version “performs in the same manner as the Reference Listed Drug.” FDA’s Glossary, available at http://www.fda.gov/Drugs/InformationOnDrugs/ucm079436.htm#RLD. A drug company seeking approval to market a generic equivalent must refer to the Reference Listed Drug in its Abbreviated New Drug Application (ANDA).” Id. Once the FDA determines that a drug company’s application contains sufficient scientific evidence establishing the bioequivalence of the product to the RLD, an applicant may manufacture and market the generic drug product to provide a safe, effective, low cost alternative to the American public. Id. 42. Furthermore, the FDA will generally assign a Therapeutic Equivalence Code (“TE Code”) of AB to those products it finds to be bioequivalent.15 This coding system allows users to quickly determine important information about the drug product in question.16 For example, the FDA states that “[p]roducts generally will be coded AB if a study is submitted demonstrating bioequivalence. Even though drug products of distributors and/or repackagers are not included in the List, they are considered therapeutically equivalent to the application holder's drug product if the application holder's drug product is rated AB.”17. 15http://www.fda.gov/Drugs/DevelopmentApprovalProcess/FormsSubmissionRequirements/Elec tronicSubmissions/DataStandardsManualmonographs/ucm071713.htm. 16 http://www.fda.gov/Drugs/DevelopmentApprovalProcess/ucm079068.htm#TEC. 17http://www.fda.gov/Drugs/DevelopmentApprovalProcess/FormsSubmissionRequirements/Elec tronicSubmissions/DataStandardsManualmonographs/ucm071713.htm. 43. Lanoxin® in tablet form has TE Code of “AB.” As the FDA has listed in its Orange Book with regard to Therapeutic Equivalents for Lanoxin®, current generic equivalents which share the code AB are those distributed by Lannett; Global, a division of Impax; West- Ward; Par; Mylan; and Caraco, which is a subsidiary of Sun. 44. According to its Form 10-K filed with the United States Securities & Exchange Commission (“SEC”) on August 27, 2015,18 Lannett has been involved in the business of generic digoxin distribution since at least March of 2004. In March of 2004, Lannett entered into a supply agreement with Jerome Stevens Pharmaceuticals (“JSP”) for the exclusive distribution rights in the United States to generic digoxin and two other drugs manufactured by JSP. As reflected in the aforementioned Form 10-K, this agreement was made in exchange for four million shares of Lannett’s common stock. Lannett and JSP thereafter amended the original agreement to extend the initial contract for five more years (until March of 2019). As further reflected in the aforementioned Form 10-K, for additional consideration, Lannett issued to JSP 1.5 million shares of Lannett common stock, valued at approximately $20.1 million. 45. Lannett markets and distributes two potencies of generic digoxin: 0.125 mg and 0.250 mg. They both have a TE Code of AB and therefore are generic equivalents to the corresponding respective strengths of Lanoxin®. As reflected in SEC Form 10-Ks from 2007-14, Lannett’s sales of generic digoxin totaled $12.4 million in 2011; $10.9 million in 2012; $11.7 million in 2013; and $54.7 million in the 2014 fiscal year. 46. By October of 2013, the generic digoxin market was essentially a duopoly controlled by Lannett and Impax. Defendant West-Ward was also a competitor, but it had to suspend operations in November of 2012 in the wake of an investigation by the FDA into 18 http://www.sec.gov/Archives/edgar/data/57725/000110465915062047/a15-13005 110k.htm production problems at its manufacturing facility.19 It resumed participation in the generic digoxin market in July of 2013 after Hikma spent $39 million in remediation efforts. As noted above, Defendant Sun’s subsidiary Caraco operated a plant in Detroit, Michigan that manufactured, inter alia, generic digoxin. The Detroit facility halted operations in June of 2009 due to violations of the FDA’s manufacturing requirements.20 Upon undergoing updates, the facility resumed production in August of 2012.21 On or around June 30, 2014, Caraco closed its Detroit facility, stating that it has “undertaken necessary measures to ensure business continuity of these products by transferring the production of these drugs to [its] other units.” (italics in original).22 Upon information and belief, Sun resumed manufacturing and distributing generic digoxin in the latter half of the year 2015.23 Market for Generic Doxycycline 47. The market for generic doxycycline is mature and the Defendants in that market can only gain market share by competing on price. 48. The primary actors in that market are Actavis, Lannett, Par, West-Ward, Sun, Endo and Mylan, who collectively control a commanding market share. 19 On February 12, 2012, the FDA sent a warning letter to West-Ward over managing and testing issues that caused its generic digoxin tablets to fail to be in compliance with current good manufacturing practices as defined in 21 C.F.R. Parts 210-11. See http://www.fda.gov/ICECI/EnforcementActions/WarningLetters/2012/ucm291643.htm. 20 See https://www.ihs.com/country-industry-forecasting.html?ID=106595376. 21 See http://www.fiercepharma.com/pharma/sun-closing-caraco-plant-detroit-and-whacking- nearly-180-jobs. 22 http://www.in-pharmatechnologist.com/Processing/Sun-Pharma-to-shutter-Detroit-MI-plant- 179-jobs-affected. 23See http://www.sunpharma.com/node/120501. 49. As with generic digoxin, generic doxycycline hyclate in capsule form almost universally has a TE Code of AB and the RLD is Pfizer’s Vibramycin®. Doxycyline monohydrate in capsule or tablet form also almost universally has a TE Code and its RLD is listed as a generic form of the drug. 50. Total United States retail sales of doxycycline in 2013 were estimated to be over $972 million.24 Defendants’ Pricing Conduct For Generic Digoxin And The Effects Thereof 51. Generic digoxin pricing was remarkably stable until approximately mid-October of 2013. That stability is reflected in the following chart submitted by Dr. Stephen Schondelmeyer (“Schondelmeyer”), Director of the PRIME Institute at the College of Pharmacy for the University of Minnesota, as part of his testimony at the Senate Hearing.25 24 http://www.drugs.com/stats/doxycycline. 25 That testimony is available at http://www.help.senate.gov/imo/media/doc/Schondelmeyer.pdf. The terms “AWP” and “WAC” in this chart refer, respectively, to “Average Wholesale Price” and “Wholesale Acquisition Price.” Both prices are referred to by Schondelmeyer as benchmark prices.26 52. This chart reflects only a portion of the price hikes for generic digoxin that occurred. The October Letters referenced above noted that prices for generic digoxin had increased dramatically between October of 2012 and June of 2014 for the market as a whole: 26 Id. at 15. 53. These astounding price increases were caused by sudden and abrupt pricing changes made by Lannett, West-Ward, Sun, and Impax that were followed by Par and Mylan when they entered the market in 2014 and 2015, respectively. In or about November and December of 2013, pricing for .125 mg and .250 mg tablets of digoxin increased more than 750%, from $.11 and $.12 per tablet to $.91 and $1.01 per tablet. Between December of 2013 and January of 2014, the prices of digoxin jumped again to $1.08 and $1.11 per tablet. Daily heart medication that cost 11 or 12 cents per pill in early November of 2013 cost nearly ten times more by early January of 2014. 54. Data from the National Average Drug Acquisition Cost (“NADAC”) on generic digoxin show price increases that led to identical prices for Lannett’s, West-Ward’s, Sun’s, and Impax’s generic digoxin products. The same was true of Par’s pricing of generic digoxin in the United States beginning in early 2014 and of Mylan’s pricing of generic digoxin when it entered the market in 2015. The following chart shows Lannett’s, West-Ward’s, Sun’s, Impax’s, Par’s and Mylan’s pricing of the 0.125 mg tablet dosage of generic digoxin during the period from October of 2012 to April of 2015. 55. The following chart, based on NADAC data, shows Lannett’s, West-Ward’s, Sun’s, Impax’s, Par’s and Mylan’s pricing of the 0.250 mg tablet dosage of generic digoxin during the period from October of 2012 to mid-March of 2015. 56. There were no reasonable justifications for this abrupt shift in pricing conduct. 57. Federal law requires drug manufacturers to report potential drug shortages to the FDA, the reasons therefor, and the expected duration of the shortage.27 No supply disruption was reported by the relevant Defendants with respect to digoxin in the fall of 2013. As stated at the website of the Generics and Biosimilars Initiative on August 29, 2014, “[a]t the time of the price increases, the US Food and Drug Administration had reported no drug shortages, there was no new patent or new formulation and digoxin is not difficult to make. The companies have not yet 27 See http://www.fda.gov/Drugs/DrugSafety/DrugShortages/ucm050796.htm#q. provided an explanation for the price rise.” 28 No explanation was presented at the Senate Hearing; as noted above, executives from Lannett, Impax and Par refused to testify. 58. The presence or absence of competitors in the marketplace also does not explain the price of generic digoxin. From October of 2012 to around November 21, 2013, the NADAC of generic digoxin was consistently around $0.11 for the 0.125 mg tablets and between $0.11 and $0.12 for the 0.250 mg tablets. The chart presented by Schondelmeyer confirms this. This was the case even though for a portion of that period after West-Ward suspended production, Lannett and Impax were the only significant players in the market. West-Ward returned to the market in July of 2013, but pricing still remained stabilized for several months. Indeed, throughout 2012 and through September of 2013, as Schondelmeyer’s chart shows, the price of generic digoxin remained steady. Following the astronomical price increases in the fall of 2013, Par entered the market in early 2015 and Mylan entered the market in 2015. Prices did not fall despite the addition of new competitors. Pricing has remained inflated to this day. 59. This abrupt shift in the pricing of generic digoxin has had a catastrophic effect on consumers. Alan Katz (“Katz”), a Bloomberg reporter, wrote a December 12, 2013 article titled “Surprise! Generic-Drug Prices Spike” and reported: Bill Drilling, an owner of a pharmacy in Sioux City, Iowa, apologizes as he rings up a customer’s three-month supply of the heart medicine digoxin. The total is $113.12—almost 10 times the cost for the same prescription in August. Digoxin isn’t a new miracle drug. . . . “I’ve been doing this since 1985, and the only direction that generics-drug prices have gone is down,” Drilling says. *** “This is starting to create hardship,” he says. Many of his customers fall into what is known as the Medicare “doughnut hole,” a coverage gap in which patients pay 47.5 percent of 28 http://www.gabionline.net/Generics/General/Lawyers-look-at-new-price-hike-for-old-drug. branded-drug costs and 79 percent of a generic’s price. Russ Clifford, a retired music teacher, learned digoxin’s cost had jumped more than fourfold when he picked up his 30-day supply in mid-November. Clifford and his wife have had to dip into savings to pay their rising pharmaceutical bills.29 60. As further noted in the October Letters: This dramatic increase in generic drug prices results in decreased access for patients. According to the National Community Pharmacists Association (NCPA), a 2013 member survey found that pharmacists across the country "have seen huge upswings in generic drug prices that are hurting patients and pharmacies ability to operate" and "77% of pharmacists reported 26 or more instances over the past six months of a large upswing in a generic drug's acquisition price." These price increases have a direct impact on patients' ability to purchase their needed medications. The NCPA survey found that "pharmacists reported patients declining their medication due to increased co-pays," and "84% of pharmacists said that the acquisition price/lagging reimbursement trend is having a 'very significant' impact on their ability to remain in business to continue serving patients.” (Footnotes omitted). 61. Independent pharmacist Robert Frankil (“Frankil”) illustrated the hardship caused by the digoxin price increases with this anecdote offered at the Senate Hearing: A recent example from my own experience is the price of Digoxin—a drug used to treat heart failure. The price of this medication jumped from about $15 for 90 days’ supply, to about $120 for 90 days’ supply. That’s an increase of 800%. One of my patients had to pay for this drug when he was in the Medicare Part D coverage gap in 2014. Last year, when in the coverage gap he paid the old price. This year he paid the new price. Needless to say, the patient was astounded, and thought I was overcharging him. The patient called all around to try to get the medicine at the old, lower price, but to no avail. This caused him lots of stress and time, and caused us lots of stress and time in explaining the situation, reversing, and rebilling the claim. This example is typical of how these price spikes put consumers and pharmacists in a bad position, often grasping at straws for explanations. And all the 29 See http://www.bloomberg.com/bw/articles/2013-12-12/generic-drug-prices-spike-in- pharmaceutical-market-surprise. while, everyone pays more, including the patient, the pharmacy, and the insurer (often the federal government).30 Defendants’ Pricing Conduct For Generic Doxycycline And The Effects Thereof 62. For generic doxycycline, the pattern of huge price increases started in the fall of 2012, a year earlier than for generic digoxin. 63. Schondelmeyer, in his testimony at the Senate Hearing, presented the following chart showing the sudden increase in West-Ward’s pricing for generic doxycycline the AWP of which went from under $2.50 for a day of therapy for 100mg capsules of doxycycline hyclate to over $11 by January of 2013: 30 http://www.help.senate.gov/imo/media/doc/Frankil.pdf. 64. Similarly, Sanders and Cummings noted huge increases in the price of generic doxycycline in their October Letters: 65. The NADAC data for 50 mg and 100 mg of generic doxycycline hyclate capsules manufactured and/or distributed by Defendants Actavis, West-Ward, Sun,31 and Endo32 reveals a similar pattern: 31 In December of 2012, which was right before doxycycline’s price hike, Sun acquired URL Pharma, Inc. (“URL”), which manufactures doxycycline through its generic drug arm called Mutual Pharmaceutical Co. See http://www.thehindubusinessline.com/companies/sun-pharma- buys-url-generic-biz-from-takeda/article4210313.ece. In 2013, URL had nearly 20% market share in doxycycline. See http://articles.economictimes.indiatimes.com/2013-08- 23/news/41440919 1 sun-pharmaceuticals-doxycycline-sun-pharma-shares. 32 On August 6, 2014, Endo completed its acquisition of DAVA Pharmaceuticals, Inc. (“DAVA”), a manufacturer of generic doxycycline. http://www.prnewswire.com/news- releases/endo-completes-acquisition-of-dava-pharmaceuticals-270220501.html. 66. Although there was some decline in prices for both dosages of doxycycline hyclate capsules, prices did not decline to the levels that existed prior to December of 2012 in this period. 67. The NADAC data for 100mg of generic doxycycline hyclate tablets manufactured and/or distributed by Defendants Actavis, West-Ward, Sun, and Endo likewise illustrates a similar pattern: There were no reasonable justifications for this abrupt shift in pricing conduct. The FDA did announce a shortage of doxycycline in January of 2013; but that generic drug was placed on the resolved shortage list in October of 2013.33 33 See http://www.cdc.gov/std/treatment/doxycyclineShortage.htm. 68. The NADAC data for 100mg doxycycline monohydrate tablets manufactured by Lannett, Par and Mylan during the period from October of 2012 through mid-February of 2015 is depicted in the following chart; while prices for this dosage reflect more of a sawtooth pattern, again, it is one of a substantial increasing trend. 69. These price hikes caused extreme hardship to consumers. As reported on WSMV- TV of Nashville’s website in March of 2013: Many people may not recognize the name, but they have probably used it for a health problem at one point. Doctors use doxycycline to treat a wide range of issues, including everything from acne to Lyme disease, anthrax exposure and even heartworm in our pets. However, the once cheap and effective drug has now dramatically gone up in price, and that has health professionals concerned. Hospitals like Vanderbilt University Medical Center keep doxycycline in stock, but some folks worry the cure for their ailment could now be financially out of reach. "It's a change that occurred overnight," said Vanderbilt pharmacy manager Michael O'Neil. Not long ago, the pharmacy at Vanderbilt's hospital could purchase a 50-count bottle of 100 mg doxycycline tablets for $10, but now the same bottle costs a staggering $250. "That's concerning to us, both as citizens and practitioners, when you see a huge increase like this in a price of a drug," O'Neil said. Vanderbilt keeps thousands of doxycycline pills on hand in the event of a bioterrorist attack, like anthrax, and O'Neil said replacing expired pills is prohibitive. "This one is just hurting us when we need to replace the medication," he said. But it's the most vulnerable who are in the most jeopardy. For a pet, a heartworm diagnosis can be a death sentence without doxycycline. Veterinarian Dr. Joshua Vaughn of the Columbia Hospital for Animals is already seeing the tragic results. "We had one patient who we diagnosed with heartworm. We recommended heartworm treatment, but when they saw the total dollar amount, they elected not to treat the dog at all," Vaughn said. While manufacturers say they are having problems with raw supply, many in the medical community see greed as an overriding factor. Vaughn said he wrote a recent prescription for doxycycline that cost $77. This week, the price increased to nearly $3,000.34 34 http://www.wsmv.com/story/21616095/sudden-increase-in-cost-of-common-drug-concerns-many. Lannett’s Statements About Generic Drug Competition 70. Defendants’ sudden and massive price increases represented a sharp departure from the previous years of low and stable prices. This in itself is indicative of collusion. In addition, Defendant Lannett’s own statements--in documents and in oral remarks by Bedrosian of Lannett at quarterly earnings calls with market analysts and the investigations of state and federal antitrust regulators--reinforce this inference of collusion.35 71. In a fourth quarter 2013 earnings call that occurred on September 10, 2013, Bedrosian signaled Lannett’s intention to increase prices and his expectations that his competitors would follow suit. Discussing the role of Smith, one of the persons apparently subpoenaed by DOJ, Bedrosian said: We’re not a price follower. We tend to be a price leader on price increasing and the credit goes to my sales vice president. He takes an aggressive stance towards raising prices. He understands one of his goals, his objectives as a sales vice president is to increase profit margins for the company. And he’s the first step in that process….I am finding a climate out there has been changed dramatically and I see more price increases coming from our competing—competitors than I’ve seen in the past. And we’re going to continue to lead. We have more price increases planned for this year within our budget. And hopefully, our competitors follow suit. (Emphases added). 72. In a subsequent earnings call, Bedrosian reported that Lannett’s chief competitor had indeed heeded its price increase signal. In an earnings call on November 7, 2013--after the initial generic digoxin price increases--Bedrosian noted, referring to Impax, that “[w]e’ve had a recent price increase on the [generic digoxin] product as well because we are now only 1 of 2 people in the market. And as a result, I expect that product to do very well.” (Emphases added). 35 http://seekingalpha.com/symbol/LCI?source=search general&s=lci. 73. The very next quarter, Bedrosian expressed complacency about the entry of a new competitor in the form of Par. On February 6, 2014--after more price increases on generic digoxin had occurred and after Par had entered the market--Bedrosian said he was not concerned about this new entry: “[a]nd we see Par as one of our rational competitors in the marketplace.” As he went on to note, “we’re not troubled by their pricing in the marketplace. Not at all.” 74. In a quarterly earnings call held on November 3, 2014. Bedrosian again expressed confidence that Lannett would not have to engage in price competition generally in the generic drug market. He said Lannett and its competitors were “less concerned about grabbing market share. We’re all interested in making a profit, not how many units we sell.” (Emphases added). Bedrosian went on to discuss, inter alia, Par and Impax, saying “the companies we’re looking at here are not irrational players. I don’t see them just going out and trying to grab market share.” (Emphases added). He also noted that Mylan was expected to enter the market, “but Mylan is one of those rational competitors, so we’re not really expecting anything crazy from them.” (Emphases added). He predicted that price increases would continue. 75. On February 4, 2015, in another quarterly earnings call, Bedrosian confirmed there would be a moratorium on price competition. He stated: “I think you’re going to find more capital pricing [in the generic marketplace], more—I’ll say less competition, in a sense. You won’t have price wars.” (Emphases added). In his view, “I just don’t see the prices eroding like they did in the past.” (Emphases added). 76. Thus, for Lannett, irrational competitors were those who competed on price in order to obtain market share. It understood that Impax, Par and Mylan, among others, were no longer interested in doing that, an understanding that could only exist if the three firms had reached a consensus on how to price. Bedrosian’s predictions bespeak that consensus. Bedrosian was also certain of reaching the same consensus with Mylan. 77. Frederick Wilson, the CEO of Impax, also spoke to this topic in a third quarter 2014 earnings call: “we’ve done what most of the other generic competitors have done, we look at opportunities, we look at how competition shifts, we look at where there may be some market movement that will allow us to take advantages on price increases and we’ve implemented those….”36 78. This meeting of the minds among the competing sellers of generic digoxin and generic doxycycline assured them handsome profits. Bedrosian noted in the February 4, 2015 earnings call that Lannett “recorded the highest net sales and net income in our company’s history.” Gross profits in the first six months of the 2015 fiscal year were $158.8 million or 76% of net sales, compared with $42.3 million or 37% of net sales during the previous fiscal year. Generic digoxin pricing played a big role in its success. The 2015 Lannett Presentation noted that generic digoxin accounted for 23% of the company’s revenues. As noted in the same presentation, Lannett is highly dependent on price increases for revenue growth. 79. Likewise, according to its 2015 SEC Form 10-K filed on February 26, 2015 (available at), Impax experienced $596 million in total revenues in the 2014 calendar year, compared to $511 million in 2013—a 17% increase. One of the primary factors in this growth was “higher sales of our Digoxin”.37 36 http://www.nasdaq.com/symbol/ipxl/call-transcripts. 37 http://d1lge852tjjqow.cloudfront.net/CIK-0001003642/c545ab21-aa3d-4426-a0b9- ba4373b6c213.pdf?noexit=true. Congressional And Regulators’ Responses 80. As noted above, the unseemly profits made by the generic drug manufacturers led to inquiries by Congress and to the Senate Hearing, where numerous witnesses referenced the pricing history summarized above. 81. Sanders and Cummings followed up on the Senate Hearing by writing a letter on February 24, 2015 to the Office of the Inspector General (“OIG”) of the Department of Health & Human Services, asking it to investigate the effect price increases of generic drugs, including generic digoxin, have had on generic drug spending within the Medicare and Medicaid programs.38 The OIG responded in a letter dated April 13, 2015, saying it planned to engage in a review of quarterly average manufacturer prices for the 200 top generic drugs from 2005 through 2014.39 82. In July of 2014, George Jepsen, the Connecticut AG, issued subpoenas to Defendants Lannett, Impax and Par, specifically saying that there was “reason to believe” that a conspiracy took place “which is for the purpose, or has the effect of, (a) fixing, controlling or maintaining prices, rates, quotations, or fees; or (b) allocating or dividing customers or territories….” This subpoena is thus not a “fishing expedition”; it is very exact, as reflected in Appendix A. In December of 2016, the Connecticut AG issued a subpoena and interrogatories to Defendant Endo requesting information regarding the pricing of a number of its generic products, including doxycycline. 40 38 http://www.sanders.senate.gov/download/sanders-cummings-letter?inline=file. 39 http://www.sanders.senate.gov/download/oig-letter-to-sen-sanders-4-13-2015?inline=file. 40 See http://www.sec.gov/Archives/edgar/data/1593034/000159303416000056/endp- 3312016x10q.htm. 83. Commencing in November of 2014, the DOJ issued grand jury subpoenas to Lannett, Impax, Par, Actavis, Mylan and, in some cases, their employees. These subpoenas have been acknowledged in SEC filings by all five companies. (It is not publicly known if West-Ward also received a subpoena, because its foreign parent, Hikma, does not make disclosures to the SEC). On May 28, 2016, Defendant Sun also disclosed that it had received a grand jury subpoena from the DOJ.41 84. In an SEC Form 10-Q dated February 6, 2015, Lannett has said that on November 3, 2014, “the Senior Vice-President of Sales and Marketing was served with a grand jury subpoena relating to a federal investigation of the generic pharmaceutical industry into possible violations of the Sherman Act.”42 The responses to that subpoena led to the issuance of a second grand jury subpoena to Lannett itself. It noted in the same SEC filing that on December 5, 2014, “[t]he Company was served with a grand jury subpoena related to the federal investigation of the generic pharmaceutical industry into possible violations of the Sherman Act. The subpoena requests corporate documents from the Company relating to corporate, financial, and employee information, communications or correspondence with competitors regarding the sale of generic prescription medications, and the marketing, sale, or pricing of certain products.” A report in Pharmacy Times described the subpoenas as follows: The Lannett Company, Inc, subpoena covers 2 specific areas related to antitrust laws and generic drug pricing. The first portion covers a Connecticut Attorney General investigation into whether the company or its employees engaged in price fixing, maintaining, 41 See http://www.bseindia.com/corporates/ann.aspx?scrip=524715&dur=A&expandable=0, at May 28, 2016. 42 http://app.quotemedia.com/data/downloadFiling?webmasterId=101533&ref=10044800&type=H TML&symbol=LCI&companyName=Lannett+Co.+Inc.&formType=10-Q&dateFiled=2015-02- 06. or controlling for digoxin. The second portion serves the company’s senior vice president of sales and marketing with a grand jury subpoena pertaining to Sherman antitrust act violations in the generic drug industry. That subpoena requests any documents exchanged with competitors related to the sale of any generic prescription medications during any time period.43 Similar statements are contained in Lannett’s most recent SEC Form 10-Q, filed on February 9, 2016.44 85. On August 27, 2015, Lannett issued a new SEC Form 10-K. It contains this further explanation of the DOJ investigation: In fiscal year 2015, the Company and certain affiliated individuals each were served with a grand jury subpoena relating to a federal investigation of the generic pharmaceutical industry into possible violations of the Sherman Act. The subpoenas request corporate documents of the Company relating to corporate, financial, and employee information, communications or correspondence with competitors regarding the sale of generic prescription medications, and the marketing, sale, or pricing of certain products, generally for the period of 2005 through the dates of the subpoenas.45 Similar statements are contained in Lannett’s most recent Form 10-Q, referenced above. Thus, Lannett has now indicated that the DOJ has caused subpoenas to be issued to a number of “affiliated individuals” and that the scope of the investigation extends back a decade. 86. Similarly, in an SEC Form 10-K dated March 12, 2015, Par stated that “[o]n December 5, 2014, we received a subpoena from the Antitrust Division of the DOJ requesting documents related to communications with competitors regarding our authorized generic version 43 http://www.pharmacytimes.com/publications/issue/2014/December2014/Senate-Hearing- Investigates-Generic-Drug-Prices. 44 http://www.sec.gov/Archives/edgar/data/57725/000110465916094983/a15-24119_110q.htm. 45 http://www.sec.gov/Archives/edgar/data/57725/000110465915062047/a15-13005 110k.htm. of Covis’s Lanoxin® (digoxin) oral tablets.”46 Par repeated this disclosure in its Form 10-Qs issued for the second quarter of 2015.47 In a Form 10-Q for the third quarter of 2015, Endo International plc, the parent company for Par, stated that “[o]n December 5, 2014, the Company’s subsidiary, Par, received a Subpoena to Testify Before Grand Jury from the Antitrust Division of the DOJ and issued by the U.S. District Court for the Eastern District of Pennsylvania. The subpoena requests documents and information focused primarily on product and pricing information relating to Par’s authorized generic version of Lanoxin (digoxin) oral tablets and Par’s generic doxycycline products, and on communications with competitors and others regarding those products. Par is cooperating fully with the investigation.”48 87. Impax’s 2015 Form 10-K referenced above states that “[o]n November 3, 2014, a sales representative of the Company received a subpoena from the Justice Department’s Antitrust Division requesting the production of documents to and testimony before the grand jury of the Eastern District of Pennsylvania. The request relates to any communication or correspondence with any competitor (or an employee of any competitor) in the sale of generic prescription medications.” Subsequently, in an SEC Form 10-Q filed on May 11, 2015, Impax indicated that the “[o]n December 5, 2014, we received a subpoena from the Antitrust Division of the DOJ 46 https://www.sec.gov/Archives/edgar/data/878088/000087808815000002/prx- 20141231x10k.htm. 47 This filing was formerly available at the web page that follows, but has since been withdrawn: http://pr.parpharm.com/phoenix.zhtml?c=81806&p=irol- SECText&TEXT=aHR0cDovL2FwaS50ZW5rd2l6YXJkLmNvbS9maWxpbmcueG1sP2lwYWd lPTEwNDIwNTIxJkRTRVE9MCZTRVE9MCZTUURFU0M9U0VDVElPTl9FTlRJUkUmc3Vi c2lkPTU3. 48 http://phx.corporate-ir.net/phoenix.zhtml?c=123046&p=irol- SECText&TEXT=aHR0cDovL2FwaS50ZW5rd2l6YXJkLmNvbS9maWxpbmcueG1sP2lwYWd lPTEwNTY2NjAwJkRTRVE9MCZTRVE9MCZTUURFU0M9U0VDVElPTl9FTlRJUkUmc3V ic2lkPTU3. requesting documents related to communications with competitors regarding our authorized generic version of Covis’s Lanoxin® (digoxin) oral tablets and our generic doxycycline products.”49 This assertion was repeated in Impax’s Form 10-Q filed on August 10, 2015 and reconfirmed in its Form 10-K filed on February 22, 2016.50 88. On August 6, 2015, Allergan (now part of Actavis) filed an SEC Form 10-Q, in which it disclosed that “[o]n June 25, 2015, [Actavis] received a subpoena from the U.S. Department of Justice (‘DOJ’), Antitrust Division seeking information relating to the marketing and pricing of certain of the Company’s generic products and communications with competitors about such products.”51 As one article noted, “[l]ike the other generic manufacturers who have been subpoenaed—Impax Laboratories, Lannett Company, and Par Pharmaceutical Companies, Inc.—Actavis has manufactured digoxin. Actavis has also supplied doxycyline, which may be significant because Par had disclosed that its DOJ subpoena sought communications related to doxycycline.”52 89. On December 4, 2015, Mylan N.V., the parent of Defendant Mylan, issued an SEC Form 8-K that stated “[o]n December 3, 2015, a subsidiary of Mylan N.V. … received a subpoena from the Antitrust Division of the U.S. Department of Justice … seeking information 49 http://d1lge852tjjqow.cloudfront.net/CIK-0001003642/88fbdd3c-25b3-4640-935d- 4c2ced2a6a47.pdf?noexit=true. 50 http://d1lge852tjjqow.cloudfront.net/CIK-0001003642/0995ec20-ce96-4de1-98aa- 4aacfdb675e6.pdf?noexit=true; http://d1lge852tjjqow.cloudfront.net/CIK- 0001003642/0d396bab-0306-4c61-90fe-b5cce6e02624.pdf?noexit=true. 51 https://www.sec.gov/Archives/edgar/data/1578845/000156459015006357/agn- 10q_20150630.htm. 52 http://www.antitrustupdateblog.com/blog/doj-generic-price-fixing-investigation-targets- allergans-actavis-unit/. relating to the marketing, pricing and sale of our generic Doxycycline products and any communications with competitors about such products.”53 Regulatory investigations against Mylan are not limited to doxycycline, however. In its SEC Form 10-K filed on February 16, 2016, Mylan N.V. reported that “[o]n December 21, 2015, the Company received a subpoena and interrogatories from the Connecticut Office of the Attorney General seeking information relating to the marketing, pricing and sale of certain of the Company’s generic products (including Doxycycline) and communications with competitors about such products.”54 90. On May 28, 2016, Sun’s parent company, Sun Pharmaceutical Industries, Ltd., stated in a filing with the National Stock Exchange of India that “…one of the Company’s U.S. subsidiaries, Sun Pharmaceutical Industries, Inc. (‘SPII’) has received a grand jury subpoena from the United States Department of Justice, Antitrust Division seeking documents from SPII and its affiliates relating to corporate and employee records, generic pharmaceutical products and pricing, communications with competitors and others regarding the sale of generic pharmaceutical products, and certain other related matters. SPII is currently responding to the subpoena.” 55 As noted above., Sun is a manufacturer and/or distributor of both generic digoxin and generic doxycycline. 91. The fact that these companies and/or their employees received subpoenas from a federal grand jury is significant, as is reflected in Chapter 3 of the 2014 edition of the DOJ’s 53 http://www.sec.gov/Archives/edgar/data/1623613/000119312515394875/d225442d8k.htm. 54 http://files.shareholder.com/downloads/ABEA-2LQZGT/146191293x0xS1623613-16- 46/1623613/filing.pdf. 55 See http://www.bseindia.com/corporates/ann.aspx?scrip=524715&dur=A&expandable=0, at May 28, 2016. Antitrust Division Manual.56 Section F.1 of that chapter notes that “staff should consider carefully the likelihood that, if a grand jury investigation developed evidence confirming the alleged anticompetitive conduct, the Division would proceed with a criminal prosecution.” Id. at III-82. The staff request needs to be approved by the relevant field chief and is then sent to the Antitrust Criminal Enforcement Division.” Id. “The DAAG [Deputy Assistant Attorney General] for Operations, the Criminal DAAG, and the Director of Criminal Enforcement will make a recommendation to the Assistant Attorney General. If approved by the Assistant Attorney General, letters of authority are issued for all attorneys who will participate in the grand jury investigation.” Id. at III-83. “The investigation should be conducted by a grand jury in a judicial district where venue lies for the offense, such as a district from or to which price-fixed sales were made or where conspiratorial communications occurred.” Id. Thus, the fact that Lannett, Impax, Actavis, Mylan, Par and Sun or their employees received federal grand jury subpoenas is a strong indicator that antitrust offenses have occurred. 92. Commentators have also taken note of the criminal subpoenas being issued. As noted on one legal website: The Justice Department’s subpoenas focus on sharing and exchanging of pricing information and other issues among generic drug companies. The initial subpoenas, including two senior executives, suggest that the Justice Department has specific information relating to their participation in potentially criminal conduct. It is rare for the Justice Department to open a criminal investigation with specific subpoenas for individuals, along with company-focused subpoenas. Given the breadth of such a potential cartel investigation, the Justice Department’s inquiry of the generic pharmaceutical industry could be significant. The prices for a large number of generic drug prices have increased significantly over the last year. 56 http://www.justice.gov/atr/public/divisionmanual/chapter3.pdf. There does not appear to be any rational explanation for such increases involving a diverse set of products. The scope of these price increases and the timing of them certainly raise serious concerns about collusive activity among competitors.57 93. Or, as Mark Rosman, former assistant chief of the National Criminal Enforcement Section of DOJ’s Antitrust Division, noted in an article on the “unusual” nature of the criminal subpoenas, “[a] DOJ investigation into the alleged exchange of pricing information in the pharmaceutical industry likely indicates that the agency anticipates uncovering criminal antitrust conduct in the form of price-fixing or customer allocation.”58 94. And, as another legal commentator has recently noted, The recent disclosure widens the DOJ’s criminal probe into whether or not leading generic drug providers are colluding to artificially raise generic drug prices. According to data from the Centers for Medicare and Medicaid Services (CMS), more than half of all generic drug prices rose between June 2013 and June 2014, including 10 percent of all generic drugs doubling in price during that time. As the fourth largest generics producer in the world, at least prior to the Teva deal, Allergan is largest company to be involved in the DOJ investigation so far. The probe became public last November when Impax was served with several criminal grand jury subpoenas. Lannett announced in a regulatory filing earlier in the year that the company, as well as its senior vice-president of sales and marketing, was being served with grand jury subpoenas as well. Like Lannett, Allergan wrote that it intends to fully cooperate with the investigation. Neither the DOJ, nor the company would comment further on the investigation beyond the filings. While Allergan made no mention of the medicines involved in the suspected collusion, filings from other companies indicate that the heart drug digoxin and the antibiotic doxycycline are among those under investigation.59 57 http://www.jdsupra.com/legalnews/criminal-global-cartel-focus-on-generic-92387/. 58 https://www.wsgr.com/publications/PDFSearch/rosman-1114.pdf. 59 http://www.legalreader.com/doj-subpoenas-allergan-as-generics-antitrust-probe-widens/. Factors Increasing The Market’s Susceptibility To Collusion 95. Publicly available data on the generic digoxin and doxycycline markets in the United States demonstrates that it is susceptible to cartelization by the Defendants. Factors that make a market susceptible to collusion include: (1) a high degree of industry concentration; (2) significant barriers to entry; (3) inelastic demand; (4) the lack of available substitutes for the goods involved; (5) a standardized product with a high degree of interchangeability between the goods of cartel participants; (6) absence of a competitive fringe of sellers; and (7) intercompetitor contacts and communication. 96. Industry Concentration. A high degree of concentration facilitates the operation of a cartel because it makes it easier to coordinate behavior among co-conspirators. 97. In the United States generic digoxin and generic doxycycline markets, the number of competitors has dwindled, creating cartel conditions. The firms that currently control most of the market are the Defendants. A graphic available at the website of one pharmacy benefits manager (“PBM”)60 reflects this development with respect to the market for generic digoxin: 98. As the PBM goes on to explain: 60 https://www.optum.com/thought-leadership/whatcanbedone.html.html. Overall, a grand jury is investigating the generic pharmaceutical industry as a whole for possible violations of anti-trust laws. More specifically, in early November 2014, the U.S. Department of Justice issued subpoenas to two generic drug makers seeking information about their interactions with competitors. In particular, these two companies are involved in the digoxin market, which has come in for scrutiny for obvious reasons. (Footnote omitted). 99. The number of meaningful competitors in the generic doxycycline market is also limited largely to seven major players (four for doxycycline hyclate, three for doxycycline monohydrate), as described above. 100. Barriers To Entry. Supracompetitive pricing in a market normally attracts additional competitors who want to avail themselves of the high levels of profitability that are available. However, the presence of significant barriers to entry makes this more difficult and helps to facilitate the operation of a cartel. 101. Here, there are significant capital, regulatory and intellectual property barriers to entry in the generic digoxin and doxycycline markets. 102. Par’s own 2015 Form 10-K (cited above) states that its business is to develop and commercialize “generic drugs with limited competition, high barriers to entry and longer life cycles.” 103. Costs of manufacture, coupled with regulatory oversight, represent a substantial barrier to entry in both the generic digoxin and doxycycline markets. This is reflected in West- Ward’s having to shut down temporarily its New Jersey production facility for digoxin and spend $39 million in remediation. Likewise, Impax’s 2015 Form 10-K (cited above) referenced FDA warning letters it received with respect to its manufacturing facilities in Hayward, California and Taiwan. And the predecessor to Actavis plc’s issues with the FDA over production of doxycycline at its New Jersey facilities provides another example. 104. Intellectual property costs can also be substantial, as reflected in Par’s digoxin licensing deal with Covis and Lannett’s licensing arrangement with JSP. 105. With respect to generic digoxin, entry has occurred on a limited basis, as reflected, inter alia, by the actions of Par and Mylan. But that entry has not curbed the price- fixing in the industry. Indeed, as noted above, Bedrosian regards both companies as “rational” competitors more interested in higher profits on fewer sales than grabbing market share through price competition. 106. Demand Inelasticity. Price elasticity of demand is defined as the measure of responsiveness in the quantity demanded for a product as a result of change in price of the same product. It is a measure of how demand for a product reacts to a change in price. The basic necessities of life—food, water, and shelter—are examples of goods that experience nearly perfectly inelastic demand at or near the minimums necessary to sustain life. In other words, a person on the verge of dying of thirst will pay almost anything for drinking water. In order for a cartel to profit from raising prices above competitive levels, demand for the product must be sufficiently inelastic such that any loss in sales will be more than offset by increases in revenue on those sales that are made. Otherwise, increased prices would result in declining revenues and profits. 107. Generic digoxin is critical to the health of patients with cardiovascular disease; it is considered a medical necessity that must be purchased at whatever cost the Defendants offer them for sale. The passages from Katz and Frankil quoted above reflect this reality. The WSMV- TV article quoted above makes a similar point as to doxycycline 108. Thus, generic digoxin and generic doxycycline are excellent candidates for cartelization because price increases will result in more revenue, rather than less. 109. Lack of Substitutes. Although there are many newer types of drugs to treat heart disease, for some patients there are no effective substitutes for digoxin; as noted above, digoxin is on the WHO’s list of essential medicines. As noted above, the same is true for doxycycline and a variety of health conditions. 110. Standardized Product with High Degree of Interchangeability. A commodity- like product is one that is standardized across suppliers and allows for a high degree of substitutability among different suppliers in the market. When products offered by different suppliers are viewed as interchangeable by purchasers, it is easier for the suppliers to agree on prices for the good in question and it is easier to monitor these prices effectively. Here, the generic digoxin and/or generic doxycycline made by the Defendant manufacturers are each chemical compounds composed of the same raw materials; indeed, Bedrosian has commented that the Defendants use many of the same suppliers. 111. Absence of a Competitive Fringe of Sellers. Companies that are not part of the conspiracy can erode at conspirators’ market shares by offering products at a lower, more competitive price. This reduces revenue and makes sustaining a conspiracy more difficult. In the market for generic digoxin, there is no realistic threat that a fringe of competitive sellers will take market share from Defendants. The Defendants in the respective markets for generic digoxin and generic doxycycline have oligopolistic power over those markets, which facilitates their ability to raise prices without losing market share to non-conspirators. 112. Intercompetitor Contacts and Communications. In order to be successful, collusive agreements require a level of trust among the conspirators. Collaboration fostered through industry associations facilitate relationships between individuals who would otherwise be predisposed to compete vigorously with each other. Here, the Defendants are members of or participants in the GPHA, which describes itself on its website as “the nation’s leading trade association for manufacturers and distributors of generic prescription drugs, manufacturers of bulk active pharmaceutical chemicals, and suppliers of other goods and services to the generic industry.”61 Thus, representatives of the Defendants have opportunities to meet and conspire at functions of this group, as well as at industry healthcare meetings. In addition, as noted above, Lannett’s Bedrosian has made positive assertions about how Lannett and its competitors view the competitive landscape for generic drugs, and that none of them will compete on price for the foreseeable future. Such statements indicate intercompetitor contacts and communications. For example, around 7 months after the price of doxycycline skyrocketed in January of 2013, Defendant West-Ward’s parent company Hikma, raised guidance for the drug doxycycline from $200 million to $230 million— a signal “that doxycycline prices will remain high.”62 The grand jury subpoenas discussed above lend further support to the conclusion that intercompetitor communications occurred with respect to the pricing of generic digoxin and/or doxycycline. Indeed, according to the previously-identified PaRR Report, “prosecutors are taking a close look at trade associations as part of their investigation as having been one potential avenue for facilitating the collusion between salespeople at different generic producers.” DEFENDANTS’ ANTITRUST VIOLATIONS 113. During the Class Period, the Defendants engaged in a continuing agreement, understanding, and conspiracy in restraint of trade to artificially raise, fix, maintain or stabilize the prices of generic drugs in the United States. 61 http://www.gphaonline.org/about/the-gpha-association. 62 See http://articles.economictimes.indiatimes.com/2013-08-23/news/41440919 1 sun- pharmaceuticals-doxycycline-sun-pharma-shares. 114. In formulating and effectuating the contract, combination or conspiracy, the Defendants identified above and their co-conspirators engaged in anticompetitive activities, the purpose and effect of which were to artificially raise, fix, maintain, and/or stabilize the price of generic digoxin and/or generic doxycycline sold in the United States. These activities included the following: a. Defendants participated in meetings and/or conversations to discuss the price of generic digoxin and/or generic doxycycline in the United States; b. Defendants agreed during those meetings and conversations to charge prices at specified levels and otherwise to increase and/or maintain prices of generic digoxin and/or generic doxycycline sold in the United States; c. Defendants agreed during those meetings and conversations to fix the price of generic digoxin and/or generic doxycycline; and d. Defendants issued price announcements and price quotations in accordance with their agreements. Defendants and their co-conspirators engaged in the activities described above for the purpose of effectuating the unlawful agreements described in the Complaint. 115. During and throughout the period of the conspiracy alleged in this Complaint, Plaintiff and members of the Class purchased generic digoxin and/or generic doxycycline from Defendants (or their subsidiaries or controlled affiliates) or their co-conspirators at inflated and supracompetitive prices. 116. Defendants’ contract, combination or conspiracy constitutes an unreasonable restraint of interstate trade and commerce in violation of Sections 1 of the Sherman Act (15 U.S.C. § 1) and the laws of various states. 117. As a result of Defendants’ unlawful conduct, Plaintiffs and the other members of the class have been injured in their business and property in that they have paid more for generic digoxin and/or generic doxycycline than they would have paid in a competitive market. 118. The unlawful contract, combination or conspiracy has had the following effects, among others: a. price competition in the market for generic digoxin and generic doxycycline has been artificially restrained; b. prices for generic digoxin and/or generic doxycycline sold by the Defendants have been raised, fixed, maintained, or stabilized at artificially high and non-competitive levels; and c. purchasers of generic digoxin and/or generic doxycycline from the Defendants have been deprived of the benefit of free and open competition in the market for generic digoxin and generic doxycycline. CLASS ACTION ALLEGATIONS 119. Plaintiff brings this action on behalf of himself and as a class action under Rule 23(a) and (b)(2) of the Federal Rules of Civil Procedure, seeking equitable and injunctive relief on behalf of the following class (the “Nationwide Class”): All persons and entities in the United States and its territories who purchased, paid and/or provided reimbursement for some or all of the purchase price for Defendants’ generic digoxin or generic doxycycline products from October 1, 2012 through the present. This class excludes: (a) Defendants, their officers, directors, management, employees, subsidiaries, and affiliates; (b) all federal and state governmental entities except for cities, towns, or municipalities with self-funded prescription drug plans; (c) all persons or entities who purchased Defendants’ generic digoxin or doxycycline products for purposes of resale or directly from Defendants; (d) fully insured health plans (i.e., health plans that purchased insurance covering 100% of their reimbursement obligation to members); (e) any “flat co-pay” consumers whose purchases of Defendants’ generic digoxin or doxycycline products were paid in part by a third party payor and whose co-payment was the same regardless of the retail purchase price; and (f) any judges or justices involved in this action and any members of their immediate families. 120. Plaintiff also brings this action on behalf of himself and as a class action under Rule 23(a) and (b)(3) of the Federal Rules of Civil Procedure seeking damages pursuant to the common law of unjust enrichment and the state antitrust, unfair competition, and consumer protection laws of the states listed below (the “Indirect Purchaser States”)63 on behalf of the following class (the “Damages Class”): All persons and entities in the Indirect Purchaser States who purchased, paid and/or provided reimbursement for some or all of the purchase price for Defendants’ generic digoxin or generic doxycycline products from October 1, 2012 through the present. This class excludes: (a) Defendants, their officers, directors, management, employees, subsidiaries, and affiliates; (b) all federal and state governmental entities except for cities, towns, or municipalities with self-funded prescription drug plans; (c) all persons or entities who purchased Defendants’ generic digoxin or doxycycline products for purposes of resale or directly from Defendants; (d) fully insured health plans (i.e., health plans that purchased insurance covering 100% of their reimbursement obligation to members); (e) any “flat co-pay” consumers whose purchases of Defendants’ generic digoxin or doxycycline products were paid in part by a third party payor and whose co-payment was the same regardless of the retail purchase price; and (f) any judges or justices involved in this action and any members of their immediate families. 63 The “Indirect Purchaser States” consist of Alabama, Arkansas, Arizona, California, District of Columbia, Florida, Hawaii, Iowa, Kansas, Maine, Massachusetts, Michigan, Minnesota, Missouri, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Mexico, New York, North Carolina, North Dakota, Oregon, Rhode Island, South Carolina, South Dakota, Tennessee, Utah, Vermont, West Virginia and Wisconsin. . 121. The Nationwide Class and the Damages Class are referred to herein as the “Classes.” 122. While Plaintiff does not know the exact number of the members of the Classes, Plaintiff believes there are millions of members in each Class. 123. Common questions of law and fact exist as to all members of the Classes. This is particularly true given the nature of Defendants’ conspiracy, which was generally applicable to all the members of both Classes, thereby making appropriate relief with respect to the Classes as a whole. Such questions of law and fact common to the Classes include, but are not limited to: a. Whether Defendants and their co-conspirators engaged in a combination and conspiracy among themselves to fix, raise, maintain and/or stabilize prices of generic digoxin and/or generic doxycycline and/or engaged in market allocation for generic digoxin and/or generic doxycycline sold by prescription in the United States; b. The identity of the participants of the alleged conspiracy; c. The duration of the alleged conspiracy and the acts carried out by Defendants and their co-conspirators in furtherance of the conspiracy; d. Whether the alleged conspiracy violated the Sherman Act, as alleged in the First Count; e. Whether the alleged conspiracy violated state antitrust and unfair competition laws, and/or state consumer protection laws, as alleged in the Second and Third Counts; f. Whether the Defendants unjustly enriched themselves to the detriment of the Plaintiff and the members of the Classes, thereby entitling Plaintiff and the members of the Classes to disgorgement of all benefits derived by Defendants, as alleged in the Fourth Count; g. Whether the conduct of the Defendants and their co- conspirators, as alleged in this Complaint, caused injury to the business or property of Plaintiff and the members of the Classes; h. The effect of the alleged conspiracy on the prices of Generic digoxin and generic doxycycline sold in the United States during the Class Period; i. The appropriate injunctive and related equitable relief for the Nationwide Class; and j. The appropriate class-wide measure of damages for the Damages Class. 124. Plaintiff’s claims are typical of the claims of the members of the Classes, and Plaintiff will fairly and adequately protect the interests of the Classes. Plaintiff and all members of the Classes are similarly affected by Defendants’ wrongful conduct in that they paid artificially inflated prices for generic digoxin and generic doxycycline purchased indirectly from the Defendants and/or their co-conspirators. 125. Plaintiff’s claims arise out of the same common course of conduct giving rise to the claims of the other members of the Classes. Plaintiff’s interests are coincident with, and not antagonistic to, those of the other members of the Classes. Plaintiff is represented by counsel who are competent and experienced in the prosecution of antitrust and class action litigation. 126. The questions of law and fact common to the members of the Classes predominate over any questions affecting only individual members, including legal and factual issues relating to liability and damages. 127. Class action treatment is a superior method for the fair and efficient adjudication of the controversy, in that, among other things, such treatment will permit a large number of similarly situated persons to prosecute their common claims in a single forum simultaneously, efficiently and without the unnecessary duplication of evidence, effort and expense that numerous individual actions would engender. The benefits of proceeding through the class mechanism, including providing injured persons or entities with a method for obtaining redress for claims that it might not be practicable to pursue individually, substantially outweigh any difficulties that may arise in management of this class action. 128. The prosecution of separate actions by individual members of the Classes would create a risk of inconsistent or varying adjudications, establishing incompatible standards of conduct for Defendants. FIRST COUNT Violation of Section 1 and 3 of the Sherman Act (on behalf of Plaintiff and the Nationwide Class) 129. Plaintiff repeats the allegations set forth above as if fully set forth herein. 130. Defendants and unnamed conspirators entered into and engaged in a contract, combination, or conspiracy in unreasonable restraint of trade in violation of Section 1 of the Sherman Act (15 U.S.C. §§ 1, 3). 131. The acts done by each of the Defendants as part of, and in furtherance of, their contract, combination, or conspiracy were authorized, ordered, or done by their officers, agents, employees, or representatives while actively engaged in the management of Defendants’ affairs. 132. During the Class Period, Defendants and their co-conspirators entered into a continuing agreement, understanding and conspiracy in restraint of trade to establish a price floor and artificially fix, raise, stabilize, and control prices for generic digoxin and doxycycline, thereby creating anticompetitive effects. 133. The conspiratorial acts and combinations have caused unreasonable restraints in the market for generic digoxin and generic doxycycline. 134. As a result of Defendants’ unlawful conduct, Plaintiff and other similarly situated indirect purchasers in the Nationwide Class who purchased generic digoxin and generic doxycycline have been harmed by being forced to pay inflated, supracompetitive prices for generic digoxin and generic doxycycline. 135. In formulating and carrying out the alleged agreement, understanding and conspiracy, Defendants and their co-conspirators did those things that they combined and conspired to do, including but not limited to the acts, practices and course of conduct set forth herein. 136. Defendants’ conspiracy had the following effects, among others: a. Price competition in the market for generic digoxin and generic doxycycline has been restrained, suppressed, and/or eliminated in the United States b. Prices for generic digoxin and generic doxycycline provided by Defendants and their co-conspirators have been fixed, raised, maintained, and stabilized at artificially high, non-competitive levels throughout the United States; and c. Plaintiff and members of the Nationwide Class who purchased generic digoxin and generic doxycycline indirectly from Defendants and their co-conspirators have been deprived of the benefits of free and open competition. 137. Plaintiff and members of the Nationwide Class have been injured and will continue to be injured in their business and property by paying more for generic digoxin and generic doxycycline purchased indirectly from Defendants and the co-conspirators than they would have paid and will pay in the absence of the conspiracy. 138. The alleged contract, combination, or conspiracy is a per se violation of the federal antitrust laws. 139. Plaintiff and members of the Nationwide Class are entitled to an injunction against Defendants, preventing and restraining the violations alleged herein. SECOND COUNT Violation of State Antitrust Statutes (on behalf of Plaintiff and the Damages Class) 140. Plaintiff repeats the allegations set forth above as if fully set forth herein. 141. During the Class Period, Defendants and their co-conspirators engaged in a continuing contract, combination or conspiracy with respect to the sale of generic digoxin and generic doxycycline in unreasonable restraint of trade and commerce and in violation of the various state antitrust and other statutes set forth below. 142. The contract, combination, or conspiracy consisted of an agreement among the Defendants and their co-conspirators to fix, raise, inflate, stabilize, and/or maintain at artificially supracompetitive prices for generic digoxin and generic doxycycline and to allocate customers for generic digoxin and generic doxycycline in the United States. 143. In formulating and effectuating this conspiracy, Defendants and their co- conspirators performed acts in furtherance of the combination and conspiracy, including: (a) participating in meetings and conversations among themselves in the United States during which they agreed to price generic digoxin and generic doxycycline at certain levels, and otherwise to fix, increase, inflate, maintain, or stabilize effective prices paid by Plaintiff and members of the Damages Class with respect to generic digoxin and generic doxycycline provided in the United States; and (b) participating in meetings and trade association conversations among themselves in the United States and elsewhere to implement, adhere to, and police the unlawful agreements they reached. 144. Defendants and their co-conspirators engaged in the actions described above for the purpose of carrying out their unlawful agreements to fix, increase, maintain, or stabilize prices of generic digoxin and generic doxycycline. 145. Defendants’ anticompetitive acts described above were knowing, willful and constitute violations or flagrant violations of the following state antitrust statutes. 146. Defendants have entered into an unlawful agreement in restraint of trade in violation of Alabama Code § 6-6-60, et seq. Defendants’ combinations or conspiracies had the following effects: (1) price competition for generic digoxin and generic doxycycline was restrained, suppressed, and eliminated throughout Arizona; (2) generic digoxin and generic doxycycline prices were raised, fixed, maintained and stabilized at artificially high levels throughout Arizona; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supracompetitive, artificially inflated prices for generic digoxin and generic doxycycline. During the Class Period, Defendants’ illegal conduct substantially affected Alabama commerce. As a direct and proximate result of defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured in their business and property and are threatened with further injury. By reason of the foregoing, Defendants entered into agreements in restraint of trade in violation of Alabama Code § 6-6-60, et seq. Accordingly, Plaintiff and members of the Damages Class seek all forms of relief available under Alabama Code § 6-6-60, et seq.. 147. Defendants have entered into an unlawful agreement in restraint of trade in violation of Arizona Revised Statutes, §§ 44-1401, et seq. Defendants’ combinations or conspiracies had the following effects: (1) price competition for generic digoxin and generic doxycycline was restrained, suppressed, and eliminated throughout Arizona; (2) generic digoxin and generic doxycycline prices were raised, fixed, maintained and stabilized at artificially high levels throughout Arizona; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supracompetitive, artificially inflated prices for generic digoxin and generic doxycycline. During the Class Period, Defendants’ illegal conduct substantially affected Arizona commerce. As a direct and proximate result of defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured in their business and property and are threatened with further injury. By reason of the foregoing, Defendants entered into agreements in restraint of trade in violation of Ariz. Rev. Stat. §§ 44-1401, et seq. Accordingly, Plaintiff and members of the Damages Class seek all forms of relief available under Ariz. Rev. Stat. §§ 44-1401, et seq. 148. Defendants have entered into an unlawful agreement in restraint of trade in violation of California Business and Professions Code §§ 16700 et seq. During the Class Period, Defendants and their co-conspirators entered into and engaged in a continuing unlawful trust in restraint of the trade and commerce described above in violation of California Business and Professions Code Section §16720. Defendants, and each of them, have acted in violation of Section 16720 to fix, raise, stabilize, and maintain prices of generic digoxin and generic doxycycline at supracompetitive levels. The aforesaid violations of Section 16720 consisted, without limitation, of a continuing unlawful trust and concert of action among the Defendants and their co-conspirators, the substantial terms of which were to fix, raise, maintain, and stabilize the prices of generic digoxin and generic doxycycline. For the purpose of forming and effectuating the unlawful trust, the Defendants and their co-conspirators have done those things which they combined and conspired to do, including but not limited to the acts, practices and course of conduct set forth above and creating a price floor, fixing, raising, and stabilizing the price of generic digoxin and generic doxycycline. The combination and conspiracy alleged herein has had, inter alia, the following effects: (1) price competition for generic digoxin and generic doxycycline has been restrained, suppressed, and/or eliminated in the State of California; (2) prices for generic digoxin and generic doxycycline provided by Defendants and their co- conspirators have been fixed, raised, stabilized, and pegged at artificially high, non-competitive levels in the State of California and throughout the United States; and (3) those who purchased generic digoxin and generic doxycycline directly or indirectly from Defendants and their co- conspirators have been deprived of the benefit of free and open competition. As a direct and proximate result of Defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured in their business and property in that they paid more for generic digoxin and generic doxycycline than they otherwise would have paid in the absence of Defendants’ unlawful conduct. As a result of Defendants’ violation of Section 16720, Plaintiff and members of the Damages Class seek treble damages and their cost of suit, including a reasonable attorney’s fee, pursuant to California Business and Professions Code § 16750(a). 149. Defendants have entered into an unlawful agreement in restraint of trade in violation of District of Columbia Code Annotated §§ 28-4501, et seq. Defendants’ combinations or conspiracies had the following effects: (1) generic digoxin and generic doxycycline price competition was restrained, suppressed, and eliminated throughout the District of Columbia; (2) generic digoxin and generic doxycycline prices were raised, fixed, maintained and stabilized at artificially high levels throughout the District of Columbia; (3) Plaintiff and members of the Damages Class, including those who resided in the District of Columbia and/or purchased generic digoxin and generic doxycycline that were shipped by Defendants or their co- conspirators, were deprived of free and open competition, including in the District of Columbia; and (4) Plaintiff and members of the Damages Class, including those who resided in the District of Columbia and/or purchased generic digoxin and generic doxycycline in the District of Columbia that were shipped by Defendants or their co-conspirators, paid supracompetitive, artificially inflated prices for generic digoxin and generic doxycycline, including in the District of Columbia. During the Class Period, Defendants’ illegal conduct substantially affected District of Columbia commerce. As a direct and proximate result of defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured in their business and property and are threatened with further injury. By reason of the foregoing, Defendants have entered into agreements in restraint of trade in violation of District of Columbia Code Ann. §§ 28-4501, et seq. Accordingly, Plaintiff and members of the Damages Class seek all forms of relief available under District of Columbia Code Ann. §§ 28-4501, et seq. 150. Defendants have entered into an unlawful agreement in restraint of trade in violation of Hawaii Revised Statutes Annotated §§ 480-1, et seq. Defendants’ unlawful conduct had the following effects: (1) generic digoxin and generic doxycycline price competition was restrained, suppressed, and eliminated throughout Hawaii; (2) generic digoxin and generic doxycycline prices were raised, fixed, maintained, and stabilized at artificially high levels throughout Hawaii; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supracompetitive, artificially inflated prices for generic digoxin and generic doxycycline. During the Class Period, Defendants’ illegal conduct substantially affected Hawaii commerce. As a direct and proximate result of Defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured in their business and property and are threatened with further injury. By reason of the foregoing, Defendants have entered into agreements in restraint of trade in violation of Hawaii Revised Statutes Annotated §§ 480-4, et seq. Accordingly, Plaintiff and members of the Damages Class seek all forms of relief available under Hawaii Revised Statutes Annotated §§ 480-4, et seq. 151. Defendants have entered into an unlawful agreement in restraint of trade in violation of the Illinois Antitrust Act (740 Illinois Compiled Statutes 10/1, et seq.) Defendants’ combinations or conspiracies had the following effects: (1) generic digoxin and generic doxycycline price competition was restrained, suppressed, and eliminated throughout Illinois; (2) generic digoxin and generic doxycycline prices were raised, fixed, maintained, and stabilized at artificially high levels throughout Illinois; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supracompetitive, artificially inflated prices for generic digoxin and generic doxycycline. During the Class Period, Defendants’ illegal conduct substantially affected Illinois commerce. As a direct and proximate result of Defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured in their business and property and are threatened with further 152. Defendants have entered into an unlawful agreement in restraint of trade in violation of Iowa Code §§ 553.1, et seq. Defendants’ combinations or conspiracies had the following effects: (1) generic digoxin and generic doxycycline price competition was restrained, suppressed, and eliminated throughout Iowa; (2) generic digoxin and generic doxycycline prices were raised, fixed, maintained and stabilized at artificially high levels throughout Iowa; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supracompetitive, artificially inflated prices for generic digoxin and generic doxycycline. During the Class Period, Defendants’ illegal conduct substantially affected Iowa commerce. As a direct and proximate result of Defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured in their business and property and are threatened with further injury. By reason of the foregoing, Defendants have entered into agreements in restraint of trade in violation of Iowa Code §§ 553.1, et seq. Accordingly, Plaintiff and members of the Damages Class seek all forms of relief available under Iowa Code §§ 553, et seq. 153. Defendants have entered into an unlawful agreement in restraint of trade in violation of Kansas Statutes Annotated, §§ 50-101, et seq. Defendants’ combinations or conspiracies had the following effects: (1) generic digoxin and generic doxycycline price competition was restrained, suppressed, and eliminated throughout Kansas; (2) generic digoxin and generic doxycycline prices were raised, fixed, maintained and stabilized at artificially high levels throughout Kansas; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supracompetitive, artificially inflated prices for generic digoxin and generic doxycycline. During the Class Period, Defendants’ illegal conduct substantially affected Kansas commerce. As a direct and proximate result of Defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured in their business and property and are threatened with further injury. By reason of the foregoing, Defendants have entered into agreements in restraint of trade in violation of Kansas Stat. Ann. §§ 50-101, et seq. Accordingly, Plaintiff and members of the Damages Class seek all forms of relief available under Kansas Stat. Ann. §§ 50-101, et seq. 154. Defendants have entered into an unlawful agreement in restraint of trade in violation of Maine Revised Statutes (Maine Rev. Stat. Ann. 10, §§ 1101, et seq.) Defendants’ combinations or conspiracies had the following effects: (1) generic digoxin and generic doxycycline price competition was restrained, suppressed, and eliminated throughout Maine; (2) generic digoxin and generic doxycycline prices were raised, fixed, maintained and stabilized at artificially high levels throughout Maine; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supracompetitive, artificially inflated prices for generic digoxin and generic doxycycline. During the Class Period, Defendants’ illegal conduct substantially affected Maine commerce. As a direct and proximate result of Defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured in their business and property and are threatened with further injury. By reason of the foregoing, Defendants have entered into agreements in restraint of trade in violation of Maine Rev. Stat. Ann. 10, §§ 1101, et seq. Accordingly, Plaintiff and members of the Damages Class seek all relief available under Maine Rev. Stat. Ann. 10, §§ 1101, et seq. 155. Defendants have entered into an unlawful agreement in restraint of trade in violation of Michigan Compiled Laws Annotated §§ 445.771, et seq. Defendants’ combinations or conspiracies had the following effects: (1) generic digoxin and generic doxycycline price competition was restrained, suppressed, and eliminated throughout Michigan; (2) generic digoxin and generic doxycycline prices were raised, fixed, maintained and stabilized at artificially high levels throughout Michigan; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supracompetitive, artificially inflated prices for generic digoxin and generic doxycycline. During the Class Period, Defendants’ illegal conduct substantially affected Michigan commerce. As a direct and proximate result of Defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured in their business and property and are threatened with further injury. By reason of the foregoing, Defendants have entered into agreements in restraint of trade in violation of Michigan Comp. Laws Ann. §§ 445.771, et seq. Accordingly, Plaintiff and members of the Damages Class seek all relief available under Michigan Comp. Laws Ann. §§ 445.771, et seq. 156. Defendants have entered into an unlawful agreement in restraint of trade in violation of Minnesota Annotated Statutes §§ 325D.49, et seq. Defendants’ combinations or conspiracies had the following effects: (1) generic digoxin and generic doxycycline price competition was restrained, suppressed, and eliminated throughout Minnesota; (2) generic digoxin and generic doxycycline prices were raised, fixed, maintained and stabilized at artificially high levels throughout Minnesota; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supracompetitive, artificially inflated prices for generic digoxin and generic doxycycline. During the Class Period, Defendants’ illegal conduct substantially affected Minnesota commerce. As a direct and proximate result of Defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured in their business and property and are threatened with further injury. By reason of the foregoing, Defendants have entered into agreements in restraint of trade in violation of Minnesota Stat. §§ 325D.49, et seq. Accordingly, Plaintiff and members of the Damages Class seek all relief available under Minnesota Stat. §§ 325D.49, et seq. 157. Defendants have entered into an unlawful agreement in restraint of trade in violation of Mississippi Code Annotated §§ 75-21-1, et seq. Defendants’ combinations or conspiracies had the following effects: (1) generic digoxin and generic doxycycline price competition was restrained, suppressed, and eliminated throughout Mississippi; (2) generic digoxin and generic doxycycline prices were raised, fixed, maintained and stabilized at artificially high levels throughout Mississippi; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supracompetitive, artificially inflated prices for generic digoxin and generic doxycycline. During the Class Period, Defendants’ illegal conduct substantially affected Mississippi commerce. As a direct and proximate result of Defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured in their business and property and are threatened with further injury. By reason of the foregoing, Defendants have entered into agreements in restraint of trade in violation of Mississippi Code Ann. § 75-21-1, et seq. Accordingly, Plaintiff and members of the Damages Class seek all relief available under Mississippi Code Ann. § 75-21-1, et seq. 158. Defendants have entered into an unlawful agreement in restraint of trade in violation of Nebraska Revised Statutes §§ 59-801, et seq. Defendants’ combinations or conspiracies had the following effects: (1) generic digoxin and generic doxycycline price competition was restrained, suppressed, and eliminated throughout Nebraska; (2) generic digoxin and generic doxycycline prices were raised, fixed, maintained and stabilized at artificially high levels throughout Nebraska; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supracompetitive, artificially inflated prices for generic digoxin and generic doxycycline. During the Class Period, Defendants’ illegal conduct substantially affected Nebraska commerce. As a direct and proximate result of Defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured in their business and property and are threatened with further injury. By reason of the foregoing, Defendants have entered into agreements in restraint of trade in violation of Nebraska Revised Statutes §§ 59-801, et seq. Accordingly, Plaintiff and members of the Damages Class seek all relief available under Nebraska Revised Statutes §§ 59-801, et 159. Defendants have entered into an unlawful agreement in restraint of trade in violation of Nevada Revised Statutes Annotated §§ 598A.010, et seq. Defendants’ combinations or conspiracies had the following effects: (1) generic digoxin and generic doxycycline price competition was restrained, suppressed, and eliminated throughout Nevada; (2) generic digoxin and generic doxycycline prices were raised, fixed, maintained and stabilized at artificially high levels throughout Nevada; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supracompetitive, artificially inflated prices for generic digoxin and generic doxycycline. During the Class Period, Defendants’ illegal conduct substantially affected Nevada commerce. As a direct and proximate result of Defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured in their business and property and are threatened with further injury. By reason of the foregoing, Defendants have entered into agreements in restraint of trade in violation of Nevada Rev. Stat. Ann. §§ 598A, et seq. Accordingly, Plaintiff and members of the Damages Class seek all relief available under Nevada Rev. Stat. Ann. §§ 598A, et seq. 160. Defendants have entered into an unlawful agreement in restraint of trade in violation of New Hampshire Revised Statutes §§ 356:1, et seq. Defendants’ combinations or conspiracies had the following effects: (1) generic digoxin and generic doxycycline price competition was restrained, suppressed, and eliminated throughout New Hampshire; (2) generic digoxin and generic doxycycline prices were raised, fixed, maintained and stabilized at artificially high levels throughout New Hampshire; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supracompetitive, artificially inflated prices for generic digoxin and generic doxycycline. During the Class Period, Defendants’ illegal conduct substantially affected New Hampshire commerce. As a direct and proximate result of Defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured in their business and property and are threatened with further injury. By reason of the foregoing, Defendants have entered into agreements in restraint of trade in violation of New Hampshire Revised Statutes §§ 356:1, et seq. Accordingly, Plaintiff and members of the Damages Class seek all relief available under New Hampshire Revised Statutes §§ 356:1, et seq. 161. Defendants have entered into an unlawful agreement in restraint of trade in violation of New Mexico Statutes Annotated §§ 57-1-1, et seq. Defendants’ combinations or conspiracies had the following effects: (1) generic digoxin and generic doxycycline price competition was restrained, suppressed, and eliminated throughout New Mexico; (2) generic digoxin and generic doxycycline prices were raised, fixed, maintained and stabilized at artificially high levels throughout New Mexico; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supracompetitive, artificially inflated prices for generic digoxin and generic doxycycline. During the Class Period, Defendants’ illegal conduct substantially affected New Mexico commerce. As a direct and proximate result of Defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured in their business and property and are threatened with further injury. By reason of the foregoing, Defendants have entered into agreements in restraint of trade in violation of New Mexico Stat. Ann. §§ 57-1-1, et seq. Accordingly, Plaintiff and members of the Damages Class seek all relief available under New Mexico Stat. Ann. §§ 57-1-1, et seq. 162. Defendants have entered into an unlawful agreement in restraint of trade in violation of New York General Business Laws §§ 340, et seq. Defendants’ combinations or conspiracies had the following effects: (1) generic digoxin and generic doxycycline price competition was restrained, suppressed, and eliminated throughout New York; (2) generic digoxin and generic doxycycline prices were raised, fixed, maintained and stabilized at artificially high levels throughout New York; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supracompetitive, artificially inflated prices for generic digoxin and generic doxycycline that were higher than they would have been absent the Defendants’ illegal acts. During the Class Period, Defendants’ illegal conduct substantially affected New York commerce. As a direct and proximate result of Defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured in their business and property and are threatened with further injury. By reason of the foregoing, Defendants have entered into agreements in restraint of trade in violation of the New York Donnelly Act, §§ 340, et seq. The conduct set forth above is a per se violation of the Act. Accordingly, Plaintiff and members of the Damages Class seek all relief available under New York Gen. Bus. Law §§ 340, et seq. 163. Defendants have entered into an unlawful agreement in restraint of trade in violation of the North Carolina General Statutes §§ 75-1, et seq. Defendants’ combinations or conspiracies had the following effects: (1) generic digoxin and generic doxycycline price competition was restrained, suppressed, and eliminated throughout North Carolina; (2) generic digoxin and generic doxycycline prices were raised, fixed, maintained and stabilized at artificially high levels throughout North Carolina; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supracompetitive, artificially inflated prices for generic digoxin and generic doxycycline. During the Class Period, Defendants’ illegal conduct substantially affected North Carolina commerce. As a direct and proximate result of Defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured in their business and property and are threatened with further injury. By reason of the foregoing, Defendants have entered into agreements in restraint of trade in violation of North Carolina Gen. Stat. §§ 75-1, et seq. Accordingly, Plaintiff and members of the Damages Class seek all relief available under North Carolina Gen. Stat. §§ 75-1, et. seq. 164. Defendants have entered into an unlawful agreement in restraint of trade in violation of North Dakota Century Code §§ 51-08.1-01, et seq. Defendants’ combinations or conspiracies had the following effects: (1) generic digoxin and generic doxycycline price competition was restrained, suppressed, and eliminated throughout North Dakota; (2) generic digoxin and generic doxycycline prices were raised, fixed, maintained and stabilized at artificially high levels throughout North Dakota; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supracompetitive, artificially inflated prices for generic digoxin and generic doxycycline. During the Class Period, Defendants’ illegal conduct had a substantial effect on North Dakota commerce. As a direct and proximate result of Defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured in their business and property and are threatened with further injury. By reason of the foregoing, Defendants have entered into agreements in restraint of trade in violation of North Dakota Cent. Code §§ 51-08.1-01, et seq. Accordingly, Plaintiff and members of the Damages Class seek all relief available under North Dakota Cent. Code §§ 51-08.1-01, et seq. 165. Defendants have entered into an unlawful agreement in restraint of trade in violation of Oregon Revised Statutes §§ 646.705, et seq. Defendants’ combinations or conspiracies had the following effects: (1) generic digoxin and generic doxycycline price competition was restrained, suppressed, and eliminated throughout Oregon; (2) generic digoxin and generic doxycycline prices were raised, fixed, maintained and stabilized at artificially high levels throughout Oregon; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supracompetitive, artificially inflated prices for generic digoxin and generic doxycycline. During the Class Period, Defendants’ illegal conduct had a substantial effect on Oregon commerce. As a direct and proximate result of Defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured in their business and property and are threatened with further injury. By reason of the foregoing, Defendants have entered into agreements in restraint of trade in violation of Oregon Revised Statutes §§ 646.705, et seq. Accordingly, Plaintiff and members of the Damages Class seek all relief available under Oregon Revised Statutes §§ 646.705, et seq. 166. Defendants have entered into an unlawful agreement in restraint of trade in violation of South Dakota Codified Laws §§ 37-1-3.1, et seq. Defendants’ combinations or conspiracies had the following effects: (1) generic digoxin and generic doxycycline price competition was restrained, suppressed, and eliminated throughout South Dakota; (2) generic digoxin and generic doxycycline prices were raised, fixed, maintained and stabilized at artificially high levels throughout South Dakota; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supracompetitive, artificially inflated prices for generic digoxin and generic doxycycline. During the Class Period, Defendants’ illegal conduct had a substantial effect on South Dakota commerce. As a direct and proximate result of Defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured in their business and property and are threatened with further injury. By reason of the foregoing, Defendants have entered into agreements in restraint of trade in violation of South Dakota Codified Laws Ann. §§ 37-1, et seq. Accordingly, Plaintiff and members of the Damages Class seek all relief available under South Dakota Codified Laws Ann. §§ 37-1, et seq. 167. Defendants have entered into an unlawful agreement in restraint of trade in violation of Tennessee Code Annotated §§ 47-25-101, et seq. Defendants’ combinations or conspiracies had the following effects: (1) generic digoxin and generic doxycycline price competition was restrained, suppressed, and eliminated throughout Tennessee; (2) generic digoxin and generic doxycycline prices were raised, fixed, maintained and stabilized at artificially high levels throughout Tennessee; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supracompetitive, artificially inflated prices for generic digoxin and generic doxycycline. During the Class Period, Defendants’ illegal conduct had a substantial effect on Tennessee commerce. As a direct and proximate result of Defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured in their business and property and are threatened with further injury. By reason of the foregoing, Defendants have entered into agreements in restraint of trade in violation of Tennessee Code Ann. §§ 47-25-101, et seq. Accordingly, Plaintiff and members of the Damages Class seek all relief available under Tennessee Code Ann. §§ 47-25-101, et seq. 168. Defendants have entered into an unlawful agreement in restraint of trade in violation of Utah Code Annotated §§ 76-10-911, et seq. Defendants’ combinations or conspiracies had the following effects: (1) generic digoxin and generic doxycycline price competition was restrained, suppressed, and eliminated throughout Utah; (2) generic digoxin and generic doxycycline prices were raised, fixed, maintained and stabilized at artificially high levels throughout Utah; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supracompetitive, artificially inflated prices for generic digoxin and generic doxycycline. During the Class Period, Defendants’ illegal conduct had a substantial effect on Utah commerce. As a direct and proximate result of Defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured in their business and property and are threatened with further injury. By reason of the foregoing, Defendants have entered into agreements in restraint of trade in violation of Utah Code Annotated §§ 76-10-911, et seq. Accordingly, Plaintiff and members of the Damages Class seek all relief available under Utah Code Annotated §§ 76-10-911, et seq. 169. Defendants have entered into an unlawful agreement in restraint of trade in violation of the Vermont Stat. Ann. 9 §§ 2453, et seq. Defendants’ combinations or conspiracies had the following effects: (1) generic digoxin and generic doxycycline price competition was restrained, suppressed, and eliminated throughout Vermont; (2) generic digoxin and generic doxycycline prices were raised, fixed, maintained and stabilized at artificially high levels throughout Vermont; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supracompetitive, artificially inflated prices for generic digoxin and generic doxycycline. During the Class Period, Defendants’ illegal conduct had a substantial effect on Vermont commerce. As a direct and proximate result of Defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured in their business and property and are threatened with further injury. By reason of the foregoing, Defendants have entered into agreements in restraint of trade in violation of Vermont Stat. Ann. 9 §§ 2453, et seq. Accordingly, Plaintiff and members of the Damages Class seek all relief available under Vermont Stat. Ann. 9 §§ 2453, et seq. 170. Defendants have entered into an unlawful agreement in restraint of trade in violation of West Virginia Code §§ 47-18-1, et seq. Defendants’ combinations or conspiracies had the following effects: (1) generic digoxin and generic doxycycline price competition was restrained, suppressed, and eliminated throughout West Virginia; (2) generic digoxin and generic doxycycline prices were raised, fixed, maintained and stabilized at artificially high levels throughout West Virginia; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supracompetitive, artificially inflated prices for generic digoxin and generic doxycycline. During the Class Period, Defendants’ illegal conduct had a substantial effect on West Virginia commerce. As a direct and proximate result of Defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured in their business and property and are threatened with further injury. By reason of the foregoing, Defendants have entered into agreements in restraint of trade in violation of West Virginia Code §§ 47-18-1, et seq. Accordingly, Plaintiff and members of the Damages Class seek all relief available under West Virginia Code §§ 47-18-1, et seq. 171. Defendants have entered into an unlawful agreement in restraint of trade in violation of the Wisconsin Statutes §§ 133.01, et seq. Defendants’ combinations or conspiracies had the following effects: (1) generic digoxin and generic doxycycline price competition was restrained, suppressed, and eliminated throughout Wisconsin; (2) generic digoxin and generic doxycycline prices were raised, fixed, maintained and stabilized at artificially high levels throughout Wisconsin; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supracompetitive, artificially inflated prices for generic digoxin and generic doxycycline. During the Class Period, Defendants’ illegal conduct had a substantial effect on Wisconsin commerce. As a direct and proximate result of Defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured in their business and property and are threatened with further injury. By reason of the foregoing, Defendants have entered into agreements in restraint of trade in violation of Wisconsin Stat. §§ 133.01, et seq. Accordingly, Plaintiff and members of the Damages Class seek all relief available under Wisconsin Stat. §§ 133.01, et seq. 172. Plaintiff and members of the Damages Class in each of the above states have been injured in their business and property by reason of Defendants’ unlawful combination, contract, conspiracy and agreement. Plaintiff and members of the Damages Class have paid more for generic digoxin and generic doxycycline than they otherwise would have paid in the absence of Defendants’ unlawful conduct. This injury is of the type the antitrust laws of the above states were designed to prevent and flows from that which makes Defendants’ conduct unlawful. 173. In addition, Defendants have profited significantly from the aforesaid conspiracy. Defendants’ profits derived from their anticompetitive conduct come at the expense and detriment of Plaintiff and members of the Damages Class. 174. Accordingly, Plaintiff and members of the Damages Class in each of the above jurisdictions seek damages (including statutory damages where applicable), to be trebled or otherwise increased as permitted by a particular jurisdiction’s antitrust law, and costs of suit, including reasonable attorneys’ fees, to the extent permitted by the above state laws. THIRD COUNT Violation of State Consumer Protection Statutes (on behalf of Plaintiff and the Damages Class) 175. Plaintiff repeats the allegations set forth above as if fully set forth herein. 176. Defendants engaged in unfair competition or unfair, unconscionable, deceptive or fraudulent acts or practices in violation of the state consumer protection and unfair competition statutes listed below. 177. Defendants have knowingly entered into an unlawful agreement in restraint of trade in violation of the Arkansas Code Annotated, § 4-88-101, et. seq. Defendants knowingly agreed to, and did in fact, act in restraint of trade or commerce by affecting, fixing, controlling, and/or maintaining at non-competitive and artificially inflated levels, the prices at which generic digoxin and generic doxycycline were sold, distributed, or obtained in Arkansas and took efforts to conceal their agreements from Plaintiff and members of the Damages Class. The aforementioned conduct on the part of the Defendants constituted “unconscionable” and “deceptive” acts or practices in violation of Arkansas Code Annotated, § 4-88-107(a)(10). Defendants’ unlawful conduct had the following effects: (1) generic digoxin and generic doxycycline price competition was restrained, suppressed, and eliminated throughout Arkansas; (2) generic digoxin and generic doxycycline prices were raised, fixed, maintained, and stabilized at artificially high levels throughout Arkansas; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supracompetitive, artificially inflated prices for generic digoxin and generic doxycycline. During the Class Period, Defendants’ illegal conduct substantially affected Arkansas commerce and consumers. As a direct and proximate result of the unlawful conduct of the Defendants, Plaintiff and members of the Damages Class have been injured in their business and property and are threatened with further injury. Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of Arkansas Code Annotated, § 4-88-107(a)(10) and, accordingly, Plaintiff and members of the Damages Class seek all relief available under that 178. Defendants have engaged in unfair competition or unfair, unconscionable, deceptive or fraudulent acts or practices in violation of California Business and Professions Code § 17200, et seq. During the Class Period, Defendants manufactured, marketed, sold, or distributed generic digoxin and generic doxycycline in California, and committed and continue to commit acts of unfair competition, as defined by Sections 17200, et seq. of the California Business and Professions Code, by engaging in the acts and practices specified above. This claim is instituted pursuant to Sections 17203 and 17204 of the California Business and Professions Code, to obtain restitution from these Defendants for acts, as alleged herein, that violated Section 17200 of the California Business and Professions Code, commonly known as the Unfair Competition Law. The Defendants’ conduct as alleged herein violated Section 17200. The acts, omissions, misrepresentations, practices and non-disclosures of Defendants, as alleged herein, constituted a common, continuous, and continuing course of conduct of unfair competition by means of unfair, unlawful, and/or fraudulent business acts or practices within the meaning of California Business and Professions Code §17200, et seq., including, but not limited to, the following: (1) the violations of Section 1 of the Sherman Act, as set forth above; (2) the violations of Section 16720, et seq. of the California Business and Professions Code, set forth above. Defendants’ acts, omissions, misrepresentations, practices, and non-disclosures, as described above, whether or not in violation of Section 16720, et seq. of the California Business and Professions Code, and whether or not concerted or independent acts, are otherwise unfair, unconscionable, unlawful or fraudulent; (3) Defendants’ acts or practices are unfair to purchasers of generic digoxin and generic doxycycline in the State of California within the meaning of Section 17200, California Business and Professions Code; and (4) Defendants’ acts and practices are fraudulent or deceptive within the meaning of Section 17200 of the California Business and Professions Code. Plaintiff and members of the Damages Class are entitled to full restitution and/or disgorgement of all revenues, earnings, profits, compensation, and benefits that may have been obtained by Defendants as a result of such business acts or practices. The illegal conduct alleged herein is continuing and there is no indication that Defendants will not continue such activity into the future. The unlawful and unfair business practices of Defendants, and each of them, as described above, have caused and continue to cause Plaintiff and members of the Damages Class to pay supracompetitive and artificially-inflated prices for generic digoxin and generic doxycycline. Plaintiff and members of the Damages Class suffered injury in fact and lost money or property as a result of such unfair competition. The conduct of Defendants as alleged in this Complaint violates Section 17200 of the California Business and Professions Code. As alleged in this Complaint, Defendants and their co-conspirators have been unjustly enriched as a result of their wrongful conduct and by Defendants’ unfair competition. Plaintiff and members of the Damages Class are accordingly entitled to equitable relief including restitution and/or disgorgement of all revenues, earnings, profits, compensation, and benefits that may have been obtained by Defendants as a result of such business practices, pursuant to the California Business and Professions Code, §§17203 and 17204. 179. Defendants have engaged in unfair competition or unfair, unconscionable, or deceptive acts or practices in violation of District of Columbia Code § 28-3901, et seq. Defendants agreed to, and did in fact, act in restraint of trade or commerce by affecting, fixing, controlling and/or maintaining, at artificial and/or non-competitive levels, the prices at which generic digoxin and generic doxycycline were sold, distributed or obtained in the District of Columbia. The foregoing conduct constitutes “unlawful trade practices,” within the meaning of D.C. Code § 28-3904. Plaintiff and members of the Damages Class were not aware of Defendants’ price-fixing conspiracy and were therefore unaware that they was being unfairly and illegally overcharged. There was a gross disparity of bargaining power between the parties with respect to the price charged by Defendants for generic digoxin and generic doxycycline. Defendants had the sole power to set that price and Plaintiff and members of the Damages Class had no power to negotiate a lower price. Moreover, Plaintiff and members of the Damages Class lacked any meaningful choice in purchasing generic digoxin and generic doxycycline because they were unaware of the unlawful overcharge and there was no alternative source of supply through which Plaintiff and members of the Damages Class could avoid the overcharges. Defendants’ conduct with regard to sales of generic digoxin and generic doxycycline, including their illegal conspiracy to secretly fix the price of generic digoxin and generic doxycycline at supracompetitive levels and overcharge consumers, was substantively unconscionable because it was one-sided and unfairly benefited Defendants at the expense of Plaintiff and the public. Defendants took grossly unfair advantage of Plaintiff and members of the Damages Class. The suppression of competition that has resulted from Defendants’ conspiracy has ultimately resulted in unconscionably higher prices for purchasers so that there was a gross disparity between the price paid and the value received for generic digoxin and generic doxycycline. Defendants’ unlawful conduct had the following effects: (1) generic digoxin and generic doxycycline price competition was restrained, suppressed, and eliminated throughout the District of Columbia; (2) generic digoxin and generic doxycycline prices were raised, fixed, maintained, and stabilized at artificially high levels throughout the District of Columbia; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supracompetitive, artificially inflated prices for generic digoxin and generic doxycycline. As a direct and proximate result of the Defendants’ conduct, Plaintiff and members of the Damages Class have been injured and are threatened with further injury. Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of District of Columbia Code § 28-3901, et seq., and, accordingly, Plaintiff and members of the Damages Class seek all relief available under that statute. 180. Defendants have engaged in unfair competition or unfair, unconscionable, or deceptive acts or practices in violation of the Florida Deceptive and Unfair Trade Practices Act, Fla. Stat. §§ 501.201, et seq. Defendants’ unlawful conduct had the following effects: (1) generic digoxin and generic doxycycline price competition was restrained, suppressed, and eliminated throughout Florida; (2) generic digoxin and generic doxycycline prices were raised, fixed, maintained, and stabilized at artificially high levels throughout Florida; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supracompetitive, artificially inflated prices for generic digoxin and generic doxycycline. During the Class Period, Defendants’ illegal conduct substantially affected Florida commerce and consumers. As a direct and proximate result of Defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured and are threatened with further injury. Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of Florida Stat. § 501.201, et seq., and, accordingly, Plaintiff and members of the Damages Class seek all relief available under that statute. 181. Defendants have engaged in unfair competition or unfair, unconscionable, or deceptive acts or practices in violation of the Hawaii Revised Statutes Annotated §§ 480-1, et seq. Defendants’ unlawful conduct had the following effects: (1) generic digoxin and generic doxycycline price competition was restrained, suppressed, and eliminated throughout Hawaii; (2) generic digoxin and generic doxycycline prices were raised, fixed, maintained, and stabilized at artificially high levels throughout Hawaii; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supracompetitive, artificially inflated prices for generic digoxin and generic doxycycline. During the Class Period, Defendants’ illegal conduct substantially affected Hawaii commerce and consumers. As a direct and proximate result of Defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured and are threatened with further injury. Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of Hawaii Rev. Stat. § 480, et seq., and, accordingly, Plaintiff and members of the Damages Class seek all relief available under that statute. 182. Defendants have engaged in unfair competition or unlawful, unfair, unconscionable, or deceptive acts or practices in violation of the Massachusetts Gen. Laws, Ch 93A, § 1, et seq. Defendants were engaged in trade or commerce as defined by G.L. 93A. Defendants, in a market that includes Massachusetts, agreed to, and did in fact, act in restraint of trade or commerce by affecting, fixing, controlling, and/or maintaining at non-competitive and artificially inflated levels, the prices at which generic digoxin and generic doxycycline were sold, distributed, or obtained in Massachusetts and took efforts to conceal their agreements from Plaintiff and members of the Damages Class. The aforementioned conduct on the part of the Defendants constituted “unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce,” in violation of Massachusetts Gen. Laws, Ch 93A, § 2, 11. Defendants’ unlawful conduct had the following effects: (1) generic digoxin and generic doxycycline price competition was restrained, suppressed, and eliminated throughout Massachusetts; (2) generic digoxin and generic doxycycline prices were raised, fixed, maintained, and stabilized at artificially high levels throughout Massachusetts; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and the members of the Damages Class paid supracompetitive, artificially inflated prices for generic digoxin and generic doxycycline. During the Class Period, Defendants’ illegal conduct substantially affected Massachusetts commerce and consumers. As a direct and proximate result of the unlawful conduct of the Defendants, Plaintiff and members of the Damages Class have been injured in their business and property and are threatened with further injury. Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of Massachusetts Gen. Laws, Ch 93A, §§ 2, 11, that were knowing or willful, and, accordingly, Plaintiff and members of the Damages Class seek all relief available under that statute, including multiple damages. 183. Defendants have engaged in unfair competition or unfair, unconscionable, or deceptive acts or practices in violation of the Missouri Merchandising Practices Act, Mo. Rev. Stat. § 407.010, et. seq. Plaintiff and members of the Damages Class purchased generic digoxin and generic doxycycline for personal or family purposes. Defendants engaged in the conduct described herein in connection with the sale of generic digoxin and generic doxycycline in trade or commerce in a market that includes Missouri. Defendants agreed to, and did in fact affect, fix, control, and/or maintain, at artificial and non-competitive levels, the prices at which generic digoxin and generic doxycycline were sold, distributed, or obtained in Missouri, which conduct constituted unfair practices in that it was unlawful under federal and state law, violated public policy, was unethical, oppressive and unscrupulous, and caused substantial injury to Plaintiff and members of the Damages Class. Defendants concealed, suppressed, and omitted to disclose material facts to Plaintiff and members of the Damages Class concerning Defendants’ unlawful activities and artificially inflated prices for generic digoxin and generic doxycycline. The concealed, suppressed, and omitted facts would have been important to Plaintiff and members of the Damages Class as they related to the cost of generic digoxin and generic doxycycline they purchased. Defendants misrepresented the real cause of price increases and/or the absence of price reductions in generic digoxin and generic doxycycline by making public statements that were not in accord with the facts. Defendants’ statements and conduct concerning the price of generic digoxin and generic doxycycline were deceptive as they had the tendency or capacity to mislead Plaintiff and members of the Damages Class to believe that they were purchasing generic digoxin and generic doxycycline at prices established by a free and fair market. Defendants’ unlawful conduct had the following effects: (1) generic digoxin and generic doxycycline price competition was restrained, suppressed, and eliminated throughout Missouri; (2) generic digoxin and generic doxycycline prices were raised, fixed, maintained, and stabilized at artificially high levels throughout Missouri; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supracompetitive, artificially inflated prices for generic digoxin and generic doxycycline. The foregoing acts and practices constituted unlawful practices in violation of the Missouri Merchandising Practices Act. As a direct and proximate result of the above-described unlawful practices, Plaintiff and members of the Damages Class suffered ascertainable loss of money or property. Accordingly, Plaintiff and members of the Damages Class seek all relief available under Missouri’s Merchandising Practices Act, specifically Mo. Rev. Stat. § 407.020, which prohibits “the act, use or employment by any person of any deception, fraud, false pretense, false promise, misrepresentation, unfair practice or the concealment, suppression, or omission of any material fact in connection with the sale or advertisement of any merchandise in trade or commerce…,” as further interpreted by the Missouri Code of State Regulations, 15 CSR 60- 7.010, et seq., 15 CSR 60-8.010, et seq., and 15 CSR 60-9.010, et seq., and Mo. Rev. Stat. § 407.025, which provides for the relief sought in this count. 184. Defendants have engaged in unfair competition or unfair, unconscionable, or deceptive acts or practices in violation of the Montana Unfair Trade Practices and Consumer Protection Act of 1970, Mont. Code, §§ 30-14-103, et seq., and §§ 30-14-201, et. seq. Defendants’ unlawful conduct had the following effects: (1) generic digoxin and generic doxycycline price competition was restrained, suppressed, and eliminated throughout Montana; (2) generic digoxin and generic doxycycline prices were raised, fixed, maintained, and stabilized at artificially high levels throughout Montana; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supracompetitive, artificially inflated prices for generic digoxin and generic doxycycline. During the Class Period, Defendants marketed, sold, or distributed generic digoxin and generic doxycycline in Montana, and Defendants’ illegal conduct substantially affected Montana commerce and consumers. As a direct and proximate result of Defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured and are threatened with further injury. Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of Mont. Code, §§ 30-14-103, et seq., and §§ 30-14-201, et. seq., and, accordingly, Plaintiff and members of the Damages Class seek all relief available under that statute. 185. Defendants have engaged in unfair competition or unfair, unconscionable, or deceptive acts or practices in violation of the New Mexico Stat. § 57-12-1, et seq. Defendants agreed to, and did in fact, act in restraint of trade or commerce by affecting, fixing, controlling and/or maintaining at non-competitive and artificially inflated levels, the prices at which generic digoxin and generic doxycycline were sold, distributed or obtained in New Mexico and took efforts to conceal their agreements from Plaintiff and members of the Damages Class. The aforementioned conduct on the part of the Defendants constituted “unconscionable trade practices,” in violation of N.M.S.A. Stat. § 57-12-3, in that such conduct, inter alia, resulted in a gross disparity between the value received by Plaintiff and members of the Damages Class and the prices paid by them for generic digoxin and generic doxycycline as set forth in N.M.S.A., § 57-12-2E. Plaintiff and members of the Damages Class were not aware of Defendants’ price- fixing conspiracy and were therefore unaware that they were being unfairly and illegally overcharged. There was a gross disparity of bargaining power between the parties with respect to the price charged by Defendants for generic digoxin and generic doxycycline. Defendants had the sole power to set that price and Plaintiff and members of the Damages Class had no power to negotiate a lower price. Moreover, Plaintiff and members of the Damages Class lacked any meaningful choice in purchasing generic digoxin and generic doxycycline because they were unaware of the unlawful overcharge and there was no alternative source of supply through which Plaintiff and members of the Damages Class could avoid the overcharges. Defendants’ conduct with regard to sales of generic digoxin and generic doxycycline, including their illegal conspiracy to secretly fix the price of generic digoxin and generic doxycycline at supracompetitive levels and overcharge consumers, was substantively unconscionable because it was one-sided and unfairly benefited Defendants at the expense of Plaintiff and the public. Defendants took grossly unfair advantage of Plaintiff and members of the Damages Class. The suppression of competition that has resulted from Defendants’ conspiracy has ultimately resulted in unconscionably higher prices for consumers so that there was a gross disparity between the price paid and the value received for generic digoxin and generic doxycycline. Defendants’ unlawful conduct had the following effects: (1) generic digoxin and generic doxycycline price competition was restrained, suppressed, and eliminated throughout New Mexico; (2) generic digoxin and generic doxycycline prices were raised, fixed, maintained, and stabilized at artificially high levels throughout New Mexico; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supracompetitive, artificially inflated prices for generic digoxin and generic doxycycline. During the Class Period, Defendants’ illegal conduct substantially affected New Mexico commerce and consumers. As a direct and proximate result of the unlawful conduct of the Defendants, Plaintiff and members of the Damages Class have been injured and are threatened with further injury. Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of New Mexico Stat. § 57-12-1, et seq., and, accordingly, Plaintiff and members of the Damages Class seek all relief available under that statute. 186. Defendants have engaged in unfair competition or unfair, unconscionable, or deceptive acts or practices in violation of N.Y. Gen. Bus. Law § 349, et seq. Defendants agree to, and did in fact, act in restraint of trade or commerce by affecting, fixing, controlling and/or maintaining, at artificial and non-competitive levels, the prices at which generic digoxin and generic doxycycline were sold, distributed or obtained in New York and took efforts to conceal their agreements from Plaintiff and members of the Damages Class. Defendants and their co- conspirators made public statements about the prices of generic digoxin and generic doxycycline that either omitted material information that rendered the statements that they made materially misleading or affirmatively misrepresented the real cause of price increases for generic digoxin and generic doxycycline; and Defendants alone possessed material information that was relevant to consumers, but failed to provide the information. Because of Defendants’ unlawful trade practices in the State of New York, New York class members who indirectly purchased generic digoxin and generic doxycycline were misled to believe that they were paying a fair price for generic digoxin and generic doxycycline or the price increases for generic digoxin and generic doxycycline were for valid business reasons; and similarly situated consumers were potentially affected by Defendants’ conspiracy. Defendants knew that their unlawful trade practices with respect to pricing generic digoxin and generic doxycycline would have an impact on New York consumers and not just the Defendants’ direct customers. Defendants knew that their unlawful trade practices with respect to pricing generic digoxin and generic doxycycline would have a broad impact, causing consumer class members who indirectly purchased generic digoxin and generic doxycycline to be injured by paying more for generic digoxin and generic doxycycline than they would have paid in the absence of Defendants’ unlawful trade acts and practices. The conduct of the Defendants described herein constitutes consumer-oriented deceptive acts or practices within the meaning of N.Y. Gen. Bus. Law § 349, which resulted in consumer injury and broad adverse impact on the public at large, and harmed the public interest of New York State in an honest marketplace in which economic activity is conducted in a competitive manner. Defendants’ unlawful conduct had the following effects: (1) generic digoxin and generic doxycycline price competition was restrained, suppressed, and eliminated throughout New York; (2) generic digoxin and generic doxycycline prices were raised, fixed, maintained, and stabilized at artificially high levels throughout New York; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supracompetitive, artificially inflated prices for generic digoxin and generic doxycycline. During the Class Period, Defendants marketed, sold, or distributed generic digoxin and generic doxycycline in New York, and Defendants’ illegal conduct substantially affected New York commerce and consumers. During the Class Period, each of the Defendants named herein, directly, or indirectly and through affiliates they dominated and controlled, manufactured, sold and/or distributed generic digoxin and generic doxycycline in New York. Plaintiff and members of the Damages Class seek all relief available pursuant to N.Y. Gen. Bus. Law § 349 (h). 187. Defendants have engaged in unfair competition or unfair, unconscionable, or deceptive acts or practices in violation of North Carolina Gen. Stat. § 75-1.1, et seq. Defendants agree to, and did in fact, act in restraint of trade or commerce by affecting, fixing, controlling and/or maintaining, at artificial and non-competitive levels, the prices at which generic digoxin and generic doxycycline were sold, distributed or obtained in North Carolina and took efforts to conceal their agreements from Plaintiff and members of the Damages Class. Defendants’ price- fixing conspiracy could not have succeeded absent deceptive conduct by Defendants to cover up their illegal acts. Secrecy was integral to the formation, implementation and maintenance of Defendants’ price-fixing conspiracy. Defendants committed inherently deceptive and self- concealing actions, of which Plaintiff and members of the Damages Class could not possibly have been aware. Defendants and their co-conspirators publicly provided pretextual and false justifications regarding their price increases. Defendants’ public statements concerning the price of generic digoxin and generic doxycycline created the illusion of competitive pricing controlled by market forces rather than supracompetitive pricing driven by Defendants’ illegal conspiracy. Moreover, Defendants deceptively concealed their unlawful activities by mutually agreeing not to divulge the existence of the conspiracy to outsiders. The conduct of the Defendants described herein constitutes consumer-oriented deceptive acts or practices within the meaning of North Carolina law, which resulted in consumer injury and broad adverse impact on the public at large, and harmed the public interest of North Carolina consumers in an honest marketplace in which economic activity is conducted in a competitive manner. Defendants’ unlawful conduct had the following effects: (1) generic digoxin and generic doxycycline price competition was restrained, suppressed, and eliminated throughout North Carolina; (2) generic digoxin and generic doxycycline prices were raised, fixed, maintained, and stabilized at artificially high levels throughout North Carolina; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supracompetitive, artificially inflated prices for generic digoxin and generic doxycycline. During the Class Period, Defendants marketed, sold, or distributed generic digoxin and generic doxycycline in North Carolina, and Defendants’ illegal conduct substantially affected North Carolina commerce and consumers. During the Class Period, each of the Defendants named herein, directly, or indirectly and through affiliates they dominated and controlled, manufactured, sold and/or distributed generic digoxin and generic doxycycline in North Carolina. Plaintiff and members of the Damages Class seek actual damages for their injuries caused by these violations in an amount to be determined at trial and are threatened with further injury. Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of North Carolina Gen. Stat. § 75-1.1, et seq., and, accordingly, Plaintiff and members of the Damages Class seek all relief available under that statute. 188. Defendants have engaged in unfair competition or unfair, unconscionable, or deceptive acts or practices in violation of the Rhode Island Unfair Trade Practice and Consumer Protection Act (R.I. Gen. Laws §§ 6-13.1-1, et seq.) Members of this Damages Class purchased generic digoxin and generic doxycycline for personal, family, or household purposes. Defendants agreed to, and did in fact, act in restraint of trade or commerce in a market that includes Rhode Island, by affecting, fixing, controlling, and/or maintaining, at artificial and non- competitive levels, the prices at which generic digoxin and generic doxycycline were sold, distributed, or obtained in Rhode Island. Defendants deliberately failed to disclose material facts to Plaintiff and members of the Damages Class concerning Defendants’ unlawful activities and artificially inflated prices for generic digoxin and generic doxycycline. Defendants owed a duty to disclose such facts, and considering the relative lack of sophistication of the average, non- business purchaser, Defendants breached that duty by their silence. Defendants misrepresented to all purchasers during the Class Period that Defendants’ generic digoxin and generic doxycycline prices were competitive and fair. Defendants’ unlawful conduct had the following effects: (1) generic digoxin and generic doxycycline price competition was restrained, suppressed, and eliminated throughout Rhode Island; (2) generic digoxin and generic doxycycline prices were raised, fixed, maintained, and stabilized at artificially high levels throughout Rhode Island; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supracompetitive, artificially inflated prices for generic digoxin and generic doxycycline. As a direct and proximate result of the Defendants’ violations of law, Plaintiff and members of the Damages Class suffered an ascertainable loss of money or property as a result of Defendants’ use or employment of unconscionable and deceptive commercial practices as set forth above. That loss was caused by Defendants’ willful and deceptive conduct, as described herein. Defendants’ deception, including their affirmative misrepresentations and omissions concerning the price of generic digoxin and generic doxycycline, likely misled all purchasers acting reasonably under the circumstances to believe that they were purchasing generic digoxin and generic doxycycline at prices set by a free and fair market. Defendants’ affirmative misrepresentations and omissions constitute information important to Plaintiff and members of the Damages Class as they related to the cost of generic digoxin and generic doxycycline they purchased. Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of Rhode Island Gen. Laws. § 6-13.1-1, et seq., and, accordingly, Plaintiff and members of the Damages Class seek all relief available under that statute. 189. Defendants have engaged in unfair competition or unfair, unconscionable, or deceptive acts or practices in violation of South Carolina Unfair Trade Practices Act (S.C. Code Ann. §§ 39-5-10, et seq.) Defendants’ combinations or conspiracies had the following effects: (1) generic digoxin and generic doxycycline price competition was restrained, suppressed, and eliminated throughout South Carolina; (2) generic digoxin and generic doxycycline prices were raised, fixed, maintained, and stabilized at artificially high levels throughout South Carolina; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supracompetitive, artificially inflated prices for generic digoxin and generic doxycycline. During the Class Period, Defendants’ illegal conduct had a substantial effect on South Carolina commerce. As a direct and proximate result of Defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured in their business and property and are threatened with further injury. Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of S.C. Code Ann. §§ 39- 5-10, et seq., and, accordingly, Plaintiff and the members of the Damages Class seek all relief available under that statute. 190. Defendants have engaged in unfair competition or unfair, unconscionable, or deceptive acts or practices in violation of 9 Vermont § 2451, et seq. Defendants agreed to, and did in fact, act in restraint of trade or commerce in a market that includes Vermont, by affecting, fixing, controlling, and/or maintaining, at artificial and non-competitive levels, the prices at which generic digoxin and generic doxycycline were sold, distributed, or obtained in Vermont. Defendants deliberately failed to disclose material facts to Plaintiff and members of the Damages Class concerning Defendants’ unlawful activities and artificially inflated prices for generic digoxin and generic doxycycline. Defendants owed a duty to disclose such facts, and considering the relative lack of sophistication of the average, non-business purchaser, Defendants breached that duty by their silence. Defendants misrepresented to all purchasers during the Class Period that Defendants’ generic digoxin and generic doxycycline prices were competitive and fair. Defendants’ unlawful conduct had the following effects: (1) generic digoxin and generic doxycycline price competition was restrained, suppressed, and eliminated throughout Vermont; (2) generic digoxin and generic doxycycline prices were raised, fixed, maintained, and stabilized at artificially high levels throughout Vermont; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supracompetitive, artificially inflated prices for generic digoxin and generic doxycycline. As a direct and proximate result of the Defendants’ violations of law, Plaintiff and members of the Damages Class suffered an ascertainable loss of money or property as a result of Defendants’ use or employment of unconscionable and deceptive commercial practices as set forth above. That loss was caused by Defendants’ willful and deceptive conduct, as described herein. Defendants’ deception, including their affirmative misrepresentations and omissions concerning the price of generic digoxin and generic doxycycline, likely misled all purchasers acting reasonably under the circumstances to believe that they were purchasing generic digoxin and generic doxycycline at prices set by a free and fair market. Defendants’ misleading conduct and unconscionable activities constitutes unfair competition or unfair or deceptive acts or practices in violation of 9 Vermont § 2451, et seq., and, accordingly, Plaintiff and members of the Damages Class seek all relief available under that statute. FOURTH COUNT Unjust Enrichment (on behalf of Plaintiff and the Damages Class) 191. Plaintiff repeats the allegations set forth above as if fully set forth herein. 192. As a result of their unlawful conduct described above, Defendants have and will continue to be unjustly enriched. Defendants have been unjustly enriched by the receipt of, at a minimum, unlawfully inflated prices and unlawful profits on generic digoxin and generic doxycycline. 193. Defendants have benefited from their unlawful acts and it would be inequitable for Defendants to be permitted to retain any of the ill-gotten gains resulting from the overpayments made by Plaintiff and members of the Damages Class for generic digoxin and generic doxycycline manufactured by Defendants during the Class Period. 194. Plaintiff and members of the Damages Class are entitled to the amount of Defendants’ ill-gotten gains resulting from their unlawful, unjust, and inequitable conduct. Plaintiff and members of the Damages Class are entitled to the establishment of a constructive trust consisting of all ill-gotten gains from which Plaintiff and members of the Damages Class may make claims on a pro rata basis PRAYER FOR RELIEF WHEREFORE, Plaintiff demands judgment that: 1. The Court determine that this action may be maintained as a class action under Rule 23(a), (b)(2) and (b)(3) of the Federal Rules of Civil Procedure, and direct that reasonable notice of this action, as provided by Rule 23(c)(2) of the Federal Rules of Civil Procedure, be given to each and every member of the Class; 2. That the unlawful conduct, contract, conspiracy, or combination alleged herein be adjudged and decreed: (a) an unreasonable restraint of trade or commerce in violation of Section 1 of the Sherman Act; (b) a per se violation of Section 1 of the Sherman Act; (c) An unlawful combination, trust, agreement, understanding and/or concert of action in violation of the state antitrust and unfair competition and consumer protection laws as set forth herein; and (d) Acts of unjust enrichment by Defendants as set forth herein. 3. Plaintiff and members of the Damages Class recover damages, to the maximum extent allowed under such laws, and that a joint and several judgment in favor of Plaintiff and members of the Damages Class be entered against Defendants in an amount to be trebled to the extent such laws permit; 4. Plaintiff and members of the Damages Class recover damages, to the maximum extent allowed by such laws, in the form of restitution and/or disgorgement of profits unlawfully gained from them; 5. Defendants, their affiliates, successors, transferees, assignees and other officers, directors, partners, agents and employees thereof, and all other persons acting or claiming to act on their behalf or in concert with them, be permanently enjoined and restrained from in any manner continuing, maintaining or renewing the conduct, contract, conspiracy, or combination alleged herein, or from entering into any other contract, conspiracy, or combination having a 88 8 Christopher L. Lebsock Stephanie Y. Cho HAUSFELD LLP 600 Montgomery Street, Suite 3200 San Francisco, CA 94111 Tel: (415) 633-1908 Fax: (415) 358-4980 Email: mlehmann@hausfeld.com Email: bsweeney@hausfeld.com Email: clebsock@hausfeld.com Michael D. Hausfeld Jeannine M. Kenney HAUSFELD LLP 1700 K Street NW, Suite 650 Washington, DC 20006 Tel: (202) 540-7200 Fax: (202) 540-7201 Email: mhausfeld@hausfeld.com Email: jkenney@hausfeld.com Frank R. Schirripa HACH ROSE SCHIRRIPA & CHEVERIE LLP 185 Madison Ave. New York, New York 10016 Tel: (212) 213-8311 Email: FS@hachroselaw.com Counsel for Plaintiff EXHIBIT A

antitrust

Nw6gFocBD5gMZwczYc6L

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA CASE NO. CLASS ACTION COMPLAINT FOR: PLAINTIFF, 1. Violation of the Fair Credit V. Reporting Act for Failure to Make Proper Disclosures, 15 U.S.C. § 1681b(b)(2)(A)(i); 2. Violation of the Fair Credit DEFENDANTS. Reporting Act for Failure to Obtain Proper Authorization, 15 U.S.C. § 1681b(b)(2)(A)(ii); DEMAND FOR A JURY TRIAL Plaintiff JAMES SNELL ("Plaintiff"), on behalf of himself and all others I. INTRODUCTION 1. Defendant G4S SECURE SOLUTIONS (USA) INC. ("Defendant") is 2. Defendant is a security service company specializing in providing 3. Plaintiff applied, was hired, and performed work for Defendant in 4. Upon information and belief, during the application process, Plaintiff 5. Defendant's FCRA disclosure is invalid on two separate grounds. First, 6. Since Defendant's standard FCRA disclosure is non-complaint, 7. Plaintiff now brings this Class Action on behalf of himself and a All employees in the United States who filled out G4S SECURE SOLUTIONS (USA) INC.'s standard "Disclosure and Authorization to Obtain Consumer Report and/or Investigative Consumer Report And Release" form at any time during the period beginning five (5) years prior to the filing of this action to the present. (the "Proposed Class") II. JURISDICTION AND VENUE 8. The Court has jurisdiction over Plaintiff's federal claims pursuant to 28 9. Venue is proper in this district pursuant to 28 U.S.C. $1391(d) because III. THE PARTIES A. PLAINTIFF 10. Plaintiff applied, was hired and performed work for Defendant in 11. Plaintiff began work for Defendant in October 2018 as an hourly B. DEFENDANT 12. Defendant is a Florida Corporation. At all times relevant herein, 13. Defendant's entity address listed with the California Secretary of State 14. Defendant requires Plaintiff and all other persons similarly situated to 15. Plaintiff is informed and believes and thereon alleges that eachIV. NATURE OF THE ACTION 16. The FCRA provides individuals with a number of rights. Specifically, 17. The FCRA's disclosure and authorization requirements are listed in 15 V. FACTUAL ALLEGATIONS 18. Plaintiff applied to work for Defendant in California. In connection 19. Upon information and belief, Defendant required all applicants to 20. Defendant's standard FCRA form is a single "document" for purposes 21. Defendant's FCRA disclosure contained extraneous information such 22. Accordingly, Plaintiff was confused regarding the nature of his rights 23. Nevertheless, Defendant procured or caused to be procured Plaintiff's 24. Defendant's failure to provide a compliant disclosure, and failure to 25. By including extraneous information in its standard FCRA disclosure, 26. Thus, Defendant "willfully" violated the FCRA. Defendant knew that VI. THE CLASS 27. Plaintiff brings this action on behalf of himself and all others similarly All employees in the United States who filled out G4S SECURE SOLUTIONS (USA) INC.'s standard "Disclosure and Authorization to Obtain Consumer Report and/or Investigative Consumer Report And Release" form at any time during the period beginning five (5) years prior to the filing of this action to the present. (the "Proposed Class") 28. Plaintiff reserves the right to amend or modify the Class description 29. This class action on behalf of members of the Proposed Class meets the A. Numerosity 30. The Proposed Class is SO numerous that joinder of all class members is 31. While the precise number of members of the Proposed Class has not 32. Plaintiff alleges that Defendant's records will provide information as to B. Commonality 33. There are questions of law and fact common to the Proposed Class thata. Whether Defendant's standard FCRA disclosure (Exhibit 1) meets 15 U.S.C. $1681b(b)(2)(A)(i)'s "clear and conspicuous disclosure" requirement; b. Whether Defendant's standard FCRA disclosure is "in a document that consists solely of the disclosure" (15 U.S.C. $1681b(b)(2)(A)(i)); C. Whether Defendant acquires applicants' consumer reports without authorization in violation of 15 U.S.C. $1681b(b)(2)(A)(ii); and d. Whether Defendant "willfully" violated the FCRA pursuant to 15 U.S.C. $1681n. C. Typicality 34. The claims of the named Plaintiff are typical of the claims of the 35. Plaintiff is a member of the Proposed Class. Plaintiff was an applicant D. Adequacy of Representation 36. Plaintiff will fairly and adequately represent and protect the interests of 37. Counsel for Plaintiff are competent and experience in litigation large E. Predominance and Superiority of a Class Action 38. A class action is superior to other available means for fair and efficient 39. Class action treatment will allow those similarly situated persons to 40. Class action treatment will allow a large number of similarly situated VII. FIRST CAUSE OF ACTION FCRA 15 U.S.C. § 1681b(b)(2)(A)(i), ET SEQ.1 (BY PLAINTIFF AND ALL MEMBERS OF THE PROPOSED CLASS AGAINST ALL DEFENDANTS) 41. Plaintiff, and the other members of the Proposed Class, reallege and 42. Under the FCRA, it is unlawful to procure a consumer report or cause (i) a clear and conspicuous disclosure has been made in writing to the consumer at any time before the report is procured or causes to be procured, in a document that consists solely of the disclosure, that a consumer report may be obtained for employment purposes; and (ii) the consumer has authorized in writing (which authorization may be made on the document referred to in clause (i)) the procurement of the report. 43. Defendant's standard FCRA form is unlawful on two separate grounds. 44. First, Defendant's FCRA disclosure violates the so-called "standalone" 45. Second, Defendant's FCRA disclosure violates the "clear and 46. The violations of the FCRA were willful based on the clear statutory 47. Defendant also had specific case law to provide guidance. See Gilberg,48. Lastly, informal guidance from the FTC is unambiguous that no 49. In addition, Defendant's violation of the "clear and conspicuous 50. Plaintiff and all other members of the Proposed Class are entitled to 51. Plaintiff and all other members of the Proposed Class are also entitled 52. Plaintiff and all other members of the Proposed Class are further VIII. SECOND CAUSE OF ACTION FOR FAILURE TO OBTAIN PROPER AUTHORIZATION IN VIOLATION OF THE FCRA [15 U.S.C. § 1681b(b)(2)(A)(ii) (BY PLAINTIFF AND ALL MEMBERS OF THE PROPOSED CLASS AGAINST ALL DEFENDANTS) 53. Plaintiff, and the other members of the Proposed Class, reallege and 54. Since Defendant's standard FCRA form contains extraneous 55. Accordingly, Plaintiff was confused regarding the nature of his rights 56. Nevertheless, Defendant procured a consumer report or caused a 57. This violation of the FCRA is willful. 15 U.S.C. $1681n. Defendant 58. Plaintiff and all other members of the Proposed Class are entitled to 59. Plaintiff and all other members of the Proposed Class are also entitled 60. Plaintiff and all other members of the Proposed Class are further PRAYER FOR RELIEF WHEREFORE, Plaintiff prays for judgment against each Defendant, jointly On behalf of the Proposed Class: A) That the Court certify the First and Second Causes of Action asserted by the Proposed Class as a Class Action pursuant to Fed. R. Civ. Proc. 23(b)(2) and/or (3); B) A determination and judgment that Defendant willfully violated 15 U.S.C. § 1681(b)(2)(A)(i) and(ii) of the FCRA; C) Pursuant to 15 U.S.C. § 1681n(a)(1)(A), an award of statutory damages to Plaintiff and all other members of the Proposed Class in an amount equal to $1,000 for Plaintiff and all other members of the Proposed Class for each willful violation of the FCRA; D) Pursuant to 15 U.S.C. § 1681n(a)(2), an award of punitive damages to Plaintiff and all other members of the Proposed Class; E) An award for costs of suit and reasonable attorneys' fees pursuant to 15 U.S.C. § 1681n(a)(3); and, F) Such other and further relief as the Court deems just and equitable.DEMAND FOR JURY TRIAL Plaintiff hereby demands a trial of his claims by jury to the extent authorized KINGSLEY & KINGSLEY, APC By: Eric B. Kingsley Kelsey M. Szamet Attorneys for Plaintiff

consumer fraud

5gaMFYcBD5gMZwczSh_T

FEB 23 2018 X Plaintiffs, VERIFIED COMPLAINT -against- Jury Trial Demanded On All Issues CV 18-1182 Index No.: SPATT, J. Defendant. X BROWN, M.J. Plaintiffs, by their attorneys, the Law Offices of Louis D. Stober, Jr., LLC, alleges as PURPOSE OF ACTION 1. The Plaintiffs bring this action as a class action lawsuit individually and on behalf of other similarly situated individuals who have, and who are currently employed by the Defendant, the County of Nassau ("County"), a number of whom were class members of prior Federal litigation before this Court entitled Ebbert V. Nassau County, 05-cv- 5445(JFB)(AKT), 2009 WL 935812 (E.D.N.Y. Mar. 31, 2009) and/or Volpe V. Nassau County, 915 F. Supp. 2d 284 (E.D.N.Y. 2013) (hereinafter referred to as the "Ebbert and Volpe cases" respectively). 2. The Plaintiffs allege that the County has failed to comply with the provisions of the New York State and Federal Equal Pay Acts ("EPA"), New York Labor Law ("NYLL") § 194 et seq. and 29 U.S.C. § 206(d) respectively, by paying the predominantly female Police Communication Operators ("PCOs") and Police Communication Operator Supervisors ("PCOSs") substantially less compensation than it did the predominantly male Fire Communication Technicians ("FCTs") and Fire Communication Technician Supervisors ("FCTSs"), despite the fact that the PCOs and PCOSs and FCTs and FCTSs are employed within the same facility and perform virtually identical duties for the County. 3. The Plaintiffs bring this action on their own behalves and on behalf of all similarly situated PCOs and PCOSs who were and continue to be required to work an extra twelve- hour "Supplemental Day" without pay in addition to their regular work schedule while the individuals employed as FCTs and FCTSs do not, thus causing the predominantly female PCOs and PCOSs from receiving the same rate of pay as the predominantly male FCTs and FCTSs for performing the same work. The members of this proposed collective and class action, including the Plaintiffs, will herein after be reference as "putative collective and class members." JURISDICTION AND VENUE 4. This Court has original subject matter jurisdiction over this action as a Federal Question pursuant to 29 U.S.C. § 206(d) and 28 U.S.C. §§ 1331. This Court has supplemental jurisdiction over the Plaintiffs' NYLL claims pursuant to 28 U.S.C. § 1367, as the Plaintiffs state and federal claims derive from a common nucleus of operative facts. 5. Venue lies in this District pursuant to 28 U.S.C. § 1391, in that all of the causes of action raised within this litigation arose within the Eastern District of New York, Nassau County, New York. 6. This Court is empowered to issue a declaratory judgment pursuant to 28 U.S.C. §§ 2201 and 2202. PARTIES 7. Plaintiff, Danielle Davidson, is a resident of Nassau County and has been employed as a Police Communications Operator ("PCO"), since December 2, 2003. 8. Plaintiff, Susan Chodkowski, is a resident of Nassau County and was employed as a PCO from April 12, 1996 until January 2004. Plaintiff Chodkowski was then promoted, and has served as a PCOS since January 22, 2004. 9. Plaintiff, Gary Volpe, is a resident of Wayne County, Pennsylvania and has been employed as a PCO since November 6, 1998. 10. Plaintiff, Matthew Sarter, is a resident of Nassau County and has been employed as a PCO since March 8, 1999. 11. Plaintiff, Wendy Neal, is a resident of Nassau County and has been employed as a PCO since November 20, 1991. 12. Plaintiff, Deborah Pedenzin, is a resident of Nassau County and has been employed as a PCO since September 4, 2007. 13. Plaintiff, Rosanna Lauro, is a resident of Nassau County and has been employed as a PCO since February 23, 2001. 14. Defendant, County of Nassau, is a municipal corporation duly incorporated under the laws of the State of New York. COLLECTIVE ACTION 15. With respect to their claims under the Federal EPA, the female Plaintiffs bring this action pursuant to 29 U.S.C. § 206(d) et seq., on behalf of themselves and all other similarly situated female PCOs and PCOSs. The putative members of this collective action include all other similarly situated female PCOs and PCOSs who have been employed by the County at any time within three years prior to the commencement of this action. 16. With respect to their claims under the Federal EPA, the male Plaintiffs also bring this action pursuant to 29 U.S.C. § 206(d) et seq., on behalf of themselves and all other similarly situated male PCOs and PCOSs. Undoubtedly, if the female Plaintiffs are successful in this lawsuit against the County, included as a remedy will be substantial back pay for the period in which the County was in violation of the Federal EPA along with the equalization of female PCOs' and PCOs' salaries with their predominantly male counterparts in Fire Communications ("FCOM"). In the interests of efficiency and economy for all of the parties involved, the male PCOs and PCOSs should be enabled by this Court to join in a collective and class action with their female colleagues, as any remedy received by the female PCOs and PCOSs would then trigger a violation of the Federal EPA with respect to the male PCOs and PCOSs, thus forcing the male PCOs and PCOSs to commence a subsequent legal action as they did in Volpe. The putative members of this collective action include all other male PCOs and PCOSs who have been employed by the County at any time within three years prior to the commencement of this action. CLASS ACTION 17. The Plaintiffs also seek to maintain this action as a class action, pursuant to Fed. R. Civ. P. 23(b)(3) with respect to their claims under the New York State EPA, on behalf ofthemselves individually and all other similarly situated PCOs and PCOSs who have been employed by the County at any time during the relevant statute of limitation period. 18. Fed. R. Civ. P. 23(a) provides that a cause of action may be maintained as a class action if the following elements are met: (1) The class is so numerous that joinder of all members is impracticable; (2) there are questions of law or fact common to the class; (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (4) the representative parties will fairly and adequately protect the interests of the class. 19. Additionally, Fed. R. Civ. P. 23(b)(3) provides that in addition to satisfying the requirements stated in subsection (a), it must be also be shown that a class action is superior to other available methods for the fair and efficient adjudication of the case or controversy. Class Definitions 20. Plaintiffs seek certification of a class consisting of the following individuals: All persons who been employed as PCOs and PCOSs and all PCO titles for the Defendants at any time from six years prior to the filing of this Action to the entry of judgment in this Action (hereinafter the "New York Class"). Numerosity 21. The Plaintiffs satisfy the numerosity requirement as the proposed class is so numerous that the joinder of all members would be both impracticable and inefficient. 22. The proposed class can be identified and located using the County's payroll and personnel records, and the putative class members may be informed of the pendency of this action by direct mail and/or published or broadcast notice. Common Questions of Law and Fact putative class members and which predominate over any questions affecting only individual members. The questions of fact and of law common to each putative class member arising from the County's violations include, but are not limited to the following questions: (1) Whether the County has violated the provisions of the New York State and Federal EPAs with respect to the female Plaintiffs and putative class members by requiring the predominantly female PCOs and PCOSs to work an extra, uncompensated for "Supplemental Day," while the predominantly male FCTs and FCTSs are not required to work any Supplemental Days, thereby causing the female PCOs and PCOSs to be compensated less for substantially the same work as the predominantly male FTCs and FTCSs; and (2) Whether the County would violate the provisions of the New York State and Federal EPAs with respect to the male Plaintiffs and putative class members by making the female PCOs and PCOSs whole for the violations of the New York State and Federal EPAs described above, thus causing the male PCOs and PCOSs to receive less compensation within the statute of limitations recovery period for performing substantially the same work as the female PCOs and PCOSs. individual Plaintiffs or individual putative class members. Based upon considerations of consistency, judicial economy, efficiency, fairness, and equity, a class action is superior to any other available method for the fair and efficient adjudication of this controversy. Typicality 25. The Plaintiffs' claims under the New York State and Federal EPAs are typical and virtually identical to the claims of the other putative class members. As a result of the County's unlawful conduct, the Plaintiffs have suffered virtually identical injuries as those suffered by other members of the putative class they seek to represent. Adequacy 26. Plaintiffs are adequate representatives of the class which they seek to represent, as they are members of the putative class and their interests do not conflict with the interests of the members of the class they seek to represent. As a result, the interests of the putative class members will be fairly and adequately protected by the Plaintiffs and their undersigned counsel. The Plaintiffs have hired competent attorneys who are experienced in class action litigation and committed to the prosecution of this Action as evidenced by their representation of these Plaintiffs and other County employees within several putative class action cases currently pending within this District, and their successful representation of a number of the male Plaintiffs and putative class members within the Volpe case. Superiority adjudication of this controversy because the individual joinder of the parties is impracticable and inefficient. Certification of this action as a class action will allow all of the PCOs and PCOSs to prosecute their virtually identical claims for relief within a single forum, simultaneously, and efficiently ensuring the most expedient conclusion possible of the litigation between the parties, without the unnecessary duplication of effort andexpense that would occur if these claims were brought individually by each of the putative class members. 28. The presentation of separate actions by individual class members could create a risk of inconsistent and varying adjudications, establish incompatible standards of conduct for Defendants and/or substantially impair or impede the ability of class members to protect their interests due to the inherent costs of bringing litigation compared with the potential recovery. STATEMENT OF FACTS police department. As PCOs and PCOSs for the for the County, their duties included receiving telephone calls placed on the County's 911 emergency system, deciding the appropriate response to each of the calls, and if necessary, dispatching the appropriate aid depending upon the gravity of the emergency situation. 30. There are presently approximately 200 PCOs and PCOSs employed by the County, over 90% of whom, are female. 31. The 1994 MOU 12-Hour Tour Agreement ("1994 MOU"), reached on January 26, 1994, and still effective presently, sets out the schedule by which the PCOs and PCOSs work. 32. The schedule set out by the 1994 MOU consists of seven week tour cycles. 33. During weeks one through six of a given tour cycle, the PCOs and PCOSs work a total of three, twelve hour shifts, for a total of 36 hours per week. However, every seventh week, the PCOs and PCOSs are required to work four twelve hour shifts for a total of 48 hours per week. called a "Supplemental Day." present, the Plaintiffs regularly and continuously worked 48-hour work weeks every seventh week, resulting in the working of approximately seven to eight Supplemental Days every year. present, the Plaintiffs were never paid overtime compensation when they worked over 40 hours every seventh week as a result of the mandatory working of a Supplemental Day. present, the Plaintiffs were neither compensated at straight time for the hours they worked during the County's mandated Supplemental Days, or overtime when the mandated working of the Supplemental Days caused the PCOs and PCOSs to work more than 40 hours in a given week. 38. The County was and continues to be aware of the fact that the Plaintiffs are paid neither straight time nor overtime as a result of the extra hours they are forced to work due to the mandated working of Supplemental Days, as the terms of the 1994 MOU agreement were brought to the attention of the County in a meeting between the County and the Plaintiffs' Union, the Civil Service Employees Association ("CSEA"), in regards to a grievance unrelated to the issues in this Action. 39. FCOM is an agency within the County to which the FTCs and FCTSs are assigned and employed. 40. The FTCs and FCTSs are located within the same facility as the PCOs and PCOSs, and perform virtually identical duties as the PCOs and PCOSs. 41. The overwhelming majority of the FCTs and FCTSs are male. 42. The FCTs and FCTSs are required to work a schedule that consists of three, twelve hours days per week for a total of 36 hours per week, constituting the same work schedule as the PCOs and PCOSs during weeks one through six of their tour cycle. 43. In contrast to the PCOs and PCOSs, the FCTs and FCTSs are not required to work the Supplemental Days by the County. 44. Because the FCTs and FCTSs are not subject to working Supplemental Days, they are essentially being compensated at a higher rate than the PCOs and PCOSs, all of whom are required to work Supplemental Days with no compensation. This results in the predominantly female PCOs, and PCOSs being compensated at a lower rate for virtually identical work than the predominantly male FCTs and FCTSs. 45. Furthermore, because the PCOs and PCOSs are required to work a Supplemental Day every seventh week at no additional compensation, they are deprived of the opportunity to work overtime on that date, whereas the FCOM employees are freely able to work an overtime shift, thereby providing the predominantly male employees of FCOM at least seven to eight more opportunities to work overtime in a given year as opposed to the predominantly female PCOs and PCOSs. 46. In early 2016, the County and the CSEA entered into a Training MOU, which mandates that the PCOs and PCOSs "exchange" one of their Supplemental Days for a mandatory "Training Day."to work an additional twelve hours in the form of training, but receive neither straight time nor overtime for these hours worked. training on an "exchange" basis, and thus receive straight time or overtime compensation when completing employer mandated training. County Law § 52, alleging that the conduct complained of herein, constituted violations of the Ebbert and Volpe settlement orders, the provisions of the New York State and Federal EPAs, and the provisions of the overtime provisions of the Fair Labor Standards Act ("FLSA") and NYLL respectively. (A copy of the March 22, 2017 Notice of Claim is annexed hereto as "Exhibit A"). 50. More than thirty days have elapsed since the Plaintiffs have filed their Notice of Claim upon the County, yet, to date, the County has still offered no remedy or redress to the Plaintiffs or any putative collective or class member for any of the violations of law identified within the Plaintiffs' Notice of Claim, including the violations of the New York State and Federal EPAs that are at issue within this Action. 51. The filing of this Action is not the first attempt by the Plaintiffs to seek redress for the County's persistent and continuous violations of the State and Federal EPAs, but instead serves as another chapter in the voluminous history of litigation between the parties, which has now persisted for over a decade. 52. The first salvo of litigation against the County with respect to alleged violations of the New York State and Federal Equal Pay Acts commenced in the year 2005, when Helen Ebbert, along with several other female PCOs and PCOSs commenced a lawsuit in this District Court entitled Ebbert V. Nassau County, 05-cv-5445(JFB)(AKT), 2009 WL 935812 (E.D.N.Y. Mar. 31, 2009), seeking an equalization of their pay to the FCTs and FCTSs for all female PCOs and PCOSs retroactive to November 18, 1999 as a result of disparities in the pay steps and pay grades between similarly situated PCOs and PCOSs and FCTs and FCTSs in the relevant time period, which caused the predominantly female PCOs and PCOSs to receive less compensation than their male counterparts in FCOM. 53. The parties in the Ebbert case settled their claims, resulting in the promulgation of the Ebbert order, which mandated that the County use best efforts to maintain equality between the predominantly female PCOs and PCOSs and the predominantly male FCTs and FCTSs, including that the predominantly female PCOs and PCOSs receive equal pay than their male counterparts in FCOM. 54. However, as a result of the Ebbert order, which awarded damages to the female PCOs and PCOSs for the County's violations of the New York State and Federal EPAs, the net effect of the ruling resulted in the male PCOs and PCOSs being paid less than their female counterparts for performing equal work, thus constituting another violation of the New York State and Federal EPAs. 55. As a result, the male PCOs and PCOSs were forced to bring their own lawsuit under the New York State and Federal EPAs to obtain parity with their female counterparts. See, Volpe V. Nassau Cty., 915 F. Supp. 2d 284, 287 (E.D.N.Y. 2013). 56. Once again, as in the Ebbert case, the Volpe case's settlement resulted in the promulgation of an order which both awarded damages to the male PCOs and PCOSs for the County's violations of the New York State and Federal EPAs, as well as imposed a requirement that parity be maintained between the male and female PCOs and PCOSs. 57. Despite the success of the plaintiffs in both the Ebbert and Volpe cases, the County has continued to violate the provisions of the New York State and Federal EPAs by compensating the female PCOs and PCOSs less than their predominantly male counterparts in FCOM, this time by mandating that the predominantly female PCOs and PCOSs work an extra Supplemental Day while the predominantly male FCTs and FCTSs are not. 58. At a meeting on August 8, 2016 between the CSEA and the County in regards to a grievance unrelated to the present action, as the CSEA's no-cost solution to remedying the grievance, Plaintiff Volpe suggested that the County discontinue its practice of mandating that the PCOs and PCOSs work Supplemental Days, arguing that the County's mandate violated the terms of the Ebbert order since the net result was that the female PCOs and PCOSs were being paid at a lower rate than their predominantly male counterparts in FCOM for virtually identical work and the FLSA, since the PCOs and PCOSs were not being paid overtime compensation for the hours worked in excess of 40 as a result of the Supplemental Day. 59. At the meeting, then Police Commissioner, Thomas Krumpter, refused to eliminate Supplemental Days despite Plaintiff Volpe's arguments. 60. At an arbitration hearing related to the grievance a few days later, counsel for the CSEA again argued that the mandated working of Supplemental Days violated the provisions of the Ebbert order and the FLSA. Despite these arguments, the County again refused to eliminate the mandated working of Supplemental Days.61. In response to the County's continued refusal to abide by the terms of the Ebbert order, the New York State and Federal EPAs, and the overtime provisions of the FLSA and NYLL, the Plaintiffs filed a Federal lawsuit within this District Court on October 17, 2016, entitled Chodkowski et al. V. County of Nassau, 16-cv-5770 (SJF) (GRB), alleging claims for breaches of the Ebbert and Volpe settlement orders, the New York State and Federal EPAs, and the overtime provisions of the FLSA and NYLL. (A copy of the Plaintiff's October 17, 2016 complaint is annexed hereto as "Exhibit B"). 62. While the initial complaint in the October 17, 2016 action contained both the parity claims under the settlement agreements and EPAs, as well as the claims for unpaid overtime compensation, during a proceeding held on April 3, 2017 in regards to the Plaintiff's motion to amend their complaint in that action, in the interests of judicial economy and in order to streamline the issues in the case, the Plaintiffs agreed to voluntary withdraw their parity claims and re-file them in state court, leaving only the overtime claims to be decided therein. 63. During the April 3, 2017 proceeding, the Plaintiffs agreed to withdraw their parity claims and re-file them in state court, with the understanding that the Plaintiffs would be entitled to obtain the full measure of relief within state court. 64. On May 5, 2017, the Plaintiffs filed a lawsuit within the Supreme Court of the State of New York, County of Nassau, alleging violations of the Ebbert and Volpe settlement orders, as well as violations of the New York State and Federal EPAs. (A copy of the Plaintiffs' May 5, 2017 complaint is annexed hereto as "Exhibit C"). 65. On September 13, 2017, the Plaintiffs moved to certify their state court action as a class action, pursuant to the provisions of the New York Civil Practice Law and Rules ("CPLR") § 901. 66. However, in a decision dated December 11, 2017, Justice James P. McCormack dismissed the Plaintiffs motion for class certification without prejudice, granting the Plaintiffs leave to re-file the motion if the Plaintiffs waived any claims for liquidated damages under the New York State and Federal EPAs, since CPLR § 901 does not allow for the class certification of an action maintaining claims for statutory liquidated or punitive damages. 67. As a result of Justice McCormack's decision, the Plaintiffs were seemingly faced with an impossible choice, as the only way to maintain a class action for their claims under the New York State and Federal EPAs in state court would have forced the Plaintiffs and all other similarly situated PCOs and PCOSs to potentially surrender more than half of their potential recovery under the New York State and Federal EPAs, despite the fact the Plaintiffs' claims under the New York State and Federal EPAs are separate and distinct from their claims alleging a breach of the Ebbert and Volpe order and remain cognizable within the Federal courts. 68. Thus, on January 12, 2018, the Plaintiffs filed a motion within state court to both amend their complaint and renew their motion for class certification. Within the motion, the Plaintiffs asked that their claims involving the breaches of the Ebbert and Volpe settlement orders be certified, but that their distinct claims under the New York State and Federal EPAs be tabled pending the result this Federal Action. COUNT I VIOLATION OF THE EQUAL PAY ACT 69. The Plaintiffs repeat and re-allege each and every allegations contained within paragraphs 1 through 69 as stated above. 70. At all times relevant herein, the County has knowingly paid the female Plaintiffs and all similarly situated female PCOs and PCOSs at a lower rate than it paid the predominantly male FTCs and FTCSs for equal work, in violation of the Federal EPA (29 U.S.C. § 206(d)(1)). 71. As stated above, the County's failure to pay the female Plaintiffs and all similarly situated female PCOs and PCOSs at the same rate it paid the predominantly male FTCs and FTCSs for equal work was willful within the meaning of the Federal EPA. 72. As a result of the County's knowing and willful violations of the Federal EPA and the regulations promulgated therein, the female Plaintiffs and all similarly situated female PCOs and PCOSs have incurred damages in an amount to be determined at trial, along with liquidated damages, attorneys' fees and costs of litigation, pre and post-judgment interest and any other relief as this Court deems just and proper. 73. As in the Volpe case, the effect of remedying the violations of the Federal EPA as between the female Plaintiffs and all similarly situated female PCOs and PCOSs and their predominantly male counterparts in FCOM, will result in the male Plaintiffs and all similarly situated male PCOs and PCOSs being compensated at a rate less than that of their female co-workers for equal work, resulting in a violation of the Federal EPA as between the male Plaintiffs and all similarly male PCOs and PCOSs and the female Plaintiffs and all similarly situated female PCOs and PCOSs. 74. Therefore, in the interests of efficiency and economy, the male Plaintiffs and all similarly situated male PCOs and PCOSs should be entitled to join this litigation, and should be awarded damages in an amount to be determined at trial, along with liquidated damages, attorneys' fees and costs of litigation, pre and post-judgment interest, and any other relief as this Court deems just and proper, in the event their female counterparts are successful. COUNT II VIOLATION OF THE NEW YORK STATE EQUAL PAY ACT through 75 as described above. knowingly paid the female Plaintiffs and all similarly situated female PCOs and PCOSs less than it paid their predominantly male counterparts in FCOM for equal work constitutes ongoing discrimination against the female Plaintiffs and the putative female class members in violation of the New York State EPA, NYLL § 194 et seq. and PCOSs at the same rate it paid their predominantly male counterparts in FCOM for equal work was willful within the meaning of the New York State Equal Pay Act. 78. As stated above within paragraph 75 of this Complaint, the effect of remedying the violations of the New York State EPA as between the female Plaintiffs and all similarly situated female PCOs and PCOSs and their predominantly male counterparts in FCOM, will result in the male Plaintiffs and all similarly situated male PCOs and PCOSs being compensated at a rate less than that of their female co-workers for equal work, resulting in a violation of the New York State EPA as between the male Plaintiffs and all similarlymale PCOs and PCOSs and the female Plaintiffs and all similarly situated female PCOs and PCOSs. 79. Therefore, in the interests of efficiency and economy, the male Plaintiffs and all similarly situated male PCOs and PCOSs should be entitled to join this litigation, and all of the Plaintiffs and putative class members should be awarded damages in an amount to be determined at trial, along with liquidated damages, attorneys' fees and costs of litigation, pre and post-judgment interest, and any other relief as this Court deems just and proper. PRAYER FOR RELIEF a.) Designating this Action as a collective and class action; b.) exercising supplemental jurisdiction over the Plaintiffs' and putative class c.) declaring that the Defendants discriminated against the Plaintiffs and the putative d.) entering a permanent injunction enjoining the Defendants from further violations e.) exercising jurisdiction to first equalize the salaries of the female PCOs and f.) awarding the Plaintiffs and the putative collective and class members all monies g.) awarding the Plaintiffs and the putative collective and class members liquidated h.) awarding a tax bump up on any award to offset the tax consequences of a lump- i.) awarding the Plaintiffs and putative collective and class members reasonable j.) awarding any other and further relief as the Court deems just and proper. JURY DEMAND The Plaintiffs hereby demand a jury trial on all issues raised herein. February 14, 2018 Yours, etc. full Law Offices of Louis D. Stober, Jr., LLC Louis D. Stober, Jr., Esq. (LS-9318) Attorneys for Plaintiffs 98 Front Street Mineola, New York 11501 (516) 742-6546 (516) 742-8603 (fax) VERIFICATION ) :SS.: ) Danielle Davidson, being duly sworn, deposes and says: I am one of the Plaintiffs in the within action; I have read the annexed Verified DANIELLE DAVIDSON 2018 with LOUIS D. STOBER Notary of New York ..2083 Que DATES 31, 18 County Comm Oct. 20VERIFICATION STATE OF NEW YORK ) :SS.: COUNTY OF NASSAU ) Gary Volpe, being duly sworn, deposes and says: I am one of the Plaintiffs in the within action; I have read the annexed Verified Complaint, know the contents thereof, and the same are true to my knowledge, except those matters therein which are stated to be alleged on information and belief, and as to those matters, I believe them to be true. Gary Volpe GARY VOLPE Sworn to before me this 14 day of February, 2018 and Notary Public LOUIS D. STOBER Notary Public, State of New York No. 02ST4822083 Commission Expires Oct. 31, , 20 18 Qualified in Nassau County VERIFICATION STATE OF NEW YORK ) :SS.: COUNTY OF NASSAU ) Susan Chodkowski, being duly sworn, deposes and says: I am one of the Plaintiffs in the within action; I have read the annexed Verified Complaint, know the contents thereof, and the same are true to my knowledge, except those matters therein which are stated to be alleged on information and belief, and as to those matters, I believe them to be true. SUSAN CHODKOWSKI Sworn to before me this 14 day of February, 2018 with Notary Public LOUIS D. STOBER Notary Public. State o: New York No. 02ST4622083 Commission Expires Oct. 31, 20 18 Qualified in Nassau County VERIFICATION ) :SS.: ) Rosanna Lauro, being duly sworn, deposes and says: I am one of the Plaintiffs in the within action; I have read the annexed Verified Rosauna Lauro ROSANNA LAURO with Notary Public, State STOBER of New York LOUIS D. No. 02ST4622083 Commission Expires Oct. 31, , 20 Qualified in Nassau County 18 VERIFICATION ) :SS.: ) Wendy Neal, being duly sworn, deposes and says: I am one of the Plaintiffs in the within action; I have read the annexed Verified Wedy In Neah WENDY NEAL 2018 LOUIS D. STOBER Notary Public, State of New York No. 02S 4822093 Qualified in Nassau County Commission Expires Oct. 31, 20 18 VERIFICATION ) :SS.: ) Matthew Sarter, being duly sworn, deposes and says: I am one of the Plaintiffs in the within action; I have read the annexed Verified MATTHEW SARTER of February, 2018 with LOUIS D. STOBER Notary Public, State of New York No. 02S74622033 Qualified in Nassau County Commission Expires Oct. 31, 20 18 VERIFICATION ) :SS.: ) Deborah Pedenzin, being duly sworn, deposes and says: I am one of the Plaintiffs in the within action; I have read the annexed Verified DEBORAH Delhi PEDENZIN Parking with LOUIS D. STOPER Notary Public State of New York No. 023 4622383 Qualified in Nassau County Commission Expires Oct. 31, , 20 18 XVERIFIED COMPLAINT Plaintiffs, -against- Index No.: Defendant. X VERIFIED COMPLAINT Law Offices of LOUIS D. STOBER, JR., LLC Attorneys for Plaintiffs 98 Front Street Mineola, NY 11501 (516) 742-6546

discrimination

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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x FRANKIE MONEGRO, on behalf of himself and all others similarly situated, INDEX NO.: 1:20-cv-7829 CLASS ACTION COMPLAINT AND Plaintiffs, v. DEMAND FOR JURY TRIAL CHESAPEAKE FINE FOOD GROUP, LLC, Defendant. : : : : : : : : : : : : - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x INTRODUCTION 1. Plaintiff FRANKIE MONEGRO, on behalf of himself and others similarly situated, asserts the following claims against Defendant CHESAPEAKE FINE FOOD GROUP, LLC as follows. 2. Plaintiff is a visually-impaired and legally blind person who requires screen- reading software to read website content using his computer. Plaintiff uses the terms “blind” or “visually-impaired” to refer to all people with visual impairments who meet the legal definition of blindness in that they have a visual acuity with correction of less than or equal to 20 x 200. Some blind people who meet this definition have limited vision. Others have no vision. 3. Based on a 2010 U.S. Census Bureau report, approximately 8.1 million people in the United States are visually impaired, including 2.0 million who are blind, and according to the American Foundation for the Blind’s 2015 report, approximately 400,000 visually impaired persons live in the State of New York. 4. Plaintiff brings this civil rights action against Defendant for its failure to design, construct, maintain, and operate its website to be fully accessible to and independently usable by Plaintiff and other blind or visually-impaired people. Defendant’s denial of full and equal access to its website, and therefore denial of its goods and services offered thereby, is a violation of Plaintiff’s rights under the Americans with Disabilities Act (“ADA”). 5. Because Defendant’s website, www.mackenzieltd.com (the “Website”), is not equally accessible to blind and visually impaired consumers, it violates the ADA. Plaintiff seeks a permanent injunction to cause a change in Defendant’s corporate policies, practices, and procedures so that Defendant’s website will become and remain accessible to blind and visually-impaired consumers. JURISDICTION AND VENUE 6. This Court has subject-matter jurisdiction over this action under 28 U.S.C. § 1331 and 42 U.S.C. § 12181, as Plaintiff’s claims arise under Title III of the ADA, 42 U.S.C. § 12181, et seq., and 28 U.S.C. § 1332. 7. This Court has supplemental jurisdiction under 28 U.S.C. § 1367 over Plaintiff’s New York City Human Rights Law, N.Y.C. Admin. Code § 8-101 et seq., (“NYCHRL”) claims. 8. Venue is proper in this district under 28 U.S.C. §1391(b)(1) and (2) because Defendant conducts and continues to conduct a substantial and significant amount of business in this District, and a substantial portion of the conduct complained of herein occurred in this District because Plaintiff attempted to utilize, on a number of occasions, the subject Website within this Judicial District. 9. Defendant is subject to personal jurisdiction in this District. Defendant has been and is committing the acts or omissions alleged herein in the Southern District of New York that caused injury and violated rights the ADA prescribes to Plaintiff and to other blind and other visually impaired-consumers. A substantial part of the acts and omissions giving rise to Plaintiff’s claims occurred in this District: on several separate occasions, Plaintiff has been denied the full use and enjoyment of the facilities, goods and services offered to the general public, on Defendant’s Website in New York County. These access barriers that Plaintiff encountered have caused a denial of Plaintiff’s full and equal access multiple times in the past, and now deter Plaintiff on a regular basis from accessing the Defendant’s Website in the future. 10. This Court is empowered to issue a declaratory judgment under 28 U.S.C. §§ 2201 and 2202. THE PARTIES 11. Plaintiff FRANKIE MONEGRO, at all relevant times, is and was a resident of New York, New York. 12. Plaintiff is a blind, visually-impaired handicapped person and a member of a protected class of individuals under the ADA, under 42 U.S.C. § 12102(1)-(2), and the regulations implementing the ADA set forth at 28 CFR §§ 36.101 et seq., and NYCHRL. 13. Defendant is and was at all relevant times a Maryland Limited Liability Company doing business in New York. 14. Defendant’s Website, and its goods, and services offered thereupon, is a public accommodation within the definition of Title III of the ADA, 42 U.S.C. § 12181(7). NATURE OF ACTION 15. The Internet has become a significant source of information, a portal, and a tool for conducting business, doing everyday activities such as shopping, learning, banking, researching, as well as many other activities for sighted, blind and visually-impaired persons alike. 16. In today’s tech-savvy world, blind and visually impaired people have the ability to access websites using keyboards in conjunction with screen access software that vocalizes the visual information found on a computer screen or displays the content on a refreshable Braille display. This technology is known as screen- reading software. Screen-reading software is currently the only method a blind or visually-impaired person may use to independently access the internet. Unless websites are designed to be read by screen-reading software, blind and visually- impaired persons are unable to fully access websites, and the information, products, goods and contained thereon. 17. Blind and visually-impaired users of Windows operating system-enabled computers and devices have several screen reading software programs available to them. Some of these programs are available for purchase and other programs are available without the user having to purchase the program separately. Job Access With Speech, otherwise known as “JAWS” is currently the most popular, separately purchased and downloaded screen-reading software program available for a Windows computer. Another popular screen-reading software program available for a Windows computer is NonVisual Desktop Access “NVDA”. 18. For screen-reading software to function, the information on a website must be capable of being rendered into text. If the website content is not capable of being rendered into text, the blind or visually-impaired user is unable to access the same content available to sighted users. 19. The international website standards organization, the World Wide Web Consortium, known throughout the world as W3C, has published version 2.1 of the Web Content Accessibility Guidelines (“WCAG 2.1”). WCAG 2.1 are well- established guidelines for making websites accessible to blind and visually- impaired people. These guidelines are universally followed by most large business entities and government agencies to ensure their websites are accessible. 20. Non-compliant websites pose common access barriers to blind and visually- impaired persons. Common barriers encountered by blind and visually impaired persons include, but are not limited to, the following: a. A text equivalent for every non-text element is not provided; b. Title frames with text are not provided for identification and navigation; c. Equivalent text is not provided when using scripts; d. Forms with the same information and functionality as for sighted persons are not provided; e. Information about the meaning and structure of content is not conveyed by more than the visual presentation of content; f. Text cannot be resized without assistive technology up to 200% without losing content or functionality; g. If the content enforces a time limit, the user is not able to extend, adjust or disable it; h. Web pages do not have titles that describe the topic or purpose; i. The purpose of each link cannot be determined from the link text alone or from the link text and its programmatically determined link context; j. One or more keyboard operable user interface lacks a mode of operation where the keyboard focus indicator is discernible; k. The default human language of each web page cannot be programmatically determined; l. When a component receives focus, it may initiate a change in context; m. Changing the setting of a user interface component may automatically cause a change of context where the user has not been advised before using the component; n. Labels or instructions are not provided when content requires user input, which include captcha prompts that require the user to verify that he or she is not a robot; o. In content which is implemented by using markup languages, elements do not have complete start and end tags, elements are not nested according to their specifications, elements may contain duplicate attributes, and/or any IDs are not unique; p. Inaccessible Portable Document Format (PDFs); and, q. The name and role of all User Interface elements cannot be programmatically determined; items that can be set by the user cannot be programmatically set; and/or notification of changes to these items is not available to user agents, including assistive technology. STATEMENT OF FACTS 21. Defendant is a gourmet foods company that owns and operates www.mackenzieltd.com (its “Website”), offering features which should allow all consumers to access the goods and services and which Defendant ensures the delivery of such goods throughout the United States, including New York State. 22. Defendant’s Website offers products and services for online sale and general delivery to the public. The Website offers features which ought to allow users to browse for items, access navigation bar descriptions and prices, and avail consumers of the ability to peruse the numerous items offered for sale. 23. Plaintiff is a visually-impaired and legally blind person, who cannot use a computer without the assistance of screen-reading software. Plaintiff is, however, a proficient NVDA screen-reader user and uses it to access the Internet. Plaintiff has visited the Website on separate occasions using a screen-reader. 24. On multiple occasions, the last occurring in September of 2020, Plaintiff visited Defendant’s website, www.mackenzieltd.com, to make a purchase. Despite his efforts, however, Plaintiff was denied a shopping experience similar to that of a sighted individual due to the website’s lack of a variety of features and accommodations, which effectively barred Plaintiff from being able to determine what specific products were offered for sale. 25. Many features on the Website lacks alt. text, which is the invisible code embedded beneath a graphical image. As a result, Plaintiff was unable to differentiate what products were on the screen due to the failure of the Website to adequately describe its content. Such issues were predominant in the section where Plaintiff was attempting, but was unsuccessful, in making a purchase. 26. Many features on the Website also fail to Add a label element or title attribute for each field. This is a problem for the visually impaired because the screen reader fails to communicate the purpose of the page element. It also leads to the user not being able to understand what he or she is expected to insert into the subject field. As a result, Plaintiff and similarly situated visually impaired users of Defendant’s Website are unable to enjoy the privileges and benefits of the Website equally to sighted users. 27. Many pages on the Website also contain the same title elements. This is a problem for the visually impaired because the screen reader fails to distinguish one page from another. In order to fix this problem, Defendant must change the title elements for each page. 28. The Website also contained a host of broken links, which is a hyperlink to a non- existent or empty webpage. For the visually impaired this is especially paralyzing due to the inability to navigate or otherwise determine where one is on the website once a broken link is encountered. For example, upon coming across a link of interest, Plaintiff was redirected to an error page. However, the screen-reader failed to communicate that the link was broken. As a result, Plaintiff could not get back to his original search. 29. These access barriers effectively denied Plaintiff the ability to use and enjoy Defendant’s website the same way sighted individuals do. 30. It is, upon information and belief, Defendant’s policy and practice to deny Plaintiff, along with other blind or visually-impaired users, access to Defendant’s website, and to therefore specifically deny the goods and services that are offered to the general public. Due to Defendant’s failure and refusal to remove access barriers to its website, Plaintiff and visually-impaired persons have been and are still being denied equal access to Defendant’s Website, and the numerous goods and services and benefits offered to the public through the Website. 31. Due to the inaccessibility of Defendant’s Website, blind and visually-impaired customers such as Plaintiff, who need screen-readers, cannot fully and equally use or enjoy the facilities, products, and services Defendant offers to the public on its Website. The access barriers Plaintiff encountered have caused a denial of Plaintiff’s full and equal access in the past, and now deter Plaintiff on a regular basis from equal access to the Website. 32. If the Website were equally accessible to all, Plaintiff could independently navigate the Website and complete a desired transaction as sighted individuals do. 33. Through his attempts to use the Website, Plaintiff has actual knowledge of the access barriers that make these services inaccessible and independently unusable by blind and visually-impaired people. 34. Because simple compliance with the WCAG 2.1 Guidelines would provide Plaintiff and other visually-impaired consumers with equal access to the Website, Plaintiff alleges that Defendant has engaged in acts of intentional discrimination, including but not limited to the following policies or practices: a. Constructing and maintaining a website that is inaccessible to visually-impaired individuals, including Plaintiff; b. Failure to construct and maintain a website that is sufficiently intuitive so as to be equally accessible to visually impaired individuals, including Plaintiff; and, c. Failing to take actions to correct these access barriers in the face of substantial harm and discrimination to blind and visually-impaired consumers, such as Plaintiff, as a member of a protected class. 35. Defendant therefore uses standards, criteria or methods of administration that have the effect of discriminating or perpetuating the discrimination of others, as alleged herein. 36. The ADA expressly contemplates the injunctive relief that Plaintiff seeks in this action. In relevant part, the ADA requires: In the case of violations of . . . this title, injunctive relief shall include an order to alter facilities to make such facilities readily accessible to and usable by individuals with disabilities . . . Where appropriate, injunctive relief shall also include requiring the . . . modification of a policy . . . 42 U.S.C. § 12188(a)(2). 37. Because Defendant’s Website has never been equally accessible, and because Defendant lacks a corporate policy that is reasonably calculated to cause its Website to become and remain accessible, Plaintiff invokes 42 U.S.C. § 12188(a)(2) and seeks a permanent injunction requiring Defendant to retain a qualified consultant acceptable to Plaintiff (“Agreed Upon Consultant”) to assist Defendant to comply with WCAG 2.1 guidelines for Defendant’s Website. Plaintiff seeks that this permanent injunction requires Defendant to cooperate with the Agreed Upon Consultant to: a. Train Defendant’s employees and agents who develop the Website on accessibility compliance under the WCAG 2.1 guidelines; b. Regularly check the accessibility of the Website under the WCAG 2.1 guidelines; c. Regularly test user accessibility by blind or vision-impaired persons to ensure that Defendant’s Website complies under the WCAG 2.1 guidelines; and, d. Develop an accessibility policy that is clearly disclosed on Defendant’s Websites, with contact information for users to report accessibility-related problems. 38. Although Defendant may currently have centralized policies regarding maintaining and operating its Website, Defendant lacks a plan and policy reasonably calculated to make them fully and equally accessible to, and independently usable by, blind and other visually-impaired consumers. 39. Defendant has, upon information and belief, invested substantial sums in developing and maintaining their Website and has generated significant revenue from the Website. These amounts are far greater than the associated cost of making their Website equally accessible to visually impaired customers. 40. Without injunctive relief, Plaintiff and other visually-impaired consumers will continue to be unable to independently use the Website, violating their rights. CLASS ACTION ALLEGATIONS 41. Plaintiff, on behalf of himself and all others similarly situated, seeks to certify a nationwide class under Fed. R. Civ. P. 23(a) and 23(b)(2): all legally blind individuals in the United States who have attempted to access Defendant’s Website and as a result have been denied access to the equal enjoyment of goods and services, during the relevant statutory period. 42. Plaintiff, on behalf of himself and all others similarly situated, seeks to certify a New York City subclass under Fed. R. Civ. P. 23(a) and 23(b)(2): all legally blind individuals in the City of New York who have attempted to access Defendant’s Website and as a result have been denied access to the equal enjoyment of goods and services offered, during the relevant statutory period. 43. Common questions of law and fact exist amongst the Class, including: a. Whether Defendant’s Website is a “public accommodation” under the ADA; b. Whether Defendant’s Website is a “place or provider of public accommodation” under the NYCHRL; c. Whether Defendant’s Website denies the full and equal enjoyment of its products, services, facilities, privileges, advantages, or accommodations to people with visual disabilities, violating the ADA; and d. Whether Defendant’s Website denies the full and equal enjoyment of its products, services, facilities, privileges, advantages, or accommodations to people with visual disabilities, violating the NYCHRL. 44. Plaintiff’s claims are typical of the Class. The Class, similarly to the Plaintiff, are severely visually impaired or otherwise blind, and claim that Defendant has violated the ADA or NYCHRL by failing to update or remove access barriers on its Website so either can be independently accessible to the Class. 45. Plaintiff will fairly and adequately represent and protect the interests of the Class Members because Plaintiff has retained and is represented by counsel competent and experienced in complex class action litigation, and because Plaintiff has no interests antagonistic to the Class Members. Class certification of the claims is appropriate under Fed. R. Civ. P. 23(b)(2) because Defendant has acted or refused to act on grounds generally applicable to the Class, making appropriate both declaratory and injunctive relief with respect to Plaintiff and the Class as a whole. 46. Alternatively, class certification is appropriate under Fed. R. Civ. P. 23(b)(3) because fact and legal questions common to Class Members predominate over questions affecting only individual Class Members, and because a class action is superior to other available methods for the fair and efficient adjudication of this litigation. 47. Judicial economy will be served by maintaining this lawsuit as a class action in that it is likely to avoid the burden that would be otherwise placed upon the judicial system by the filing of numerous similar suits by people with visual disabilities throughout the United States. FIRST CAUSE OF ACTION VIOLATIONS OF THE ADA, 42 U.S.C. § 12181 et seq. 48. Plaintiff, on behalf of himself and the Class Members, repeats and realleges every allegation of the preceding paragraphs as if fully set forth herein. 49. Section 302(a) of Title III of the ADA, 42 U.S.C. § 12101 et seq., provides: No individual shall be discriminated against on the basis of disability in the full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations of any place of public accommodation by any person who owns, leases (or leases to), or operates a place of public accommodation. 42 U.S.C. § 12182(a). 50. Defendant’s Website is a public accommodations within the definition of Title III of the ADA, 42 U.S.C. § 12181(7). The Website is a service that is offered to the general public, and as such, must be equally accessible to all potential consumers. 51. Under Section 302(b)(1) of Title III of the ADA, it is unlawful discrimination to deny individuals with disabilities the opportunity to participate in or benefit from the products, services, facilities, privileges, advantages, or accommodations of an entity. 42 U.S.C. § 12182(b)(1)(A)(i). 52. Under Section 302(b)(1) of Title III of the ADA, it is unlawful discrimination to deny individuals with disabilities an opportunity to participate in or benefit from the products, services, facilities, privileges, advantages, or accommodation, which is equal to the opportunities afforded to other individuals. 42 U.S.C. § 12182(b)(1)(A)(ii). 53. Under Section 302(b)(2) of Title III of the ADA, unlawful discrimination also includes, among other things: [A] failure to make reasonable modifications in policies, practices, or procedures, when such modifications are necessary to afford such goods, services, facilities, privileges, advantages, or accommodations to individuals with disabilities, unless the entity can demonstrate that making such modifications would fundamentally alter the nature of such goods, services, facilities, privileges, advantages or accommodations; and a failure to take such steps as may be necessary to ensure that no individual with a disability is excluded, denied services, segregated or otherwise treated differently than other individuals because of the absence of auxiliary aids and services, unless the entity can demonstrate that taking such steps would fundamentally alter the nature of the good, service, facility, privilege, advantage, or accommodation being offered or would result in an undue burden. 42 U.S.C. § 12182(b)(2)(A)(ii)-(iii). 54. The acts alleged herein constitute violations of Title III of the ADA, and the regulations promulgated thereunder. Plaintiff, who is a member of a protected class of persons under the ADA, has a physical disability that substantially limits the major life activity of sight within the meaning of 42 U.S.C. §§ 12102(1)(A)- (2)(A). Furthermore, Plaintiff has been denied full and equal access to the Website, has not been provided services that are provided to other patrons who are not disabled, and has been provided services that are inferior to the services provided to non-disabled persons. Defendant has failed to take any prompt and equitable steps to remedy its discriminatory conduct. These violations are ongoing. 55. Under 42 U.S.C. § 12188 and the remedies, procedures, and rights set forth and incorporated therein, Plaintiff, requests relief as set forth below. SECOND CAUSE OF ACTION VIOLATIONS OF THE NYCHRL 56. Plaintiff, on behalf of himself and the New York City Sub-Class Members, repeats and realleges every allegation of the preceding paragraphs as if fully set forth herein. 57. N.Y.C. Administrative Code § 8-107(4)(a) provides that “It shall be an unlawful discriminatory practice for any person, being the owner, lessee, proprietor, manager, superintendent, agent or employee of any place or provider of public accommodation, because of . . . disability . . . directly or indirectly, to refuse, withhold from or deny to such person, any of the accommodations, advantages, facilities or privileges thereof.” 58. Defendant’s Website is a sales establishment and public accommodations within the definition of N.Y.C. Admin. Code § 8-102(9). 59. Defendant is subject to NYCHRL because it owns and operates its Website, making it a person within the meaning of N.Y.C. Admin. Code § 8-102(1). 60. Defendant is violating N.Y.C. Administrative Code § 8-107(4)(a) in refusing to update or remove access barriers to Website, causing its Website and the services integrated with such Website to be completely inaccessible to the blind. This inaccessibility denies blind patrons full and equal access to the facilities, products, and services that Defendant makes available to the non-disabled public. 61. Defendant is required to “make reasonable accommodation to the needs of persons with disabilities . . . any person prohibited by the provisions of [§ 8-107 et seq.] from discriminating on the basis of disability shall make reasonable accommodation to enable a person with a disability to . . . enjoy the right or rights in question provided that the disability is known or should have been known by the covered entity.” N.Y.C. Admin. Code § 8-107(15)(a). 62. Defendant’s actions constitute willful intentional discrimination against the Sub- Class on the basis of a disability in violation of the N.Y.C. Administrative Code § 8-107(4)(a) and § 8-107(15)(a) in that Defendant has: a. constructed and maintained a website that is inaccessible to blind class members with knowledge of the discrimination; and/or b. constructed and maintained a website that is sufficiently intuitive and/or obvious that is inaccessible to blind class members; and/or c. failed to take actions to correct these access barriers in the face of substantial harm and discrimination to blind class members. 63. Defendant has failed to take any prompt and equitable steps to remedy their discriminatory conduct. These violations are ongoing. 64. As such, Defendant discriminates, and will continue in the future to discriminate against Plaintiff and members of the proposed class and subclass on the basis of disability in the full and equal enjoyment of the products, services, facilities, privileges, advantages, accommodations and/or opportunities of its Website under § 8-107(4)(a) and/or its implementing regulations. Unless the Court enjoins Defendant from continuing to engage in these unlawful practices, Plaintiff and members of the class will continue to suffer irreparable harm. 65. Defendant’s actions were and are in violation of the NYCHRL and therefore Plaintiff invokes his right to injunctive relief to remedy the discrimination. 66. Plaintiff is also entitled to compensatory damages, as well as civil penalties and fines under N.Y.C. Administrative Code § 8-120(8) and § 8-126(a) for each offense as well as punitive damages pursuant to § 8-502. 67. Plaintiff is also entitled to reasonable attorneys’ fees and costs. 68. Under N.Y.C. Administrative Code § 8-120 and § 8-126 and the remedies, procedures, and rights set forth and incorporated therein Plaintiff prays for judgment as set forth below. THIRD CAUSE OF ACTION DECLARATORY RELIEF 69. Plaintiff, on behalf of himself and the Class and New York City Sub-Classes Members, repeats and realleges every allegation of the preceding paragraphs as if fully set forth herein. 70. An actual controversy has arisen and now exists between the parties in that Plaintiff contends, and is informed and believes that Defendant denies, that its Website contains access barriers denying blind customers the full and equal access to the products, services and facilities of its Website, which Defendant owns, operates and controls, fails to comply with applicable laws including, but not limited to, Title III of the Americans with Disabilities Act, 42 U.S.C. §§ 12182, et seq., and N.Y.C. Admin. Code § 8-107, et seq. prohibiting discrimination against the blind. 71. A judicial declaration is necessary and appropriate at this time in order that each of the parties may know their respective rights and duties and act accordingly. PRAYER FOR RELIEF WHEREFORE, Plaintiff respectfully requests this Court grant the following relief: a. A preliminary and permanent injunction to prohibit Defendant from violating the Americans with Disabilities Act, 42 U.S.C. §§ 12182, et seq., N.Y.C. Administrative Code § 8-107, et seq., and the laws of New York; b. A preliminary and permanent injunction requiring Defendant to take all the steps necessary to make its Website into full compliance with the requirements set forth in the ADA, and its implementing regulations, so that the Website is readily accessible to and usable by blind individuals; c. A declaration that Defendant owns, maintains and/or operates its Website in a manner that discriminates against the blind and which fails to provide access for persons with disabilities as required by Americans with Disabilities Act, 42 U.S.C. §§ 12182, et seq., N.Y.C. Administrative Code § 8-107, et seq., and the laws of New York d. An order certifying the Class and Sub-Classes under Fed. R. Civ. P. 23(a) & (b)(2) and/or (b)(3), appointing Plaintiff as Class Representative, and his attorneys as Class Counsel; e. Compensatory damages in an amount to be determined by proof, including all applicable statutory and punitive damages and fines, to Plaintiff and the proposed class and subclasses for violations of their civil rights under New York City Human Rights Law and City Law; f. Pre- and post-judgment interest; g. An award of costs and expenses of this action together with reasonable attorneys’ and expert fees; and h. Such other and further relief as this Court deems just and proper. DEMAND FOR TRIAL BY JURY Pursuant to Fed. R. Civ. P. 38(b), Plaintiff demands a trial by jury on all questions of fact the Complaint raises. Dated: Hackensack, New Jersey September 23, 2020 STEIN SAKS, PLLC By: /s/ David P. Force David P. Force, Esq. dforce@steinsakslegal.com 285 Passaic Street Hackensack, NJ 07601 Tel: (201) 282-6500 Fax: (201) 282-6501 ATTORNEYS FOR PLAINTIFF

civil rights, immigration, family

pBV4F4cBD5gMZwczcZiQ

MUDGE KOELTL 13 CV 0579 IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK Plaintiff, CLASS ACTION COMPLAINT -against- JAN 252013 Defendants. Plaintiff Steven Trimmer ("Plaintiff"), individually and on behalf of all others similarly NATURE OF THE ACTION 1. This lawsuit seeks to recover overtime compensation for Plaintiff and his similarly 2. According to Barnes & Noble's 2012 Annual Report, the Company operates 691 3. Barnes & Noble "cultivates a culture of outgoing, helpful and knowledgeable 4. At Barnes & Noble, ASMs are required to provide customer service while on 5. ASMs typically earn under $50,000 per year. 6. In or around June 2010, Barnes & Noble reclassified their ASMs as non-exempt 7. Prior to the reclassification, regardless of the number of hours worked, ASMs did 8. Defendants classified all ASMs as exempt from overtime pay. 9. ASMs' primary duties are customer service and are similar to the duties 10. ASMs should have always been classified as non-exempt from the overtime 11. Upon information and belief, Defendants applied the same employment policies, 12. Plaintiff brings this action on behalf of himself and similarly situated current and 2 13. Plaintiff also brings this action on behalf of himself and all similarly situated THE PARTIES Steven Trimmer 14. Steven Trimmer ("Trimmer") is an adult individual who is a resident of Brooklyn, 15. From in or around October 2007 to January 8, 2013, Trimmer was employed by 16. As an ASM, Trimmer frequently performed the functions of an hourly bookseller. 17. Trimmer frequently worked over 40 hours per week. On average he worked 45 to 18. Pursuant to Barnes & Noble's policy and pattern or practice, Barnes & Noble did 19. Trimmer is a covered employee within the meaning of the FLSA and the NYLL. 3 20. A written consent form for Trimmer is being filed with this Class Action Barnes & Noble, Inc. 21. Barnes & Noble, Inc. ("B&N") has owned and/or operated the Barnes & Noble 22. B&N is a foreign business corporation organized and existing under the laws of 23. Upon information and belief, B&N's principal executive office is located at 122 24. B&N is a covered employer within the meaning of the FLSA and the NYLL, and, 25. At all times relevant, B&N maintained control, oversight, and direction over 26. B&N applies the same employment policies, practices, and procedures to all 27. Upon information and belief, at all times relevant, B&N's annual gross volume of Barnes & Noble Booksellers, Inc. 28. Barnes & Noble Booksellers, Inc. ("B&N Booksellers") has owned and/or 29. B&N Booksellers is a foreign business corporation organized and existing under 430. Upon information and belief, B&N Booksellers' principal executive office is 31. At all times relevant, B&N Booksellers has been the corporate entity listed on 32. B&N Booksellers is a covered employer within the meaning of the FLSA and the 33. At all times relevant, B&N Booksellers maintained control, oversight, and 34. B&N Booksellers applies the same employment policies, practices, and 35. Upon information and belief, at all times relevant, B&N Booksellers' annual JURISDICTION AND VENUE 36. This Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1337 37. This Court also has jurisdiction over Plaintiff's claims under the FLSA pursuant 38. This Court is empowered to issue a declaratory judgment pursuant to 28 U.S.C. 39. Venue is proper in the Southern District of New York pursuant to 28 U.S.C. - 5 - COLLECTIVE ACTION ALLEGATIONS 40. Plaintiff brings the First Cause of Action, an FLSA claim, on behalf of himself and 41. Defendants are liable under the FLSA for, inter alia, failing to properly compensate 42. Consistent with Defendants' policy and pattern or practice, Plaintiff and the FLSA 43. All of the work that Plaintiff and the FLSA Collective have performed has been 44. As part of its regular business practice, Defendants have intentionally, willfully, and (a) willfully failing to pay its employees, including Plaintiff and the FLSA Collective, premium overtime wages for hours that they worked in excess of 40 hours per workweek; (b) willfully misclassifying Plaintiff and members of the FLSA collective as exempt from the protections of the FLSA; and (c) willfully failing to record all of the time that its employees, including Plaintiff and the FLSA Collective, have worked for the benefit of Defendants. 45. Defendants are aware or should have been aware that federal law required them to pay - 6 - 46. Plaintiff and the FLSA Collective perform or performed the same primary duties. 47. Defendants' unlawful conduct has been widespread, repeated, and consistent. 48. There are many similarly situated current and former ASMs who have been 49. Those similarly situated employees are known to Defendants, are readily CLASS ACTION ALLEGATIONS 50. Plaintiff brings the Second Cause of Action, a NYLL claim, under Rule 23 of the All persons who work or have worked as an Assistant Store Manager and similar employees at Barnes & Noble bookstores in New York between January 25, 2007 and the date of final judgment in this matter (the "Rule 23 Class"). 51. Excluded from the Rule 23 Class are Defendants, Defendants' legal 52. The members of the Rule 23 Class are SO numerous that joinder of all members is 53. Upon information and belief, the size of the Rule 23 Class is at least 50 754. Defendants have acted or have refused to act on grounds generally applicable to 55. Common questions of law and fact exist as to the Rule 23 Class that predominate (a) whether Defendants violated NYLL, Articles 6 and 19, and the supporting New York State Department of Labor regulations; (b) whether Defendants failed to compensate Plaintiff and the Rule 23 Class for hours worked in excess of 40 hours per workweek; (c) whether Defendants misclassified Plaintiff and the Rule 23 Class; (d) whether Defendants failed to keep true and accurate time and pay records for all hours worked by Plaintiff and the Rule 23 Class, and other records required by the NYLL; (e) whether Defendants failed to furnish Plaintiff and the Rule 23 Class with an accurate statement of wages, hours worked, rates paid, and the gross wages as required by the NYLL; (f) whether Defendants' policy of failing to pay workers was instituted willfully or with reckless disregard of the law; and (g) the nature and extent of class-wide injury and the measure of damages for those injuries. 56. The claims of Plaintiff are typical of the claims of the Rule 23 Class he seeks to - 8 57. Plaintiff will fairly and adequately represent and protect the interests of the 58. A class action is superior to other available methods for the fair and efficient 59. This action is properly maintainable as a class action under Federal Rule of Civil 9 COMMON FACTUAL ALLEGATIONS 60. Throughout his employment with Defendants, Plaintiff and the members of the 61. Plaintiff's duties were assigned to him by his superiors. 62. Defendants were aware that Plaintiff and the Class Members worked more than 63. Defendants did not keep accurate records of hours worked by Plaintiff - 64. Plaintiff and the Class Members' primary duties were routine, non-exempt tasks a. assisting customers find merchandise, b. handle returns and exchanges, C. make reading recommendations to potential customers, d. up-selling Barnes and Noble products to customers, e. cleaning and operating the cash register in the café area, f. stocking shelves; and g. operating the cash register. 65. Plaintiff and Class Members spent the majority of their time assisting customers - 1066. Plaintiff and Class Members' duties did not differ substantially from the duties of 67. Plaintiff and Class Members' primary job duties as ASMs did not include: a. Hiring; b. Firing; C. Scheduling; and d. Disciplining other employees. 68. Plaintiff's primary duty was not directly related to Defendants or Defendants' a. was not involved in planning Defendants' long or short term business objectives; b. could not formulate, affect, implement or interpret Defendants' management policies or operating practices; C. did not carry out major assignments that affected Defendants' business operations; d. did not have authority to commit Defendants in matters that have significant financial impact; and e. could not waive or deviate from Defendants' established policies or procedures without prior approval. FIRST CAUSE OF ACTION Fair Labor Standards Act - Overtime Wages 69. Plaintiff realleges and incorporates by reference all allegations in all preceding 70. Defendants have engaged in a widespread pattern and practice of violating the 11 - 71. Plaintiff has consented, in writing, to be a party to this action, pursuant to 29 72. At all relevant times, Plaintiff and other similarly situated current and former 73. The overtime wage provisions set forth in §§ 201 et seq. of the FLSA apply to 74. Defendants are an employer engaged in commerce and/or the production of goods 75. At all times relevant, Plaintiff was an employee within the meaning of 29 U.S.C. 76. Defendants have failed to pay Plaintiff and other similarly situated current and 77. Defendants' violations of the FLSA, as described in this Class and Collective 78. Because Defendants' violations of the FLSA have been willful, a three-year 79. As a result of Defendants' willful violations of the FLSA, Plaintiff and all other - 12 - 80. As a result of the unlawful acts of Defendants, Plaintiff and other similarly SECOND CAUSE OF ACTION New York Labor Law - Unpaid Overtime 81. Plaintiff realleges and incorporates by reference all allegations in all preceding 82. Defendants engaged in a widespread pattern, policy, and practice of violating the 83. At all times relevant, Plaintiff and the members of the Rule 23 Class have been 84. Plaintiff and the Rule 23 Class are covered by the NYLL. 85. Defendants employed Plaintiff and the Rule 23 Class as an employer. 86. Defendants have failed to pay Plaintiff and the Rule 23 Class overtime wages to 87. Defendants failed to pay Plaintiff and the Rule 23 Class overtime at a wage rate of 88. Defendants failed to keep, make, preserve, maintain, and furnish accurate records 89. Defendants' violations of the NYLL, as described in this Class and Collective 13 - 90. Due to Defendants' violations of the NYLL, Plaintiff and the Rule 23 Class are PRAYER FOR RELIEF WHEREFORE, Plaintiff, individually and on behalf of all other similarly situated A. That, at the earliest possible time, Plaintiff be allowed to give notice of this B. Unpaid overtime pay and an additional and equal amount as liquidated damages C. Certification of this case as a class action pursuant to Rule 23 of the Federal Rules D. Designation of Plaintiff as representative of the Rule 23 Class and counsel of E. Issuance of a declaratory judgment that the practices complained of in this Class- 14 - F. Unpaid overtime pay and liquidated damages permitted by law pursuant to the G. Prejudgement and post-judgment interest; H. An injunction requiring Defendant to pay all statutorily required wages and cease I. Reasonable attorneys' fees and costs of the action; and J. Such other relief as this Court shall deem just and proper. January 25, 2013 Respectfully submitted, Brow Do Brian S. Schaffer FITAPELLI & SCHAFFER, LLP Joseph A. Fitapelli Brian S. Schaffer Frank J. Mazzaferro 475 Park Avenue South, 12th Floor New York, New York 10016 Telephone: (212) 300-0375 Attorneys for Plaintiff and the Putative Class - 15 - FAIR LABOR STANDARDS ACT CONSENT 1. I consent to be a party plaintiff in a lawsuit against Barnes & Noble and/or related 2. By signing and returning this consent form, I hereby designate Fitapelli & SC Steven M. TRIMMES

employment & labor

PMRkDYcBD5gMZwcz_XsW

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE FRASER CONSTRUCTION COMPANY, INC., individually and on behalf of all others similarly situated, CASE NO. CLASS ACTION COMPLAINT Plaintiff, v. CEDAR SHAKE & SHINGLE BUREAU, a Washington nonprofit corporation; WALDUN FOREST PRODUCTS, LTD, a British Columbia corporation; ANBROOK INDUSTRIES LTD, a British Columbia corporation; and G&R CEDAR LTD., a British Columbia corporation, Defendants. TABLE OF CONTENTS I. NATURE OF THE ACTION .............................................................................................. 1 II. JURISDICTION AND VENUE ......................................................................................... 4 III. PARTIES ............................................................................................................................. 5 A. Plaintiff ................................................................................................................... 5 B. Defendants .............................................................................................................. 5 IV. CO-CONSPIRATORS ........................................................................................................ 7 V. TRADE AND COMMERCE .............................................................................................. 9 VI. FACTUAL ALLEGATIONS ............................................................................................ 10 A. Relevant Products ................................................................................................. 10 B. Industry Background ............................................................................................. 11 1. CSSB and the Cert-Label Trademark ....................................................... 11 2. The Domestic Cedar Shakes and Shingles Market ................................... 13 C. The structure and characteristics of the cedar shakes and shingles market make the conspiracy economically plausible. ...................................................................... 15 1. The cedar shakes and shingles market is vertically integrated. ................ 15 2. Demand for cedar shakes and shingles is inelastic. .................................. 15 3. Cedar shakes and shingles are commodity-like products. ........................ 15 4. There are no significant substitutes for cedar shakes and shingles. .......... 16 5. The cedar shakes and shingles market is highly concentrated. ................. 17 6. The voting structure of the CSSB concentrates power in the hands of the largest manufacturers. ............................................................................... 18 7. Defendants had ample opportunity to conspire. ....................................... 19 8. High entry barriers exist in the cedar shakes and shingles market. .......... 20 D. The performance observed in the cedar shakes and shingles industry makes the conspiracy economically plausible. ...................................................................... 21 1. The prices of cedar shakes and shingles since at least 2011 cannot be explained by ordinary market forces. ........................................................ 21 2. Cedar shakes and shingles inventories significantly have increased in recent years compared to production levels. ............................................. 26 E. Traditional conspiracy evidence demonstrates the conspiracy’s existence. ......... 27 VII. CLASS ACTION ALLEGATIONS .................................................................................. 30 VIII. ANTITRUST INJURY ..................................................................................................... 36 IX. FRAUDULENT CONCEALMENT AND TOLLING ..................................................... 37 X. CLAIMS FOR RELIEF .................................................................................................... 38 A. Claims Under Federal Law ................................................................................... 38 1. Violation of Section 1 of the Sherman Act ............................................... 38 B. State Law Antitrust Claims ................................................................................... 39 1. Violation of Arizona’s Uniform State Antitrust Act (Arizona Revised Statutes §§ 44-1401, et seq.) on behalf of the Arizona Class ................... 39 2. Violation of California’s Cartwright Act (Cal. Bus. & Prof. Code § 1600, et seq.) on behalf of the California Class .................................................. 40 3. Violation of the Colorado Revised Statutes §§ 6-4-101, et seq. on behalf of the Colorado Class. ................................................................................... 42 4. Violation of the District of Columbia Antitrust Act (D.C. Code § 28-4501, et seq.) on behalf of the District of Columbia Class ................................. 43 5. Violation of the Illinois Antitrust Act (740 §§ ILCS 10/1, et seq.) on behalf of the Illinois Class ................................................................................... 44 6. Violation of Iowa Competition Law (Iowa Code §§ 553.1, et seq.) on behalf of the Iowa Class ............................................................................ 45 7. Violation of the Kansas Restraint of Trade Act (Kan. Stat. Ann. §§ 50-112, et seq.) on behalf of the Kansas Class....................................................... 46 8. Violation of Maine’s Antitrust Statute (Me. Rev. Stat. Ann. Tit. 10, § 1101, et seq.) on behalf of the Maine Class ........................................................ 47 9. Violation of the Michigan Antitrust Reform Act (Mich. Comp. Laws §§ 445.771, et seq.) on behalf of the Michigan Class .................................... 47 10. Violation of Minnesota Antitrust Law (Minn. Stat. §§ 325D.49, et seq.) on behalf of the Minnesota Class ................................................................... 48 11. Violation of the Mississippi Antitrust Statute (Miss. Code Ann. § 74-21-1, et seq.) on behalf of the Mississippi Class ................................................ 49 12. Violation of the Missouri Merchandising Practices Act (Mo. Stat. § 407.010, et seq.) on behalf of the Missouri Class ..................................... 50 13. Violation of the Nebraska Junkin Act (Neb. Rev. Stat. § 59-801, et seq.) on behalf of the Nebraska Class..................................................................... 51 14. Violations of the Nevada Unfair Trade Practices Act (Nev. Rev. Stat § 598A.030(1)) on behalf of the Nevada Class ............................................ 52 15. Violation of New Hampshire’s Antitrust Statute (N.H. Rev. Stat. Ann. §§ 356, et seq.) on behalf of the New Hampshire Class ................................ 53 16. Violation of the New Mexico Antitrust Act (N.M. Stat. Ann. §§ 57-1-1, et seq.) on behalf of the New Mexico Class. ................................................ 54 17. Violation of New York General Business Laws §§ 340, et seq., on behalf of the New York Class .............................................................................. 54 18. Violation of the North Carolina General Statutes §§ 75-1, et seq., on behalf of the North Carolina Class............................................................ 55 19. Violation of the North Dakota Uniform State Antitrust Act (N.D. Cent. Code §§ 51-08.1, et seq.) on behalf of the North Dakota Class ............... 56 20. Violation of the Oregon Antitrust Law (Or. Rev. Stat §§ 646.705, et seq.) on behalf of the Oregon Class ................................................................... 57 21. Violation of the Rhode Island Antitrust Act (R.I. Gen. Laws §§ 6-36-1, et seq.) on behalf of the Rhode Island Class ................................................. 57 22. Violation of the South Dakota Antitrust Statute (S.D. Codified Laws §§ 37-1, et seq.) on behalf of the South Dakota Class ................................... 58 23. Violation of the Tennessee Trade Practices Act (Tenn. Code §§ 47-25-101, et seq.) on behalf of the Tennessee Class .................................................. 59 24. Violation of the Utah Antitrust Act (Utah Code Ann. § 76-10-3101, et seq.) on behalf of the Utah Class ....................................................................... 61 25. Violation of the West Virginia Antitrust Act (W. Va. Code § 47-18-1, et seq.) on behalf of the West Virginia Class ................................................ 61 26. Violation of the Wisconsin Antitrust Act (Wis. Stat. §§ 133.01, et seq.) on behalf of the Wisconsin Class ................................................................... 62 C. Violations of State Consumer Protection Law ...................................................... 63 1. Violation of Alaska Statute § 45.50.471, et seq., on behalf of the Alaska Class .......................................................................................................... 63 2. Violation of the Colorado Consumer Protection Act (Colo. Rev. Stat. §§ 6- 1-101, et seq.) on behalf of the Colorado Class ........................................ 64 3. Violation of California’s Unfair Competition Law (Cal. Bus. & Prof. Code §§ 17200, et seq.) (“UCL”) on behalf of the Colorado Class ................... 65 4. Violation of Delaware’s Consumer Fraud Act (6 Del. Code §§ 2511, et seq.) on behalf of the Delaware Class ....................................................... 67 5. Violation of the District of Columbia Consumer Protection Procedures Act (D.C. Code § 28-3901, et seq.) on behalf of the District of Columbia Class ................................................................................................................... 68 6. Violation of the Florida Deceptive and Unfair Trade Practices Act (Fla. Stat. § 501.201(2), et seq.) on behalf of the Florida Class ........................ 69 7. Violation of the Hawaii Revised Statutes Annotated §§ 480-1, et seq., on behalf of the Hawaii Class ........................................................................ 70 8. Violation of the Illinois Consumer Fraud and Deceptive Business Practices Act (Ill. Comp. Stat. Ann. 815 Ill. Comp. Stat. Ann. 505/10a, et seq.) on behalf of the Illinois Class ........................................................................ 71 9. Violation of the Massachusetts Consumer Protection Act (Mass. Gen. Laws Ch. 93A § 1, et seq.) on behalf of the Massachusetts Class ............ 72 10. Violation of the Michigan Consumer Protection Act (Mich. Comp. Laws Ann. §§ 445.901, et seq.) on behalf of the Michigan Class ...................... 73 11. Violation of the Minnesota Consumer Fraud Act (Minn. Stat. § 235F.68, et seq.) on behalf of the Minnesota Class ..................................................... 74 12. Violation of the Montana Unfair Trade Practices and Consumer Protection Act of 1970 (Mont. Code §§ 30-14-103, et seq.) on behalf of the Montana Class .......................................................................................................... 75 13. Violation of the Nebraska Consumer Protection Act (Neb. Rev. Stat. § 59- 1602) on behalf of the Nebraska Class ..................................................... 76 14. Violation of the Nevada Deceptive Trade Practices Act (Nev. Rev. Stat § 598.0903, et seq.) on behalf of the Nevada Class ..................................... 77 15. Violation of the New Hampshire Consumer Protection Act (N.H. Rev. Stat. Ann. tit. XXXI, § 358-A, et seq.) on behalf of the New Hampshire Class .......................................................................................................... 78 16. Violation of the New Mexico Unfair Practices Act (N.M. Stat. Ann. §§ 57- 12-3, et seq.) on behalf of the New Mexico Class .................................... 78 17. Violation of the North Carolina Unfair Trade and Business Practices Act (N.C. Gen. Stat. § 75-1.1, et seq.) on behalf of the North Carolina Class 80 18. Violation of the North Dakota Unfair Trade Practices Law (N.D. Cent. Code § 51-10-01, et seq.) on behalf of the North Dakota Class ............... 81 19. Violation of the Oregon Unlawful Trade Practices Act (Or. Rev. Stat. § 646.608, et seq.) on behalf of the Oregon Class ....................................... 81 20. Violation of the Rhode Island Deceptive Trade Practices Act (R.I. Gen. Laws § 6-13.1-1, et seq.) on behalf of the Rhode Island Class ................. 83 21. Violation of South Carolina’s Unfair Trade Practices Act (S.C. Code Ann. §§ 39-5-10) on behalf of the South Carolina Class ................................... 84 22. Violation of South Dakota Deceptive Trade Practices and Consumer Protection Law (S.D. Codified Laws § 37-24-6) on behalf of the South Dakota Class ............................................................................................. 85 23. Violation of the Utah Consumer Sales Practices Act (Utah Code Ann. §§ 13-11-1, et seq.) on behalf of the Utah Class ............................................ 86 24. Violation of the Utah Unfair Practices Act (Utah Code Ann. §§ 13-5-1, et seq.) on behalf of the Utah Class .............................................................. 87 25. Violation of Vermont Stat. Ann. 9 § 2453, et seq. on behalf of the Vermont Class .......................................................................................................... 88 26. Violation of the Virginia Consumer Protection Act of 1997 Va. Code § 59.1-196, et seq. on behalf of the Virginia Class ...................................... 88 D. Unjust Enrichment ................................................................................................ 90 XII. JURY TRIAL DEMANDED ............................................................................................ 91 Plaintiff Fraser Construction Company, Inc. (“Plaintiff”) brings this action on behalf of itself and on behalf of numerous State damages classes (defined below) and a nationwide injunctive relief class (collectively, the “Classes”) consisting of all individuals and entities in the United States that indirectly purchased cedar shakes and shingles for resale that were manufactured by a Manufacturer Defendant or co-conspirator named in this complaint from at least as early as January 1, 2011 through the present (“Class Period”). I. NATURE OF THE ACTION 1. This is an antitrust conspiracy case involving cedar shakes and shingles. Cedar shakes are rustic-looking roof shingles split by hand. They have a relatively rough appearance and are almost always used for roofing. Cedar shingles, on the other hand, are uniformly sawn by machine for a consistent look and thickness. They are used for both sidewalls and roofing applications. 2. Three Defendants—Defendant Anbrook Industries Ltd. (“Anbrook”), Defendant Waldun Forest Products Ltd. (“Waldun”), and Defendant G&R Cedar Ltd. (“G&R”) (collectively, “Manufacturer Defendants”)—as well as other non-defendant co-conspirator manufacturers produce cedar shakes and shingles and sell them to direct purchasers, which predominantly if not exclusively consist of wholesalers. Those direct purchasers then sell cedar shakes and shingles to indirect purchasers who, in turn, resell them to other entities like contractors and end users. Plaintiff is an indirect purchaser who resells cedar shakes and shingles to other entities and individuals further down the distribution chain. 3. The remaining Defendant, the Cedar Shake & Shingle Bureau (“CSSB”), is the main trade association serving the cedar shake and shingle industry in North America. The CSSB controls the “Certi-Label” trademark placed on cedar shakes and shingles, including the Certi- Grade, Certi-Sawn, and Certi-Split trademark labels. CSSB Certi-Label products account for about 95% of the high-end cedar shake and shingle products sold in the United States. Each of the Manufacturer Defendants, as well as several other co-conspirator manufacturers, sit on the CSSB’s Board of Directors. During the Class Period, Manufacturer Defendants and their co- conspirator manufacturers regularly attended in-person meetings held by the CSSB. 4. This action arises out of a conspiracy orchestrated by Defendants to fix, increase, maintain, or stabilize the price of cedar shakes and shingles and reduce price competition among cedar shake and shingle manufacturers in violation of federal antitrust law as well as the antitrust, consumer protection, and unjust enrichment laws of numerous states. Defendants’ conspiracy began at least as early as January 1, 2011 and continues through today. 5. Although Plaintiff has not yet had the opportunity to obtain any discovery from Defendants, Plaintiff already can allege numerous highly-detailed facts that demonstrate the existence, let alone plausibility, of the alleged conspiracy. 6. Throughout the Class Period, senior high-ranking personnel employed by Manufacturer Defendants, including Waldun’s Curtis Walker, Anbrook’s Brooke Meeker, and G&R Cedar’s Stuart Dziedzic, expressly discussed and agreed on pricing levels to charge purchasers on numerous occasions, including in person and over the telephone. 7. For example, in late 2018, Waldun’s Mr. Walker paid a visit to co-conspirator Watkins Sawmills Ltd. (“Watkins”). During this meeting, Mr. Walker told Kris Watkins, Chief of Operations of Watkins, that “Waldun Forest Products never dropped their pricing” and that all CSSB-affiliated manufacturers should keep their prices at consistent levels. When Mr. Watkins noted that an emerging competitor, S&W Forest Products Ltd. (“S&W”), discounted its prices during months of lowered demand, Mr. Walker responded, “Yeah, well we just need to get rid of that guy.” 8. In addition, Manufacturer Defendants have concentrated their power in the CSSB, partly due to the consolidation of the shake and shingle industry, and partly due to the voting structure of the CSSB, which weighs votes based on each manufacturer member’s annual cedar shake and shingle production. 9. Through this consolidation of power over the CSSB, Manufacturer Defendants have used their weighted voting power to terminate the membership of CSSB members who do not follow the price leadership of the Manufacturer Defendants. Accordingly, the Manufacturer Defendants disallowed low-cost competitors from obtaining Certi-Label approval, regardless of the quality of their work. These low-cost competitors’ inability to use Certi-Labels has prevented them from pricing their products at a level that would permit them to stay in business, and thus effectively eliminated them from the cedar shake and shingles market. 10. One such recently terminated manufacturer is S&W. Defendants conspired to and did terminate the CSSB membership of S&W in late 2018 based on a pretextual reason that was both false and not applied to other manufacturers that did not undercut Manufacturer Defendants on price. 11. Plaintiff does not rely only on traditional conspiracy evidence of the type noted above. The structure and characteristics of the cedar shakes and shingles market, in addition to its performance (i.e., pricing), also demonstrates the plausibility of the alleged conspiracy. 12. The following industry characteristics, which are seen in many industries victimized by price-fixing, render the existence of the alleged conspiracy plausible: the industry is highly vertically integrated; product demand is inelastic; the products are commodity-like; there are no good substitute products; the market is highly-concentrated; barriers to enter the market are high; and there is ample opportunity to conspire. 13. Plaintiff also has conducted a thorough economic analysis of pricing in the industry with the assistance of an experienced economics consulting firm. This proprietary analysis, which is discussed and illustrated in several charts below, demonstrates that the pricing of cedar shake and shingles sold in the United States has increased substantially since January 1, 2011 and that these price increases cannot be explained by normal market forces such as raw material costs or supply and demand. 14. Defendants’ anticompetitive actions had the intended purpose and effect of artificially fixing, raising, maintaining, and stabilizing the price of cedar shakes and shingles to Plaintiff and other members of the Classes in the United States. 15. As a result of Defendants’ unlawful conduct, Plaintiff and other members of the Classes paid artificially inflated prices for cedar shakes and shingles. These prices exceeded the amount they would have paid for cedar shakes and shingles if the price had been set by a competitive, collusion-free market. Accordingly, Plaintiff and other members of the Classes suffered an antitrust injury as a result of Defendants’ conduct. II. JURISDICTION AND VENUE 16. Plaintiff brings this action under Section 16 of the Clayton Act (15 U.S.C. § 26) to secure injunctive relief against Defendants for violating Section 1 of the Sherman Act (15 U.S.C. § 1). This Court has subject matter jurisdiction under 28 U.S.C. §§ 1331, 1337, and Sections 4 and 16 of the Clayton Act, 15 U.S.C. §§ 15(a) and 26. 17. Plaintiff asserts claims for actual and exemplary damages and injunctive relief pursuant to state antitrust, unfair competition, and consumer protection laws, and seeks to obtain restitution, recover damages, and secure other relief against Defendants for violation of those state laws. Plaintiff and the other members of the Classes also seek attorney’s fees, costs, and other expenses under federal and state laws. This Court has jurisdiction over the subject matter of this action pursuant to 28 U.S.C. §§ 1332(d) and 1367 because: (a) this is a class action where the matter or controversy exceeds the sum of $5,000,000, exclusive of interest and costs, and in which some members of the proposed Classes are citizens of a state different from some Defendants; and (b) Plaintiff’s state law claims form part of the same case or controversy as their federal claims under Article III of the United States Constitution. 18. Venue is appropriate in this District under 28 U.S.C. § 1391(b), (c) and (d) because one or more Defendants resided or transacted business in this District and is licensed to do business or is doing business in this District, and because a substantial portion of the affected interstate commerce described herein was carried out in this District. 19. This Court has personal jurisdiction over each Defendant because each Defendant: (a) transacted business throughout the United States, including in this District; (b) manufactured, sold, shipped, or delivered substantial quantities of cedar shakes and shingles throughout the United States, including this District; (c) had substantial contacts with the United States, including this District; or (d) engaged in an antitrust conspiracy that was directed at and had a direct, foreseeable, and intended effect of causing injury to the business or property of persons residing in, located in, or doing business throughout the United States, including this District. 20. The activities of the Defendants and all co-conspirators, as described herein, were within the flow of, were intended to, and did have direct, substantial, and reasonably foreseeable effects on the foreign and interstate commerce of the United States. 21. No other forum would be more convenient for the parties and witnesses to litigate this case. III. PARTIES A. Plaintiff 22. Plaintiff Fraser Construction Company, Inc. is a Massachusetts corporation with a principal place of business in Mashpee, Massachusetts. Plaintiff purchased cedar shakes and shingles bearing the CSSB Certi-Label trademark indirectly from one or more of the Manufacturer Defendants or co-conspirator manufacturers for resale during the Class Period. B. Defendants 23. Defendant Cedar Shake & Shingle Bureau is a Washington nonprofit corporation that is the only trade association serving the cedar shake and shingle industry in the United States and Canada. The CSSB is headquartered in Mission, British Columbia, and maintains an office in Sumas, Washington. 24. Defendant Anbrook Industries Ltd. is a British Columbia corporation with its principal place of business in Pitt Meadows, British Columbia. Anbrook is one of the largest cedar shake and shingle manufacturers in the world. It is a member of the CSSB, and its President, Brooke Meeker, sits on the CSSB’s Board of Directors, acting as its Chairman. Anbrook owns and operates a cedar shake and shingle manufacturing facility in Pitt Meadows, British Columbia. Anbrook manufactures Certigrade Shingles, Certi-Sawn Shakes, and Certi- Split Shakes. During the Class Period, Anbrook or its predecessors, wholly-owned or controlled subsidies, or affiliates sold cedar shakes and shingles in interstate commerce, directly or through its wholly-owned or controlled affiliates, to purchasers in the United States. 25. Defendant Waldun Forest Products Ltd. is a British Columbia corporation with its principal place of business in Maple Ridge, British Columbia. Waldun is “the largest company in the world manufacturing such a selection of cedar products.” It is a member of the CSSB, and its Director, Curtis Walker, sits on CSSB’s Board of Directors, serving as its Secretary/Treasurer. Waldun owns and operates a cedar shake and shingle manufacturing facility in Maple Ridge, British Columbia. Waldun manufactures Certigrade Shingles, Certi-Sawn Shakes, and Certi-Split Shakes, as well as Certi-Ridge, Custom Dimension products, Sidewall, and Specialty Cuts. During the Class Period, Waldun or its predecessors, wholly-owned or controlled subsidies, or affiliates sold cedar shakes and shingles in interstate commerce, directly or through its wholly- owned or controlled affiliates, to purchasers in the United States. 26. Defendant G&R Cedar Ltd. is a British Columbia corporation headquartered in Matsqui, British Columbia. G&R is a self-described industry leader in the cedar shake and shingle industry. It is a member of the CSSB, and its Sales Manager, Stuart Dziedzic, sits on CSSB’s Board of Directors. G&R owns and operates a cedar shake and shingle manufacturing facility in Matsqui, British Columbia and an additional sidewall shingle manufacturing facility in Chilliwack, British Columbia. G&R manufactures Certigrade Shingles, Certi-Sawn Shakes, and Certi-Split Shakes, as well as Custom Dimension products, Sidewall, and Specialty Cuts. During the Class Period, G&R or its predecessors, wholly-owned or controlled subsidies, or affiliates sold cedar shakes and shingles in interstate commerce, directly or through its wholly- owned or controlled affiliates, to purchasers in the United States. 27. “Defendant” or “Defendants” as used herein includes, in addition to those named specifically above, all of the named Defendants’ predecessors, including cedar shake and shingle companies that merged with or were acquired by the named Defendants and each named Defendant’s wholly-owned or controlled subsidiaries or affiliates that sold cedar shakes and shingles in interstate commerce, directly or through its wholly-owned or controlled affiliates, to purchasers in the United States during the Class Period. 28. To the extent that subsidiaries and divisions within each Defendant’s corporate family sold or distributed cedar shakes and shingles to purchasers, these subsidiaries played a material role in the conspiracy alleged in this Complaint because Defendants wished to ensure that the prices paid for such cedar shakes and shingles would not undercut the artificially raised and inflated pricing that was the aim and intended result of Defendants’ coordinated and collusive behavior as alleged herein. Thus, all such entities within the corporate family were active, knowing participants in the conspiracy alleged herein, and their conduct in selling, pricing, distributing and collecting monies from Plaintiff and the members of the Classes for cedar shakes and shingles was known to and approved by their respective corporate parent named as a Defendant in this Complaint. 29. Each of the Defendants named herein acted as the agent or joint-venturer of or for the other Defendants with respect to the acts, violations, and common course of conduct alleged 30. Defendants are also liable for acts done in furtherance of the alleged conspiracy by companies they acquired through mergers and acquisitions. 31. Whenever reference is made to any act of any corporation, the allegation means that the corporation engaged in the act by or through its officers, directors, agents, employees, or representatives while they were actively engaged in the management, direction, control, or transaction of the corporation’s business or affairs. IV. CO-CONSPIRATORS 32. A&R Cedar, Inc. (“A&R”) is a Washington corporation headquartered in Hoquiam, Washington. It is a member of the CSSB, and a member of its senior management team, Cecilia Acuna, sits on the CSSB Board of Directors. A&R manufactures Certigrade Shingles and Certi-Sawn Shakes, as well as Certi-Ridge, Custom Dimension products, and Sidewall. During the Class Period, A&R or its predecessors, wholly-owned or controlled subsidies, or affiliates sold cedar shakes and shingles in interstate commerce, directly or through its wholly-owned or controlled affiliates, to purchasers in the United States. 33. Best Shingle Sales Inc. (“Best”) is a Washington corporation headquartered in Hoquiam, Washington. It is a member of the CSSB, and its owner, Terry Kost, sits on CSSB’s Board of Directors. Best manufactures Certigrade Shingles and Certi-Sawn Shakes, as well as Sidewall. During the Class Period, Best or its predecessors, wholly-owned or controlled subsidies, or affiliates sold cedar shakes and shingles in interstate commerce, directly or through its wholly-owned or controlled affiliates, to purchasers in the United States. 34. Premium Cedar Products Ltd. (“Premium”) is a British Columbia corporation headquartered in Mission, British Columbia. It is a member of the CSSB, and one of its senior managers, Ed Watkins, sits on CSSB’s Board of Directors and served as its Past Chairman. Premium manufactures Certigrade Shingles, Certi-Ridge, Certi-Sawn Shakes, and Certi-Split Shakes, as well as Custom Dimension products and Specialty Cuts. During the Class Period, Premium or its predecessors, wholly-owned or controlled subsidies, or affiliates sold cedar shakes and shingles in interstate commerce, directly or through its wholly-owned or controlled affiliates, to purchasers in the United States. 35. Watkins Sawmills Ltd. is a British Columbia corporation headquartered in Mission, British Columbia. It has common ownership and management with Premium, and even uses the same main telephone number. It is a member of the CSSB, and its President, Ed Watkins, sits on CSSB’s Board of Directors and served as its Past Chairman. Watkins manufactures Certigrade Shingles, Certi-Sawn Shakes, and Certi-Split Shakes, as well as Certi- Ridge, Custom Dimension products, Sidewall, and Specialty Cuts. During the Class Period, Watkins or its predecessors, wholly-owned or controlled subsidies, or affiliates sold cedar shakes and shingles in interstate commerce, directly or through its wholly-owned or controlled affiliates, to purchasers in the United States. 36. Various other persons, firms, and corporations not currently named as defendants have participated as co-conspirators with Defendants and have performed acts and made statements in furtherance of the conspiracy. Defendants are jointly and severally liable for the acts of their co-conspirators whether or not named as defendants in this Complaint. V. TRADE AND COMMERCE 37. During the Class Period, Defendants engaged in conduct both inside and outside of the United States that caused direct, substantial, and reasonably foreseeable and intended anticompetitive effects upon interstate commerce within the United States. 38. During the Class Period, each Manufacturer Defendant, directly or through its subsidiaries or other affiliates, sold cedar shakes and shingles in the United States in a continuous and uninterrupted flow of interstate commerce and foreign commerce, including through and into this judicial district. 39. During the Class Period, Manufacturer Defendants and Co-Conspirators collectively possessed a sizeable majority share of the market for cedar shakes and shingles in the United States. 40. Cedar shakes and shingles manufactured abroad by Manufacturer Defendants and sold as stand-alone products are goods brought into the United States for sale and therefore constitute import commerce. To the extent that any cedar shakes and shingles are purchased in the United States, and do not constitute import commerce, Defendants’ unlawful conduct with respect thereto, as more fully alleged herein during the Class Period, had and continues to have a direct, substantial, and reasonably foreseeable effect on United States commerce. The anticompetitive conduct, and its effect on United States commerce described herein, caused antitrust injury to Plaintiff and members of the Classes in the United States. 41. Defendants’ business activities substantially affected interstate trade and commerce in the United States and caused antitrust injury in the United States. 42. By reason of the unlawful activities hereinafter alleged, Defendants substantially affected commerce throughout the United States, causing injury to Plaintiff and members of the Classes. Defendants, directly and through their agents, engaged in activities affecting all states, to fix, raise, maintain or stabilize prices for cedar shakes and shingles, which unreasonably restrained trade and adversely affected the market for such products. VI. FACTUAL ALLEGATIONS A. Relevant Products 43. Cedar shakes are rustic looking and used in roofing. Cedar shingles, which are used in both roofing and sidewall applications, are uniformly sawn for a consistent and even thickness and provide a uniform machine-produced look. According to G&R Cedar’s website, “[t]he main difference between a shingle and a shake is that a shingle is sawn on both sides for a smooth, tailored appearance, while a shake is split on the face, and sawn on the back, for a rougher, rustic look.” 44. Illustrative examples of a cedar shake and a cedar shingle are shown below: Cedar Shake (Split and Resawn) Cedar Shingle (Sawn) 45. As used in this Complaint, “cedar shakes and shingles” and “high-end cedar shake and shingles” refers to the following cedar products bearing the Certi-Label of the CSSB: Certigrade Shingles, Certi-Sawn Shakes, and Certi-Split Shakes. 46. CSSB Certi-Labeled shakes and shingles are all produced from the same raw materials: cedar logs and cut blocks. B. Industry Background 1. CSSB and the Cert-Label Trademark 47. For more than a century, the CSSB has been the preeminent regulator of the cedar shake and shingle industry in the United States and Canada. 48. The CSSB drafted and holds the copyright to the CSSB-97 grading and packing 49. CSSB-97 grading rules cover two species of cedar: Western Red Cedar and Alaskan Yellow Cedar. 50. CSSB-97 grading rules, which govern the production and packing of shake and shingle products, have been widely incorporated into building codes throughout the United States, Canada and internationally. 51. The CSSB has aggressively and successfully promoted its CSSB-97 grading rules and its trademarked Certi-Label shakes and shingles. In order to distinguish products of different qualities, each certification has stringent requirements setting forth how the product will “grade,” taking into consideration numerous factors such as how clear the wood is, the thickness of the product, and the grain of the wood. For instance, Certigrade Shingles are broken down into Number 1 Grade, Number 2 Grade, Number 3 Grade, and Undercoursing Grade products. 52. Membership in the CSSB trade association is a necessary prerequisite to any manufacturer of cedar shakes and shingles being able to effectively compete in the domestic market for high-end shakes and shingles. 53. The Certi-Label is the gold standard in the shake and shingle business. A mill must have access to that label to sell its products in the high-end shake and shingle market in the United States. The CSSB label is perceived as guaranteeing a certain quality product. Due to that reputation, many architects and builders require Certi-Label products in their building specifications. Along with those spec jobs, customers in many regions of the country such as the northeastern United States, Pacific Northwest, Mountain West, and Midwest, purchase Certi- Labeled products nearly exclusively. 54. As a result, during the last 20 years, virtually all of the manufacturers of high-end cedar shakes and shingles utilized on the roofs and exterior walls of residential dwellings and commercial buildings in the United States have been members of the CSSB. 55. The CSSB aggressively promotes its Certi-Label. For example, the CSSB website contains a 20-page brochure explaining how to read CSSB Certi-Labels and different shake and shingle grades, which includes examples of all CSSB Certi-Label products: 56. The CSSB also warns consumers about the potential use of products bearing competing labels that are not CSSB Certi-Labels, further amplifying the purported difference between products bearing the trade association’s trademark and those that do not. For example, the CSSB issued the following “Consumer Service Alert”: 2. The Domestic Cedar Shakes and Shingles Market 57. The United States cedar shakes and shingles market is a national market valued in the hundreds of millions of dollars annually. 58. A July 2018 report by BCC Research titled “Residential Roofing Materials: The North American Market” estimates 2018 total North American residential roofing material market sales of “nearly $13.0 billion.” Furthermore, based on declarations filed by experienced industry participants, including Terry Adkins and Lynne Christensen, in a lawsuit that S&W recently filed, wood products represent approximately 2.1% to 3% of the residential roofing material market. Using these statements and figures, it is estimated that the annual volume of wood roofing products sold in North America is between approximately $270 million and $390 million, with the lion’s share sold into the United States. 59. Cedar is the most popular wood siding and roofing choice and offers significant advantages for insulation and durability over the more common asphalt shingle roof. Cedar is also considerably more expensive than alternative roofing materials like asphalt shingles and vinyl siding because it is widely considered to be more visually pleasing as well as more durable than other products. 60. Approximately $5.6 billion of softwood lumber imports were reported by the U.S. Commerce Department in 2017, including cedar, spruce, and Douglas fir. Cedar shakes and shingles represent a substantial portion of this commerce. While roofing and siding generally constitutes 10% of the cost of a home, cedar shakes and shingles constitutes a proportionally higher percentage due to the price premium they command over alternative products. 61. Installing cedar roof shingles (for a roof size of 1,400-2,100 square feet) currently costs approximately $12,800–$19,700, depending on the type and finish options. Because shakes are a premium quality product and are also harder to install, installing cedar roofing shakes can cost up to 1.5–2 times as much as shingles. On average, installation of cedar roofing shakes costs approximately $15,200–$24,000 (for a roof size 1,400–2,100 square feet), depending on the type and finish options. 62. CSSB Certi-Labeled shakes and shingles, which are installed on the roofs and exterior walls of residential dwellings and commercial buildings, constitute an economically distinct relevant product market in the United States. Manufacturers that do not have the ability to market their cedar shakes and shingles with the CSSB-97 grading rules only have access to a small fraction of the high-end cedar shake and shingle market. CSSB Certi-Labels, which include the Certi-Grade, Certi-Sawn, Certi-Split and Certi-Ridge labels, account for an estimated 95% of the high-end cedar shake and shingles utilized in this relevant U.S. product market. 63. As a result, a manufacturing participant in this market must be a member of the CSSB. Although non-CSSB or “non-bureau” mills can produce shingles that comply with the CSSB-97 grading rules, the substantial price difference between CSSB Certi-Label cedar shakes and shingles and the same grades produced by non-bureau mills is 15%–20%. This prevents non- bureau mills from being able to compete effectively for the high-value cedar logs and cut blocks that must be obtained in order to produce high-end cedar shake and shingle products. C. The structure and characteristics of the cedar shakes and shingles market make the conspiracy economically plausible. 1. The cedar shakes and shingles market is vertically integrated. 64. The cedar shakes and shingles industry has become highly vertically integrated, particularly as a result of acquisitions by Manufacturer Defendants. 65. For example, Defendant Waldun states on its website that it “has integrated the various aspects of cedar manufacturing, producing cedar lumber, shakes, and value-added rebutted and rejointed sidewall shingles.” 66. Vertically integrated industries such as this one are highly susceptible to collusion because the dominant firms control all or nearly all aspects of the supply chain, and thus have the ability to coordinate on output and inventory levels and, ultimately, prices. 2. Demand for cedar shakes and shingles is inelastic. 67. Consumer demand for cedar shakes and shingles is relatively unaffected by price, thus rendering it inelastic. Inelastic demand means that increases in price result in limited declines in quantity sold in the market. In order for a group of companies to profit from raising prices above competitive levels, demand must be inelastic at competitive prices, which allows group members to raise prices without seeing a decline in sales revenue. 68. While demand for cedar shakes and shingles is driven by residential and consumer construction, consumer demand for these particular products is unaffected by a significant and non-transitory price increase in them. 69. Demand inelasticity for cedar shakes and shingles is not surprising when one examines their distinctive product qualities and attributes compared to shakes and shingles not bearing the CSSB’s Certi-Label as well as other roofing and siding materials, as discussed further below. 3. Cedar shakes and shingles are commodity-like products. 70. Cedar shake and shingle products containing the CSSB’s Certi-Label trademark— the products at issue in this case—are undifferentiated, commodity-like products because each manufacturers’ product within a relevant product type, size, and grade containing the Certi-Label is interchangeable with the corresponding product of another manufacturer. 71. Stated another way, cedar shakes and shingles are commodity-like products with little or no product differentiation based on manufacturer. To be sold as a product bearing the CSSB Certi-Label, all products must be uniform and meet the specifications required by the 72. Consequently, price is the primary basis on which Manufacturer Defendants and co-conspirator manufacturers compete for sales. In cases like this, anticompetitive coordination on pricing among competitors is easier because they cannot differentiate their products on other bases, like meaningful quality differences, to customers. 4. There are no significant substitutes for cedar shakes and shingles. 73. There are no significant substitutes for cedar shakes and shingles. While there are potential substitute products—non-Certi-Label shakes and shingles, asphalt shingle roofs, ceramic tile roofs, slate roofs, vinyl siding, or a different type wood siding—the characteristics of those products lack the unique characteristics of Certi-Label cedar wood shakes and shingles. 74. Cedar shakes and shingles have a historic appearance and texture that cannot be attained with modern products. They are considered high-end products that have a distinctive look and feel. They are typically found on more expensive homes and upscale commercial buildings. One exemplar follows: Residence with Cedar Shakes and Shingles 75. Cedar shakes and shingles are also more durable, which offers long-term cost savings compared to other products. This is reflected in the fact that these products have significantly longer warranties than alternative products. 76. For all these reasons, cedar shakes and shingles are significantly more expensive than alternative products. On average, these products are 15-20% more expensive than non- Certi-Label shakes and shingles, and approximately twice as expensive as other kinds of commonly used roofing and siding products, like asphalt shingles, ceramic tiles, and vinyl 77. Further, cedar shakes and shingles are only a small component of the overall cost of a home or building, so consumers are unlikely to substitute other products in the face of increasing prices. 5. The cedar shakes and shingles market is highly concentrated. 78. The cedar shake and shingle industry has become significantly consolidated over the past two decades, with shake and shingle manufacturers now operating only in the Pacific Northwest. There are currently 45 total manufacturers who are members of CSSB: 17 manufacturers operate in Washington, three operate in Idaho, and 25 operate in British Columbia. 79. Manufacturer Defendants are the three largest members of the CSSB. On information and belief, these Defendants, together with the co-conspirator manufacturers, collectively possess market power sufficient to control prices in and exclude price competition from the high-end cedar shake and shingle market. 6. The voting structure of the CSSB concentrates power in the hands of the largest manufacturers. 80. The structure of the CSSB allows Manufacturer Defendants to use the CSSB for anticompetitive purposes. These include colluding to fix prices on cedar shake and shingle products and to expel CSSB members, including upstart and low-cost rivals, that engage in price competition, thereby preventing them from using the indispensable CSSB label. These actions blatantly violate § 1 of the Sherman Act, which prohibits the member competitors of a trade association from engaging in collusive joint action that hinders robust competition. 81. The CSSB grants member mills weighted votes based on each mill member’s annual cedar shake and shingle production. 82. During the last five years, several powerful, large mill members of the CSSB have conspired to promote and adopt an anticompetitive agenda that further concentrates voting power on the Board of Directors in their hands. Led by Waldun and Anbrook, whose executives have served on the CSSB Board of Directors during each of the last 10 years, the largest mill members of the CSSB have utilized their weighted voting power to defeat bylaw proposals by small CSSB members to eliminate weighted voting on non-manufacturing matters and to impose term limits on directors. This same group of large mills, again led by co-defendants Waldun and Anbrook, increased their collective power over the CSSB by adopting bylaw changes that reduced the number of seats on the Board of Directors, reduced membership meeting quorum requirements, and ensured that the Board chairperson (who is currently Anbrook’s President) was not constrained by the historic practice of voting only in the event of a tie but rather was afforded full voting rights like other members of the Board of Directors. 7. Defendants had ample opportunity to conspire. 83. Defendants had numerous opportunities to discuss, agree and act on anticompetitive schemes that had the purpose and intent of artificially raising the prices of cedar shakes and shingles. 84. First Manufacturer Defendants and their co-conspirators are members of the CSSB, which provided an important opportunity to meet and collude with one another. 85. Manufacturer Defendants each have executives who serve on the CSSB Board of Directors. Brooke Meeker, President and CEO of Anbrook, has been a member of the CSSB Board of Directors for more than 10 years and is the current Board Chairman. Curtis Walker, President and CEO of Waldun, has been a member of the CSSB Board of Directors for more than 10 years and is the current Secretary/Treasurer. G&R Cedar Sales Manager Stuart Dziedzic also currently sits on the Board of Directors. Other cedar shake and shingle manufacturer companies on the Board of Directors include co-conspirators A&R, Best, Premium Cedar, and Watkins. 86. Every year in August or September, the CSSB holds its Annual General Meeting, which includes a meeting of the Board of Directors. For instance, on September 10-12, 2015, the CSSB held its Annual General Meeting in Whistler, British Columbia. On August 26-27, 2016, the CSSB held its Annual General Meeting in Vancouver, British Columbia. On September 15, 2017, the CSSB held its Annual General Meeting in Vancouver, British Columbia. 87. The CSSB also holds regular conference calls and in-person meetings during the year. For instance, on February 17, 2016, the CSSB Board of Directors held a conference call, which included a confidential portion to which non-members were not invited. On May 27, 2016, the CSSB Board of Directors met in Ocean Shores, Washington. 88. The CSSB also holds various ad hoc events during the year attended by the Manufacturer Defendants’ executives and senior management. For example, on December 17, 2015, the CSSB hosted a Lifetime Achievement Awards luncheon in Bellingham, Washington. 89. Second, the close proximity of Defendants and many manufacturer co- conspirators provided ample opportunities to meet and discuss pricing of cedar shakes and shingles as well as conspire to exclude and eliminate competitive threats from the market. 90. Manufacturer Defendants are all located in the greater Vancouver, British Columbia metro area. Anbrook is headquartered in Pitt Meadows, British Columbia, while Waldun is headquartered in the neighboring city, Maple Ridge, British Columbia— approximately 16 miles east of Anbrook. G&R Cedar is based in Matsqui, which is only about 23 miles to the west of both cities. Additionally, Defendant CSSB is located just outside the Vancouver metro area in Mission, British Columbia—approximately 7 miles east of Waldun. 91. The co-conspirator manufacturers are also located close to each other and to Defendants. Premium Cedar and Watkins are both located in Maple Ridge, British Columbia, the same city where Waldun is located. A&R and Best are both headquartered in Hoquiam, Washington. 8. High entry barriers exist in the cedar shakes and shingles market. 92. There are significant barriers to entering the United States market for cedar shakes and shingles. This reality makes it difficult for upstart and potential competitors to enter the market in a meaningful way in order to offer competitive prices for cedar shakes and shingles to purchasers. 93. To effectively compete with cedar shake and shingle products, the product must be CSSB Certi-Labeled. Although non-CSSB or “non-bureau” manufacturers can produce shingles that comply with the CSSB-97 grading rules, there is a 15%-20% price difference between CSSB Certi-Label cedar shakes and shingles and the same grades produced by non- bureau manufacturers. This prevents non-bureau manufacturers from being able to compete effectively for the high-cost cedar logs and cut blocks needed to make cedar shakes and shingles. Accordingly, a manufacturer participant in the cedar shakes and shingles market is required to be a member of the CSSB in order to compete. 94. Even if an upstart or potential competitor managed to gain entry to CSSB to participate in the cedar shakes and shingles market, that competitor could not deviate from the price-fixing conspiracy implemented by the Defendants and gain substantial market share through price competition. Otherwise, that competitor would be expelled from the CSSB, as was S&W in December 2018. D. The performance observed in the cedar shakes and shingles industry makes the conspiracy economically plausible. 1. The prices of cedar shakes and shingles since at least 2011 cannot be explained by ordinary market forces. 95. Since at least January 1, 2011, the price of cedar shakes and shingles has risen and cannot be fully explained by normal market forces such as increased raw material costs or increased demand. 96. Since at least January 1, 2011, there has been a consistent increase in the prices of cedar shingles and shakes. For example, as shown in the chart below, prices of Number 1 Grade products have surpassed pre-recession levels, with certain products experiencing 10 percent year-over-year price increases. Chart 1 Price per Square of Number 1 Grade Cedar Shingles and Shakes1 $300 $250 $200 $150 $100 $50 $0 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Green W Red Cedar Shingles #1 5X Prices Per Square Net f.o.b. Mill Green W Red Cedar Shingles #1 Perfections Prices Per Square Net f.o.b. Mill Green W Red Cedar Shakes Tapersawn #1 5/8"x24" Prices Per Square Net f.o.b. Mill (Piggyback) Green W Red Cedar Shakes #1 1/2"x24" Prices Per Square Net f.o.b. Mill (Piggyback) Green W Red Cedar Shakes #1 3/4"x24" Prices Per Square Net f.o.b. Mill (Piggyback) 97. Similarly, the price of the lower quality Grade 2 has also increased markedly since 2011, as illustrated in the chart below: 1 Weekly price series as reported by Random Lengths Publications, Inc. Chart 2 Price per Square of Number 2 Grade Cedar Shingles2 $140 $120 $100 $80 $60 $40 $20 $0 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Green W Red Cedar Shingles #2 5X Prices Per Square Net f.o.b. Mill Green W Red Cedar Shingles #2 Perfections Prices Per Square Net f.o.b. Mill 98. The increase in prices for finished cedar shingles and shakes contrasts with much lower price increases associated with softwood lumber, the main raw material and cost input for these products, as well as the export price of Canadian coniferous timber over the same period. The following chart shows the: • Producer Price Index (“PPI”) for Commodity data for Lumber and wood products, covering Wood ties, siding, shingles, and shakes, and contract sawing of logs owned by others; • PPI for industry data for Sawmills, covering Wood ties, siding, shingles, and shakes, and contract sawing of logs owned by others, not seasonally adjusted; and • Average Canadian export price index for coniferous industrial roundwood other than fir or spruce or pine (USD). 2 Weekly price series as reported by Random Lengths Publications, Inc. Chart 3 Producer Price Indices for Softwood Lumber and Sawmill Shingle and Shake Products vs Price of Canadian Softwood Timber3 250 225 200 175 150 125 100 75 50 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 PPI (Commodity) - Softwood Lumber PPI (Industry) - Sawmills - Wood ties, siding, shingles, and shakes, and contract sawing of logs owned by others Average canadian export price index - Coniferous industrial roundwood other than fir or spruce or pine (USD) 99. Comparing the above series shows that prices for cedar shingles and shakes have grown far more rapidly than the prices of other softwood lumber inputs and the price of Canadian timber. This disparity in price increases is also indicated by the following chart: 3 US Bureau of Labor Statistics, “PPI industry data for Sawmills-Wood ties, siding, shingles, and shakes, and contract sawing of logs owned by others, not seasonally adjusted” and “PPI Commodity data for Lumber and wood products-Wood ties, siding, shingles, and shakes, and contract sawing of logs owned by others, not seasonally adjusted.” United Nations Economic Commission for Europe, Food and Agriculture Organization of the United Nations, TIMBER database (series: Coniferous industrial roundwood other than fir or spruce or pine). Chart 4 Index of Cedar Shingles and Shakes Prices vs Input Prices4 250 225 200 175 150 125 100 75 50 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 PPI (Commodity) - Softwood Lumber PPI (Industry) - Sawmills - Wood ties, siding, shingles, and shakes, and contract sawing of logs owned by others Average canadian export price index - Coniferous industrial roundwood other than fir or spruce or pine (USD) Number 1 Grade Shingles: Index Number 1 Grade Shakes: Index Number 2 Grade Shingles: Index 100. The above charts and resulting analysis reveals that prices for cedar shingles and shakes have displayed a consistent increase since 2011 when, all else being equal, one would expect a decline as explained below. 101. Moreover, tariffs recently being considered for softwood lumber imports from Canada also do not explain the price increase in cedar shakes and shingles, since those tariffs have not actually been implemented. While a September 2018 decision from the International Trade Administration (“ITA”) suggested that these producers were encompassed by a January 4 US Bureau of Labor Statistics, “PPI industry data for Sawmills-Wood ties, siding, shingles, and shakes, and contract sawing of logs owned by others, not seasonally adjusted” and “PPI Commodity data for Lumber and wood products-Wood ties, siding, shingles, and shakes, and contract sawing of logs owned by others, not seasonally adjusted.” United Nations Economic Commission for Europe, Food and Agriculture Organization of the United Nations, TIMBER database (series: Coniferous industrial roundwood other than fir or spruce or pine). Weekly price series as reported by Random Lengths Publications, Inc. 2018 tariff order, manufacturers formed a Shake and Shingle Alliance (“SSA”) to challenge the ITA’s decision. On November 8, 2018, SSA sued to challenge the ITA decision in the Court of International Trade. Information from the International Trade Commission currently shows cedar shakes and shingles being free of any such tariff. 2. Cedar shakes and shingles inventories have significantly increased in recent years compared to production levels. 102. One indicia of anticompetitive behavior in an industry is unexplained increases in inventories of a commodity product. During the class period, this indicia was present. 103. The chart below is a monthly comparison of the value of inventory of cedar shakes and siding to the value of cedar shakes and shingles manufactured each month. The manufacture of new cedar shakes and shingles began declining in 2009 and remained relatively low through 2016. However, in the 2011-2012 period, the inventories of cedar shakes and shingles maintained by these manufacturers started to stabilize and then increase substantially. At the same time, as seen above, prices for shingles and shakes were generally increasing over this time period. In a competitive market, manufacturers would opt to sell at a lower price rather than accumulate inventory. This build-up of inventory is suggestive of anti-competitive restrictions by manufacturers of cedar shakes and shingles in order to maintain or increase E. Traditional conspiracy evidence demonstrates the conspiracy’s existence. 104. Under the auspices of the Certi-Label labeling program, which accounts for the vast majority of cedar shakes and shingles sold in the United States, Defendants and their co- conspirators enacted a scheme to fix pricing and exclude competitive threats from the market. 105. As noted above, due to consolidation and the weighted voting structure of the CSSB, Manufacturer Defendants have obtained a concentration of power in the CSSB. Manufacturer Defendants increased their collective voting power through a series of Board actions in November 2016, November 2017, and November 2018. As a result of these actions, Manufacturer Defendants, along with their co-conspirators, now effectively control the CSSB 106. On information and belief, no later than January 1, 2011 and continuing through the present, Defendants and their co-conspirators conspired to fix prices for cedar shakes and shingle products sold into the United States market. 107. Manufacturer Defendants—the largest manufacturer members of the Board of Directors—did this by agreeing among themselves and their co-conspirators (and potentially others) on prices and price levels to charge for cedar shakes and shingles. As part of this illicit scheme, Defendants also pressured other CSSB members to hold their prices at consistent levels and not lower them or offer discounts to customers. 108. As part of the same anticompetitive scheme, Manufacturer Defendants and CSSB, along with their co-conspirators, conspired to eliminate or discipline other CSSB members who compete on price and who are unwilling to follow the price leadership of Manufacturer Defendants. This blatantly anticompetitive and illegal motivation resulted in the CSSB Board of Directors voting to terminate the membership of S&W on December 21, 2018, a membership that S&W had held for 24 years dating back to 1994. 109. In a lawsuit filed against Waldun, Anbrook and CSSB in this District on February 13, 2019, S&W alleges it was expelled from the CSSB for undercutting the pricing set by Defendants and others pursuant to the conspiracy. As S&W alleges in its complaint: “Throughout the four years predating the filing of this complaint, Waldun’s Curtis Walker and Anbrook’s Brooke Meeker have regularly conspired and colluded to fix prices for cedar shake and shingle products sold into the United States market and have encouraged other mill manufacturers to join in that price collusion.” 110. S&W specifically alleges that the reason it was terminated from the CSSB was that S&W would not participate in the price-fixing conspiracy. According to S&W, it was forced out of the CSSB during a “hastily convened special meeting by telephone conference call” involving presently unknown members of the CSSB Board of Directors. S&W maintains that the purported reason for its expulsion—a mislabeling violation—is false, pretextual, and unsupported: “Despite these facts, several CSSB Directors who are executives with Waldun, Anbrook and a number of other large member mills successfully secured a three-fourths vote in favor of terminating S&W’s CSSB membership, not because of a mislabeling violation but in pursuit of their conspiracy to eliminate a competitor unwilling to engage in price fixing or collusion.” 111. A wholesaler with whom Plaintiff’s counsel has spoken in connection with this matter echoes S&W’s assessment. A sales manager at a national wholesale company claims he heard that S&W got kicked out of CSSB “over a fairly minor thing” involving a specialty cut product. 112. On information and belief, and as alleged in S&W’s complaint, other manufacturers besides S&W have been excluded or removed from the CSSB as a result of not participating in the alleged anticompetitive pricing conspiracy. 113. Kris Watkins, Chief of Operations of Watkins, submitted a declaration in support of the S&W Forest Products lawsuit. The declaration describes a discussion between Mr. Watkins and Waldun’s Curtis Walker. During a December 5, 2018, visit that Mr. Walker made to Mr. Watkins’ office, one of the issues discussed was “shake and shingle pricing.” In response to Watkins’ comment that his company had decided to absorb some of the impact of a tariff rather than pass it all on to customers, “Mr. Walker told me that we should not have done this and that Waldun Forest Products never dropped their pricing.” 114. Mr. Watkins continued in his declaration: “This conversation about pricing continued with Mr. Walker arguing that CSSB mills should hold their prices at consistent levels. I disagreed and told him such an approach was unrealistic because the smaller self-financed mills needed to drop their prices during times like winter slowdowns when cash flow was reduced in order to generate operating cash. Mr. Walker stated that he did not believe that many CSSB mills would do this. I countered that S&W Forest Products did it from time to time because I recalled specific situations where we offered shake or shingle products from S&W at discounted prices because Michael Watkins [Kris Watkins’ relative] stated that the company needed to generate the cash flow. In response, Mr. Walker appeared very agitated and said: ‘yeah, well we just need to get rid of that guy.’” 115. Len Taylor, the President and Owner of Taylor Forest Products, Inc., also submitted a declaration in support of the S&W Forest Products lawsuit. The declaration describes a business trip that Mr. Taylor took to British Columbia sometime within the last five years. During the business trip, Mr. Taylor visited Defendant G&R’s facility in Chilliwack, British Columbia. The purpose of his visit was to meet with G&R’s Sales Manager Stuart Dziedzic. 116. While Mr. Taylor cannot remember the month or year of this meeting, he distinctly recalls what happened during it. Mr. Taylor was waiting in Mr. Dziedzic’s office while Mr. Dziedzic was finishing a telephone call. When Mr. Dziedzic got off the phone, Mr. Dziedzic said that some competitors were being tough on him and wanted him to raise G&R’s cedar shake and shingle prices. 117. Mr. Taylor is 100% certain that Mr. Dziedzic told him that the call was from either Anbrook’s Brooke Meeker or Waldun’s Curtis Walker, but he cannot remember which of the two was the person who called him. It was clear, however, from Mr. Dziedzic’s statements to Mr. Taylor that Mr. Dziedzic was referring to collective pressure from both Anbrook and Waldun based upon the call Mr. Dziedzic received from either Ms. Meeker or Mr. Walker. 118. Defendants’ and co-conspirators’ collusive conduct had the intended purpose and effect of increasing the price of cedar shakes and shingles sold to Plaintiff and the other members of the Classes. VII. CLASS ACTION ALLEGATIONS 119. Plaintiff brings this action on behalf of itself, and as a class action under the Federal Rules of Civil Procedure, Rule 23(a), (b)(2) and (b)(3), seeking injunctive relief pursuant to federal law, and damages pursuant to various state antitrust, unfair competition, unjust enrichment, and consumer protection laws of the states listed below on behalf of the members of the following classes: Nationwide class: All persons and entities who indirectly purchased Cedar shakes and shingles from Defendants or co-conspirators for resale in the United States during the Class Period. Alaska class: All persons and entities who indirectly purchased cedar shakes and shingles from Defendants or co-conspirators for resale in Alaska during the Class Period. Arizona class: All persons and entities who indirectly purchased cedar shakes and shingles from Defendants or co-conspirators for resale in Arizona during the Class Period. Arkansas class: All persons and entities who indirectly purchased cedar shakes and shingles from Defendants or co-conspirators for resale in Arkansas during the Class Period. California class: All persons and entities who indirectly purchased cedar shakes and shingles from Defendants or co-conspirators for resale in California during the Class Period. Colorado class: All persons and entities who indirectly purchased cedar shakes and shingles from Defendants or co-conspirators for resale in Colorado during the Class Period. Delaware class: All persons and entities who indirectly purchased cedar shakes and shingles from Defendants or co-conspirators for resale in Delaware during the Class Period. District of Columbia class: All persons and entities who indirectly purchased cedar shakes and shingles from Defendants or co-conspirators for resale in the District of Columbia during the Class Period. Florida class: All persons and entities who indirectly purchased cedar shakes and shingles from Defendants or co-conspirators for resale in Florida during the Class Period. Georgia class: All persons and entities who indirectly purchased cedar shakes and shingles from Defendants or co-conspirators for resale in Georgia during the Class Period. Hawaii class: All persons and entities who indirectly purchased cedar shakes and shingles from Defendants or co-conspirators for resale in Hawaii during the Class Period. Illinois class: All persons and entities who indirectly purchased cedar shakes and shingles from Defendants or co-conspirators for resale in Illinois during the Class Period. Iowa class: All persons and entities who indirectly purchased cedar shakes and shingles from Defendants or co-conspirators for resale in Iowa during the Class Period. Kansas class: All persons and entities who indirectly purchased cedar shakes and shingles from Defendants or co-conspirators for resale in Kansas during the Class Period. Maine class: All persons and entities who indirectly purchased cedar shakes and shingles from Defendants or co-conspirators for resale in Maine during the Class Period. Massachusetts class: All persons and entities who indirectly purchased cedar shakes and shingles from Defendants or co-conspirators for resale in Massachusetts during the Class Period. Michigan class: All persons and entities who indirectly purchased cedar shakes and shingles from Defendants or co-conspirators for resale in Michigan during the Class Period. Minnesota class: All persons and entities who indirectly purchased cedar shakes and shingles from Defendants or co-conspirators for resale in Minnesota during the Class Period. Mississippi class: All persons and entities who indirectly purchased cedar shakes and shingles from Defendants or co-conspirators for resale in Mississippi during the Class Period. Missouri class: All persons and entities who indirectly purchased cedar shakes and shingles from Defendants or co-conspirators for resale in Missouri during the Class Period. Montana class: All persons and entities who indirectly purchased cedar shakes and shingles from Defendants or co-conspirators for resale in Montana during the Class Period. Nebraska class: All persons and entities who indirectly purchased cedar shakes and shingles from Defendants or co-conspirators for resale in Nebraska during the Class Period. Nevada class: All persons and entities who indirectly purchased cedar shakes and shingles from Defendants or co-conspirators for resale in Nevada during the Class Period. New Hampshire class: All persons and entities who indirectly purchased cedar shakes and shingles from Defendants or co-conspirators for resale in New Hampshire during the Class Period. New Mexico class: All persons and entities who indirectly purchased cedar shakes and shingles from Defendants or co-conspirators for resale in New Mexico during the Class Period. New York class: All persons and who indirectly purchased cedar shakes and shingles from Defendants or co-conspirators for resale in New York during the Class Period. North Carolina class: All persons and entities who indirectly purchased cedar shakes and shingles from Defendants or co-conspirators for resale in North Carolina during the Class Period. North Dakota class: All persons and entities who indirectly purchased cedar shakes and shingles from Defendants or co-conspirators for resale in North Dakota during the Class Period. Oregon class: All persons and entities who indirectly purchased cedar shakes and shingles from Defendants or co-conspirators for resale in Oregon during the Class Period. Rhode Island class: All persons and entities who indirectly purchased cedar shakes and shingles from Defendants or co-conspirators for resale in Rhode Island during the Class Period. South Carolina class: All persons and entities who indirectly purchased cedar shakes and shingles from Defendants or co-conspirators for resale in South Carolina during the Class Period. South Dakota class: All persons and entities who indirectly purchased cedar shakes and shingles from Defendants or co-conspirators for resale in South Dakota during the Class Period. Tennessee class: All persons and entities who indirectly purchased cedar shakes and shingles from Defendants or co-conspirators for resale in Tennessee during the Class Period. Utah class: All persons and entities who indirectly purchased cedar shakes and shingles from Defendants or co-conspirators for resale in Utah during the Class Period. Vermont class: All persons and entities who indirectly purchased cedar shakes and shingles from Defendants or co-conspirators for resale in Vermont during the Class Period. Virginia class: All persons and entities who indirectly purchased cedar shakes and shingles from Defendants or co-conspirators for resale in Virginia during the Class Period. West Virginia class: All persons and entities who indirectly purchased cedar shakes and shingles from Defendants or co-conspirators for resale in West Virginia during the Class Period. Wisconsin class: All persons and entities who indirectly purchased cedar shakes and shingles from Defendants or co-conspirators for resale in Wisconsin during the Class Period 120. Specifically excluded from the Classes are the Defendants; the officers, directors or employees of any Defendant; any entity in which any Defendant has a controlling interest; and any affiliate, legal representative, heir or assign of any Defendant. Also excluded from the Classes are any federal, state or local governmental entities, any judicial officer presiding over this action and the members of his/her immediate family and judicial staff, any juror assigned to this action, and any co-conspirator identified in this action. Further excluded from the Classes are purchases of value-added products not manufactured, supplied or processed by Defendants, or otherwise not under the control of Defendants. 121. Class Period: The Class Period (also referenced as the Conspiracy Period herein) is defined as January 1, 2011 to the present. Additional discovery may reveal that the conduct alleged in this Complaint commenced at an earlier time, and Plaintiff reserves all rights to amend its complaint as appropriate. 122. Class Identity: The above-defined Classes are readily identifiable and are ones for which records should exist. 123. Numerosity: Plaintiff does not know the exact number of the members of the Classes because such information presently is in the exclusive control of Defendants, retailers, resellers and other entities in the supply chain of cedar shakes and shingles. Plaintiff believes that due to the nature of the trade and commerce involved, there are hundreds or thousands of members of the Classes geographically dispersed throughout the United States, such that joinder of all members of the Classes is impracticable. 124. Typicality: Plaintiff’s claims are typical of the claims of the members of the Classes because Plaintiff purchased cedar shakes and shingles indirectly from one or more of the Defendants for resale to end users, and therefore Plaintiff’ claims arise from the same common course of conduct giving rise to the claims of the Classes and the relief sought is common to the Classes. 125. Common questions exist and predominate over any individual questions: There are questions of law and fact common to the Classes, including, but not limited to: 126. Whether Defendants and their co-conspirators engaged in an agreement, combination, or conspiracy to fix, raise, elevate, maintain, or stabilize prices of cedar shakes and shingles sold in interstate commerce in the United States; a. The identity of the participants of the alleged conspiracy; b. The duration of the conspiracy alleged herein and the acts performed by Defendants and their co-conspirators in furtherance of the conspiracy; c. Whether the alleged conspiracy violated federal antitrust law; d. Whether the alleged conspiracy violated the antitrust and consumer protection laws of the various states; e. Whether the conduct of Defendants and their co-conspirators, as alleged in this Complaint, caused injury to the business or property of the Plaintiff and the other members of the Classes; f. The effect of Defendants’ alleged conspiracy on the prices of cedar shakes and shingles sold in the United States during the Class Period; g. Whether Plaintiff and other members of the Classes are entitled to, among other things, injunctive relief and if so, the nature and extent of such injunctive relief; and h. The appropriate class-wide measure of damages. 127. These and other questions of law and fact, which are common to the members of the Classes, predominate over any questions affecting only individual members of the Classes. 128. Adequacy: Plaintiff will fairly and adequately protect the interests of the Classes in that Plaintiff’ interests are aligned with, and not antagonistic to, those of the other members of the Classes who indirectly purchased cedar shakes and shingles from Defendants or co- conspirators for resale, and Plaintiff has retained counsel competent and experienced in the prosecution of class actions and antitrust litigation to represent itself and the Classes. 129. Superiority: A class action is superior to other available methods for the fair and efficient adjudication of this controversy since individual joinder of all damaged members of the Classes is impractical. Prosecution as a class action will eliminate the possibility of duplicative litigation. The relatively small damages suffered by individual members of the Classes compared to the expense and burden of individual prosecution of the claims asserted in this litigation means that, absent a class action, it would not be feasible for members of the Classes to seek redress for the violations of law herein alleged. Further, individual litigation presents the potential for inconsistent or contradictory judgments and would greatly magnify the delay and expense to all parties and to the court system. Accordingly, a class action presents far fewer case management difficulties and will provide the benefits of unitary adjudication, an economy of scale, and comprehensive supervision by a single court. 130. The prosecution of separate actions by individual members of the Classes would create the risk of inconsistent or varying adjudications, establishing incompatible standards of conduct for Defendants. 131. Plaintiff brings this action on behalf of all persons similarly situated pursuant to Rule 23, on behalf of all persons and entities that, as residents of various states, indirectly purchased one or more cedar shakes and shingles that a defendant or co-conspirator manufactured for resale during the Class Period. 132. Defendants have acted on grounds generally applicable to the Classes, thereby making final injunctive relief appropriate with respect to the Classes as a whole. VIII. ANTITRUST INJURY 133. In an efficient market, manufacturers of cedar shakes and shingles would compete on price to keep or increase their market share. For example, a company might choose to absorb some of the impact of tariffs rather than passing the price increase to the customers. Similarly, smaller self-financed mills may need to drop their prices during winter slowdowns to generate operating cash. 134. Defendants’ anticompetitive conduct had the following effects, among others: a. Price competition has been restrained or eliminated with respect to cedar shakes and shingles; b. The prices of cedar shakes and shingles have been fixed, raised, stabilized, or maintained at artificially inflated levels; and c. Purchasers of cedar shakes and shingles have been deprived of free and open competition among cedar shake and shingle manufacturers. 135. The purpose of the conspiratorial conduct of Defendants and their con- conspirators was to raise, fix, or maintain the price of cedar shakes and shingles and, as a direct and foreseeable result, Plaintiff and the other members of the Classes paid supra-competitive prices for cedar shakes and shingles during the Class Period. 136. By reason of the alleged violations of the antitrust and other laws, Plaintiff and the other members of the Classes have sustained injury to their businesses or property, having paid higher prices for cedar shakes and shingles than they would have paid in the absence of Defendants’ illegal contract, combination, or conspiracy, and as a result have suffered damages. 137. This is an antitrust injury of the type that the antitrust laws were meant to punish and prevent. IX. FRAUDULENT CONCEALMENT AND TOLLING 138. Plaintiff had neither actual nor constructive knowledge of the facts constituting its claim for relief. 139. Plaintiff and the other members of the Classes did not discover, and could not have discovered through the existence of reasonable diligence, the existence of the conspiracy alleged herein until on or about February 13, 2019, the date on which S&W Forest Products filed its antitrust complaint and exposed allegations of collusion among Defendants. 140. Defendants and their co-conspirators engaged in a secret conspiracy that did not reveal facts that would put Plaintiff and the other members of the Classes on inquiry notice that there was a conspiracy to fix the prices of cedar shakes and shingles. 141. Accordingly, Plaintiff could not have had either actual or constructive knowledge of the conspiracy until the S&W complaint was filed. 142. Furthermore, Defendants and their co-conspirators took active steps to conceal the conspiracy and prevent Plaintiff and the other members of the Classes from discovering its existence until the S&W complaint was filed. For example, to discuss and implement the conspiracy, Defendants and their co-conspirators met in private at their places of business and during CSSB meetings that were not open to the public. They also discussed the conspiracy during private telephone calls. Finally, Defendants and their co-conspirators did not reveal in their price increase announcements or otherwise that a reason for the price increases and price levels during the Class Period was the anticompetitive conspiracy described herein. 143. Because the alleged conspiracy was kept secret, Plaintiff and the other members of the Classes were unaware of this unlawful conduct alleged herein and did not know that the prices they paid for cedar shakes and shingles were artificially high during the Class Period. X. CLAIMS FOR RELIEF A. Claims Under Federal Law 1. Violation of Section 1 of the Sherman Act 144. Plaintiff incorporates and realleges, as though fully set forth herein, each and every allegation set forth in the preceding paragraphs of this Complaint. 145. Beginning at a time currently unknown to Plaintiff, but at least as early as January 1, 2011, and continuing through the present, the exact dates being unknown to Plaintiff, Defendants and their co-conspirators entered into a continuing agreement, understanding, and conspiracy in restraint of trade artificially to fix, raise, stabilize, and peg prices for cedar shakes and shingles in the United States, in violation of Section 1 of the Sherman Act (15 U.S.C. § 1). 146. In forming and carrying out the alleged agreement, understanding, and conspiracy, Defendants and their co-conspirators did those things that they combined and conspired to do, including but not limited to the acts, practices, and course of conduct set forth above, and the following, among others: a. Fixing, raising, stabilizing, and maintaining the price of cedar shakes and shingles; and b. Excluding upstart and lower-cost cedar shake and shingle manufacturers from the market. 147. The combination and conspiracy alleged herein has had the following effects, among others: a. Price competition in the sale of cedar shakes and shingles has been restrained, suppressed, or eliminated in the United States; b. Prices for cedar shakes and shingles manufactured by Defendants and their co- conspirators have been fixed, raised, maintained and stabilized at artificially high, non-competitive levels throughout the United States; and c. Those who purchased cedar shakes and shingles manufactured by Defendants and their co-conspirators have been deprived of the benefits of free and open competition. 148. Plaintiff and members of the Classes have been injured and will continue to be injured in their businesses and property by paying more for cedar shakes and shingles manufactured by Defendants and their co-conspirators for resale than they would have paid and will pay in the absence of the combination and conspiracy. B. State Law Antitrust Claims 1. Violation of Arizona’s Uniform State Antitrust Act (Arizona Revised Statutes §§ 44-1401, et seq.) on behalf of the Arizona Class 149. Plaintiff incorporates and realleges, as though fully set forth herein, each and every allegation set forth in the preceding paragraphs of this Complaint. 150. Defendants have entered into an unlawful agreement in restraint of trade in violation of Arizona Revised Statutes §§ 44-1401, et seq. 151. Defendants entered into a contract, combination, or conspiracy between two or more persons in restraint of, or to monopolize, trade or commerce in the cedar shakes and shingles market, a substantial part of which occurred within Arizona. 152. Defendants established, maintained, or used a monopoly, or attempted to establish a monopoly, of trade or commerce in the relevant market, a substantial part of which occurred within Arizona, for the purpose of excluding competition or controlling, fixing, or maintaining prices in the cedar shakes and shingles market. 153. During the Class Period, Defendants’ illegal conduct was flagrant and substantially affected Arizona’s trade and commerce. 154. As a direct and proximate cause of Defendants’ unlawful conduct, the Arizona Plaintiff(s) and members of the Arizona Class have been injured in their business or property and are threatened with further injury. 155. The combination and conspiracy alleged herein has had the following effects, among others: a. Price competition in the sale of cedar shakes and shingles has been restrained, suppressed, and/or eliminated in the United States; b. Prices for cedar shakes and shingles manufactured by Defendants and all of their co-conspirators have been fixed, raised, maintained and stabilized at artificially high, non-competitive levels throughout the United States; and c. Those who purchased cedar shakes and shingles manufactured by the Defendants and their co-conspirators have been deprived of the benefits of free and open competition. 156. By reason of the foregoing, Defendants entered into agreements in restraint of trade in violation of Arizona Revised Statutes §§ 44-1401, et seq. Accordingly, Arizona Plaintiff(s) and members of the Arizona Class are entitled to and seek all damages and other forms of relief available under Arizona Revised Statutes §§ 44-1401, et seq. 157. Notice and a copy of this Complaint is being served upon the Arizona Attorney General on behalf of Arizona Plaintiff(s) and the Arizona Class. Ariz. Rev. Stat. § 44-1415. 2. Violation of California’s Cartwright Act (Cal. Bus. & Prof. Code § 1600, et seq.) on behalf of the California Class 158. Defendants have entered into an unlawful agreement in restraint of trade in violation of the California Business and Professions Code §§ 16700, et seq., (“The Cartwright 159. California policy is that “vigorous representation and protection of consumer interests are essential to the fair and efficient functioning of a free enterprise market economy,” including by fostering competition in the marketplace. Cal. Bus. & Prof. Code § 301. 160. Under the Cartwright Act, indirect purchasers have standing to bring and maintain an action for damages and other relief based on the facts alleged in this Complaint. Cal. Bus. & Prof. Code § 16750(a). 161. Under California law, a trust is any combination intended for various purposes, including but not limited to creating or carrying out restrictions in trade or commerce, limiting or reducing the production or increasing the price of merchandise, or preventing competition in the market for a commodity. Cal. Bus. & Prof. Code § 16720. Every trust in California is unlawful except as provided by the Code. Cal. Bus. & Prof. Code § 16726. 162. During the Class Period, Defendants and their co-conspirators entered into and engaged in a continuing unlawful trust in restraint of the trade and commerce described above in violation of Section 16720 of the California Business and Professions Code. Defendants, and each of them, have acted in violation of Section 16720 of the California Business and Professions Code to fix, raise, stabilize, and/or maintain prices of cedar shakes and shingles at supra-competitive levels. The aforesaid violations of Section 16720 of the California Business and Professions Code consisted, without limitation, of a continuing unlawful trust and concert of action among the Defendants and their co-conspirators, the substantial terms of which were to fix, raise, maintain, and/or stabilize the prices of cedar shakes and shingles. 163. The combination and conspiracy alleged herein has had the following effects, among others: a. Price competition in the sale of cedar shakes and shingles has been restrained, suppressed, and/or eliminated in the United States; b. Prices for cedar shakes and shingles manufactured by Defendants and all of their Co-Conspirators have been fixed, raised, maintained and stabilized at artificially high, non-competitive levels throughout the United States; and c. Those who purchased cedar shakes and shingles manufactured by the Defendants and their co-conspirators have been deprived of the benefits of free and open competition. 164. The California Class purchased cedar shakes and shingles within the State of California during the Class Period. 165. But for Defendants’ conduct set forth herein, the price of cedar shakes and shingles would have been lower, in an amount to be determined at trial. 166. Defendants’ anticompetitive conduct was knowing, willful and constitutes a flagrant violation of the California Business and Professions Code §§ 16700, et seq. 167. For the purpose of forming and effectuating the unlawful trust, Defendants and their co-conspirators have done those things which they combined and conspired to do, including but not in any way limited to the acts, practices and course of conduct set forth above and the following: fixing, raising, stabilizing, and/or pegging the price of cedar shakes and shingles. 3. Violation of the Colorado Revised Statutes §§ 6-4-101, et seq. on behalf of the Colorado Class. 168. Defendants have entered into an unlawful agreement in restraint of trade in violation of the Colorado Revised Statutes §§ 6-4-101, et seq. 169. The combination and conspiracy alleged herein has had the following effects, among others: a. Price competition in the sale of cedar shakes and shingles has been restrained, suppressed, and/or eliminated in the United States; b. Prices for cedar shakes and shingles manufactured by Defendants and all of their Co-Conspirators have been fixed, raised, maintained and stabilized at artificially high, non-competitive levels throughout the United States; and c. Those who purchased cedar shakes and shingles manufactured by the Defendants and their co-conspirators have been deprived of the benefits of free and open competition. 170. During the Class Period, Defendants’ illegal conduct substantially affected Colorado commerce. 171. As a direct and proximate result of Defendants’ unlawful conduct, Colorado Plaintiff(s) and members of the Colorado Class have been injured in their business and property and are threatened with further injury. 172. By reason of the foregoing, Defendants entered into agreements in restraint of trade in violation of Colorado Revised Statutes §§ 6-4-101, et seq. Accordingly, Colorado Plaintiff(s) and members of the Colorado Class seek all damages and other forms of relief available under Colorado Revised Statutes §§ 6-4-101, et seq. 173. Notice and a copy of this Complaint is being served upon the Colorado Attorney General on behalf of Colorado Plaintiff(s) and the Colorado Class. Colo. Rev. Stat. § 6-4-115. 4. Violation of the District of Columbia Antitrust Act (D.C. Code § 28-4501, et seq.) on behalf of the District of Columbia Class 174. Plaintiff incorporates and realleges, as though fully set forth herein, each and every allegation set forth in the preceding paragraphs of this Complaint. 175. The policy of District of Columbia Code, Title 28, Chapter 45 (Restraints of Trade) is to “promote the unhampered freedom of commerce and industry throughout the District of Columbia by prohibiting restraints of trade and monopolistic practices.” 176. The combination and conspiracy alleged herein has had the following effects, among others: a. Price competition in the sale of cedar shakes and shingles has been restrained, suppressed, and/or eliminated in the United States; b. Prices for cedar shakes and shingles manufactured by Defendants and all of their Co-Conspirators have been fixed, raised, maintained and stabilized at artificially high, non-competitive levels throughout the United States; and c. Those who purchased cedar shakes and shingles manufactured by the Defendants and their co-conspirators have been deprived of the benefits of free and open competition. 177. Members of the District of Columbia Class purchased cedar shakes and shingles within the District of Columbia during the Class Period. But for Defendants’ conduct set forth herein, the price of cedar shakes and shingles would have been lower, in an amount to be determined at trial. 178. Under District of Columbia law, indirect purchasers have standing to maintain an action under the antitrust provisions of the D.C. Code based on the facts alleged in this Complaint, because “any indirect purchaser in the chain of manufacture, production or distribution of goods...shall be deemed to be injured within the meaning of this chapter.” D.C. Code § 28-4509(a). 179. Defendants contracted, combined or conspired to act in restraint of trade within the District of Columbia, and monopolized or attempted to monopolize the market for cedar shakes and shingles within the District of Columbia, in violation of D.C. Code § 28-4501, et seq. 180. Plaintiff and members of the District of Columbia Class were injured with respect to purchases of cedar shakes and shingles in the District of Columbia and are entitled to all forms of relief, including actual damages, treble damages, and interest, reasonable attorney’s fees and 5. Violation of the Illinois Antitrust Act (740 §§ ILCS 10/1, et seq.) on behalf of the Illinois Class 181. Plaintiff incorporates and realleges, as though fully set forth herein, each and every allegation set forth in the preceding paragraphs of this Complaint. 182. The Illinois Antitrust Act, 740 ILCS 10/1, et seq., aims “to promote the unhampered growth of commerce and industry throughout the State by prohibiting restraints of trade which are secured through monopolistic or oligarchic practices and which act or tend to act to decrease competition between and among persons engaged in commerce and trade. . . .” 740 ILCS 10/1. 183. Illinois Plaintiff(s) and members of the Illinois Class have standing to pursue claims against the Defendants and their co-conspirators, as the Illinois Antitrust Act provides in relevant part that, “[n]o provision of this Act shall deny any person who is an indirect purchaser the right to sue for damages.” 740 ILCS 10/7. 184. Plaintiff purchased cedar shakes and shingles within the State of Illinois during the Class Period. But for Defendants’ conduct set forth herein, the price of cedar shakes and shingles would have been lower, in an amount to be determined at trial. 185. Under the Illinois Antitrust Act, indirect purchasers have standing to maintain an action for damages based on the facts alleged in this Complaint. 740 ILCS 10/7(2). 186. Defendants made contracts or engaged in a combination or conspiracy with each other, though they would have been competitors but for their prior agreement, for the purpose of fixing, controlling or maintaining prices for cedar shakes and shingles sold, and/or for allocating customers or markets for cedar shakes and shingles within the intrastate commerce of Illinois. 187. Defendants further unreasonably restrained trade or commerce and established, maintained or attempted to acquire monopoly power over the market for cedar shakes and shingles in Illinois for the purpose of excluding competition, in violation of 740 ILCS 10/1, et 188. During the Class Period, Defendants’ illegal conduct substantially affected Illinois commerce, including by causing the price of cedar shakes and shingles in Illinois to be artificially elevated to the detriment of the Illinois Plaintiff(s) and the members of the Illinois 189. Plaintiff and members of the Illinois Class were injured with respect to purchases of cedar shakes and shingles in Illinois and are entitled to all forms of relief, including actual damages, treble damages, reasonable attorney’s fees, and costs. 6. Violation of Iowa Competition Law (Iowa Code §§ 553.1, et seq.) on behalf of the Iowa Class 190. Plaintiff incorporates and realleges, as though fully set forth herein, each and every allegation set forth in the preceding paragraphs of this Complaint. 191. The Iowa Competition Law aims to “prohibit[] restraint of economic activity and monopolistic practices.” Iowa Code § 553.2. 192. Plaintiff purchased cedar shakes and shingles within the State of Iowa during the Class Period. But for Defendants’ conduct set forth herein, the price of cedar shakes and shingles would have been lower, in an amount to be determined at trial. 193. Defendants contracted, combined or conspired to restrain or monopolize trade in the market for cedar shakes and shingles, and attempted to establish or did in fact establish a monopoly for the purpose of excluding competition or controlling, fixing or maintaining prices for cedar shakes and shingles, in violation of Iowa Code § 553.1, et seq. 194. During the Class Period, Defendants’ illegal conduct substantially affected Iowa commerce, including by causing the price in Iowa of cedar shakes and shingles to be artificially elevated. 195. Plaintiff and members of the Iowa Class were injured with respect to purchases of cedar shakes and shingles in Iowa, and are entitled to all forms of relief, including actual damages, exemplary damages for willful conduct, reasonable attorney’s fees and costs, and injunctive relief. 7. Violation of the Kansas Restraint of Trade Act (Kan. Stat. Ann. §§ 50-112, et seq.) on behalf of the Kansas Class 196. Plaintiff incorporates and realleges, as though fully set forth herein, each and every allegation set forth in the preceding paragraphs of this Complaint. 197. The Kansas Restraint of Trade Act aims to prohibit practices which, inter alia, “tend to prevent full and free competition in the importation, transportation or sale of articles imported into this state.” Kan. Stat. Ann. § 50-112. 198. Plaintiff purchased cedar shakes and shingles within the State of Kansas during the Class Period. But for Defendants’ conduct set forth herein, the price of cedar shakes and shingles would have been lower, in an amount to be determined at trial. 199. Under the Kansas Restraint of Trade Act, indirect purchasers have standing to maintain an action based on the facts alleged in this Complaint. Kan. Stat. Ann § 50-161(b). 200. Defendants combined capital, skill or acts for the purposes of creating restrictions in trade or commerce of cedar shakes and shingles, increasing the price of cedar shakes and shingles, preventing competition in the sale of cedar shakes and shingles, or binding themselves not to sell cedar shakes and shingles, in a manner that established the price of cedar shakes and shingles and precluded free and unrestricted competition among themselves in the sale of cedar shakes and shingles, in violation of Kan. Stat. Ann. § 50-101, et seq. 201. Plaintiff and members of the Kansas Class were injured with respect to purchases of cedar shakes and shingles in Kansas and are entitled to all forms of relief, including actual damages, reasonable attorney’s fees and costs, and injunctive relief. 8. Violation of Maine’s Antitrust Statute (Me. Rev. Stat. Ann. Tit. 10, § 1101, et seq.) on behalf of the Maine Class 202. Plaintiff incorporates and realleges, as though fully set forth herein, each and every allegation set forth in the preceding paragraphs of this Complaint. 203. Part 3 of Title 10 the Maine Revised Statutes generally governs regulation of trade in Maine. Chapter 201 thereof governs monopolies and profiteering, generally prohibiting contracts in restraint of trade and conspiracies to monopolize trade. Me. Rev. Stat. Ann. Tit. 10, §§ 1101-02. 204. Plaintiff purchased cedar shakes and shingles within the State of Maine during the Class Period. But for Defendants’ conduct set forth herein, the price of cedar shakes and shingles would have been lower, in an amount to be determined at trial. 205. Under Maine law, indirect purchasers have standing to maintain an action based on the facts alleged in this Complaint. Me. Rev. Stat. Ann. Tit. 10, § 1104(1). 206. Defendants contracted, combined or conspired in restraint of trade or commerce of cedar shakes and shingles within the intrastate commerce of Maine, and monopolized or attempted to monopolize the trade or commerce of cedar shakes and shingles within the intrastate commerce of Maine, in violation of Me. Rev. Stat. Ann. Tit. 10, § 1101, et seq. 207. Plaintiff and members of the Maine Class were injured with respect to purchases of cedar shakes and shingles in Maine and are entitled to all forms of relief, including actual damages, treble damages, reasonable attorneys’ and experts’ fees and costs. 9. Violation of the Michigan Antitrust Reform Act (Mich. Comp. Laws §§ 445.771, et seq.) on behalf of the Michigan Class 208. Plaintiff incorporates and realleges, as though fully set forth herein, each and every allegation set forth in the preceding paragraphs of this Complaint. 209. The Michigan Antitrust Reform Act aims “to prohibit contracts, combinations, and conspiracies in restraint of trade or commerce...to prohibit monopolies and attempts to monopolize trade or commerce...[and] to provide remedies, fines, and penalties for violations of this act.” Mich. Act 274 of 1984. 210. Plaintiff purchased cedar shakes and shingles within the State of Michigan during the Class Period. But for Defendants’ conduct set forth herein, the price of cedar shakes and shingles would have been lower, in an amount to be determined at trial. 211. Under the Michigan Antitrust Reform Act, indirect purchasers have standing to maintain an action based on the facts alleged in this Complaint. Mich. Comp. Laws. § 452.778(2). 212. Defendants contracted, combined or conspired to restrain or monopolize trade or commerce in the market for cedar shakes and shingles, in violation of Mich. Comp. Laws § 445.772, et seq. 213. Plaintiff and members of the Michigan Class were injured with respect to purchases of cedar shakes and shingles in Michigan and are entitled to all forms of relief, including actual damages, treble damages for flagrant violations, interest, costs, reasonable attorney’s fees, and injunctive or other appropriate equitable relief. 10. Violation of Minnesota Antitrust Law (Minn. Stat. §§ 325D.49, et seq.) on behalf of the Minnesota Class 214. Plaintiff incorporates and realleges, as though fully set forth herein, each and every allegation set forth in the preceding paragraphs of this Complaint. 215. The Minnesota Antitrust Law of 1971 aims to prohibit any contract, combination or conspiracy when any part thereof was created, formed, or entered into in Minnesota; any contract, combination or conspiracy, wherever created, formed or entered into; any establishment, maintenance or use of monopoly power; and any attempt to establish, maintain or use monopoly power, whenever any of these affect Minnesota trade or commerce. 216. Plaintiff purchased cedar shakes and shingles within the State of Minnesota during the Class Period. But for Defendants’ conduct set forth herein, the price of cedar shakes and shingles would have been lower, in an amount to be determined at trial. 217. Under the Minnesota Antitrust Act of 1971, indirect purchasers have standing to maintain an action based on the facts alleged in this Complaint. Minn. Stat. § 325D.56. 218. Defendants contracted, combined or conspired in unreasonable restraint of trade or commerce in the market for cedar shakes and shingles within the intrastate commerce of and outside of Minnesota; established, maintained, used or attempted to establish, maintain or use monopoly power over the trade or commerce in the market for cedar shakes and shingles within the intrastate commerce of and outside of Minnesota; and fixed prices and allocated markets for cedar shakes and shingles within the intrastate commerce of and outside of Minnesota, in violation of Minn. Stat. § 325D.49, et seq. 219. Plaintiff and members of the Minnesota Class were injured with respect to purchases of cedar shakes and shingles in Minnesota and are entitled to all forms of relief, including actual damages, treble damages, costs and disbursements, reasonable attorney’s fees, and injunctive relief necessary to prevent and restrain violations hereof. 11. Violation of the Mississippi Antitrust Statute (Miss. Code Ann. § 74-21-1, et seq.) on behalf of the Mississippi Class 220. Plaintiff incorporates and realleges, as though fully set forth herein, each and every allegation set forth in the preceding paragraphs of this Complaint. 221. Title 75 of the Mississippi Code regulates trade, commerce and investments. Chapter 21 thereof generally prohibits trusts and combines in restraint or hindrance of trade, with the aim that “trusts and combines may be suppressed, and the benefits arising from competition in business [are] preserved” to Mississippians. Miss. Code Ann. § 75-21-39. 222. Trusts are combinations, contracts, understandings or agreements, express or implied, when inimical to the public welfare and with the effect of, inter alia, restraining trade, increasing the price or output of a commodity, or hindering competition in the production or sale of a commodity. Miss. Code Ann. § 75-21-1. 223. Plaintiff purchased cedar shakes and shingles within the State of Mississippi during the Class Period. But for Defendants’ conduct set forth herein, the price of cedar shakes and shingles would have been lower, in an amount to be determined at trial. 224. Under Mississippi law, indirect purchasers have standing to maintain an action under the antitrust provisions of the Mississippi Code based on the facts alleged in this Defendants combined, contracted, understood and agreed in the market for cedar shakes and shingles, in a manner inimical to public welfare, with the effect of restraining trade, increasing the price of cedar shakes and shingles and hindering competition in the sale of cedar shakes and shingles, in violation of Miss. Code Ann. § 75-21-1(a), et seq. 225. Defendants monopolized or attempted to monopolize the production, control or sale of cedar shakes and shingles, in violation of Miss. Code Ann. § 75-21-3, et seq. 226. Defendants’ cedar shakes and shingles are sold indirectly via distributors throughout the State of Mississippi. During the Class Period, Defendants’ illegal conduct substantially affected Mississippi commerce. 227. Plaintiff and members of the Mississippi Class were injured with respect to purchases of cedar shakes and shingles in Mississippi and are entitled to all forms of relief, including actual damages and a penalty of $500 per instance of injury. 12. Violation of the Missouri Merchandising Practices Act (Mo. Stat. § 407.010, et seq.) on behalf of the Missouri Class 228. Plaintiff incorporates and realleges, as though fully set forth herein, each and every allegation set forth in the preceding paragraphs of this Complaint. 229. Chapter 407 of the Missouri Merchandising Practices Act (the “MMPA”) generally governs unlawful business practices, including antitrust violations such as restraints of trade and monopolization. 230. Plaintiff purchased cedar shakes and shingles within the State of Missouri during the Class Period. But for Defendants’ conduct set forth herein, the price of cedar shakes and shingles would have been lower, in an amount to be determined at trial. 231. Under Missouri law, indirect purchasers have standing to maintain an action under the MMPA based on the facts alleged in this Complaint. Gibbons v. J. Nuckolls, Inc., 216 S.W.3d 667, 669 (Mo. 2007). 232. Defendants contracted, combined or conspired in restraint of trade or commerce of cedar shakes and shingles within the intrastate commerce of Missouri, and monopolized or attempted to monopolize the market for cedar shakes and shingles within the intrastate commerce of Missouri by possessing monopoly power in the market and willfully maintaining that power through agreements to fix prices, allocate markets and otherwise control trade, in violation of Mo. Ann. Stat. § 407.010, et seq. 233. Plaintiff and members of the Missouri Class were injured with respect to purchases of cedar shakes and shingles in Missouri and are entitled to all forms of relief, including actual damages or liquidated damages in an amount which bears a reasonable relation to the actual damages which have been sustained, as well as reasonable attorney’s fees, costs, and injunctive relief. 13. Violation of the Nebraska Junkin Act (Neb. Rev. Stat. § 59-801, et seq.) on behalf of the Nebraska Class 234. Plaintiff incorporates and realleges, as though fully set forth herein, each and every allegation set forth in the preceding paragraphs of this Complaint. 235. Chapter 59 of the Nebraska Revised Statute generally governs business and trade practices. Sections 801 through 831 thereof, known as the Junkin Act, prohibit antitrust violations such as restraints of trade and monopolization. 236. Plaintiff purchased cedar shakes and shingles within the State of Nebraska during the Class Period. But for Defendants’ conduct set forth herein, the price of cedar shakes and shingles would have been lower, in an amount to be determined at trial. 237. Under Nebraska law, indirect purchasers have standing to maintain an action under the Junkin Act based on the facts alleged in this Complaint. Neb. Rev. Stat. § 59-821. 238. Defendants contracted, combined or conspired in restraint of trade or commerce of cedar shakes and shingles within the intrastate commerce of Nebraska, and monopolized or attempted to monopolize the market for cedar shakes and shingles within the intrastate commerce of Nebraska by possessing monopoly power in the market and willfully maintaining that power through agreements to fix prices, allocate markets and otherwise control trade, in violation of Neb. Rev. Stat. § 59-801, et seq. 239. Plaintiff and members of the Nebraska Class were injured with respect to purchases of cedar shakes and shingles in Nebraska and are entitled to all forms of relief, including actual damages or liquidated damages in an amount which bears a reasonable relation to the actual damages which have been sustained, as well as reasonable attorney’s fees, costs, and injunctive relief. 14. Violations of the Nevada Unfair Trade Practices Act (Nev. Rev. Stat § 598A.030(1)) on behalf of the Nevada Class 240. Plaintiff incorporates and realleges, as though fully set forth herein, each and every allegation set forth in the preceding paragraphs of this Complaint. 241. The Nevada Unfair Trade Practice Act (“NUTPA”) states that “free, open and competitive production and sale of commodities...is necessary to the economic well-being of the citizens of the State of Nevada.” Nev. Rev. Stat. Ann. § 598A.030(1). 242. The policy of NUTPA is to prohibit acts in restraint of trade or commerce, to preserve and protect the free, open and competitive market, and to penalize all persons engaged in anticompetitive practices. Nev. Rev. Stat. Ann. § 598A.030(2). Such acts include price fixing, division of markets, allocation of customers, and monopolization of trade. Nev. Rev. Stat. Ann. § 598A.060. 243. Plaintiff purchased cedar shakes and shingles within the State of Nevada during the Class Period. But for Defendants’ conduct set forth herein, the price of cedar shakes and shingles would have been lower, in an amount to be determined at trial. 244. Under Nevada law, indirect purchasers have standing to maintain an action under NUTPA based on the facts alleged in this Complaint. Nev. Rev. Stat. Ann. §598A.210(2). 245. Defendants fixed prices by agreeing to establish prices for cedar shakes and shingles in Nevada, divided Nevada markets, allocated Nevada customers, and monopolized or attempted monopolize trade or commerce of cedar shakes and shingles within the intrastate commerce of Nevada, constituting a contract, combination or conspiracy in restraint of trade in violation of Nev. Rev. Stat. Ann. § 598A, et seq. 246. Plaintiff and members of the Nevada Class were injured with respect to purchases of cedar shakes and shingles in Nevada in that many of sales of Defendants’ cedar shakes and shingles took place in Nevada, purchased by Nevada consumers at supra-competitive prices caused by Defendants’ conduct. 247. Accordingly, Plaintiff and members of the Nevada Class are entitled to all forms of relief, including actual damages, treble damages, reasonable attorney’s fees, costs, and injunctive relief. 248. In accordance with the requirements of § 598A.210(3), notice of this action was mailed to the Nevada Attorney General by Plaintiff. 15. Violation of New Hampshire’s Antitrust Statute (N.H. Rev. Stat. Ann. §§ 356, et seq.) on behalf of the New Hampshire Class 249. Plaintiff incorporates and realleges, as though fully set forth herein, each and every allegation set forth in the preceding paragraphs of this Complaint. 250. Title XXXI of the New Hampshire Statutes generally governs trade and commerce. Chapter 356 thereof governs combinations and monopolies and prohibits restraints of trade. N.H. Rev. Stat. Ann. §§ 356:2, 3. 251. Plaintiff purchased cedar shakes and shingles within the State of New Hampshire during the Class Period. But for Defendants’ conduct set forth herein, the price of cedar shakes and shingles would have been lower, in an amount to be determined at trial. 252. Under New Hampshire law, indirect purchasers have standing to maintain an action based on the facts alleged in this Complaint. N.H. Rev. Stat. Ann. § 356:11(II). 253. Defendants fixed, controlled or maintained prices for cedar shakes and shingles, allocated customers or markets for cedar shakes and shingles, and established, maintained or used monopoly power, or attempted to, constituting a contract, combination or conspiracy in restraint of trade in violation of N.H. Rev. Stat. Ann. § 356:1, et seq. 254. Plaintiff and members of the New Hampshire Class were injured with respect to purchases of cedar shakes and shingles in New Hampshire and are entitled to all forms of relief, including actual damages sustained, treble damages for willful or flagrant violations, reasonable attorney’s fees, costs, and injunctive relief. 16. Violation of the New Mexico Antitrust Act (N.M. Stat. Ann. §§ 57-1-1, et seq.) on behalf of the New Mexico Class. 255. Plaintiff incorporates and realleges, as though fully set forth herein, each and every allegation set forth in the preceding paragraphs of this Complaint. 256. The New Mexico Antitrust Act aims to prohibit restraints of trade and monopolistic practices. N.M. Stat. Ann. 57-1-15. 257. Plaintiff purchased cedar shakes and shingles within the State of New Mexico during the Class Period. But for Defendants’ conduct set forth herein, the price of cedar shakes and shingles would have been lower, in an amount to be determined at trial. 258. Under New Mexico law, indirect purchasers have standing to maintain an action based on the facts alleged in this Complaint. N.M. Stat. Ann. § 57-1-3. 259. Defendants contracted, agreed, combined or conspired, and monopolized or attempted to monopolize trade for cedar shakes and shingles within the intrastate commerce of New Mexico, in violation of N.M. Stat. Ann. § 57-1-1, et seq. 260. Plaintiff and members of the New Mexico Class were injured with respect to purchases of cedar shakes and shingles in New Mexico and are entitled to all forms of relief, including actual damages, treble damages, reasonable attorney’s fees, costs, and injunctive relief. 17. Violation of New York General Business Laws §§ 340, et seq., on behalf of the New York Class 261. Plaintiff incorporates and realleges, as though fully set forth herein, each and every allegation set forth in the preceding paragraphs of this Complaint. 262. Article 22 of the New York General Business Law general prohibits monopolies and contracts or agreements in restraint of trade, with the policy of encouraging competition or the free exercise of any activity in the conduct of any business, trade or commerce in New York. N.Y. Gen. Bus. Law § 340(1). 263. Plaintiff purchased cedar shakes and shingles within the State of New York during the Class Period. But for Defendants’ conduct set forth herein, the price of cedar shakes and shingles would have been lower, in an amount to be determined at trial. 264. Under New York law, indirect purchasers have standing to maintain an action based on the facts alleged in this Complaint. N.Y. Gen. Bus. Law § 340(6). 265. Defendants established or maintained a monopoly within the intrastate commerce of New York for the trade or commerce of cedar shakes and shingles and restrained competition in the free exercise of the conduct of the business of cedar shakes and shingles within the intrastate commerce of New York, in violation of N.Y. Gen. Bus. Law § 340, et seq. 266. Plaintiff and members of the New York Class were injured with respect to purchases of cedar shakes and shingles in New York and are entitled to all forms of relief, including actual damages, treble damages, costs not exceeding $10,000, and reasonable attorney’s fees. 18. Violation of the North Carolina General Statutes §§ 75-1, et seq., on behalf of the North Carolina Class 267. 205. Plaintiff incorporates and realleges, as though fully set forth herein, each and every allegation set forth in the preceding paragraphs of this Complaint. 268. Defendants entered into a contract or combination in the form of trust or otherwise, or conspiracy in restraint of trade or commerce in the cedar shakes and shingles market, a substantial part of which occurred within North Carolina. 269. Defendants established, maintained, or used a monopoly, or attempted to establish a monopoly, of trade or commerce in the cedar shakes and shingles market, for the purpose of affecting competition or controlling, fixing, or maintaining prices, a substantial part of which occurred within North Carolina. 270. Defendants’ unlawful conduct substantially affected North Carolina’s trade and commerce. 271. As a direct and proximate cause of Defendants’ unlawful conduct, Plaintiff and the members of the North Carolina Class have been injured in their business or property and are threatened with further injury. 272. By reason of the foregoing, Plaintiff and members of the North Carolina Class are entitled to seek all forms of relief available, including treble damages, under N.C. Gen. Stat. § 75-1, et seq. 19. Violation of the North Dakota Uniform State Antitrust Act (N.D. Cent. Code §§ 51-08.1, et seq.) on behalf of the North Dakota Class 273. 211. Plaintiff incorporates and realleges, as though fully set forth herein, each and every allegation set forth in the preceding paragraphs of this Complaint. 274. The North Dakota Uniform State Antitrust Act generally prohibits restraints on or monopolization of trade. N.D. Cent. Code § 51-08.1, et seq. 275. Plaintiff purchased cedar shakes and shingles within the State of North Dakota during the Class Period. But for Defendants’ conduct set forth herein, the price of cedar shakes and shingles would have been lower, in an amount to be determined at trial. 276. Under the North Dakota Uniform State Antitrust Act, indirect purchasers have standing to maintain an action based on the facts alleged in this Complaint. N.D. Cent. Code § 51-08.1-08. 277. Defendants contracted, combined or conspired in restraint of, or to monopolize trade or commerce in the market for cedar shakes and shingles, and established, maintained, or used a monopoly, or attempted to do so, for the purposes of excluding competition or controlling, fixing or maintaining prices for cedar shakes and shingles, in violation of N.D. Cent. Code §§ 51-08.1-02, 03. 278. Plaintiff and members of the North Dakota Class were injured with respect to purchases in North Dakota and are entitled to all forms of relief, including actual damages, treble damages for flagrant violations, costs, reasonable attorney’s fees, and injunctive or other equitable relief. 20. Violation of the Oregon Antitrust Law (Or. Rev. Stat §§ 646.705, et seq.) on behalf of the Oregon Class 279. Plaintiff incorporates and realleges, as though fully set forth herein, each and every allegation set forth in the preceding paragraphs of this Complaint. 280. Chapter 646 of the Oregon Revised Statutes generally governs business and trade practices within Oregon. Sections 705 through 899 thereof govern antitrust violations, with the policy to “encourage free and open competition in the interest of the general welfare and economy of the state.” Or. Rev. Stat. § 646.715. 281. Plaintiff purchased cedar shakes and shingles within the State of Oregon during the Class Period. But for Defendants’ conduct set forth herein, the price of cedar shakes and shingles would have been lower, in an amount to be determined at trial. 282. Under Oregon law, indirect purchasers have standing under the antitrust provisions of the Oregon Revised Statutes to maintain an action based on the facts alleged in this Complaint. Or. Rev. Stat. § 646.780(1)(a). 283. Defendants contracted, combined, or conspired in restraint of trade or commerce of cedar shakes and shingles, and monopolized or attempted to monopolize the trade or commerce of cedar shakes and shingles, in violation of Or. Rev. Stat. § 646.705, et seq. 284. Plaintiff and members of the Oregon Class were injured with respect to purchases of cedar shakes and shingles within the intrastate commerce of Oregon, or alternatively to interstate commerce involving actual or threatened injury to persons located in Oregon, and are entitled to all forms of relief, including actual damages, treble damages, reasonable attorney’s fees, expert witness fees and investigative costs, and injunctive relief. 21. Violation of the Rhode Island Antitrust Act (R.I. Gen. Laws §§ 6-36-1, et seq.) on behalf of the Rhode Island Class 285. 223. Plaintiff incorporates and realleges, as though fully set forth herein, each and every allegation set forth in the preceding paragraphs of this Complaint. 286. The Rhode Island Antitrust Act aims to promote the unhampered growth of commerce and industry throughout Rhode Island by prohibiting unreasonable restraints of trade and monopolistic practices that hamper, prevent or decrease competition. R.I. Gen. Laws § 6-36- 2(a)(2). 287. Plaintiff purchased cedar shakes and shingles within the State of Rhode Island during the Class Period. But for Defendants’ conduct set forth herein, the price of cedar shakes and shingles would have been lower, in an amount to be determined at trial. 288. Under the Rhode Island Antitrust Act, no later than January 1, 2011 (further investigation and discovery may reveal an earlier date), indirect purchasers have standing to maintain an action based on the facts alleged in this Complaint. R.I. Gen. Laws § 6-36-11(a). In Rhode Island, the claims of the Plaintiff and the Class alleged herein run no later than January 1, 2011 (further investigation and discovery may reveal an earlier date) through the date that the effects of Defendants’ anticompetitive conduct cease. 289. Defendants contracted, combined and conspired in restraint of trade of cedar shakes and shingles within the intrastate commerce of Rhode Island, and established, maintained or used, or attempted to establish, maintain or use, a monopoly in the trade of cedar shakes and shingles for the purpose of excluding competition or controlling, fixing or maintaining prices within the intrastate commerce of Rhode Island, in violation of R.I. Gen. Laws § 6-36-1, et seq. 290. Plaintiff and members of the Rhode Island Class were injured with respect to purchases of cedar shakes and shingles in Rhode Island and are entitled to all forms of relief, including actual damages, treble damages, reasonable costs, reasonable attorney’s fees, and injunctive relief. 22. Violation of the South Dakota Antitrust Statute (S.D. Codified Laws §§ 37-1, et seq.) on behalf of the South Dakota Class 291. Plaintiff incorporates and realleges, as though fully set forth herein, each and every allegation set forth in the preceding paragraphs of this Complaint. 292. Chapter 37-1 of the South Dakota Codified Laws prohibits restraint of trade, monopolies and discriminatory trade practices. S.D. Codified Laws §§ 37-1- 3.1, 3.2. 293. Plaintiff purchased cedar shakes and shingles within the State of South Dakota during the Class Period. But for Defendants’ conduct set forth herein, the price of cedar shakes and shingles would have been lower, in an amount to be determined at trial. 294. Under South Dakota law, indirect purchasers have standing under the antitrust provisions of the South Dakota Codified Laws to maintain an action based on the facts alleged in this Complaint. S.D. Codified Laws § 37-1-33. 295. Defendants contracted, combined or conspired in restraint of trade or commerce of cedar shakes and shingles within the intrastate commerce of South Dakota, and monopolized or attempted to monopolize trade or commerce of cedar shakes and shingles within the intrastate commerce of South Dakota, in violation of S.D. Codified Laws § 37-1, et seq. 296. Plaintiff and members of the South Dakota Class were injured with respect to purchases of cedar shakes and shingles in South Dakota and are entitled to all forms of relief, including actual damages, treble damages, taxable costs, reasonable attorney’s fees, and injunctive or other equitable relief. 23. Violation of the Tennessee Trade Practices Act (Tenn. Code §§ 47-25-101, et seq.) on behalf of the Tennessee Class 297. Plaintiff incorporates and realleges, as though fully set forth herein, each and every allegation set forth in the preceding paragraphs of this Complaint. 298. The Tennessee Trade Practices Act generally governs commerce and trade in Tennessee, and it prohibits, inter alia, all arrangements, contracts, agreements, or combinations between persons or corporations made with a view to lessen, or which tend to lessen, full and free competition in goods in Tennessee. All such arrangements, contracts, agreements, or combinations between persons or corporations designed, or which tend, to increase the prices of any such goods, are against public policy, unlawful, and void. Tenn. Code, § 47-25-101. 299. Defendants competed unfairly and colluded by meeting to fix prices, divide markets, and otherwise restrain trade as set forth herein, in violation of Tenn. Code, § 47-25-101, 300. Defendant’s conduct violated the Tennessee Trade Practice Act because it was an arrangement, contract, agreement, or combination to lessen full and free competition in goods in Tennessee, and because it tended to increase the prices of goods in Tennessee. Specifically, Defendants’ combination or conspiracy had the following effects: (1) price competition for cedar shakes and shingles was restrained, suppressed, and eliminated throughout Tennessee; (2) prices for cedar shakes and shingles were raised, fixed, maintained and stabilized at artificially high levels throughout Tennessee; (3) Plaintiff and the Tennessee Class were deprived of free and open competition; and (4) Plaintiff and the Tennessee Class paid supra-competitive, artificially inflated prices for cedar shakes and shingles. 301. During the Class Period, Defendants’ illegal conduct had a substantial effect on Tennessee commerce as cedar shakes and shingles were sold in Tennessee. 302. Plaintiff and the Tennessee Class purchased cedar shakes and shingles within the State of Tennessee during the Class Period. But for Defendants’ conduct set forth herein, the price of cedar shakes and shingles would have been lower, in an amount to be determined at trial. As a direct and proximate result of Defendants’ unlawful conduct, Plaintiff and the Tennessee Class have been injured in their business and property and are threatened with further injury 303. Under Tennessee law, indirect purchasers (such as Plaintiff and the Tennessee Class) have standing under the Tennessee Trade Practice Acts to maintain an action based on the facts alleged in this Complaint. 304. Plaintiff and members of the Tennessee Class were injured with respect to purchases of cedar shakes and shingles in Tennessee and are entitled to all forms of relief available under the law, including return of the unlawful overcharges that they paid on their purchases, damages, equitable relief, and reasonable attorney’s fees. 24. Violation of the Utah Antitrust Act (Utah Code Ann. § 76-10- 3101, et seq.) on behalf of the Utah Class 305. Plaintiff incorporates and realleges, as though fully set forth herein, each and every allegation set forth in the preceding paragraphs of this Complaint. 306. The Utah Antitrust Act aims to “encourage free and open competition in the interest of the general welfare and economy of this state by prohibiting monopolistic and unfair trade practices, combinations and conspiracies in restraint of trade or commerce . . . .” Utah Code Ann. § 76-10-3102. 307. Plaintiff purchased cedar shakes and shingles within the State of Utah during the Class Period. But for Defendants’ conduct set forth herein, the price of cedar shakes and shingles would have been lower, in an amount to be determined at trial. 308. Under the Utah Antitrust Act, indirect purchasers who are either Utah residents or Utah citizens have standing to maintain an action based on the facts alleged in this Complaint. Utah Code Ann. § 76-10-3109(1)(a). 309. Defendants contracted, combined or conspired in restraint of trade or commerce of cedar shakes and shingles, and monopolized or attempted to monopolize trade or commerce of cedar shakes and shingles, in violation of Utah Code Ann. § 76-10-3101, et seq. 310. Plaintiff and members of the Utah Class who are either Utah residents or Utah citizens were injured with respect to purchases of cedar shakes and shingles in Utah and are entitled to all forms of relief, including actual damages, treble damages, costs of suit, reasonable attorney’s fees, and injunctive relief. 25. Violation of the West Virginia Antitrust Act (W. Va. Code § 47- 18-1, et seq.) on behalf of the West Virginia Class 311. Plaintiff incorporates and realleges, as though fully set forth herein, each and every allegation set forth in the preceding paragraphs of this Complaint. 312. The violations of federal antitrust law set forth above also constitute violations of section 47-18-1 of the West Virginia Code. 313. During the Class Period, Defendants and their co-conspirators engaged in a continuing contract, combination or conspiracy in unreasonable restraint of trade and commerce and other anticompetitive conduct alleged above in violation of W. Va. Code § 47-18-1, et seq. 314. Defendants’ anticompetitive acts described above were knowing, willful and constitute violations or flagrant violations of the West Virginia Antitrust Act. 315. As a direct and proximate result of Defendants’ unlawful conduct, Plaintiff and members of the West Virginia Class have been injured in their business and property in that they paid more for cedar shakes and shingles than they otherwise would have paid in the absence of Defendants’ unlawful conduct. As a result of Defendants’ violation of Section 47-18-3 of the West Virginia Antitrust Act, Plaintiff and members of the West Virginia Class seek treble damages and their cost of suit, including reasonable attorney’s fees, pursuant to section 47-18-9 of the West Virginia Code. 26. Violation of the Wisconsin Antitrust Act (Wis. Stat. §§ 133.01, et seq.) on behalf of the Wisconsin Class 316. Plaintiff incorporates and realleges, as though fully set forth herein, each and every allegation set forth in the preceding paragraphs of this Complaint. 317. Chapter 133 of the Wisconsin Statutes governs trust and monopolies, with the intent “to safeguard the public against the creation or perpetuation of monopolies and to foster and encourage competition by prohibiting unfair and discriminatory business practices which destroy or hamper competition.” Wis. Stat. § 133.01. 318. Plaintiff purchased cedar shakes and shingles within the State of Wisconsin during the Class Period. But for Defendants’ conduct set forth herein, the price of cedar shakes and shingles would have been lower, in an amount to be determined at trial. 319. Under Wisconsin law, indirect purchasers have standing under the antitrust provisions of the Wisconsin Statutes to maintain an action based on the facts alleged in this Complaint. Wis. Stat. 133.18(a). 320. Defendants contracted, combined or conspired in restraint of trade or commerce of cedar shakes and shingles, and monopolized or attempted to monopolize the trade or commerce of cedar shakes and shingles, with the intention of injuring or destroying competition therein, in violation of Wis. Stat. § 133.01, et seq. 321. Plaintiff and members of the Wisconsin Class were injured with respect to purchases of cedar shakes and shingles in Wisconsin in that the actions alleged herein substantially affected the people of Wisconsin, with many in Wisconsin paying substantially higher prices for Defendants’ cedar shakes and shingles in Wisconsin. 322. Accordingly, Plaintiff and members of the Wisconsin Class are entitled to all forms of relief, including actual damages, treble damages, costs and reasonable attorney’s fees, and injunctive relief. 323. Defendants’ and their co-conspirators’ anticompetitive activities have directly, foreseeably, and proximately caused injury to Plaintiff and members of the Classes in the United States. Their injuries consist of: (1) being denied the opportunity to purchase lower-priced cedar shakes and shingles from Defendants, and (2) paying higher prices for Defendants’ cedar shakes and shingles than they would have in the absence of Defendants’ conduct. These injuries are of the type of the laws of the above States were designed to prevent, and flow from that which makes Defendants’ conduct unlawful. 324. Defendants are jointly and severally liable for all damages suffered by Plaintiff and members of the Classes. C. Violations of State Consumer Protection Law 1. Violation of Alaska Statute § 45.50.471, et seq., on behalf of the Alaska Class 325. Plaintiff incorporates and realleges, as though fully set forth herein, each and every allegation set forth in the preceding paragraphs of this Complaint. 326. Defendants have engaged in unfair competition or unfair, unconscionable, or deceptive acts or practices in violation of Alaska Statute § 45.50.471, et seq. 327. Defendants knowingly agreed to, and did in fact, act in restraint of trade or commerce by affecting, fixing, controlling, and/or maintaining at non-competitive and artificially inflated levels, the prices at which cedar shakes and shingles were sold, distributed, or obtained in Alaska and took efforts to conceal their agreements from Plaintiff and members of the Class. 328. The aforementioned conduct on the part of Defendants constituted “unconscionable” and “deceptive” acts or practices in violation of Alaska law. 329. Defendants’ unlawful conduct had the following effects: (1) cedar shakes and shingles price competition was restrained, suppressed, and eliminated throughout Alaska; (2) cedar shakes and shingles prices were raised, fixed, maintained, and stabilized at artificially high levels throughout Alaska; (3) Plaintiff and members of the Alaska Class were deprived of free and open competition; and (4) Plaintiff and members of the Alaska Class paid supra-competitive, artificially inflated prices for cedar shakes and shingles. 330. During the Class Period, Defendants’ illegal conduct substantially affected Alaska commerce and consumers. 331. As a direct and proximate result of Defendants’ unlawful conduct, Plaintiff and members of the Alaska Class have been injured and are threatened with further injury. 332. Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of Alaska Stat. § 45.50.471, et seq., and, accordingly, Plaintiff and members of the Alaska Class seek all relief available under that statute. 2. Violation of the Colorado Consumer Protection Act (Colo. Rev. Stat. §§ 6-1-101, et seq.) on behalf of the Colorado Class 333. Plaintiff incorporates and realleges, as though fully set forth herein, each and every allegation set forth in the preceding paragraphs of this Complaint. 334. Defendants have engaged in unfair competition or unfair, unconscionable, or deceptive acts or practices in violation of Colorado Consumer Protection Act, Colorado Rev. Stat. § 6-1-101, et seq. 335. Defendants engaged in an unfair and deceptive trade practices during the course of their business dealings, which significantly impacted Plaintiff as an actual or potential consumers of the Defendants’ goods and which caused Plaintiff to suffer injury. 336. Defendants took efforts to conceal their agreements from Plaintiff. Defendants’ unlawful conduct had the following effects: (1) cedar shakes and shingles price competition was restrained, suppressed, and eliminated throughout Colorado; (2) cedar shakes and shingles prices were raised, fixed, maintained, and stabilized at artificially high levels throughout Colorado; (3) Plaintiff and members of the Colorado Class were deprived of free and open competition; and (4) Plaintiff and members of the Colorado Class paid supracompetitive, artificially inflated prices for cedar shakes and shingles. 337. During the Class Period, Defendants’ illegal conduct substantially affected Colorado commerce and consumers. 338. As a direct and proximate result of Defendants’ unlawful conduct, Plaintiff and members of the Colorado Class have been injured and are threatened with further injury. 339. Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of Colorado Rev. Stat. § 6-1-101, et seq., and, accordingly, Plaintiff and members of the Colorado Class seek all relief available under that statute and as equity demands. 3. Violation of California’s Unfair Competition Law (Cal. Bus. & Prof. Code §§ 17200, et seq.) (“UCL”) on behalf of the California Class 340. Plaintiff incorporates and realleges, as though fully set forth herein, each and every allegation set forth in the preceding paragraphs of this Complaint. 341. The violations of federal antitrust law set forth above also constitute violations of section 17200, et seq. of California Business and Professions Code. 342. Defendants have engaged in unfair competition or unfair, unconscionable, deceptive or fraudulent acts or practices in violation of the UCL by engaging in the acts and practices specified above. 343. This claim is instituted pursuant to sections 17203 and 17204 of California Business and Professions Code, to obtain restitution from these Defendants for acts, as alleged herein, that violated the UCL. 344. The Defendants’ conduct as alleged herein violated the UCL. The acts, omissions, misrepresentations, practices and non-disclosures of Defendants, as alleged herein, constituted a common, continuous, and continuing course of conduct of unfair competition by means of unfair, unlawful, and/or fraudulent business acts or practices within the meaning of the UCL, including, but not limited to, the violations of section 16720, et seq., of California Business and Professions Code, set forth above. 345. Defendants’ acts, omissions, misrepresentations, practices, and non- disclosures, as described above, whether or not in violation of section 16720, et seq., of California Business and Professions Code, and whether or not concerted or independent acts, are otherwise unfair, unconscionable, unlawful or fraudulent. 346. Plaintiff and members of the California Class are entitled to full restitution and/or disgorgement of all revenues, earnings, profits, compensation, and benefits that may have been obtained by Defendants as a result of such business acts or practices. 347. The illegal conduct alleged herein is continuing and there is no indication that Defendants will not continue such activity into the future. 348. The unlawful and unfair business practices of Defendants, and each of them, as described above, have caused and continue to cause Plaintiff and the members of the California Class to pay supra-competitive and artificially-inflated prices for cedar shakes and shingles sold in the State of California. Plaintiff and the members of the California Class suffered injury in fact and lost money or property as a result of such unfair competition. 349. As alleged in this Complaint, Defendants and their co-conspirators have been unjustly enriched as a result of their wrongful conduct and by Defendants’ unfair competition. Plaintiff and the members of the California Class are accordingly entitled to equitable relief including restitution and/or disgorgement of all revenues, earnings, profits, compensation, and benefits that may have been obtained by Defendants as a result of such business practices, pursuant to California Business and Professions Code sections 17203 and 17204. 4. Violation of Delaware’s Consumer Fraud Act (6 Del. Code §§ 2511, et seq.) on behalf of the Delaware Class 350. Plaintiff incorporates and realleges, as though fully set forth herein, each and every allegation set forth in the preceding paragraphs of this Complaint. 351. Defendants have engaged in unfair competition or unfair, unconscionable, or deceptive acts or practices in violation of the Delaware Consumer Fraud Act, 6 Del. Code §2511, 352. Defendants agreed to, and did in fact, act in restraint of trade or commerce in Delaware, by affecting, fixing, controlling, and/or maintaining, at artificial and non-competitive levels, the prices at which cedar shakes and shingles were sold, distributed, or obtained in Delaware. 353. Defendants deliberately failed to disclose material facts to Plaintiff and members of the Delaware Class concerning Defendants’ unlawful activities and artificially inflated prices for cedar shakes and shingles. 354. Defendants misrepresented to all purchasers during the Class Period that Defendants’ cedar shakes and shingles prices were competitive and fair. Defendants’ unlawful conduct had the following effects: (1) cedar shakes and shingles price competition was restrained, suppressed, and eliminated throughout Delaware; (2) cedar shakes and shingles prices were raised, fixed, maintained, and stabilized at artificially high levels throughout Delaware; (3) Plaintiff and members of the Delaware Class were deprived of free and open competition; and (4) Plaintiff and members of the Delaware Class paid supracompetitive, artificially inflated prices for cedar shakes and shingles. 355. During the Class Period, Defendants’ illegal conduct had a substantial effect on Delaware commerce and consumers. 356. As a direct and proximate result of Defendants’ violations of law, Plaintiff and members of the Delaware Class suffered an ascertainable loss of money or property as a result of Defendants’ use or employment of unconscionable and deceptive commercial practices as set forth above. That loss was caused by Defendants’ willful and deceptive conduct, as described 357. Defendants’ deception, including their affirmative misrepresentations and omissions concerning the price of cedar shakes and shingles, likely misled all purchasers acting reasonably under the circumstances to believe that they were purchasing cedar shakes and shingles at prices set by a free and fair market. 358. Defendants’ misleading conduct and unconscionable activities constitute violations of 6 Del. Code § 2511, et seq., and, accordingly, Plaintiff and members of the Delaware Class seek all relief available under that statute. 5. Violation of the District of Columbia Consumer Protection Procedures Act (D.C. Code § 28-3901, et seq.) on behalf of the District of Columbia Class 359. Plaintiff incorporates and realleges, as though fully set forth herein, each and every allegation set forth in the preceding paragraphs of this Complaint. 360. Plaintiff and members of the District of Columbia Class purchased cedar shakes and shingles for personal, family, or household purposes. 361. By reason of the conduct alleged herein, Defendants have violated D.C. Code § 28-3901, et seq. 362. Defendants are “merchants” within the meaning of D.C. Code § 28- 3901(a)(3). 363. Defendants entered into a contract, combination, or conspiracy between two or more persons in restraint of, or to monopolize, trade or commerce in the cedar shakes and shingles market, a substantial part of which occurred within the District of Columbia. 364. Defendant established, maintained, or used a monopoly, or attempted to establish a monopoly, of trade or commerce in the relevant market, a substantial part of which occurred within the District of Columbia, for the purpose of excluding competition or controlling, fixing, or maintaining prices in the cedar shakes and shingles market. 365. Defendants’ conduct was an unfair method of competition, and an unfair or deceptive act or practice within the conduct of commerce within the District of Columbia. 366. Defendants’ unlawful conduct substantially affected the District of Columbia’s trade and commerce. 367. As a direct and proximate cause of Defendants’ unlawful conduct, Plaintiff and members of the District of Columbia Class have been injured in their business or property and are threatened with further injury. 368. By reason of the foregoing, Plaintiff and members of the District of Columbia Class are entitled to seek all forms of relief, including treble damages or $1500 per violation (whichever is greater) plus punitive damages, reasonable attorney’s fees and costs under D.C. Code § 28-3901, et seq. 6. Violation of the Florida Deceptive and Unfair Trade Practices Act (Fla. Stat. § 501.201(2), et seq.) on behalf of the Florida Class 369. Plaintiff incorporates and realleges, as though fully set forth herein, each and every allegation set forth in the preceding paragraphs of this Complaint. 370. The Florida Deceptive & Unfair Trade Practices Act, Florida Stat. §§ 501.201, et seq. (the “FDUTPA”), generally prohibits “unfair methods of competition, unconscionable acts or practices, and unfair or deceptive acts or practices in the conduct of any trade or commerce,” including practices in restraint of trade. Florida Stat. § 501.204(1). 371. The primary policy of the FDUTPA is “[t]o protect the consuming public and legitimate business enterprises from those who engage in unfair methods of competition, or unconscionable, deceptive, or unfair acts or practices in the conduct of any trade or commerce.” Florida Stat. § 501.202(2). 372. A claim for damages under the FDUTPA has three elements: (1) a prohibited practice; (2) causation; and (3) actual damages. 373. Under Florida law, indirect purchasers have standing to maintain an action under the FDUTPA based on the facts alleged in this Complaint. Fla. Stat. § 501.211(a) (“anyone aggrieved by a violation of this [statute] may bring an action . . .”). 374. Plaintiff purchased cedar shakes and shingles within the State of Florida during the Class Period. But for Defendants’ conduct set forth herein, the price of cedar shakes and shingles would have been lower, in an amount to be determined at trial. 375. Defendants entered into a contract, combination or conspiracy between two or more persons in restraint of, or to monopolize, trade or commerce in the cedar shakes and shingles market, a substantial part of which occurred within Florida. 376. Defendants established, maintained or used a monopoly, or attempted to establish a monopoly, of trade or commerce in the market for cedar shakes and shingles, for the purpose of excluding competition or controlling, fixing or maintaining prices in Florida at a level higher than the competitive market level, beginning at least as early as 2008 and continuing through the date of this filing. 377. Accordingly, Defendants’ conduct was an unfair method of competition, and an unfair or deceptive act or practice within the conduct of commerce within the State of Florida. 378. Defendants’ unlawful conduct substantially affected Florida’s trade and commerce. 379. As a direct and proximate cause of Defendants’ unlawful conduct, Plaintiff and the members of the Florida Class have been injured in their business or property by virtue of overcharges for cedar shakes and shingles and are threatened with further injury. 380. By reason of the foregoing, Plaintiff and the members of the Florida Class is entitled to seek all forms of relief, including injunctive relief pursuant to Florida Stat. §501.208 and declaratory judgment, actual damages, reasonable attorney’s fees and costs pursuant to Florida Stat. § 501.211. 7. Violation of the Hawaii Revised Statutes Annotated §§ 480-1, et seq., on behalf of the Hawaii Class 381. Plaintiff incorporates and realleges, as though fully set forth herein, each and every allegation set forth in the preceding paragraphs of this Complaint. 382. Defendants have engaged in unfair competition or unfair, unconscionable, or deceptive acts or practices in violation of the Hawaii Revised Statutes Annotated §§ 480-1, et 383. Defendants’ unlawful conduct had the following effects: (1) cedar shakes and shingles price competition was restrained, suppressed, and eliminated throughout Hawaii; (2) cedar shakes and shingles prices were, fixed, maintained, and stabilized at artificially high levels throughout Hawaii; (3) Plaintiff and members of the Hawaii Class were deprived of free and open competition; and (4) Plaintiff and members of the Hawaii Class paid supracompetitive, artificially inflated prices for cedar shakes and shingles. 384. During the Class Period, Defendants’ illegal conduct substantially affected Hawaii commerce and consumers. 385. As a direct and proximate result of Defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured and are threatened with further injury. 8. Violation of the Illinois Consumer Fraud and Deceptive Business Practices Act (Ill. Comp. Stat. Ann. 815 Ill. Comp. Stat. Ann. 505/10a, et seq.) on behalf of the Illinois Class 386. Plaintiff incorporates and realleges, as though fully set forth herein, each and every allegation set forth in the preceding paragraphs of this Complaint. 387. By reason of the conduct alleged herein, Defendants have violated 740 Ill. Comp. Stat. Ann. 10/3(1), et seq. 388. Defendants entered into a contract, combination, or conspiracy between two or more persons in restraint of, or to monopolize, trade or commerce in the cedar shakes and shingles market, a substantial part of which occurred within Illinois. 389. Defendants established, maintained, or used a monopoly, or attempted to establish a monopoly, of trade or commerce in the relevant market, a substantial part of which occurred within Illinois, for the purpose of excluding competition or controlling, fixing, or maintaining prices in the cedar shakes and shingles market. 390. Defendants’ conduct was unfair, unconscionable, or deceptive within the conduct of commerce within the State of Illinois. 391. Defendants’ conduct misled consumers, withheld material facts, and resulted in material misrepresentations to Plaintiff and members of the Classes. 392. Defendants’ unlawful conduct substantially affected Illinois’s trade and commerce. 393. As a direct and proximate cause of Defendants’ unlawful conduct, the Plaintiff and members of the Illinois Class were actually deceived and have been injured in their business or property and are threatened with further injury. 394. By reason of the foregoing, Plaintiff and members of the Illinois Class are entitled to seek all forms of relief, including actual damages or any other relief the Court deems proper under 815 Ill. Comp. Stat. Ann. 505/10a, et seq. 9. Violation of the Massachusetts Consumer Protection Act (Mass. Gen. Laws Ch. 93A § 1, et seq.) on behalf of the Massachusetts Class 395. 335. Plaintiff incorporates and realleges, as though fully set forth herein, each and every allegation set forth in the preceding paragraphs of this Complaint. 396. By reason of the conduct alleged herein, Defendants have violated the Massachusetts Consumer Protection Act, Mass. Gen. Laws Ch. 93A § 2, et seq. 397. Plaintiff purchased cedar shakes and shingles within the State of Massachusetts during the Class Period. But for Defendants’ conduct set forth herein, the price of cedar shakes and shingles would have been lower, in an amount to be determined at trial. 398. Defendants entered into a contract, combination, or conspiracy between two or more persons in restraint of, or to monopolize, trade or commerce in the cedar shakes and shingles market, a substantial part of which occurred within Massachusetts. 399. Defendants established, maintained, or used a monopoly, or attempted to establish a monopoly, of trade or commerce in the market for cedar shakes and shingles, a substantial part of which occurred within Massachusetts, for the purpose of excluding competition or controlling, fixing, or maintaining prices in the cedar shakes and shingles market. 400. Defendants’ conduct was an unfair method of competition, and an unfair or deceptive act or practice within the conduct of commerce within the State of Massachusetts. 401. Defendants’ unlawful conduct substantially affected Massachusetts’ trade and commerce. 402. As a direct and proximate cause of Defendants’ unlawful conduct, the Plaintiff and the members of the Massachusetts Class have been injured in their business or property and are threatened with further injury. 403. By reason of the foregoing, the Plaintiff and the Massachusetts Class are entitled to seek all forms of relief, including up to treble damages and reasonable attorney’s fees and costs under Mass. Gen. Laws Ch. 93A § 9. 404. Certain of the Defendants have been served with a demand letter or, upon information and belief, such service of a demand letter was unnecessary due to the defendant not maintaining a place of business within the Commonwealth of Massachusetts or not keeping assets within the Commonwealth. Mass. Gen. Laws Ch. 93A § 2. 10. Violation of the Michigan Consumer Protection Act (Mich. Comp. Laws Ann. §§ 445.901, et seq.) on behalf of the Michigan Class 405. Plaintiff incorporates and realleges, as though fully set forth herein, each and every allegation set forth in the preceding paragraphs of this Complaint. 406. By reason of the conduct alleged herein, Defendants have violated Mich. Comp. Laws Ann. § 445.901, et seq. 407. Defendants have entered into a contract, combination, or conspiracy between two or more persons in restraint of, or to monopolize, trade or commerce in the cedar shakes and shingles market, a substantial part of which occurred within Michigan. 408. Defendants established, maintained, or used a monopoly, or attempted to establish a monopoly, of trade or commerce in the cedar shakes and shingles market, for the purpose of excluding or limiting competition or controlling or maintaining prices, a substantial part of which occurred within Michigan. 409. Defendants’ conduct was conducted with the intent to deceive Michigan consumers regarding the nature of Defendants’ actions within the stream of Michigan commerce. 410. Defendants’ conduct was unfair, unconscionable, or deceptive within the conduct of commerce within the State of Michigan. 411. Defendants’ conduct misled consumers, withheld material facts, and took advantage of Plaintiff and members-of-the-Classes’ inability to protect themselves. 412. Defendants’ unlawful conduct substantially affected Michigan’s trade and commerce. 413. As a direct and proximate cause of Defendants’ unlawful conduct, the Plaintiff and members of the Michigan Class have been injured in their business or property and are threatened with further injury. 414. By reason of the foregoing, the Plaintiff and the Michigan Class are entitled to seek all forms of relief available under Mich. Comp. Laws Ann. § 445.911. 11. Violation of the Minnesota Consumer Fraud Act (Minn. Stat. § 235F.68, et seq.) on behalf of the Minnesota Class 415. Plaintiff incorporates and realleges, as though fully set forth herein, each and every allegation set forth in the preceding paragraphs of this Complaint. 416. By reason of the conduct alleged herein, Defendants have violated Minn. Stat. § 325F.68, et seq. 417. Defendants engaged in a deceptive trade practice with the intent to injure competitors and consumers through supra-competitive profits. 418. Defendants established, maintained, or used a monopoly, or attempted to establish a monopoly, of trade or commerce in the cedar shakes and shingles market, a substantial part of which occurred within Minnesota, for the purpose of controlling, fixing, or maintaining prices in the cedar shakes and shingles market. 419. Defendants’ conduct was unfair, unconscionable, or deceptive within the conduct of commerce within the State of Minnesota. 420. Defendants’ conduct, specifically in the form of fraudulent concealment of their horizontal agreement, created a fraudulent or deceptive act or practice committed by a supplier in connection with a consumer transaction. 421. Defendants’ unlawful conduct substantially affected Minnesota’s trade and commerce. 422. Defendants’ conduct was willful. 423. As a direct and proximate cause of Defendants’ unlawful conduct, the Plaintiff and the members of the Minnesota Class have been injured in their business or property and are threatened with further injury. 424. By reason of the foregoing, the Plaintiff and the members of the Minnesota Class are entitled to seek all forms of relief, including damages, reasonable attorney’s fees and costs under Minn. Stat. § 325F.68, et seq. and applicable case law. 12. Violation of the Montana Unfair Trade Practices and Consumer Protection Act of 1970 (Mont. Code §§ 30-14-103, et seq.) on behalf of the Montana Class 425. Plaintiff incorporates and realleges, as though fully set forth herein, each and every allegation set forth in the preceding paragraphs of this Complaint. 426. Defendants have engaged in unfair competition or unfair, unconscionable, or deceptive acts or practices in violation of the Montana Unfair Trade Practices and Consumer Protection Act of 1970, Mont. Code, §§ 30-14-103, et seq., and §§ 30-14-201, et. seq. 427. Defendants’ unlawful conduct had the following effects: (1) cedar shakes and shingles price competition was restrained, suppressed, and eliminated throughout Montana; (2) cedar shakes and shingles prices were raised, fixed, maintained, and stabilized at artificially high levels throughout Montana; (3) Plaintiff and members of the Montana Class were deprived of free and open competition; and (4) Plaintiff and members of the Montana Class paid supracompetitive, artificially inflated prices for cedar shakes and shingles. 428. During the Class Period, defendants’ illegal conduct substantially affected Montana commerce and consumers. 429. As a direct and proximate result of defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured and are threatened with further injury. Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of Mont. Code, §§ 30-14-103, et seq., and §§ 30-14-201, et seq., and, accordingly, 430. Plaintiff and members of the Montana Class seek all relief available under that statute. 13. Violation of the Nebraska Consumer Protection Act (Neb. Rev. Stat. § 59-1602) on behalf of the Nebraska Class 431. Plaintiff incorporates and realleges, as though fully set forth herein, each and every allegation set forth in the preceding paragraphs of this Complaint. 432. By reason of the conduct alleged herein, Defendants have violated Neb. Rev. Stat. § 59-1602, et seq. 433. Defendants have entered into a contract, combination, or conspiracy between two or more persons in restraint of, or to monopolize, trade or commerce in the cedar shakes and shingles market, a substantial part of which occurred within Nebraska. 434. Defendants established, maintained, or used a monopoly, or attempted to establish a monopoly, of trade or commerce in the cedar shakes and shingles market, for the purpose of excluding or limiting competition or controlling or maintaining prices, a substantial part of which occurred within Nebraska. 435. Defendants’ conduct was conducted with the intent to deceive Nebraska consumers regarding the nature of Defendants’ actions within the stream of Nebraska commerce. 436. Defendants’ conduct was unfair, unconscionable, or deceptive within the conduct of commerce within the State of Nebraska. 437. Defendants’ conduct misled consumers, withheld material facts, and had a direct or indirect impact upon the ability of Plaintiff and the other members of the Classes to protect themselves. 438. Defendants’ unlawful conduct substantially affected Nebraska’s trade and commerce. 439. As a direct and proximate cause of Defendants’ unlawful conduct, the Plaintiff and the members of the Nebraska Class have been injured in their business or property and are threatened with further injury. 440. By reason of the foregoing, Plaintiff and members of the Nebraska Class are entitled to seek all forms of relief available under Neb. Rev. Stat. § 59- 1614. 14. Violation of the Nevada Deceptive Trade Practices Act (Nev. Rev. Stat § 598.0903, et seq.) on behalf of the Nevada Class 441. 380. Plaintiff incorporates and realleges, as though fully set forth herein, each and every allegation set forth in the preceding paragraphs of this Complaint. 442. By reason of the conduct alleged herein, Defendants have violated Nev. Rev. Stat. § 598.0903, et seq. 443. Defendants engaged in a deceptive trade practice with the intent to injure competitors and to substantially lessen competition. 444. Defendants established, maintained, or used a monopoly, or attempted to establish a monopoly, of trade or commerce in the cedar shakes and shingles market, a substantial part of which occurred within Nevada, for the purpose of excluding competition or controlling, fixing, or maintaining prices in the cedar shakes and shingles market. 445. Defendants’ conduct was unfair, unconscionable, or deceptive within the conduct of commerce within the State of Nevada. 446. Defendants’ conduct amounted to a fraudulent act or practice committed by a supplier in connection with a consumer transaction. 447. Defendants’ unlawful conduct substantially affected Nevada’s trade and commerce. 448. Defendants’ conduct was willful. 449. As a direct and proximate cause of Defendants’ unlawful conduct, the members of the Nevada Class have been injured in their business or property and are threatened with further 450. By reason of the foregoing, the Nevada Class is entitled to seek all forms of relief, including damages, reasonable attorney’s fees and costs, and a civil penalty of up to $5,000 per violation under Nev. Rev. Stat. § 598.0993. 15. Violation of the New Hampshire Consumer Protection Act (N.H. Rev. Stat. Ann. tit. XXXI, § 358-A, et seq.) on behalf of the New Hampshire Class 451. Plaintiff incorporates and realleges, as though fully set forth herein, each and every allegation set forth in the preceding paragraphs of this Complaint. 452. By reason of the conduct alleged herein, Defendants have violated N.H. Rev. Stat. Ann. tit. XXXI, § 358-A, et seq. 453. Defendants have entered into a contract, combination, or conspiracy between two or more persons in restraint of, or to monopolize, trade or commerce in the cedar shakes and shingles market, a substantial part of which occurred within New Hampshire. 454. Defendants established, maintained, or used a monopoly, or attempted to establish a monopoly, of trade or commerce in the cedar shakes and shingles market, for the purpose of excluding or limiting competition or controlling or maintaining prices, a substantial part of which occurred within New Hampshire. 455. Defendants’ conduct was conducted with the intent to deceive New Hampshire consumers regarding the nature of Defendants’ actions within the stream of New Hampshire commerce. 456. Defendants’ conduct was unfair or deceptive within the conduct of commerce within the State of New Hampshire. 457. Defendants’ conduct was willful and knowing. 458. Defendants’ conduct misled consumers, withheld material facts, and had a direct or indirect impact upon Plaintiff and members-of-the-Classes’ ability to protect themselves. 16. Violation of the New Mexico Unfair Practices Act (N.M. Stat. Ann. §§ 57-12-3, et seq.) on behalf of the New Mexico Class 459. Plaintiff incorporates and realleges, as though fully set forth herein, each and every allegation set forth in the preceding paragraphs of this Complaint. 460. By reason of the conduct alleged herein, Defendants have violated N.M. Stat. Ann. §§ 57-12-3, et seq. 461. Defendants entered into a contract, combination, or conspiracy between two or more persons in restraint of, or to monopolize, trade or commerce in the cedar shakes and shingles market, a substantial part of which occurred within New Mexico. 462. Defendants established, maintained, or used a monopoly, or attempted to establish a monopoly, of trade or commerce in the Relevant market, a substantial part of which occurred within New Mexico, for the purpose of excluding competition or controlling, fixing, or maintaining prices in the cedar shakes and shingles market. 463. Defendants’ conduct was unfair, unconscionable, or deceptive within the conduct of commerce within the State of New Mexico. 464. Defendants’ conduct misled consumers, withheld material facts, and resulted in material misrepresentations to Plaintiff and members of the Class. 465. Defendants’ unlawful conduct substantially affected New Mexico’s trade and commerce. 466. Defendants’ conduct constituted “unconscionable trade practices” in that such conduct, inter alia, resulted in a gross disparity between the value received by the New Mexico class members and the price paid by them for cedar shakes and shingles as set forth in N.M. Stat. Ann. § 57-12-2E. 467. Defendants’ conduct was willful. 468. As a direct and proximate cause of Defendants’ unlawful conduct, the Plaintiff and the members of the New Mexico Class have been injured in their business or property and are threatened with further injury. 469. By reason of the foregoing, Plaintiff and members of the New Mexico Class are entitled to seek all forms of relief, including actual damages or up to $300 per violation, whichever is greater, plus reasonable attorney’s fees under N.M. Stat. Ann. §§ 57-12-10. 17. Violation of the North Carolina Unfair Trade and Business Practices Act (N.C. Gen. Stat. § 75-1.1, et seq.) on behalf of the North Carolina Class 470. Plaintiff incorporates and realleges, as though fully set forth herein, each and every allegation set forth in the preceding paragraphs of this Complaint. 471. By reason of the conduct alleged herein, Defendants have violated N.C. Gen. Stat. § 75-1.1, et seq. 472. Defendants entered into a contract, combination, or conspiracy in restraint of, or to monopolize, trade or commerce in the cedar shakes and shingles market, a substantial part of which occurred within North Carolina. 473. Defendants’ conduct was unfair, unconscionable, or deceptive within the conduct of commerce within the State of North Carolina. 474. Defendants’ trade practices are and have been immoral, unethical, unscrupulous, and substantially injurious to consumers. 475. Defendants’ conduct misled consumers, withheld material facts, and resulted in material misrepresentations to Plaintiff and members of the Class. 476. Defendants’ unlawful conduct substantially affected North Carolina’s trade and commerce. 477. Defendants’ conduct constitutes consumer-oriented deceptive acts or practices within the meaning of North Carolina law, which resulted in consumer injury and broad adverse impact on the public at large, and harmed the public interest of North Carolina consumers in an honest marketplace in which economic activity is conducted in a competitive manner. 478. As a direct and proximate cause of Defendants’ unlawful conduct, the Plaintiff and the members of the North Carolina Class have been injured in their business or property and are threatened with further injury. 479. By reason of the foregoing, the Plaintiff and the members of the North Carolina Class are entitled to seek all forms of relief, including treble damages under N.C. Gen. Stat. § 75- 18. Violation of the North Dakota Unfair Trade Practices Law (N.D. Cent. Code § 51-10-01, et seq.) on behalf of the North Dakota Class 480. Plaintiff incorporates and realleges, as though fully set forth herein, each and every allegation set forth in the preceding paragraphs of this Complaint. 481. By reason of the conduct alleged herein, Defendants have violated N.D. Cent. Code § 51-10-01, et seq. 482. Defendants engaged in a deceptive trade practice with the intent to injure competitors and consumers through supra-competitive profits. 483. Defendants established, maintained, or used a monopoly, or attempted to establish a monopoly, of trade or commerce in the cedar shakes and shingles market, a substantial part of which occurred within North Dakota, for the purpose of controlling, fixing, or maintaining prices in the cedar shakes and shingles market. 484. Defendants’ conduct was unfair, unconscionable, or deceptive within the conduct of commerce within the State of North Dakota. 485. Defendants’ conduct amounted to a fraudulent or deceptive act or practice committed by a supplier in connection with a consumer transaction. 486. Defendants’ unlawful conduct substantially affected North Dakota’s trade and commerce. 487. Defendants’ conduct was willful. 488. As a direct and proximate cause of Defendants’ unlawful conduct, the Plaintiff and the members of the North Dakota Class have been injured in their business or property and are threatened with further injury. 489. By reason of the foregoing, the Plaintiff and the members of the North Dakota Class are entitled to seek all forms of relief, including damages and injunctive relief under N.D. Cent. Code § 51-10-06. 19. Violation of the Oregon Unlawful Trade Practices Act (Or. Rev. Stat. § 646.608, et seq.) on behalf of the Oregon Class 490. Plaintiff incorporates and realleges, as though fully set forth herein, each and every allegation set forth in the preceding paragraphs of this Complaint. 491. By reason of the conduct alleged herein, Defendants have violated Or. Rev. Stat. § 646.608, et seq. 492. Defendants have entered into a contract, combination, or conspiracy between two or more persons in restraint of, or to monopolize, trade or commerce in the cedar shakes and shingles market, a substantial part of which occurred within Oregon. 493. Defendants established, maintained, or used a monopoly, or attempted to establish a monopoly, of trade or commerce in the cedar shakes and shingles market, for the purpose of excluding or limiting competition or controlling or maintaining prices, a substantial part of which occurred within Oregon. 494. Defendants’ conduct was conducted with the intent to deceive Oregon consumers regarding the nature of Defendants’ actions within the stream of Oregon commerce. 495. Defendants’ conduct was unfair or deceptive within the conduct of commerce within the State of Oregon. 496. Defendants’ conduct misled consumers, withheld material facts, and had a direct or indirect impact upon Plaintiff’ and members-of-the-Classes’ ability to protect themselves. 497. Defendants’ unlawful conduct substantially affected Oregon’s trade and commerce. 498. As a direct and proximate cause of Defendants’ unlawful conduct, the Plaintiff and the members of the Oregon Class have been injured in their business or property and are threatened with further injury. 499. By reason of the foregoing, the Plaintiff and the members of the Oregon Class are entitled to seek all forms of relief available under Or. Rev. Stat. § 646.638. 500. Pursuant to section 646.638 of the Oregon Unlawful Trade Practices Act, with the filing of this action, a copy of this Complaint is being served upon the Attorney General of Oregon. 20. Violation of the Rhode Island Deceptive Trade Practices Act (R.I. Gen. Laws § 6-13.1-1, et seq.) on behalf of the Rhode Island Class 501. Plaintiff incorporates and realleges, as though fully set forth herein, each and every allegation set forth in the preceding paragraphs of this Complaint. 502. By reason of the conduct alleged herein, Defendants have violated R.I. Gen Laws § 6-13.1-1, et seq. 503. Defendants engaged in an unfair or deceptive act or practice with the intent to injure competitors and consumers through supra-competitive profits. 504. Defendants established, maintained, or used a monopoly, or attempted to establish a monopoly, of trade or commerce in the cedar shakes and shingles market, a substantial part of which occurred within Rhode Island, for the purpose of controlling, fixing, or maintaining prices in the cedar shakes and shingles market. 505. Defendants’ conduct was unfair or deceptive within the conduct of commerce within the State of Rhode Island. 506. Defendants’ conduct amounted to an unfair or deceptive act or practice committed by a supplier in connection with a consumer transaction. 507. Defendants’ unlawful conduct substantially affected Rhode Island’s trade and commerce. 508. Defendants’ conduct was willful. 509. Defendants deliberately failed to disclose material facts to Plaintiff and members of the Rhode Island Class concerning Defendants’ unlawful activities, including the horizontal conspiracy and artificially-inflated prices for cedar shakes and shingles. 510. Defendants’ deception, including its affirmative misrepresentations and/or omissions concerning the price of cedar shakes and shingles, constitutes information necessary to Plaintiff and members of the Rhode Island Class relating to the cost of cedar shakes and shingles purchased. 511. Plaintiff and members of the Rhode Island class purchased goods, namely cedar shakes and shingles, primarily for personal, family, or household purposes. 512. As a direct and proximate cause of Defendants’ unlawful conduct, the Plaintiff and the members of the Rhode Island Class have been injured in their business or property and are threatened with further injury. 513. By reason of the foregoing, Plaintiff and the members of the Rhode Island Class are entitled to seek all forms of relief, including actual damages or $200 per violation, whichever is greater, and injunctive relief and punitive damages under R.I. Gen Laws § 6-13.1-5.2. 21. Violation of South Carolina’s Unfair Trade Practices Act (S.C. Code Ann. §§ 39-5-10) on behalf of the South Carolina Class 514. Plaintiff incorporates and realleges, as though fully set forth herein, each and every allegation set forth in the preceding paragraphs of this Complaint. 515. By reason of the conduct alleged herein, Defendants have violated S.C. Code Ann. §§ 39-5-10. 516. Defendants have entered into a contract, combination, or conspiracy between two or more persons in restraint of, or to monopolize, trade or commerce in the cedar shakes and shingles market, a substantial part of which occurred within Oregon. 517. Defendants established, maintained, or used a monopoly, or attempted to establish a monopoly, of trade or commerce in the cedar shakes and shingles market, for the purpose of excluding or limiting competition or controlling or maintaining prices, a substantial part of which occurred within South Carolina. 518. Defendants’ conduct was conducted with the intent to deceive South Carolina consumers regarding the nature of Defendants’ actions within the stream of South Carolina commerce. 519. Defendants’ conduct was unfair or deceptive within the conduct of commerce within the State of South Carolina. 520. Defendants’ conduct misled consumers, withheld material facts, and had a direct or indirect impact upon Plaintiff’ and members-of-the-Classes’ ability to protect themselves. 521. Defendants’ unlawful conduct substantially affected South Carolina trade and commerce. 522. Defendants’ unlawful conduct substantially harmed the public interest of the State of South Carolina, as numerous citizens purchase cedar shakes and shingles for their homes and businesses. 22. Violation of South Dakota Deceptive Trade Practices and Consumer Protection Law (S.D. Codified Laws § 37-24-6) on behalf of the South Dakota Class 523. Plaintiff incorporates and realleges, as though fully set forth herein, each and every allegation set forth in the preceding paragraphs of this Complaint. 524. By reason of the conduct alleged herein, Defendants have violated S.D. Codified Laws § 37-24-6. 525. Defendants engaged in a deceptive trade practice with the intent to injure competitors and consumers through supra-competitive profits. 526. Defendants established, maintained, or used a monopoly, or attempted to establish a monopoly, of trade or commerce in the cedar shakes and shingles market, a substantial part of which occurred within South Dakota, for the purpose of controlling, fixing, or maintaining prices in the cedar shakes and shingles market. 527. Defendants’ conduct was unfair, unconscionable, or deceptive within the conduct of commerce within the State of South Dakota. 528. Defendants’ conduct amounted to a fraudulent or deceptive act or practice committed by a supplier in connection with a consumer transaction. 529. Defendants’ unlawful conduct substantially affected South Dakota’s trade and commerce. 530. Defendants’ conduct was willful. 531. As a direct and proximate cause of Defendants’ unlawful conduct, the Plaintiff and the members of the South Dakota Class have been injured in their business or property and are threatened with further injury. 532. By reason of the foregoing, Plaintiff and the members of the South Dakota Class are entitled to seek all forms of relief, including actual damages and injunctive relief under S.D. Codified Laws § 37-24-31. 23. Violation of the Utah Consumer Sales Practices Act (Utah Code Ann. §§ 13-11-1, et seq.) on behalf of the Utah Class 533. 475. Plaintiff incorporates and realleges, as though fully set forth herein, each and every allegation set forth in the preceding paragraphs of this Complaint. 534. By reason of the conduct alleged herein, Defendants have violated Utah Code Ann. §§ 13-11-1, et seq. 535. Defendants entered into a contract, combination, or conspiracy between two or more persons in restraint of, or to monopolize, trade or commerce in the cedar shakes and shingles market, a substantial part of which occurred within Utah. 536. Defendants are suppliers within the meaning of Utah Code Ann. §§ 13-11-3. 537. Defendants established, maintained, or used a monopoly, or attempted to establish a monopoly, of trade or commerce in the Relevant market, a substantial part of which occurred within Utah, for the purpose of excluding competition or controlling, fixing, or maintaining prices in the cedar shakes and shingles market. 538. Defendants’ conduct was unfair, unconscionable, or deceptive within the conduct of commerce within the State of Utah. 539. Defendants’ conduct and/or practices were unconscionable and were undertaken in connection with consumer transactions. 540. Defendants knew or had reason to know that their conduct was unconscionable. 541. Defendants’ conduct misled consumers, withheld material facts, and resulted in material misrepresentations to Plaintiff and members of the Class. 542. Defendants’ unlawful conduct substantially affected Utah’s trade and commerce. 543. As a direct and proximate cause of Defendants’ unlawful conduct, the Plaintiff and the members of the Utah Class have been injured in their business or property and are threatened with further injury. 544. By reason of the foregoing, the Plaintiff and the members of the Utah Class are entitled to seek all forms of relief, including declaratory judgment, injunctive relief, and ancillary relief, pursuant to Utah Code Ann. §§ 13-11-19(5) and 13-11-20. 24. Violation of the Utah Unfair Practices Act (Utah Code Ann. §§ 13-5-1, et seq.) on behalf of the Utah Class 545. Plaintiff incorporates and realleges, as though fully set forth herein, each and every allegation set forth in the preceding paragraphs of this Complaint. 546. By reason of the conduct alleged herein, Defendants have violated Utah Code Ann. §§ 13-5-1, et seq. 547. Defendants entered into a contract, combination, or conspiracy between two or more persons in restraint of, or to monopolize, trade or commerce in the cedar shakes and shingles market, a substantial part of which occurred within Utah. 548. Defendants established, maintained, or used a monopoly, or attempted to establish a monopoly, of trade or commerce in the Relevant market, a substantial part of which occurred within Utah, for the purpose of excluding competition or controlling, fixing, or maintaining prices in the cedar shakes and shingles market. 549. Defendants’ conduct caused or was intended to cause unfair methods of competition within the State of Utah. 550. Defendants’ unlawful conduct substantially affected Utah’s trade and commerce. 551. As a direct and proximate cause of Defendants’ unlawful conduct, the Plaintiff and the members of the Utah Class have been injured in their business or property and are threatened with further injury. 552. By reason of the foregoing, the Plaintiff and the members of the Utah Class are entitled to seek all forms of relief, including actual damages or $2000 per Utah Class member, whichever is greater, plus reasonable attorney’s fees under Utah Code Ann. §§ 13-5-14, et seq. 25. Violation of Vermont Stat. Ann. 9 § 2453, et seq. on behalf of the Vermont Class 553. 495. Plaintiff incorporates and realleges, as though fully set forth herein, each and every allegation set forth in the preceding paragraphs of this Complaint. 554. Defendants have entered into an unlawful agreement in restraint of trade in violation of Vermont Stat. Ann. 9 § 2453, et seq. 555. Defendants’ combination or conspiracy had the following effects: (1) cedar shakes and shingles price competition was restrained, suppressed, and eliminated throughout Vermont; (2) cedar shakes and shingles prices were raised, fixed, maintained and stabilized at artificially high levels throughout Vermont; (3) Plaintiff and members of the Vermont Class were deprived of free and open competition; and (4) Plaintiff and members of the Vermont Class paid supracompetitive, artificially inflated prices for cedar shakes and shingles. 556. During the Class Period, Defendants’ illegal conduct had a substantial effect on Vermont commerce. 557. As a direct and proximate result of Defendants’ unlawful conduct, Plaintiff and members of the Vermont Class have been injured in their business and property and are threatened with further injury. 558. By reason of the foregoing, Defendants have entered into an agreement in restraint of trade in violation of Vermont Stat. Ann. 9 § 2453, et seq. Accordingly, Plaintiff and members of the Vermont Class seek all relief available under Vermont Stat. Ann. 9 § 2453, et 26. Violation of the Virginia Consumer Protection Act of 1997 Va. Code § 59.1-196, et seq. on behalf of the Virginia Class 559. Plaintiff incorporates and realleges, as though fully set forth herein, each and every allegation set forth in the preceding paragraphs of this Complaint. 560. Defendants have entered into an unlawful agreement in restraint of trade in violation of Virginia Consumer Protection Act of 1977, Va. Code § 59.1-196, et seq. 561. Defendants have engaged in unfair competition or unfair, unconscionable, or deceptive acts or practices in violation of the Virginia Consumer Protection Act of 1977, Va. Code § 59.1-196, et seq. 562. Members of the Virginia Class purchased and/or reimbursed for cedar shakes and shingles to be used for personal, family, or household purposes. 563. Defendants agreed to, and did in fact, act in restraint of trade or commerce in a market that includes Virginia, by affecting, fixing, controlling, and/or maintaining, at artificial and non-competitive levels, the prices at which cedar shakes and shingles were sold, distributed, or obtained in Virginia. 564. Defendants deliberately failed to disclose material facts to Plaintiff and members of the Virginia Class concerning Defendants’ unlawful activities and artificially inflated prices for cedar shakes and shingles. Defendants misrepresented to all purchasers during the Class Period that Defendants’ cedar shakes and shingles prices were competitive and fair. 565. Defendants’ unlawful conduct had the following effects: (1) cedar shakes and shingles price competition was restrained, suppressed, and eliminated throughout Virginia; (2) cedar shakes and shingles prices were raised, fixed, maintained, and stabilized at artificially high levels throughout Virginia; (3) Plaintiff and members of the Virginia Class were deprived of free and open competition; and (4) Plaintiff and members of the Virginia Class paid supracompetitive, artificially inflated prices for cedar shakes and shingles. 566. Defendants’ illegal conduct substantially affected Virginia commerce and consumers. 567. As a direct and proximate result of Defendants’ violations of law, Plaintiff and members of the Virginia Class suffered an ascertainable loss of money or property as a result of Defendants’ use or employment of unconscionable and deceptive commercial practices as set forth above. 568. That loss was caused by Defendants’ willful and deceptive conduct, as described herein. Defendants’ deception, including their affirmative misrepresentations and omissions concerning the price of cedar shakes and shingles, likely misled all purchasers acting reasonably under the circumstances to believe that they were purchasing cedar shakes and shingles at prices set by a free and fair market. 569. Defendants’ affirmative misrepresentations and omissions constitute information important to Plaintiff and members of the Virginia Class as they related to the cost of cedar shakes and shingles they purchased. 570. Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of Va. Code § 59.1-196, et seq., and, accordingly, Plaintiff and members of the Virginia Class seek all relief available under that statute. D. Unjust Enrichment 571. Plaintiff incorporates by reference the allegations in the preceding paragraphs. 572. As a result of their unlawful conduct described above, Defendants have and will continued to be unjustly enriched by the receipt of unlawfully inflated prices and unlawful profits of cedar shakes and shingles. 573. Under common law principles of unjust enrichment, Defendants should not be permitted to retain the benefits conferred on them by overpayments by Plaintiff and members of the Classes in the following states: Arizona, California, Delaware, District of Columbia, Florida, Georgia, Hawaii, Illinois, Iowa, Kansas, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Carolina, Oregon, Rhode Island, South Carolina, South Dakota, Tennessee, Utah, West Virginia, and Wisconsin. XI. REQUEST FOR RELIEF 574. WHEREFORE, Plaintiff, on behalf of himself and the Classes of all others so similarly situated, respectfully requests judgment against Defendants as follows: a. The Court determine that this action may be maintained as a class action under Rule 23(a), (b)(2), and (b)(3) of the Federal Rules of Civil Procedure, appoint Plaintiff as a Class Representative and its counsel of record as Class Counsel, and direct that notice of this action, as provided by Rule 23(c) of the Federal Rules of Civil Procedure, be given to the Classes, once certified; b. The unlawful conduct, conspiracy or combination alleged herein be adjudged and decreed in violation of Section 1 of the Sherman Act and listed state antitrust laws, unfair competition laws, state consumer protection laws, and common law; c. Plaintiff and the Classes recover damages, to the maximum extent allowed under the listed state antitrust laws, unfair competition laws, state consumer protection laws, and common law; d. Defendants, their affiliates, successors, transferees, assignees and other officers, directors, partners, agents and employees thereof, and all other persons acting or claiming to act on their behalf or in concert with them, be permanently enjoined and restrained from in any manner continuing, maintaining or renewing the conduct, conspiracy, or combination alleged herein, or from entering into any other conspiracy or combination having a similar purpose or effect, and from adopting or following any practice, plan, program, or device having a similar purpose or effect; e. Plaintiff and the members of the Classes be awarded pre- and post-judgment interest as provided by law, and that such interest be awarded at the highest legal rate from and after the date of service of this Complaint; f. Plaintiff and the members of the Classes recover their costs of suit, including reasonable attorney’s fees, as provided by law; and g. Plaintiff and the members of the Classes have such other and further relief as the case may require and the Court may deem just and proper. XII. JURY TRIAL DEMANDED Plaintiff demands a trial by jury, pursuant to Rule 38(b) of the Federal Rules of Civil Procedure, of all issues so triable. Dated: March 26, 2019 /s/ Greg J. Hollon Greg J. Hollon MCNAUL EBEL NAWROT & HELGREN PLLC One Union Square 600 University Street, Suite 2700 Seattle, Washington 98101 Tel: (206) 467-1816 ghollon@mcnaul.com Christopher J. Cormier (to be admitted PHV) BURNS CHAREST LLP 5290 Denver Tech Center Pkwy., Suite 150 Greenwood Village, Colorado 80111 Tel: (720) 630-2092 ccormier@burnscharest.com Warren T. Burns (to be admitted PHV) Will Thompson (to be admitted PHV) Spencer Cox (to be admitted PHV) BURNS CHAREST LLP 900 Jackson Street, Suite 500 Dallas, Texas 75201 Tel: (469) 904-4550 wburns@burnscharest.com wthompson@burnscharest.com scox@burnscharest.com Lydia Wright (to be admitted PHV) BURNS CHAREST LLP 65 Canal Street, Suite 1170 New Orleans, Louisiana 70130 Tel: (504) 799-2845 lwright@burnscharest.com George Farah HANDLEY FARAH ANDERSON 81 Prospect Street Brooklyn, NY 11201 Tel: (212) 477-8090 gfarah@hfajustice.com Keith Dubanevich STOLL BERNE 209 SW Oak Street, Suite 500 Portland, Oregon 97204 Tel: (503) 227-1600 tdejong@stollberne.com kdubanevich@stollberne.com Counsel for Plaintiff Fraser Construction Company, Inc. and the Proposed Classes

antitrust

ha6gCocBD5gMZwcz4zNB

IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS CORPUS CHRISTI DIVISION KEVIN KING and CHRISTOPHER FRISCO, § Individually and on behalf of all others § similarly situated § § Plaintiffs, § Civil Action No. 2:15-cv-282 § v. § § JURY TRIAL DEMANDED WASTE FACILITIES, INC. AND MUD § PUDDLES SERVICES, LLC § § COLLECTIVE ACTION Defendants § PURSUANT TO 29 U.S.C. § 216(b) ORIGINAL COLLECTIVE ACTION COMPLAINT Kevin King and Christopher Frisco bring this action individually and on behalf of all individuals (hereinafter “Plaintiffs and the Potential Class Members” or “Day Rate Workers”) employed by Waste Facilities, Inc. (“WFI”) and/or Mud Puddles Services, LLC (“Mud Puddles”) (collectively, “the Defendants”), at any time during the past three years, to recover compensation, liquidated damages, attorneys’ fees, and costs, pursuant to the provisions of Section 216(b) of the Fair Labor Standards Act of 1938, as amended 29 U.S.C. § 216(b). I. OVERVIEW 1.1 This is a collective action to recover overtime wages brought pursuant to the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et. seq. 1.2 Plaintiffs and the Potential Class Members are those persons who worked for Defendants within the last three years and were paid a flat sum for each day worked (“day rate”) plus a non-discretionary job bonus, but did not receive overtime for all hours worked over 40 in each workweek (the “Day Rate Workers”). 1.3 The FLSA requires that all forms of compensation—including the non- discretionary job bonuses paid to the Day Rate Workers—be included in the calculation of the regular rate of pay for overtime purposes. 1.4 Plaintiffs and the Potential Class Members were also required to engage in unpaid or off-the-clock work activities including daily safety meetings before the beginning of their regularly scheduled shifts. 1.5 Plaintiffs and the Potential Class Members routinely work (and worked) in excess of 40 hours per workweek. 1.6 Plaintiffs and the Potential Class Members were not paid overtime for all hours worked in excess of forty (40) hours per workweek. 1.7 The decision by Defendants not to pay overtime compensation to Plaintiffs and the Potential Class Members was neither reasonable nor in good faith. 1.8 Defendants knowingly and deliberately failed to compensate Plaintiffs and the Potential Class Members overtime for all hours worked in excess of forty (40) hours per workweek. 1.9 Plaintiffs and the Potential Class Members did not and currently do not perform work that meets the definition of exempt work under the FLSA.1 Specifically, Plaintiffs and the Potential Class Members are blue-collar workers who performed technical and manual labor type job duties in the oilfield.                                                                                                                 1 All exemptions are to be narrowly construed and the burden of proof to establish them lies with the employer. Vela v. City of Houston, 276 F.3d 659, 666 (5th Cir. 2001). 1.10 Plaintiffs and the Potential Class Members therefore seek to recover all unpaid overtime and other damages owed under the FLSA as a collective action pursuant to 29 U.S.C. § 216(b). 1.11 Plaintiffs also pray that all similarly situated workers (Potential Class Members) be notified of the pendency of this action to apprise them of their rights and provide them an opportunity to opt-in to this lawsuit. II. THE PARTIES 2.1 Plaintiff Kevin King (“King”) is an individual who resides in Rockport, Aransas County, Texas and was employed by WFI and Mud Puddles within the meaning of the FLSA in this judicial district within the relevant three-year period. Plaintiff King’s consent to be a party plaintiff is attached hereto as Exhibit “A.” 2.2 Plaintiff Christopher Frisco (“Frisco”) is an individual who resides in Rockport, Aransas County, Texas and was employed by WFI within the meaning of the FLSA in this judicial district within the relevant three-year period. Plaintiff Frisco’s consent to be a party plaintiff is attached as Exhibit “B.” 2.3 The Potential Class Members are those current and former employees who work (or have worked) for WFI and Mud Puddles in the past three years and have been subjected to the same illegal pay system under which Plaintiffs King and Frisco worked and were paid (the “Day Rate Workers”). 2.4 Waste Facilities, Inc. (“WFI”) is a Texas corporation with its principal place of business in Premont, Jim Wells County, Texas. WFI may be served through its registered agent for service, Turner Stone & Co., LLP, 12700 Park Central Drive, Suite 1610, Dallas, Texas 75251. 2.5 Mud Puddles Services, LLC (“Mud Puddles”) is a Texas limited liability company and may be served through its registered agent for service, Scott Meek, 8005 Rosecreek Court, Burleson, Texas 76028. 2.6 Defendants WFI and Mud Puddles are joint employers pursuant to 29 C.F.R. § 791.2. They have common ownership, oversight and control over Plaintiffs and the Potential Class Members. Discovery will show that there are no real, legitimate or other meaningful differences between the two entities. As a result, Defendants are responsible, both individually and jointly, for compliance with all of the applicable provisions of the Act, including the overtime provisions, with respect to the entire employment for the workweeks at issue in this case. III. JURISDICTION & VENUE 3.1 This Court has subject matter jurisdiction over this case pursuant to 28 U.S.C. § 1331 as this is an action arising under 29 U.S.C. § 201 et. seq. 3.2 This Court has personal jurisdiction over WFI and Mud Puddles because the cause of action arose within this district as a result of WFI and Mud Puddle’s conduct within this District. 3.3 Venue is proper in the Southern District of Texas because this is a judicial district where a substantial part of the events or omissions giving rise to the claim occurred. 3.4 Specifically, WFI resides and conducts substantial business in this District and Division. Moreover, Plaintiffs King and Frisco worked in and resided in this District and Division throughout their employment with WFI and Mud Puddles. 3.5 Venue is therefore proper in this Court pursuant to 28 U.S.C. § 1391(b) & IV. FLSA COVERAGE 4.1 At all times hereinafter mentioned, Defendants have been an employer or employers within the meaning of Section 3(d) of the FLSA, 29 U.S.C. § 203(d). 4.2 At all times hereinafter mentioned, Defendants have been an enterprise or enterprises within the meaning of Section 3(r) of the FLSA, 29 U.S.C. § 203(r). 4.3 At all times hereinafter mentioned, Defendants have been an enterprise or enterprises engaged in commerce or in the production of goods for commerce within the meaning of Section 3(s)(1) of the FLSA, 29 U.S.C. § 203(s)(1), in that said enterprises have had employees engaged in commerce or in the production of goods for commerce, or employees handling, selling, or otherwise working on goods or materials that have been moved in or produced for commerce by any person, or in any closely related process or occupation directly essential to the production thereof, and in that those enterprises have had, and have, an annual gross volume of sales made or business done of not less than $500,000.00 (exclusive of excise taxes at the retail level which are separately stated). 4.4 During the respective periods of Plaintiff and the Potential Class Members’ employment by Defendants, these individuals provided services for Defendants that involved interstate commerce. 4.5 In performing the operations hereinabove described, Plaintiff and the Potential Class Members were engaged in commerce or in the production of goods for commerce within the meaning of §§ 203(b), 203(i), 203(j), 206(a), and 207(a) of the FLSA. 29 U.S.C. §§ 203(b), 203(i), 203(j), 206(a), 207(a). 4.6 Specifically, Plaintiff and the Potential Class Members are (or were) non- exempt employees who worked for Defendants and were engaged in oilfield services that were directly essential to the production of goods for Defendants and related oil and gas exploration and production companies. 29 U.S.C. § 203(j). 4.7 At all times hereinafter mentioned, Plaintiff and the Potential Class Members are (or were) individual employees who were engaged in commerce or in the production of goods for commerce as required by 29 U.S.C. §§ 206-207. 4.8 The proposed class of similarly situated employees, i.e. potential class members sought to be certified pursuant to 29 U.S.C. § 216(b), is defined as “all Day Rate Workers employed by Waste Facilities, Inc. and/or Mud Puddles Services, LLC, at any time from June 22, 2012 to the present.” 4.9 The precise size and identity of the proposed class should be ascertainable from the business records, tax records, and/or employee or personnel records of Defendants. V. FACTS 5.1 WFI touts itself as the market leader in environmental surface disposal and bio-remediation in the State of Texas. Defendant WFI maintains locations in four counties within the State of Texas and offers the handling, disposing and reclaiming of drilling fluids and cuttings associated with drilling waste from natural gas rigs across the State of Texas.2                                                                                                                 2 See http://wastefacilities.com/page0.html. 5.2 WFI operates both oil-based and water-based facilities throughout South Texas and the surrounding Eagle Ford Shale area but its primary operations are located near Premont, Jim Wells County, Texas.3 5.3 Mud Puddles provides a variety of well site services to the oil and gas industry throughout the State of Texas, including but not limited to, site maintenance, clean-up and removal of materials associated with drilling waste from oil wells and natural gas rigs. 5.4 To provide their services, WFI and Mud Puddles employed (and continue to employ) numerous Day Rate Workers—all of these individuals make up the putative or potential class. While exact job titles may differ, these employees are subjected to the same or similar illegal pay practices for similar work in the oilfield. 5.5 Plaintiffs and the Potential Class Members were (and are) paid a day rate plus a non-discretionary job bonus for time worked at a well site/drilling location.4 5.6 Plaintiffs and the Potential Class Members were (and are) also required to engage in unpaid off-the-clock work activities. Specifically, Plaintiffs and the Potential Class Members were required to attend daily 30-minute pre-shift safety meetings at the well site. 5.7 Although widely understood by employers across the United States to be compensable time under the FLSA, Defendants did not (and do not) pay Plaintiffs and the Potential Class Members for this time.                                                                                                                 3 See http://wastefacilities.com/page12.html. 4 True and correct copies of a Mud Puddles pay stub dated December 5, 2014 and a WFI bonus sheet dated February 5, 2015, both for Plaintiff King, are attached hereto as Exhibits “C” and “D.” 5.8 This uncompensated work performed by Plaintiffs and the Potential Class Members accounts for many hours of unpaid work per week by Plaintiffs and the Potential Class Members. 5.9 Upon information and belief, Plaintiffs and the Potential Class Members would conduct their day-to-day activities within designed parameters and in accordance with pre-determined operational plans coordinated by Defendants and/or their clients. 5.10 Upon further information and belief, Plaintiffs and the Potential Class Members’ daily and weekly activities were routine and largely governed by standardized plans, procedures, and checklists created by Defendants and/or their clients. Virtually every job function was pre-determined by Defendants, including the tools to use at a job site, the schedule of work, and related work duties. Plaintiffs and the Potential Class Members were prohibited from varying their job duties outside of the predetermined parameters. Moreover, Plaintiffs and the Potential Class Members’ job functions were primarily technical and manual labor in nature, requiring little to no official training, much less a college education or other advanced degree. 5.11 Indeed, Plaintiffs and the Potential Class Members are blue-collar workers. They rely on their hands, physical skills, and energy to perform manual labor in the oilfield. 5.12 Plaintiffs and the Potential Class Members’ duties did not (and currently do not) include managerial responsibilities or the exercise of independent discretion or judgment. 5.13 Plaintiffs and the Potential Class Members did not (and currently do not) have the authority to hire or fire other employees, and they were not (and currently are not) responsible for making hiring or firing recommendations. 5.14 Moreover, Plaintiffs and the Potential Class Members did not (and currently do not) supervise two or more employees. 5.15 Plaintiffs and the Potential Class Members worked (and continue to work) long hours. Specifically, Defendants regularly scheduled the Day Rate Workers for a minimum of 12 hours per day and they regularly worked a minimum of 84 hours per week.5 5.16 Upon information and belief, the non-discretionary bonuses paid to Plaintiff and the Potential Class Members were meant to encourage and motivate Plaintiff and the Potential Class Members to work harder and to reward them for their hard work. 5.17 Upon information and belief, the non-discretionary bonuses were based upon a pre-determined formula established by Defendants. Moreover, specific criteria had to be met in order to receive the job bonuses. 5.18 When Plaintiffs and the Potential Class Members met the criteria, they were entitled to receive the job bonuses. 5.19 The FLSA mandates that overtime be paid at one and one-half times an employee’s regular rate of pay. Under the FLSA, the regular rate of pay is the economic reality of the arrangement between the employer and the employee. 29 C.F.R. § 778.108.                                                                                                                 5 True and correct copies of sample WFI Rig Service Tickets / Timesheets for Plaintiffs King and Frisco dated February 15, 2015 and February 25, 2015, respectively, are attached hereto as Exhibits “E” and “F.” 5.20 Pursuant to 29 C.F.R. § 778.209, these non-discretionary job bonuses (and any other non-discretionary compensation) should have been included in Plaintiffs and the Potential Class Members’ regular rates of pay before any and all overtime multipliers were applied. 5.21 Not only did Defendants fail to include these non-discretionary job bonuses in the Day Rate Workers’ regular rates of pay before applying any and all overtime multipliers, Defendants did not pay any overtime at all for work in excess of forty (40) hours per week. 5.22 Defendants denied Plaintiffs and the Potential Class Members overtime pay as a result of a widely applicable, illegal pay practice. Specifically, Plaintiffs King and Frisco regularly worked in excess of 40 hours per week but never received overtime compensation. Instead of paying overtime, Defendants applied this pay practice despite clear and controlling law that states that the manual labor/technical duties that were performed by the Day Rate Workers consisted of non-exempt work. 5.23 Accordingly, Defendants’ pay policies and practices blatantly violated (and continue to violate) the FLSA. VI. CAUSES OF ACTION A. FAILURE TO PAY WAGES IN ACCORDANCE WITH THE FAIR LABOR STANDARDS ACT 6.1 Defendants violated provisions of Sections 6, 7 and 15 of the FLSA, 29 U.S.C. §§ 206, 207, and 215(a)(2) by employing individuals in an enterprise engaged in commerce or in the production of goods for commerce within the meaning of the FLSA for workweeks longer than forty (40) hours without compensating such employees for their employment in excess of forty (40) hours per week at rates at least one and one- half times the regular rates for which they were employed. 6.2 Moreover, Defendants knowingly, willfully and in reckless disregard carried out their illegal pattern of failing to pay the Day Rate Workers overtime compensation. 29 U.S.C. § 255(a). 6.3 Defendants knew or should have known their pay practices were in violation of the FLSA. 6.4 Defendants are sophisticated parties and employer(s), and therefore knew (or should have known) their policies were in violation of the FLSA. 6.5 The Day Rate Workers, on the other hand, are (and were) unsophisticated laborers who trusted Defendants to pay according to the law. 6.6 The decision and practice by Defendants to not pay overtime was neither reasonable nor in good faith. 6.7 Accordingly, the Day Rate Workers are entitled to overtime wages for all hours worked pursuant to the FLSA in an amount equal to one-and-a-half times their regular rate of pay, plus liquidated damages, attorneys’ fees and costs. B. COLLECTIVE ACTION ALLEGATIONS 6.8 Pursuant to 29 U.S.C. § 216(b), this is a collective action filed on behalf of all those who are (or were) similarly situated to Plaintiffs King and Frisco. 6.9 Other similarly situated employees have been victimized by Defendants’ patterns, practices, and policies, which are in willful violation of the FLSA. 6.10 The Potential Class Members are “all Day Rate Workers employed by Waste Facilities, Inc. and/or Mud Puddles Services, LLC, at any time from June 22, 2012 to the present.” 6.11 Defendants’ failure to pay wages for all hours worked and overtime compensation at the rates required by the FLSA results from generally applicable policies and practices, and does not depend on the personal circumstances of the Potential Class Members. 6.12 Thus, Plaintiffs King and Frisco’s experiences are typical of the experiences of the Potential Class Members. 6.13 The specific job titles or precise job requirements of the various Potential Class Members does not prevent collective treatment. 6.14 All of the Potential Class Members—regardless of their specific job titles, precise job requirements, rates of pay, or job locations—are entitled to be properly compensated for all hours worked in excess of forty (40) hours per workweek. 6.15 Although the issues of damages may be individual in character, there is no detraction from the common nucleus of liability facts. Indeed, the Day Rate Workers are blue-collar oilfield workers entitled to overtime after 40 hours in a week. 6.16 Defendants employed a substantial number of workers in the United States during the past three years. These workers are geographically dispersed, residing and working in states across the country. Because these workers do not have fixed work locations, they may work in different states across the country in the course of a given year. 6.17 Absent a collective action, many members of the proposed FLSA class likely will not obtain redress of their injuries and Defendants will retain the proceeds of its rampant violations. 6.18 Moreover, individual litigation would be unduly burdensome to the judicial system. Concentrating the litigation in one forum will promote judicial economy and parity among the claims of the individual members of the classes and provide for judicial consistency. 6.19 Accordingly, the class of similarly situated plaintiffs should be defined as: ALL DAY RATE WORKERS EMPLOYED BY WASTE FACILITIES, INC. AND/OR MUD PUDDLES SERVICES, LLC, AT ANY TIME FROM JUNE 22, 2012 THROUGH THE PRESENT. VII. RELIEF SOUGHT 7.1 Plaintiffs respectfully pray for judgment against Defendants as follows: a. For an Order recognizing this proceeding as a collective action pursuant to Section 216(b) of the FLSA and requiring Defendants to provide the names, addresses, e-mail addresses, telephone numbers, and social security numbers of all potential collective action members; b. For an Order approving the form and content of a notice to be sent to all potential collective action members advising them of the pendency of this litigation and of their rights with respect thereto; c. For an Order awarding Plaintiffs (and those who have joined in the suit) back wages that have been improperly withheld; d. For an Order pursuant to Section 16(b) of the FLSA finding Defendants liable for unpaid back wages due to Plaintiffs (and those who have joined in the suit), and for liquidated damages equal in amount to the unpaid compensation found due to Plaintiffs (and those who have joined in the suit); e. For an Order awarding Plaintiffs (and those who have joined in the suit) the costs of this action; f. For an Order awarding Plaintiffs (and those who have joined in the suit) attorneys’ fees; g. For an Order awarding Plaintiffs (and those who have joined in the suit) pre-judgment and post-judgment interest at the highest rates allowed by law; h. For an Order awarding Plaintiffs service awards as permitted by i. For an Order compelling the accounting of the books and records of Defendants; and j. For an Order granting such other and further relief as may be necessary and appropriate. Respectfully submitted, By: /s/ Clif Alexander Clif Alexander Federal I.D. No. 1138436 Texas Bar No. 24064805 calexander@swhhb.com Craig M. Sico Federal I.D. No. 13540 Texas Bar No. 18339850 csico@swhhb.com SICO, WHITE, HOELSCHER, HARRIS & BRAUGH LLP 802 N. Carancahua, Suite 900 Corpus Christi, Texas 78401 Telephone: 361/653-3300 Facsimile: 361/653-3333 AND Timothy D. Raub Federal I.D. No. 22942 Texas Bar No. 00789570 timraub@raublawfirm.com RAUB LAW FIRM, P.C. 814 Leopard Street Corpus Christi, Texas 78401 Telephone: 361/880-8181 Facsimile: 361/887-6521 ATTORNEYS IN CHARGE FOR PLAINTIFFS AND POTENTIAL CLASS MEMBERS

employment & labor

gbjeC4cBD5gMZwczDy6k

IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK ) ) ) ) Civil Action No. Plaintiff, ) ) COMPLAINT V. ) ) Jury Trial Demanded ) ) ) ) ) Defendants. COMPLAINT Plaintiff Nancy Martignago ("Plaintiff" or "Martignago"), on behalf of herself and all NATURE OF THE ACTION 1. Plaintiff brings this action on behalf of herself and other similarly situated 2. Plaintiff seeks to bring this action as a collective class action under the FLSA for 1 3. As a result of Defendants' unlawful actions, Plaintiff and all those similarly JURISDICTION AND VENUE 4. Plaintiff's claims arise under The Fair Labor Standards Act, 29 U.S.C. § 201, et in any Federal or State Court of Competent jurisdiction." Supplemental 5. Venue is proper in the Southern District of New York pursuant to 28 U.S.C. 2 PARTIES 6. Plaintiff Nancy Martignago is a female CA who began her employment with 7. Defendant Merrill Lynch is a registered broker dealer and investment advisor that 8. Defendant Bank of America is one of the largest financial services companies in 9. On September 15, 2008, Bank of America and Merrill Lynch announced that 3 SUMMARY OF CLAIMS 10. Plaintiff, who is employed as a CA for Defendants, seeks to bring this action on 11. At all times relevant, Plaintiff, and all those similarly situated, were or are 12. At all times relevant, Defendants were or are the collective employers of Plaintiff, 13. Plaintiff's primary job duties, as well those of the putative FLSA class members, 14. Defendants have willfully refused to pay Plaintiff, and the FLSA class, overtime 415. Defendants also willfully fail and have failed to maintain records of overtime 16. Defendants practices violate the FLSA. Plaintiff, and all those similarly situated, FACTUAL ALLEGATIONS 17. Defendants provide retail brokerage services to their clients through their FA 18. Some CAs are "registered," which means that they have passed examinations and 5 19. All CAs working for Defendants are similarly situated in that they all perform 20. All CAs are similarly situated in that they are all subject to the same 21. The Defendants implement this compensation policy, plan, or procedure under the 22. As employees of Merrill Lynch, CAs receive a base salary from Merrill Lynch, 23. The majority of CAs' earnings come from what is generally called "supplemental 6 4 24. The supplemental compensation that CAs receive is not a bonus, gift, or incentive 25. With respect to overtime, CAs earn overtime based on their low base Merrill 26. Merrill Lynch also requires that management approve overtime before it is paid. 727. Many FAs require their CAs to work overtime, even without management 28. Defendants thus knowingly and willfully violate the FLSA by failing to properly 29. In addition to the above, Merrill Lynch's policies, practices and conduct, in 30. As an example of such discrimination, females are often steered away from the 8 31. Although high producing FAs have some role in selecting their CAs, Merrill 32. Notably, although Merrill Lynch permits FAs to pay CAs, it sets no mandate, 933. FAs control a major portion of CAs' earnings, and thus, CAs "fortunate" enough 34. Merrill Lynch policies and practices with respect to CAs often harm the 10 35. Plaintiff has been employed as a CA for Merrill Lynch since approximately 1985. 36. In May 2007, Merrill Lynch assigned Plaintiff to work with the Holley/Schultz 37. Throughout Plaintiff's tenure at Merrill Lynch, Plaintiff has regularly worked in 38. Although Plaintiff frequently worked in excess of forty hours per workweek, 11 39. Despite Plaintiff's excessive hours on the job, Defendants did not pay her the 40. Additionally, despite Plaintiff's performance and dedication to the team, Holley 41. Holley criticized and punished Plaintiff when she sought to help a female FA who 42. In or around May 2008, Holley hired a new female CA onto the team when 1243. When Plaintiff arrived at Southlake, Holley's differential treatment of the new 44. Holley also regularly engaged in open and inappropriate behavior of a flirtatious 45. After months of enduring Holley's differential treatment and having to personally 46. Merrill Lynch management seized possession of the email, and was therefore on 13 47. Plaintiff was then demoted and transferred back to the Fort Worth branch to assist COUNT I VIOLATION OF THE FAIR LABOR STANDARDS ACT (Collective Action and Individual Claim) 48. Plaintiff incorporates each and every allegation set forth in this Complaint. 49. Plaintiff brings FLSA claims on behalf of herself and all those similarly situated 50. Plaintiff seeks to proceed against Defendants for their FLSA violations as a 51. Upon information and belief, there are thousands of similarly situated current and 14 52. Many of these similarly situated CAs would not otherwise be able to pursue their 53. The names and addresses of these similarly situated employees are available from 54. Throughout the relevant time period, Plaintiff was and is an employee of 55. Throughout the relevant time period, Defendants were and are employers of 56. On information and belief, Merrill Lynch CAs, including Plaintiff, are nonexempt 57. On information and belief, Merrill Lynch CAs, including Plaintiff, are not subject 58. At all times relevant, Defendants have willfully failed to pay Plaintiff and the 59. Moreover, Defendants have willfully and intentionally engaged in a persistent 1560. As described above, by refusing to pay Plaintiff and the FLSA Class, or credit 61. Plaintiff expressed her consent to make these claims under the FLSA against 62. The foregoing conduct, as alleged, constitutes a willful violation of the FLSA 63. As a result of Defendants' unlawful actions, Plaintiff and the FLSA class have 16 COUNT II BREACH OF CONTRACT AND UNJUST ENRICHMENT (Claim of Plaintiff Martignago Only) 64. Plaintiff incorporates each and every allegation set forth in this Complaint. 65. Defendants entered into certain oral and written contracts with Plaintiff, whose 66. These contracts required Defendants' compliance with their terms and with 67. Defendants breached these contracts by engaging in the conduct described herein 68. Moreover, by breaching these contracts, Defendants have been unjustly enriched 69. Defendants' breaches of these agreements caused Plaintiff substantial harm, for PRAYER FOR RELIEF WHEREFORE, Plaintiff respectfully requests that this Court find in favor of her and the a. Designation of this action as a collective action on behalf of the proposed members under the FLSA, and that the Court issue prompt notice to all 17 similarly situated putative collective action plaintiffs to provide them notice of this action, the nature of the claims, and of their right to file consents and join this lawsuit pursuant to 29 U.S.C. § 216(b); b. Designate Plaintiff as a Class Representative for the putative collective action plaintiffs; C. Designate Plaintiff's counsel of record as counsel to represent the putative collective action plaintiffs; d. A declaratory judgment that Defendants' acts, conduct, policies and practices complained of herein are unlawful and violate the FLSA; e. Order appropriate equitable and injunctive relief to remedy the violations of the FLSA; f. Award Plaintiff and all others similarly situated the value of all compensation and benefits lost as a result of Defendants' unlawful conduct, including, but not limited to unpaid overtime wages and liquidated damages; g. Award Plaintiffs and all others similarly situated prejudgment and post-judgment interest and attorneys fees, costs and disbursements, as provided by law; h. Award Plaintiff the value of all compensation and benefits lost as a result of Defendants' breach of contract, including but not limited to restitution of any funds that Defendants have unjustly received from Plaintiff; and i. Award Plaintiff and all others similarly situated such other relief as this Court deems just and proper. 18DEMAND FOR A JURY TRIAL Plaintiff hereby demands a jury trial as provided the Federal Rules of Civil Procedure Respectfully submitted on behalf of Plaintiff Nancy Martignago and all those similarly situated, By: D Jennifer Schoen Gilbert (Admitted in Illinois and Indiana) Application for Admission on Motion to Practice as an Attorney and Counselor-at-Law in the State of New York has been initiated. By: Shona B. Glink (Local Counsel) 19

employment & labor

_-ezEYcBD5gMZwczFy0B

IN THE UNITED STATES DISTRICT COURT THE SOUTHERN DISTRICT OF TEXAS CORPUS CHRISTI DIVISION * * Plaintiffs * * * CIVIL ACTION NO. * Jury Trial * Defendant * PLAINTIFF'S ORIGINAL FEDERAL COMPLAINT NOW COMES, Rosendo Zamora, individually, and on behalf of similarly situated PARTIES potential Plaintiffs were and are classified as 'Closed Loop Operator' employees aka 'sit hands' and 'service' employees which identifies the classes of all similarly situated present and former employees. in Nueces County, Texas, and may be served by serving: CT Corporation System 350 N. St. Paul, Ste. 2900 Dallas, Tx. 75201-4234 1 business entity, then Plaintiff would request leave to add as a proper party, substitute the true name and/or to serve said corporation or business entity. VENUE AND JURISDICTION part of the events or omissions giving rise to this cause of action occurred in Nueces County, Texas and the federal Southern District of Texas. Moreover, venue is proper in Nueces County, Texas, in that Defendant conducts business in Nueces County at 426 Flato Road, Corpus Christi, Texas.. MISNOMER/MISIDENTIFICATION contention that such was a "misidentification," "misnomer" and/or such parties are/were "alter egos" of parties named herein. Alternatively, Plaintiff contends that such "corporate veils" should be pierced to hold such parties properly included in the interest of justice. RESPONDEAT SUPERIOR employees and vice-principals of defendant(s) and were at all times acting in the course and scope of that employment. Accordingly, defendant(s) are liable for such 2 conduct under the doctrine of Respondeat Superior. FACTUAL BACKGROUND aware of the acts and omissions alleged herein, and through its authorized employees, agents, officers, executives, or representatives, knowingly formulated, participated in, and/or approved the wrongful and illegal conduct complained of herein. were / are classified as and worked as 'Closed Loop' employees aka 'sit hands' and 'drilling fluid service' employees which identifies the class of all similarly situated present and former employees. locations to install, operate, maintain, and rig down Defendant's drilling fluid filtering equipment and products. The equipment filtered cuttings, rocks and solid materials from drilling fluids. required to work in excess of 40 hours per week but were not paid overtime nor paid for all time worked as required by law. The Defendant(s) failure to pay overtime and for all time they worked violated the Fair Labor Standards Act (FLSA). Therefore, Plaintiff and said present and/or former employees are entitled to recover pay for each hour worked. Plaintiff and said present and former employees are entitled to recover pay for each hour worked in excess of 40 hours during any one work week at the rate 3 of one and one half times his hourly rate including not being paid travel time to and from oil rig locations. loop employees, would show that he was and they were denied payment for all hours worked and/or of overtime wages in violation of the FLSA as a result of the Defendant's common policy / plan. The common policy and plan resulted in unpaid time and/or unpaid overtime for all closed loop operator employees. The Defendant's / Defendants' common policy / plan included: a. limiting reportable hours to 12 hrs per day per closed loop employee on two man jobs; b. limiting reportable hours to 16 hrs per day per closed loop employee on one man jobs; members for all time worked / on duty on closed loop jobs: a. Not paying Plaintiff(s) to attend all on site daily safety meetings amounting to 30 minutes of unpaid overtime per safety meeting; b. Not paying Plaintiff(s) for donning and doffing required safety gear amounting to 30 minutes of unpaid overtime per day; C. Not paying Plaintiff(s) for doing all daily reports on their off shift time amounting to 30 minutes of unpaid overtime per day; d. Not paying Plaintiff(s) all time 'worked' / 'on duty' per day on one man jobs amounting in unpaid overtime equal to the difference of 24 and the time recorded on timesheets; and e. Not paying Plaintiff(s) for all time worked helping / training coworker on their scheduled off time on two man jobs. 4employees would show the following violations of the FLSA: a. Not paid for mandatory safety meetings before each shift each day worked, which unpaid time was 30 minutes per day; b. Not paid for doing daily reports, which unpaid time was 30 minutes per day; c. Not paid for donning and doffing required safety and work gear and cleaning of drilling fluids after the end of assigned work shift, which unpaid time was 30 minutes per day; d. Not paid for working in excess of 16 hours per day on 1 man job assignments which employees were required to stay on location 24 hours per day to be available for work and which time is the difference between 24 hours and time submitted on timesheets each day; e. Not paid for working in excess of 12 hours per day on 2 man job assignments, including not paying Plaintiff(s) for all time worked helping / training coworker on their scheduled off time on two man jobs; f. Not paid for all hours on job locations; g. Failure to pay FLSA wages when due. and former employees that the above referenced types of work could not be submitted on time sheets for payment of wages and employees were not allowed to submit these times on their timesheets and these FLSA violations. and Closed Loop Operators during all times that Defendant paid Plaintiff / Closed Loop Operators a salary / day rate. intended to mislead Plaintiffs, including telling Plaintiffs that they were not entitled to 5 overtime and that they could not get overtime for all hours worked, even though it was a violation of law. Upon information and belief, Defendant paid supervisors bonuses based upon limiting the reported overtime hours of employees. Therefore, the acts were intentional and made knowingly and Plaintiffs are entitled to three years of accrued, unpaid overtime pay. equal to the overtime benefits due because of the willful nature of the Defendants' failure to take reasonable steps to comply with the FLSA. ATTORNEYS' FEES prosecute this action. Plaintiff is entitled to recover the reasonable and necessary attorneys fees, expert fees and court costs to prosecute this action. JURY DEMAND CONCLUSION WHEREFORE, Plaintiffs pray that Defendant(s) be cited to appear and answer 6 Respectfully Submitted, By: /s/ Adam Poncio Adam Poncio Southern District No. 194847 State Bar No. 16109800 PONCIO LAW OFFICES A Professional Corporation 5410 Fredericksburg Rd., # 109 San Antonio, Texas 78229-3550 Telephone: (210) 212-7979 Facsimile: (210) 212-5880 Chris McJunkin Southern District No.23548 State Bar #13686525 2842 Lawnview Corpus Christi, Tx. 78404 Tel: (361) 882-5747 Fax: (361) 882-8926 7

employment & labor

3-eyEYcBD5gMZwczcSdp

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF KANSAS ) ) Case No.: KEELY BAILEY on her own behalf and on behalf of other similarly situated persons, ) ) ) Plaintiff, ) ) v. ) ) COMPLAINT – CLASS ACTION ) ) ) ) BURY THE HATCHET KC, LLC, BURY THE HATCHET, LLC, BURY THE HATCHET HOLDINGS, LLC., and BURY THE HATCHET OP, LLC, JURY TRIAL DEMAND Defendants. ) ) CLASS ACTION COMPLAINT Introduction 1. With the push of a single button, modern computers can transmit text messages to millions of telephones. For businesses, this is a powerful and irresistible method of mass communication. At very minimal cost, a business can achieve targeted, immediate and vast promotion of its brand. At the same time, text messages are uniquely personal. Each advertisement is placed quite literally into the hands of a consumer. 2. The Defendants market themselves and their services through text message and advertisements sent in violation of the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. 3. Plaintiff Keely Bailey (“Representative Plaintiff”), on her own behalf and on behalf of all other similarly situated persons, brings this Complaint for Injunctive Relief and Damages to obtain from defendant all damages, injunctive relief, attorneys’ fees, costs and other remedies plaintiffs are entitled to recover under law and equity. JURISDICTION AND VENUE 4. Federal question jurisdiction exists pursuant to 28 U.S.C. § 1367(a) because Plaintiff asserts legal claims under federal law, the TCPA. 5. Many of the wrongful acts and omissions referenced in this complaint occurred, were initiated, were furthered, or were given assistance in this district. 6. Defendants conduct business and have harmed consumers in this district. 7. Venue is proper in this Court. PARTIES 8. Plaintiff Keely Bailey is an individual domiciled and residing in Johnson County, Kansas. 9. Bury the Hatchet, LLC, Bury the Hatchet OP, LLC and Bury the Hatchet Holdings, LLC (collectively “Bury the Hatchet”) are foreign corporations organized under the law of Georgia, with their principal place of business in Georgia, with locations in Kansas and across the nation. See ¶13, infra. 10. Defendant Bury the Hatchet KC is located at 7105 West 105th Street, Overland Park, Kansas 66212. 11. Defendants, acting directly or else through other persons acting on their behalf, conspired to, agreed to, contributed to, assisted with, or otherwise caused all of the wrongful acts and omissions that are the subject of this complaint. To the extent that Defendants acted as alleged in this complaint through another person, such other persons were acting within actual or ostensible authority provided by Defendants, and Defendant ratified each act. Defendants had actual and ultimate control over every act or omission attributed to Defendants in this complaint. But for the conduct of Defendants and others acting on its behalf, none of the wrongful acts and injuries 2 alleged herein would have occurred. FACTUAL ALLEGATIONS 12. Bury the Hatchet KC is a premier recreational axe throwing facility in Overland Park, Kansas. It promotes itself as a great location for corporate outings, team building, or a night out with friends and family. Defendant has a 7,200 sq./ft axe throwing facility is in Overland Park, Kansas. 13. Bury the Hatchet also has locations in: (1) Atlanta, Georgia; (2) Bensalem, Pennsylvania; (3) Bloomfield/Montclair, New Jersey; (4) Cherry Hill, New Jersey; (5) King of Prussia, Pennsylvania; (6) Matawan/Old Bridge, New Jersey; and (7) Philadelphia, Pennsylvania. Additionally, Defendant advertises that they will be opening locations in: (1) Brooklyn, New York; (2) Paramus, New Jersey; and (3) Woodbridge, New Jersey. 14. Indeed, Bury the Hatchet is one of the fastest growing and most established axe throwing brands in the United States. Defendants offer various axe throwing games, tournaments and are part of the World Axe Throwing League (“WATL”). 15. In order to participate, each paying customer must provide a valid telephone number on one of the multiple computer tablets stationed at the entry to the facility. 16. Defendants have engineered a method that collects information from its customers and then transfers it to computer systems under Defendants’ possession, custody or control (herein “Defendants’ computer systems”). 17. After harvesting telephone numbers from its customers, Defendants’ computer systems store the telephone numbers and then automatically transmits programmatically generated text message advertisements to the telephone numbers which are assigned to a cellular telephone service subscriber. 3 18. Defendants’ computer system has the present and proven ability to dial numerous cellular telephone numbers and transmit numerous text messages to large lists of stored cellular telephone number without any human involvement by any person. More simply stated, the Defendants harvest cellular telephone numbers from their customers and transmits these telephone numbers to Defendants’ computer systems for the sole purpose sending automated spam advertising text messages to the cellular telephone numbers of consumers. 19. Defendants’ scheme to capture consumer contact information, including cellular telephone numbers, for their spam messages begins by mandating that customers provide their telephone number before participating in axe-throwing activities. Defendants demand customers’ telephone numbers and other consumer information before they are allowed to participate in the axe-throwing activities. 20. For example, to have to opportunity to participate in recreational axe throwing activities, a customer must fill out a form which in turn harvests the customer’s cellular telephone data, among other personal information. In short, Defendants are requiring customers (for the privilege of participating) to provide them with their cellular telephone data. Defendants’ computer systems then harvest the information and Defendant’s computer systems process the data and sequentially generate advertising text messages of Defendant’s services. The text messages are sent by Defendants or their agents. 21. Defendants did not disclose that any person would be called, or that a person would be spammed with a commercial text message to a cellular telephone. Without any such notice to customers, Defendants’ computer systems extracted telephone numbers and sent promotional text messages written by Defendants. Customers of Defendants were not informed of what the text messages would say; they had no power to control any of the contents of the messages; and had 4 no information on how they would be sent. The customer only completes a form asking for a telephone number, which unbeknownst to her/him harvests sensitive data allowing Defendant’s computer systems to send cellular text messages. 22. As designed, created, implemented, utilized, and deployed by Defendants, the system by which Defendants’ harvests data from their users’ telephones, and automatically generates spam text messages to thousands of consumers, operates as an automated telephone dialing system (“ATDS”) as that term is defined under the TCPA. Indeed, Defendant’s ATDS equipment can generate numbers and dial them without human intervention regardless of whether the numbers are called randomly or sequentially generated or come from calling lists, which is the case here. Defendants carried out and otherwise substantially assisted with an aggressive marketing campaign which has relied upon this ATDS functionality. Defendants’ computer systems generate commercial advertisements on behalf of the Defendants and, in an automated manner, sequentially transmits these advertisements as unsolicited short message system (“SMS”) text messages to stored lists of cellular telephone numbers. 5 23. Defendant’s marketing campaign and its ATDS have injured numerous customers, including Plaintiff. On August 14, 2018, plaintiff received the unsolicited text message from Bury the Hatchet KC. 24. This message was sent by Defendants’ computer system, which are ATDS’s and can generate numbers and dial them without human intervention. 25. Upon information and belief, numerous other individuals have received the exact text message from Defendants, or similar text message spam. Defendants have sent such text spam messages to customers of its other facilities across the United States. 6 26. The fact that Defendants utilize a computerized ATDS is illustrated by the systems ability to instantly generate a pre-programed, automated response to any telephone number from which t receives a message. 27. When a customer sends a text message to Defendants’ ATDS, an immediate automated and pre-programed message is provided back to the telephone number from which the message was received. In other words, when a message is received Defendants’ system stores and dials the number from which the message is received. 28. Upon information and belief, Bury the Hatchet has sent spam text messages to other customers around the country. Customers of other of Defendants’ locations, made complaints of receiving spam text messages just days after a visit. 29. As part of its marketing scheme, Bury the Hatchet uses its system of electronic transmission devices which have the capability to send tens of thousands of text messages to consumers in an automated manner, and thereby sent the unsolicited text messages substantially similar, if not identical, to the text message identified above to numerous consumers throughout the United States, including Plaintiff. Considering that the Defendants have multiple locations used by thousands of consumers, Defendant sent far more text messages than humans could manually transmit economically. The transmission of so many unsolicited text messages burdened or injured the telecommunications infrastructure through which all text messages must pass. As a consequence, cellular service providers incurred avoidable costs which negatively impact the price that consumers like Plaintiffs must pay for cellular telephone services. 30. Consumers have no effective means to avoid the receipt of unsolicited text messages. Before the transmission of these text messages, none of the consumers to whom these text messages were directed provided defendant with consent to be sent the text messages. 7 Defendants did not obtain prior consent from the intended recipients before sending these text messages. Nor did Defendants have any reasonable basis upon which to conclude that the intended recipients of these text messages had invited the text messages sent by Defendants’ computer systems. 31. By the conduct detailed above, Defendants, directly or through authorized or ostensible agents, engaged in unlawful and otherwise wrongful marketing and advertising practices. These practices have damaged Representative Plaintiff and persons similarly situated. Defendants used its ATDS to cause the transmission of unsolicited electronic commercial text messages to the cellular telephone numbers assigned to Representative Plaintiff and numerous other consumers. 32. Defendants’ conduct above negatively affects the public interest. Defendants caused the unsolicited transmission of numerous SMS text messages to numerous consumers throughout the United States and its territories. 33. Plaintiff did not provide her cellular telephone number to defendants or Defendants’ agents to receive marketing messages via text message or any other telephonic communication. Nor did she provide authorization or consent to defendants to send any text message or to store her personal contact information for purposes of marketing. Defendants nevertheless sent Plaintiff the text message. Plaintiffs’ receipt of this unsolicited text message surprised and annoyed Plaintiff. Like other similarly situated persons who were sent such text messages, Plaintiff was injured as a result of Defendants’ transmission of the text message in ways including, but not limited to, the following: (a) Having to pay a cellular service provider to receive the unsolicited text message from Defendant; (b) Invasion of privacy; (c) Aggravation and annoyance from having to retrieve or administer the unsolicited text message on the cellular telephone which received the unsolicited 8 text message; (d) Loss of use of the full capacities and capabilities, e.g., electronic storage space, of the cellular telephone which received the unsolicited text message; (e) Loss of energy stored in the battery of the cellular telephone which received the unsolicited text message; and (f) Impairment, burden, or injury to the cellular telephone network upon which Plaintiff and consumers like her rely. 34. By the conduct detailed above, defendants directly or through authorized or ostensible agents acting within the scope of their authority, or else as subsequently ratified, caused the unlawful transmission of text messages to the cellular telephone numbers of Plaintiff and other similarly situated consumers and otherwise engaged in unlawful marketing and advertising practices. 35. Bury the Hatchet called cellular telephone numbers using an automatic telephone dialing system without prior express consent. CLASS ACTION ALLEGATIONS 36. Representative Plaintiff brings this class action on behalf of herself and as a representative of the following class of persons entitled to remedies under the Telephone Consumer Protection Act including, but not limited to, damages: All persons in the United States of America who were sent, to their cellular telephone numbers, at least one text message containing an advertisement from Bury the Hatchet without prior express consent. 32. Plaintiff’s class claims satisfy all of the requirements for class action certification pursuant to the Civil Procedure Rules 23(a) and 23(b)(1), 23(b)(2), and 23(b)(3). 33. Satisfying all requisite numerosity requirements, numerous consumers in the United States are believed to be members of this class. Joinder of so many class members into a single action is impracticable. In fact, given the number of class members, the only way to deliver 9 substantial justice to all members of the class is by means of a single class action. 34. There are questions of fact and law common to the class, which predominate over any questions affecting only individual members. The questions of law and fact common to the class arising from defendants’ conduct include, without limitation, the following: • Whether defendants negligently, willfully, and/or knowingly caused violations of the Telephone Consumer Protection Act, 47 U.S.C. § 227, when sending unsolicited text messages to Representative Plaintiff and the class? • Whether defendants used an automated telephone dialing system (“ATDS”) to send text messages to Plaintiff? • Whether any Defendants are vicariously or otherwise liable for unsolicited text messages sent to Plaintiff and the class? 39. The questions set forth above predominate over any questions affecting only individual persons, and a class action is superior with respect to considerations of consistency, economy, efficiency, fairness and equity, to other available methods for the fair and efficient adjudication of Plaintiffs’ claims. 40. Representative Plaintiff’s claims are typical of those of the class in that she, just like the other members of the class, was the victim of the unlawful marketing practices referenced in this complaint. The text message which Representative Plaintiff received is typical of the text messages which were transmitted to other members of the class. 41. A class action is the appropriate method for the fair and efficient adjudication of this controversy. Defendants have acted in a general manner to the damage of the class. The presentation of separate actions by individual class members could create a risk of inconsistent and varying adjudications, establish incompatible standards of conduct for Defendants, and/or substantially impair or impede the ability of class members to protect their interests. Moreover, the individual damages of each of the class members are so low that it would be economically impracticable for putative class members to bring their claims individually. 42. A primary factor in Plaintiff’s bringing this case is for final injunctive relief which 10 is necessary and appropriate to ensure that Defendant ceases its unlawful and wrongful conduct. A class action is the most efficient means to ensure that Defendant does not injure the class in the future. 43. Representative Plaintiff is an adequate representative of the class because she is a member of the class and her interests do not conflict with the interests of the members of the class she seeks to represent. The interests of the members of the class will be fairly and adequately protected by Representative Plaintiff. Representative Plaintiff is represented by attorneys who have extensive, multi-jurisdictional experience representing clients in complex class action litigation. 44. Maintenance of this action as a class action is a fair and efficient method for the adjudication of this controversy. It would be impractical and undesirable for each member of the class who suffered harm to bring a separate action. In addition, the maintenance of separate actions would place a substantial and unnecessary burden on the courts and could result in inconsistent adjudications, while a single class action can determine, with judicial economy, the rights of all class members. 45. If this action is not certified as a class action, then the only way that the court system will not be overburdened by a multiplicity of suits over the subject matter of this complaint is if members of the class cannot or do not pursue an action against Defendants for reasons altogether unrelated to the merits of their claims, e.g., challenges in accessing legal counsel, the mundane realities of surviving in a challenging economy, et cetera. Most Plaintiffs can obtain legal representation for their claims only through a class action. The only practical way to ensure that all members of the class are afforded an opportunity to obtain substantial justice with regard to the wrongs and injuries inflicted upon them by defendants is to resolve the subject matter of this complaint through a class action. 11 FIRST COUNT Violations of the Telephone Consumer Protection Act (Representative Plaintiff and the National Class vs. All Defendants) 46. Plaintiff reasserts and re-alleges the allegations set forth in the above paragraphs as if the same were alleged herein this count. 47. At all times material herein, Plaintiff has been entitled to the rights, protections, and benefits provided under the Telephone Consumer Protection Act, 47 U.S.C. § 227. 48. Negligently, recklessly, willfully, and/or intentionally, Defendants directly and/or vicariously engaged in acts, omissions, and/or other actions that violate the Telephone Consumer Protection Act. Defendants directly and/or vicariously created, designed, deployed, and otherwise used an ATDS which initiated numerous telephone calls to cellular telephone numbers without prior express consent. These telephone calls transmitted unsolicited commercial text messages to the cellular telephones of Representative Plaintiff and the other members of the class as referenced in this complaint. 49. Plaintiff and each member of the proposed class are entitled to recover $500 in damages from the defendants for each violation of the Telephone Consumer Protection Act. 50. Additionally, Plaintiffs are entitled to all damages referenced herein and in accord with proof, attorneys’ fees, costs, treble damages, and other remedies allowed by the Telephone Consumer Protection Act or else otherwise permitted by law. 51. The defendants should cease their unlawful conduct now and in the future with (a) a judicial declaration which clearly states the illegality of the conduct and (b) an injunction barring defendants from engaging in such illegal conduct in the future. PRAYER FOR RELIEF WHEREFORE, Representative Plaintiff, and all others similarly situated demand judgment against defendants and pray this Court do the following: A. Issue a declaration which makes clear the illegality of defendants’ wrongful conduct. 12 B. Grant a permanent injunction enjoining defendant, its officers, successors, agents, assigns, and all persons in active concert or participation with Defendant, from engaging in the unlawful conduct, including without limitation using an automated telephone dialing system to send unsolicited text messages. C. Declare that the subject text messages are commercial electronic text messages. D. Declare that Defendants’ computer systems are an ATDS under the TCPA. E. Declare that Defendants did not first obtain any consent before sending the subject text messages to Plaintiffs. F. Declare that Defendant’s actions as alleged in this complaint violate the TCPA. G. Order defendant to make Representative Plaintiff and the other class members whole by providing compensation for past and future pecuniary losses resulting from the unlawful practices described above in amounts to be determined at trial but in no event less than $500.00 for each violation of 47 U.S.C. § 227. et seq. H. Order defendants to make Representative Plaintiff and the other class members whole by providing appropriate prejudgment interest, in an amount to be determined at trial, and other affirmative relief necessary to eradicate the effects of the unlawful practices. I. Order defendants to pay Representative Plaintiff and the other class members punitive and/or treble damages to the fullest extent allowed by law, including but not limited to all punitive and/or treble damages for a knowing or willful violation of the Telephone Consumer Protection Act. J. Award Representative Plaintiff and the other class members the costs of this action, including attorneys’ fees, as authorized by law and/or as sounds in tort, contract, or equity. Grant any additional or further relief as provided by law or equity which this Court finds appropriate, equitable, or just. 13 HKM ATTORNEYS LLP /s/ John J. Ziegelmeyer III John J. Ziegelmeyer III KS No. 23003 1501 Westport Road Kansas City, Missouri 64111 Tel: 816.875.3332 jziegelmeyer@hkm.com www.hkm.com Donald W. Heyrich, Esq. HKM Attorneys 600 Stewart Street Seattle, WA 98101 Tel:206.383.2504 dheyrich@hkm.com www.hkm.com Pro Hac Vice Motion Forthcoming ATTORNEYS FOR PLAINTIFF 14

privacy

PMDdDIcBD5gMZwczijiV

THE ROSEN LAW FIRM, P.A. Phillip Kim, Esq. (PK 9384) Laurence M. Rosen, Esq. (LR 5733) 275 Madison Ave., 34th Floor New York, New York 10016 Telephone: (212) 686-1060 Fax: (212) 202-3827 Email: pkim@rosenlegal.com lrosen@rosenlegal.com Counsel for Plaintiff UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK MICHAEL BEHRENDSEN, Individually and on behalf of all others similarly situated, Plaintiff, v. Case No: CLASS ACTION COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS JURY TRIAL DEMANDED YANGTZE RIVER PORT AND LOGISTICS LIMITED, XIANGYAO LIU, XIN ZHENG, and TSZ-KIT CHAN, Defendants. Plaintiff Michael Behrendsen (“Plaintiff”), individually and on behalf of all other persons similarly situated, by Plaintiff’s undersigned attorneys, for Plaintiff’s complaint against Defendants (defined below), alleges the following based upon personal knowledge as to Plaintiff and Plaintiff’s own acts, and information and belief as to all other matters, based upon, inter alia, the investigation conducted by and through his attorneys, which included, among other things, a review of the Defendants’ public documents, conference calls and announcements made by Defendants, United States Securities and Exchange Commission (“SEC”) filings, wire and press releases published by and regarding Yangtze River Port and Logistics Limited (“Yangtze” or the “Company”), and information readily obtainable on the Internet. Plaintiff believes that substantial evidentiary support will exist for the allegations set forth herein after a reasonable opportunity for discovery. NATURE OF THE ACTION 1. This is a class action on behalf of persons or entities who purchased or otherwise acquired publicly traded Yangtze securities between February 2, 2016 and December 5, 2018, inclusive (the “Class Period”). Plaintiff seeks to recover compensable damages caused by Defendants’ violations of the federal securities laws under the Securities Exchange Act of 1934 (the “Exchange Act”). JURISDICTION AND VENUE 2. The claims asserted herein arise under and pursuant to Sections 10(b) and 20(a) of the Exchange Act (15 U.S.C. §§ 78j(b) and 78t(a)) and Rule 10b-5 promulgated thereunder by the SEC (17 C.F.R. § 240.10b-5). 3. This Court has jurisdiction over the subject matter of this action pursuant to 28 U.S.C. § 1331, and Section 27 of the Exchange Act (15 U.S.C. §78aa). 4. Venue is proper in this judicial district pursuant to 28 U.S.C. § 1391(b) and Section 27 of the Exchange Act (15 U.S.C. § 78aa(c)) as the alleged misstatements entered and the subsequent damages took place in this judicial district. 5. In connection with the acts, conduct and other wrongs alleged in this complaint, Defendants, directly or indirectly, used the means and instrumentalities of interstate commerce, including but not limited to, the United States mails, interstate telephone communications and the facilities of the national securities exchange. PARTIES 6. Plaintiff, as set forth in the accompanying certification, incorporated by reference herein, purchased Yangtze securities during the Class Period and was economically damaged thereby. 7. Defendant Yangtze is a Nevada corporation with headquarters in New York City. Yangtze operates through its wholly-owned subsidiary, Wuhan Yangtze River Newport Logistics Co., Ltd. (“Wuhan Newport”) incorporated in the People’s Republic of China (“PRC”) which is a logistics and port management company that engages in the business of real estate and infrastructural development and operating a port logistics center in the PRC. Yangtze reached the U.S. markets through a reversed merger. Yangtze’s securities trade on NASDAQ under the ticker symbol “YRIV.” 8. Defendant Xiangyao Liu (“Liu”) served as the Company’s Chief Executive Officer (“CEO”) and Chairman of the Board (“Chairman”) during the Class Period. 9. Defendant Xin Zheng (“Zheng”) served as the Company’s Chief Financial Officer (“CFO”) from the beginning of the Class Period until May 2017. 10. Defendant Tsz-Kit Chan (“Chan”) served as the Company’s CFO since May 11. Defendants Liu, Zheng, and Chan are collectively referred to herein as the “Individual Defendants.” 12. Each of the Individual Defendants: (a) directly participated in the management of the Company; (b) was directly involved in the day-to-day operations of the Company at the highest levels; (c) was privy to confidential proprietary information concerning the Company and its business and operations; (d) was directly or indirectly involved in drafting, producing, reviewing and/or disseminating the false and misleading statements and information alleged herein; (e) was directly or indirectly involved in the oversight or implementation of the Company’s internal controls; (f) was aware of or recklessly disregarded the fact that the false and misleading statements were being issued concerning the Company; and/or (g) approved or ratified these statements in violation of the federal securities laws. 13. Yangtze is liable for the acts of the Individual Defendants and its employees under the doctrine of respondeat superior and common law principles of agency because all of the wrongful acts complained of herein were carried out within the scope of their employment. 14. The scienter of the Individual Defendants and other employees and agents of the Company is similarly imputed to Yangtze under respondeat superior and agency principles. 15. Defendants Yangtze and the Individual Defendants are collectively referred to herein as “Defendants.” SUBSTANTIVE ALLEGATIONS Materially False and Misleading Statements Issued During the Class Period 16. On February 2, 2016, Yangtze filed its annual report on Form 10-K with the SEC which provided its financial results and position for the fiscal year ended December 31, 2015 (“2015 10-K”). The 2015 10-K was signed by Defendants Liu and Zheng. The 2015 10-K contained signed certifications pursuant to the Sarbanes-Oxley Act of 2002 (“SOX”) by Defendants Liu and Zheng attesting the accuracy of financial reporting, the disclosure of any material changes to the Company’s internal control over financial reporting and the disclosure of all fraud. 17. The 2015 10-K discussed the Wuhan Yangtze River Newport Logistics Center, stating in relevant part: One of the main projects of our Company is the Wuhan Yangtze River Newport Logistics Center (the “Logistics Center”), which is an extensive complex that is located in Wuhan, the capital of Hubei Province of China, a major transportation hub with dozens of railways, roads and expressways passing through the city and connecting to major cities in Mainland China, with connections to international centers of commerce and business. * * * Wuhan Newport has signed an agreement to rent 1.2 million square meters of land on a long term basis for building logistics warehouses covering 400,000 square meters in support of the new port. The warehouses is expected to comprise of port terminal zones, warehouse logistics zones, cold chain supply zones and railroad loading and unloading zones. The warehouses, once constructed, will connect the port terminal along the Yangtze River and the railway leading to Europe, satisfying the requirement of China’s latest “One Belt, One Road” initiative. It will also be able to support large logistics companies in Wuhan and other nearby provinces that lease the warehouses, terminals and offices. (Emphasis added). 18. The 2015 10-K discussed legal proceedings that the Company faced, stating in relevant part: Item 3. Legal Proceedings. We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect. 19. On March 10, 2017, Yangtze filed its annual report on Form 10-K with the SEC which provided its financial results and position for the fiscal year ended December 31, 2016 (“2016 10-K”). The 2016 10-K was signed by Defendants Liu and Zheng. The 2016 10-K contained signed SOX by Defendants Liu and Zheng attesting the accuracy of financial reporting, the disclosure of any material changes to the Company’s internal control over financial reporting and the disclosure of all fraud. 20. The 2016 10-K discussed the Wuhan Yangtze River Newport Logistics Center, stating in relevant part: The Wuhan Yangtze River Newport Logistics Center (the “Logistics Center”), is an extensive complex located in Wuhan, the capital of the Hubei Province of China, a major transportation hub city with access to numerous railways, roads and expressways passing through the city and connecting to major cities in China, as well as other international centers of commerce and business. The Logistics Center is expected to occupy approximately 1,918,000 square meters, for which the construction and development are expected to be completed in three phases in three years and reach its target maximum annual profit by the end of 2021 assuming the entire funding required for construction of the Logistics Center of $1.03 billion is in place by 2020 and the Logistics Center is in operation per our business plan. The following table illustrates the timeframe of our investment and construction progress * * * Wuhan Newport has signed a twenty-year lease agreement, the maximum number of years permitted by the applicable PRC laws, and with rights to renew at its sole discretion effective April 27, 2015, to lease approximately 1,200,000 square meters of land for building logistics warehouses in support of the Logistics Center. The warehouses are expected to be comprised of port terminal zones, warehouse logistics zones, cold chain supply zones and railroad loading and unloading zones. The warehouses, once constructed, will connect the port terminal along the Yangtze River and the railway leading to Europe, satisfying the requirement of China’s latest “One Belt, One Road” initiative. It will also be able to support large logistics companies in Wuhan and other nearby provinces which will rent the warehouses, terminals and offices within the Logistics Center. (Emphasis added). 21. The 2016 10-K discussed legal proceedings that the Company faced, stating in relevant part: Item 3. Legal Proceedings We are currently not involved in any litigation that we believe could have a materially adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our Company or any of our subsidiaries, threatened against or affecting our Company, our common stock, any of our subsidiaries or of our Company’s or our Company’s subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect. 22. On March 9, 2018, Yangtze filed its annual report on Form 10-K with the SEC which provided its financial results and position for the fiscal year ended December 31, 2017 (“2017 10-K”). The 2017 10-K was signed by Defendants Liu and Chan. The 2017 10-K contained signed SOX by Defendants Liu and Chan attesting the accuracy of financial reporting, the disclosure of any material changes to the Company’s internal control over financial reporting and the disclosure of all fraud. 23. The 2017 10-K discussed the Wuhan Yangtze River Newport Logistics Center, stating in relevant part: The Logistics Center will be an extensive complex located in Wuhan Newport Yangluo Port. Wuhan, the capital of the Hubei Province in the People’s Republic of China is a major transportation hub city with access to numerous railways, roads and expressways passing through the city and connecting to major cities in China, as well as other international centers of commerce and business. * * * The Logistics Center is expected to occupy approximately 1,918,000 square meters, for which the construction and development are expected to be completed in three phases in three years and reach its target maximum annual profit by the end of 2022 assuming the entire funding required for construction of the Logistics Center of $1.03 billion is in place by 2021 and the Logistics Center is in operation per our business plan. We have updated our original time-frame and the following table illustrates the anticipated timeframe of our investment and construction progress. (Emphasis added). 24. The 2017 10-K discussed legal proceedings that the Company faced, stating in relevant part: Item 3. Legal Proceedings We are currently not involved in any litigation that we believe could have a materially adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our Company or any of our subsidiaries, threatened against or affecting our Company, our common stock, any of our subsidiaries or of our Company’s or our Company’s subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect. 25. On April 20, 2018, Yangtze filed its quarterly report on Form 10-Q with the SEC for the quarter ended March 31, 2018 (“1Q18 10-Q”). The 1Q18 10-Q was signed by Defendants Liu and Chan. The 1Q18 10-Q contained signed SOX by Defendants Liu and Chan attesting the accuracy of financial reporting, the disclosure of any material changes to the Company’s internal control over financial reporting and the disclosure of all fraud. 26. The 1Q18 10-Q discussed the Wuhan Yangtze River Newport Logistics Center, stating in relevant part: The Logistics Center is expected to occupy approximately 1,918,000 square meters, for which the construction and development are expected to be completed in five years while the total anticipated investment have been divided into three phases – 40% of the total in the first year and 30% respectively in the second and third years. The following table illustrates the timeframe of our investment and construction progress. * * * Wuhan Newport has signed a twenty-year lease agreement effective April 27, 2015, the maximum number of years permitted by the applicable PRC laws, and with rights to renew at its sole discretion to lease approximately 1,200,000 square meters of land for building logistics warehouses in support of the Logistics Center. The warehouses are expected to comprise port terminal zones, warehouse logistics zones, cold chain supply zones and railroad loading and unloading zones. The warehouses will connect the port terminal along the Yangtze River and the railway leading to Europe, satisfying the requirement of China’s latest “One Belt, One Road” initiative. It will also be able to support large logistics companies in Wuhan and other nearby provinces which will rent the warehouses, terminals and offices within the Logistics Center. (Emphasis added). 27. The 1Q18 10-Q discussed legal proceedings that the Company faced, stating in relevant part: Item 1. Legal Proceedings. We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our Company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect. 28. On August 14, 2018, Yangtze filed its quarterly report on Form 10-Q with the SEC for the quarter ended June 30, 2018 (“2Q18 10-Q”). The 2Q18 10-Q was signed by Defendants Liu and Chan. The 2Q18 10-Q contained signed SOX by Defendants Liu and Chan attesting the accuracy of financial reporting, the disclosure of any material changes to the Company’s internal control over financial reporting and the disclosure of all fraud. 29. The 2Q18 10-Q discussed the Wuhan Yangtze River Newport Logistics Center, stating in relevant part: The Logistics Center is expected to occupy approximately 1,918,000 square meters, for which the construction and development are expected to be completed in five years while the total anticipated investment have been divided into three phases – 40% of the total in the first year and 30% respectively in the second and third years. The following table illustrates the timeframe of our investment and construction progress. * * * Wuhan Newport has signed a twenty-year lease agreement effective April 27, 2015, the maximum number of years permitted by the applicable PRC laws, and with rights to renew at its sole discretion to lease approximately 1,200,000 square meters of land for building logistics warehouses in support of the Logistics Center. The warehouses are expected to comprise port terminal zones, warehouse logistics zones, cold chain supply zones and railroad loading and unloading zones. The warehouses will connect the port terminal along the Yangtze River and the railway leading to Europe, satisfying the requirement of China’s latest “One Belt, One Road” initiative. It will also be able to support large logistics companies in Wuhan and other nearby provinces which will rent the warehouses, terminals and offices within the Logistics Center. (Emphasis added). 30. The 2Q18 10-Q discussed legal proceedings that the Company faced, stating in relevant part: Item 1. Legal Proceedings. We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our Company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect. 31. On November 9, 2018, Yangtze filed its quarterly report on Form 10-Q with the SEC for the quarter ended September 30, 2018 (“3Q18 10-Q”). The 3Q18 10-Q was signed by Defendants Liu and Chan. The 3Q18 10-Q contained signed SOX by Defendants Liu and Chan attesting the accuracy of financial reporting, the disclosure of any material changes to the Company’s internal control over financial reporting and the disclosure of all fraud. 32. The 3Q18 10-Q discussed the Wuhan Yangtze River Newport Logistics Center, stating in relevant part: The Logistics Center is expected to occupy approximately 1,918,000 square meters, for which the construction and development are expected to be completed in five years while the total anticipated investment have been divided into three phases – 40% of the total in the first year and 30% respectively in the second and third years. The following table illustrates the timeframe of our investment and construction progress. * * * Wuhan Newport has signed a twenty-year lease agreement effective April 27, 2015, the maximum number of years permitted by the applicable PRC laws, and with rights to renew at its sole discretion to lease approximately 1,200,000 square meters of land for building logistics warehouses in support of the Logistics Center. The warehouses are expected to comprise port terminal zones, warehouse logistics zones, cold chain supply zones and railroad loading and unloading zones. The warehouses will connect the port terminal along the Yangtze River and the railway leading to Europe, satisfying the requirement of China’s latest “One Belt, One Road” initiative. It will also be able to support large logistics companies in Wuhan and other nearby provinces which will rent the warehouses, terminals and offices within the Logistics Center. (Emphasis added). 33. The 3Q18 10-Q discussed legal proceedings that the Company faced, stating in relevant part: Item 1. Legal Proceedings. We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our Company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect. 34. The statements contained in ¶¶16-33 were materially false and/or misleading because they misrepresented and failed to disclose the following adverse facts pertaining to the Company’s business, operations and prospects, which were known to Defendants or recklessly disregarded by them. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (1) Yangtze’s purported lease of the Wuhan Yangtze River Newport Logistics Center, the Company’s main asset, was a fabrication; (2) Yangtze’s only operating subsidiary, Wuhan Newport, was declared insolvent in China due to a number of default judgments against it; and (3) as a result, Defendants’ statements about its business, operations, and prospects, were materially false and misleading and/or lacked a reasonable basis at all relevant times. THE TRUTH BEGINS TO EMERGE 35. On August 27, 2018, before the market opened, Barron’s published an article entitled, “A Troubled Chinese Company Is Seeking a Lifeline From U.S. Investors” which began to reveal information about Yangtze’s legal proceedings, stating in relevant part: Meanwhile, the company’s Wuhan operating subsidiary is showing up on official websites in which Chinese courts list debtors with unpaid legal judgments. Government websites listing “untrustworthy debtors” are a recent phenomenon in China, filling an information vacuum in a developing economy that doesn’t yet have Western-style credit bureaus and rating agencies. The raft of unpaid bills attributed to Yangtze’s subsidiary — Wuhan Yangtze River Newport Logistics Co — totals $120 million for more than a dozen cases. (Emphasis added). 36. On this news shares of Yangtze fell $0.11 per share or almost 1% to close on $11.53 on August 27, 2018. 37. On December 6, 2018, before the market opened, Hindenburg Research published a report entitled, “Yangtze River Port & Logistics: Total Zero. On-the-Ground Research Shows Assets Appear to be Largely Fabricated” (“Hindenburg Report”). The report discussed the Wuhan Yangtze River Newport Logistics Center, stating in relevant part: Evidence Shows That YRIV’s Claim to Its Main Asset Is Likely Fabricated * * * Given that the company reports total assets of $386 million (pg. F-1), the undeveloped Logistics Center land use rights comprise over 77% of the company’s total asset base. The Logistics Center is intended to be built on 1.2 million square meters of land leased from Chunfeng Village. * * * Our first clue that something was amiss came from the Hubei Provincial Government sourced records, which show that the total area of Chunfeng village is 610,000 square meters; only half the size of the area YRIV claims to lease from the village: * * * Our team spoke with officials in the village committee and asked about their relationship with YRIV. When asked if they leased any land to the company, they replied that they had not. We also confirmed that the village is currently only 0.61 square kilometers. * * * Going one level deeper, we found further evidence that the company’s “plan” to build a 1.2 million square meter facility on a plot of land half that size did not comport with geographic reality. After consulting with local authorities and villagers, the on the ground team learned that most of the area YRIV claimed to lease from Chunfeng Village actually belongs to Junming Village (军民村), Jiangdi Village (江堤村) and/or the Huayou Pipe Base (华油管道基地). Chufeng Village barely overlaps with the area YRIV claims to lease. * * * All told, we think the supposed leased land for the Logistics Center is a total fabrication. (Emphasis added). 38. The Hindenburg Report also discussed the legal proceedings facing the Company, stating in relevant part: YRIV Has Numerous Undisclosed Legal Proceedings & Judgements Against it and Its Operating Subsidiary Has Been Declared Insolvent in China YRIV has repeatedly claimed that they are “not involved in any litigation that [it] believe[s] could have a materially adverse effect on [its] financial condition.” (Source: 2018, 2017) Despite those representations, our research indicates that the precise opposite is in fact the case: the company’s operating subsidiary, Wuhan Newport, has so many claims and default judgements against it that it has been declared insolvent in China, according to our search of Chinese court databases. In just one example, China Construction Bank is litigating with YRIV’s operating subsidiary, Wuhan Newport, regarding $44 million in loans to the company. The loan is disclosed in YRIV’s filings (pg. F-17): However, the litigation relating to the exact loan is not disclosed in YRIV’s SEC filings. Here is the Chinese and English translation of the litigation: 原告建行钢城支行诉称，2014年5月28日，原告与被告新港公司签订编号为 GCDK2014- 090号《固定资产贷款合同》（以下简称贷款合同），约定新港公司向原告 借款29000万元，期限6年（2014年5月30日至2020年5月29日），贷款利率为 基准利率上浮5%，按季结息； …… 原告于2014年5月30日依约向新港公司发放了贷款29000万元，但新港公司并 未依约还款付息，担保人亦未履行担保责任，且新港公司、人和公司已出现 涉及重大法律纠纷等情形。根据《贷款合同》的约定，原告有权宣布贷款立 即到期并要求新港公司立即偿还《贷款合同》项下的所有到期及未到期的本 金、利息和费用。 Translation: The plaintiff China Construction Bank Gangcheng Branch states, on May 28, 2014, the plaintiff and the defendant Wuhan Newport executed No. GCDK 2014- 90 Fixed Assets Loan Agreement (“Loan Agreement”) and stipulated that Wuhan Newport borrowed RMB 290 million from the plaintiff with the term of six years (May 30, 2014 to May 29, 2020), the interest shall be the base interest plus 5 % and quarterly interest payment. The plaintiff (China Construction Bank) disbursed the loan payment RMB 290 million (USD 44 million) to YRIV on May 30, 2014. However, YRIV did not repay the interest and principal and the guarantor (Renhe Corp. the former shareholder of YRIV) did not perform its guarantee obligation. YRIV and Renhe Corp. were already involved in severe litigations. * * * As Wuhan Newport cannot repay its legal obligation under these judgements, it has been added to the local list of dishonest judgement debtors. This means that in the event that Wuhan Newport (the operating subsidiary of YRIV) receives any investment money from its investors, it’s already earmarked to fulfill its outstanding debt. (Emphasis added). 39. On this news, shares of Yangtze fell $3.34 per share or over 28% over the next two trading days to close at $8.28 per share on December 7, 2018. 40. As a result of Defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the Company’s common shares, Plaintiff and other Class members have suffered significant losses and damages. PLAINTIFF’S CLASS ACTION ALLEGATIONS 41. Plaintiff brings this action as a class action pursuant to Federal Rule of Civil Procedure 23(a) and (b)(3) on behalf of a class consisting of all persons other than defendants who acquired Yangtze securities publicly traded on NASDAQ during the Class Period, and who were damaged thereby (the “Class”). Excluded from the Class are Defendants, the officers and directors of Yangtze, members of the Individual Defendants’ immediate families and their legal representatives, heirs, successors or assigns and any entity in which Officer or Director Defendants have or had a controlling interest. 42. The members of the Class are so numerous that joinder of all members is impracticable. Throughout the Class Period, Yangtze securities were actively traded on NASDAQ. While the exact number of Class members is unknown to Plaintiff at this time and can be ascertained only through appropriate discovery, Plaintiff believes that there are hundreds, if not thousands of members in the proposed Class. 43. Plaintiff’s claims are typical of the claims of the members of the Class as all members of the Class are similarly affected by defendants’ wrongful conduct in violation of federal law that is complained of herein. 44. Plaintiff will fairly and adequately protect the interests of the members of the Class and has retained counsel competent and experienced in class and securities litigation. Plaintiff has no interests antagonistic to or in conflict with those of the Class. 45. Common questions of law and fact exist as to all members of the Class and predominate over any questions solely affecting individual members of the Class. Among the questions of law and fact common to the Class are: • whether the Exchange Act were violated by Defendants’ acts as alleged herein; • whether statements made by Defendants to the investing public during the Class Period misrepresented material facts about the financial condition and business Yangtze; • whether Defendants’ public statements to the investing public during the Class Period omitted material facts necessary to make the statements made, in light of the circumstances under which they were made, not misleading; • whether the Defendants caused Yangtze to issue false and misleading SEC filings during the Class Period; • whether Defendants acted knowingly or recklessly in issuing false and SEC filing • whether the prices of Yangtze securities during the Class Period were artificially inflated because of the Defendants’ conduct complained of herein; and • whether the members of the Class have sustained damages and, if so, what is the proper measure of damages. 46. A class action is superior to all other available methods for the fair and efficient adjudication of this controversy since joinder of all members is impracticable. Furthermore, as the damages suffered by individual Class members may be relatively small, the expense and burden of individual litigation make it impossible for members of the Class to individually redress the wrongs done to them. There will be no difficulty in the management of this action as a class action. 47. Plaintiff will rely, in part, upon the presumption of reliance established by the fraud-on-the-market doctrine in that: • Yangtze shares met the requirements for listing, and were listed and actively traded on NASDAQ, a highly efficient and automated market; • As a public issuer, Yangtze filed periodic public reports with the SEC and NASDAQ; • Yangtze regularly communicated with public investors via established market communication mechanisms, including through the regular dissemination of press releases via major newswire services and through other wide-ranging public disclosures, such as communications with the financial press and other similar reporting services; and • Yangtze was followed by a number of securities analysts employed by major brokerage firms who wrote reports that were widely distributed and publicly available. 48. Based on the foregoing, the market for Yangtze securities promptly digested current information regarding Yangtze from all publicly available sources and reflected such information in the prices of the shares, and Plaintiff and the members of the Class are entitled to a presumption of reliance upon the integrity of the market. 49. Alternatively, Plaintiff and the members of the Class are entitled to the presumption of reliance established by the Supreme Court in Affiliated Ute Citizens of the State of Utah v. United States, 406 U.S. 128 (1972), as Defendants omitted material information in their Class Period statements in violation of a duty to disclose such information as detailed COUNT I For Violations of Section 10(b) And Rule 10b-5 Promulgated Thereunder Against All Defendants 50. Plaintiff repeats and realleges each and every allegation contained above as if fully set forth herein. 51. This Count is asserted against Defendants is based upon Section 10(b) of the Exchange Act, 15 U.S.C. § 78j(b), and Rule 10b-5 promulgated thereunder by the SEC. 52. During the Class Period, Defendants, individually and in concert, directly or indirectly, disseminated or approved the false statements specified above, which they knew or deliberately disregarded were misleading in that they contained misrepresentations and failed to disclose material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading. 53. Defendants violated §10(b) of the 1934 Act and Rule 10b-5 in that they: • employed devices, schemes and artifices to defraud; • made untrue statements of material facts or omitted to state material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; or • engaged in acts, practices and a course of business that operated as a fraud or deceit upon plaintiff and others similarly situated in connection with their purchases of Yangtze securities during the Class Period. 54. Defendants acted with scienter in that they knew that the public documents and statements issued or disseminated in the name of Yangtze were materially false and misleading; knew that such statements or documents would be issued or disseminated to the investing public; and knowingly and substantially participated, or acquiesced in the issuance or dissemination of such statements or documents as primary violations of the securities laws. These defendants by virtue of their receipt of information reflecting the true facts of Yangtze, their control over, and/or receipt and/or modification of Yangtze’s allegedly materially misleading statements, and/or their associations with the Company which made them privy to confidential proprietary information concerning Yangtze, participated in the fraudulent scheme alleged herein. 55. Individual Defendants, who are the senior officers and/or directors of the Company, had actual knowledge of the material omissions and/or the falsity of the material statements set forth above, and intended to deceive Plaintiff and the other members of the Class, or, in the alternative, acted with reckless disregard for the truth when they failed to ascertain and disclose the true facts in the statements made by them or other Yangtze personnel to members of the investing public, including Plaintiff and the Class. 56. As a result of the foregoing, the market price of Yangtze securities was artificially inflated during the Class Period. In ignorance of the falsity of Defendants’ statements, Plaintiff and the other members of the Class relied on the statements described above and/or the integrity of the market price of Yangtze securities during the Class Period in purchasing Yangtze securities at prices that were artificially inflated as a result of Defendants’ false and misleading statements. 57. Had Plaintiff and the other members of the Class been aware that the market price of Yangtze securities had been artificially and falsely inflated by Defendants’ misleading statements and by the material adverse information which Defendants did not disclose, they would not have purchased Yangtze securities at the artificially inflated prices that they did, or at 58. As a result of the wrongful conduct alleged herein, Plaintiff and other members of the Class have suffered damages in an amount to be established at trial. 59. By reason of the foregoing, Defendants have violated Section 10(b) of the 1934 Act and Rule 10b-5 promulgated thereunder and are liable to the plaintiff and the other members of the Class for substantial damages which they suffered in connection with their purchase of Yangtze securities during the Class Period. COUNT II Violations of Section 20(a) of the Exchange Act Against the Individual Defendants 60. Plaintiff repeats and realleges each and every allegation contained in the foregoing paragraphs as if fully set forth herein. 61. During the Class Period, the Individual Defendants participated in the operation and management of Yangtze, and conducted and participated, directly and indirectly, in the conduct of Yangtze’s business affairs. Because of their senior positions, they knew the adverse non-public information about Yangtze’s misstatement of revenue and profit and false financial statements. 62. As officers and/or directors of a publicly owned company, the Individual Defendants had a duty to disseminate accurate and truthful information with respect to Yangtze’s financial condition and results of operations, and to correct promptly any public statements issued by Yangtze which had become materially false or misleading. 63. Because of their positions of control and authority as senior officers, the Individual Defendants were able to, and did, control the contents of the various reports, press releases and public filings which Yangtze disseminated in the marketplace during the Class Period concerning Yangtze’s results of operations. Throughout the Class Period, the Individual Defendants exercised their power and authority to cause Yangtze to engage in the wrongful acts complained of herein. The Individual Defendants therefore, were “controlling persons” of Yangtze within the meaning of Section 20(a) of the Exchange Act. In this capacity, they participated in the unlawful conduct alleged which artificially inflated the market price of Yangtze securities. 64. By reason of the above conduct, the Individual Defendants are liable pursuant to Section 20(a) of the Exchange Act for the violations committed by Yangtze. PRAYER FOR RELIEF WHEREFORE, plaintiff, on behalf of himself and the Class, prays for judgment and relief as follows: (a) declaring this action to be a proper class action, designating plaintiff as Lead Plaintiff and certifying plaintiff as a class representative under Rule 23 of the Federal Rules of Civil Procedure and designating plaintiff’s counsel as Lead Counsel; (b) awarding damages in favor of plaintiff and the other Class members against all defendants, jointly and severally, together with interest thereon; awarding plaintiff and the Class reasonable costs and expenses incurred in this action, including counsel fees and expert fees; and (d) awarding plaintiff and other members of the Class such other and further relief as the Court may deem just and proper. JURY TRIAL DEMANDED Plaintiff hereby demands a trial by jury. Dated: January 2, 2019 Respectfully submitted, THE ROSEN LAW FIRM, P.A. /s/Phillip Kim Phillip Kim, Esq. (PK 9384) Laurence M. Rosen, Esq. (LR 5733) 275 Madison Avenue, 34th Floor New York, NY 10016 Telephone: (212) 686-1060 Fax: (212) 202-3827 Email: pkim@rosenlegal.com lrosen@rosenlegal.com Counsel for Plaintiff

securities

jqzygIsBafuLXYh7DOg_

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x RAYMOND GONZALEZ, on behalf of himself and all others similarly situated, CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL Plaintiffs, v. RELIABLE KNITTING WORKS, Defendant. : : : : : : : : : : : : - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x INTRODUCTION 1. Plaintiff RAYMOND GONZALEZ, on behalf of himself and others similarly situated, asserts the following claims against Defendant RELIABLE KNITTING WORKS as follows. 2. Based on a 2010 U.S. Census Bureau report, approximately 8.1 million people in the United States are visually impaired, including 2.0 million who are blind, and according to the American Foundation for the Blind’s 2016 report, approximately 420,000 visually impaired persons live in the State of New York. 3. Plaintiff brings this civil rights action against Defendant for its failure to design, construct, maintain, and operate its website to be fully accessible to and independently usable by Plaintiff and other blind or visually-impaired people. 4. Plaintiff uses the terms “blind” or “visually-impaired” to refer to all people with visual impairments who meet the legal definition of blindness in that they have a visual acuity with correction of less than or equal to 20 x 200. 5. Defendant’s denial of full and equal access to its website, and therefore denial of its goods and services offered thereby, is a violation of Plaintiff’s rights under the Americans with Disabilities Act (“ADA”). 6. Because Defendant’s website, www.muk-luks.com (the “Website” or “Defendant’s website”), is not equally accessible to blind and visually-impaired consumers, it violates the ADA. Plaintiff seeks a permanent injunction to cause a change in Defendant’s corporate policies, practices, and procedures so that Defendant’s website will become and remain accessible to blind and visually-impaired consumers. JURISDICTION AND VENUE 7. This Court has subject-matter jurisdiction over this action under 28 U.S.C. § 1331 and 42 U.S.C. § 12181, as Plaintiff’s claims arise under Title III of the ADA, 42 U.S.C. § 12181, et seq., and 28 U.S.C. § 1332. 8. This Court has supplemental jurisdiction under 28 U.S.C. § 1367 over Plaintiff’s New York City Human Rights Law, N.Y.C. Admin. Code § 8-101 et seq., (“NYCHRL”) claims. 9. Venue is proper in this district under 28 U.S.C. §1391(b)(1) and (2) because Defendant conducts and continues to conduct a substantial and significant amount of business in this District, and a substantial portion of the conduct complained of herein occurred in this District because Plaintiff attempted to utilize, on a number of occasions, the subject Website within this Judicial District. 10. Defendant is subject to personal jurisdiction in this District. Defendant has been and is committing the acts or omissions alleged herein in the Southern District of New York that caused injury, and violated rights the ADA prescribes to Plaintiff and to other blind and other visually impaired-consumers in this District. A substantial part of the acts and omissions giving rise to Plaintiff’s claims occurred in this District: Plaintiff has been denied the full use and enjoyment of the facilities, goods and services offered to the general public, on Defendant’s Website in New York County. These access barriers that Plaintiff encountered have caused a denial of Plaintiff’s full and equal access multiple times in the past, and now deter Plaintiff on a regular basis from accessing the Defendant’s Website in the future. 11. This Court is empowered to issue a declaratory judgment under 28 U.S.C. §§ 2201 and 2202. THE PARTIES 12. Plaintiff RAYMOND GONZALEZ, at all relevant times, is and was a resident of New York, New York. 13. Plaintiff is a blind, visually-impaired handicapped person and a member of member of a protected class of individuals under the ADA, under 42 U.S.C. § 12102(1)-(2), and the regulations implementing the ADA set forth at 28 CFR § 36.101 et seq., and NYCHRL. 14. Defendant is and was at all relevant times a Wisconsin Corporation doing business in New York. 15. Defendant’s Website, and its goods and services offered thereupon, is a public accommodation within the definition of Title III of the ADA, 42 U.S.C. § 12181(7). NATURE OF ACTION 16. The Internet has become a significant source of information, a portal, and a tool for conducting business, doing everyday activities such as shopping, learning, banking, researching, as well as many other activities for sighted, blind and visually- impaired persons alike. 17. In today’s tech-savvy world, blind and visually-impaired people have the ability to access websites using keyboards in conjunction with screen access software that vocalizes the visual information found on a computer screen or displays the content on a refreshable Braille display. This technology is known as screen-reading software. Screen-reading software is currently the only method a blind or visually- impaired person may independently access the internet. Unless websites are designed to be read by screen-reading software, blind and visually-impaired persons are unable to fully access websites, and the information, products, goods and contained thereon. 18. Blind and visually-impaired users of Windows operating system-enabled computers and devices have several screen reading software programs available to them. Some of these programs are available for purchase and other programs are available without the user having to purchase the program separately. NonVisual Desktop Access, otherwise known as “NVDA” is a popular, screen-reading software program available for a Windows computer. 19. For screen-reading software to function, the information on a website must be capable of being rendered into text. If the website content is not capable of being rendered into text, the blind or visually-impaired user is unable to access the same content available to sighted users. 20. The international website standards organization, the World Wide Web Consortium, known throughout the world as W3C, has published version 2.1 of the Web Content Accessibility Guidelines (“WCAG 2.1”). WCAG 2.1 are well- established guidelines for making websites accessible to blind and visually- impaired people. These guidelines are universally followed by most large business entities and government agencies to ensure their websites are accessible. STATEMENT OF FACTS 21. Defendant is a footwear, sock, and cold weather gear company that owns and operates the website, www.muk-luks.com (its “Website”), offering features which should allow all consumers to access the goods and services which Defendant ensures the delivery of throughout the United States, including New York State. 22. Defendant’s Website offers its products and services for online sale and general delivery to the public. The Website offers features which ought to allow users to browse for items, access navigation bar descriptions and prices, and avail consumers of the ability to peruse the numerous items offered for sale. 23. Plaintiff is a visually-impaired and legally blind person, who cannot use a computer without the assistance of screen-reading software. Plaintiff is, however, a proficient NVDA screen-reader user and uses it to access the Internet. Plaintiff has visited the Website using a screen-reader. 24. Plaintiff most recently visited Defendant’s website in March of 2020 to browse and potentially make a purchase. Despite his efforts, however, Plaintiff was denied a user experience similar to that of a sighted individual due to the website’s lack of a variety of features and accommodations, which effectively barred Plaintiff from being able to enjoy the privileges and benefits of Defendant’s public accommodation. 25. For example, many features on the Website lacks alt. text, which is the invisible code embedded beneath a graphical image. As a result, Plaintiff was unable to differentiate what products were on the screen due to the failure of the Website to adequately describe its content. 26. Many features on the Website also fail to contain a proper label element or title attribute for each field. This is a problem for the visually impaired because the screen reader fails to communicate the purpose of the page element. It also leads to the user not being able to understand what he or she is expected to insert into the subject field. As a result, Plaintiff was unable to enjoy the privileges and benefits of the Website equally to sighted users. 27. Many pages on the Website also contain the same title elements. This was a problem for Plaintiff because in certain instances the screen reader failed to distinguish one page from another. In order to fix this problem, Defendant must change the title elements for each page. 28. The Website also contains a host of broken links, which is a hyperlink to a non- existent or empty webpage. For the visually impaired this is especially paralyzing due to the inability to navigate or otherwise determine where one is on the website once a broken link is encountered. For example, upon coming across a link of interest, Plaintiff was redirected to an error page. However, the screen-reader failed to communicate that the link was broken. As a result, Plaintiff could not get back to his original search. 29. As a result of visiting Defendant’s Website and from investigations performed on his behalf, Plaintiff is aware that the Website includes at least the following additional barriers blocking his full and equal use: a. The Website does not provide a text equivalent for every non-text element; b. The purpose of each link cannot be determined from the link text alone or from the link text and its programmatically determined link context; c. Web pages lack titles that describe their topic or purpose; d. Headings and labels do not describe topic or purpose; e. Keyboard user interfaces lack a mode of operation where the keyboard focus indicator is visible; f. The default human language of each web page cannot be programmatically determined; g. The human language of each passage or phrase in the content cannot be programmatically determined; h. Labels or instructions are not always provided when content requires user input; i. Text cannot be resized up to 200 percent without assistive technology so that it may still be viewed without loss of content or functionality; j. A mechanism is not always available to bypass blocks of content that are repeated on multiple web pages; k. A correct reading sequence is not provided on pages where the sequence in which content is presented affects its meaning; l. In content implemented using markup languages, elements do not always have complete start and end tags, are not nested according to their specifications, may contain duplicate attributes, and IDs are not always unique; and m. The name and role of all UI elements cannot be programmatically determined; things that can be set by the user cannot be programmatically set; and/or notification of changes to these items is not available to user agents, including assistive technology. 30. These access barriers effectively denied Plaintiff the ability to use and enjoy Defendant’s website the same way sighted individuals do. 31. It is, upon information and belief, Defendant’s policy and practice to deny Plaintiff, along with other blind or visually-impaired users, access to Defendant’s website, and to therefore specifically deny the goods and services that are offered to the general public. Due to Defendant’s failure and refusal to remove access barriers to its website, Plaintiff and visually-impaired persons have been and are still being denied equal access to Defendant’s Website, and the numerous goods and services and benefits offered to the public through the Website. 32. Due to the inaccessibility of Defendant’s Website, blind and visually-impaired customers such as Plaintiff, who need screen-readers, cannot fully and equally use or enjoy the facilities, products, and services Defendant offers to the public on its Website. The access barriers Plaintiff encountered have caused a denial of Plaintiff’s full and equal access in the past, and now deter Plaintiff on a regular basis from visiting the Website, presently and in the future. 33. If the Website were equally accessible to all, Plaintiff could independently navigate the Website and complete a desired transaction as sighted individuals do. 34. Through his attempts to use the Website, Plaintiff has actual knowledge of the access barriers that make these services inaccessible and independently unusable by blind and visually-impaired people. 35. Because simple compliance with the WCAG 2.1 Guidelines would provide Plaintiff and other visually-impaired consumers with equal access to the Website, Plaintiff alleges that Defendant has engaged in acts of intentional discrimination, including but not limited to the following policies or practices: a. Constructing and maintaining a website that is inaccessible to visually-impaired individuals, including Plaintiff; b. Failure to construct and maintain a website that is sufficiently intuitive so as to be equally accessible to visually-impaired individuals, including Plaintiff; and, c. Failing to take actions to correct these access barriers in the face of substantial harm and discrimination to blind and visually-impaired consumers, such as Plaintiff, as a member of a protected class. 36. Defendant therefore uses standards, criteria or methods of administration that have the effect of discriminating or perpetuating the discrimination of others, as alleged herein. 37. The ADA expressly contemplates the injunctive relief that Plaintiff seeks in this action. In relevant part, the ADA requires: In the case of violations of . . . this title, injunctive relief shall include an order to alter facilities to make such facilities readily accessible to and usable by individuals with disabilities . . . Where appropriate, injunctive relief shall also include requiring the . . . modification of a policy . . . 42 U.S.C. § 12188(a)(2). 38. Upon information and belief, because RELIABLE KNITTING WORKS’s Website has never been accessible and because RELIABLE KNITTING WORKS does not have, and has never had, an adequate corporate policy that is reasonably calculated to cause its Website to become and remain accessible, Plaintiff invokes 42 U.S.C. § 12188(a)(2) and seeks a permanent injunction requiring: a. that RELIABLE KNITTING WORKS retain a qualified consultant acceptable to Plaintiff (“Mutually Agreed Upon Consultant”) who shall assist it in improving the accessibility of its Website so the goods and services on them may be equally accessed and enjoyed by individuals with vision related disabilities; b. that RELIABLE KNITTING WORKS work with the Mutually Agreed Upon Consultant to ensure that all employees involved in website development and content development be given web accessibility training on a periodic basis, including onsite training to create accessible content at the design and development stages; c. that RELIABLE KNITTING WORKS work with the Mutually Agreed Upon Consultant to perform an automated accessibility audit on a periodic basis to evaluate whether its Website may be equally accessed and enjoyed by individuals with vision related disabilities on an ongoing basis; d. that RELIABLE KNITTING WORKS work with the Mutually Agreed Upon Consultant to perform end-user accessibility/usability testing on a periodic basis with said testing to be performed by individuals with various disabilities to evaluate whether its Website may be equally accessed and enjoyed by individuals with vision related disabilities on an ongoing basis; e. that RELIABLE KNITTING WORKS work with the Mutually Agreed Upon Consultant to create an accessibility policy that will be posted on its Website, along with an e-mail address and tollfree phone number to report accessibility- related problems; and f. that Plaintiff, their counsel and its experts monitor Defendant’s Website for up to two years after the Mutually Agreed Upon Consultant validates it is free of accessibility errors/violations to ensure it has adopted and implemented adequate accessibility policies. 39. Web-based technologies have features and content that are modified on a daily, and in some instances, an hourly, basis, and a one time “fix” to an inaccessible website will not cause the website to remain accessible without a corresponding change in corporate policies related to those web-based technologies. To evaluate whether an inaccessible website has been rendered accessible, and whether corporate policies related to web-based technologies have been changed in a meaningful manner that will cause the website to remain accessible, the website must be reviewed on a periodic basis using both automated accessibility screening tools and end user testing by disabled individuals. 40. Although Defendant may currently have centralized policies regarding maintaining and operating its Website, Defendant lacks a plan and policy reasonably calculated to make them fully and equally accessible to, and independently usable by, blind and other visually-impaired consumers. 41. Defendant has, upon information and belief, invested substantial sums in developing and maintaining their Website and has generated significant revenue from the Website. These amounts are far greater than the associated cost of making their Website equally accessible to visually impaired customers. 42. Without injunctive relief, Plaintiff and other visually-impaired consumers will continue to be unable to independently use the Website, violating their rights. CLASS ACTION ALLEGATIONS 43. Plaintiff, on behalf of himself and all others similarly situated, seeks to certify a nationwide class under Fed. R. Civ. P. 23(a) and 23(b)(2): all legally blind individuals in the United States who have attempted to access Defendant’s Website and as a result have been denied access to the equal enjoyment of goods and services, during the relevant statutory period. 44. Plaintiff, on behalf of himself and all others similarly situated, seeks certify a New York City subclass under Fed. R. Civ. P. 23(a) and 23(b)(2): all legally blind individuals in the City of New York who have attempted to access Defendant’s Website and as a result have been denied access to the equal enjoyment of goods and services offered, during the relevant statutory period. 45. Common questions of law and fact exist amongst Class, including: a. Whether Defendant’s Website is a “public accommodation” under the ADA; b. Whether Defendant’s Website is a “place or provider of public accommodation” under the NYCHRL; c. Whether Defendant’s Website denies the full and equal enjoyment of its products, services, facilities, privileges, advantages, or accommodations to people with visual disabilities, violating the ADA; and d. Whether Defendant’s Website denies the full and equal enjoyment of its products, services, facilities, privileges, advantages, or accommodations to people with visual disabilities, violating the NYCHRL. 46. Plaintiff’s claims are typical of the Class. The Class, similarly to the Plaintiff, are severely visually impaired or otherwise blind, and claim that Defendant has violated the ADA or NYCHRL by failing to update or remove access barriers on its Website so either can be independently accessible to the Class. 47. Plaintiff will fairly and adequately represent and protect the interests of the Class Members because Plaintiff has retained and is represented by counsel competent and experienced in complex class action litigation, and because Plaintiff has no interests antagonistic to the Class Members. Class certification of the claims is appropriate under Fed. R. Civ. P. 23(b)(2) because Defendant has acted or refused to act on grounds generally applicable to the Class, making appropriate both declaratory and injunctive relief with respect to Plaintiff and the Class as a whole. 48. Alternatively, class certification is appropriate under Fed. R. Civ. P. 23(b)(3) because fact and legal questions common to Class Members predominate over questions affecting only individual Class Members, and because a class action is superior to other available methods for the fair and efficient adjudication of this litigation. 49. Judicial economy will be served by maintaining this lawsuit as a class action in that it is likely to avoid the burden that would be otherwise placed upon the judicial system by the filing of numerous similar suits by people with visual disabilities throughout the United States. FIRST CAUSE OF ACTION VIOLATIONS OF THE ADA, 42 U.S.C. § 12181 et seq. 50. Plaintiff, on behalf of himself and the Class Members, repeats and realleges every allegation of the preceding paragraphs as if fully set forth herein. 51. Section 302(a) of Title III of the ADA, 42 U.S.C. § 12101 et seq., provides: No individual shall be discriminated against on the basis of disability in the full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations of any place of public accommodation by any person who owns, leases (or leases to), or operates a place of public accommodation. 42 U.S.C. § 12182(a). 52. Defendant’s Website is a public accommodations within the definition of Title III of the ADA, 42 U.S.C. § 12181(7). The Website is a service that is offered to the general public, and as such, must be equally accessible to all potential consumers. 53. Under Section 302(b)(1) of Title III of the ADA, it is unlawful discrimination to deny individuals with disabilities the opportunity to participate in or benefit from the products, services, facilities, privileges, advantages, or accommodations of an entity. 42 U.S.C. § 12182(b)(1)(A)(i). 54. Under Section 302(b)(1) of Title III of the ADA, it is unlawful discrimination to deny individuals with disabilities an opportunity to participate in or benefit from the products, services, facilities, privileges, advantages, or accommodation, which is equal to the opportunities afforded to other individuals. 42 U.S.C. § 12182(b)(1)(A)(ii). 55. Under Section 302(b)(2) of Title III of the ADA, unlawful discrimination also includes, among other things: [A] failure to make reasonable modifications in policies, practices, or procedures, when such modifications are necessary to afford such goods, services, facilities, privileges, advantages, or accommodations to individuals with disabilities, unless the entity can demonstrate that making such modifications would fundamentally alter the nature of such goods, services, facilities, privileges, advantages or accommodations; and a failure to take such steps as may be necessary to ensure that no individual with a disability is excluded, denied services, segregated or otherwise treated differently than other individuals because of the absence of auxiliary aids and services, unless the entity can demonstrate that taking such steps would fundamentally alter the nature of the good, service, facility, privilege, advantage, or accommodation being offered or would result in an undue burden. 42 U.S.C. § 12182(b)(2)(A)(ii)-(iii). 56. The acts alleged herein constitute violations of Title III of the ADA, and the regulations promulgated thereunder. Plaintiff, who is a member of a protected class of persons under the ADA, has a physical disability that substantially limits the major life activity of sight within the meaning of 42 U.S.C. §§ 12102(1)(A)-(2)(A). Furthermore, Plaintiff has been denied full and equal access to the Website, has not been provided services that are provided to other patrons who are not disabled, and has been provided services that are inferior to the services provided to non-disabled persons. Defendant has failed to take any prompt and equitable steps to remedy its discriminatory conduct. These violations are ongoing. 57. Under 42 U.S.C. § 12188 and the remedies, procedures, and rights set forth and incorporated therein, Plaintiff, requests relief as set forth below. SECOND CAUSE OF ACTION VIOLATIONS OF THE NYCHRL 58. Plaintiff, on behalf of himself and the New York City Sub-Class Members, repeats and realleges every allegation of the preceding paragraphs as if fully set forth herein. 59. N.Y.C. Administrative Code § 8-107(4)(a) provides that “It shall be an unlawful discriminatory practice for any person, being the owner, lessee, proprietor, manager, superintendent, agent or employee of any place or provider of public accommodation, because of . . . disability . . . directly or indirectly, to refuse, withhold from or deny to such person, any of the accommodations, advantages, facilities or privileges thereof.” 60. Defendant’s Website is a sales establishment and public accommodations within the definition of N.Y.C. Admin. Code § 8-102(9). 61. Defendant is subject to NYCHRL because it owns and operates its Website, making it a person within the meaning of N.Y.C. Admin. Code § 8-102(1). 62. Defendant is violating N.Y.C. Administrative Code § 8-107(4)(a) in refusing to update or remove access barriers to Website, causing its Website and the services integrated with such Website to be completely inaccessible to the blind. This inaccessibility denies blind patrons full and equal access to the facilities, products, and services that Defendant makes available to the non-disabled public. 63. Defendant is required to “make reasonable accommodation to the needs of persons with disabilities . . . any person prohibited by the provisions of [§ 8-107 et seq.] from discriminating on the basis of disability shall make reasonable accommodation to enable a person with a disability to . . . enjoy the right or rights in question provided that the disability is known or should have been known by the covered entity.” N.Y.C. Admin. Code § 8-107(15)(a). 64. Defendant’s actions constitute willful intentional discrimination against the Sub- Class on the basis of a disability in violation of the N.Y.C. Administrative Code § 8-107(4)(a) and § 8-107(15)(a) in that Defendant has: a. constructed and maintained a website that is inaccessible to blind class members with knowledge of the discrimination; and/or b. constructed and maintained a website that is sufficiently intuitive and/or obvious that is inaccessible to blind class members; and/or c. failed to take actions to correct these access barriers in the face of substantial harm and discrimination to blind class members. 65. Defendant has failed to take any prompt and equitable steps to remedy their discriminatory conduct. These violations are ongoing. 66. As such, Defendant discriminates, and will continue in the future to discriminate against Plaintiff and members of the proposed class and subclass on the basis of disability in the full and equal enjoyment of the products, services, facilities, privileges, advantages, accommodations and/or opportunities of its Website under § 8-107(4)(a) and/or its implementing regulations. Unless the Court enjoins Defendant from continuing to engage in these unlawful practices, Plaintiff and members of the class will continue to suffer irreparable harm. 67. Defendant’s actions were and are in violation of the NYCHRL and therefore Plaintiff invokes his right to injunctive relief to remedy the discrimination. 68. Plaintiff is also entitled to compensatory damages, as well as civil penalties and fines under N.Y.C. Administrative Code § 8-120(8) and § 8-126(a) for each offense as well as punitive damages pursuant to § 8-502. 69. Plaintiff is also entitled to reasonable attorneys’ fees and costs. 70. Under N.Y.C. Administrative Code § 8-120 and § 8-126 and the remedies, procedures, and rights set forth and incorporated therein Plaintiff prays for judgment as set forth below. THIRD CAUSE OF ACTION DECLARATORY RELIEF 71. Plaintiff, on behalf of himself and the Class and New York City Sub-Classes Members, repeats and realleges every allegation of the preceding paragraphs as if fully set forth herein. 72. An actual controversy has arisen and now exists between the parties in that Plaintiff contends, and is informed and believes that Defendant denies, that its Website contains access barriers denying blind customers the full and equal access to the products, services and facilities of its Website, which Defendant owns, operations and controls, fails to comply with applicable laws including, but not limited to, Title III of the Americans with Disabilities Act, 42 U.S.C. §§ 12182, et seq., and N.Y.C. Admin. Code § 8-107, et seq. prohibiting discrimination against the blind. 73. A judicial declaration is necessary and appropriate at this time in order that each of the parties may know their respective rights and duties and act accordingly. PRAYER FOR RELIEF WHEREFORE, Plaintiff respectfully requests this Court grant the following relief: a. A preliminary and permanent injunction to prohibit Defendant from violating the Americans with Disabilities Act, 42 U.S.C. §§ 12182, et seq., N.Y.C. Administrative Code § 8-107, et seq., and the laws of New York; b. A preliminary and permanent injunction requiring Defendant to take all the steps necessary to make its Website into full compliance with the requirements set forth in the ADA, and its implementing regulations, so that the Website is readily accessible to and usable by blind individuals; c. A declaration that Defendant owns, maintains and/or operates its Website in a manner that discriminates against the blind and which fails to provide access for persons with disabilities as required by Americans with Disabilities Act, 42 U.S.C. §§ 12182, et seq., N.Y.C. Administrative Code § 8-107, et seq., and the laws of New York d. An order certifying the Class and Sub-Classes under Fed. R. Civ. P. 23(a) & (b)(2) and/or (b)(3), appointing Plaintiff as Class Representative, and his attorneys as Class Counsel; e. Compensatory damages in an amount to be determined by proof, including all applicable statutory and punitive damages and fines, to Plaintiff and the proposed class and subclasses for violations of their civil rights under New York City Human Rights Law and City Law; f. Pre- and post-judgment interest; g. An award of costs and expenses of this action together with reasonable attorneys’ and expert fees; and h. Such other and further relief as this Court deems just and proper. DEMAND FOR TRIAL BY JURY Pursuant to Fed. R. Civ. P. 38(b), Plaintiff demands a trial by jury on all questions of fact the Complaint raises. Dated: Queens, New York July 7, 2020 MARS KHAIMOV LAW, PLLC By: /s/ Mars Khaimov Mars Khaimov, Esq. marskhaimovlaw@gmail.com 10826 64th Avenue, Second Floor Forest Hills, New York 11375 Tel: (929) 324-0717 Attorneys for Plaintiff

civil rights, immigration, family

ntomEIcBD5gMZwcz5bav

INCLERKGOFFICE DEC 19 2012 SPATT, J. X BROWN, M.J. COLLECTIVE AND Plaintiffs, CLASS ACTION COMPLAINT -against- Jury Trial Demanded Defendants. X Plaintiffs, JOSE MANUEL HENRIQUEZ and JOSE HECTOR FUENTES by and NATURE OF THE CLAIM 1. This action is brought on behalf of plaintiffs and a putative class of 2. Plaintiffs bring this action under the Fair Labor Standards Act, 29 U.S.C. of JURISDICTION AND VENUE 3. This Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331 4. In addition, the Court has jurisdiction over Plaintiffs' claims under the 5. Venue is proper in the Eastern District of New York pursuant to 28 U.S.C. 6. At all times relevant, Defendant KELCO, operates a business located at 40 THE PARTIES 7. Upon information and belief, Defendant KELCO is a domestic business 8. Upon information and belief, Defendant KELCO is one of the largest 9. KELCO is a covered employer within the meaning of the Fair Labor 10. Upon information and belief, the defendant KELCO is engaged in a for 11. Upon information and belief, Defendant JOHN KELLY is the owner of 12. Upon information and belief, Defendant JOHN KELLY is a shareholder 13. Upon information and belief, Defendant JOHN KELLY is an officer of 14. Upon information and belief, Defendant JOHN KELLY had authority to 15. Upon information and belief, Defendant JOHN KELLY is the owner of 16. Upon information and belief, Defendant JOSEPH PROVENZANO is a 17. Upon information and belief, Defendant JOSEPH PROVENZANO is an 18. Upon information and belief, Defendant JOSEPH PROVENZANO was 19. Defendant ELM GENERAL CONSTRUCTION CORP. is an entity 20. Defendant KELLY'S CREW is an entity related to and/or affiliated with 21. Plaintiff JOSE MANUEL HENRIQUEZ resides in the County of Suffolk 22. Plaintiff, JOSE MANUEL HENRIQUEZ, began his employment with 23. Plaintiff JOSE HECTOR FUENTES resides in the County of Suffolk and 24. Plaintiff, JOSE HECTOR FUENTES, began his employment with FACTS 25. Plaintiff JOSE MANUEL HENRIQUEZ worked as a landscape laborer26. Plaintiff JOSE HECTOR FUENTES worked as a landscape laborer for 27. At all times pertinent to this Complaint, the Plaintiffs JOSE MANUAL 28. Plaintiffs were paid on an hourly basis with payroll checks issued by KELCO's 29. Throughout the course of their employment with KELCO, Plaintiffs 30. Throughout the course of their employment with KELKO, JOSE 31. Consistent with KELCO's general policy and pattern or practice, Plaintiffs 32. KELCO did not satisfy its obligation under FLSA and NYLL to pay its 33. As part of its regular business practice, KELCO has intentionally, (a) willfully failing to record all of the time that its employees, including (b) willfully failing to pay its employees, including Plaintiff and the Class 34. KELCO is aware or should have been aware that state and federal law 35. KELCO's failure to pay Plaintiff and Class Members overtime wages for COLLECTIVE ACTION ALLEGATIONS 36. Plaintiffs bring FLSA claims on behalf of themselves and all similarly 37. At all relevant times, Plaintiffs JOSE MANUEL HENRIQUEZ and JOSE 38. KELCO is liable under the FLSA for, inter alia, failing to properly 39. The First Claim for Relief is properly brought under and maintained as an CLASS ACTION ALLEGATIONS 40. Plaintiffs also bring New York Labor Law claims on behalf of themselves 41. The persons in the Rule 23 Class identified above are so numerous that 42. The Rule 23 Class Members are readily ascertainable. For purposes of 43. KELCO has acted or has refused to act on grounds generally applicable to 44. There are questions of law and fact common to the Rule 23 Class that (a) whether KELCO has failed to keep true and accurate time records for all (b) what proof of hours worked is sufficient when an employer fails in its duty (c) what were the policies, practices, programs, procedures, protocols and (d) whether KELCO has failed and/or refused to pay Plaintiffs and the Rule (e) the nature and extent of Rule 23 Class-wide injury and the appropriate(f) whether KELCO's general practice of failing and/or refusing to pay 45. The claims of the Plaintiffs are typical of the claims of the Rule 23 Class 46. Plaintiffs' claims are typical of those claims which could be alleged by 47. Plaintiffs will fairly and adequately represent and protect the interests of 48. Plaintiffs have retained counsel competent and experienced in complex 49. A class action is superior to other available methods for the fair and 50. Current employees are often afraid to assert their rights out of fear of PREVAILING WAGE 51. The Plaintiffs performed labor for KELCO for certain projects located in 52. Throughout their employment with KELCO plaintiffs worked on 53. KELCO had a duty to pay the employees working on those public works 54. Upon information and belief, KELCO entered into a number of public 55. The Public Works Contracts included but are not limited to projects upon 56. Article I, Section 17 of the New York Constitution and Section 220 of the 57. The prevailing rate of wage is the rate of wage paid in the locality by58. Section 220 also requires that the laborers, workmen and mechanics upon 59. Upon information and belief, the schedule of prevailing rates of wages and 60. Plaintiffs and other members of the putative class furnished labor to 61. KELCO willfully paid plaintiffs and the other members of the putative FIRST CLAIM FOR RELIEF PURSUANT TO THE FEDERAL FAIR LABOR STANDARDS ACT 29 U.S.C. § 216(B) 62. Plaintiffs allege and incorporate by reference all allegations in all 63. The plaintiffs bring this First Claim for Relief pursuant to 29 U.S.C. § 64. Pursuant to the applicable provisions of the FLSA, 29 U.S.C. § 206 and § 65. The plaintiffs on behalf of themselves and all other similarly situated SECOND CLAIM FOR RELIEF TO RECOVER UNPAID OVERTIME WAGES UNDER NEW YORK STATE LABOR LAW 66. Plaintiffs allege and incorporate by reference all allegations in all 67. At all relevant times, Plaintiffs were employees and Defendant has been 68. The overtime wage provisions of Article 19 of the New York Labor Law 69. Defendant employed plaintiffs for workweeks longer than forty (40) hours 70. The complete records concerning the number of hours worked by the 71. Defendant have failed to pay Plaintiffs and the Rule 23 Class Members 72. By defendant's failure to pay Plaintiffs and the Rule 23 Class Members 73. Due to defendant's violations of the New York Labor Law, Plaintiffs and THIRD CLAIM FOR RELIEF BREACH OF CONTRACT ON BEHALF OF PLAINTIFFS AS THIRD PARTY BENEFICIARIES 74. Plaintiffs repeat and reallege each and every allegation previously set forth 75. Defendant KELCO entered into contracts with one or more third parties to76. Defendant KELCO agreed as part of such contracts and/or as a matter of 77. Upon information and belief, the Public Works Contracts entered into by 78. Those prevailing rates of wages and supplemental benefits were made a 79. The plaintiffs were third-party beneficiaries of the contacts entered into by 80. Defendant KELCO breached the Public Works Contracts in that it failed 81. Defendant KELCO is liable to the plaintiffs and the other members of the 82. Defendant KELCO entered into contracts with one or more third parties to 83. Defendant KELCO entered into the aforesaid contracts to perform the 84. Plaintiffs were third party beneficiaries of the aforesaid contracts. 85. Defendant KELCO breached the aforesaid contracts in that they failed to 86. Defendant KELCO is liable to plaintiffs for damages based upon an PRAYER FOR RELIEF WHEREFORE, Plaintiffs, individually and on behalf of all other similarly (i) Unpaid wages and an additional and equal amount as liquidated damages (ii) Certification of this case as a collective action under 29 U.S.C. $216(b) (iii) Designation of Plaintiffs as representatives of the Rule 23 Class, and (iv) Issuance of a declaratory judgment that the practices complained of in this (v) Unpaid overtime pay pursuant to New York Labor Law, Article 19, §§650 (vi) Unpaid prevailing wages and supplemental benefits; (vii) All attorneys' fees and costs incurred in prosecuting these claims; and (viii) Such other relief as this Court deems just and proper. DEMAND FOR TRIAL BY JURY Pursuant to Rule 38(b) of the Federal Rules of Civil Procedure, Plaintiffs demand December 18, 2012 FRANK & ASSOCIATES, P.C. By: Peter A. Romero (PR-1658) 500 Bi-County Blvd., 112N Farmingdale, New York 11735 Tel. (631) 756-0400 Fax (631) 756-0547 promero@laborlaws.com Attorneys for Plaintiffs

employment & labor

DsWMDYcBD5gMZwczSLew

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF TEXAS CASE NO: NICOLE WILLIAMSON, individually and on behalf of all others similarly situated, CLASS ACTION Plaintiff, JURY TRIAL DEMANDED v. CLAY COOLEY, LLC D/B/A CLAY COOLEY KIA, Defendant. __________________________________/ CLASS ACTION COMPLAINT Plaintiff Nicole Williamson brings this class action against Defendant Clay Cooley, LLC d/b/a Clay Cooley KIA (“Defendant”) and alleges as follows upon personal knowledge as to Plaintiff and Plaintiff’s own acts and experiences, and, as to all other matters, upon information and belief, including investigation conducted by Plaintiff’s attorneys. NATURE OF THE ACTION 1. This is a putative class action pursuant to the Telephone Consumer Protection Act, 47 U.S.C. §§ 227, et seq. (the “TCPA”). 2. Defendant operates a car dealership selling new and used cars as well as vehicle maintenance, service and parts. 3. To market its business, Defendant uses prerecorded messages to send prerecorded voice messages to individuals’ cellular phone numbers without first obtaining the required express written consent. 4. Through this action, Plaintiff seeks injunctive relief to halt Defendant’s illegal conduct, which has resulted in the invasion of privacy, harassment, aggravation, and disruption of the daily life of thousands of individuals. Plaintiff also seeks statutory damages on behalf of Plaintiff and members of the Class, and any other available legal or equitable remedies. JURISDICTION AND VENUE 5. This Court has federal question subject matter jurisdiction over this action pursuant to 28 U.S.C. § 1331, as the action arises under the Telephone Consumer Protection Act, 47 U.S.C. §§ 227, et seq. (“TCPA”). 6. The Court has personal jurisdiction over Defendant and venue is proper in this District because Defendant directs, markets, and provides its business activities to this District, and because Defendant’s unauthorized marketing scheme was directed by Defendant to consumers in this District, including Plaintiff. 7. Furthermore, Defendant initiated and directed, or caused to be initiated and directed, the transmission of unsolicited prerecorded voice messages to Plaintiff’s cellular telephone number (the “3132 Number”) which has the area code 214 and is therefore associated with Dallas, Texas. Plaintiff received such messages on the 3132 Number while residing in and physically present in Texas. PARTIES 8. Plaintiff is a natural person who, at all times relevant to this action, was a resident of the Tarrant County, Texas. 9. Defendant is a corporation whose principal office is located in Irving, Texas. Defendant directs, markets, and provides its business activities throughout the state of Texas. 10. Unless otherwise indicated, the use of Defendant’s name in this Complaint includes all agents, employees, officers, members, directors, heirs, successors, assigns, principals, trustees, sureties, subrogees, representatives, vendors, and insurers of Defendant. THE TCPA 11. The TCPA prohibits: (1) any person from calling a cellular telephone number; (2) using … an artificial or prerecorded voice; (3) without the recipient’s prior express consent. 47 U.S.C. § 227(b)(1)(A). 12. The TCPA exists to prevent communications like the ones described within this Complaint. See Mims v. Arrow Fin. Servs., LLC, 132 S. Ct. 740, 744 (2012). 13. In an action under the TCPA, a plaintiff must show only that the defendant “called a number assigned to a cellular telephone service using an automatic dialing system or prerecorded voice.” Breslow v. Wells Fargo Bank, N.A., 857 F. Supp. 2d 1316, 1319 (S.D. Fla. 2012), aff'd, 755 F.3d 1265 (11th Cir. 2014). 14. The Federal Communications Commission (“FCC”) is empowered to issue rules and regulations implementing the TCPA. According to the FCC’s findings, calls in violation of the TCPA are prohibited because, as Congress found, automated or prerecorded telephone calls are a greater nuisance and invasion of privacy than live solicitation calls, and such calls can be costly and inconvenient. The FCC also recognized that wireless customers are charged for incoming calls whether they pay in advance or after the minutes are used. Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, CG Docket No. 02-278, Report and Order, 18 FCC Rcd 14014 15. In 2012, the FCC issued an order further restricting automated telemarketing calls, requiring “prior express written consent” for such calls. See In the Matter of Rules & Regulations Implementing the Tel. Consumer Prot. Act of 1991, 27 F.C.C.R. 1830, 1838 ¶ 20 (Feb. 15, 2012) (emphasis supplied). 16. To obtain express written consent for telemarketing calls, a defendant must establish that it secured the plaintiff’s signature in a form that gives the plaintiff a “‘clear and conspicuous disclosure’ of the consequences of providing the requested consent….and having received this information, agrees unambiguously to receive such calls at a telephone number the [plaintiff] designates.” In re Rules & Regulations Implementing the Tel. Consumer Prot. Act of 1991, 27 F.C.C.R. 1830, 1837 ¶ 18, 1838 ¶ 20, 1844 ¶ 33, 1857 ¶ 66, 1858 ¶ 71 (F.C.C. Feb. 15, 2012). 17. The TCPA regulations promulgated by the FCC define “telemarketing” as “the initiation of a telephone call or message for the purpose of encouraging the purchase or rental of, or investment in, property, goods, or services.” 47 C.F.R. § 64.1200(f)(12). In determining whether a communication constitutes telemarketing, a court must evaluate the ultimate purpose of the communication. See Golan v. Veritas Entm't, LLC, 788 F.3d 814, 820 (8th Cir. 2015). 18. “Neither the TCPA nor its implementing regulations ‘require an explicit mention of a good, product, or service’ where the implication of an improper purpose is ‘clear from the context.’” Id. (citing Chesbro v. Best Buy Stores, L.P., 705 F.3d 913, 918 (9th Cir. 2012)). 19. “‘Telemarketing’ occurs when the context of a call indicates that it was initiated and transmitted to a person for the purpose of promoting property, goods, or services.” Golan, 788 F.3d at 820 (citing 47 C.F.R. § 64.1200(a)(2)(iii); 47 C.F.R. § 64.1200(f)(12); In re Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, 18 F.C.C. Rcd at 14098 ¶ 141, 2003 WL 21517853, at *49). 20. The FCC has explained that calls motivated in part by the intent to sell property, goods, or services are considered telemarketing under the TCPA. See In re Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, 18 FCC Rcd. 14014, ¶¶ 139-142 (2003). This is true whether call recipients are encouraged to purchase, rent, or invest in property, goods, or services during the call or in the future. Id. 21. In other words, offers “that are part of an overall marketing campaign to sell property, goods, or services constitute” telemarketing under the TCPA. See In re Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, 18 FCC Rcd. 14014, ¶ 136 (2003). 22. If a call is not deemed telemarketing, a defendant must nevertheless demonstrate that it obtained the plaintiff’s prior express consent. See In the Matter of Rules and Regulations Implementing the Tel. Consumer Prot. Act of 1991, 30 FCC Rcd. 7961, 7991-92 (2015) (requiring express consent “for non-telemarketing and non-advertising calls”). FACTS 23. From as early as 2017 through 2020, Defendant has caused multiple prerecorded voice messages to be transmitted to Plaintiff’s cellular telephone number ending in 3132 (“3132 Number”). 24. The prerecorded messages included a prerecorded voice which identified itself as calling from Defendant and which wanted to sell Plaintiff a vehicle if she was in the market to purchase one. The prerecorded messages also included music and Defendant’s marketing slogan “shop me first, shop me last, either way, come see Clay!”. 25. At the time Plaintiff received these prerecorded voice messages Plaintiff was the subscriber and/or sole user of the 3132 Number. 26. Defendant’s prerecorded message calls constitute telemarketing/advertising because they promoted Defendant’s business, goods and services. 27. At no point in time did Plaintiff provide Defendant with her express written consent to be contacted by prerecorded message. 28. Upon information and belief, Defendant caused similar prerecorded messages to be sent to individuals residing within this judicial district. 29. Defendant’s unsolicited prerecorded messages caused Plaintiff additional harm, including invasion of privacy, aggravation, annoyance, intrusion on seclusion, trespass, and conversion. Defendant’s call also inconvenienced Plaintiff and caused disruption to Plaintiff’s daily life. CLASS ALLEGATIONS PROPOSED CLASS 30. Plaintiff brings this case as a class action pursuant to Fed. R. Civ. P. 23, on behalf of Plaintiff and all others similarly situated. 31. Plaintiff brings this case on behalf of the Class defined as follows: NO CONSENT CLASS: All persons in the United States who, within four years prior to the filing of this action, (1) were sent a prerecorded message by or on behalf of Defendant, (2) regarding Defendant’s goods, products or services, and (4) for which Defendant failed to secure the called party’s express written consent. 32. Plaintiff reserves the right to modify the Class definitions as warranted as facts are learned in further investigation and discovery. 33. Defendant and its employees or agents are excluded from the Classes. Plaintiff does not know the number of members in each the Class but believes the Class members number in the several thousands, if not more. NUMEROSITY 34. Upon information and belief, Defendant has sent prerecorded messages to cellular telephone numbers belonging to thousands of consumers throughout the United States without their prior express consent. The members of the Class, therefore, are believed to be so numerous that joinder of all members is impracticable. 35. The exact number and identities of the members of the Class are unknown at this time and can only be ascertained through discovery. Identification of the Class members is a matter capable of ministerial determination from Defendant’s call records. COMMON QUESTIONS OF LAW AND FACT 36. There are numerous questions of law and fact common to members of the Class which predominate over any questions affecting only individual members of the Class. Among the questions of law and fact common to the members of the Class are: a) Whether Defendant made non-emergency calls to Plaintiff’s and Class members’ cellular telephones using a prerecorded message; b) Whether Defendant can meet its burden of showing that it obtained prior express written consent to make such calls; c) Whether Defendant’s conduct was knowing and willful; d) Whether Defendant is liable for damages, and the amount of such damages; and e) Whether Defendant should be enjoined from such conduct in the future. 37. The common questions in this case are capable of having common answers. If Plaintiff’s claim that Defendant routinely transmits prerecorded messages to telephone numbers assigned to cellular telephone services is accurate, Plaintiff and the Class members will have identical claims capable of being efficiently adjudicated and administered in this case. TYPICALITY 38. Plaintiff’s claims are typical of the claims of the Class members, as they are all based on the same factual and legal theories. PROTECTING THE INTERESTS OF THE CLASS MEMBERS 39. Plaintiff is a representative who will fully and adequately assert and protect the interests of the Class, and has retained competent counsel. Accordingly, Plaintiff is an adequate representative and will fairly and adequately protect the interests of the Class. PROCEEDING VIA CLASS ACTION IS SUPERIOR AND ADVISABLE 40. A class action is superior to all other available methods for the fair and efficient adjudication of this lawsuit, because individual litigation of the claims of all members of the Class is economically unfeasible and procedurally impracticable. While the aggregate damages sustained by the Class are in the millions of dollars, the individual damages incurred by each member of the Class resulting from Defendant’s wrongful conduct are too small to warrant the expense of individual lawsuits. The likelihood of individual Class members prosecuting their own separate claims is remote, and, even if every member of the Class could afford individual litigation, the court system would be unduly burdened by individual litigation of such cases. 41. The prosecution of separate actions by members of the Class would create a risk of establishing inconsistent rulings and/or incompatible standards of conduct for Defendant. For example, one court might enjoin Defendant from performing the challenged acts, whereas another may not. Additionally, individual actions may be dispositive of the interests of the Class, although certain class members are not parties to such actions. COUNT I Violations of the TCPA, 47 U.S.C. § 227(b) (On Behalf of Plaintiff and No Consent Class) 42. Plaintiff re-alleges and incorporates the foregoing allegations as if fully set forth herein. 43. It is a violation of the TCPA to make “any call (other than a call made for emergency purposes or made with the prior express consent of the called party) using any …artificial or prerecorded voice to any telephone number assigned to a … cellular telephone service ….” 47 U.S.C. § 227(b)(1)(A)(iii). 44. Defendant – or third parties directed by Defendant – used prerecorded messages to make non-emergency telephone calls to the cellular telephones of Plaintiff and the other members of the Class defined below. 45. Defendant – or third parties directed by Defendant – used prerecorded messages to make non-emergency telephone calls to the telephones of Plaintiff and other members of the Class. 46. These calls were made without regard to whether or not Defendant had first obtained express permission from the called party to make such calls. In fact, Defendant did not have prior express consent to call the cell phones of Plaintiff and the other members of the putative Class when its calls were made. 47. Defendant has, therefore, violated § 227(b)(1)(A)(iii) of the TCPA by using an prerecorded messages to make non-emergency telephone calls to the cell phones of Plaintiff and the other members of the putative Class without their prior express written consent. 48. Defendant knew that it did not have prior express consent to make these calls, and knew or should have known that it was using prerecorded messages. The violations were therefore willful or knowing. 49. As a result of Defendant’s conduct and pursuant to § 227(b)(3) of the TCPA, Plaintiff and the other members of the putative Class were harmed and are each entitled to a minimum of $500.00 in damages for each violation. Plaintiff and the members of the Class are also entitled to an injunction against future calls. Id. COUNT II VIOLATION OF 47 C.F.R. § 64.1200(a) (On Behalf of Plaintiff and No Consent Class) 50. Plaintiff re-alleges and incorporates the foregoing allegations set forth in paragraphs 1 through 41 as if fully set forth herein. 51. It is a violation of the TCPA regulations promulgated by the FCC to “initiate any telephone call…using an… artificial or prerecorded voice to any telephone number assigned to a paging service, cellular telephone service, specialized mobile radio service, or other radio common carrier service, or any service for which the called party is charged for the call.” 47 C.F.R. § 64.1200(a)(1)(iii). 52. Additionally, it is a violation of the TCPA regulations promulgated by the FCC to “[i]nitiate, or cause to be initiated, any telephone call that includes or introduces an advertisement or constitutes telemarketing, …artificial or prerecorded voice …other than a call made with the prior express written consent of the called party or the prior express consent of the called party when the call is made…” 47 C.F.R. § 64.1200(a)(2). 53. Defendant transmitted calls using prerecorded messages to call the telephone numbers of Plaintiff and members of the putative class without their prior express written consent and/or continued to prerecorded messages after consent was revoked. 54. Defendant has therefore violated § 64.1200(a)(1)(iii) and § 64.1200(a)(2) by using an prerecorded voice messages to make non-emergency telephone calls to the telephones of Plaintiff and the other members of the putative Class without their prior express written consent. 55. Defendant knew that it did not have prior express written consent to make these calls, and knew or should have known that it was using prerecorded messages. The violations were therefore willful or knowing. 56. As a result of Defendant’s conduct and pursuant to § 227(b)(3) of the TCPA, Plaintiff and the other members of the putative Class were harmed and are each entitled to a minimum of $500.00 in damages for each violation. Plaintiff and the class are also entitled to an injunction against future 57. Because Defendant knew or should have known that Plaintiff and the other members of the putative Class had not given prior express written consent to receive its messages to their telephones the Court should treble the amount of statutory damages available to Plaintiff and the other members of the putative Class pursuant to § 227(b)(3) of the TCPA. PRAYER FOR RELIEF WHEREFORE, Plaintiff, individually and on behalf of the Class, prays for the following a) An order certifying this case as a class action on behalf of the Class as defined above, and appointing Plaintiff as the representative of the Class and Plaintiff’s counsel as Class Counsel; b) An award of actual and statutory damages for Plaintiff and each member of the Class; c) As a result of Defendant’s negligent violations of 47 U.S.C. §§ 227, et seq., and 47 C.F.R. § 64.1200, Plaintiff seeks for Plaintiff and each member of the Class $500.00 in statutory damages for each and every violation pursuant to 47 U.S.C. § 227(b)(3). d) As a result of Defendant’s knowing and/or willful violations of 47 U.S.C. §§ 227, et seq., and 47 C.F.R. § 64.1200, Plaintiff seeks for Plaintiff and each member of the Class treble damages, as provided by statute, up to $1,500.00 for each and every violation pursuant to 47 U.S.C. § 227(b)(3). e) An order declaring that Defendant’s actions, as set out above, violate the TCPA; f) Such further and other relief as the Court deems necessary. JURY DEMAND Plaintiff hereby demand a trial by jury. DOCUMENT PRESERVATION DEMAND Plaintiff demands that Defendants take affirmative steps to preserve all records, lists, electronic databases or other itemizations associated with the allegations herein, including all records, lists, electronic databases or other itemizations in the possession of any vendors, individuals, and/or companies contracted, hired, or directed by Defendant to assist in sending the alleged communications. Respectfully submitted, Dated: April 15, 2021 /S/Frank Harber Frank Harber, Esq. State Bar No. 24090143 771 E Southlake Blvd, Suite 111 Southlake, Texas 76092 817.523.1611 frank@harberlawgroup.com By: /s/ Ignacio Hiraldo Ignacio Hiraldo, Esq. IJhiraldo@Hiraldolaw.com IJH Law 1200 Brickell Ave. Suite 1950 Miami, FL 33131 E: IJhiraldo@IJhlaw.com T: 786-496-4469 Pro Hac Vice to be filed Attorneys for Plaintiff and the Proposed Class

privacy

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IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK TAX DIVAS, LLC and WILLIAMS AND J BOOKKEEPING Individually and on behalf of all others similarly situated, 1:20-cv-05311 Plaintiffs, CASE NO. ________________________ JURY TRIAL DEMANDED INJUNCTIVE RELIEF SOUGHT J.P. MORGAN CHASE BANK and CITIBANK, N.A., Defendants. ____________________________________/ CLASS ACTION COMPLAINT Plaintiffs TAX DIVAS, LLC and WILLIAMS AND J BOOKKEEPING through counsel, bring this Class Action Complaint and Demand for Jury Trial against Defendants J.P. MORGAN CHASE BANK and CITIBANK, N.A., alleging claims for declaratory relief, unjust enrichment, conversion, money had and received, and breach of contract. Plaintiffs allege as follows upon personal knowledge as to themselves and their own acts and experiences, and as to all other matters upon information and belief and the investigation of counsel. NATURE OF THE ACTION 1. In March of 2020, as the SARS-CoV-2 virus—the virus that causes the COVID-19 disease (also called “coronavirus”)—spread across the United States, Congress passed and President Donald J. Trump signed the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), a $2 trillion coronavirus response bill intended to speed relief across the American economy. As businesses shut down in compliance with state and local shelter-in-place orders—or simply in response to a severe decline in demand for services—millions of Americans lost their jobs and the stock market crashed. The CARES Act was intended to inject money into the economy and help keep businesses and individuals afloat during an unprecedented economic upheaval. 2. Along with other provisions, the CARES Act created the Paycheck Protection Program (“PPP”) to funnel forgivable loans to small businesses. The CARES Act initially authorized up to $349 billion in forgivable loans; that money quickly ran out, and Congress later authorized an additional $310 billion to the program. 3. Small businesses were invited to apply for PPP funds starting April 3, 2020. Applicants could seek PPP loan funding through certain pre-approved Small Business Administration (“SBA”) lenders or through any federally insured depository institution, federally insured credit union, or Farm Credit System institution that chose to participate. 4. Lenders were compensated for their participation in the program through generous origination fees, paid by the government, that were tied to the amount of each loan. Lenders are eligible to receive (a) 5% for loans up to and including $350,000; (b) 3% for loans of more than $350,000 and less than $2,000,000; and (c) 1% for loans of at least $2,000,000. To receive these substantial origination fees, the lenders took on no risk (because the loan funds were provided by the government) and did little work. Instead, the lenders were paid for funneling money from the SBA to the small business applicants. Lenders were required to certify under penalty of perjury that they were in compliance, and would remain in compliance, with PPP regulations. 5. The amount of money offered to small business applicants was based on applicants’ historical payroll information with specific limitations. But because the purpose of the program was to make money available quickly, lending institutions were not required to independently verify applicants’ representations. Instead, small businesses seeking PPP funding were required to make specific attestations and certifications under penalty of serious civil and criminal penalties, including imprisonment and hefty fines. 6. Congress understood that in order to be able to make timely, truthful, and accurate representations in their PPP applications, many small businesses applying for PPP funding would rely on the assistance and expertise of professionals: accountants, bookkeepers, tax preparers, financial advisors, attorneys, and other such agents (collectively, “Agents”). 7. To incentivize these Agents to assist small businesses with their PPP applications, Congress provided that Agents who assisted small business owners would be compensated through a fee of up to (a) 1% for loans of up to $350,000 (or up to $3,500 for loans in this tier); (b) 0.50% for loans of more than $350,000 and less than $2 million (or up to $9,999 for loans in this tier); or (c) 0.25% for loans of at least $2 million (“Agent Fees”). See Business Loan Program Temporary Changes; Paycheck Protection Program, 85 Fed. Reg. 20811-01, 20816 (April 15, 2020) (“PPP Regulations”). 8. The PPP Regulations expressly require that Agent Fees be paid by the lending institution out of the origination fees the lender would receive from the SBA, and prohibit Agents from collecting fees from applicants or taking fees from the PPP loans. 9. Defendants Chase and Citibank each profited handsomely from their involvement in the PPP. 10. Chase is the largest PPP lender by net dollars of PPP funding processed according to SBA data.1 Chase has provided over $29 billion in SBA PPP funds to small businesses, processing at least 269,424 successful PPP loan applications with an average loan size of $107,882. Assuming a conservative origination fee of 1%, Chase received or is entitled to receive over $290 million in origination fees from the SBA (and likely more than that). 11. Citibank also received a windfall from the SBA. As of April 23, 2020, Citibank had 1 See U.S. Small Business Administration, Paycheck Protection Program (PPP) Report Approvals through 06/06/2020 (June 30, 2020), https://www.sba.gov/sites/default/files/2020- 07/PPP%20Results%20-%20Sunday%20FINAL-508.pdf. distributed over $1.1 billion in SBA PPP funds to small businesses.2 Again assuming the most conservative origination fee, Citibank received or is entitled to receive at least $10 million in origination fees from the SBA—not accounting for any loans distributed since late April. 12. Plaintiff Tax Divas, LLC (“Tax Divas”) is an accounting firm located in Las Vegas, Nevada. Mary Fries, its owner and founder, assisted her small business clients with preparing and submitting PPP loan applications to Defendants. She helped one client apply for funding with Chase, securing a PPP loan in the amount of $200,000; and helped another client apply for funding with Citibank, securing a PPP loan of $5,000. 13. Plaintiff Williams and J Bookkeeping (“Williams and J”) is a bookkeeping firm located in Texas. Jenene Williams, the owner and founder of Williams and J Bookkeeping, assisted her small business client with preparing and submitting a PPP loan application to Defendant Chase. She helped her client secure a PPP loan in the amount of $67,417 through Chase. 14. Yet despite clear direction from the SBA that the Agent fees “will be paid by the lender out of the fees the lender receives from the SBA,” and despite certifying under penalty of perjury that it was in compliance and would remain in compliance with PPP regulations, neither of the Defendants has remitted any Agent Fees to Plaintiffs. 15. Plaintiffs are not alone in their predicament. Upon information and belief, each Defendant has enacted a companywide policy to deny Agents the Agent Fees to which they are entitled. Not one of the Defendants implemented any process for identifying the Agents who assisted borrowers in obtaining PPP loans—likely hoping that the absence of such records would relieve them of the obligation to pay Agents their mandatory fees. 2 Megan Sheets, How big banks including Chase and Citi helped virtually all of their wealthiest clients get millions of dollars in pandemic aid while up to 94 percent of their smaller customers got none, The Daily Mail (April 23, 2020), https://www.dailymail.co.uk/news/article-8249807/How-big-banks-including-Chase-Citi- helped-richest-clients-millions-pandemic-aid.html (last accessed July 10, 2020). 4 16. Defendants’ schemes, which directly contradict the mandate of the PPP Regulations, excluded Agents like Plaintiffs from access to SBA funding 17. Plaintiffs are also suffering from the economic downturn due to the coronavirus pandemic. They are entitled to the Agent Fees they earned by helping other small businesses apply for forgivable loans. Plaintiffs and other Agents entitled to receive Agent Fees from Defendants have no other recourse to collect their compensation because the PPP regulations assign the responsibility for paying them to lenders alone and prohibit them from collecting compensation from their clients. 18. Ignoring this clear mandate, Defendants have refused to pay Plaintiffs and other Agents—depriving them of much-needed funds during a time of severe economic hardship, even as Defendants enjoy a windfall. 19. Plaintiffs thus bring this Class Action Complaint to vindicate their rights and those of other Agents similarly situated, and to recover the Agent Fees to which they are entitled. PARTIES 20. Plaintiff Tax Divas, LLC is a limited liability company with its principal place of business in Las Vegas, Nevada. Its owner and sole shareholder is Mary Fries, a resident and citizen of Nevada. 21. Plaintiff Williams and J Bookkeeping is a Texas corporation with a principal place of business in Fort Worth, TX. 22. Defendant J.P. Morgan Chase Bank, N.A., is a national bank headquartered in New York, NY. Chase conducts substantial business in this district, in the State of New York, and throughout the United States. 23. Defendant Citibank, N.A. is a national bank headquartered in New York, NY. Citibank conducts substantial business in this district, in the State of New York, and throughout the United JURISDICTION AND VENUE 24. This Court has subject matter jurisdiction over this action under the Class Action Fairness Act, 28 U.S.C. § 1332(d), because (a) at least one member of the proposed Class is a citizen of a different state than Defendants; (b) the claims of the proposed Class Members exceed $5,000,000 in the aggregate; and (c) none of the exceptions under that subsection apply. 25. This Court has personal jurisdiction over Defendants because Defendants transact business and commit torts in this district as described herein. 26. Venue is proper in this District because a substantial part of the events, acts, or omissions giving rise to the claims occurred in this District. 27. This Court has jurisdiction to grant declaratory relief under 28 U.S.C. § 2201 because an actual controversy exists between the parties as to their respective rights and obligations under the PPP Regulations. FACTUAL ALLEGATIONS 28. Beginning in December 2019, reports began to surface about a novel coronavirus spreading rapidly through Wuhan, China. By March 1, 2020, researchers concluded that over 9,000 people in the United States had already been infected and that the virus had been spreading, undetected, within the United States for six weeks.3 The World Health Organization declared the COVID-19 outbreak a pandemic on March 11. On March 13, 2020, President Donald Trump declared that the pandemic was of “sufficient severity and magnitude to warrant an emergency declaration for all states, territories and the District of Columbia.” California Governor Gavin Newsom issued a stay- 3 See Cedars-Sinai, Study Estimates COVID-19 May Have Infected Over 9,000 in U.S. (Mar. 9, 2020), https://www.cedars-sinai.org/newsroom/study-estimates-covid-19-may-have-infected-over-9000- in-us/(last accessed July 10, 2020); Sheri Fink & Mike Baker, Coronavirus May Have Spread in U.S. for Weeks, Gene Sequencing Suggests, The New York Times (Mar. 1, 2020), https://www.nytimes.com/2020/03/01/health/coronavirus-washington- spread.html?action=click&module=Top%20Stories&pgtype=Homepage (last accessed July 10, 2020). 6 at-home order on March 19, ordering the closure of most public spaces and nonessential businesses. California’s order was followed by Illinois on March 21, New York on March 22, and dozens of other states and the District of Columbia in the days and weeks that followed. 29. As the pandemic spread, millions of people in the United States lost their jobs as state and local stay-at-home orders forced businesses to close. Even in states where businesses were allowed to remain open, multiple sectors experienced economic devastation as consumers stayed home to try to counteract the spread of the deadly virus. Demand for goods and services plummeted. 30. On March 25, 2020, in response to overwhelming pleas for assistance from state and local governments, businesses, and individuals, the United States Senate passed the CARES Act. The House of Representatives approved the bill the following day, and President Trump signed it into law on March 27, 2020. See Coronavirus Aid, Relief, and Economic Security Act, Pub. L. 116-136, 134 Stat. 281 (2020). The $2 trillion stimulus bill is the largest stimulus bill in American history. 31. One of the cornerstones of the CARES Act is the $659 billion loan program for small businesses, the Paycheck Protection Program. See id. § 1102, 134 Stat. at 286 (codified at 15 U.S.C. § 636(a) (2020)). In creating the PPP, the federal government recognized that “many small businesses nationwide are experiencing economic hardship as a direct result of the Federal, State, and local public health measures that are being taken to minimize the public’s exposure to the virus.” PPP Regulations at 20811. The intent of the PPP is to “provide relief to America’s small business expeditiously.” Id. 32. PPP loans provided small businesses with eight weeks of cash-flow assistance based on historical payroll information. The loans are forgivable up to the full principal amount of the loan and any accrued interest if the borrower uses the loan proceeds for certain purposes and uses at least 75% of the funds for payroll costs. Id. at 20813-14. This restriction was implemented “to ensure that the finite appropriations available for these loans are directed toward payroll protection, as each loan that is issued depletes the appropriation, regardless of whether portions of the loan are later forgiven.” Id. at 20814. Amounts that are not forgiven will accrue interest at a rate of 1% with a maturity of two years. Id. at 20813. 33. Unlike some other financial assistance provided in the CARES Act, the PPP provided that private lending institutions, rather than government agencies, were to accept loan applications and distribute funds. Lenders approved to make PPP funds included certain SBA-approved lenders, any federally insured depository institution or any federally insured credit union, any Farm Credit System Institution, and certain other financing providers that met specific requirements. Id. at 20815. 34. To compensate lenders for participating in the program, the PPP Regulations provide that SBA will pay lenders substantial origination fees for processing PPP loans: (a) 5% for loans up to and including $350,000 (or up to $17,500 for loans in this tier); (b) 3% for loans of more than $350,000 and less than $2,000,000 (or up to $59,999 for loans in this tier); and (c) 1% for loans of at least $2,000,000. Id. at 20816. 35. In order to expedite the provision of PPP loan funds to businesses in need, the PPP Regulations provide that lenders may rely on borrower certifications and attestations in order to approve a loan application, rather than independently verifying the information provided in the application. Id. at 20815-16. The CARES Act specifically provides that lending institutions will not be subject to enforcement actions or penalties if the lender has received a borrower attestation. Id. at 36. But because the program intentionally did not include any process for verifying borrower representations, the penalties for providing false information are severe. Knowingly making a false statement to obtain a guaranteed loan from SBA is punishable by imprisonment and fines. Id. at 20814. It was therefore incumbent upon small business applicants to provide truthful and accurate information in their applications. 37. PPP applications were to be processed and funded on a “first-come, first-served” basis. Because the PPP funds were limited, submitting an accurate application as quickly as possible, before the appropriation was depleted, was critical. 38. Because many small businesses applying for PPP funding would require the assistance of professional accountants, bookkeepers, tax preparers, financial advisors, attorneys, and other agents in order to provide timely, truthful, and accurate representations, Congress recognized that these “agents” would need to be compensated for their work as well. See 15 U.S.C. § 636(a)(36)(P)(ii) (“An agent that assists an eligible recipient to prepare an application for a covered loan may not collect a fee in excess of the limits established by the Administrator.”). 39. The SBA, in turn, determined that these reasonable fees were required to be paid by the lender, in specifically delineated amounts. The PPP Regulations include express provisions for the compensation of Agents: c. Who pays the fee to an agent who assists a borrower? Agent fees will be paid by the lender out of the fees the lender receives from SBA. Agents may not collect fees from the borrower or be paid out of the PPP loan proceeds. The total amount that an agent may collect from the lender for assistance in preparing an application for a PPP loan (including referral to the lender) may not exceed: i. One (1) percent for loans of not more than $350,000; ii. 0.50 percent for loans of more than $350,000 and less than $2 million; and iii. 0.25 percent for loans of at least $2 million. The Act authorizes the Administrator to establish limits on agent fees. The Administrator, in consultation with the Secretary, determined that the agent fee limits set forth above are reasonable based upon the application requirements and the fees that lenders receive for making PPP loans. Id. at 20816. 40. The SBA also issued a fact sheet that makes clear that Agent Fees must be paid by the lender: “Agent fees will be paid out of lender fees. The lender will pay the agent. Agents may not collect any fees from the applicant.”4 41. Congress and the SBA did not create a particular process or requirement that lenders or Agents were required to follow in order for the Agent to receive its portion of the fee. Creating a uniform process (and requiring all lenders to comply with additional regulations) would have slowed down implementation of the program—when its core purpose was the speedy distribution of funds to businesses—and could have incentivized lenders to prioritize applicants that did not use Agents so that lenders did not have to share their origination fees. 42. Instead, the SBA left to the discretion of the lender how best to process applications speedily while complying with the regulations requiring them to compensate Agents for the latter’s critical role in the program. 43. But, prior to becoming an approved PPP lender, lenders were required to fill out and sign the “CARES Act Section 1102 Lender Agreement” for each loan.5 That agreement requires the lender to certify under penalty of perjury that it is “in compliance and will maintain compliance with all applicable requirements of the Paycheck Protection Program, and PPP Loan Program Requirements.” 44. Defendants have each breached their commitment to remain in compliance with PPP Regulations. Defendants have not paid the fees of Agents for their assistance in providing accurate and truthful information on borrowers’ applications. Instead, each Defendant is retaining all of the origination fees received from SBA for itself despite its obligation to distribute some portion of those fees to Agents. These funds are a windfall to Defendants—making them the recipients of substantial government aid that they do not need and do not deserve. 4 Paycheck Protection Program (PPP) Information Sheet for Lenders (Mar. 31, 2020), https://home.treasury.gov/system/files/136/PPP%20Lender%20Information%20Fact%20Sheet.p df (last accessed July 10, 2020). 5 The agreement is available for download at https://www.sba.gov/document/sba-form--cares-act- section-1102-lender-agreement. 10 45. Defendants did not implement any process for identifying the Agents who assisted borrowers in obtaining PPP loans from them. By failing even to ask borrowers whether they utilized the assistance of an Agent, Defendants demonstrated that they did not want to obtain any records of Agent involvement—likely hoping that the absence of such records would relieve them of the obligation to pay Agents their mandatory fees. 46. Upon information and belief, each Defendant has adopted a company-wide policy of refusing to pay Agents their mandatory fees. 47. Each Defendant’s policy of refusing to pay Agent Fees that are due, that lenders are required to pay, and that only lenders are authorized to pay, deprive Agents of their ability to receive the payment they are owed. 48. Each Defendant processed PPP loan applications and provided SBA loan funding to small business applicants. In return, each Defendant received or will receive hefty origination fees from the SBA as payment. Chase provided small businesses with at least $29 billion in SBA PPP funds as of June 30, 2020. Assuming a conservative origination fee of 1%, Chase received or is entitled to receive over $290 million in origination fees from the SBA. 49. Citibank also received a windfall from the SBA, and has received or is entitled to receive at least $10 million in origination fees from the SBA. 50. Each defendant represented on its website that it was processing PPP applications in accordance with PPP Regulations and SBA guidance. 51. But rather than comply with the PPP Regulations and pay Agents their Agent Fees, each Defendant has decided to keep that money for itself. NAMED PLAINTIFFS’ FACTS TAX DIVAS 52. Tax Divas is owned by Mary Fries, an enrolled agent with the IRS and former IRS employee who lives in Las Vegas, NV. 53. Shortly after the CARES Act was enacted, Ms. Fries’s clients began contacting her about the PPP. Ms. Fries quickly became familiar with the PPP because she is a member of the National Society of Tax Professionals and volunteers for its helpline. She has also taken courses about the PPP to remain informed about updates and changes. Ms. Fries was thus well positioned to assist her clients with their applications. 54. One of Ms. Fries’s clients, the owner of a contracting business that provides drywall and painting services (the “Contractor”) contacted Ms. Fries for assistance with a PPP application in early April. The Contractor came to Ms. Fries’s office, where she assisted him with reviewing, assembling, and calculating the financial information necessary for the PPP application. Thanks to her assistance, the Contractor was able to apply for and receive a PPP loan of $200,000 from Chase. 55. The Chase application did not include a field for asking whether the applicant was assisted by an Agent. Thus, Ms. Fries asked the Contractor to contact Chase and ask what information they needed from so that they could pay Tax Divas an Agent Fee. Chase told the Contractor that Chase did not pay Agent Fees and thus it did not need any information from Ms. Fries or Tax Divas. 56. Based on the size of the loan and the PPP regulations, Chase was entitled to receive origination fees from the SBA of $10,000. 57. Also based on the PPP Regulations, Tax Divas was entitled to Agent Fees of $2,000, which should have been paid from the origination fees that Chase received. 58. But to date, Tax Divas has not received any compensation for its substantial assistance with its client’s PPP loan application—assistance that inured to the benefit of Chase, which received a windfall in origination fees from the SBA. Instead, Chase’s policy is not to ask whether Agents assisted with PPP loan applications and not to pay Agents the fees they are entitled to under the PPP Regulations. 59. Tax Divas has suffered financial harm as a result of Chase’s unlawful and unfair actions by being deprived of statutorily mandated compensation for professional services. 60. Tax Divas has no recourse because it is barred from receiving compensation from its 61. Tax Divas also helped a client apply for funding from Citibank. Also in early April, a client that owns a small scooter rental startup (the “Scooter Rental”) in Las Vegas asked Ms. Fries to help with a PPP application. 62. Ms. Fries helped the Scooter Rental gather all of the financial information necessary for the PPP application. Thanks to her assistance, the Scooter Rental was able to apply for and receive a PPP loan of $5,000 from Citibank. 63. The Citibank application did not include a field for asking whether the applicant was assisted by an Agent. Thus, Ms. Fries asked the Scooter Rental to contact Citibank and ask what information they needed from so that they could pay Tax Divas an Agent Fee. Citibank told the Scooter Rental that Citibank did not pay Agent Fees and thus it did not need any information from Ms. Fries or Tax Divas. 64. Based on the size of the loan and the PPP regulations, Citibank was entitled to receive origination fees from the SBA of $250. 65. Also based on the PPP Regulations, Tax Divas was entitled to Agent Fees of $50, which should have been paid from the origination fees that Citibank received. 66. But to date, Tax Divas has not received any compensation for its substantial assistance with the PPP loan application—assistance that inured to the benefit of Citibank, which received a windfall in origination fees from the SBA. Instead, Citibank’s policy is not to ask whether Agents assisted with PPP loan applications and not to pay Agents the fees they are entitled to under the PPP Regulations. 67. Tax Divas has suffered financial harm as a result of Citibank’s unlawful and unfair actions by being deprived of statutorily mandated compensation for professional services. WILLIAMS AND J 68. Williams & J is owned by Jenene Williams, a bookkeeper based in Fort Worth, TX. Ms. Williams has been in business since 2008 and assists several small business clients with their tax filings and books. 69. After the coronavirus began to spread and businesses began to close, Ms. Williams began researching resources to assist her clients, including the PPP. Since the CARES Act was enacted, Ms. Williams has spent substantial time and resources educating herself about the PPP and its requirements. 70. In May 2020, one of Williams and J’s clients contacted Ms. Williams for assistance with a PPP application to Chase. The client wanted to apply through Chase because he already had a business account with Chase. 71. Ms. Williams spent approximately three days gathering the client’s payroll and other financial information to assist with the PPP application. She provided the client with all of the information that the company needed for the application. When it came time for the client to prepare the application, Ms. Williams spoke with the owner over the phone while he was filling in the fields to explain in real-time what information he should input. 72. The Chase application did not include a field for asking whether the applicant was assisted by an Agent. 73. Based on the size of the loan and the PPP regulations, Chase was entitled to receive origination fees from the SBA of $3,370. 74. Also based on the PPP Regulations, Williams & J was entitled to Agent Fees of $674, which should have been paid from the origination fees that Chase received. 75. But to date, Williams & J has not received any compensation for her substantial assistance with the PPP loan application—assistance that inured to the benefit of Chase, which received a windfall in origination fees from the SBA. Instead, Chase’s policy is not to ask whether Agents assisted with PPP loan applications and not to pay Agents the fees they are entitled to under the PPP Regulations. 76. Williams & J has suffered financial harm as a result of Chase’s unlawful and unfair actions by being deprived of statutorily mandated compensation for professional services. CLASS ACTION ALLEGATIONS 77. Plaintiffs Tax Divas and Williams & J bring this action on behalf of themselves and the following Class and Subclasses: Chase Class: All persons and entities in the United States who (1) served as an Agent6 for a person or entity who applied for and received a PPP loan through Chase and (2) were not paid an Agent Fee by Chase.7 Chase Texas Subclass (by Plaintiff Williams & J): All persons and entities in Texas who (1) served as an Agent for a person or entity who applied for and received a PPP loan through Chase and (2) were not paid an Agent Fee by Chase. Chase Nevada Subclass (by Plaintiff Tax Divas): All persons and entities in Nevada who (1) served as an Agent for a person or entity who applied for and received a PPP loan through Chase and (2) were not paid an Agent Fee by Chase. 78. Plaintiff Tax Divas also brings this action on behalf of itself and the following Class and Subclass: 6 For purposes of all of the proposed classes and subclasses, “Agent” refers to the term “agent” as it is used in Business Loan Program Temporary Changes; Paycheck Protection Program, 85 Fed. Reg. 20811-01, 20816 (April 15, 2020), and the Paycheck Protection Program (PPP) Information Sheet for Lenders (Mar. 31, 2020), https://home.treasury.gov/system/files/136/PPP%20Lender%20Information%20Fact%20Sheet.p df (last accessed July 10, 2020). 7 For purposes of all of the proposed classes and subclasses, “Agent Fee” refers to the agent fees described in Business Loan Program Temporary Changes; Paycheck Protection Program, 85 Fed. Reg. 20811-01, 20816 (April 15, 2020). 15 Citibank Class: All persons and entities in the United States who (1) served as an Agent for a person or entity who applied for and received a PPP loan through Citibank and (2) were not paid an Agent Fee by Citbank. Citibank Nevada Subclass: All persons and entities in Nevada who (1) served as an Agent for a person or entity who applied for and received a PPP loan through Citibank and (2) were not paid an Agent Fee by Citibank. 79. The class definitions are subject to modification, including the addition of one or more subclasses, based on facts obtained in discovery. 80. Excluded from the Classes8 are the Defendants; any entities in which any Defendant has a controlling interest; their agents and employees; and any Judge to whom this action is assigned and any member of such Judge’s staff and immediate family. 81. Plaintiffs propose that they be appointed class representatives. 82. Plaintiffs and the Classes have been harmed by Defendants’ acts. 83. Numerosity is satisfied. Upon information and belief, there are thousands of Class Members. Individual joinder of these persons is impracticable. 84. There are questions of law and fact common to Plaintiffs and the Classes, including, but not limited to: a. Whether Defendants’ conduct violates the CARES Act or its implementing regulations; b. Whether Defendants are required to compensate Plaintiffs from the origination fees they are entitled to receive or have received from SBA through the PPP; c. Whether Defendants have a policy and/or practice of declining to pay Agents for their participation in the PPP; d. Whether Defendants’ conduct was unfair; 8 As used herein, the term “Class” encompasses the Chase Class and the Citibank Class. “Class Members” means members of the Chase Class and the Citibank Class. e. Whether Plaintiffs and the Class Members are third-party beneficiaries of Defendants’ contract with the SBA; f. Whether Defendants breached their contracts with SBA; g. Whether Defendants were unjustly enriched; h. Whether Defendants exercised wrongful control over Plaintiffs’ and the Class Members’ property; i. Whether Defendants received money that was intended to be used for the benefit of Plaintiffs and the Class Members; j. Whether Plaintiffs and the Class Members are entitled to restitution of funds unlawfully withheld; k. Whether Plaintiffs and the Class Members are entitled to injunctive or declaratory relief; and l. Whether Plaintiffs and the Class Members are entitled to damages. 85. Plaintiffs’ claims are typical of the claims of Class Members. Plaintiffs and the Class Members were all harmed when Defendants refused to pay them Agent Fees under the PPP. Plaintiffs’ claims are not antagonistic to the claims of other Class Members. 86. Plaintiffs are adequate representatives of the Classes because their interests do not conflict with the interests of the Class Members. Plaintiffs will fairly and adequately protect the interests of the Classes. 87. Plaintiffs have hired counsel that is skilled and experienced in class actions, including numerous complex class actions against financial institutions, and are adequate class counsel capable of protecting the interests of the Class Members. 88. Common questions of law and fact predominate over questions affecting only individual Class Members, and a class action is the superior method for fair and efficient adjudication of this controversy. The damages suffered by individual Class Members are likely relatively small, and it would be difficult and not economical for individual Class Members to pursue complex litigation against Defendants to recover the fees to which they are entitled. Further, individual litigation would increase the delay and expense to all parties due to the complex legal and factual issues presented in the Complaint. A class action provides easier management, the benefits of single adjudication, and economies of scale. CAUSES OF ACTION COUNT I Declaratory Relief 28 U.S.C. § 2201 On behalf of all Plaintiffs and the Chase Class against Chase; and On behalf of Plaintiff Tax Divas and the Citibank Class against Citibank 89. Plaintiffs incorporate by reference paragraphs 1 through 88 set forth above. 90. Plaintiffs and the Class Members are “agents” as defined by the PPP Regulations and publications pertaining to the PPP. 91. Plaintiffs and the Class Members assisted clients with preparing applications for, and applying for, PPP loans, which were funded by one or more of the Defendants through the PPP. 92. The PPP Regulations provide that Plaintiffs and the Class Members must be compensated for that work by Defendants, from the fees that Defendants received from the SBA as compensation for participation in the program. 93. Defendants have both refused to make these payments. 94. An actual controversy has arisen between Plaintiffs and the Class Members, on the one hand, and one or more of the Defendants, on the other, because each Defendant by its refusal to pay Agent Fees to Plaintiffs and the Class Members denies that it is obligated to do so. 95. Plaintiffs and the Class Members seek a declaration in accordance with PPP Regulations and the Declaratory Judgment Act that Defendants are obligated to set aside money to pay, and to pay, Agents in accordance with PPP Regulations for work performed on behalf of a client in relation to the preparation and/or submission of a PPP loan application that resulted in a funded PPP loan. COUNT II Unjust Enrichment On behalf of all Plaintiffs and the Chase Class against Chase; and On behalf of Plaintiff Tax Divas and the Citibank Class against Citibank 96. Plaintiffs incorporate by reference paragraphs 1 through 88 set forth above. 97. Defendants each received a benefit in the form of origination fees paid by the SBA in connection with funded PPP loans. 98. Under the PPP Regulations and SBA guidance, a portion of those fees were to be paid to Agents, like and including Plaintiffs and the Class Members, who assisted with their clients’ successful PPP applications. 99. Each Defendant is refusing to pay those Agent Fees, in contravention of PPP Regulations. 100. Each Defendant is thus benefiting in the form of millions of dollars of origination fees, to the detriment of Agents including Plaintiffs and the Class Members, by keeping the Agent Fees for itself. Defendants know that they received or will receive these benefits by virtue of their participation in the PPP Program and their certification of compliance with PPP Regulations. 101. It would be inequitable, unjust, and unfair to permit Defendants to retain the Agent Fees owed to Plaintiffs and the Class Members under the PPP Regulations and SBA guidance. Plaintiffs and the Class Members can reasonably expect to receive payment that is mandated by federal regulation. This is particularly so in the context of a global pandemic that has rattled the economy. 102. Each Defendant must disgorge the portion of any and all PPP origination fees that is owed to Plaintiffs and the Class Members in their capacities as Agents. COUNT III Conversion On behalf of all Plaintiffs and the Chase Class against Chase; and On behalf of Plaintiff Tax Divas and the Citibank Class against Citibank 103. Plaintiffs incorporate by reference paragraphs 1 through 88 set forth above. 104. Under the PPP Regulations and SBA guidance, Plaintiffs and the Class Members, as Agents, have a right to Agent Fees that must be paid from the lender origination fees provided to each Defendant by the SBA in exchange for processing the funded PPP loan applications of Plaintiffs’ and the Class Members’ clients. 105. The PPP Regulations state that “Agent fees will be paid out of lender fees” and create specific guidelines for the amount that should be paid. The SBA determined that the Agent Fee limits are “reasonable based upon the application requirements and the fees that lenders receive for making PPP loans.” 106. The PPP Regulations also unequivocally state that Agents “may not collect fees from the applicant,” making it clear that the lenders are responsible for paying the Agent Fees. 107. Plaintiffs and the Class Members assisted their clients with applications for PPP loans that were subsequently funded. Due to Plaintiffs’ and the Class Members’ efforts, their clients were awarded PPP loans through applications to one or more of the Defendants. As such, Plaintiffs and the Class Members have a right to immediate possession of Agent Fees to be paid by whichever Defendant funded their clients’ loan(s). 108. Although Plaintiffs and the Class Members are entitled to Agent Fees under the PPP Regulations, each Defendant has refused to provide those fees to Plaintiffs and the Class Members. Even if Plaintiffs and the Class Members had requested their Agent Fees, the Defendants would have each refused the requests, because each Defendant has adopted a company-wide policy of refusing to pay Agent Fees. 109. By retaining the Agent Fees for themselves, each Defendant has maintained wrongful control over Plaintiffs’ and the Class Members’ property, inconsistent with their entitlements under the PPP Regulations. 110. Each Agent Fee to which Plaintiffs and the Class Members are entitled is a specific, identifiable sum, according to the amount of the PPP loan funded and the applicable PPP Regulation. Plaintiff Tax Divas, is entitled to $2,000 which has been wrongfully withheld by Chase and $50 which has been wrongfully withheld by Citibank. Plaintiff Williams and J is entitled to $674, which has been wrongfully withheld by Chase. 111. Plaintiffs and the Class Members have been injured by Defendants’ wrongful exercise of dominion over their property COUNT IV Money Had and Received On behalf of all Plaintiffs and the Chase Class against Chase; and On behalf of Plaintiff Tax Divas and the Citibank Class against Citibank 112. Plaintiffs incorporate by reference paragraphs 1 through 88 set forth above. 113. Under the PPP Regulations and SBA guidance, Plaintiffs and the Class Members, as Agents, have a right to Agent Fees that must be paid from the lender origination fees provided to each Defendant by the SBA in exchange for processing the funded PPP loan applications of Plaintiffs’ and the Class Members’ clients. 114. The PPP Regulations state that “Agent fees will be paid out of lender fees” and create specific guidelines for the amount that should be paid. The SBA determined that the Agent Fee limits are “reasonable based upon the application requirements and the fees that lenders receive for making PPP loans.” 115. The PPP Regulations also unequivocally state that Agents “may not collect fees from the applicant,” making it clear that the lenders are responsible for paying the Agents Fees. 116. Plaintiffs and the Class Members assisted their clients with applications for PPP loans that were subsequently funded. Due to Plaintiffs’ and the Class Members’ efforts, their clients were awarded PPP loans through applications to one or more of the Defendants. As such, Plaintiffs and the Class Members have a right to immediate possession of Agent Fees to be paid by whichever Defendant funded their clients’ loan(s). 117. Although Plaintiffs and the Class Members are entitled to Agent Fees under the PPP Regulations, each Defendant has refused to provide those fees to Plaintiffs and the Class Members. 118. Each Defendant received benefits in the form of money that was intended to be paid to Plaintiffs and the Class Members when it received origination fees, a portion of which were earmarked for Plaintiffs and the Class Members as Agent Fees under the PPP Regulations. Defendant had knowledge of these benefits by virtue of their participation in the PPP and their certification of compliance with PPP Regulations. 119. Instead of paying that money to Plaintiffs and the Class Members, each Defendant kept that money for itself. Thus, the money was not used for Plaintiffs’ or the Class Members’ benefit. 120. Defendant has not given the money to Plaintiffs or the Class Members. 121. In equity and good conscience, the Agent Fees should be paid by Defendants to Plaintiffs and the Class Members. COUNT V Breach of Contract – Third Party Beneficiary On behalf of all Plaintiffs and the Chase Class against Chase; and On behalf of Plaintiff Tax Divas and the Citibank Class against Citibank 122. Plaintiffs incorporate by reference paragraphs 1 through 88 set forth above. 123. Upon information and belief, in order to process PPP loan applications, each Defendant entered into an agreement with the SBA. 124. The agreements required that each Defendant adhere to the PPP Regulations and certify compliance with them under penalty of perjury. The agreements between the SBA and each Defendant thus incorporate the PPP Regulations by reference. 125. As part of the agreement, each Defendant certified, under penalty of perjury, that it was in compliance and would remain in compliance with PPP Regulations that specifically require PPP lenders to pay the fees of any Agent that assists with successful PPP applications, within limits. 126. Plaintiffs and the Class Members were intended beneficiaries of the agreement between the SBA and the Defendants. Thus, Plaintiffs and the Class Members may enforce the promises directly made for them, including the promise to comply with PPP Regulations mandating lenders, including Defendants, to pay Agent Fees. 127. The acts of the SBA and the Defendants created a duty and established privity between each Defendant on the one hand, and Agents, including Plaintiffs and the Class Members, on the 128. Nevertheless, Defendants have each breached the agreements by adopting policies of not paying Agent Fees and refusing to pay Plaintiffs and the Class Members the Agent Fees to which they are entitled, conduct that violated the PPP Regulations. 129. By refusing to pay Agent Fees in accordance with PPP Regulations, Defendants are in violation of the terms of their agreements with the SBA, thereby damaging Plaintiffs and the Class Members. COUNT VI Violations of New York General Business Law § 349 On behalf of all Plaintiffs and the Chase Class against Chase; and On behalf of Plaintiff Tax Divas and the Citibank Class against Citibank 130. Plaintiffs incorporate by reference paragraphs 1 through 88 set forth above. 131. Plaintiffs and the Class Members are “persons” within the meaning of N.Y. Gen. Bus. L. § 349(h). 132. Gen. Bus. Law § 349(a) prohibits the use of deceptive acts or practices in the conduct of any business, trade or commerce or in the furnishing of any service in the state of New York. 133. As alleged herein, Defendants engaged in deceptive acts and practices in the form of misrepresentations on their websites, that they were processing the applications submitted in conformity with PPP rules and according to SBA guidance. However, neither Defendant has paid the Agent Fees required by the PPP Regulations and SBA Guidance to Plaintiffs and the Class Members. These misrepresentations and omissions in the conduct of business and provision of services violate Gen. Bus. Law § 349. 134. Defendants knew or should have known that their acts, practices, statements, policies, correspondence, and representations were likely to deceive and mislead Plaintiffs and the Class Members. 135. Plaintiffs and the Class Members were injured as a result of Defendants’ violations of Gen. Bus. Law § 349 because they were deprived of the Agent Fees to which they are entitled. 136. Defendants’ deceptive acts and practices caused damages and injury to Plaintiffs and the Class Members. 137. Defendants’ refusal to pay Agent Fees in accordance with applicable regulations is a matter of public interest because the PPP loans, and the SBA origination fees that Defendants receive, are paid for by taxpayers. 138. Plaintiffs and the Class Members ask the Court to award equitable relief, restitution, civil penalties, punitive damages, attorneys’ fees, consequential damages, and all other damages available at law. COUNT VII Violations of Nevada Deceptive Trade Practices Act On behalf of Plaintiff Tax Divas and the Chase Nevada Subclass against Chase; and On behalf of Plaintiff Tax Divas and the Citibank Nevada Subclass against Citibank 139. Plaintiff Tax Divas incorporates by reference paragraphs 1 through 88 set forth above. 140. The Nevada Deceptive Trade Practices Act (“NDTPA”) prohibits deceptive trade practices. 141. A person engages in a deceptive trade practice if the person knowingly makes a false representation in a transaction. Nev. Rev. Stat. § 598.0915(15). 142. A person engages in a deceptive trade practice if the person knowingly misrepresents the legal rights, obligations or remedies of a party to a transaction. Nev. Rev. Stat. § 598.092(8); 143. As alleged herein, Defendants engaged in deceptive acts and practices in the form of misrepresentations on their websites, that they were processing the applications submitted in conformity with PPP rules and according to SBA guidance—including the obligation to pay Agent Fees. However, neither Defendant has paid the Agent Fees required by the PPP Regulations and SBA Guidance to Plaintiffs and the Class Members. These misrepresentations and omissions in the conduct of business and provision of services violate the NDTPA. 144. Defendants knew or should have known that their acts, practices, statements, policies, correspondence, and representations were likely to deceive and mislead Plaintiffs and the Class Members. Defendants knew that they were required to pay Agent Fees because they certified compliance with the PPP Regulations that contain that requirement. 145. Plaintiffs and the Class Members were injured as a result of Defendants’ violations of the NDTPA because they were deprived of the Agent Fees to which they are entitled. 146. Defendants’ deceptive acts and practices caused damages and injury to Plaintiffs and the Class Members. 147. Defendants’ refusal to pay Agent Fees in accordance with applicable regulations is a matter of public interest because the PPP loans, and the SBA origination fees that Defendants receive, are paid for by taxpayers. 148. Plaintiffs and the Class Members ask the Court to award equitable relief, restitution, civil penalties, punitive damages, attorneys’ fees, consequential damages, and all other damages available at law. Nev. Rev. Stat. § 41.600. PRAYER FOR RELIEF WHEREFORE, Plaintiffs, individually and on behalf of the Classes, respectfully pray that this a. Enter an order certifying the Classes, appointing Plaintiffs as the Class Representative, and appointing Plaintiffs’ counsel as Class Counsel; b. Enter an order declaring that Defendants’ actions and omissions, described above, are unlawful; c. Award all actual, consequential, compensatory, punitive, and statutory damages as available under law, including without limitation actual damages for past, present, and future expenses caused by Defendants’ misconduct, lost time and interest, and all other damages suffered; d. An award of pre- and post-judgment interest as allowed by law; e. An award of reasonable attorneys’ fees and expenses; f. The entry of injunctive and declaratory relief as necessary to protect the interests of Plaintiffs and the Classes; and g. Such other and further relief as the Court deems reasonable and just. PLAINTIFFS DEMAND A TRIAL BY JURY ON ALL ISSUES SO TRIABLE. Dated: July 10, 2020 Respectfully submitted, __/s/ Katherine M. Aizpuru__ Katherine M. Aizpuru (N.Y. Bar No. 5305990) Hassan A. Zavareei* Andrea R. Gold* TYCKO & ZAVAREEI LLP 1828 L Street NW, Suite 1000 Washington, D.C. 20036 Telephone: (202) 973-0900 Facsimile: (202) 973-0950 hzavareei@tzlegal.com agold@tzlegal.com kaizpuru@tzlegal.com Counsel for Plaintiffs and the Putative Classes *Pro hac vice applications to be submitted

healthcare

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UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION SKY FEDERAL CREDIT UNION, on Behalf of Itself and All Others Similarly Situated, Case No. Plaintiff, CLASS ACTION COMPLAINT JURY TRIAL DEMANDED FAIR ISAAC CORPORATION, Defendant. I. NATURE OF THE ACTION ............................................................................................. 1 II. PARTIES ............................................................................................................................ 4 A. Plaintiff ................................................................................................................... 4 B. Defendant ................................................................................................................ 5 III. JURISDICTION, VENUE, AND INTERSTATE COMMERCE ...................................... 5 IV. ALLEGATIONS OF FACT SUPPORTING THE CLAIM FOR RELIEF ........................ 6 A. Credit Scores ........................................................................................................... 6 B. The Markets for Credit Scores in the United States ............................................... 7 C. Fair Isaac Has a Monopoly in the B2B Credit Score Market ............................... 10 D. Attempts to Compete Have Been Stymied by Fair Isaac’s Monopoly in the B2B Credit Score Market ................................................................................ 11 E. Fair Isaac Has Contracted with the Credit Bureaus as Agents and Co-Conspirators in Its Scheme to Monopolize ..................................................... 13 F. Fair Isaac’s Other Anticompetitive and Exclusionary Conduct ........................... 14 1. Fair Isaac and the Credit Bureaus Have Entered into Anticompetitive Contract Terms that Restrict Their Ability to Compete and Sell VantageScore ............................................................................................ 15 a. The Anticompetitive Agreements Restrict the Credit Bureaus’ Ability to Develop or Sell Other Credit Scores Compatible with B2B Purchasers’ Existing Systems ....................................... 15 b. Fair Isaac and the Credit Bureaus Have Agreed to a Penalty Pricing and Bundling Scheme to Foreclose Competition from Competitors in the B2B Credit Score Market ............................... 17 c. Fair Isaac and the Credit Bureaus Have Agreed to Contract Provisions that Allow Fair Isaac to Extract Monopoly Prices ...... 18 2. Fair Isaac’s Campaign to Create Fear, Uncertainty, and Doubt About VantageScore Among B2B Purchasers .................................................... 19 3. Fair Isaac’s Anticompetitive and Exclusionary Conduct Harms Competition............................................................................................... 21 V. CLASS ACTION ALLEGATIONS ................................................................................. 22 VI. STATUTES OF LIMITATIONS AND TOLLING .......................................................... 25 VII. CLAIMS FOR RELIEF .................................................................................................... 25 CLAIM ONE: MONOPOLIZATION 15 U.S.C. §2......................................................... 25 CLAIM TWO: CONSPIRACY TO MONOPOLIZE 15 U.S.C. §2 ................................. 27 CLAIM THREE: UNREASONABLE RESTRAINT OF TRADE 15 U.S.C. §1 ............ 29 CLAIM FOUR: STATE ANTITRUST LAWS ................................................................ 30 CLAIM FIVE: STATE UNFAIR TRADE PRACTICES LAWS .................................... 32 i IX. DEMAND FOR JURY TRIAL ........................................................................................ 33 ii Plaintiff Sky Federal Credit Union, on behalf of itself and all other similarly situated residents of the United States, brings claims under the Sherman Act and state laws against Defendant Fair Isaac Corporation (“Fair Isaac”) for redress of the injury and damages resulting from its monopolizing, conspiring to monopolize, and otherwise unreasonably restraining trade from at least as early as January 1, 2006, through the date by which the anticompetitive effects of Defendant’s violations of law shall have ceased, but in any case no earlier than the present (the “Class Period”). Based upon personal knowledge, information and belief, proceedings and admissions made in Case No. 1:17-cv-08318 (N.D. Ill.), related ongoing federal government investigations, and investigation of counsel, Plaintiff alleges: I. NATURE OF THE ACTION 1. “Credit Scores” are three digit numbers that rank or “score” creditworthiness within a range by applying certain algorithms to credit histories. There are two distinct markets for Credit Scores in the United States: (1) the market for the sale of Credit Scores to lenders, financial institutions, and other businesses for risk management decisions (the “B2B Credit Score Market”); and (2) the market for the sale of Credit Scores directly to consumers to monitor their own credit records (the “business-to-consumer” or “B2C Credit Score Market”). 2. This case concerns the B2B Credit Score Market, over which Defendant Fair Isaac has unlawfully maintained a 90% monopoly for many years. 3. Fair Isaac has abused its monopoly power by engaging in anticompetitive and exclusionary conduct and agreements. Fair Isaac has suppressed competition, stymied innovation, and limited access to credit for millions of Americans – all in violation of Sections 1 and 2 of the Sherman Act, 15 U.S.C. §§1 & 2, as well as numerous state antitrust and unfair trade practices 4. Fair Isaac’s FICO Credit Scores (“FICO Scores”) have dominated the market for nearly three decades. Fair Isaac executives have bragged that their FICO Scores are “the 800- pound gorilla” and are “deeply embedded in the system in North America.” Fair Isaac admitted in 2017 that it has “maintained a 90-plus percent market share for at least 13 years.” Fair Isaac advertises that its FICO Scores are used for 90% of all lending decisions in the United States and that Fair Isaac sells four times more FICO Scores per year than McDonald’s sells hamburgers worldwide. 5. TransUnion, Experian, and Equifax are credit reporting agencies that collect, standardize, and distribute information on consumer credit activity (collectively, the “Credit Bureaus”). Credit Bureaus sell lenders, financial institutions, and other businesses credit reports and Credit Scores – including Fair Isaac’s FICO Scores – that are used to make decisions about whether and on what terms to evaluate and extend credit. Credit Bureaus sell those credit reports and Credit Scores to businesses in every state. For decades, Credit Bureaus have acted as Fair Isaac’s agents and co-conspirators to broker sales between businesses and Fair Isaac of the dominant FICO Scores. Fair Isaac has used these distribution agreements to place anticompetitive restrictions on the three dominant Credit Bureaus’ ability to develop or distribute competitive Credit Scores; prohibited Credit Bureaus from individually negotiating royalty prices for access to FICO Scores; charged discriminatory and prohibitively high royalty prices for FICO Scores if a Credit Bureau customer purchases a FICO Score while providing the consumer with a competing score; and increased the royalty prices that must be paid by Credit Bureaus. Nevertheless, the Credit Bureaus have agreed to, and acquiesced in, these restrictions. 6. In 2006, VantageScore Solutions, LLC (“VantageScore”), a joint venture of the Credit Bureaus, launched a competitive Credit Score known as VantageScore. From the outset, VantageScore was competitively priced, highly predictive, and scored millions more Americans than Fair Isaac’s FICO products. Today, by making full use of the Credit Bureaus’ consumer data, including rental and utility payments, VantageScore is capable of providing Credit Scores for an additional 30 million Americans than FICO can. Were VantageScore widely adopted by businesses, millions more creditworthy Americans would have the opportunity to apply for a home mortgage, car loan, or credit card, and obtain credit at lower cost. 7. Rather than compete on the merits with VantageScore, Fair Isaac has engaged in a pattern of anticompetitive conduct over the course of more than a decade to discourage the adoption of VantageScore and preserve its own monopoly, with the Credit Bureaus’ assistance. Fair Isaac has abused its monopoly power to prevent the Credit Bureaus from successfully marketing and selling a competitive alternative to FICO Scores and has waged a disparaging public relations and advertising campaign to create fear, uncertainty, and doubt about VantageScore’s viability and reliability with lenders and consumers. 8. Through its exclusionary conduct, Fair Isaac has succeeded in preventing the substantial sales growth that VantageScore or a competing credit scoring system would have achieved though competition on the merits. Having suppressed competition, Fair Isaac has been able to significantly increase prices, including most recently in September 2019, for its FICO Scores. But for Fair Isaac’s suppression of competition and the resulting contractual agreements not to compete, VantageScore or another competitive credit scoring system would have thrived and won substantial market share through its innovative product and would have reduced the prices paid for B2B Credit Scores by Plaintiff and members of the Class. 9. Fair Isaac’s anticompetitive and exclusionary conduct has harmed businesses that have been deprived of competitive pricing for instruments to allow them to gauge credit risk and have had their freedom of choice restricted. Opening the market to competition is essential to competitive pricing and product innovation, including scoring the tens of millions of creditworthy Americans who have been denied access to credit. 10. In February 2018, TransUnion filed antitrust counterclaims for monopolization and related claims against Fair Isaac in this District. See Fair Isaac Corp. v. Trans Union LLC, No. 1:17-cv-08318, ECF No. 38 (redacted counterclaims). In March 2019, The Honorable Sharon Johnson Coleman denied Fair Isaac’s motion to dismiss TransUnion’s antitrust counterclaims. See id., ECF No. 96. The matter is ongoing. 11. On March 15, 2020, Fair Isaac disclosed that it was under investigation by the Antitrust Division of the United States Department of Justice for exclusionary conduct relating to that alleged in the counterclaim upheld by Judge Coleman.1 II. PARTIES A. Plaintiff 12. Plaintiff Sky Federal Credit Union is a federally chartered credit union with a principal place of business in Livingston, Montana. 13. Plaintiff is a financial institution that provides financial services, including deposit accounts, credit and/or debit cards, and lending and other credit-related facilities for consumers. 14. During the Class Period, Plaintiff directly purchased B2B Credit Scores from Defendant and a Credit Bureau. 15. Plaintiff was injured in its business or property as a direct, proximate, and material result of Defendant’s violations of law. 1 See Press Release, Fair Isaac Corporation, FICO Statement Regarding Antitrust Investigation, https://www.prnewswire.com/news-releases/fico-statement-regarding-antitrust- investigation-301024452.html (Mar. 15, 2020). 16. Plaintiff is threatened with future injury to its business and property by reason of Defendant’s continuing violations of law. B. Defendant 17. Defendant Fair Isaac Corporation is a Delaware corporation, with its principal place of business at 181 Metro Drive, Suite 700, San Jose, California 95110. III. JURISDICTION, VENUE, AND INTERSTATE COMMERCE 18. This action arises under Sections 1 and 2 of the Sherman Antitrust Act of 1890 (as amended), 15 U.S.C. §§1 & 2, and Sections 4 & 16 of the Clayton Antitrust Act of 1914 (as amended), 15 U.S.C. §§15 & 26. 19. This Court has subject matter jurisdiction under 28 U.S.C. §§1331, 1332(d), and 20. The Court has supplemental jurisdiction under 28 U.S.C. §1367 over Plaintiff’s state law claims. 21. Venue is proper in this District under 15 U.S.C. §§15(a) & 22, and 28 U.S.C. §1391(b), (c) and (d), because during the Class Period, Defendant resided, transacted business, was found, or had agents in the United States, including in this District, and a substantial portion of the alleged activity affected interstate trade and commerce, including in this District. 22. During the Class Period, Defendant’s conduct was within the flow of, was intended to, and did, in fact, have a substantial effect on the interstate commerce of the United States, including in this District. 23. During the Class Period, Defendant used the instrumentalities of interstate commerce, including interstate wires, wireless spectrum, and the U.S. mail, to effectuate its illegal scheme. 24. Defendant’s conduct also had a substantial effect on the intrastate commerce of at least Arizona; Arkansas; California; Connecticut; District of Columbia; Florida; Hawaii; Illinois; Iowa; Kansas; Maine; Maryland; Massachusetts; Michigan; Minnesota; Mississippi; Missouri; Montana; Nebraska; Nevada; New Mexico; New York; North Carolina; North Dakota; Oregon; Rhode Island; South Carolina; South Dakota; Tennessee; Utah; Vermont; West Virginia; and Wisconsin. 25. This Court has personal jurisdiction over Defendant because Defendant transacted business, maintained substantial contacts, and is located and/or committed unlawful conduct in this District. The unlawful scheme was directed at, and had the intended effect of, causing injury to persons residing in, located in, or doing business in this District. 26. Plaintiff purchased at least one FICO Score from Fair Isaac and TransUnion, which is headquartered in this District. 27. Defendant employs persons who work in its Credit Score business in this District. 28. Defendant is registered to do business in Illinois with the Illinois Secretary of State. 29. Defendant selected this District to institute Case No. 1:17-cv-08318, to which this case is filed as related by Plaintiff. IV. ALLEGATIONS OF FACT SUPPORTING THE CLAIM FOR RELIEF A. Credit Scores 30. Credit Scores are typically three-digit numbers that are designed to assess credit risk. Higher scores generally indicate that a consumer poses less credit risk. Credit Scores are produced using credit scoring systems that apply a credit scoring algorithm to a consumer credit report. Credit Scores are usually accompanied by “reason codes,” which inform the lender about the reasons that contributed most significantly to reducing a particular consumer’s Credit Score. 31. Credit Scores are the most widely used indicators of consumers’ creditworthiness in the United States. Lenders, financial institutions, and other businesses rely on Credit Scores to decide whether and on what terms to extend credit to consumers. Consumers, in contrast, rely on Credit Scores to determine whether they will be able to get a mortgage, credit card, auto loan, or other credit product and the rate they will pay. 32. The Credit Bureaus collect and supply aggregated consumer credit data in the form of consumer reports. The Credit Bureaus continuously gather credit and financial data about consumers from creditors, governmental entities, public records, collection agencies, and other third parties. This information is then compiled into a “credit file.” The Credit Bureaus sell credit reports, which include information gathered from a consumer’s credit file, to businesses and consumers. 33. While Credit Scores are sometimes sold together with credit reports, credit reports are different from Credit Scores and can be sold independently. A credit report is a statement that has detailed information about a consumer’s credit activity and current credit situation. A consumer’s credit report might, for example, include information about that consumer’s history of mortgage payments, credit card balances, credit card payments, and credit inquiries. A Credit Score takes the detailed information in a credit report and turns it into a single three-digit number. B. The Markets for Credit Scores in the United States 34. There are two distinct markets for Credit Scores in the United States: (1) the B2B Credit Score Market and (2) the B2C Credit Score Market. B2B and B2C Credit Scores are priced, purchased, and used very differently and serve very different purposes. The lenders, financial institutions, and other businesses in the B2B Credit Score Market that purchase and use Credit Scores to assess creditworthiness and make decisions about whether and on what terms to extend credit or otherwise take on risk do not consider credit reports, insurance scores, or any other information about borrowers, to be a substitute for Credit Scores. 35. Consumers in the B2C Credit Score Market purchase their own Credit Scores to better understand their own creditworthiness and how they likely will be viewed by potential lenders. 36. The United States is the relevant geographic market in which B2B Credit Scores are provided. The restraints on competition in the B2B Credit Score Market contained in Fair Isaac’s contracts relate to the provision of B2B Credit Scores to businesses throughout the United 37. Purchasers in the B2B Credit Score Market are comprised of lenders, financial institutions, and other businesses that purchase B2B Credit Scores in order to make risk management decisions (“B2B Purchasers”). Lenders, financial institutions, and other businesses that purchase Credit Reports from Defendant and/or the Credit Bureaus generally purchase Credit Scores in order to determine the credit-worthiness and identity of qualified borrowers to whom a preapproved credit offer will be extended (“pre-screening”), make lending decisions (“lending”), or review the risk associated with existing borrowers for purposes such as extending additional credit or changing other account terms (“account management”). 38. Customers in the B2C Credit Score Market, in contrast, purchase Credit Scores in order to manage their credit, protect their identity, or assess their likelihood of obtaining credit. Today, American consumers have signed up for over 160 million credit monitoring or identity protection accounts from businesses such as Capital One, Credit Karma, and LifeLock. Many of those accounts include access to the consumer’s own Credit Score. 39. The credit risk scoring industry, industry analysts, policy analysts, and investors recognize the B2B Credit Score Market as distinct from the B2C Credit Score Market. Fair Isaac also regularly acknowledges that the B2B Credit Score Market is distinct from the B2C Credit Score Market. For example, in its 2019 Form 10-K, Fair Isaac distinguished between its “business- to-business scoring solutions and services” and “business-to-consumer scoring solutions and services including myFICO solutions for consumers.” 40. The B2B Credit Score Market is characterized by significant barriers to entry. B2B Purchasers encounter significant “switching costs” if they adopt a new Credit Score that has different score-to-risk relationships or that uses different reason codes – regardless of whether it is an updated version of the score they already use or an entirely new brand of Credit Score (unlike consumers in the B2C Credit Score Market). These switching costs arise because employees have to be trained in the properties and characteristics of a new score; B2B Purchasers must ensure that the new score will be adequately predictive of the creditworthiness of their own customer base; B2B Purchasers often conduct extensive, costly, and time-consuming validation tests to determine whether the new score is cost-effective; and B2B Purchasers may need to invest in updating their internal systems to ensure technical compatibility between those systems and a new score. 41. Network effects also characterize the B2B Credit Score Market. For example, in the mortgage and auto loan industries the consistent use of particular Credit Scores with similar score-to-risk relationships and reason codes facilitates the bundling of large groups of mortgage and auto loans from different originators into securities that can be sold to investors. Because of the consistent use of a single type of Credit Score, marketing materials for these securities can include data on the average and stratified Credit Scores of the borrowers associated with the underlying loans. C. Fair Isaac Has a Monopoly in the B2B Credit Score Market 42. Fair Isaac has maintained a monopoly over the B2B Credit Score Market in the United States for roughly three decades, largely through the unlawfully achieved dominance of its FICO product line, which includes many different types of FICO Scores. Introduced in the 1980s, Fair Isaac’s “FICO Classic” Credit Scores are the best known and most widely used B2B Credit Scores in the United States. FICO Classic applies an algorithm to each Credit Bureau’s data and generates a score between 300 and 850 that purports to give an indication of the individual’s credit risk. It also generates a set of “reason codes” that explain the reasons the consumer has not been assigned the maximum score. 43. Fair Isaac advertises its monopoly in the B2B Credit Score Market. On its website, Fair Isaac advertises: 10 billion FICO Scores are sold each year, which is four times the number of hamburgers that McDonald’s sells worldwide each year; 27.4 million FICO Scores are sold every day, which is over twice the number of cups of coffee Starbucks sells worldwide in a day; and 90% of all lending decisions in the United States rely on FICO Scores. 44. Similarly, in its 2019 Form 10-K, Fair Isaac described its “FICO Scores” as “the standard measure in the U.S. of consumer credit risk” and reported that “FICO Scores are used . . . by nearly all of the major banks, credit card organizations, mortgage lenders, and auto loan originators.” 45. Fair Isaac representatives have described Fair Isaac’s FICO score as “the 800- pound gorilla” in the market for B2B Credit Scores and bragged about Fair Isaac’s 90% market share. For example, in November 2017, at the JPMorgan Ultimate Services Investor Conference, Fair Isaac’s CFO and Executive Vice President, Michael Pung, stated that Fair Isaac’s FICO Scores are: • The “most widely used credit scoring system here in the U.S.”; • Used by “[v]irtually every major lender in the U.S.”; and that • Fair Isaac has “maintained a 90-plus percent market share for at least . . . 13 years.” 46. Fair Isaac representatives have also recognized that FICO Scores have benefited from the network effects created by the widespread use of FICO Scores in many industries. For example, in November 2011, then-CEO of Fair Isaac, Mark Greene, explained that the “network effect” of “FICO Scores . . . being sort of the standard language” and “having everybody . . . standardize on a FICO Score, that’s magic.” 47. Fair Isaac’s monopoly in the B2B Credit Score Market for Credit Scores has given it the power to control prices. Indeed, Fair Isaac’s CEO, Will Lansing, has noted that in the B2B Credit Score Market Fair Isaac has “quite a bit of discretion in whether we want our margins to be higher or lower or where they are.” D. Attempts to Compete Have Been Stymied by Fair Isaac’s Monopoly in the B2B Credit Score Market 48. In March 2006, VantageScore introduced the VantageScore Credit Score and credit scoring system. VantageScore is a competitor to FICO Scores in the B2B Credit Score Market. 49. From the time it was first released in 2006, VantageScore scored millions more consumers than the FICO scoring systems. Whereas Fair Isaac’s FICO scoring systems would not generate a score if a consumer had not used credit in more than six months or if a credit account was fewer than six months old, VantageScore calculated scores for consumers that had not used credit for up to two years. It also reached more consumers by using utility and telecommunications payment histories when reported to the Credit Bureaus. 50. Today, VantageScore scores 30 million more Americans than traditional FICO scoring systems. Fair Isaac’s outdated FICO Classic credit scoring systems – which are still used by many lenders – exclude many creditworthy Americans that VantageScore can reliably score. About one-quarter of American adults – some 65 million people – do not have a traditional FICO score. VantageScore is capable of reducing the number of adults without a Credit Score by almost half. Ten million of those newly scored individuals are “prime” borrowers that should be attractive to traditional lenders. 51. Without a Credit Score, it is difficult or impossible to apply for or successfully obtain a mortgage, car loan, or reasonable interest rates on personal lines of credit. Not having a Credit Score can also have drastic effects outside of the credit market. For example, Credit Scores are increasingly used by landlords to screen potential tenants. 52. Those excluded by Fair Isaac’s traditional FICO scoring systems – who face an increased risk of being denied access to credit in the form of credit cards, auto and home loans, and apartment housing – include disproportionate numbers of low-income and minority consumers. 53. Indeed, one advocacy group focused on making it possible for people with limited incomes, especially people of color, to achieve financial security has observed: “Black and Hispanic individuals are . . . significantly more likely than white individuals to be credit invisible” – meaning that they have “no established credit history,” are “unscored,” and “lack[] sufficient or recent enough credit history to be given a [FICO] Credit Score.” VantageScore calculates a score for 9.5 million Hispanic and Black consumers who do not have a FICO score, including 2.7 million minority consumers who should be considered “prime” borrowers. 54. Despite the potential advantages of using VantageScore, Fair Isaac continues to maintain its monopoly in the B2B Credit Score Market. In February 2013, at a Morgan Stanley Conference, Fair Isaac’s CEO, Will Lansing, explained that despite the existence of VantageScore, “there [is] not that much competition around our [B2B] scores business” because “FICO scores are very much part of the fabric of the banking industry” and “really deeply imbedded.” E. Fair Isaac Has Contracted with the Credit Bureaus as Agents and Co- Conspirators in Its Scheme to Monopolize 55. With its dominant position in the B2B Credit Score Market, Fair Isaac uses the Credit Bureaus to perpetuate and extend its monopoly. Fair Isaac’s relationship with B2B Purchasers is often dependent on B2B Purchasers’ relationships with the Credit Bureaus. To facilitate the sale of its FICO Scores to B2B Purchasers, Fair Isaac enlists the assistance of the Credit Bureaus. 56. When a B2B Purchaser requires a Credit Score, it purchases the report from the Credit Bureau, and the Credit Score jointly from the Credit Bureau and Fair Isaac. Although the payment may at times occur in a single transaction, the practical reality, as expressly set forth in contracts governing the sale of Credit Scores to B2B Purchasers, is that both the Credit Bureau and Fair Isaac act as the provider of the FICO Score. 57. B2B Purchasers’ contracts for FICO Scores are often known as Credit Scoring Services Agreements (“CSSAs”). CSSAs provide for both the method of payment and fee model for the delivery of Credit Score services. 58. For example, the CSSA between Plaintiff, its Credit Bureau, and Fair Isaac makes clear in the “Method of Payment” section that “Experian/Fair, Isaac will deliver to Subscriber invoices” for its Credit Scores and that “Subscriber will pay Experian/Fair, Isaac the amounts indicated on such invoices.” It also specifies that in “consideration of Experian/Fair, Isaac’s performance of the Experian/Fair, Isaac Model, Subscriber will pay Experian/Fair, Isaac fees.” 59. In Plaintiff’s and Class Members’ procurement of FICO Scores, the Credit Bureaus act as co-conspirators and agents of Fair Isaac. Indeed, Plaintiff’s CSSA states that “the Experian/Fair, Isaac Model results from the joint efforts of Experian Information Solutions, Inc. and Fair, Isaac and Company, Incorporated”; and authorizes the Credit Bureau to execute the contract “on behalf of itself and Fair, Isaac and Company, Incorporated.” (Fair Isaac was formerly known as Fair, Isaac and Company.) F. Fair Isaac’s Other Anticompetitive and Exclusionary Conduct 60. Fair Isaac has used its monopoly power to coordinate a multi-faceted campaign to eliminate competition from VantageScore. Fair Isaac has been explicit that this is its goal. In April 2015, Will Lansing informed investors on a quarterly earnings conference call that Fair Isaac’s strategic goal was to ensure that “the entire industry adopts FICO scores instead of [other] scores.” To achieve this goal, Fair Isaac has enlisted its competitors (the Credit Bureaus, which jointly own and control VantageScore) to agree to anticompetitive contracts that: prevent them from developing or selling alternative Credit Scores that could be seamlessly integrated into many lenders’ systems or used interchangeably with FICO Scores; prevent them from competing with each other to negotiate prices from FICO; and create a pricing scheme effectively foreclosing B2B Purchasers from choosing to use FICO Scores in their lending decisions at the same time as providing customers with a competing Credit Score, including VantageScore. At the same time, Fair Isaac has waged a media campaign against VantageScore and made false and misleading statements in order to sow fear, uncertainty, and doubt about VantageScore’s reliability. By its anticompetitive and exclusionary conduct, Fair Isaac has injured competition in the B2B Credit Score Market, increased prices for Plaintiff and the Class, and limited access to credit for millions of Americans. 1. Fair Isaac and the Credit Bureaus Have Entered into Anticompetitive Contract Terms that Restrict Their Ability to Compete and Sell VantageScore 61. In January 2015, Fair Isaac and TransUnion entered into a contract, the Analytic and Data License Agreement. With TransUnion’s prior contracts with Fair Isaac set to expire on December 31, 2014, Fair Isaac demanded that the parties enter into a new contract rather than renew their existing contracts. Fair Isaac represented to TransUnion that Experian and Equifax had already agreed to materially similar new contracts with Fair Isaac. If TransUnion did not agree to the terms demanded by Fair Isaac, it would lose substantial business from customers that depend on FICO Scores. On information and belief, TransUnion, Equifax, and Experian all agreed to Fair Isaac’s plan to exclude competitors and maintain its monopoly. a. The Anticompetitive Agreements Restrict the Credit Bureaus’ Ability to Develop or Sell Other Credit Scores Compatible with B2B Purchasers’ Existing Systems 62. Fair Isaac has imposed a similar or identical “No Equivalent Products” clause on each of the Credit Bureaus. By imposing a “No Equivalent Products” term, Fair Isaac has sought to block the Credit Bureaus from offering alternative Credit Score products, such as VantageScore, that would allow B2B Purchasers to easily switch from FICO Scores to VantageScore without incurring the cost of redesigning their lending programs and systems, or to use VantageScore alongside or interchangeably with FICO Scores. The Credit Bureaus have agreed to and acquiesced in these anticompetitive agreements, terms, and resulting anticompetitive effects. 63. The “No Equivalent Products” clause provides that a Credit Bureau may not internally develop a credit scoring system that is aligned to the odds-to-score relationship of any Fair Isaac Analytic or that uses more than a limited number of reason codes that “match” reason codes used by any Fair Isaac Analytic. It also prohibits a Credit Bureau from distributing any competing analytic (i.e., credit scoring system) that is aligned with FICO Scores or uses too many of the same reason codes, and the clause expressly names Vantage Score Solutions LLC as a developer of such a scoring system that may not be distributed if VantageScore were to offer an “Equivalent Product.” 64. For example, if a competing Credit Score product used a 700 score to indicate a less-than-five-percent risk of credit delinquency, and if a 700 FICO score also indicated the same risk of delinquency, then the “No Equivalent Products” clause prevents a Credit Bureau from distributing the competing product. Similarly, if a competing Credit Score product used reason codes that match 20% or more of the reason codes used by FICO scoring systems, the “No Equivalent Products” clause prohibits a Credit Bureau from distributing the product. 65. The “No Equivalent Products” clause effectively prevents a Credit Bureau from developing (contrary to the original goal of VantageScore and the easy ability to do so) or selling an alternative to FICO’s Credit Scores that would (i) be compatible with many B2B Purchasers’ systems, models, and processes; and (ii) allow B2B Purchasers to have a legitimate choice between using FICO Scores and an alternative score. Many B2B Purchasers have spent substantial effort and resources to develop systems, models, and processes that are designed for FICO Scores. B2B Purchasers’ systems, models, and processes are tailored to FICO’s odds-to-score relationship (i.e., each given score has a given ratio of non-defaulting consumers to defaulting consumers), and reason codes (the particular reasons cited for increased risk of default). For example, a bank’s software might be designed to accept one or more FICO Scores and reason codes, combine this information with data it collects internally, and automatically produce a lending decision. 66. The “No Equivalent Products” clause protects and sustains Fair Isaac’s monopoly. The odds-to-score relationship is an arbitrary mapping between risk and score and does not reflect protectable intellectual property. Similarly, the reason codes that may not be used by an “Equivalent Product” were not invented by Fair Isaac but reflect well-established industry best practices for lending. b. Fair Isaac and the Credit Bureaus Have Agreed to a Penalty Pricing and Bundling Scheme to Foreclose Competition from Competitors in the B2B Credit Score Market 67. Fair Isaac’s contracts with each Credit Bureau include a similar or identical “Dynamic Royalty Schedule” clause and a similar or identical “Pre-Qualification” royalty category. Through the “Pre-Qualification” royalty category, Fair Isaac has effectively foreclosed lenders from the ability to purchase and use a FICO score in their lending decision while providing a consumer with a competing Credit Score, which drives lenders to buy exclusively Fair Isaac’s FICO Scores and not to purchase competing Credit Scores. As a consequence of Fair Isaac’s imposition of the “Pre-Qualification” royalty category, TransUnion has lost sales of VantageScore to major banks to provide to consumers. 68. In 2015, Fair Isaac unilaterally imposed, and the Credit Bureaus have complied with, a new “Pre-Qualification” royalty category, which Fair Isaac defines to “mean an End User’s qualification of a potential consumer customer for an End User’s own internal lending offering.” This royalty category distinguishes between: (1) lenders that use FICO Scores for “Pre- Qualification” without providing any Credit Score or credit data to consumers; and (2) lenders that use FICO Scores for “Pre-Qualification” while also providing Credit Scores or credit data to consumers “in connection” with the “Pre-Qualification.” Certain banks and lenders offer consumers opportunities to apply to qualify for credit opportunities (e.g., a credit card or loan) and, at the same time, receive their personal Credit Score. The offer of a free Credit Score to a consumer can entice consumers to apply for credit opportunities. 69. The royalty price associated with a FICO score used for “Pre-Qualification” depends on whether other Credit Scores or credit data are provided to consumers. If a lender purchases a FICO score for use in “Pre-Qualification” and does not provide any Credit Score or credit data to the consumer “in connection” with the “Pre-Qualification,” there is one per-score royalty rate. If the lender purchases a FICO score for use in “Pre-Qualification” and provides any other Credit Score (such as a VantageScore) to the consumer “in connection” with the “Pre- Qualification,” there is a different per-score royalty rate that is higher – a penalty rate. 70. The penalty rate can be avoided in one of two ways, both of which involve purchasing exclusively FICO Scores. First, the B2B Purchaser could purchase a FICO score for use in “Pre-Qualification” and provide no Credit Score or credit data to the consumer. Second, the B2B Purchaser could purchase a bundled FICO product from Fair Isaac. Fair Isaac offers bundled products to lenders that combine the use of scores by lenders with the provision of scores to consumers. 71. There is no legitimate business justification for the penalty rate agreed upon by Fair Isaac and the Credit Bureaus when the lender also purchases any other Credit Score to disclose to consumers. The transparent purpose of the “Pre-Qualification” royalty category is to drive all B2B Purchasers engaging in “Pre-Qualification” to purchase exclusively FICO Scores and make it cost- prohibitive for B2B Purchasers engaging in “Pre-Qualification” to purchase a competing Credit Score for disclosure to consumers. This scheme has been effective, and few, if any, B2B Purchasers have opted to pay the penalty rate. c. Fair Isaac and the Credit Bureaus Have Agreed to Contract Provisions that Allow Fair Isaac to Extract Monopoly Prices 72. Fair Isaac’s “Level Playing Field,” requires that the prices that are made available to one Credit Bureau be made available to the other Credit Bureaus. Taken together, the “Dynamic Royalty Schedule” and the “Level Playing Field” clauses enable Fair Isaac to unilaterally increase the royalty prices it charges for FICO Scores. Fair Isaac’s contracts with TransUnion, Equifax, and Experian include similar or identical “Level Playing Field” and “Dynamic Royalty Schedule” provisions. 73. Fair Isaac has used the “Level Playing Field” and “Dynamic Royalty Schedule” provisions in its contracts with the Credit Bureaus to extract monopoly prices from B2B Purchasers. These provisions disincentivize a Credit Bureau from negotiating for a lower price because it knows that even if it succeeds, it will not as a result gain a competitive advantage over the other Credit Bureaus. 2. Fair Isaac’s Campaign to Create Fear, Uncertainty, and Doubt About VantageScore Among B2B Purchasers 74. Despite having successfully induced the Credit Bureaus to agree with Fair Isaac and with each other to impose restrictions on VantageScore’s ability to compete with FICO, Fair Isaac has gone even further and waged an aggressive public relations and advertising campaign to spread false statements, convey false impressions, and mislead B2B Purchasers about the qualities and characteristics of FICO Scores and VantageScore. In advertisements, letters, and blog posts, Fair Isaac has disparaged VantageScore by calling it a “Fako” score, falsely claimed that VantageScore is an unreliable measure of creditworthiness, and misrepresented the information considered by VantageScore’s credit scoring system. 75. On December 12, 2017, Fair Isaac took out a full-page advertisement in The Wall Street Journal addressed to “Lenders, Policymakers and Consumer Advocates” that disparaged VantageScore without identifying it by name. The advertisement contrasted Fair Isaac, which “is not owned by the credit bureaus” and whose FICO Scores have been used “by lenders and securitization investors for decades,” with an alternative Credit Score, which is “owned by the credit bureaus,” is less reliable than FICO Scores in evaluating credit risk, and fails to use “sound practices” or “science-based credit evaluation.” To anyone familiar with the market for Credit Scores, the advertisement unambiguously conveys the false message that VantageScore is “[w]eakening scoring standards, [and] harm[ing] consumers, and the lending system,” particularly in the B2B Credit Score Market. 76. The Wall Street Journal advertisement directed readers to “Learn more at FICO.com/independent,” a Fair Isaac-owned website that connects visitors to articles and blog posts that disparage VantageScore by name. One such blog post asserts: “Despite claims by VantageScore, weakening the minimum scoring criteria will not empower millions of low-risk mortgage credit seekers.” 77. Moreover, the implication that FICO Classic scoring systems provide Credit Scores for as many consumers as VantageScore is false and misleading. VantageScore provides Credit Scores for millions of American consumers that are not scored by FICO Classic scoring systems. 78. Fair Isaac’s website includes numerous posts disparaging VantageScore and making false or misleading statements about VantageScore’s features. For example, one blog post claims that “[r]esearch results consistently showed that scoring models relying solely on sparse or old credit data were weak and did a poor job forecasting future performance.” This statement is false and misleading because it conveys the message that VantageScore’s scoring model is “weak” and does a “poor job forecasting future performance” because it considers a consumer’s full credit history even if the consumer has not used a traditional credit line in the last six months. In fact, studies have shown that VantageScore is strongly predictive. 79. Another blog post claims that whereas “FICO Score 9 differentiates medical from non-medical collections,” “VantageScore does not.” This statement conveys the false message that VantageScore does not differentiate medical from non-medical collections. In fact, VantageScore 3.0 was the first credit scoring system to address medical debt. VantageScore 4.0, the most recent version of VantageScore, distinguishes medical collection accounts from non- medical collection accounts and penalizes medical collections less than non-medical ones. 80. Fair Isaac’s campaign against VantageScore is not new. In 2006, just months after the launch of VantageScore, Fair Isaac filed a meritless lawsuit against the Credit Bureaus and VantageScore in the United States District Court for the District of Minnesota. See Fair Isaac Corporation v. Equifax Inc., No. 06-cv-04112 (D. Minn.). This was the monopolist’s first attempt to kill the nascent competitor. Fair Isaac’s numerous claims included a claim that the development of VantageScore violated the antitrust laws and a claim that the development of VantageScore constituted trademark infringement. In its prayer for relief, Fair Isaac sought nothing less than the end of VantageScore: it requested that the “Defendants be ordered to dissolve VantageScore.” 81. All of Fair Isaac’s claims failed; in fact, the jury concluded that Fair Isaac was the wrongdoer. In support of its trademark infringement claim, Fair Isaac had alleged that VantageScore’s use of a scoring range of 501-990 constituted trademark infringement because it was similar to FICO’s scoring range of 300-850. The Credit Bureaus and VantageScore counterclaimed for fraud on the United States Patent and Trademark Office (“PTO”), alleging that Fair Isaac had misrepresented to the PTO that only FICO used the 300-850 score range. The jury concluded that Fair Isaac had committed fraud on the PTO by making false statements as part of its application to register the score range of 300-850 as a trademark. 82. The public statements described in the foregoing paragraphs were transmitted to and seen by a substantial number of businesses and consumers nationwide. 3. Fair Isaac’s Anticompetitive and Exclusionary Conduct Harms Competition 83. Fair Isaac’s campaign of exclusionary conduct to maintain and expand its monopoly has harmed and continues to harm participants in the B2B Credit Score Market. Fair Isaac’s unlawful conduct, including that which has been taken in concert with the Credit Bureaus, has foreclosed competition in the B2B Credit Score Market by foreclosing opportunities for the Credit Bureaus to sell VantageScore or any other competitive products. The anticompetitive and exclusionary conduct has allowed Fair Isaac to maintain its monopoly and charge monopoly prices for B2B Credit Scores to B2B Purchasers during the Class Period. 84. Fair Isaac’s conduct, in concert with the Credit Bureaus, including by the contracts entered into by the Credit Bureaus, has reduced choice for B2B Purchasers. The anticompetitive terms agreed to between Fair Isaac and the Credit Bureaus have frustrated the ability of B2B Purchasers to purchase VantageScore or any other competitive Credit Score that could be seamlessly integrated into lenders’ existing processes and systems. Fair Isaac’s media and advertising campaign against VantageScore has been successful in sowing fear, uncertainty, and doubt about VantageScore in the marketplace. 85. Media sources, financial blogs, and consumers have absorbed Fair Isaac’s message that VantageScore is a “Fako” score merely because it is not a FICO score. For example, thebalance.com – a website devoted to personal finance issues – posted in February 2017, and continues to display as of the date of this filing: “If you purchased your Credit Score anywhere but MyFICO.com, then it’s a Fako score.”2 V. CLASS ACTION ALLEGATIONS 86. Plaintiff brings this action on behalf of itself, and, under Rules 23(a) and (b) of the Federal Rules of Civil Procedure, on behalf of: All B2B Purchasers residing in the United States that directly purchased a FICO Score from Fair Isaac and/or a Credit Bureau during the Class Period. 2 Latoya Irby, FICO & FAKO Credit Scores, THE BALANCE, https://www.thebalance.com/ fico-and-fako-credit-scores-960497 (last visited Apr. 2, 2020). 87. Excluded from the Class are: Defendant, its officers, directors, management, employees, subsidiaries, and affiliates. Also expressly excluded are any natural persons that purchased their own Credit Score solely via myFico.com, the Credit Bureaus, or other entities for their personal use. 88. Also excluded is the Judge presiding over this action, his or her law clerks, spouse, and any person within the third degree of relationship living in the Judge’s household or the spouse of such a person. 89. Members of the Class are so numerous and geographically dispersed that joinder is impracticable. Further, members of the Class are readily identifiable from information and records in the possession of Defendant. 90. Plaintiff’s claims are typical of the claims of the members of the Class. Plaintiff and members of the Class were damaged by the same wrongful conduct of Defendant. 91. Plaintiff will fairly and adequately protect and represent the interests of members of the Class. The interests of Plaintiff are coincident with, and not antagonistic to, those of members of the Class. 92. Plaintiff is represented by counsel with experience in the prosecution and leadership of class action antitrust and other complex litigation, including class actions in the financial services industry. 93. Questions of law and fact common to the members of the Class predominate over questions that may affect only individual Class members, thereby making damages with respect to members of the Class as a whole appropriate. Questions of law and fact common to members of the Class include, but are not limited to: a. whether Defendant monopolized, conspired to monopolize, or unreasonably restrained trade in violation of federal law; b. whether Defendant monopolized, conspired to monopolize, or unreasonably restrained trade in violation of certain state antitrust laws; c. whether Defendant engaged in unfair or deceptive trade practices in violation of certain state laws; d. the duration of the alleged unlawful conduct; e. injury suffered by Plaintiff and members of the Class; f. damages suffered by Plaintiff and members of the Class; and g. whether Defendant has acted or refused to act on grounds generally applicable to members of the Class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to members of the Class as a whole. 94. Class action treatment is a superior method for the fair and efficient adjudication of the controversy. Such treatment will permit a large number of similarly situated persons to prosecute their common claims in a single forum simultaneously, efficiently, and without the unnecessary duplication of evidence, effort, or expense that numerous individual actions would require. 95. The benefit of proceeding through the class mechanism, including providing injured persons or entities a method for obtaining redress on claims that could not practicably be pursued individually, substantially outweighs potential difficulties in management of this class 96. Plaintiff knows of no special difficulty to be encountered in the maintenance of this action that would preclude its maintenance as a class action. 97. Plaintiff has defined members of the Class based on currently available information and hereby reserves the right to amend the definition of members of the Class, including, without limitation, the Class Period. VI. STATUTES OF LIMITATIONS AND TOLLING 98. By its very nature, the unlawful activity in which Defendant engaged was self- concealing from Plaintiff and the Class. As a result of Defendant’s affirmative acts, misrepresentations, and nondisclosures as alleged herein, any applicable statutes of limitation on claims asserted by Plaintiff and members of the Class have been and are tolled, and Defendant is equitably estopped from raising statutes of limitations as a defense. 99. Any applicable statutes of limitations were tolled at least until February 12, 2018, the date that TransUnion filed its Counterclaim against Defendant. 100. The federal government’s initiation of its antitrust investigation of Defendant’s unlawful conduct also operates to toll any federal statute of limitations under 15 U.S.C. §16. VII. CLAIMS FOR RELIEF CLAIM ONE: MONOPOLIZATION 15 U.S.C. §2 101. Plaintiff incorporates by reference and re-alleges the preceding allegations as though fully set forth herein. 102. The relevant product market is the market for the sale of B2B Credit Scores. 103. The relevant geographic market for the sale of B2B Credit Scores is the United 104. The B2B Credit Score Market is the relevant market. 105. Fair Isaac has had and continues to have at least 90% market share in the B2B Credit Score Market. 106. Fair Isaac has had and continues to have monopoly power in the B2B Credit Score Market. 107. Fair Isaac has had and continues to have the power to control prices or exclude competition in the B2B Credit Score Market. 108. Through unlawful, interconnected, and mutually reinforcing anticompetitive and exclusionary acts and agreements, Fair Isaac has substantially foreclosed competition in the market for B2B Credit Scores in the United States in violation of Section 2 of the Sherman Act, 15 U.S.C. 109. Fair Isaac has demonstrated its ability to control prices and exclude competition by raising prices without a corresponding increase in demand and to supracompetitive levels. 110. Fair Isaac’s monopoly is not due to growth or development because of a superior product, business acumen, or historic accident. 111. Fair Isaac’s monopolization has injured and will continue to injure competition in this market. 112. Fair Isaac’s exclusionary and anticompetitive acts substantially affect interstate commerce and injure competition nationwide. 113. The anticompetitive conduct raised the prices for FICO Scores above the competitive level and otherwise injured competition without any offsetting procompetitive benefit to consumers. 114. Plaintiff and members of the Class have been injured in their business or property by reason of Defendant’s violation of Section 2 of the Sherman Act within the meaning of Section 4 of the Clayton Antitrust Act, 15 U.S.C. §15. 115. Plaintiff and members of the Class are threatened with future injury to their business and property by reason of Defendant’s continuing violation of Section 2 of the Sherman Act within the meaning of Section 16 of the Clayton Antitrust Act, 15 U.S.C. §26. CLAIM TWO: CONSPIRACY TO MONOPOLIZE 15 U.S.C. §2 116. Plaintiff incorporates by reference and re-alleges the preceding allegations as though fully set forth herein. 117. The relevant product market is the market for the sale of B2B Credit Scores. 118. The relevant geographic market for the sale of B2B Credit Scores is the United 119. The B2B Credit Score Market is the relevant market. 120. Fair Isaac has had and continues to have at least 90% market share in the B2B Credit Score Market. 121. Fair Isaac has had and continues to have monopoly power in the B2B Credit Score Market. 122. Fair Isaac has had and continues to have the power to control prices or exclude competition in the B2B Credit Score Market. 123. Through unlawful, interconnected, and mutually reinforcing anticompetitive and exclusionary acts and agreements, Fair Isaac has substantially foreclosed competition in the market for B2B Credit Score Market in the United States in violation of Section 2 of the Sherman Act, 15 U.S.C. §2. 124. Fair Isaac has demonstrated its ability to control prices and exclude competition by raising prices without a corresponding increase in demand, and to supracompetitive levels. 125. Fair Isaac entered into a combination or conspiracy with the Credit Bureaus to maintain its monopoly power in the B2B Credit Score Market. Fair Isaac created and maintained this conspiracy through a series of agreements with each of the Credit Bureaus. In these agreements, the Credit Bureaus and Fair Isaac agreed that the Credit Bureaus would not offer or sell VantageScore or any other competing Credit Score to Plaintiff and members of the Class. Fair Isaac and the Credit Bureaus further agreed that the Credit Bureaus would act as Fair Isaac’s agent in the sale of FICO Scores to Plaintiff and members of the Class. 126. These agreements foreclosed competition in a substantial portion of the B2B Credit Score Market and unlawfully maintained Fair Isaac’s monopoly, resulting in Fair Isaac extracting supracompetitive prices for FICO Scores from Plaintiff and members of the Class. 127. Fair Isaac’s monopoly is not due to growth or development because of a superior product, business acumen, or historic accident. 128. Fair Isaac’s monopolization conspiracy has injured and will continue to injure competition in this market. 129. Fair Isaac has acted with the specific intent of monopolizing the market for B2B Credit Scores in the United States. 130. Fair Isaac’s exclusionary and anticompetitive acts substantially affect interstate commerce and injure competition nationwide. 131. The conspiracy raised the prices for FICO Scores above the competitive level and otherwise injured competition without any offsetting procompetitive benefit to consumers. 132. Plaintiff and members of the Class have been injured in their business or property by reason of Defendant’s violation of Section 2 of the Sherman Act within the meaning of Section 4 of the Clayton Antitrust Act, 15 U.S.C. §15. 133. Plaintiff and members of the Class are threatened with future injury to their business and property by reason of Defendant’s continuing violation of Section 2 of the Sherman Act within the meaning of Section 16 of the Clayton Antitrust Act, 15 U.S.C. §26. CLAIM THREE: UNREASONABLE RESTRAINT OF TRADE 15 U.S.C. §1 134. Plaintiff incorporates by reference and re-alleges the preceding allegations as though fully set forth herein. 135. The relevant product market is the market for the sale of B2B Credit Scores. 136. The relevant geographic market for the sale of B2B Credit Scores is the United 137. The B2B Credit Score Market is the relevant market. 138. Fair Isaac and the Credit Bureaus have had and continue to collectively have at least 90% market share in the B2B Credit Score Market. 139. Fair Isaac has had and continues to have monopoly power in the B2B Credit Score Market. 140. Fair Isaac has had and continues to have the power to control prices or exclude competition in the B2B Credit Score Market. 141. Fair Isaac entered into agreements with TransUnion, Experian, and Equifax that contained anticompetitive terms whereby each Credit Bureau agreed not to offer or sell VantageScore as a competing product to Plaintiff and members of the Class. 142. The agreements between Fair Isaac and the Credit Bureaus had substantial anticompetitive effects. The agreements excluded VantageScore, a significant competitor, from a substantial portion of competition in the B2B Credit Score Market. 143. The agreements raised the price for FICO Scores above the competitive level and otherwise injured competition without any offsetting procompetitive benefit to consumers. 144. Fair Isaac’s exclusionary and anticompetitive acts substantially affect interstate commerce and injure competition nationwide. 145. Plaintiff and members of the Class continue to suffer damage, and will continue to do so, if Fair Isaac does not cease its anticompetitive conduct. 146. Plaintiff and members of the Class have been injured in their business or property by reason of Defendant’s violation of Section 1 of the Sherman Act, within the meaning of Section 4 of the Clayton Antitrust Act, 15 U.S.C. §15. 147. Plaintiff and members of the Class are threatened with future injury to their business and property by reason of Defendant’s continuing violation of Section 1 of the Sherman Act, within the meaning of Section 16 of the Clayton Antitrust Act, 15 U.S.C. §26. CLAIM FOUR: STATE ANTITRUST LAWS 148. Plaintiff incorporates by reference and re-alleges the preceding allegations as though fully set forth herein. 149. By reason of the foregoing, Defendant has violated, and Plaintiff and members of the Class are entitled to relief under, the antitrust laws of the States of Arizona, California, Connecticut, Hawaii, Illinois, Iowa, Kansas, Maine, Maryland, Michigan, Minnesota, Mississippi, Nebraska, Nevada, New Mexico, New York, North Carolina, North Dakota, Oregon, Rhode Island, South Dakota, Tennessee, Utah, Vermont, West Virginia, and Wisconsin, as well as the District of Columbia, as follows: i. Arizona Revised Statutes §44-1401, et seq.; ii. California Cartwright Act, California Business & Professions Code §16700, et seq. iii. Connecticut Antitrust Act, Conn. Gen. Stat. 35-24, et seq.; iv. District of Columbia Code §28-4501, et seq.; v. Hawaii Revised Statutes §480-2, et seq.; vi. Illinois Antitrust Act, Illinois Complied Statutes §740, Ill. Comp. Stat. 1011, et seq.; vii. Iowa Competition Law, Iowa Code §553.1, et seq.; viii. Kansas Statutes Annotated §50-101, et seq.; ix. Maine Revised Statutes Annotated, tit. 10, §1101, et seq.; x. Maryland Code Annotated, Commercial Law, §11-204, et seq.; xi. Michigan Compiled Laws §445.771, et seq.; xii. Minnesota Antitrust Law of 1971, Minnesota Statutes §325D.49, et seq.; xiii. Mississippi Code Annotated §75-21-1, et seq.; xiv. Nebraska Revised Statutes §59-801, et seq.; xv. Nevada Revised Statutes Annotated §598A.010, et seq.; xvi. New Mexico Statutes Annotated §57-1-1, et seq.; xvii. New York Donnelly Act, New York General Business Law §340, et seq.; xviii. North Carolina General Statutes §75-1, et seq.; xix. North Dakota Century Code §51-08.1-01, et seq.; xx. Oregon Revised Statutes §646.705, et seq.; xxi. Rhode Island General Laws §6-36-4, et seq.; xxii. South Dakota Codified Laws §37-1-3.1, et seq.; xxiii. Tennessee Code Annotated §47-25-101, et seq.; xxiv. Utah Code Annotated §76-10-3104, et seq.; xxv. Vermont Statutes Annotated, tit. 9, §2451, et seq.; xxvi. West Virginia Code §47-18-1, et seq.; and xxvii. Wisconsin Statutes §133.01, et seq. CLAIM FIVE: STATE UNFAIR TRADE PRACTICES LAWS 150. Plaintiff incorporates by reference and re-alleges the preceding allegations as though fully set forth herein. 151. By reason of the foregoing, Defendant has violated, and Plaintiff and members of the Class are entitled to relief under, the Unfair Trade Practices and Consumer Protection Laws of the States of Arkansas, California, Connecticut, Florida, Massachusetts, Missouri, Montana, New Mexico, New York, North Carolina, Rhode Island, South Carolina, and Vermont, as well as the District of Columbia, as follows: i. Arkansas Code Annotated, §4-88-101, et seq.; ii. California Business and Professions Code §17200, et seq.; iii. Connecticut Unfair Trade Practices Act, Conn Gen. Stat. §42-110a, et seq.; iv. District of Columbia Code §28-3901, et seq.; v. Florida Deceptive and Unfair Trade Practices Act, Fla. Stat. §501.201, et seq.; vi. Massachusetts Consumer Protection Act, Mass. Gen. L. Ch. 93A, et seq.; vii. Missouri Merchandising Practices Act, Mo. Rev. Stat. §407.010, et seq.; viii. Montana Code, §30-14-103, et seq., and §30-14-201, et seq.; ix. New Mexico Statutes Annotated §57-12-1, et seq.; x. New York General Business Law §349, et seq.; xi. North Carolina General Statutes §75-1.1, et seq.; xii. Rhode Island General Laws §6-13.1-1, et seq.; xiii. South Carolina Code Annotated §39-5-10, et seq.; and xiv. Vermont Statutes Annotated, tit. 9, §2451, et seq. VIII. PRAYER FOR RELIEF WHEREFORE, Plaintiff, on behalf of itself and members of the Class, respectfully prays that This Honorable Court: A. Order that this action may be maintained as a class action pursuant to Rules 23(a) & (b) of the Federal Rules of Civil Procedure, that it be named a Class Representative, that the undersigned be named Lead Class Counsel, and that reasonable notice of this action, as provided by Rule 23(c)(2), be given to members of the Class; B. Adjudge that Defendant violated the federal antitrust laws as set forth above; C. Adjudge that Defendant violated the state antitrust and unfair trade practices laws as set forth above; D. Award Plaintiff and members of the Class actual, treble, and exemplary damages; E. Award Plaintiff and members of the Class attorneys’ fees and costs of suit, including costs of consulting and testifying experts; F. Award Plaintiff and members of the Class pre- and post-judgment interest; G. Enjoin Defendant from its violations of law; and H. Grant such other, further and different relief, including structural relief, as may be just and proper. IX. DEMAND FOR JURY TRIAL Under Rule 38(b) of the Federal Rules of Civil Procedure, Plaintiff demands a Trial by Jury as to all issues so triable. Dated: April 2, 2020 SCOTT+SCOTT ATTORNEYS AT LAW LLP s/ Joseph P. Guglielmo Joseph P. Guglielmo (N.D. Ill. No. 2759819) Peter A. Barile III (N.D. Ill. No. 4364295) Justin W. Batten (pro hac vice forthcoming) The Helmsley Building 230 Park Avenue, 17th Floor New York, NY 10169 Telephone: 212-223-6444 Facsimile: 212-223-6334 jgugliemo@scott-scott.com pbarile@scott-scott.com jbatten@scott-scott.com Christopher M. Burke (pro hac vice forthcoming) SCOTT+SCOTT ATTORNEYS AT LAW LLP 600 W. Broadway, Suite 3300 San Diego, CA 92101 Telephone: 619-233-4565 Facsimile: 619-233-0508 cburke@scott-scott.com George A. Zelcs (Ill. Bar No. 3123738) Randall P. Ewing, Jr. (Ill. Bar No. 6294238) Ryan Z. Cortazar (Ill. Bar No. 6323766) KOREIN TILLERY, LLC 205 North Michigan Avenue, Suite 1950 Chicago, IL 60601 Telephone: 312-641-9750 Facsimile: 312-641-9751 gzelcs@koreintillery.com rewing@koreintillery.com rcortazar@koreintillery.com Steven M. Berezney (N.D. Ill. Bar No. 56091) Michael E. Klenov (Ill. Bar No. 6300228) KOREIN TILLERY, LLC 505 North 7th Street, Suite 3600 St. Louis, MO 63101 Telephone: 314-241-4844 Facsimile: 314-241-3525 sberezney@koreintillery.com mklenov@koreintillery.com Counsel for Plaintiff Sky Federal Credit Union

antitrust

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Case No. 1:13-cv-7840 JURY TRIAL DEMANDED IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION ABSOLUTE ARCHITECTURE P.C., an Illinois corporation, individually and on behalf of all others similarly situated, Plaintiff, v. GRANITE MAX, INC., an Illinois corporation, Defendant. ) ) ) ) ) ) ) ) ) ) ) ) CLASS ACTION COMPLAINT Plaintiff Absolute Architecture P.C. (“Plaintiff”) brings this class action Complaint against Defendant Granite Max, Inc. (“Defendant”), on behalf of itself and all others similarly situated, and complains and alleges upon personal knowledge as to itself and its own acts and experiences, and, as to all other matters, upon information and belief, including investigation conducted by its attorneys. I. NATURE OF THE ACTION 1. Defendant is a corporation that offers custom fabrication and installation of granite countertops for use in residential and commercial buildings. In an effort to market its products and services, Defendant sent unsolicited junk faxes in bulk—“fax blasts”—to unwilling recipients with deficient opt-out notices. Fax advertising shifts the cost of the marketing promotion from the marketer—the sender of the fax—to the unwilling recipient, and is expressly prohibited by the Telephone Consumer Protection Act, 47 U.S.C. §227, et seq. (“TCPA”). 2. Neither Plaintiff nor the other Class members ever consented, authorized, desired or permitted Defendant to send them faxes. 3. In order to redress these injuries, Plaintiff seeks an injunction requiring Defendant to cease all unsolicited faxing and deficient opt-out notice activities, and an award of statutory damages to the Class members under the TCPA, together with costs and attorneys’ fees. II. JURISDICTION AND VENUE 4. This Court has original jurisdiction over the claims in this action pursuant to 28 U.S.C. § 1331, because they arise under the laws of the United States. 5. This Court has personal jurisdiction over Defendant under 735 ILCS 5/2-209, because Defendant was a corporation organized under the laws of the State of Illinois, because a substantial portion of the wrongdoing alleged in this Complaint took place in and/or was directed toward this State, and because Defendant transacts business within this State. 6. Venue is proper in this District pursuant to 28 U.S.C. § 1391(b) because a substantial part of the events giving rise to the claim occurred in this District. III. PARTIES Plaintiff 7. Plaintiff is a corporation organized in and existing under the laws of the State of Illinois with its principal place of business in Winnetka, Illinois. Defendant 8. Defendant was a corporation organized in and existing under the laws of the State of Illinois with its principal place of business in Elk Grove, Illinois. Defendant was involuntarily dissolved on May 10, 2013. IV. FACTUAL BACKGROUND 9. On or about February 5, 2013, Plaintiff received an unsolicited fax advertisement attached as Exhibit A. 10. On or about February 5, 2013, Plaintiff received another unsolicited fax advertisement attached as Exhibit B. 11. In or around May, 2013, Plaintiff received another unsolicited fax advertisement attached as Exhibit C. Discovery may reveal the transmission of additional faxes. 12. None of the faxes satisfy all of the opt-out notice requirements under § 227(b)(2)(D). For example, the fax attached as Exhibit C has the following opt-out notice: OUR PURPOSE IS NOT TO ANNOY BUT TO INFORM, IF YOU WISH TO BE REMOVED FROM OUR FAX LIST, PLEASE EMAIL US AT URSULA@GRANITEMAX.COM OR FAX WITH COMPANY NAME & FAX # THANK YOU However, the notice fails to state that failure to comply with an opt-out request within the shortest reasonable time is unlawful, as required by § 227(b)(2)(D)(ii). 13. Defendant sent the faxes and/or is responsible, as a matter of law, for the actions of the individuals who sent the faxes. 14. Defendant’s products and services were advertised in the faxes, and Defendant derived an economic benefit from the transmission of the faxes. 15. Plaintiff had no prior relationship with Defendant and did not consent to the receipt of the above-referenced (or any) fax advertisements from Defendant. 16. On information and belief, the faxes attached as Exhibits A-C were transmitted as part of mass broadcasting, or “blasts,” of faxes. 17. There is no reasonable means by which Plaintiff and Class members can avoid receiving unsolicited and unlawful faxes. V. CLASS ALLEGATIONS 18. Plaintiff brings Count I, as set forth below, on behalf of itself and as a class action pursuant to the provisions of Rules 23(a), (b)(2), and (b)(3) of the Federal Rules of Civil Procedure on behalf of a class defined as: Unsolicited Fax Class (“Class One”) All individuals or entities in the United States who received one or more unsolicited facsimile advertisements from or on behalf of Defendant (“Class One”). Excluded from Class One are Defendant and its subsidiaries and affiliates; all persons who make a timely election to be excluded from Class One; governmental entities; and the judge to whom this case is assigned and any immediate family members thereof. 19. Plaintiff brings Count II, as set forth below, on behalf of itself and as a class action pursuant to the provisions of Rules 23(a), (b)(2), and (b)(3) of the Federal Rules of Civil Procedure on behalf of a class defined as: Opt-out Notice Class (“Class Two”) All individuals or entities in the United States who received one or more facsimile advertisements with opt-out notices from or on behalf of Defendant that do not comply with 47 U.S.C. § 227(b)(2)(D) (“Class Two”). Excluded from Class Two are Defendant and its subsidiaries and affiliates; all persons who make a timely election to be excluded from Class Two; governmental entities; and the judge to whom this case is assigned and any immediate family members thereof. 20. “Class members” or “the Class” refer to both Class One and Class Two, unless otherwise stated. 21. Certification of Plaintiff’s claims for classwide treatment is appropriate because Plaintiff can prove the elements of its claims on a classwide basis using the same evidence as would be used to prove those elements in individual actions alleging the same claims. 22. Numerosity – Federal Rule of Civil Procedure 23(a)(1). The members of the Class are so numerous that individual joinder of all Class members is impracticable. On information and belief, there are thousands of consumers and recipients who have been damaged by Defendant’s wrongful conduct as alleged herein. The precise number of Class members and their addresses is presently unknown to Plaintiff, but may be ascertained from Defendant’s books and records. Class members may be notified of the pendency of this action by recognized, Court- approved notice dissemination methods, which may include U.S. mail, electronic mail, Internet postings, and/or published notice. 23. Commonality and Predominance – Federal Rule of Civil Procedure 23(a)(2) and 23(b)(3). This action involves common questions of law and fact, which predominate over any questions affecting individual Class members, including, without limitation: a. Whether Defendant engaged in a pattern of sending unsolicited fax advertisements as alleged herein; b. The manner in which Defendant compiled or obtained its list of fax numbers; c. Whether Defendant violated the TCPA; d. Whether Plaintiff and the Class are entitled to actual, statutory, or other forms of damages, and other monetary relief and, in what amount(s); e. Whether Plaintiff and the Class are entitled to treble damages based on the willfulness of Defendant’s conduct; and f. Whether Plaintiff and the Class are entitled to equitable relief, including but not limited to injunctive relief and restitution. 24. Typicality – Federal Rule of Civil Procedure 23(a)(3). Plaintiff’s claims are typical of the other Class members’ claims because, among other things, all Class members were comparably injured through the uniform prohibited conduct described above. 25. Adequacy of Representation – Federal Rule of Civil Procedure 23(a)(4). Plaintiff is an adequate representative of the Class because its interests do not conflict with the interests of the other Class members it seeks to represent; it has retained counsel competent and experienced in complex commercial and class action litigation; and Plaintiff intends to prosecute this action vigorously. The interests of the Class members will be fairly and adequately protected by the Plaintiff and its counsel. 26. Declaratory and Injunctive Relief – Federal Rule of Civil Procedure 23(b)(2). Defendant has acted or refused to act on grounds generally applicable to Plaintiff and the other Class members, thereby making appropriate final injunctive relief and declaratory relief, as described below, with respect to Class as a whole. 27. Superiority – Federal Rule of Civil Procedure 23(b)(3). A class action is superior to any other available means for the fair and efficient adjudication of this controversy, and no unusual difficulties are likely to be encountered in the management of this class action. The damages or other financial detriment suffered by Plaintiff and the other Class members are relatively small compared to the burden and expense that would be required to individually litigate their claims against Defendant, so it would be impracticable for Class members to individually seek redress for Defendant’s wrongful conduct. Even if Class members could afford individual litigation, the court system could not. Individualized litigation creates a potential for inconsistent or contradictory judgments, and increases the delay and expense to all parties and the court system. By contrast, the class action device presents far fewer management difficulties, and provides the benefits of single adjudication, economy of scale, and comprehensive supervision by a single court. V. CLAIMS ALLEGED COUNT I Violation of the TCPA, 47 U.S.C. § 227 (On behalf of Class One) 28. Plaintiff incorporates by reference the foregoing allegations as if fully set forth 29. Defendant and/or its agents used a telephone facsimile machine, computer or other device to send unsolicited advertisements to a telephone facsimile machine, in violation of the TCPA, 47 U.S.C. §227(b)(l)(C). 30. On information and belief, these unsolicited advertisements were transmitted en masse without the prior express consent of Plaintiff and Class One. 31. As a result of Defendant’s unlawful conduct, Plaintiff and Class One suffered actual damages and, under Section 227(b)(3), are entitled to recover for actual monetary loss from such a violation, or to receive at least $500 in damages for each such violation, whichever is greater, or both such actions. COUNT II Insufficient Opt-out Notice in Violation of the TCPA, 47 U.S.C. § 227(b)(2)(D) (On behalf of Class Two) 32. Plaintiff incorporates by reference the foregoing allegations as if fully set forth 33. Defendant’s faxes fail to satisfy all of the opt-out notice requirements under § 227(b)(2)(D). Namely, the notice in each fax does not: a. Appear clearly and conspicuously on the first page of the fax as required by § 227 (b)(2)(D)(i); b. State that the sender’s failure to comply with an opt-out request within the shortest time reasonable is unlawful, as required by § 227(b)(2)(D)(ii); c. Set forth the elements of a valid opt-out request, as required by § 227(b)(2)(D)(iii); d. Include a domestic telephone number and fax number within the notice to use for an opt-out request, pursuant to § 227(b)(2)(D)(iv)(I); e. Permit Plaintiff and the other Class members to submit a request at any time to a telephone number and fax number, under § 227(b)(2)(D)(v); and f. Comply with the technical requirements of § 227(d), as required by § 227(b)(2)(D)(vi). 34. As a result of Defendant’s unlawful conduct, Plaintiff and Class Two suffered actual damages and, under Section 227(b)(3), are entitled to recover for actual monetary loss from such violations, or to receive at least $500 in damages for each such violation, whichever is greater, or both such actions. VI. JURY DEMAND Pursuant to Federal Rule of Civil Procedure 38(b), Plaintiff demands a trial by jury of all claims in this Complaint so triable. VII. REQUEST FOR RELIEF WHEREFORE, Plaintiff Absolute Architecture P.C., individually and on behalf of the Class, requests that the Court enter an Order as follows: A. Certifying the Class as defined above, appointing Plaintiff Absolute Architecture P.C. as the representative of the Class, and appointing its counsel as Class Counsel; B. Awarding actual and statutory damages; C. Enjoining Defendant from sending unsolicited facsimile advertisements with deficient opt-out notices; D. Awarding of reasonable attorneys’ fees and costs; and E. Awarding such other and further relief that the Court deems reasonable and just. Dated: November 1, 2013 Respectfully submitted, ABSOLUTE ARCHITECTURE P.C., individually and on behalf of all others similarly situated By:________________________________ One of the Attorneys for Plaintiff And the Proposed Putative Class Joseph J. Siprut jsiprut@siprut.com Gregg M. Barbakoff gbarbakoff@siprut.com SIPRUT PC 17 North State Street Suite 1600 Chicago, Illinois 60602 312.236.0000 Fax: 312.948.9196 4814-8248-9875, v. 2

privacy

sBIRF4cBD5gMZwcz-2DR

Ben A. Kaplan CHULSKY KAPLAN LLC 280 Prospect Ave. 6G Hackensack, NJ 07601 Phone: (877) 827-3395 ex 102 Cell Phone: (201) 803-6611 Fax: (877) 827-3394 ben@chulskykaplanlaw.com Attorneys for Plaintiff(s) UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY Civil Case Number: _____________ CIVIL ACTION VIVIAN PENHA, on behalf of herself and all others similarly situated, Plaintiff(s), CLASS ACTION COMPLAINT AND -against- DEMAND FOR JURY TRIAL CREDIT COLLECTION SERVICES, INC., Defendant(s). LOCAL CIVIL RULE 10.1 STATEMENT 1. The mailing addresses of the parties to this action are: VIVIAN PENHA 168 W. Passaic Street Maywood, New Jersey 07607 CREDIT COLLECTION SERVICES, INC. 725 Canton Street Norwood, Massachusetts 02062 PRELIMINARY STATEMENT 2. Plaintiff on behalf of herself and all others similarly situated (“Plaintiff”), by and through her attorneys, alleges that the Defendant, CREDIT COLLECTION SERVICES, INC. (“CCSI”) and JOHN DOES 1-25 their employees, agents and successors (collectively Page 1 of 11 “Defendants”) violated 15 U.S.C. § 1692 et seq., the Fair Debt Collection Practices Act (hereinafter “FDCPA”), which prohibits debt collectors from engaging in abusive, deceptive and unfair practices. JURISDICTION AND VENUE 3. This Court has jurisdiction over this action pursuant to 28 U.S.C. § 1331. This is an action for violations of 15 U.S.C. § 1692 et seq. 4. Venue is proper in this district under 28 U.S.C. §1391(b) and 15 U.S.C. § 1692k(d) because the acts of the Defendant that give rise to this action, occurred in substantial part, in this district and at least one of the Plaintiffs resides in this jurisdiction. DEFINITIONS 5. As used in this complaint, the terms “creditor,” “consumer,” “debt” and “debt collector” are defined at 15 U.S.C. § 1692a. PARTIES 6. Plaintiff is a natural person, a resident of Bergen County, New Jersey and is a “Consumer” as defined by 15 U.S.C. § 1692a(3). 7. CCSI maintains a location at 725 Canton Street, Norwood, Massachusetts 02062. 8. CCSI uses the instrumentalities of interstate commerce or the mails to engage in the principal business of collecting debt and/or to regularly engage in the collection or attempt to collect debt asserted to be due or owed to another. 9. CCSI is a “Debt Collector” as that term is defined by 15 U.S.C. § 1692(a)(6). 10. John Does 1-25, are currently unknown Defendants whose identities will be obtained in discovery and at that time will be made parties to this action pursuant to the Federal Rules of Civil Procedure (hereinafter “FRCP”); Rule 15, Rule 20 and Rule 21. Plaintiff’s claims Page 2 of 11 against the currently unknown Defendants arise out of the same transaction, occurrence or series of transactions arising from known Defendant’s actions and are due to common questions of law and fact whose joinder will promote litigation and judicial efficiency. CLASS ACTION ALLEGATIONS 11. Plaintiff brings this action as a state-wide class action, pursuant to Rule 23 of the FRCP, on behalf of herself and all New Jersey consumers and their successors in interest (the “Class”), who were harmed by the Defendant’s conduct in violation of the FDCPA, as described in this Complaint. 12. This Action is properly maintained as a class action. The Class is initially defined All New Jersey consumers for whom Defendant communicated to any person credit information, which is known to be false and/or for whom Defendant failed to communicate to any person that a disputed debt was disputed as set forth herein. The class definition may be subsequently modified or refined. The Class period begins one year prior to the filing of this Action. 13. The Class satisfies all the requirements of Rule 23 of the FRCP for maintaining a class action: a. Numerosity: The Class is so numerous that joinder of all members is impracticable because there are hundreds and/or thousands of persons who were harmed by the Defendant’s conduct in violation of the FDCPA. Plaintiff is complaining about a standard conduct that occurred to at least fifty (50) persons. Page 3 of 11 b. Commonality: There are questions of law and fact common to the class members which predominate over questions affecting any individual Class member. These common questions of law and fact include, without limitation: i. Whether the Defendants violated various provisions of the FDCPA; ii. Whether Plaintiff and the Class have been injured by the Defendants' conduct; iii. Whether Plaintiff and the Class have sustained damages and are entitled to restitution as a result of Defendants' wrongdoing and if so, what is the proper measure and appropriate statutory formula to be applied in determining such damages and restitution; and iv. Whether Plaintiff and the Class are entitled to declaratory relief. c. Typicality: Plaintiff’s claims are typical of the Class, which all arise from the same operative facts and are based on the same legal theories. d. Adequacy of Representation: Plaintiff has no interest adverse or antagonistic to the interest of the other members of the Class. Plaintiff will fairly and adequately protect the interest of the Class and has retained experienced and competent attorneys to represent the Class. 14. A Class Action is superior to other methods for the fair and efficient adjudication of the claims herein asserted. Plaintiff anticipates no unusual difficulties in the management of this class action. Page 4 of 11 15. A Class Action will permit large numbers of similarly situated persons to prosecute their common claims in a single forum simultaneously and without the duplication of effort and expense that numerous individual actions would engender. Class treatment will also permit the adjudication of relatively small claims by many Class members who could not otherwise afford to seek legal redress for the wrongs complained of herein. Absent a Class Action, class members will continue to suffer losses of statutory protected rights as well as damages. 16. Defendant(s) have acted on grounds generally applicable to the entire Class, thereby making appropriate final relief with respect to the Class as a whole. STATEMENT OF FACTS 17. Plaintiff is at all times to this lawsuit, a "consumer" as that term is defined by 15 U.S.C. § 1692a(3). 18. Sometime prior to October 29, 2020, Plaintiff allegedly incurred one or more financial obligations ("OBLIGATION or OBLIGATIONS") for which Defendant reported information to one or more national credit reporting agencies. 19. The OBLIGATIONS arose out of a transaction, in which money, property, insurance or services, which are the subject of the transaction, are primarily for personal, family or household purposes. 20. Plaintiff incurred the OBLIGATIONS by obtaining goods and services which were primarily for personal, family and household purposes. 21. Plaintiff did not incur the OBLIGATIONS for business purposes. 22. The OBLIGATIONS did not arise out of a transaction that was for business use. 23. Each OBLIGATION is a "debt" as defined by 15 U.S.C. § 1692a(5). Page 5 of 11 24. At some time prior to October 29, 2020, the OBLIGATIONS were placed with Defendant for the purpose of collection. 25. At the time the OBLIGATIONS were placed with Defendant for the purpose of collection, the OBLIGATIONS were past due. 26. At the time the OBLIGATIONS were placed with Defendant for the purpose of collection, the OBLIGATIONS were in default. 27. Plaintiff caused to be delivered to Defendant 2 letters dated October 29, 2020, which were addressed to Defendant. Exhibit A, which is fully incorporated herein by reference. 28. The October 29, 2020 letters were sent to Defendant in connection with the collection of the OBLIGATIONS. 29. The October 29, 2020 letters which were sent to the Defendant stated in part: RE: Vivian Penha Creditor: QUEST DIAGNOSTICS INCORPORAT Alleged Amount Due: $483.00 Please be advised that I dispute the above debt. RE: Vivian Penha Creditor: QUEST DIAGNOSTICS INCORPORAT Alleged Amount Due: $154.00 Please be advised that I dispute the above debt. 30. After the date of the dispute, Defendant knew or should have known that the credit information concerning the OBLIGATIONS would be communicated to creditors and other persons. 31. The credit information communicated to these creditors and other persons did not indicate that the OBLIGATIONS were disputed. Page 6 of 11 32. The credit information communicated to these creditors and other persons concerning the OBLIGATIONS was false. 33. Defendant failed to communicate to any person that the OBLIGATIONS were disputed. 34. Since October 29, 2020, Defendant has communicated to at least one person, credit information which is known or should be known to be false. 35. CCSI knew or should have known that its actions violated the FDCPA. 36. Defendants could have taken the steps necessary to bring their actions within compliance with the FDCPA, but neglected to do so and failed to adequately review its actions to ensure compliance with the law. POLICIES AND PRACTICES COMPLAINED OF 37. Defendants' failure to report a disputed debt as such violates the FDCPA, by inter (a) Using false, deceptive or misleading representations or means in connection with the collection of a debt; (b) By communicating credit information which is known to be false or should be known to be false; and (c) Using a false representation or deceptive means to collect or attempt to collect a debt. 38. On information and belief, Defendant engaged in the practices described herein, for at least 50 natural persons within New Jersey within one year of this Complaint. Page 7 of 11 COUNT I FAIR DEBT COLLECTION PRACTICES ACT, 15 U.S.C. § 1692 et seq. VIOLATIONS 39. Plaintiff, on behalf of herself and others similarly situated, repeats and realleges all prior allegations as if set forth at length herein. 40. Defendant violated 15 U.S.C. § 1692e of the FDCPA by using any false, deceptive or misleading representation or means in connection with its attempts to collect debts from Plaintiff and others similarly situated. 41. Defendant violated 15 U.S.C. § 1692e of the FDCPA in connection with Plaintiff and others similarly situated. 42. By failing to communicate that the OBLIGATION was disputed to one or more of the credit reporting bureaus, Defendant engaged in a false, deceptive or misleading representation or means in connection with the collection of the debt. 43. Defendant violated 15 U.S.C. § 1692e(2)(A) of the FDCPA by falsely representing the character or legal status of the debt. 44. By failing to communicate that a disputed debt was disputed, Defendant made a false representation of the character or legal status of the debt. 45. By communicating credit information which is known to be false or should be known to be false, Defendant made a false representation of the character or legal status of the 46. Section 1692e(8) of the FDCPA prohibits a debt collector from communicating to any person credit information which is known to be false or should be known to be false, including the failure to communicate that a disputed debt is disputed. Page 8 of 11 47. Defendant violated 15 U.S.C. § 1692e(8) of the FDCPA by communicating to any person credit information which is known to be false or should be known to be false. 48. Defendant violated 15 U.S.C. § 1692e(8) of the FDCPA by failing to communicate to any person that the OBLIGATION was disputed. 49. Defendant violated 15 U.S.C. § 1692e(8) of the FDCPA by failing to communicate to one or more of the credit reporting bureaus that the OBLIGATION was disputed. 50. Section 1692e(10) prohibits the use of any false representation or deceptive means to collect or attempt to collect any debt. 51. By failing to communicate that the OBLIGATION was disputed as described herein, Defendant engaged in a false representation or deceptive means to collect or attempt to collect the debt. 52. Congress enacted the FDCPA in part to eliminate abusive debt collection practices by debt collectors. 53. Plaintiff and others similarly situated have a right to free from abusive debt collection practices by debt collectors. 54. Plaintiff and others similarly situated have a right to have the Defendant abide by its obligations under the FDCPA and those specifically found at 15 U.S.C. § 1692e(8). 55. Plaintiff and others similarly situated have suffered harm as a direct result of the abusive, deceptive and unfair collection practices described herein. 56. Plaintiff has suffered damages and other harm as a direct result of the Defendants’ actions, conduct, omissions and violations of the FDCPA described herein. 57. Defendant’s failure to act as described herein caused harm to the credit of Plaintiff and others similarly situated. Page 9 of 11 WHEREFORE, Plaintiff demands judgment against Defendants as follows: (a) Declaring that this action is properly maintainable as a Class Action and certifying Plaintiff as Class representative and her attorneys as Class Counsel; (b) Awarding Plaintiff and the Class statutory damages; (c) Awarding Plaintiff and the Class actual damages; (d) Awarding pre-judgment interest; (e) Awarding post-judgment interest. (f) Awarding Plaintiff costs of this Action, including reasonable attorneys' fees and expenses; and (g) Awarding Plaintiff and the Class such other and further relief as the Court may deem just and proper. DEMAND FOR DOCUMENT RETENTION AND PRESERVATION Plaintiff and others similarly situated demand that each Defendant, and its agents, or anyone acting on its behalf, preserve and be immediately restrained from altering, deleting, or destroying any documents or records that are described herein and/or that are relevant to this Complaint. s/ Ben A. Kaplan Ben A. Kaplan, Esq. (NJ 0337712008) Page 10 of 11 DEMAND FOR TRIAL BY JURY Pursuant to Rule 38 of the Federal Rules of Civil Procedure, Plaintiff hereby requests a trial by jury on all issues so triable. Dated: February 24, 2021 Respectfully submitted, By: s/ Ben A. Kaplan Ben A. Kaplan, Esq. (NJ 0337712008) CHULSKY KAPLAN, LLC 280 Prospect Avenue, 6G Hackensack, New Jersey 07601 Phone (877) 827-3395 ex 102 Cell Phone: (201) 803-6611 Fax: (877) 827-3394 ben@chulskykaplanlaw.com Attorneys for Plaintiff CERTIFICATION PURSUANT TO LOCAL RULE 11.2 I, hereby certify that the matter in controversy is not the subject of any other court, arbitration or administrative proceeding. Dated: February 24, 2021 s/ Ben A. Kaplan Ben A. Kaplan, Esq. (NJ 0337712008) CHULSKY KAPLAN, LLC 280 Prospect Avenue, 6G Hackensack, New Jersey 07601 Phone (877) 827-3395 ex 102 Cell Phone: (201) 803-6611 Fax: (877) 827-3394 ben@chulskykaplanlaw.com Attorneys for Plaintiff Page 11 of 11

consumer fraud

SqNHCYcBD5gMZwczBla8

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION DARRICK JONES and TERRENCE BRIDGEFORTH, Individually and on behalf of all others similarly situated, Case No: Plaintiffs, v. FLEETCOR TECHNOLOGIES OPERATING COMPANY, LLC, Defendant. ______________________________________/ COLLECTIVE ACTION COMPLAINT FOR VIOLATIONS OF THE FAIR LABOR STANDARDS ACT Plaintiffs, DARRICK JONES and TERRENCE BRIDGEFORTH, individually and on behalf of all others similarly situated bring this collective action for violations of the Fair Labor Standards Act (“FLSA”) and state as follows: JURISDICTION AND VENUE 1. This Court has original jurisdiction to hear this Complaint and to adjudicate the claims stated herein pursuant to 28 U.S.C. Section 1331 because this action asserts claims arising under federal law, the FLSA, 29 U.S.C. Section 201, et seq. 2. Venue is proper in this District, pursuant to 28 U.S.C. Section 1391, because the Defendant resides in this District with principal offices located in this district, and because a substantial part of the events or omissions giving rise to the claims occurred in this District. PARTIES 3. Plaintiff, DARRICK JONES, is a resident of the State of Georgia and over the age Page 1 of 12 4. Plaintiff, DARRICK JONES, began his employment with Defendant in February of 2011 and continued said employment until March of 2015. 5. Plaintiff, TERRENCE BRIDGEFORTH, is a resident of the State of Georgia and over the age of 18. 6. Plaintiff, TERRENCE BRIDGEFORTH, was employed by Defendant from May 5, 2014 until December 20, 2015. 7. Defendant is a publicly traded foreign corporation with its principal place of business located at 5445 Triangle Parkway, Suite 400, Norcross, Georgia, 30092. 8. Defendant is subject to the jurisdiction of the FLSA, engaged in interstate commerce and earnings exceeding $500,000 in the prior 3 years. 9. Plaintiffs and those similarly situated are current and former employees of Defendant within the meaning of the FLSA, and Defendant employed them within three (3) years of the date this Complaint was filed. 10. Neither Plaintiff opted into the prior collective actions and incurred unpaid overtime hours, along with many other sales representatives without ever being paid a premium for those hours. FACTUAL ALLEGATIONS 11. Defendant is a wholly owned subsidiary of a publicly traded company, Fleetcor Technologies Inc. (symbol FLT) that has annual revenues that exceed $500,000.00 per annum. 12. Defendant employs inside sales representatives, upwards of one thousand or more, working in multiple offices selling gas cards to businesses. 13. Defendant provides fuel cards and workforce payment products to businesses, commercial fleets, oil companies, petroleum marketers and government entities throughout the Page 2 of 12 United States. 14. At all times relevant to this Complaint, Plaintiffs and those similarly situated, worked for Defendant as inside sales representatives from within Defendant’s office in Norcross Georgia. 15. Plaintiffs and those similarly situated worked for a base salary in addition to commissions based on their sales numbers. 16. Plaintiff, DARRICK JONES, was paid $32,000.00 per year hour plus commissions. 17. Plaintiff, TERRENCE BRIDGEFORTH, was paid $35,000.00 per year plus commissions. 18. Plaintiffs and those similarly situated worked over forty (40) hours routinely and with Defendant’s knowledge and behest throughout their employment with Defendant. 19. During the hiring process, Defendant, through its managers, represented to Plaintiffs and those similarly situated that the job was a forty (40) hour per week position. 20. Plaintiffs when hired believed the salary was being paid for only a 40 hour work 21. Plaintiffs and the class of similarly situated employees those regularly ad routinely worked over forty (40) hours each week with Defendant’s knowledge and behest throughout their employment with Defendant. 22. Shortly after their employment began, Plaintiffs superiors began to pressure, urge and encourage them and all other inside sales representatives to work beyond the scheduled 40 hours, including coming in early, staying late and working through lunches in order to meet goals and quotas and maximize sales. Page 3 of 12 23. Defendant, through its managers, encouraged and pressured Plaintiffs and those similarly situated to work as many hours as necessary to meet sales production numbers and any employees. 24. Plaintiffs were also made to believe through representations by Defendant that they were not entitled under the law to be paid for the overtime hours because they were salaried employees, as well as under the contention that any hours worked over 40 simply are not their responsibility under the law. 25. Initially, there was no time tracking methods used by the Defendant to track time worked by Plaintiffs and those similarly situated in the office. 26. Later, Defendant introduced a paper-based time tracking system. Plaintiffs and all other sales representatives were required to fill in blank spaces on timesheets provided by the Defendant. 27. However, Defendant’s managers instructed Plaintiffs and all other similarly situated sales representatives not to put the true number of hours they worked on the paper timesheets. Instead, Plaintiffs and those similarly situated were told by Defendant’s managers to place eight (8) hours worked per day, regardless of the number of hours worked; thus creating a de facto policy of working off the clock. 28. Defendant at one time also attempted to use some electronic system for recording hours, but that system failed. 29. During one short period of time, Defendant did instruct employees against working overtime and even represented that they would pay overtime wages, but very quickly is was “business as usual”, the majority of sales reps working overtime hours without being paid and continually warned about hitting numbers and goals no matter how many hours it took. Page 4 of 12 30. Plaintiff Bridgeforth at one time reported the overtime hours on time sheets, but was never paid for the hours. Defendant gave him the “run around”, continuous excuses that they were “looking into it”, and would get back to him. 31. Eventually Bridgeforth, as well as others, simply were encouraged to drop the issue of complaints of not being paid overtime wages in order to keep their jobs. 32. Defendants made it clear to Plaintiffs and all other sales representatives that production, sales and hitting matrix goals of phone calls were the prime objective and that they were to work as many hours as necessary to meet these goals and numbers or they would be terminated as employees. 33. Even after the Complaint and Collective Action of Miller v. Fleetcor was made well known to the Defendant and numerous employees, Defendant continued up to the present to permit, encourage and pressure inside sales representatives to work over 40 hours without any premium paid for the wages. 34. During the entire time Plaintiffs and those similarly situated worked for Defendant, Defendant knew that the inside sales representatives were working overtime and also working off the clock. 35. Plaintiffs, like all other inside sales representatives were not entirely concerned over recording or documenting their hours since Defendant made it clear that they would not and do not pay overtime wages. 36. Defendant’s managers readily observed Plaintiffs and those similarly situated working overtime within the offices of Defendant. 37. Plaintiffs and all similarly situated inside sales representatives, accessed electronic and computer systems, telephone, and e-mails, which would, if produced, help reflect the true Page 5 of 12 hours that they worked. 38. However, Defendants did not accurately record the hours of these non-exempt employees. 39. At all times material to this Complaint, Defendant failed to compensate Plaintiffs and all similarly situated inside sales representatives for overtime hours worked. 40. Defendant has litigated, or is currently litigating, collective actions with substantially similar claims in the United States District Court for the Northern District of Georgia: Miller v. FleetCor Technologies Operating Company, case number 1:13-CV-2403; which as of this writing may be resolved as from the latest filing on the Court Docket; and Mintchev et al v. Fleetcor Technologies Operating Company, case number 1:15-cv-03586, recently resolved. 41. Likewise, Defendant faced collective actions from other inside sales representatives in similar FLSA overtime wage claims such as in the case of Brown and Gillard, et al. v. Fleetcor Technologies Operating Company, Case Number 8:14-cv-02606. 42. Defendants well understand that the inside sales representatives they employ do not meet or satisfy any exemption under the FLSA. 43. It is unclear whether the Defendant here for the Plaintiffs misclassified them as Exempt employees, a clearly unlawful and erroneous position and action, or whether they simply just willfully refused to pay overtime wages for non-exempt employees and did not throughout the period of the 3 years preceding the filing of this Complaint properly and accurately record and track the hours inside sales representatives worked in violation of the FSLA. 44. The Miller Court has already heard and denied a motion for decertification. 45. Plaintiffs are not part of the collective classes that were certified in the above- Page 6 of 12 referenced cases. 46. The unlawful pay practices of Defendant have continued throughout the period of time these other prior lawsuits are and were pending up through the present, as even employees up through the filing of the complaint here were working overtime hours, with the knowledge of Defendant without being paid a premium for those hours. 47. In other words, Defendant has never changed its pay practices to bring it within compliance of the FLSA. 48. Plaintiffs did not negotiate or ever agree that their salaries were intended to pay them for all hours, and had they known that they were non-exempt employees under the FLSA when hired and entitled to a premium for overtime hours, they never would have agreed to the compensation plan provide and would have complained and objected to not being paid overtime wages for all hours worked over 40 in a work week. COLLECTIVE ACTION ALLEGATIONS 49. Plaintiffs submit that there are others, similarly situated to themselves, who were denied overtime wages and who were not part of the previously filed collective action cases, such as Miller v. Fleetcor. 50. Upon information and belief, the class size during the relevant class period is upwards of 900 employees, just in the Georgia office. 51. Upon information and belief, 40% or less of the putative class has opted in and claimed their wages in the Miller case, and many other employees hired since the notice period ended also were subjected to the same unlawful pay practices such that the putative class at issue here remains still estimated at 550 who were not part of any prior collective action and whose rights under the FLSA are at issue and impacted by this case. Page 7 of 12 52. Plaintiffs, and all other similarly situated inside sales representatives handle either inbound or outbound calls to sell gas or fuel cards to businesses. 53. Inside sales representatives do not supervise 2 or more full time employees and thus cannot meet the Executive Exemption. 54. Inside sales representatives primary job duties do not involve the exercise of independent discretion and judgment in matters of significance, they are in the production aspect of Defendant’s’ business, selling its products and following scripts. Thus they cannot meet the Administrative Exemption. 55. Defendants know now, and have known for the past 3 years that inside sales representatives do not meet or satisfy any exemption under the FLSA and are entitled to overtime wages or a premium for all hours worked. 56. Plaintiffs are micro managed and highly scrutinized on a daily and weekly basis with very little room if at all in deviating from strict regulated manners in which to perform their job duties and responsibilities. 57. Inside sales representatives do not have decision making authority. 58. Plaintiffs and all inside sales representatives work in a very high pressured, boiler room type environment. 59. Plaintiffs bring this suit on behalf of themselves and all others similarly situated and propose the following collective description: All persons who perform(ed) work for Defendant as inside sales representatives at any of its offices in the United States, under any title, such as Account Manager, Territory Manager Account Executive, Consultant, at any time within three (3) years of the filing Page 8 of 12 of this Complaint or who are currently employed by Defendant and who have not previously opted into any other collective cases against FleetCor Technologies Operating Company, LLC, or if they did, those persons who continued to work overtime hours after those cases resolved without being paid a premium for all overtime hours worked. COUNT I VIOLATION OF THE FAIR LABOR STANDARDS ACT 60. Plaintiffs re-allege and incorporate by reference all above paragraphs as if fully set forth herein. 61. The FLSA requires employers to pay employees wages at a rate no less than one- and-a-half times their regular hourly rate of pay for all hours worked in excess of forty (40) hours in individual work weeks. 19 U.S.C. § 207. 62. Defendant is an “employer” of Plaintiffs and those similarly situated within the meaning of the FLSA. 63. Defendant is an “enterprise” as defined by the FLSA and engaged in interstate commerce. 64. Plaintiffs and those similarly situated worked more than forty (40) hours in the workweeks going back three (3) years from the filing of this Complaint and did not receive overtime compensation for all of the overtime hours worked. 65. Plaintiffs and those similarly situated are not exempt employees under the FLSA or other Federal rules and regulations. 66. Defendant has willfully violated the FLSA and is liable for wages for a three (3) year period of time preceding the filing of this complaint. Defendant has known for the past 3 Page 9 of 12 years that the inside sales representatives were non-exempt employees, and continued refuse to compensate Plaintiff and the class of similarly situated for overtime hours worked. 67. Defendant did not make a good faith effort to comply with the FLSA and owes Plaintiffs and those similarly situated liquidated damages and an equal sum of all wages owed. 68. Defendant knew that the Plaintiffs and those similarly situated were working overtime hours and willfully refused to pay Plaintiffs and all similarly situated inside sales representatives overtime pay at one and a half time their regular rate of pay for all overtime hours worked. 69. Defendant also has failed to pay overtime at the proper rate of one and one half time the employees’ regular rate of pay including the value of all commissions and bonuses earned. 70. Defendant has also violated the record keeping provision of the FLSA, 29 CFR 516.2, which mandates that an Employer record and track the hours of non-exempt employees. 71. Because of these unlawful pay practices, which have continued in the past three years up through the present, Plaintiffs and those similarly situated have suffered lost wages and damages. WHEREFORE, Plaintiffs and those similarly situated request from this Court: a. An order certifying this as a collective action; b. Appointment of the Plaintiffs as class representatives; c. Appointment of the undersigned as attorney of record for the collective class; d. Authorization for the issuance of a notice to all similarly situated former and current inside sales representatives of Defendant that apprise the Page 10 of 12 putative class and notify them of the pendency of this action and provides them with the opportunity to assert timely FLSA claims by the filing of individual consent to join forms; e. Judgement finding Plaintiffs and those similarly situated are entitled to overtime pay at one and a half times their regular rate; f. Judgement against the Defendant finding they violated the FLSA; g. Judgement against the Defendant finding they acted willfully and in bad faith; h. Award of monetary damages for unpaid wages; i. Award of monetary damages for liquidated damages under the FLSA; j. Special award to Plaintiffs for service as class representatives; k. Award of reasonable attorneys’ fees, costs, and expenses; and l. Such other equitable or legal relief the Court should deem necessary and just including the entry of an Injunction barring the Defendant from continuing to violate the FLSA by failing to pay overtime wages to inside sales representatives. Dated: April 4, 2016 Page 11 of 12 Respectfully submitted, FELDMAN LAW GROUP P.A. _________________________________ Mitchell L. Feldman, Esquire Georgia Bar No.: 257791 FELDMAN LAW GROUP P.A. 1201 Peachtree Street Colony Square, Suite 200 Atlanta, GA 30361 Tel: (813) 639-9366 Fax: (813) 639-9376 E-Mail: mfeldman@ffmlawgroup.com Page 12 of 12

employment & labor

fbxqDIcBD5gMZwczC5bR

UNITED STATES DISTRICT COURT DISTRICT OF MASSACHUSETTS PAUL SANDERS, Individually and On Behalf of All Others Similarly Situated, Plaintiff, v. ) ) ) ) ) ) ) ) ) ) ) ) AVEO PHARMACEUTICALS, INC., TUAN HA-NGOC, DAVID B. JOHNSTON, and WILLIAM SLICHENMYER, Defendants. Case No. CLASS ACTION COMPLAINT FOR VIOLATIONS OF FEDERAL SECURITIES LAWS DEMAND FOR JURY TRIAL CLASS ACTION COMPLAINT Plaintiff Paul Sanders (“Plaintiff”), individually and on behalf of all other persons similarly situated, by his undersigned attorneys, for his complaint against defendants, alleges the following based upon personal knowledge as to himself and his own acts, and information and belief as to all other matters, based upon, inter alia, the investigation conducted by and through his attorneys, which included, among other things, a review of the defendants’ public documents, conference calls and announcements made by defendants, United States Securities and Exchange Commission (“SEC”) filings, wire and press releases published by and regarding Aveo Pharmaceuticals Inc. (“Aveo” or the “Company”), analysts’ reports and advisories about the Company, and information readily obtainable on the Internet. Plaintiff believes that substantial evidentiary support will exist for the allegations set forth herein after a reasonable opportunity for discovery. NATURE OF THE ACTION 1. This is a federal securities class action on behalf of a class consisting of all persons other than defendants who purchased Aveo securities between January 3, 2012 and May 1, 2013, inclusive (the “Class Period”), seeking to recover damages caused by defendants’ violations of the federal securities laws and to pursue remedies under the Securities Exchange Act of 1934 (the “Exchange Act”). 2. Aveo is a biopharmaceutical company focused on discovering, developing, and commercializing cancer therapeutics. The Company’s lead product is an oral inhibitor of the vascular endothelial growth factor (“VEGF”) receptors. 3. Throughout the Class Period, Defendants conditioned investors to believe that the Company’s drug Tivopath or tivozanib, for the treatment of advanced kidney cancer, would receive approval from the U.S. Food and Drug Administration (“FDA”) through a host of materially false and misleading statements regarding the phase 3 trial design and results. Specifically: (a) the Company failed to disclose to investors that the FDA had recommended to the Company to conduct an additional phase 3 trial due to adverse trends in the Company’s first Phase III trial; (b) the Company misled investors regarding the overall safety and efficacy of the product, including by misleading investors regarding the 25% higher rate of death associated with tivozanib therapy compared to the control drug, sorafenib; (c) the Company failed to disclose that almost 90% of the patients studied in TIVO-1 were enrolled from sites in Central and Eastern Europe with inconsistent treatment patterns from those in the US. As a result of the foregoing, the Company’s statements were materially false and misleading at all relevant times. 4. On April 30, 2013, the FDA released its Oncologic Drugs Advisory Committee (“ODAC”) briefing document (the, “Briefing Document”) that, among other matters, took particular issue with the rigor of the tivozanib trial: In considering the results from a single randomized trial submitted in support of marketing approval of a new molecular entity, FDA expects that the trial will be adequately designed and well conducted and that the results will be internally consistent. We are asking the ODAC’s advice on whether this single trial is sufficient to support approval of tivozanib for the indication of treatment of patients with advanced renal cell cancer or whether an additional trial is necessary before considering marketing approval. 5. The Briefing Document also highlighted the regulatory history of Tivopath, and the fact that the Company disregarded explicit FDA recommendations for the Company to conduct an additional Phase III trial, “[a] pre-NDA meeting was held in May 2012. Here, the FDA expressed concern about the adverse trend in overall survival in the single Phase 3 trial (“TIVO- 1”) and recommended that the sponsor [Aveo] conduct a second adequately powered randomized trial in a population comparable to that in the US.” 6. In response to this news the Company’s shares fell $2.33 or 31.31% per share to close at $5.11 on April 30, 2013, on volume of over 15 million shares. 7. On May 2, 2013, the Company and the FDA made presentations to the ODAC regarding the new drug application of tivozanib. The FDA noted in its presentation to the ODAC that: a) tivozanib was studied in a Phase 3 trial with inconsistent results; b) tivozanib increased potential risk of death by 25% compared to the control drug, sorafenib; c) tivozanib therapy induced higher rates of hypertension, hemorrhage and dysphonia than sorafenib; d) TIVO-1 had a flawed trial design; e) TIVO-1 provided internally inconsistent trial results; f) TIVO-1 provided uninterpretable overall survival results; and g) TIVO-1 provided inconclusive risk-benefit assessment data. 8. On May 2, 2013, the ODAC voted by an overwhelming majority (13 to 1) not to recommend approval of tivozanib, because, “the application for investigational agent tivozanib did not demonstrate a favorable benefit-to-risk evaluation for the treatment of advanced renal cell carcinoma (RCC) in an adequate and well-controlled trial.” 9. As a result of this announcement, Aveo shares declined $2.61 per share or nearly 50%, to close at $2.65 per share on May 2, 2013, on volume of over 15 million shares. 10. As a result of Defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the Company’s securities, Plaintiff and other Class members have suffered significant damages. JURISDICTION AND VENUE 11. The claims asserted herein arise under and pursuant to Sections l0(b) and 20(a) of the Exchange Act, 15 U.S.C. §§ 78j(b) and 78t(a), and Rule l0b-5 promulgated thereunder by the SEC, 17 C.F.R. § 240.10b-5. 12. This Court has jurisdiction over the subject matter of this action pursuant to 28 U.S.C. §§ 1331 and 1337, and Section 27 of the Exchange Act, 15 U.S.C. § 78aa. 13. Venue is proper in this District pursuant to Section 27 of the Exchange Act, and 28 U.S.C. § 1391(b). Aveo maintains its principal place of business in this District and many of the acts and practices complained of occurred in substantial part herein. 14. In connection with the acts alleged in this complaint, Defendants, directly or indirectly, used the means and instrumentalities of interstate commerce, including, but not limited to, the mails, interstate telephone communications, and the facilities of the national securities markets. PARTIES 15. Plaintiff Paul Sanders, as set forth in the accompanying certification, incorporated by reference herein, purchased Aveo securities at artificially inflated prices during the Class Period and was damaged thereby. 16. Defendant Aveo is a corporation organized under the laws of the state of Delaware, maintaining its principal place of business at 75 Sidney Street, Cambridge, Massachusetts 02139. Aveo’s common stock trades on the NASDAQ Global Stock Market (“NASDAQ”) under the ticker symbol “AVEO.” 17. Defendant Tuan Ha-Ngoc (“Ha-Ngoc”) has served as president and Chief Executive Officer of Aveo, and as a member of the Company’s Board of Directors since June 2002, and sold 4,613 Company shares during the Class Period. 18. Defendant David N. Johnston (“Johnston”) has served as Aveo’s Chief Financial Officer since October 2007, and sold 19,704 Company shares during the Class Period. 19. Defendant William Slichenmyer (“Slichenmyer”) has served as Aveo’s Chief Medical Officer since September 2009, and sold 14,257 Company shares during the Class 20. The defendants referenced above in ¶¶ 17 - 19 are referred to herein as the “Individual Defendants.” SUBSTANTIVE ALLEGATIONS BACKGROUND 21. Aveo is a biopharmaceutical company focused on discovering, developing, and commercializing cancer therapeutics. The Company’s lead product candidate is an oral inhibitor of the vascular endothelial growth factor (“VEGF”) receptors. One of the Company’s principal products is Tivopath or tivozanib, marketed by the Company for the treatment of advanced kidney cancer. MATERIALLY FALSE AND MISLEADING STATEMENTS MADE DURING THE CLASS PERIOD 22. On January 3, 2012, the Company issued a press release announcing that tivozanib successfully demonstrated progression-free survival superiority over sorafenib in patients with advanced renal cell cancer in the phase 3 TIVO-1 trial. Specifically, the Company stated the following, in relevant part: [T]hat tivozanib demonstrated superiority over sorafenib in the primary endpoint of progression-free survival (PFS) in TIVO-1, a global, randomized Phase 3 clinical trial evaluating the efficacy and safety of investigational drug tivozanib compared to sorafenib in 517 patients with advanced renal cell carcinoma (RCC). TIVO-1 is the first registration study in first-line RCC that is comparing an investigational agent against an approved VEGF therapy. All patients in TIVO-1 had clear cell RCC, had undergone a prior nephrectomy, and had not previously been treated with either a VEGF or mTOR therapy. Based on the top-line analysis of events in TIVO-1, determined by a blinded, independent review committee, key top-line findings include: • tivozanib demonstrated a statistically significant improvement in PFS with a median PFS of 11.9 months compared to a median PFS of 9.1 months for sorafenib in the overall study population • tivozanib demonstrated a statistically significant improvement in PFS with a median PFS of 12.7 months compared to a median PFS of 9.1 months for sorafenib in the pre-specified subpopulation of patients who were treatment naïve (no prior systemic anti-cancer therapy); this subpopulation was approximately 70% of the total study population • tivozanib demonstrated a well-tolerated safety profile consistent with the Phase 2 experience; the most commonly reported side effect was hypertension, a well- established on-target and manageable effect of VEGFR inhibitors 23. On February 14, 2012, the Company issued a press release announcing its 2011 financial results, and reviewed key progress achieved with its tivozanib development programs in the fourth quarter of 2011. The Company stated the following, in relevant part: “The recent success of our Phase 3 registration trial of tivozanib in RCC, TIVO-1, marks an important milestone for AVEO as we prepare for our first NDA submission later this year,” said Tuan Ha-Ngoc, president and chief executive officer of AVEO. “Tivozanib’s favorable efficacy and tolerability have now been demonstrated in two large, well-controlled studies. We believe the longest median progression-free survival reported to-date in a first-line pivotal trial in treatment naïve RCC patients combined with its well-tolerated safety profile positions tivozanib to provide patients with a significantly differentiated treatment option.” Fourth Quarter 2011 Key Accomplishments: Completed top-line analysis of pivotal tivozanib Phase 3 trial, TIVO-1: Notably, in the fourth quarter, AVEO completed top-line analysis of TIVO-1, a global, randomized, Phase 3, superiority clinical trial evaluating the efficacy and safety of tivozanib compared to sorafenib in 517 patients with advanced renal cell carcinoma (RCC). Top-line data were announced in January 2012 and showed that tivozanib successfully demonstrated superiority over sorafenib in the primary endpoint of progression-free survival (PFS) in TIVO-1. Key top-line findings from TIVO-1 include: Tivozanib demonstrated a statistically significant improvement in PFS with a median PFS of 11.9 months compared to a median PFS of 9.1 months for sorafenib in the overall study population. 24. On March 30, 2012, the Company filed with the SEC its annual report for the period ending December 31, 2011. In the annual report, the Company stated in relevant part: Tivozanib, our lead product candidate, which we partnered with Astellas Pharma Inc., or Astellas, in 2011, is a potent, selective, long half-life inhibitor of all three vascular endothelial growth factor, or VEGF, receptors that is designed to optimize VEGF blockade while minimizing off-target toxicities. Our clinical trials of tivozanib to date have demonstrated a favorable safety and efficacy profile for tivozanib. In January 2012, we announced top-line data from our global, phase 3 clinical trial comparing the efficacy and safety of tivozanib with Nexavar® (sorafenib), an approved therapy, for first-line treatment in renal cell carcinoma, or RCC, which we refer to as the TIVO-1 study. The TIVO-1 study is being conducted in patients with advanced clear cell RCC who have undergone a prior nephrectomy (kidney removal) and who have not received any prior VEGF- and mTOR-targeted therapy. In this trial, we measured, among other things, each patient’s progression-free survival, or PFS, which refers to the period of time that began when a patient entered the clinical trial and ended when either the patient died or the patient’s cancer had grown by a specified percentage or spread to a new location in the body. PFS is the primary endpoint in the TIVO-1 study. In the TIVO-1 study, tivozanib demonstrated a statistically significant improvement in PFS over Nexavar with a median PFS of 11.9 months for tivozanib compared to a median PFS of 9.1 months for Nexavar in the overall study population. Tivozanib also demonstrated a statistically significant improvement in PFS with a median PFS of 12.7 months compared to a median PFS of 9.1 months for Nexavar in the pre-specified subpopulation of patients who received no prior systemic anti- cancer therapy for metastatic disease—a subpopulation that comprised approximately 70% of the total study population. In the TIVO-1 study, tivozanib demonstrated a well-tolerated safety profile consistent with the results from our tivozanib phase 2 clinical trial in patients with advanced RCC; the most commonly reported side effect was hypertension, a well-established on-target and manageable effect of VEGF receptor inhibitors. The most common treatment- related side effects seen in the phase 2 clinical trial were hypertension (44.9%) and dysphonia, or hoarseness of voice (21.7%). Additionally, the incidence of other side effects in the phase 2 clinical trial that are commonly associated with other VEGF receptor inhibitors, such as diarrhea, rash, mucositis, stomatitis, fatigue, and hand-foot syndrome, was relatively low. 25. On April 12, 2012, the Company issued a press release announcing publication of positive tivozanib Phase 2 clinical trial results in the Journal of Clinical Oncology. In the press release, Defendant Slichenmyer commented the following in relevant part: We believe that the efficacy and safety profile consistently demonstrated by tivozanib and recently validated in our Phase 3 TIVO-1 trial represent an important step forward in the treatment of patients who have advanced RCC. We are pleased with the opportunity to collaborate with tivozanib study investigators on publishing these positive Phase 2 data in the Journal of Clinical Oncology, and look forward to advancing our work with our global partners at Astellas to bring tivozanib to patients who can benefit from this therapy. 26. On May 9, 2012, the Company filed its quarterly report for the period ending March 31, 2012. The Company reported in relevant part: Tivozanib, our lead product candidate, the development of which is part of our 2011 partnership with Astellas Pharma Inc., or Astellas, is a potent, selective, long half-life inhibitor of all three vascular endothelial growth factor, or VEGF, receptors that is designed to optimize VEGF blockade while minimizing off-target toxicities. Our clinical trials of tivozanib to date have demonstrated a favorable safety and efficacy profile for tivozanib. In January 2012, we announced top-line data from our global, phase 3 clinical trial comparing the efficacy and safety of tivozanib with Nexavar (sorafenib), an approved therapy, for first-line treatment in advanced renal cell carcinoma, or RCC, which we refer to as the TIVO-1 study. The TIVO-1 study is being conducted in patients with advanced clear cell RCC who have undergone a prior nephrectomy (kidney removal) and who have not received any prior VEGF and mTOR-targeted therapy. In this trial, we measured, among other things, each patient’s progression-free survival, or PFS, which refers to the period of time that began when a patient entered the clinical trial and ended when either the patient died or the patient’s cancer had grown by a specified percentage or spread to a new location in the body. PFS is the primary endpoint in the TIVO-1 study. In the TIVO-1 study, tivozanib demonstrated a statistically significant improvement in PFS over Nexavar with a median PFS of 11.9 months for tivozanib compared to a median PFS of 9.1 months for Nexavar in the overall study population. Tivozanib also demonstrated a statistically significant improvement in PFS with a median PFS of 12.7 months compared to a median PFS of 9.1 months for Nexavar in the pre-specified subpopulation of patients who received no prior systemic anti-cancer therapy for metastatic disease—a subpopulation that comprised approximately 70% of the total study population. In the TIVO-1 study, tivozanib demonstrated a well-tolerated safety profile consistent with the results from our tivozanib phase 2 clinical trial in patients with advanced RCC; the most commonly reported side effect was hypertension, a well established on-target and manageable effect of VEGF receptor inhibitors. The most common treatment-related side effects seen in the phase 2 clinical trial were hypertension (44.9%) and dysphonia, or hoarseness of voice (21.7%). Additionally, the incidence of other side effects in the phase 2 clinical trial that are commonly associated with other VEGF receptor inhibitors, such as diarrhea, rash, mucositis, stomatitis, fatigue, and hand-foot syndrome, was relatively low. 27. On May 16, 2012, the Company issued a press release announcing positive findings from TIVO-1, “Superiority Study of Tivozanib in First-Line Advanced RCC.” The press release stated in relevant part: TIVO-1 is the first superiority pivotal study in first-line advanced renal cell carcinoma (RCC) in which an investigational agent (tivozanib) has demonstrated statistically significant and clinically meaningful progression-free survival (PFS) superiority versus an approved targeted agent (sorafenib) in advanced RCC. “TIVO-1 is novel in that this Phase 3 clinical study used an approved targeted comparator drug to evaluate first-line RCC treatment,” said Dr. Motzer. “Patients in the study who had no prior treatment for advanced kidney cancer and who were given tivozanib met the primary PFS endpoint and tolerated the drug well.” A total of 517 patients were randomized to tivozanib (N=260) or sorafenib (N=257). The performance status and other prognostic indicators of patients enrolled in this study were consistent with other pivotal trials in first-line advanced RCC. “Despite recent advances in the treatment of kidney cancer, patients are in need of new options which are effective and well-tolerated,” said Daniel George, M.D., director, GU Medical Oncology and director, prostate clinic, Duke University. “The superior PFS and favorable tolerability demonstrated by tivozanib in TIVO- 1 represents an important potential step forward for patients in the treatment of kidney cancer.” 28. On August 7, 2012, the Company filed with the SEC a quarterly report for the period ending, June 30, 2012. In the quarterly report the Company stated in relevant part: Tivozanib, our lead product candidate, the development of which is part of our 2011 partnership with Astellas Pharma Inc., or Astellas, is a potent, selective, long half-life inhibitor of all three vascular endothelial growth factor, or VEGF, receptors that is designed to optimize VEGF blockade while minimizing off-target toxicities. Our clinical trials of tivozanib to date have demonstrated a favorable safety and efficacy profile for tivozanib. In May 2012, we announced detailed data from our global, phase 3 clinical trial comparing the efficacy and safety of tivozanib with Nexavar ® (sorafenib), an approved therapy, for first-line treatment in advanced renal cell carcinoma, or RCC, which we refer to as the TIVO-1 study. The TIVO-1 study is being conducted in patients with advanced clear cell RCC who have undergone a prior nephrectomy (kidney removal) and who have not received any prior VEGF- and mTOR-targeted therapy. In this trial, we measured, among other things, each patient’s progression-free survival, or PFS, which refers to the period of time that began when a patient entered the clinical trial and ended when either the patient died or the patient’s cancer had grown by a specified percentage or spread to a new location in the body. PFS is the primary endpoint in the TIVO-1 study. 29. On September 28, 2012, the Company issued a press release announcing that Aveo had submitted a New Drug Application (“NDA”) to the FDA seeking approval for tivozanib in patients with advanced rencal cell carcinoma. The press release stated in relevant part: The NDA submission is based on results of the global Phase 3 TIVO-1 (Tivozanib Versus Sorafenib in 1st line Advanced RCC) trial, a randomized superiority-designed pivotal trial evaluating the efficacy and safety of tivozanib compared to sorafenib in 517 patients with advanced RCC who had no prior treatment with a systemic therapy, as well as data from 17 clinical studies involving over 1,000 subjects who received tivozanib. In TIVO-1, tivozanib demonstrated a statistically significant improvement in progression-free survival (PFS) versus sorafenib, an approved targeted agent, and a favorable tolerability profile. 30. On October 1, 2012, the Company issued a press release announcing new data demonstrating the safety and tolerability profile of tivozanib in patients with advanced kidney cancer. The press release reported that the Company had recently submitted a NDA to the FDA seeking approval for tivozanib. The press release reported in relevant part: Investigators evaluated drug-related AEs versus sorafenib with the goal of better understanding the tivozanib safety profile. The results of the safety analysis showed: • Investigator-reported adverse events for tivozanib showed lower rates of dose reductions, interruptions, and discontinuations compared to sorafenib: dose reductions (11.6% vs. 42.8%, p<0.001), interruptions (17.8% vs. 35.4%, p<0.001), and discontinuations (4.2% vs. 5.4%). • Drug-related AEs occurred in fewer patients on tivozanib than patients on sorafenib (67.6% vs. 83.3%). • Fewer patients in the tivozanib group had ≥Grade 3 drug -related AEs than patients in the sorafenib group (36.3% vs. 51.0%, respectively). ≥Grade 3 hypertension, an established on-target effect of angiogenesis inhibitors, was more common in the tivozanib group (23.6% vs. 15.2%), and ≥Grade 3 hand-foot syndrome (1.9% vs. 16.7%), diarrhea (1.9% vs. 5.8%) and lipase elevation (0.8% vs. 5.8%) were more common in the sorafenib group. “Our tivozanib development program in RCC is comprehensive and ongoing. With positive safety and efficacy data from TIVO-1 in-hand, we continue to explore the role of biomarkers and patient preference with the ultimate goal of helping clinicians optimize RCC treatment,” said William Slichenmyer, M.D., Sc.M., chief medical officer at AVEO. “Additional analyses from our ongoing biomarker program will be presented at future congresses and our TAURUS patient preference study vs. Sutent (sunitinib) is now underway. 31. On November 8, 2012, the Company filed with the SEC its quarterly report for the period ending September 30, 2012. The report stated in relevant part: We recently submitted a New Drug Application to the U.S. Food and Drug Administration seeking approval for tivozanib, our lead product candidate, in patients with advanced renal cell carcinoma, or RCC. Tivozanib, the development of which is part of our 2011 partnership with Astellas Pharma Inc., or Astellas, is a potent, selective, long half-life inhibitor of all three vascular endothelial growth factor, or VEGF, receptors which is designed to optimize VEGF blockade while minimizing off-target toxicities. Our clinical trials of tivozanib to date have demonstrated a favorable safety and efficacy profile for tivozanib. We announced detailed data from our global, phase 3 clinical trial comparing the efficacy and safety of tivozanib with Nexavar ® (sorafenib), an approved therapy, for first-line treatment in advanced RCC, which we refer to as the TIVO-1 study. The TIVO-1 study was conducted in patients with advanced clear cell RCC who had undergone a prior nephrectomy (kidney removal) and who had not received any prior VEGF- and mTOR-targeted therapy. In this trial, we measured, among other things, each patient’s progression-free survival, or PFS, which refers to the period of time that began when a patient entered the clinical trial and ended when either the patient died or the patient’s cancer had grown by a specified percentage or spread to a new location in the body. 32. On February 27, 2013, the Company issued a press release announcing that the FDA Oncologic Drugs advisory Committee (“ODAC”) will review the Company’s NDA for tivozanib for the treatment of patients with advanced renal cell carcinoma during the morning session of its meeting on May 2, 2013. The press release also stated in relevant part: The NDA includes results of the global Phase 3 TIVO-1 (TIvozanib Versus sOrafenib in 1st line advanced RCC) trial, a randomized superiority-designed pivotal trial evaluating the efficacy and safety of tivozanib compared to sorafenib, an approved targeted agent, in 517 patients with advanced RCC, as well as data from 16 additional AVEO-sponsored studies involving over 1,000 subjects who received tivozanib. 33. On March 11, 2013, the Company filed with the SEC its annual report for the period ending December 31, 2012. The Company stated in relevant part: In the TIVO-1 study, tivozanib demonstrated a statistically significant improvement in PFS over Nexavar with a median PFS of 11.9 months for tivozanib compared to a median PFS of 9.1 months for Nexavar in the overall study population. Tivozanib also demonstrated a statistically significant improvement in PFS with a median PFS of 12.7 months compared to a median PFS of 9.1 months for Nexavar in the pre-specified subpopulation of patients who received no prior systemic anti-cancer therapy for metastatic disease—a subpopulation that comprised approximately 70% of the total study population. Overall survival was a secondary endpoint of the TIVO-1 study. The final overall survival, or OS, analysis, as specified by the TIVO-1 protocol, showed a median OS of 28.8 months (95% confidence interval, or CI: 22.5–NA) for the tivozanib arm versus a median OS of 29.3 months (95% CI: 29.3–NA) for the Nexavar arm. No statistical difference between the two arms (HR=1.245, p=0.105) was observed. Due to the fact that patients in the Nexavar arm who developed disease progression were given the option to receive tivozanib, a substantial difference in the use of subsequent therapies resulted. Of 189 patients who discontinued their initial therapy on the tivozanib arm, 36% received some form of subsequent therapy, including 10% who received subsequent anti-VEGF therapy. Of 226 patients who discontinued their initial therapy on the Nexavar arm, 74% received some form of subsequent therapy, including 70% who received subsequent anti- VEGF therapy (98% of whom received tivozanib). We believe that the different utilization of second line therapies in the two arms of the TIVO-1 study impacted the relative performance of the two arms in the OS endpoint. Dose interruptions due to an adverse event occurred in 46 (18%) tivozanib-treated patients compared to 91 (35%) Nexavar-treated patients (p<0.001). Dose reductions due to an adverse event occurred in 30 (12%) tivozanib-treated patients compared to 110 (43%) Nexavar-treated patients (p<0.001). There were 11 (4%) tivozanib-treated patients who discontinued the study due to drug-related adverse events compared to 14 (5%) Nexavar-treated patients (p=0.683). 34. The statements referenced in ¶¶ 22-33 above were materially false and/or misleading because they misrepresented and failed to disclose that: a) the FDA had recommended to the Company as early as May 2012 that it should conduct an additional phase 3 trial due to adverse trends in the TIVO-1 study; b) the Company misled investors regarding the overall safety and efficacy of the product, including by misleading investors regarding the 25% higher rate of death associated with tivozanib therapy compared to the control drug, sorafenib; c) almost 90% of the patients studied in TIVO-1 were enrolled from sites in Central and Eastern Europe with inconsistent treatment patterns from those studied in the US. THE TRUTH IS REVEALED 35. On April 30, 2013, the FDA released its Oncologic Drugs Advisory Committee Briefing Document, which found a number of flaws with the TIVO-1 trial. In considering the results from a single randomized trial submitted in support of marketing approval of a new molecular entity, FDA expects that the trial will be adequately designed and well conducted and that the results will be internally consistent. We are asking the ODAC’s advice on whether this single trial is sufficient to support approval of tivozanib for the indication of treatment of patients with advanced renal cell cancer or whether an additional trial is necessary before considering marketing approval. 36. The Briefing Document also highlighted the regulatory history of Tivopath, and the fact that the Company disregarded FDA recommendations for improving its clinical studies, “[a] pre-NDA meeting was held in May 2012. Here, the FDA expressed concern about the adverse trend in overall survival in the single Phase 3 trial and recommended that the sponsor [Aveo] conduct a second adequately powered randomized trial in a population comparable to that in the 37. The Briefing Document continued to criticize the Company’s clinical trial design: The Phase 3 study was carried out at 76 sites. It was initiated in February 2010 and was ongoing at the time of submission. As shown in Table 5, most of the study sites were in Eastern Europe with potentially different standard of care and practice patterns compared to the US. Patients on the sorafenib arm of the Phase 3 study with PD could receive tivozanib on an extension/crossover study. Patients on the tivozanib arm of the Phase 3 study with PD could receive additional medications. However, the 2nd line use of targeted therapies was not considered the standard of care in many of the countries participating in the trial. Table 5: Geographic Distribution of Patient Accrual Geographic Region Tivozanib N = 260 Sorafenib N = 257 Central/Eastern Europe 229 (88%) 228 (89%) North America/Western Europe 22 (9%) 18 (7%) Rest of World 9 (4%) 11 (4%) The majority of the patients on the sorafenib arm received tivozanib after the development of INV-determined PD while most of the patients on the tivozanib arm did not receive subsequent targeted therapy. The majority of patients were enrolled from sites in Central and Eastern Europe where 2nd line targeted therapy was not available. This is not consistent with the practice patterns in the US and it is, therefore, unclear whether the patients in this study were representative of those in the US. (emphasis added). 38. The Briefing Document also noted certain adverse events of special interest, including that one patient died due to pancreatitis: Adverse events of special interest in the tivozanib arm of the Phase 3 trial include: hypertension (45%), hemorrhage (12%), proteinuria (9%), arterial embolic and thrombotic events (3%), hypothyroidism (5%), GI perforation/fistula (1%), and pancreatitis (0.8%). In the Safety Database, 1 patient developed hepatic failure and a 2nd patient developed posterior reversible encephalopathy syndrome. Note that the incidence of elevated TSH (62%) and proteinuria by dipstick (32%) along with grade 3-4 amylase (5%) and lipase (10%), was much higher than the number of reports of the corresponding adverse events. Importantly, 1 patient died due to pancreatitis. 39. In response to this announcement, the Company’s shares fell $2.33 or 31.31% per share to close at $5.11 on April 30, 2013, on volume of over 15 million shares. 40. On May 2, 2013, the Company disclosed that the Oncologic Drugs Advisory Committee (“ODAC”) of the FDA voted by an overwhelming majority (13 to 1, with no abstentions) not to recommend approval of tivozanib. The ODAC found, “that the application for investigational agent tivozanib did not demonstrate a favorable benefit-to-risk evaluation for the treatment of advanced renal cell carcinoma (RCC) in an adequate and well-controlled trial.” 41. The FDA noted in its presentation to the ODAC that: a) tivozanib was studied in a Phase 3 trial with inconsistent results; b) tivozanib increased potential risk of death by 25% compared to the control drug, sorafenib; c) tivozanib therapy induced higher rates of hypertension, hemorrhage and dysphonia than sorafenib; d) TIVO-1 had a flawed trial design; e) internal inconsistency in the TIVO-1 trial results; f) TIVO-1 provided uninterpretable overall survival results; and, g) TIVO-1 provided an inconclusive risk-benefit assessment. 42. As a result of this disclosure, Aveo shares declined $2.61 per share or nearly 50%, to close at $2.65 per share on May 2, 2013, on volume of over 15 million shares. PLAINTIFF’S CLASS ACTION ALLEGATIONS 43. Plaintiff brings this action as a class action pursuant to Federal Rule of Civil Procedure 23(a) and (b)(3) on behalf of a Class, consisting of all those who purchased or otherwise acquired Aveo securities during the Class Period (the “Class”); and were damaged thereby. Excluded from the Class are defendants herein, the officers and directors of the Company, at all relevant times, members of their immediate families and their legal representatives, heirs, successors or assigns and any entity in which defendants have or had a controlling interest. 44. The members of the Class are so numerous that joinder of all members is impracticable. Throughout the Class Period, Aveo securities were actively traded on the NASDAQ. While the exact number of Class members is unknown to Plaintiff at this time and can be ascertained only through appropriate discovery, Plaintiff believes that there are hundreds or thousands of members in the proposed Class. Record owners and other members of the Class may be identified from records maintained by Aveo or its transfer agent and may be notified of the pendency of this action by mail, using the form of notice similar to that customarily used in securities class actions. 45. Plaintiff’s claims are typical of the claims of the members of the Class as all members of the Class are similarly affected by defendants’ wrongful conduct in violation of federal law that is complained of herein. 46. Plaintiff will fairly and adequately protect the interests of the members of the Class and has retained counsel competent and experienced in class and securities litigation. Plaintiff has no interests antagonistic to or in conflict with those of the Class. 47. Common questions of law and fact exist as to all members of the Class and predominate over any questions solely affecting individual members of the Class. Among the questions of law and fact common to the Class are: • whether the federal securities laws were violated by defendants’ acts as alleged herein; • whether statements made by defendants to the investing public during the Class Period misrepresented material facts about the business, operations and management of Aveo; • whether the Individual Defendants caused Aveo to issue false and misleading financial statements during the Class Period; • whether defendants acted knowingly or recklessly in issuing false and misleading financial statements; • whether the prices of Aveo securities during the Class Period were artificially inflated because of the defendants’ conduct complained of herein; and • whether the members of the Class have sustained damages and, if so, what is the proper measure of damages. 48. A class action is superior to all other available methods for the fair and efficient adjudication of this controversy since joinder of all members is impracticable. Furthermore, as the damages suffered by individual Class members may be relatively small, the expense and burden of individual litigation make it impossible for members of the Class to individually redress the wrongs done to them. There will be no difficulty in the management of this action as a class action. 49. Plaintiff will rely, in part, upon the presumption of reliance established by the fraud-on-the-market doctrine in that: • defendants made public misrepresentations or failed to disclose material facts during the Class Period; • the omissions and misrepresentations were material; • Aveo securities are traded in efficient markets; • the Company’s shares were liquid and traded with moderate to heavy volume during the Class Period; • the Company traded on the NASDAQ, and was covered by multiple analysts; • the misrepresentations and omissions alleged would tend to induce a reasonable investor to misjudge the value of the Company’s securities; and • Plaintiff and members of the Class purchased and/or sold Aveo securities between the time the defendants failed to disclose or misrepresented material facts and the time the true facts were disclosed, without knowledge of the omitted or misrepresented facts. 50. Based upon the foregoing, Plaintiff and the members of the Class are entitled to a presumption of reliance upon the integrity of the market. NO SAFE HARBOR 51. The statutory safe harbor provided for forward-looking statements under certain circumstances does not apply to any of the allegedly false statements pleaded in this Complaint. Many of the specific statements pleaded herein were not identified as “forward-looking statements” when made. To the extent there were any forward-looking statements, there were no meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those in the purportedly forward-looking statements. Alternatively, to the extent that the statutory safe harbor does apply to any forward-looking statements pleaded herein, defendants are liable for those false forward-looking statements because at the time each of those forward-looking statements were made, the particular speaker knew that the particular forward-looking statement was false, and/or the forward-looking statement was authorized and/or approved by an executive officer of Aveo who knew that those statements were false when made. COUNT I (Against All Defendants For Violations of Section 10(b) And Rule 10b-5 Promulgated Thereunder) 52. Plaintiff repeats and realleges each and every allegation contained above as if fully set forth herein. 53. This Count is asserted against defendants and is based upon Section 10(b) of the Exchange Act, 15 U.S.C. § 78j(b), and Rule 10b-5 promulgated thereunder by the SEC. 54. During the Class Period, defendants engaged in a plan, scheme, conspiracy and course of conduct, pursuant to which they knowingly or recklessly engaged in acts, transactions, practices and courses of business which operated as a fraud and deceit upon Plaintiff and the other members of the Class; made various untrue statements of material facts and omitted to state material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; and employed devices, schemes and artifices to defraud in connection with the purchase and sale of securities. Such scheme was intended to, and, throughout the Class Period, did: (i) deceive the investing public, including Plaintiff and other Class members, as alleged herein; (ii) artificially inflate and maintain the market price of Aveo securities; and (iii) cause Plaintiff and other members of the Class to purchase Aveo securities at artificially inflated prices. In furtherance of this unlawful scheme, plan and course of conduct, defendants, and each of them, took the actions set forth herein. 55. Pursuant to the above plan, scheme, conspiracy and course of conduct, each of the defendants participated directly or indirectly in the preparation and/or issuance of the quarterly and annual reports, SEC filings, press releases and other statements and documents described above, including statements made to securities analysts and the media that were designed to influence the market for Aveo securities and options. Such reports, filings, releases and statements were materially false and misleading in that they failed to disclose material adverse information and misrepresented the truth about Aveo’s finances and business prospects. 56. By virtue of their positions at Aveo, defendants had actual knowledge of the materially false and misleading statements and material omissions alleged herein and intended thereby to deceive Plaintiff and the other members of the Class, or, in the alternative, defendants acted with reckless disregard for the truth in that they failed or refused to ascertain and disclose such facts as would reveal the materially false and misleading nature of the statements made, although such facts were readily available to defendants. Said acts and omissions of defendants were committed willfully or with reckless disregard for the truth. In addition, each defendant knew or recklessly disregarded that material facts were being misrepresented or omitted as described above. 57. Information showing that defendants acted knowingly or with reckless disregard for the truth is peculiarly within defendants’ knowledge and control. As the senior managers and/or directors of Aveo, the Individual Defendants had knowledge of the details of Aveo’s internal 58. The Individual Defendants are liable both directly and indirectly for the wrongs complained of herein. Because of their positions of control and authority, the Individual Defendants were able to and did, directly or indirectly, control the content of the statements of Aveo. As officers and/or directors of a publicly-held company, the Individual Defendants had a duty to disseminate timely, accurate, and truthful information with respect to Aveo’s businesses, operations, future financial condition and future prospects. As a result of the dissemination of the aforementioned false and misleading reports, releases and public statements, the market price of Aveo securities was artificially inflated throughout the Class Period. In ignorance of the adverse facts concerning Aveo’s business and financial condition which were concealed by defendants, Plaintiff and the other members of the Class purchased Aveo securities at artificially inflated prices and relied upon the price of the securities, the integrity of the market for the securities and/or upon statements disseminated by defendants, and were damaged thereby. 59. During the Class Period, Aveo securities were traded on an active and efficient market. Plaintiff and the other members of the Class, relying on the materially false and misleading statements described herein, which the defendants made, issued or caused to be disseminated, or relying upon the integrity of the market, purchased shares of Aveo securities at prices artificially inflated by defendants’ wrongful conduct. Had Plaintiff and the other members of the Class known the truth, they would not have purchased said securities or would not have purchased them at the inflated prices that were paid. At the time of the purchases by Plaintiff and the Class, the true value of Aveo securities were substantially lower than the prices paid by Plaintiff and the other members of the Class. The market price of Aveo securities declined sharply upon public disclosure of the facts alleged herein to the injury of Plaintiff and Class members. 60. By reason of the conduct alleged herein, defendants knowingly or recklessly, directly or indirectly, have violated Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder. 61. As a direct and proximate result of defendants’ wrongful conduct, Plaintiff and the other members of the Class suffered damages in connection with their respective purchases and sales of the Company’s securities during the Class Period, upon the disclosure that the Company had disseminated false financial statements to the investing public related to its prospects for FDA approval. COUNT II (Violations of Section 20(a) of the Exchange Act Against The Individual Defendants) 62. Plaintiff repeats and realleges each and every allegation contained in the foregoing paragraphs as if fully set forth herein. 63. During the Class Period, the Individual Defendants participated in the operation and management of Aveo, and conducted and participated, directly and indirectly, in the conduct of Aveo’s business affairs. Because of their senior positions, they knew the adverse non-public information regarding Aveo’s NDA submission to the FDA. 64. As officers and/or directors of a publicly owned company, the Individual Defendants had a duty to disseminate accurate and truthful information with respect to Aveo’s financial condition and results of operations, and to correct promptly any public statements issued by Aveo which had become materially false or misleading. 65. Because of their positions of control and authority as senior officers, the Individual Defendants were able to, and did, control the contents of the various reports, press releases and public filings which Aveo disseminated in the marketplace during the Class Period concerning Aveo’s financial prospects. Throughout the Class Period, the Individual Defendants exercised their power and authority to cause Aveo to engage in the wrongful acts complained of herein. The Individual Defendants therefore, were “controlling persons” of Aveo within the meaning of Section 20(a) of the Exchange Act. In this capacity, they participated in the unlawful conduct alleged which artificially inflated the market price of Aveo securities. 66. Each of the Individual Defendants, therefore, acted as a controlling person of Aveo. By reason of their senior management positions and/or being directors of Aveo, each of the Individual Defendants had the power to direct the actions of, and exercised the same to cause, Aveo to engage in the unlawful acts and conduct complained of herein. Each of the Individual Defendants exercised control over the general operations of Aveo and possessed the power to control the specific activities which comprise the primary violations about which Plaintiff and the other members of the Class complain. 67. By reason of the above conduct, the Individual Defendants are liable pursuant to Section 20(a) of the Exchange Act for the violations committed by Aveo. PRAYER FOR RELIEF WHEREFORE, Plaintiff demands judgment against defendants as follows: A. Determining that the instant action may be maintained as a class action under Rule 23 of the Federal Rules of Civil Procedure, and certifying Plaintiff as the Class representative; B. Requiring defendants to pay damages sustained by Plaintiff and the Class by reason of the acts and transactions alleged herein; C. Awarding Plaintiff and the other members of the Class prejudgment and post- judgment interest, as well as their reasonable attorneys’ fees, expert fees and other costs; and D. Awarding such other and further relief as this Court may deem just and proper. DEMAND FOR TRIAL BY JURY Plaintiff hereby demands a trial by jury. Dated: May 9, 2013 By his attorneys, /s/ Adam M. Stewart______________ Edward F. Haber (BBO# 215620) Adam M. Stewart (BBO# 661090) SHAPIRO HABER & URMY LLP 53 State Street Boston, MA 02109 (617) 439-3939 – Telephone (617) 439-0134 – Facsimile ehaber@shulaw.com astewart@shulaw.com POMERANTZ GROSSMAN HUFFORD DAHLSTROM & GROSS LLP Marc I. Gross Jeremy A. Lieberman 600 Third Avenue, 20th Floor New York, New York 10016 Telephone: 212-661-1100 Facsimile: 212-661-8665 POMERANTZ GROSSMAN HUFFORD DAHLSTROM & GROSS LLP Patrick V. Dahlstrom 10 South LaSalle Street, Suite 3505 Chicago, IL 60603 Telephone: 312-377-1181 Facsimile: 312-377-1184 Counsel for Plaintiff Paul Sanders

securities

i1Yr_4gBF5pVm5zY8rX0

KAZEROUNI LAW GROUP, APC Abbas Kazerounian, Esq. (249203) ak@kazlg.com 245 Fischer Avenue, Unit D1 Costa Mesa, CA 92626 Telephone: (800) 400-6808 Facsimile: (800) 520-5523 KAZEROUNI LAW GROUP, APC Jason A. Ibey, Esq. (284607) jason@kazlg.com 321 N Mall Drive, Suite R108 St. George, Utah 84790 Telephone: (800) 400-6806 Facsimile: (800) 520-5523 [Additional Counsel On Signature Page] Attorneys for Plaintiff, Thane Charman UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA '20CV1086 KSC L Case No.: THANE CHARMAN, Individually and On Behalf of All Others Similarly Situated, Plaintiff, v. CLASS ACTION COMPLAINT FOR DAMAGES AND INJUNCTIVE RELEIF PURSUANT TO THE TELEPHONE CONSUMER PROTECTION ACT, 47 U.S.C. § 227, ET SEQ. HOMES.COM, INC., JURY TRIAL DEMANDED Defendant. CLASS ACTION COMPLAINT 1. In 1991, Congress passed the Telephone Consumer Protection Act, 47 U.S.C. § 227, et seq., (“TCPA”), in response to complaints about certain telemarketing practices. 2. In enacting the TCPA, Congress intended to give consumers a choice as to how creditors and telemarketers may call them, and made specific findings that “[t]echnologies that might allow consumers to avoid receiving such calls are not universally available, are costly, are unlikely to be enforced, or place an inordinate burden on the consumer. TCPA, Pub.L. No. 102–243, § 11. Toward this end, Congress found that: [b]anning such automated or prerecorded telephone calls to the home, except when the receiving party consents to receiving the call or when such calls are necessary in an emergency situation affecting the health and safety of the consumer, is the only effective means of protecting telephone consumers from this nuisance and privacy invasion. Id. at § 12; see also, Martin v. Leading Edge Recovery Solutions, LLC, 2012 WL 3292838, at* 4 (N.D.Ill. Aug. 10, 2012) (citing Congressional findings on TCPA’s purpose). 3. The Federal Trade Commission (“FCC”) is charged with the authority to issue regulations implementing the TCPA. According to findings by the FCC, automated calls and text messages are prohibited under the TCPA because receiving them is a greater invasion of privacy and nuisance compared to live solicitation calls. The FCC has also acknowledged that wireless customers are charged for any incoming calls and text messages. 4. Plaintiff THANE CHARMAN, (“Mr. Charman,” or “Plaintiff”), individually and on behalf of all others similarly situated (“Class Members”), brings this action for damages and injunctive relief, and any other available legal CLASS ACTION COMPLAINT PAGE 1 OF 12 HOMES.COM, INC. (“Homes.com” or “Defendant”) in negligently and/or intentionally contacting Plaintiff on his cellular telephone, in violation of the Telephone Consumer Protection Act, 47 U.S.C. § 227, et seq., (“TCPA”), thereby invading Plaintiff’s privacy. 5. Plaintiff makes these allegations on information and belief, with the exception of those allegations that pertain to Plaintiff, or to Plaintiff’s counsel, which Plaintiff alleges on personal knowledge. 6. Unless otherwise indicated, the use of Defendant’s name in this Complaint includes all agents, employees, officers, members, directors, heirs, successors, assigns, principals, trustees, sureties, subrogees, representatives, and insurers of the named Defendant. JURISDICTION AND VENUE 7. This Court has federal question jurisdiction because this case arises out of violation of federal law. 47 U.S.C § 227(b). 8. Personal jurisdiction and venue are proper pursuant to 28 U.S.C. § 1391 for the following reasons: (1) Plaintiff resides within this judicial district; (2) the conduct complained of herein occurred within this judicial district; and (3) Defendant conducted business within this judicial district at all times relevant. Specifically, Defendant invaded Plaintiff’s privacy by contacting Plaintiff on his cellular telephone by automated marketing text message, which occurred while Plaintiff was physically located in the County of San Diego, State of California, pursuant to 28 U.S.C. § 1391(b)(2). PARTIES 9. Plaintiff is an individual residing in the County of San Diego, State of California, and is, and at all times mentioned herein was, a “person” as defined by 47 U.S.C. § 153(39). 10. Upon information and belief, Plaintiff alleges that Defendant is a CLASS ACTION COMPLAINT PAGE 2 OF 12 Virginia. 11. Defendant is, and at all times mentioned herein was, a “person” as defined by 47 U.S.C. § 153(39). 12. Upon information and belief, Homes.com is a real estate website that in part generates lead for listings for real estate agents. 13. Plaintiff alleges that at all times relevant herein, Defendant conducted business in the State of California, in the County of San Diego, and within this judicial district. FACTUAL ALLEGATIONS 14. Upon information and belief, Homes.com has a practice of sending unsolicited, automated text messages to individuals to market its leads for listings to real estate agents. 15. Plaintiff is, and at all times mentioned herein was, the subscriber of the cellular telephone number (619) ***-1119 (the “1119 Number”). The 1119 Number is, and at all times mentioned herein was, assigned to a cellular telephone service as specified in 47 U.S.C. § 227(b)(1)(A)(iii). 16. On or about March 3, 2020, Defendant sent a marketing text message to the 1119 Number, from (858) 877-9704, without Plaintiff’s prior express written consent. 17. The text message read: Hi. This is Joe from Homes.com. I am just reaching out in regards to your city. We have an opening right now where you will be the main agent in front of Active Buyers and Sellers in the market. Phone leads are exclusive and we will prescreen all your leads for you. We are getting lot of traffic in your area. What are your favorite zip codes? 18. Upon information and belief, this generic text message was sent to CLASS ACTION COMPLAINT PAGE 3 OF 12 purposes. 19. The text message sent by Defendant to the 1119 Number contained no method for Plaintiff to instruct Defendant to stop sending Plaintiff the unwanted text messages. 20. Plaintiff has not done any prior business with Homes.com. 21. Because Plaintiff is alerted when a text message is received to Plaintiff’s cellular device, the unsolicited text message that Defendant transmitted to Plaintiff’s cellular device invaded Plaintiff’s privacy, and distracted and annoyed Plaintiff upon receipt. 22. Upon information and belief, Defendant sent the aforementioned text message to Plaintiff’s cellular telephone using a phone number used by Defendant for operating Defendant’s text message marketing program. 23. Upon information and belief, Defendant sent or transmitted, or had sent or transmitted on its behalf, the same or substantially similar unsolicited text message en masse to thousands of customers’ cellular telephones nationwide. 24. Upon information and belief, the automated text messaging system used by Defendant to send the text messages has the capacity to store or produce telephone numbers to be called, using a random or sequential number generator. 25. Upon information and belief, the automated text messaging system has the capacity to, and does, automatically send text messages to stored telephone numbers, without human intervention. 26. The text message at issue sent by Defendant to the 1119 Number on March 8, 2020 constituted an “advertisement” and/ or “telemarketing” as prohibited by the TCPA, as Defendant sent the text message to Plaintiff in order to advertise its services. 27. Defendant’s telephonic communications to Plaintiff were not made for emergency purposes, as defined by 47 U.S.C. § 227(b)(1)(A)(iii). CLASS ACTION COMPLAINT PAGE 4 OF 12 form of consent to Defendant or any affiliate, subsidiary, or agent of Defendant to transmit text messages to the 1119 Number by means of an “automatic telephone dialing system,” within the meaning of 47 U.S.C. § 227(b)(1)(A). 29. Through Defendant’s aforementioned conduct, Plaintiff suffered an invasion of a legally protected interest in privacy, which is specifically addressed and protected by the TCPA. 30. Plaintiff was personally affected by Defendant’s aforementioned conduct because Plaintiff was frustrated and distressed that Defendant annoyed Plaintiff with an unwanted marketing text message, without Plaintiff’s consent. 31. The text messages from Defendant, or its agent(s), violated 47 U.S.C. § 227(b)(1)(A)(iii). CLASS ACTION ALLEGATIONS 32. Plaintiff brings this action on behalf of Plaintiff and all others similarly situated (the “Class”). 33. Plaintiff represents, and is a member of, the Class, pursuant to Fed. R. Civ. P. 23(b) and 23(b)(3), which is defined as follows: All persons within the United States who were sent any text message by Defendant, or its employees, agent, affiliate, or subsidiary, for marketing purposes, using the same or substantially similar text messaging system used to send a text message to Plaintiff, without express written consent, within the four years prior to the filing of the Complaint to the date of class certification. 34. Excluded from the Class are: (1) Defendant, any entity or division in which Defendant has a controlling interest, and their legal representatives, officers, directors, assigns, and successors; (2) the Judge to whom this case is assigned and the Judge’s staff; and (3) those persons who have suffered personal injuries as a result of the facts alleged herein. CLASS ACTION COMPLAINT PAGE 5 OF 12 redefine any additional subclass as appropriate based on discovery and specific theories of liability. 36. The Class that Plaintiff seeks to represent contains numerous members and is clearly ascertainable including, without limitation, by using Defendant’s records to determine the size of the Class and to determine the identities of individual Class members. Numerosity 37. The Class members are so numerous that joinder of all members would be unfeasible and impractical. The membership of the Class is currently unknown to Plaintiff at this time. However, given that, on information and belief, Defendant sent or transmitted, or had sent or transmitted on its behalf, unsolicited text messages en masse to thousands of customers’ cellular telephones nationwide during the proposed class period, it is reasonable to presume that the members of the Class are so numerous that joinder of all members is impracticable. The disposition of their claims in a class action will provide substantial benefits to the parties and the Court. Commonality 38. There are questions of law and fact common to the Class that predominate over any questions affecting only individual Class members. Those common questions of law and fact include, without limitation, the following: a) Whether within the four years prior to the filing of this Complaint to the date of class certification, Defendant or affiliates, subsidiaries, or agents of Defendant sent any text messages without the prior express written consent of Plaintiff and Class members using an “automatic telephone dialing system”; b) Whether Defendant or affiliates, subsidiaries, or agents of Defendant transmitted advertising or telemarketing text messages CLASS ACTION COMPLAINT PAGE 6 OF 12 c) Whether Defendant or affiliates, subsidiaries, or agents of Defendant can meet their burden to show Defendant obtained prior express written consent (as defined by 47 C.F.R. 64.1200(f)(8)) to send the text messages complained of, assuming such an affirmative defense is raised; d) Whether the complained of conduct was knowing or willful; e) Whether Plaintiff and the members of the Class were damaged thereby, and the extent of damages for such violation; and, f) Whether Defendant or affiliates, subsidiaries, or agents of Defendant should be enjoined from engaging in such conduct in the future. Typicality 39. Plaintiff is qualified to, and will, fairly and adequately protect the interests of each Class member with whom they are similarly situated, and Plaintiff’s claims (or defenses, if any) are typical of all Class members’ as demonstrated herein. 40. Plaintiff represents and is a Class member of the Class because Plaintiff received at least one marketing text message through the use of an automatic telephone dialing system, without providing prior express written consent to the Defendant within the meaning of the TCPA. Consequently, the claims of Plaintiff are typical of the claims of Class members and Plaintiff’s interests are consistent with and not antagonistic to those of the other Class members Plaintiff seeks to represent. 41. Plaintiff and all members of the Class have been impacted by, and face continuing harm arising out of, Defendant’s violations or misconduct as alleged herein. CLASS ACTION COMPLAINT PAGE 7 OF 12 Adequacy 42. Plaintiff is qualified to, and will, fairly and adequately protect the interests of each Class member with whom Plaintiff is similarly situated, as demonstrated herein. Plaintiff acknowledges that Plaintiff has an obligation to make known to the Court any relationship, conflicts, or differences with any Class member. Plaintiff’s attorneys, the proposed class counsel, are versed in the rules governing class action discovery, certification, and settlement. In addition, the proposed class counsel is experienced in handling claims involving consumer actions and violations of Telephone Consumer Protection Act, 47 U.S.C. § 227, et seq. Plaintiff has incurred, and throughout the duration of this action, will continue to incur costs and attorneys’ fees that have been, are, and will be, necessarily expended for the prosecution of this action for the substantial benefit of each Class member. Neither Plaintiff nor Plaintiff’s counsel have any interests adverse to those of the other Class members. Predominance 43. Questions of law or fact common to the members of the Class predominate over any questions affecting only individual members of the class. The elements of the legal claims brought by Plaintiff and members of the Class are capable of proof at trial through evidence that is common to the class rather than individual to its members. Superiority 44. A class action is superior to other available methods for the fair and efficient adjudication of this controversy because individual litigation of the claims of all Class members is impracticable and questions of law and fact common to the Class predominate over any questions affecting only individual members of the Class. Even if every individual Class member could afford individual litigation, the court system could not. It would be unduly burdensome to the courts if individual litigation of the numerous cases were to be required. CLASS ACTION COMPLAINT PAGE 8 OF 12 inconsistent, or contradictory judgments, and would magnify the delay and expense to all parties and to the court system resulting from multiple trials of the same factual issues. By contrast, conducting this action as a class action will present fewer management difficulties, conserve the resources of the parties and the court system, and protect the rights of each Class member. Further, it will prevent the very real harm that would be suffered by numerous Class members who will be unable to enforce individual claims of this size on their own, and by Defendant’s competitors, who will be placed at a competitive disadvantage because they chose to obey the law. Plaintiff anticipates no difficulty in the management of this case as a class action. 46. The prosecution of separate actions by individual Class members may create a risk of adjudications with respect to them that would, as a practical matter, be dispositive of the interests of other Class members not parties to those adjudications, or that would otherwise substantially impair or impede the ability of those non-party Class members to protect their interests. 47. The prosecution of individual actions by Class members would establish inconsistent standards of conduct for Defendant. 48. Defendant has acted or refused to act in ways generally applicable to the Class, thereby making appropriate final and injunctive relief or corresponding declaratory relief with regard to members of the Class as a whole. Likewise, Defendant’s conduct as described above is unlawful, is capable of repetition, and will continue unless restrained and enjoined by the Court. 49. The Class may also be certified because: (a) the prosecution of separate actions by individual Class members would create a risk of inconsistent or varying adjudication with respect to individual Class members, which would establish incompatible standards of conduct for Defendants; CLASS ACTION COMPLAINT PAGE 9 OF 12 members would create a risk of adjudications with respect to them that would, as a practical matter, be dispositive of the interests of other Class members not parties to the adjudications, or substantially impair or impede their ability to protect their interests; and, (c) Defendants have acted or refused to act on grounds generally applicable to the Class, thereby making appropriate final and injunctive relief with respect to the members of the Class as a whole. 50. This suit seeks only damages and injunctive relief for recovery of statutory damages on behalf of Class and it expressly is not intended to request any recovery for personal injury and claims related thereto. Plaintiffs reserve the right to expand the Class definitions to seek recovery on behalf of additional persons as warranted as facts are learned in further investigation and discovery. FIRST CAUSE OF ACTION NEGLIGENT VIOLATIONS OF THE TCPA 47 U.S.C. § 227 ET SEQ. 51. Plaintiff repeats and incorporates by reference the allegations set forth above as though fully stated herein. 52. The foregoing acts and omissions of Defendant constitute numerous and multiple negligent violations of the TCPA, including but not limited to each and every one of the above-cited provisions of 47 U.S.C. § 227, et seq. 53. As a result of Defendant’s negligent violations of 47 U.S.C. § 227, Plaintiff and all Class members are entitled to, and do seek, injunctive relief prohibiting such conduct violating the TCPA in the future. 54. As a result of Defendant’s negligent violations of 47 U.S.C. § 227, Plaintiff and all Class members are also entitled to, and do seek, an award of CLASS ACTION COMPLAINT PAGE 10 OF 12 227(b)(3)(B). SECOND CAUSE OF ACTION KNOWING AND/OR WILLFUL VIOLATIONS OF THE TCPA 47 U.S.C. § 227 ET SEQ. 55. Plaintiff repeats and incorporates by reference the allegations set forth above as though fully stated herein. 56. The foregoing acts and omissions of Defendant constitute numerous and multiple knowing and/or willful violations of the TCPA, including but not limited to each and every one of the above-cited provisions of 47 U.S.C. § 227, et 57. As a result of Defendant’s knowing and/or willful violations of 47 U.S.C. § 227, et seq., Plaintiff and all Class members are entitled to, and do seek, injunctive relief prohibiting such conduct violating the TCPA in the future. 58. As a result of Defendant’s knowing and/or willful violations of 47 U.S.C. § 227, et seq., Plaintiff and all Class members are also entitled to, and do seek, an award of $1,500.00 in statutory damages, for each and every violation, pursuant to 47 U.S.C. § 227(b)(3)(B) and 47 U.S.C. § 227(b)(3)(C). PRAYER FOR RELIEF WHEREFORE, Plaintiff, on behalf of himself and members of the Class, prays for the following relief: • An order certifying the Class and appointing Plaintiff the representative of the Class, and appointing counsel for Plaintiff as Class Counsel; • An award of $500.00 in statutory damages to Plaintiff and each Class member for each and every negligent violation of 47 U.S.C. § 227(b)(1) by Defendant, pursuant to 47 U.S.C. § 227(b)(3)(B); CLASS ACTION COMPLAINT PAGE 11 OF 12 member for each and every knowing and/or willful violation of 47 U.S.C. § 227(b)(1) by Defendant, pursuant to 47 U.S.C. § 227(b)(3)(B); • Pre-judgment and post-judgment interest; • An order providing injunctive relief prohibiting such conduct in the future, pursuant to 47 U.S.C. § 227(b)(3)(A); • An order declaring that Defendant’s actions alleged above violate the TCPA; • Costs of suit; • An award of reasonable attorneys’ fees, pursuant to, inter alia, the common fund doctrine; • Any other further relief that the court may deem just and proper. JURY DEMAND 59. Pursuant to the Seventh Amendment to the Constitution of the United States of America, Plaintiff is entitled to, and demands, a trial by jury. Dated: June 15, 2020 Respectfully submitted, KAZEROUNI LAW GROUP, APC By: s/ Abbas Kazerounian ABBAS KAZEROUNIAN, ESQ. ak@kazlg.com ATTORNEY FOR PLAINTIFF Additional Plaintiffs’ Counsel MADAR LAW CORPORATION Alex S. Madar, Esq. (319745) alex@madarlaw.net 14410 Via Venezia Apt 1404, San Diego, CA 92129-1666 Telephone: (858) 299-5879 Facsimile: (619) 354-7281 CLASS ACTION COMPLAINT PAGE 12 OF 12

privacy

wuofEocBD5gMZwczkJWL

Dennis J. Stewart (SBN 99152) GUSTAFSON GLUEK PLLC 600 B Street 17th Floor San Diego, CA 92101 Telephone: (619) 595-3299 dstewart@gustafsongluek.com Attorneys for Plaintiff Jim Riley UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA Case No. ____________________ CLASS ACTION COMPLAINT FOR VIOLATIONS OF: 1. SHERMAN ACT §§ 1, 2, 2. CLAYTON ACT § 7, 3. STATE ANTITRUST LAWS, 4. STATE CONSUMER PROTECTION LAWS, and 5. UNJUST ENRICHMENT JURY TRIAL DEMANDED JIM RILEY, on behalf of himself and all others similarly situated, Plaintiffs, v. CELESTRON ACQUISITION, LLC, NANTONG SCHMIDT OPTO-ELECTRICAL TECHNOLOGY CO. LTD., NINGBO SUNNY ELECTRONIC CO. LTD. OLIVON MANUFACTURING CO. LTD., OLIVON USA, LLC, SKY-WATCHER CANADA, SKY-WATCHER USA, SUZHOU SYNTA OPTICAL TECHNOLOGY CO., LTD., SW TECHNOLOGY CORP., SYNTA CANADA INTERNATIONAL ENTERPRISES LTD., and SYNTA TECHNOLOGY CORP. OF TAIWAN, Defendants. Page I.  INTRODUCTION ...............................................................................................................1  II.  JURISDICTION AND VENUE ..........................................................................................3  III.  PARTIES .............................................................................................................................5    Plaintiffs ...................................................................................................................5    Defendants ...............................................................................................................5  1.  The Synta Defendants ..................................................................................5  2.  The Sunny Defendant ..................................................................................7    Agents and Co-Conspirators ....................................................................................8  1.  The Synta Co-Conspirators ..........................................................................8  2.  The Sunny Co-Conspirators .........................................................................9  3.  Defendants’ Corporate Families Acted as Single Enterprises, and Defendant Parent Companies Exercised Substantial Control over Their U.S. Affiliates ............................................................................................11  4.  Defendants’ High-Level Employees Organized the Conspiracy and Their Subordinate Employees—Including Those of Their United States’ Subsidiaries—Executed the Conspiracy ....................................................12  5.  The Defendants and Co-Conspirators Who Engaged in Collusive Conduct Participated in Discussions on Behalf of Entire Corporate Families and Failed to Distinguish Between Corporate Entities in the Same Corporate Family ........................................................................................................13  6.  The Nature of the Telescope Industry Required Foreign Companies Named As Defendants and Co-Conspirators Herein to Use Their United States Subsidiaries and Affiliates As Distribution and Sales Arms .....................14  IV.  FACTUAL ALLEGATIONS ............................................................................................15    Consumer Telescopes ............................................................................................15    The Consumer Telescope Markets .........................................................................15  1.  The Manufacturing Market ........................................................................16  2.  The Distribution Market ............................................................................16    The Defendants Are Liable for the Anticompetitive Conduct Alleged Herein .....17    The Federal Trade Commission’s Actions in the Consumer Telescope Market ...18    The Defendants and Co-Conspirators Monopolized Different Products in the Consumer Telescope Market .................................................................................19    The Defendants and Co-Conspirators Colluded on Sunny’s Acquisition of Meade ................................................................................................................................20    The Defendants and Co-Conspirators Conspired to Interfere with Orion’s Acquisition of the Hayneedle Assets .....................................................................21    Illustrative Examples of Defendants’ Anticompetitive Conduct and Conspiracy to Fix Prices ...............................................................................................................22    The Structure and Characteristics of the Consumer Telescope Market Render the Conspiracy More Plausible ....................................................................................28  1.  The Consumer Telescope Manufacturing and Distribution Markets Have High Barriers to Entry ................................................................................28  2.  The Consumer Telescope Manufacturing and Distribution Markets Are Highly Concentrated ..................................................................................29  3.  There is Inelasticity of Demand for Consumer Telescopes .......................30  V.  CLASS ACTION ALLEGATIONS ..................................................................................30    California Law Should Be Applied to the Nationwide Indirect Purchaser States’ Damages Class .......................................................................................................31  1.  The Conspiracy Emanated from California: Location of Defendants and Co-Conspirators .........................................................................................32  2.  The Conspiracy Emanated from California: Location of Individuals .......32  3.  Specific Targets of the Conspiracy Were from California ........................32  4.  The Conspiracy Emanated from California: Sheppard Mullin Facilitated the Conspiracy from California .................................................................33  5.  The Defendants and Co-Conspirators Targeted California .......................33    Alternatively, Plaintiffs Will Seek to Certify State Damages Classes ...................34  VI.  PLAINTIFFS AND THE CLASSES SUFFERED ANTITRUST INJURY .....................41  VII.  THE STATUTE OF LIMITATIONS DOES NOT BAR PLAINTIFF’S CLAIMS ..........44    The Statute of Limitations Did Not Begin to Run Because Plaintiffs Did Not and Could Not Discover Their Claims .........................................................................44    Fraudulent Concealment Tolled the Statute of Limitations ...................................45  VIII.  CAUSES OF ACTION ......................................................................................................47 First Cause of Action  Violation of Section 1 of the Sherman Act (15 U.S.C. § 1)   Restraint of Trade (on behalf of Plaintiffs and the Nationwide Injunctive Class) .......47 Second Cause of Action  Violation of Section 2 of the Sherman Act (15 U.S.C. § 2) Monopolization  (on behalf of Plaintiffs and the Nationwide Injunctive Class) .....................................49 Third Cause of Action  Violation of Section 2 of the Sherman Act (15 U.S.C. § 2) Attempted Monopolization  (on behalf of Plaintiffs and the Nationwide Injunctive Class) .....................................50 Fourth Cause of Action  Violation of Section 7 of the Clayton Act (15 U.S.C. § 18) (on behalf of Plaintiffs and the Nationwide Injunctive Class) .................................................................................52 Fifth Cause of Action  Violation of the State Antitrust Laws (on behalf of Plaintiffs and the Damages Class or, Alternatively, on Behalf of the State Damages Classes) ........................................53 Sixth Cause of Action  Violation of State Consumer Protection Laws (on behalf of Plaintiffs and the Damages Class or, Alternatively, on Behalf of the State Damages Classes) ..............72 Seventh Cause of Action Against All Defendants  Unjust Enrichment (on behalf of Plaintiffs and the Damages Class or, Alternatively, on Behalf of the State Damages Classes) ....................................................................90  IX.  PRAYER FOR RELIEF ....................................................................................................90  X.  JURY DEMAND ...............................................................................................................93  all others similarly situated against Defendants Celestron Acquisition, LLC, Nantong Schmidt Opto-Electrical Technology Co., Ltd., Olivon Manufacturing Co. Ltd., Olivon USA, LLC, Sky- Watcher Canada, Sky-Watcher USA, Suzhou Synta Optical Technology Co., Ltd., SW Technology Corp., Synta Canada International Enterprises Ltd., Synta Technology Corp. of Taiwan (together, “Synta Defendants”), and Ningbo Sunny Electronic Co. Ltd. (“Sunny Defendant”) (collectively, “Defendants”). The conspiracy and conduct alleged herein were engaged in and facilitated by the following entities and individuals (“Co-Conspirators”): Good Advance Industries Ltd., Dar Tson “David” Shen, Jean Shen, Sylvia Shen, Corey Lee, Laurence Huen, Joseph Lupica, and Dave Anderson (together, “Synta Co-Conspirators”); Sunny Optical Technology Co., Ltd., Meade Instruments Corp., Sunny Optics Inc., Wenjun “Peter” Ni, and Wang Wenjian (together, “Sunny Co-Conspirators”). The foregoing entities have been named as Defendants and Co-Conspirators for engaging in a conspiracy to unlawfully fix prices, allocate the market and customers, and unlawful monopolistic conduct in the United States for consumer telescopes. Plaintiff hereby alleges, on information and behalf, except as to those allegations which pertain to themselves, as follows: I. INTRODUCTION 1. Astronomy is one of the oldest and most popular hobbies in the United States. Unfortunately, however, telescope manufacturers and distributors have been engaged in price fixing to take advantage of those who engage in this hobby. As a result, Americans have collectively paid hundreds of millions of dollars in illegal overcharges for telescopes since 2005 as a result of a long-running conspiracy to unlawfully fix the prices, allocate the market and customers, and gain an unlawful monopoly in the United States for telescopes, causing the prices of telescopes to be raised beyond competitive levels. 2. Orion Technologies, Inc. (“Orion) is a California-based distributor and seller of telescopes, binoculars, and accessories. Orion imports products from Chinese manufacturers like Sunny and Synta, which are the two largest manufacturers of telescopes sold in the United States. distributors, such as Orion, Amazon, or Walmart, which then markets and sells them to consumers online, in stores, through mail-order catalogs, among other means. 3. In November 2016, Orion filed a lawsuit in this District against Sunny, identifying its primary competitor, Synta, for conspiring to “divide the market, fix prices, [and] throttle competition” in violation of the Sherman, Clayton, and California Cartwright Acts, as well as California’s unfair competition law. See Optronic Techs., Inc. v. Ningbo Sunny Electronic Co., Ltd. et al., No. 5:16-cv-06370-EJD-VKD (N.D. Cal.) (“Orion Litigation”). Synta and Sunny manufacture a large majority of all consumer telescopes imported into the United States. Specifically, Orion alleged Sunny and Synta conspired to: (1) fix the prices and credit terms of consumer telescopes purchased in the United States; (2) facilitate Sunny’s purchase of Meade Instruments Corp.; and (3) divide the telescope market by product type and allocate customers, and that they formed, or attempted to form, a monopoly and pushed Orion out of the United States consumer telescope market by refusing to deal with Orion and unlawfully concentrating the market for telescope manufacturing services. 4. On December 5, 2019, following a six-week jury trial and two days of deliberation, the jury delivered a verdict in favor of Orion, awarding Orion $16.8 million in single damages after finding that the defendants had violated the Sherman Act and the Clayton Act by engaging in a conspiracy to fix the price for, and allocate the market of, telescopes and accessories and to monopolize the domestic consumer telescope market. U.S. District Judge Edward J. Davila delivered a partial final judgment in the amount of $50.4 million by trebling the jury’s award and granting post-judgment interest. 5. As a direct result of the anticompetitive and unlawful conduct alleged in the Orion Litigation and as alleged herein, Plaintiff and the Classes (defined infra) paid artificially inflated prices for consumer telescopes during the period from and including January 1, 2005 through August 31, 2019 (“Class Period”) and have thereby suffered antitrust injury to their property. 6. To remedy Plaintiff’s injury caused by Defendants’ unlawful conduct, Plaintiff seeks compensatory damages to be trebled in accordance with antitrust laws, injunctive relief, and II. JURISDICTION AND VENUE 7. Plaintiff brings this action under Section 16 of the Clayton Act (15 U.S.C. § 26) to secure equitable and injunctive relief against the Defendants for violating Section 1 of the Sherman Act (15 U.S.C. § 1). Plaintiff also asserts claims for actual and exemplary damages pursuant to state antitrust, consumer protection, and unjust enrichment laws, and seek to obtain restitution, recover damages, and secure other relief against the Defendants for violations of those state laws. Plaintiff and the Classes also seek attorneys’ fees, costs, and other expenses under federal and state law. 8. This Court has jurisdiction over the subject matter of this action pursuant to Section 16 of the Clayton Act (15 U.S.C. § 16), Section 1 of the Sherman Act (15 U.S.C. § 1), and Title 28, United States Code, Sections 1331 and 1337. This Court has subject matter jurisdiction of the state law claims pursuant to 28 U.S.C. §§ 1332(d) and 1367, in that: (1) this is a class action in which the matter or controversy exceeds the sum of $5,000,000, exclusive of interest and costs, and in which some members of the Classes are citizens of a state different from the Defendants; and (2) Plaintiff’s state law claims form part of the same case or controversy as their federal claims under Article III of the United States Constitution. 9. Venue is proper in this District pursuant to Section 12 of the Clayton Act (15 U.S.C. § 22), and 28 U.S.C. §§ 1391 (b), (c), and (d), because a substantial part of the events giving rise to Plaintiff’s claims occurred in this District, a substantial portion of the affected interstate trade and commerce discussed below has been carried out in this District, and the Defendants reside, are licensed to do business in, are doing business in, have agents in, and are found in or transact business in this District. 10. This Court has in personam jurisdiction over the Defendants because the Defendants either directly or through the ownership and/or control of their subsidiaries, inter alia: (a) transacted business in the United States, including in this District; (b) directly or indirectly sold or marketed substantial quantities of telescopes throughout the United States, including in this District; (c) had substantial aggregate contacts with the United States as a whole, including in was directed at, and had a direct, substantial, reasonably foreseeable and intended effect of causing injury to the property of persons and entities residing in, located in, or doing business throughout the United States, including in this District. The Defendants also conduct business throughout the United States, including in this jurisdiction, and they have purposefully availed themselves of the laws of the United States. Furthermore, Defendants Celestron Acquisition, LLC and Sky-Watcher USA are headquartered in California, and Co-Conspirator Meade Instruments Corp. is headquartered in California. 11. The Defendants engaged in conduct both inside and outside of the United States that caused direct, substantial, and reasonably foreseeable and intended anticompetitive effects on interstate commerce within the United States. 12. The activities of the Defendants and Co-Conspirators directly targeted the United States consumer telescope market and were within the flow of, were intended to, and did have, a substantial effect on interstate commerce of the United States. The Defendants’ products are sold in the flow of United States interstate commerce. 13. Telescopes manufactured abroad by the Defendants and Co-Conspirators and sold in the United States are goods brought into the United States for sale, and therefore constitute import commerce. To the extent any telescopes are purchased in the United States, and such telescopes do not constitute import commerce, the Defendants and Co-Conspirators’ activities with respect thereto, as more fully alleged herein during the Class Period, had, and continue to have, a direct, substantial and reasonably foreseeable effect on United States commerce. The anticompetitive conduct, and its effect on United States commerce described herein, caused antitrust injury to Plaintiff and members of the Classes in the United States. 14. By reason of the unlawful activities hereinafter alleged, the Defendants and Co- Conspirators’ unlawful activities substantially affected commerce throughout the United States, causing injury to Plaintiff and members of the Classes. The Defendants and Co-Conspirators directly and through their agents, engaged in activities affecting all states, to fix, raise, maintain and/or stabilize prices and allocate the market and customers in the United States for telescopes. telescopes. 15. The Defendants’ conspiracy and wrongdoing described herein adversely affected persons in the United States who purchased telescopes. III. PARTIES Plaintiff 16. Plaintiff Jim Riley is a Missouri resident who purchased at least one telescope indirectly from Defendants or Co-Conspirators during the Class Period. Mr. Riley is a consumer of telescopes and accessories. Defendants 1. The Synta Defendants 17. Defendant Synta Technology Corporation of Taiwan (“Synta Technology”) is a company headquartered in Taiwan. Together with its subsidiaries and affiliates, it has sold telescopes into the U.S., Canada, and the European Union during the Class Period. Synta Technology has sold telescopes that were shipped into the Northern District of California. Its address in Taiwan is No. 89 Lane 4 Chia-An W. Road Lung-Tan Taoyuan Taiwan R.O.C. Synta Technology is a member of Defendants’ anticompetitive conspiracy. 18. Defendant SW Technology Corporation (“SW Technology”) a Delaware corporation with its principal place of business at 2835 Columbia Street Torrance, California 90503. SW Technology is a subsidiary and wholly owned and/or controlled by its parent, Defendant Synta Technology Corporation of Taiwan. SW Technology manufactured, marketed, and/or sold telescopes that were sold and purchased throughout the United States, including in the Northern District of California, during the Class Period. On information and belief, at all times during the Class Period, Dar Tson Shen (see infra) established SW Technology in 2005 to acquire Defendant Celestron as a wholly owned subsidiary and continues to operate SW Technology as a holding company. 19. Defendant Suzhou Synta Optical Technology Co., Ltd. (“Suzhou Synta”) is a telescope manufacturing company located in Suzhou, China. Suzhou Synta is owned and/or Northern District of California during the Class Period. Suzhou Synta’s principal place of business is located at No. 65, Yushan Road, New District, 215011, Jiangsu, China. Suzhou Synta is the primary manufacturing subsidiary of Synta Technology. Synta Canada (see supra) owns 20 percent of Suzhou Synta. During the Class Period, Suzhou Synta—directly and/or through its subsidiaries, which it wholly owned and/or controlled—manufactured, marketed, and/or sold telescopes that were sold and purchased throughout the United States, including in this District. 20. Defendant Nantong Schmidt Opto-Electrical Technology Co. Ltd. (“Nantong Synta”) is a telescope manufacturing company located in Nantong, China. Nantong Synta is owned and/or controlled by David Shen, and has manufactured telescopes that were sold into the Northern District of California during the Class Period, including to Defendant Celestron. Its principal place of business is located at No. 399 West Zhongshan Rd, Rugao City Jiangsu, China. 21. Defendant Celestron Acquisition, LLC (“Celestron”) is a Delaware corporation with its principal place of business located at 2835 Columbia Street Torrance, California 90503. Celestron is a subsidiary and wholly owned and/or controlled by its parent, Defendant SW Technology Corporation, and an affiliate of Defendant Synta Technology Corporation of Taiwan (see infra). Celestron manufactured, marketed, and/or sold telescopes that were sold and purchased throughout the United States, including in the Northern District of California, during the Class Period. Celestron is the largest importer and distributor of telescopes in the United States. 22. Defendant Synta Canada International Enterprises Ltd. (“Synta Canada”) is a Canadian corporation with its principal place of business at 4035 Williams Road, Richmond, BC V7E 1J7, Canada. On information and belief, Synta Canada owns 20 percent of Suzhou Synta Optical Technology Co. (see infra). Synta Canada manufactured, marketed, and/or sold telescopes that were sold and purchased throughout the United States, including in the Northern District of California, during the Class Period. 23. Defendant Olivon Manufacturing Co. Ltd. (“Olivon Canada”) is a Canadian corporation with its principal place of business located at 11880 Hammersmith Way, Richmond, sold telescopes that were sold and purchased throughout the United States, including in the Northern District of California, during the Class Period. 24. Defendant Olivon USA, LLC (“Olivon USA”) is a Nevada corporation with its principal place of business located at 701 S Carson Street, Suite 200 200, Carson City, Nevada 89701. On information and belief, Olivon USA manufactured, marketed, and/or sold telescopes that were sold and purchased throughout the United States, including in the Northern District of California, during the Class Period. 25. Defendant Sky-Watcher Canada is a Canadian corporation with its principal place of business located at 11880 Hammersmith Way, Richmond, BC V7A 5C8, Canada. Defendant Synta Technology Corporation of Taiwan established Sky-Watcher Canada in 1999 to sell telescopes manufactured by Defendant Suzhou Synta Optical Technology Co. On information and belief, Sky-Watcher Canada manufactured, marketed, and/or sold telescopes that were sold and purchased throughout the United States, including in the Northern District of California, during the Class Period. 26. Defendant Sky-Watcher USA is an American corporation with its principal place of business located at 475 Alaska Avenue, Torrance, California 90503. Defendant Synta Technology Corporation of Taiwan established Sky-Watcher USA in the late 2000s to sell telescopes manufactured by Defendant Suzhou Synta Optical Technology Co. On information and belief, Sky-Watcher USA manufactured, marketed, and/or sold telescopes that were sold and purchased throughout the United States, including in the Northern District of California, during the Class Period. 2. The Sunny Defendant 27. Defendant Ningbo Sunny Electronic Co. Ltd. (“Ningbo Sunny”) is a Chinese corporation organized and existing under the laws of China with its principal place of business located at 199 An Shan Lu, Yuyao, Ningbo, Zhejiang, China. During the Class Period, Ningbo Sunny—directly and/or through its subsidiaries, which it wholly owned and/or controlled, and through Defendant Celestron (see supra) and other distributors—manufactured, marketed, and/or District. Agents and Co-Conspirators 1. The Synta Co-Conspirators 28. Co-Conspirator Good Advance Industries Ltd. (“Good Advance”) is a Taiwanese corporation with its principal place of business located at No. 89 Lane 4 Chia-An W. Road Lung-Tan Taoyuan Taiwan R.O.C. On information and belief, Good Advance manufactured, marketed, and/or sold telescopes that were sold and purchased throughout the United States, including in this District, during the Class Period. 29. Co-Conspirator Dar Tson (“David”) Shen is the founder, owner, and chairman of the Synta Defendants and Synta Co-Conspirators. These companies are affiliates of each other. Some of them are shell companies and others are holding companies. On information and belief, Mr. Shen and his family, including Jean Shen and Sylvia Shen, controlled the aforementioned 11 entities during the Class Period. Mr. Shen regularly comes to this District to meet with U.S. distributors of Synta products. Even though Mr. Shen founded and oversees Synta, he was concurrently an officer of Ningbo Sunny from 2001 to 2005—a direct, horizontal competitor. In fact, he held a 26 percent ownership stake in Ningbo Sunny until 2005 when Synta acquired Celestron. At that time, he transferred his shares to his sister, Dong Yun Zue, who continues to hold those shares. 30. Co-Conspirator Jean Shen participated in the conspiracy alleged herein, including by representing to telescope distributors that Synta’s competitor, Co-Conspirator Ningbo Sunny, was one of “my family’s companies[.]” She is the sister of Mr. Shen, who exercises control over Defendants Olivon Manufacturing and Olivon USA through Ms. Jean Shen. 31. Co-Conspirator Sylvia Shen is a member of Defendant Celestron’s executive committee and Defendant SW Technology’s CEO, CFO, and Secretary. She participated in the conspiracy alleged herein. She is the sister of Mr. Shen, who exercise control over Defendant Celestron and other Synta affiliates through Ms. Sylvia Shen. 32. Co-Conspirator Corey Lee is Defendant Celestron’s CEO and resides in 33. Co-Conspirator Laurence Huen is Defendant Celestron’s board member and Mr. Shen’s close advisor and confidante. Mr. Huen participated in the conspiracy alleged herein. Mr. Huen also assisted Defendant Lupica and acted as a conduit of information between horizontal competitors Synta and Sunny. 34. Co-Conspirator Joseph Lupica is Celestron’s former CEO who—through the collusive arrangements of the Defendants and Co-Conspirators—became the CEO of Meade, Celestron’s main, direct horizontal competitor. Lupica resides in Palm Springs, California. Mr. Lupica participated in the conspiracy alleged herein. He began replacing Meade’s management with officers from Celestron, including Celestron’s Vice President of Sales, Victor Aniceto, who was hired as the Vice President of Sales for Meade. Later, when Defendant Lupica retired, Mr. Aniceto was promoted to President of Meade. Mr. Lupica has admitted that Ningbo Sunny could not have acquired Meade but for the collusive assistance it received from its horizontal competitor Synta. 35. Co-Conspirator Dave Anderson is also Celestron’s former CEO. Mr. Anderson participated in the conspiracy alleged herein. 2. The Sunny Co-Conspirators 36. Co-Conspirator Sunny Optical Technology Co., Ltd. (“Sunny Optical”) is a Chinese corporation organized and existing under the laws of China with its principal place of business located at 27-29 Shunke Road, Yuyao, Zhejiang, China. Sunny Optical is an affiliate of Ningbo Sunny. Sunny Optical manufactured, marketed, and/or sold telescopes that were sold and purchased throughout the United States, including in this District, during the Class Period. On information and belief, at all times during the Class Period, Sunny Optical’s activities in the United States were under the control and direction of Ningbo Sunny. 37. Co-Conspirator Meade Instruments Corp. (“Meade”) is a Delaware corporation with its principal place of business located at 27 Hubble, Irvine, California 92618. Meade is a subsidiary and wholly owned and/or controlled by its parent, Ningbo Sunny. Meade United States, including in this District, during the Class Period. On information and belief, at all times during the Class Period, Meade’s activities in the United States were under the control and direction of its Ningbo Sunny. The only reason Meade Instruments Corp. was not named as a Defendant herein is that it has filed for bankruptcy and doing so would violate the bankruptcy stay (see Case No. 8:19-bk-14714-CB (C.D. Cal.)). 38. Co-Conspirator Sunny Optics Inc. (“Sunny Optics”) is a Delaware corporation formed for the purpose of merging with Meade. Upon information and belief, Sunny Optics is a subsidiary of Ningbo Sunny. 39. Co-Conspirator Wenjun (“Peter”) Ni is the founder, owner, and CEO of Ningbo Sunny and Meade and, on information and belief, controlled the aforementioned three entities during the Class Period. 40. Co-Conspirator Wang Wenjian is the director and controlling shareholder of Sunny Optical and the uncle of Mr. Ni. 41. As indicated above, the Defendants and Co-Conspirators shared certain executives that facilitated the conspiracy. For example, although Mr. Shen founded Synta Technology in 1980, he also served as an officer and vice chairman of its direct competitor, Ningbo Sunny, from November 2001 to July 2005. Mr. Shen also owned 26 percent of Ningbo Sunny until 2005, at which time he transferred his shares to his sister-in-law, Dong Yun Xue, who continues to hold that interest. As another example, Joe Lupica was the former CEO of both Celestron and Meade, and his transition from CEO at Celestron to CEO at Meade is part of the conspiracy alleged herein. 42. Defendants acted as the principals of or agents for the unnamed co-conspirators with respect to the acts, violations, and common course of conduct alleged herein. 43. Various persons, partnerships, sole proprietors, firms, corporations and individuals not named as defendants in this lawsuit, and individuals, the identities of which are presently unknown, have participated as co-conspirators with Defendants in the offenses alleged in this Complaint, and have performed acts and made statements in furtherance of the conspiracy or in furtherance of the anticompetitive conduct. corporation or limited liability entity, the allegation means that the corporation or limited liability entity engaged in the act, deed or transaction by or through its officers, directors, agents, employees or representatives while they were actively engaged in the management, direction, control or transaction of the corporation’s or limited liability entity’s business or affairs. 3. Defendants’ Corporate Families Acted as Single Enterprises, and Defendant Parent Companies Exercised Substantial Control over Their U.S. Affiliates 45. When Defendants reached an agreement on fixing the prices and allocating the market of telescopes—whether as a result of formal or informal meetings or discussions arranged to implement or enforce cartel purposes and agreements—each of the Defendants and Co- Conspirators meant for their collusive agreements to impact the pricing for all telescopes subject to the cartel’s anticompetitive efforts regardless of where they were sold. 46. As part of a single, integrated global enterprise, Defendants and Co-Conspirators manufacture, market, and/or sell telescopes. They sell their telescopes around the world, including in the United States. Accordingly, to achieve the cartel’s anticompetitive aims, Defendants and Co-Conspirators effectuated the cartel by establishing pricing and allocating the market in which they compete. 47. Foreign-based Defendants and Co-Conspirators established United States (and North American) subsidiaries not only to market and sell their telescopes in the United States but also to effectuate and achieve the cartel’s aims and purposes. Without doing so, these corporate entities would have had to perform such functions themselves. These corporate entities chose not to do so and instead established corporate subsidiaries and affiliates that perform functions at the direction of and are controlled by their officers in China. 48. These United States (and other North American) subsidiaries have no authority to set prices below the prices for telescopes agreed to among the cartel’s members. For these subsidiaries, pricing authority largely was held by their Chinese corporate parent or affiliate. 49. Because their foreign-based corporate parent or affiliate had significant control over all aspects of their business (e.g., type of telescopes, prices, supply, business strategy, customer American) subsidiaries operated as little more than distribution and sales offices for their foreign- based corporate parent or affiliate. Indeed, the foreign-based corporate parent or affiliate named their own family members employees and officers of their United States’ subsidiaries. As a result, the United States (and other North American subsidiaries) were—as intended—able to advance the cartel aims in the United States. 4. Defendants’ High-Level Employees Organized the Conspiracy and Their Subordinate Employees—Including Those of Their United States’ Subsidiaries—Executed the Conspiracy 50. The Defendants and Co-Conspirators organized the telescope conspiracy at a high- level within their respective corporate families. Both executives and subordinate employees carried out the conspiracy. Additionally, given the nature of the industry, the subsidiaries and affiliates implemented the conspiratorial agreements within their respective corporate families. 51. Each of the corporate families alleged herein (i.e., Synta and Sunny) operate not as separate corporate entities but as a single enterprise. Each corporate family holds itself out to the public as a single, integrated enterprise. Each of the parent and/or foreign entities named in this case operate a hierarchical corporate structure wherein they treat subsidiaries not as separate corporate entities under their own control but as mere divisions of the corporate parent. 52. Each corporate parent alleged herein also coordinates and manages the finances and meetings between officers from each of the different subsidiaries to facilitate an integrated enterprise to link the various supply chains to the corporate families’ clients. The parent defendants dominate and control the finances, policies, and business practices of their various subsidiaries, including the United States subsidiaries. 53. In light of the fact that the U.S. subsidiaries named in this Complaint were treated as mere distribution and sales offices of the Chinese parent or foreign affiliate, they were generally kept informed about the competitor meetings and discussions occurring abroad and were not permitted to undercut the pricing and market allocation agreements reached during those meetings and discussions. 54. By virtue of their integrated enterprises, and by virtue of the other allegations in this behalf of, and reported these meetings and discussions to, their respective corporate family and United States subsidiaries. In fact, Chinese-based parents and affiliates often provided pricing instructions to their United States subsidiaries, which acted as their distribution and sales arms in the United States. 5. The Defendants and Co-Conspirators Who Engaged in Collusive Conduct Participated in Discussions on Behalf of Entire Corporate Families and Failed to Distinguish Between Corporate Entities in the Same Corporate Family 55. In meetings and discussions between the Defendants and Co-Conspirators in furtherance of the telescope conspiracy (see infra), Plaintiff alleges generally which corporate family was represented in a particular meeting or communications. This is because the individual participants in the conspiratorial meetings and discussions did not distinguish between entities within a particular corporate family, referring to themselves or others, for example, merely as “Synta,” “Celestron,” “Sunny,” or “Meade.” Indeed, the officers from Defendants appear to have attended the conspiratorial meetings on behalf of their entire corporate families, including their respective United States’ subsidiaries. Further, because of their generic uses of the Defendants and Co-Conspirators’ names, individual participants in the conspiratorial meetings and discussions did not always know the specific corporate affiliation of their counterparts nor did they distinguish between entities within the respective corporate families. Participants in the conspiratorial meetings entered into agreements on behalf of, and reported these meetings and discussions to their respective corporate families and United States affiliates. As a result, the entire corporate family was represented in meetings and discussions by their agents and were parties to the agreements reached in those meetings. 56. For example, in an email from Peter Ni to Celestron’s former CEO Dave Anderson and Celestron’s Board members Laurence Huen, Mr. Chen and Sylvia Shen, Mr. Ni wrote “But the premise of this case is CELESTRON/SYNTA should be provided the financial support to SUNNY” and “[a]t present, Meade has already started to borrow money from East West Bank by offering guarantees from sunny.” See infra at section IV.H., ¶ 91. Meade CEO Defendant Lupica, “Mr. Ni. . . . doesn’t want to disrupt Synta business. However, this promo will not be disruptive to Celestron business.” See infra at section IV.H., ¶ 99. 58. Additionally, former CEO of Celestron and Meade, Joe Lupica, wrote in an email to Sunny Optics and Meade, “On the other hand if we take advantage of the strong relationships among Sunny, Synta, Celestron and Meade (under Peter’s ownership) we can quickly turn the company around and the four companies can dominate the telescope industry” (emphasis added). 59. Further revealing the interrelatedness of the Sunny corporate family is the manner in which invoices were paid. For example, Sunny Optical’s financial statements reflect Meade paying invoices issued by Sheppard, Mullin, Richter, & Hampton, LLP, the law firm which represented Sunny in the acquisition of Meade. 60. Further, the Defendants and Co-Conspirators knew the individuals at the conspiratorial meetings represented their entire respective corporate family; otherwise, the Defendants and Co-Conspirators would not have entered into the illegal agreements if affiliate companies could simply undercut the agreements reached. 6. The Nature of the Telescope Industry Required Foreign Companies Named As Defendants and Co-Conspirators Herein to Use Their United States Subsidiaries and Affiliates As Distribution and Sales Arms 61. The Defendants and Co-conspirators’ United States subsidiaries are wholly-owned and/or controlled by their foreign parents or affiliates. As part of each Defendant’s global enterprise, its United States subsidiary or affiliate assists the foreign parent or affiliate with the distribution and/or sale of telescopes to consumers in the United States. In most cases, the United States subsidiaries carry out the distribution and/or sales of telescopes to customers in the United States after obtaining products manufactured at the foreign parent or affiliate’s factories located abroad. Generally, United States’ subsidiaries facilitate direct purchaser orders for telescopes with parents or affiliates overseas. That is, the foreign parent or affiliate manufactures telescopes other North American) subsidiaries or affiliates. Indeed, the foreign parents and affiliates make millions—if not, billions—of dollars of “sales” annually to their United States’ (and other North American) subsidiaries and affiliates as part of their global business. 62. In sum, the foreign-based Defendants and Co-Conspirators sell directly to the United States and operates their telescope business as a single global enterprise with their subsidiaries and affiliates in the United States and North America generally. IV. FACTUAL ALLEGATIONS Consumer Telescopes 63. A telescope is an optical instrument that magnifies and enhances the view of faraway objects. Most telescopes available for purchase to consumers fall into one of two main categories, refractor or reflector, though a combination of the two, Schmidt-Cassegrain telescopes, are also available. 64. A refractor telescope contains convex (bending outwards) lenses to collect, focus, and magnify light. Rays of light travel through the objective (main) lens where they are focused at the focal length of the eyepiece. The refracting telescope technology has been applied to other devices like binoculars and zoom lenses. 65. In contrast, a reflector telescope, the more common of the two, contains concave (bending inwards like a cave) mirrors. Light travels down the tube where it is reflected (hence the name reflector) up to a secondary mirror near the top of the tube, which directs the light into the eyepiece. This exact system is known as a Newtonian reflector. There are quite a few variations on this, including the Georgian and Cassegrain reflectors. 66. The Schmidt-Cassegrain telescope has gained immense popularity over the last 30 years. This type of telescope uses both lenses and mirrors in a compound system. The Consumer Telescope Markets 67. The global market for consumer telescopes is $250 million to $500 million annually. universities. The United States is the largest or one of the largest markets for consumer telescopes. Within the consumer telescope market, there are two relevant markets. 1. The Manufacturing Market 68. The first is for manufacturing consumer telescopes and telescope accessories for import into the United States. The geographic scope of this market is global. Sunny and Synta together have 80 percent of that market. 69. Although Sunny and Synta are each capable of manufacturing all types of consumer telescopes, Sunny and Synta have an illegal agreement or understanding that Synta manufactures higher-end products, while Sunny manufactures lower-end products. Pursuant to that unlawful agreement or understanding, Synta will not manufacture or respond to a request for quotation (“RFQ”) for products offered by Sunny, and vice versa. As a result of their understanding, Sunny and Synta can and do charge supracompetitive prices, restrict supply, and engage in other anticompetitive conduct that artificially increases the prices of the telescopes purchased by American consumers from the Defendants and their subsidiaries. 2. The Distribution Market 70. The second relevant market is a distribution market downstream from the aforementioned manufacturing market. The geographic scope of this market is the United States. Sunny and Synta collectively dominate the consumer telescope market in the United States by manufacturing, marketing, and/or selling over 80 percent of consumer telescopes in the United States. 71. In 2005, Synta acquired Celestron as a wholly-owned subsidiary. Celestron became the dominant telescope distributor in the United States though the Defendants and Co- Conspirators’ efforts. Subsequently, Sunny acquired Meade with Synta’s help and assistance, despite concerns from the Federal Trade Commission that it would become a monopoly. Synta and Sunny manufacture, market, and/or sell their telescopes to distributors, including their respective wholly owned subsidiaries Celestron and Meade, which then sell the telescopes online, in stores, and through dealers to astronomy enthusiasts in the United States. Celestron and Meade The Defendants Are Liable for the Anticompetitive Conduct Alleged Herein 72. The jury in the Orion Litigation reached various findings of antitrust liability by defendants. As mentioned, supra, Orion won a $16.8 million jury verdict against Ningbo Sunny and its subsidiaries, which was statutorily trebled under 15 U.S.C. § 15(a) to $50.4 million. Orion’s claims withstood motions to dismiss and summary judgment before proceeding to trial in November 2019. 73. In the Orion Litigation, the jury unanimously found, inter alia: a. The defendants agreed with their competitors to fix the price and credit terms for telescopes and accessories in violation of Section 1 of the Sherman Act; b. The defendants agreed with a third party, other than a competitor, to fix the price or credit terms for telescopes and accessories in a manner that unreasonably restrained trade, such that the anticompetitive effects outweighed any procompetitive effects, in violation of Section 1 of the Sherman Act; c. The defendants agreed with a competitor or potential competitor either (a) not to compete with each other in the manufacture or sale of telescopes and accessories, or (b) to divide customers or potential customers between them, in violation of Section 1 of the Sherman Act; d. The defendants agreed with a third party, other than a competitor or potential competitor, either (a) not to complete with each other in the manufacture or sale of telescopes and accessories, or (b) to divide customers or potential customers between them in a manner that unreasonably restrained trade, such that the anticompetitive effects outweighed any procompetitive effects, in violation of Section 1 of the Sherman Act; e. The defendants engaged in anticompetitive conduct in violation of Section 2 of the Sherman Act; f. The defendants had a specific intent to achieve monopoly power in the Act; g. There is or was a dangerous probability that the defendants could achieve monopoly power in violation of Section 2 of the Sherman Act; h. The defendants knowingly entered into an agreement with another person or entity to obtain or maintain monopoly power in the telescope manufacturing market in violation of Section 2 of the Sherman Act; i. The defendants specifically intended that one of the parties to the agreement would obtain or maintain monopoly power in the telescope manufacturing market in violation of Section 2 of the Sherman Act; j. The defendants committed an overt act in furtherance of the conspiracy in violation of Section 2 of the Sherman Act; and k. Co-Conspirators Ningbo Sunny and Sunny Optical’s acquisition of Co- Conspirator Meade created a reasonable likelihood of substantially lessening competition or creating a monopoly in the telescope manufacturing market in violation of Section 7 of the Clayton Act. See Verdict Form, Orion Litigation (Nov. 26, 2019), ECF No. 501. 74. The defendants’ antitrust liability has therefore unquestionably been proven by a preponderance of the evidence. The jury verdict against the defendants in the previous action is as valid as a guilty plea. The Federal Trade Commission’s Actions in the Consumer Telescope Market 75. Antitrust concerns in the consumer telescope market are not new; indeed, they arose in 2005, when Synta acquired Celestron, the largest distributor of telescopes in the United States at the time and a rival of Meade, another consumer telescope distributor. In May 2002, Meade had itself attempted to acquire Celestron. The parties abandoned the deal, however, after the Federal Trade Commission (“FTC”) authorized staff to seek a temporary restraining order and a preliminary injunction in federal district court to stop any attempt by Meade, the leading manufacturer of performance telescopes and Schmidt-Cassegrain telescopes in the United States, two performance telescope provider in the United States and the only other supplier of Schmidt- Cassegrain telescopes. According to the FTC’s complaint, Meade’s acquisition of Celestron assets would adversely impact the performance telescope market by eliminating substantial actual competition between the two companies and by creating a monopoly in the market for telescopes.1 76. Similarly, in 1991, the FTC gave final approval to a consent agreement settling charges that a proposed joint venture between Meade and Celestron would have created a virtual monopoly in the manufacture and sale of certain telescopes. The agreement placed a 10-year requirement on Harbour Group Investments, L.P. and Diethelm Holding Ltd. (the former parents of Meade and Celestron, respectively) to obtain FTC approval before acquiring any company that manufactures or sells certain telescopes in the United States. This consent agreement followed a decision by the U.S. District Court for the District of Columbia granting the FTC’s motion for a preliminary injunction barring the acquisition of any assets or other interest in Celestron International by Harbour Group Meade’s parent) and further barring Diethelm (Celestron’s parent) from acquiring any assets or other interest in Meade.2 The Defendants and Co-Conspirators Monopolized Different Products in the Consumer Telescope Market 77. Through their unlawful agreements with horizontal competitors, Synta and Sunny effectively divided the consumer telescope market. As alleged above, Synta and Sunny agreed that Synta would manufacture higher-end products and Sunny would manufacture lower-end products. They also agreed that Synta would not manufacturer or respond to an RFQ for products manufactured by Sunny and vice versa. Both adhered to their agreements. As a result of their respective market shares, agreements not to compete, and significant barriers to entry (see infra), Synta and Sunny both have, and have maintained, an effective monopoly over the respective 1 “FTC Authorizes Injunction to Pre-empt Meade Instruments' Purchase of All, or Certain Assets, of Tasco Holdings, Inc.’s Celestron International,” Fed. Trade Comm’n (May 29, 2002), available at https://www.ftc.gov/news-events/press-releases/2002/05/ftc-authorizes-injunction-pre-empt- meade-instruments-purchase-all 2 FTC v. Harbour Group Investments, 1990 US Dist. LEXIS 15542 (D.D.C. 1990) supracompetitive prices, and engage in other anticompetitive conduct that artificially increases the prices of the telescopes that they respectively manufacture, market, and/or sell. The Defendants and Co-Conspirators Colluded on Sunny’s Acquisition of Meade 78. Meade was the leading American telescope manufacturer and supplier for many years. It owned critical patents, had a manufacturing facility in Mexico, and manufactured high- and low-end telescopes. One of the patents was for GoTo technology, a highly valued type of telescope mount and related software that can automatically point a telescope at astronomical objects that the user selects. GoTo technology was also the subject of extensive litigation between Meade and Celestron. 79. When Meade was offered for sale in 2013, Jinghua Optical Co. Ltd. (“Jinghua”), a small telescope manufacturer and competitor of Sunny and Synta, made a bid to purchase it. If Jinghua had been able to purchase Meade, it would have gained critical knowledge about the manufacture of high-end telescopes and accessories as well as Meade’s patent portfolio, permitting it to better compete with Sunny and Synta in both the manufacturing and distribution markets. 80. Sunny and Synta colluded to prevent Jinghua’s acquisition of Meade, which would have diversified manufacturing, preserved an independent distributor, and increased competition in the telescope industry. Sunny and Synta were motivated to scupper the Jinghua deal and to conspire because the FTC had blocked Meade and Celestron’s merger in 1991 and 2002. Additionally, Synta could not acquire Meade due to its ownership of Celestron. As a result, Sunny’s Mr. Ni and Synta’s Mr. Chen agreed that if Sunny moved to acquire Meade, Celestron and Synta would provide financial and other assistance to complete the acquisition. This is not the kind of arrangement into which true competitors enter. 81. Synta/Celestron made substantial payments and loans to Ningbo Sunny to facilitate the Meade acquisition. These payments were documented, for example, in an accounting provided by Celestron’s CFO, Paul Roth. As part of this unlawful agreement, Celestron took equity in 82. On information and belief, in exchange for this support, Sunny concealed Synta’s and Celestron’s involvement or assistance in its acquisition of Meade from the FTC; Sunny offered Celestron equity in Meade; Sunny provided Celestron and Synta with access to Meade’s intellectual property rights, thereby ensuring that Celestron no longer needed to compete with Meade (previously an independent company); and Sunny shared its customers’ data—including pricing data—with Celestron and Synta, thus enabling them to coordinate their prices and strategies. This cooperation reinforced Synta and Sunny’s respective monopoly in the United States for their products. 83. Synta and Sunny’s combination and conspiracy eliminated a competitor (Meade), increased market concentration, and solidified their monopoly power. Specifically, the effect of Sunny’s acquisition of Meade lessened competition, raised the already-high barriers to entry (see infra), and tended to create monopolies for Synta and Sunny’s in the United States. 84. After the Meade acquisition, Co-Conspirators Shen and Huen continued to provide advice and assistance to horizontal competitors Ningbo Sunny and Meade, met with Mr. Ni about these issues, and toured Meade’s facilities. Mr. Huen also instructed Ningbo Sunny to remove Meade’s CEO and to replace him with Celestron’s former CEO, Mr. Lupica. The Defendants and Co-Conspirators Conspired to Interfere with Orion’s Acquisition of the Hayneedle Assets 85. Synta and Sunny colluded to prevent Orion from acquiring various valuable assets. In 2014, Orion attempted to acquire certain assets, including web domains like telescopes.com, from online retailer, Hayneedle (“Hayneedle Assets”). The Defendants and Co-Conspirators used their market power to fix credit terms to prevent Orion from acquiring the Hayneedle Assets. Specifically, they cut off Orion’s credit when they learned that Orion sought to acquire these assets. 86. On May 12, 2014, Orion sent a letter of intent to Hayneedle indicating that Orion sought to purchase the Hayneedle Assets. On June 14, 2014, Synta sent Orion’s CEO, Peter Moreo, an email that ended Orion’s credit, stating, “if Orion really buys Hayneedle, this will be email to Sunny and requested that Sunny also withdraw Orion’s line of credit. Sunny then sent Orion an email nearly identical to Synta’s email. With its supplier credit cut off, Orion could not move forward with the asset acquisition. Synta and Sunny therefore sabotaged Orion’s purchase of the Hayneedle Assets that would have allowed it to better compete with them. Illustrative Examples of Defendants’ Anticompetitive Conduct and Conspiracy to Fix Prices 87. In the Orion Litigation, evidence demonstrated that the defendants fixed the prices for consumer telescopes, allocated the market thereof, illegally acquired assets, and unlawfully monopolized, and/or attempted to monopolize, the telescope supply and distribution markets. They also used cooperation and dominance in the consumer telescope manufacturing market to facilitate their syndicate of companies’ takeover of the distribution market. The defendants’ anticompetitive conduct includes, without limitation: a. Fixing the prices of consumer telescopes; b. Allocating the market for consumer telescopes; c. Jointing working together, and aiding and abetting Sunny’s acquisition of Celestron’s horizontal competitor, Meade; d. Exchanging non-public, material information with each other, including Meade’s intellectual property, business plans, and product pricing strategies; e. Exchanging non-public, material information about competitors’ businesses, including intellectual property, business plans, and product pricing strategies; and f. Aiding and abetting each other’s consolidation and maintenance of monopoly power. 88. Through these activities, the Sunny and Synta corporate families illegally combined and conspired with each other instead of competing against one another and enabled Celestron to dominate the consumer telescope distribution market. Celestron has amassed at least 70 percent of the consumer telescope market in the United States as a result of the Defendants and 89. Illustrative examples of the Defendants and Co-Conspirators’ conspiratorial conduct in the consumer telescope manufacturing and distribution markets include, but are not limited to: 90. Regarding the horizontal competitors’ conspiracy to acquire Meade for Sunny, Sunny’s Mr. Ni confirmed to Celestron’s then-CEO David Anderson and directors, David Shen, Laurence Huen, Jack Chen, and Sylvia Shen, that Sunny would purchase Meade to prevent JOC (Jinghua) from doing so per the parties’ discussion and indicated that Celestron and Synta should provide the financial support to Sunny. 91. In the Orion Litigation, the jury found that Sunny and Synta conspired to acquire Meade. Synta made substantial payments and loans to Sunny to facilitate the Meade acquisition. Celestron took equity in its competitor, Meade, as part of this unlawful arrangement between 92. Additionally, Sheppard, Mullin, Richter, & Hampton, LLP (“Sheppard Mullin”) represented Sunny in the acquisition of Meade. According to the engagement letter, however, Sheppard Mullin was required to take instructions from Synta’s Mr. Shen and his executives, including Celestron’s Joe Lupica and Dave Anderson (Messrs). Lupica and Anderson helped Sheppard Mullin negotiate and structure the transaction and instructed it to keep Messrs. Shen and Ni updated. This is not the kind of arrangement that would occur amongst normal horizontal competitors. 93. Sunny’s Mr. Ni and Synta’s Mr. Shen also agreed that Celestron’s then-CEO, Mr. Lupica, would be transferred to Sunny, and after Sunny’s acquisition of Meade, Mr. Lupica would become Meade’s CEO. He and others acted as a conduit of information between Sunny and Synta. 94. When the FTC inquired into whether Synta’s Mr. Shen was involved in any way in Sunny’s Meade acquisition, Sheppard Mullin partner Robert Magelnicki represented to the FTC that “except for the limited advice to Peter Ni regarding how to acquire a U.S. company . . . , David Shen has no role in the proposed acquisition of Meade” on August 22, 2013. This statement was false given that Sunny’s Mr. Ni and Synta’s Mr. Shen agreed before this that Mr. Shen and his companies would provide financial support to Sunny in connection with the Meade acquisition. 95. The FTC was also concerned that Synta’s Mr. Shen was previously a Ningbo Sunny shareholder. To allay the FTC’s concerns, Ningbo Sunny’s Mr. Ni formed Sunny Optics, Inc., the entity used to acquire Meade and became its sole shareholder. Sheppard Mullin then represented acquisition closed, Mr. Ni transferred his interest in Sunny Optics to Ningbo Sunny for a nominal amount of $1. 96. After Sunny acquired Meade, Sunny and Synta agreed not to compete with each other, which was the entire purpose of this charade from the beginning. For example, a December 12, 2013 email thread between the entities reflects a request from Synta’s Mr. Shen to Sunny’s Mr. Ni to reach an understanding with Celestron’s then-CEO about not competing against Celestron for sales: 97. In a June 13, 2014 email, Synta’s Mr. Shen informed Sunny’s Mr. Ni and Celestron’s Mr. Anderson, “The best way in the future is to divide the products and sell them into different markets to reduce conflicts”: be a competitor and is trustworthy when it comes to business.” 104. The Defendants and Co-Conspirators coordinated and raised their prices as a result of their per se illegal agreements and understandings. They sought to avoid competition with each other’s products and developed strategies to protect each other from further competition. Mr. Lupica wrote, they did this to collectively “dominate the telescope industry.” 105. As Synta’s Mr. Shen explained to Sunny, “we do not need to wage a price war[.]” The Structure and Characteristics of the Consumer Telescope Market Render the Conspiracy More Plausible 106. The consumer telescope manufacturing and distribution markets are conducive to a price-fixing agreement because of their structure and other characteristics, which have made collusion particularly attractive in these markets. Specifically, these markets: (1) have high barriers to entry; (2) are highly concentrated; and (3) have inelastic demand. 1. The Consumer Telescope Manufacturing and Distribution Markets Have High Barriers to Entry 107. A collusive arrangement that raises product prices above competitive levels would, under basic economic principles, attract new entrants seeking to benefit from the supra- competitive pricing. Where, however, there are significant barriers to entry, new entrants are less likely to enter the market. Thus, barriers to entry help to facilitate the formation and maintenance of a cartel. 108. There are substantial barriers that preclude, reduce, or make more difficult entry into the telescope manufacturing and distribution markets. A new entrant into the business would face costly and lengthy start-up costs, including multi-million-dollar costs associated with manufacturing plants and equipment, energy, transportation, distribution infrastructure, skilled labor, and long-standing customer relationships. 109. The high barriers to entry allow the Defendants and Co-Conspirators to control prices and output for several reasons. First, manufacturing telescopes requires high capital investments, and Sunny and Synta are vertically integrated with the largest distributors. There is profitable. Second, manufacturing telescopes requires key intellectual property rights, such as patents on software to automatically detect celestial objects demanded by amateur astronomers. Meade invented this software and initially owned the patents. The Defendants and Co- Conspirators colluded, however, so that Sunny could acquire Meade, thereby blocking independent manufacturers that might have been able to successfully compete with Sunny or Synta with this game-changing intellectual property. 110. As evidence of the high barriers to entry, no new, significant consumer telescope manufacturers have entered the market in at least a decade. Furthermore, in light of Sunny’s acquisition of Meade, which also had manufacturing capabilities, in 2013, the number of suppliers has essentially dwindled to Sunny and Synta. 111. Furthermore, Ningbo Sunny’s plan to similarly dismantle Meade’s manufacturing capabilities, and the failure of any replacement suppliers to emerge, demonstrate that the barriers to entry into the supply market, combined with Defendants’ anticompetitive conduct, have effectively foreclosed competition at the supply level. 2. The Consumer Telescope Manufacturing and Distribution Markets Are Highly Concentrated 112. A highly concentrated market is more susceptible to collusion and other anticompetitive practices. 113. The Defendants and Co-Conspirators dominate both the consumer telescope manufacturing market globally and distribution market in the United States. As mentioned above, the Defendants and Co-Conspirators have 80 percent of the former and over 80 percent of the latter. 114. The consumer telescope manufacturing market was not always highly concentrated. Sunny and Synta transformed this market, however, by colluding to prevent competitors from entering the market and thereby making sure they are the only viable sources of consumer telescopes. 115. Sunny and Synta also conspired to leverage their collective market power in Synta’s Celestron rose to prominence over other distributors. Additionally, when Sunny acquired Meade with the help of Synta, Defendants and Co-Conspirators removed a competitor and independent supplier from the distribution market—Meade. Neither Celestron nor Meade have seriously competed since Sunny’s acquisition of Meade or exercised their manufacturing capabilities to diversify the supply of consumer telescopes. 116. Furthermore, Sunny and Synta consolidated control of the distribution market by fixing prices and engaging in anticompetitive conduct. Specifically, Synta and Sunny would offer supply to Celestron at prices far below, and with credit terms far better, than those offered to distributors outside of their syndicate of companies, thereby raising consumer telescope prices in the distribution market. With no other meaningful sources of supply, Plaintiff and the Classes had no choice but to pay the supracompetitive prices caused by the Defendants and Co-Conspirators’ unlawful conduct. 3. There is Inelasticity of Demand for Consumer Telescopes 117. “Elasticity” is a term used to describe the sensitivity of supply and demand to changes in one or the other. For example, demand is said to be “inelastic” if an increase in the price of a product results in only a small decline in the quantity sold of that product, if any. In other words, customers have nowhere to turn for alternative, cheaper products of similar quality, and so continue to purchase despite a price increase. 118. For a cartel to profit from raising prices above competitive levels, demand must be relatively inelastic at competitive prices. Otherwise, increased prices would result in declining sales, revenues, and profits, as customers purchased substitute products or declined to buy altogether. Inelastic demand is a market characteristic that facilitates collusion, allowing producers to raise their prices without triggering customer substitution and lost sales revenue. 119. Demand for consumer telescopes is highly inelastic because there are no close substitutes for these products. V. CLASS ACTION ALLEGATIONS 120. Plaintiff brings this action on behalf of himself and as a class action pursuant to relief on behalf of the following classes (“Nationwide Injunctive Class”) under Sections 1 and 2 of the Sherman Act (15 U.S.C. §§ 1, 2): All persons and entities who indirectly purchased a telescope for their own use and not for resale during the period from and including January 1, 2005 through August 31, 2019 that was manufactured or sold by the Defendants or Co-Conspirators, or any current or former affiliate thereof. 121. Plaintiff also brings this action on behalf of himself and as a nationwide class of Indirect Purchaser States under Rule 23(a) and (b)(2), seeking damages pursuant to California state antitrust and consumer protection laws as well as common law unjust enrichment on behalf of the following class (“Damages Class”): All persons and entities who indirectly purchased a telescope for their own use and not for resale in one of the Indirect Purchaser States during the period from and including January 1, 2005 through August 31, 2019 that was manufactured or sold by the Defendants or Co-Conspirators, or any current or former affiliate thereof. 122. The “Indirect Purchaser States,” for purposes of this complaint, are: Arizona, Arkansas, California, Connecticut, District of Columbia, Florida, Hawaii, Illinois, Iowa, Kansas, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Mexico, New York, North Carolina, North Dakota, Oregon, Rhode Island, South Carolina, South Dakota, Tennessee, Utah, Vermont, West Virginia, and Wisconsin. California Law Should Be Applied to the Nationwide Indirect Purchaser States’ Damages Class 123. It is appropriate to apply California law to a class of indirect purchaser plaintiffs from the Indirect Purchaser States because many of the Defendants and Co-Conspirators and their respective subsidiaries and affiliates can be found in California and have their principal place of business in California; many of the key witnesses reside in California; the Defendants and Co- Conspirators carried out their conspiracy in California, inter alia, by coordinating it through the California offices of Sunny’s legal counsel, Sheppard Mullin; and much of the Defendants and Co-Conspirators’ sales occurred in California. California law should be applied to the Damages Class for the following reasons: 1. The Conspiracy Emanated from California: Location of Defendants and Co-Conspirators 124. Aside from the foreign entities, the most critical corporate entities furthering the conspiracy alleged herein were incorporated in or carried out their principal place of business in California. 125. Defendant Celestron—a major participant in the conspiracy—is headquartered and has its principal place of business in Torrance, California. Acts in furtherance of the conspiracy by Celestron were carried out in California. 126. Defendant Sky-Watcher USA is headquartered and has its principal place of business in Southern California. 127. Co-Conspirator Meade—a major participant in the conspiracy, which would have been named as a Defendant but for its bankruptcy petition—is headquartered in Irvine, California. Acts in furtherance of the conspiracy by Meade were carried out in California. 128. According to an April 11, 2014 email from Mr. Lupica, when Sunny acquired Meade in 2013, Meade had over 10 legal entities formed in California that were paying state taxes each year, including Meade Instruments Holding Corp., Meade Coronado Holding Corp., MTSC Holding Corp., MC Holding Corp., Meade Instruments Europe Corp., Meade.com, and Coronado Instruments Inc., among others. 2. The Conspiracy Emanated from California: Location of Individuals 129. David Shen regularly comes to this District and other places in the U.S. to meet with United States distributors of Synta products. Acts in furtherance of the conspiracy by David Shen were carried out in California. 130. Joe Lupica, Celestron’s former CEO and then Meade’s former CEO, resides in California. Acts in furtherance of the conspiracy by Joe Lupica were carried out in California. 131. Corey Lee, Celestron’s CEO, resides in California. Acts in furtherance of the conspiracy by Corey Lee were carried out in California. 3. Specific Targets of the Conspiracy Were from California 132. A unanimous jury has already found that Orion, an American retail company that 133. Orion, which competes with Synta and Sunny both in the manufacture and distribution of telescopes and filed a complaint against them in the Orion Litigation, has corporate offices in Watsonville, California and a retail store in Cupertino, California. 4. The Conspiracy Emanated from California: Sheppard Mullin Facilitated the Conspiracy from California 134. The persons at the law firm of Sheppard Mullin who helped facilitate the conspiracy, did so from California. For example, a June 6, 2013 engagement letter with Sunny in connection with Sunny’s acquisition of Meade specifies that “this agreement will be governed by the laws of California without regard to its conflict rules.” 135. Will S. Chuchawat, the Sheppard Mullin attorney who wrote the aforementioned engagement letter, is based in California. On information and belief, he accepted instruction from both Sunny and Synta on structuring and negotiating Sunny’s acquisition of Meade and handled the acquisition from California 136. Jason Schendel, another Sheppard Mullin attorney, who worked on the deal process, is also based in California. On information and belief, he accepted instruction from both Sunny and Synta on structuring and negotiating Sunny’s acquisition of Meade and handled the acquisition from the Bay Area. Indeed, a July 16, 2013 email from him to Celestron’s then-CEO Mr. Lupica and Celestron’s board member Mr. Huen regarding next steps in Sunny’s acquisition of Meade confirms as much. 5. The Defendants and Co-Conspirators Targeted California 137. The Defendants and Co-Conspirators directed their conduct at persons and activities within California. For example, Synta manufactures a large proportion of productions for California-based Orion under the Orion brand name. 138. There are at least 73 amateur astronomy clubs in California that feature meetings, viewing nights, star parties, and stargazing programs which, on information and belief, is more than any other state. 139. Defendants have violated California antitrust and consumer protection laws, and like Defendants that operate within its borders. Alternatively, Plaintiffs Will Seek to Certify State Damages Classes 140. As an alternative to the Damages Class, in the event California law is not applied to class members’ claims residing in states that recognize a form of indirect purchaser cause of action, Plaintiffs will seek certification of classes asserting claims of damages under the antitrust statutes and/or consumer protection statutes of the following Indirect Purchaser States (collectively, the “State Damages Classes”): Arizona: All persons and entities who indirectly purchased a telescope for their own use and not for resale in Arizona during the period from and including January 1, 2005 through August 31, 2019 that was manufactured or sold by the Defendants or Co-Conspirators, or any current or former affiliate thereof. Arkansas: All persons and entities who indirectly purchased a telescope for their own use and not for resale in Arkansas during the period from and including January 1, 2005 through August 31, 2019 that was manufactured or sold by the Defendants or Co-Conspirators, or any current or former affiliate thereof. California: All persons and entities who indirectly purchased a telescope for their own use and not for resale in California during the period from and including January 1, 2005 through August 31, 2019 that was manufactured or sold by the Defendants or Co-Conspirators, or any current or former affiliate thereof. Connecticut: All persons and entities who indirectly purchased a telescope for their own use and not for resale in Connecticut during the period from and including January 1, 2005 through August 31, 2019 that was manufactured or sold by the Defendants or Co-Conspirators, or any current or former affiliate thereof. District of Columbia: All persons and entities who indirectly purchased a telescope for their own use and not for resale in the District of Columbia during the period from and including January 1, 2005 through August 31, 2019 that was manufactured or sold by the Defendants or Co-Conspirators, or any current or former affiliate thereof. Florida: All persons and entities who indirectly purchased a telescope for their own use and not for resale in Florida during the period from and including January 1, 2005 through August 31, 2019 that was manufactured or sold by the Defendants or Co-Conspirators, or any current or former affiliate thereof. Hawaii: All persons and entities who indirectly purchased a telescope for their own use and not for resale in Hawaii during the period from and including January 1, 2005 through August 31, 2019 that was manufactured or sold by the Defendants or Co-Conspirators, or any current or former affiliate thereof. Illinois: All persons and entities who indirectly purchased a telescope for their own use and not for resale in Illinois during the period from and including January 1, 2005 through August 31, 2019 that was manufactured or sold by the Defendants or Co-Conspirators, or any current or former affiliate thereof. Iowa: All persons and entities who indirectly purchased a telescope for their own use and not for resale in Iowa during the period from and including January 1, 2005 through August 31, 2019 that was manufactured or sold by the Defendants or Co- Conspirators, or any current or former affiliate thereof. Kansas: All persons and entities who indirectly purchased a telescope for their own use and not for resale in Kansas during the period from and including January 1, 2005 through August 31, 2019 that was manufactured or sold by the Defendants or Co-Conspirators, or any current or former affiliate thereof. Maine: All persons and entities who indirectly purchased a telescope for their own use and not for resale in Maine during the period from and including January 1, 2005 through August 31, 2019 that was manufactured or sold by the Defendants or Co-Conspirators, or any current or former affiliate thereof. Massachusetts: All persons and entities who indirectly purchased a telescope for their own use and not for resale in Massachusetts during the period from and including January 1, 2005 through August 31, 2019 that was manufactured or sold by the Defendants or Co-Conspirators, or any current or former affiliate thereof. Michigan: All persons and entities who indirectly purchased a telescope for their own use and not for resale in Michigan during the period from and including January 1, 2005 through August 31, 2019 that was manufactured or sold by the Defendants or Co-Conspirators, or any current or former affiliate thereof. Minnesota: All persons and entities who indirectly purchased a telescope for their own use and not for resale in Minnesota during the period from and including January 1, 2005 through August 31, 2019 that was manufactured or sold by the Defendants or Co-Conspirators, or any current or former affiliate thereof. Mississippi: All persons and entities who indirectly purchased a telescope for their own use and not for resale in Mississippi during the period from and including January 1, 2005 through August 31, 2019 that was manufactured or sold by the Defendants or Co-Conspirators, or any current or former affiliate thereof. Missouri: All persons and entities who indirectly purchased a telescope for their own use and not for resale in Missouri during the period from and including January 1, 2005 through August 31, 2019 that was manufactured or sold by the Defendants or Co-Conspirators, or any current or former affiliate thereof. Montana: All persons and entities who indirectly purchased a telescope for their own use and not for resale in Montana during the period from and including January 1, 2005 through August 31, 2019 that was manufactured or sold by the Defendants or Co-Conspirators, or any current or former affiliate thereof. Nebraska: All persons and entities who indirectly purchased a telescope for their own use and not for resale in Nebraska during the period from and including January 1, 2005 through August 31, 2019 that was manufactured or sold by the Defendants or Co-Conspirators, or any current or former affiliate thereof. Nevada: All persons and entities who indirectly purchased a telescope for their own use and not for resale in Nevada during the period from and including January 1, 2005 through August 31, 2019 that was manufactured or sold by the Defendants or Co-Conspirators, or any current or former affiliate thereof. New Hampshire: All persons and entities who indirectly purchased a telescope for their own use and not for resale in New Hampshire during the period from and including January 1, 2005 through August 31, 2019 that was manufactured or sold by the Defendants or Co-Conspirators, or any current or former affiliate thereof. New Mexico: All persons and entities who indirectly purchased a telescope for their own use and not for resale in New Mexico during the period from and including January 1, 2005 through August 31, 2019 that was manufactured or sold by the Defendants or Co-Conspirators, or any current or former affiliate thereof. New York: All persons and entities who indirectly purchased a telescope for their own use and not for resale in New York during the period from and including January 1, 2005 through August 31, 2019 that was manufactured or sold by the Defendants or Co-Conspirators, or any current or former affiliate thereof. North Carolina: All persons and entities who indirectly purchased a telescope for their own use and not for resale in North Carolina during the period from and including January 1, 2005 through August 31, 2019 that was manufactured or sold by the Defendants or Co-Conspirators, or any current or former affiliate thereof. North Dakota: All persons and entities who indirectly purchased a telescope for their own use and not for resale in North Dakota during the period from and including January 1, 2005 through August 31, 2019 that was manufactured or sold by the Defendants or Co-Conspirators, or any current or former affiliate thereof. Oregon: All persons and entities who indirectly purchased a telescope for their own use and not for resale in Oregon during the period from and including January 1, 2005 through August 31, 2019 that was manufactured or sold by the Defendants or Co-Conspirators, or any current or former affiliate thereof. Rhode Island: All persons and entities who indirectly purchased a telescope for their own use and not for resale in Rhode Island during the period from and including January 1, 2005 through August 31, 2019 that was manufactured or sold by the Defendants or Co-Conspirators, or any current or former affiliate thereof. South Carolina: All persons and entities who indirectly purchased a telescope for their own use and not for resale in South Carolina during the period from and including January 1, 2005 through August 31, 2019 that was manufactured or sold by the Defendants or Co-Conspirators, or any current or former affiliate thereof. South Dakota: All persons and entities who indirectly purchased a telescope for their own use and not for resale in South Dakota during the period from and including January 1, 2005 through August 31, 2019 that was manufactured or sold by the Defendants or Co-Conspirators, or any current or former affiliate thereof. Tennessee: All persons and entities who indirectly purchased a telescope for their own use and not for resale in Tennessee during the period from and including January 1, 2005 through August 31, 2019 that was manufactured or sold by the Defendants or Co-Conspirators, or any current or former affiliate thereof. Utah: All persons and entities who indirectly purchased a telescope for their own use and not for resale in Utah during the period from and including January 1, 2005 through August 31, 2019 that was manufactured or sold by the Defendants or Co- Conspirators, or any current or former affiliate thereof. Vermont: All persons and entities who indirectly purchased a telescope for their own use and not for resale in Vermont during the period from and including January 1, 2005 through August 31, 2019 that was manufactured or sold by the Defendants or Co-Conspirators, or any current or former affiliate thereof. West Virginia: All persons and entities who indirectly purchased a telescope for their own use and not for resale in West Virginia during the period from and including January 1, 2005 through August 31, 2019 that was manufactured or sold by the Defendants or Co-Conspirators, or any current or former affiliate thereof. Wisconsin: All persons and entities who indirectly purchased a telescope for their own use and not for resale in Wisconsin during the period from and including January 1, 2005 through August 31, 2019 that was manufactured or sold by the Defendants or Co-Conspirators, or any current or former affiliate thereof. 141. The Nationwide Injunctive Class, Damages Class, and the State Damages Classes are referred to herein as the “Classes” unless otherwise indicated. Excluded from the Classes are the Defendants and Co-Conspirators, their parent companies, subsidiaries and affiliates, any co- conspirators, federal governmental entities and instrumentalities of the federal government, states and their subdivisions, agencies and instrumentalities, and persons who purchased telescopes directly. Plaintiff reserves the right to amend the aforementioned definitions if discovery and further investigation reveal that they should be expanded or otherwise modified. 142. Plaintiff properly brings this action as a class action under Rule 23(a) for the following reasons: a. Numerosity (Fed. R. Civ. P. 23(a)(1)): The Classes are so numerous and geographically dispersed throughout the United States that the joinder of all Class Members is impracticable. While Plaintiff does not know the exact number and identity of all Class Members, Plaintiff is informed and believe that there are tens of thousands of members in each Class. The precise number of Class Members can be ascertained through discovery; b. Commonality and Predominance (Fed. R. Civ. P. 23(a)(2) and 23(b)(3)): There are questions of law and fact common to the Classes which predominate over any questions that may affect particular Class Members. This is particularly true given the nature of the Defendants’ conspiracy, making appropriate relief with respect to the Classes as a whole. Such questions of law and fact common to the Classes include, but are not limited to: i. Whether the Defendants and their co-conspirators engaged in a combination and conspiracy among themselves to fix, raise, maintain or stabilize the prices of telescopes sold in the United States; ii. The identity of the participants of the alleged conspiracy; iii. The duration of the alleged conspiracy and the acts carried out by the Defendants and their co-conspirators in furtherance of the conspiracy; iv. Whether the alleged conspiracy violated the Sherman Act, as alleged in the First Cause of Action; v. Whether the consumer telescope market is a relevant product market; vi. Whether the United States constitutes a relevant geographic market for consumer telescopes; vii. Whether Defendants possess market or monopoly power in the consumer telescopes market; viii. Whether Defendants and their alleged horizontal competitors agreed or combined to restrain competition and exclude competitors from the consumer telescopes market; ix. Whether Defendants entered into concerted refusals to deal to foreclose competition and exclude competitors from the consumer telescopes market; x. Whether the alleged monopoly and/or attempt to monopolize violated the Sherman Act, as alleged in the Second and Third Causes of Action; xi. Whether the alleged conspiracy, monopoly, and/or attempt to as alleged in the Fifth and Sixth Causes of Action; xii. Whether the Defendants unjustly enriched themselves to the detriment of the Plaintiff and the members of the Damages Class, thereby entitling Plaintiff and the members of the Damages Class to disgorgement of all benefits derived by the Defendants, as alleged in the Sixth Cause of Action; xiii. Whether the conduct of the Defendants and their co-conspirators, as alleged in this Complaint, caused injury to the property of Plaintiff and the members of the Classes; xiv. The effect of the alleged conspiracy on the prices of telescopes sold in the United States during the Class Period; xv. Whether Plaintiff and members of the Classes had any reason to know or suspect the conspiracy, or any means to discover the conspiracy; xvi. Whether the Defendants and their co-conspirators fraudulently concealed the conspiracy’s existence from Plaintiff and the members of the Classes; xvii. The appropriate injunctive and related equitable relief for the Nationwide Class; and xviii. The appropriate class-wide measure of damages for the Damages Class. c. Typicality (Fed. R. Civ. P. 23(a)(3)): Plaintiff’s claims are typical of the claims of Class Members. Plaintiff and the Classes have been injured by the same wrongful practices of Defendants. Plaintiff’s claims arise from the same practices and conduct that give rise to the claims of the Classes and are based on the same legal theories; d. Adequacy of Representation (Fed. R. Civ. P. 23(a)(4)): Plaintiff will fairly and adequately protect the interests of the Classes in that he has no retained attorneys experienced in consumer class actions and complex litigation as counsel; 143. This action is properly brought as a class action under Rule 23(b) for the following reasons: a. Class Action Status (Fed. R. Civ. P. 23(b)(1)): Class action status in this action is warranted under Rule 23(b)(1)(A) because prosecution of separate actions by Class Members would create a risk of establishing incompatible standards of conduct for Defendants. Class action status is also warranted under Rule 23(b)(1)(B) because prosecution of separate actions by Class Members would create a risk of adjudications with respect to individual members of the Class that, as a practical matter, would be dispositive of the interests of other members not parties to this action, or that would substantially impair or impede their ability to protect their interests. b. Declaratory and Injunctive Relief (Fed. R. C. P. 23(b)(2)): Certification under Rule 23(b)(2) is warranted because Defendants acted or refused to act on grounds generally applicable to the Classes, thereby making appropriate final injunctive, declaratory, or other appropriate equitable relief with respect to the Classes as a whole. c. Superiority (Fed. R. Civ. P. 23(b)(3)): Certification under Rule 23(b)(3) is appropriate because questions of law or fact common to Class Members predominate over any questions affecting only individual members, and class action treatment is superior to the other available methods for the fair and efficient adjudication of this controversy. d. The Classes are ascertainable, and there is a well-defined community of interest in the questions of law or fact alleged herein since the rights of each Class Member were infringed or violated in the same fashion; 144. A class action is superior to other available methods for the fair and efficient a. Given the size of individual Class Member’s claims and the expense of litigating those claims, few, if any, Class Members could afford to or would seek legal redress individually for the wrongs Defendants committed against them and absent Class Members have no substantial interest in individually controlling the prosecution of individual actions; b. This action will promote an orderly and expeditious administration and adjudication of the proposed Class claims, economies of time, effort and resources will be fostered and uniformity of decisions will be insured; c. Without a class action, Class Members will continue to suffer damages, and Defendant’s violations of law will proceed without remedy while Defendants continue to reap and retain the substantial proceeds of their wrongful conduct; and d. Plaintiff knows of no difficulty that will be encountered in the management of this litigation which would preclude its maintenance as a class action. VI. PLAINTIFF AND THE CLASSES SUFFERED ANTITRUST INJURY 145. In the consumer telescope manufacturing market, price competition has been restrained or eliminated because Sunny and Synta engaged in price-fixing, agreed to allocate the market among themselves, limit supply, thereby raising consumer prices. 146. Competition, innovation, and consumer choice have also been restrained due to Ningbo Sunny’s acquisition of Meade. Since Ningbo Sunny acquired Meade, Meade has not significantly competed with Celestron. Moreover, the acquisition of Meade prevented companies that are trying to compete against Defendants, such as Jinghua, from obtaining a potential manufacturing facility and important intellectual property that would have increased competition. 147. In the consumer telescope distribution market, price competition has also been restrained or eliminated because Sunny and Synta allocated the market among themselves. Additionally, by fixing prices and credit terms so that unaffiliated distributors pay more than with each other, Sunny and Synta have prevented independent distributors from fairly competing against their own affiliates and putting downward pressure on prices. 148. The Defendants’ conspiracy had the following effects, among others: a. The number of manufacturers and products for consumer telescopes and accessories have been reduced as a result of Synta’s acquisition of Celestron and Sunny’s acquisition of Meade; b. There have been no new entrants into the consumer telescope market for a decade and many independent manufacturers and distributors have gone out of business as a result of Synta and Sunny’s collusion; c. Price competition has been restrained or eliminated with respect to telescopes; d. The prices of telescopes have been fixed, raised, maintained, or stabilized at artificially inflated levels; e. Indirect purchasers of telescopes have been deprived of free and open competition; and f. Indirect purchasers of telescopes paid artificially inflated prices. 149. These antitrust injuries are of the type that the antitrust laws were meant to punish and prevent. 150. On information and belief, Sunny and Synta have collectively controlled at least 65 percent of the global manufacturing market since 2012. This figure increased to over 90 percent in 2012. 151. During the Class Period, Plaintiff and the members of the Classes paid supra- competitive prices for telescopes. Telescope distributors and retailers passed on inflated prices to Plaintiff and the members of the Classes. Those overcharges have unjustly enriched the Defendants. Telescopes follow a traceable physical chain of distribution from the Defendants to Plaintiff and the members of the Classes, and any cost changes attributable to telescopes can be traced through the chain of distribution to Plaintiff and the members of the Classes. prices be traced to show that changes in the prices paid by direct purchasers affect prices paid by indirect purchasers. Here, the inflated prices of telescopes resulting from the Defendants’ price- fixing conspiracy have been passed on to Plaintiff and the other members of the Classes by distributors and retailers. 153. The economic and legal literature has recognized that unlawful overcharges in a multiple-level distribution chain normally result in higher prices for those at the bottom of the distribution chain. Two antitrust scholars – Professors Robert G. Harris (Professor Emeritus and former Chair of the Business and Public Policy Group at the Haas School of Business at the University of California at Berkeley) and the late Lawrence A. Sullivan (Professor of Law Emeritus at Southwestern Law School and author of the Handbook of the Law of Antitrust) – have observed that “in a multiple- level chain of distribution, passing on monopoly overcharges is not the exception: it is the rule.”3 154. As Professor Jeffrey K. MacKie-Mason (Arthur W. Burks Professor for Information and Computer Science and Professor of Economics and Public Policy at the University of Michigan), an expert who presented evidence in a number of the indirect purchaser cases involving Microsoft Corporation, said (in a passage quoted in the judicial decision in that case granting class certification): As is well known in economic theory and practice, at least some of the overcharge will be passed on by distributors to end consumers. When the distribution markets are highly competitive, as they are here, all or nearly the entire overcharge will be passed on through to ultimate consumers…Both of Microsoft’s experts also agree upon the economic phenomenon of cost pass through, and how it works in competitive markets. This general phenomenon of cost pass through is well established in antitrust laws and economics as well.4 155. The purpose of the conspiratorial conduct of the Defendants and their co- conspirators was to raise, fix, rig or stabilize the price of telescopes. Economists have developed 3 Robert G. Harris & Lawrence A. Sullivan, Passing on the Monopoly Overcharge: A Comprehensive Policy Analysis, 128 U. PA. L. REV. 268, 275 (1979). 4 Order re: Class Certification at 13-14, Coordination Proceedings Special Title (Rule 1550(b)) Microsoft I-V Cases, No. J.C.C.P. No. 4106, (Cal. Sup. Ct. Aug. 29, 2000). “dependent” variable in those cases when changes in the dependent variable are explained by changes in a multitude of variables, even when all such variables may be changing simultaneously. That analysis – called regression analysis – is commonly used in the real world and in litigation to determine the impact of a price increase on one cost in a product (or service) that is an assemblage of costs. Thus, it is possible to isolate and identify only the impact of an increase in the price of telescopes to distributors and retailers on the price of telescopes to consumers while controlling for the impact of other price-determining factors. 156. The precise amount of the overcharge impacting the prices of telescopes can be measured and quantified. Commonly used and well-accepted economic models can be used to measure both the extent and the amount of the supra-competitive charge passed through the chain of distribution. Thus, the economic harm to Plaintiff and members of the Classes can be quantified. 157. By reason of the violations of the antitrust, consumer protection, and unjust enrichment laws alleged herein, Plaintiff and the members of the Classes have sustained injury to their property, having paid higher prices for telescopes than they would have paid in the absence of the Defendants’ illegal contract, combination, or conspiracy, and, as a result, have suffered damages in an amount presently undetermined. This is an antitrust injury of the type that the antitrust laws were meant to punish and prevent. VII. THE STATUTE OF LIMITATIONS DOES NOT BAR PLAINTIFF’S CLAIMS The Statute of Limitations Did Not Begin to Run Because Plaintiff Did Not and Could Not Discover His Claims 158. Plaintiff repeats and re-alleges the allegations set forth above. Plaintiff and the members of the Classes had no knowledge of the combination or conspiracy alleged herein, or of facts sufficient to place them on inquiry notice of the claims set forth herein, until (at the earliest) September 2019, when evidence of Defendants’ conspiracy was first made public in the Orion Litigation. 159. Plaintiff and members of the Classes are consumers that purchased telescopes not for resale. They had no direct contact or interaction with the Defendants and had no means from Complaint before September 2019. 160. No information in the public domain was available to Plaintiff and members of the Classes concerning the combination or conspiracy alleged herein prior to September 2019 when evidence of Defendants’ conspiracy was first made public in the Orion Litigation. Plaintiff and the members of the Classes had no means of obtaining any facts or information concerning any aspect of the Defendants or their co-conspirators’ dealings with competitors or direct purchasers, much less the fact that the Defendants and their co-conspirators had engaged in the combination and conspiracy alleged herein. 161. For these reasons, the statute of limitations as to Plaintiff’s and the Classes’ claims did not begin to run until, at the earliest, September 2019. Fraudulent Concealment Tolled the Statute of Limitations 162. In the alternative, application of the doctrine of fraudulent concealment tolled the statute of limitations on the claims asserted herein by Plaintiff and the Classes. Plaintiff and the members of the Classes did not discover, and could not discover through the exercise of reasonable diligence, the existence of the conspiracy alleged herein until September 2019 when evidence of Defendants’ conspiracy was first made public in the Orion Litigation. 163. Before that time, Plaintiff and the members of the Classes were unaware of the Defendants’ unlawful conduct and did not know before then that they were paying supra- competitive prices for telescopes throughout the United States during the Class Period. No information, actual or constructive, was ever made available to Plaintiff and members of the Classes that even hinted to Plaintiff that they were being injured by the Defendants’ unlawful conduct. 164. The affirmative acts of the Defendants alleged herein, including acts in furtherance of the conspiracy, were wrongfully concealed and carried out in a manner that precluded detection. The following are illustrative examples of Defendants’ fraudulent concealment: 165. Synta and Sunny attempted to conceal the existence of their transactions in connection with Sunny’s acquisition of Meade. David Anderson revealed in an email recently payments to Sunny. This represents a majority of the monies that will be paid to Sunny this year. If Celestron continues with this payment pattern it will need to disclose this arrangement to its auditors and its bank. Though we see this as temporary an outside group (such as the bank or auditing firm) will interpret it as a significant change due to the fact that the majority of payments for the last 7 months were made in anticipation with no discernable benefit to Celestron.” 166. Additionally, as stated, supra, when the FTC inquired into whether Synta’s Mr. Shen was involved in Sunny’s Meade acquisition, Sheppard Mullin partner Robert Magelnicki represented to the FTC that “except for the limited advice to Peter Ni regarding how to acquire a U.S. company . . . , David Shen has no role in the proposed acquisition of Meade[.]” This statement was false in light of the fact that Sunny’s Mr. Ni and Synta’s Mr. Shen agreed before this that Mr. Shen and his companies would provide financial support to Sunny in connection with the Meade acquisition. 167. Furthermore, as part of Synta and Sunny’s collusion regarding Meade, Celestron took equity in Meade, which is memorialized in Defendants and Co-Conspirators’ shadow books. 168. In addition to the foregoing acts of fraudulent concealment, by their very nature, the Defendants’ anticompetitive conspiracy and unlawful combinations were inherently self- concealing. Telescopes are not exempt from antitrust regulation and, thus, Plaintiff and members of the Classes reasonably considered the consumer telescopes industry to be a competitive industry. On information and belief, the Defendants met and communicated in secret and agreed to keep the facts about its collusive conduct from being discovered by any member of the public or by distributors, retailers, and other direct purchasers with whom they did business. Accordingly, a reasonable person under the circumstances would not have been alerted to begin to investigate the legitimacy of the Defendants’ telescope prices before September 2019, at the earliest. 169. Plaintiff and the members of the Classes could not have discovered the alleged contract, conspiracy or combination at an earlier date by the exercise of reasonable diligence because of the deceptive practices and techniques of secrecy employed by the Defendants and or conspiracy. 170. Because the alleged conspiracy was self-concealing and affirmatively concealed by the Defendants and its co-conspirators, Plaintiff and members of the Classes had no knowledge of the alleged conspiracy, or of any facts or information that would have caused a reasonably diligent person to investigate whether a conspiracy existed, until, at the earliest, September 2019 when evidence of Defendants’ conspiracy was first made public in the Orion Litigation. 171. For these reasons, the statute of limitations applicable to Plaintiff and the Classes’ claims was tolled and did not begin to run until September 2019. VIII. CAUSES OF ACTION First Cause of Action Violation of Section 1 of the Sherman Act (15 U.S.C. § 1) Restraint of Trade (on behalf of Plaintiff and the Nationwide Injunctive Class) 172. Plaintiff incorporates by reference the allegations in the preceding paragraphs. 173. The Defendants and unnamed co-conspirators entered into and engaged in a contract, combination, or conspiracy in unreasonable restraint of trade in violation of Section 1 of the Sherman Act (15 U.S.C. § 1). 174. The acts done by the Defendants as part of, and in furtherance of, its and its co- conspirators’ contract, combination, or conspiracy were authorized, ordered, or done by their officers, agents, employees, or representatives while actively engaged in the management of their affairs. 175. During the Class Period, the Defendants and their co-conspirators entered into a continuing agreement, understanding and conspiracy in restraint of trade to artificially fix, raise, stabilize, and control prices for telescopes, thereby creating anticompetitive effects. 176. The anticompetitive acts were intentionally directed at the United States market for telescopes and had a substantial and foreseeable effect on interstate commerce by raising and fixing prices for telescopes throughout the United States. 177. The conspiratorial acts and combinations have caused unreasonable restraints in the 178. As a result of the Defendants’ unlawful conduct, Plaintiff and other similarly situated indirect purchasers in the Nationwide Injunctive Class who purchased telescopes have been harmed by being forced to pay inflated, supra-competitive prices for telescopes. 179. In formulating and carrying out the alleged agreement, understanding and conspiracy, the Defendants and their co-conspirators did those things that they combined and conspired to do, including but not limited to the acts, practices and course of conduct set forth herein. 180. The Defendants and their co-conspirators’ conspiracy had the following effects, among others: a. Price competition in the market for telescopes has been restrained, suppressed, and/or eliminated in the United States; b. Prices for telescopes sold by the Defendants and their co-conspirators have been fixed, raised, maintained, and stabilized at artificially high, non- competitive levels throughout the United States; and c. Plaintiff and members of the Nationwide Injunctive Class who purchased telescopes indirectly from the Defendants and their co-conspirators have been deprived of the benefits of free and open competition. 181. Plaintiff and members of the Nationwide Injunctive Class have been injured and will continue to be injured in their business and property by paying more for telescopes purchased indirectly from the Defendants and their co-conspirators than they would have paid and will pay in the absence of the conspiracy. 182. The alleged contract, combination, or conspiracy is a per se violation of the federal antitrust laws. 183. Plaintiff and members of the Nationwide Injunctive Class are entitled to an injunction against the Defendants, preventing and restraining the violations alleged herein. Second Cause of Action Violation of Section 2 of the Sherman Act (15 U.S.C. § 2) Monopolization 184. Plaintiff incorporates by reference the allegations in the preceding paragraphs. 185. The relevant market is the consumer telescope manufacturing market globally and distribution market in the United States. 186. The Defendants and Co-Conspirators have monopoly power in both the manufacturing market and the distribution market through: a. Synta’s acquisition of Celestron in 2005; b. Synta facilitating Sunny’s acquisition of Meade in 2013, thereby eliminating Meade as a competitor manufacturer and distributor and increasing market concentration; c. Synta and Sunny agreeing to allocating the consumer telescope market such that Synta manufacturers higher-end products and Sunny manufacturers lower-end products; d. Synta and Sunny agreeing to not to bid on RFQs for each other’s product offerings; e. Synta and Sunny exchanging their intellectual property and material, non- public information with each other, thereby enabling them to coordinate prices and strategies; and f. Synta and Sunny exchanging their competitors’ (e.g., Orion’s) intellectual property and material, non-public information with each other, thereby enabling them to coordinate prices and strategies. 187. The Defendants and Co-Conspirators have willfully acquired or maintained their monopoly in the consumer telescope market through the aforementioned conduct plus: a. Colluding to prevent Jinghua from acquiring Meade; b. Making false representations to the FTC regarding Synta’s involvement in Sunny’s acquisition of Meade; and c. Colluding to sabotage Orion’s acquisition of the Hayneedle Assets. 188. The Defendants’ acquisition or maintenance of its monopoly in the consumer business acumen, or historic accident, but is the result of the unlawful conduct alleged herein. 189. There is no procompetitive justification for the Defendants’ anticompetitive conduct that outweighs its anticompetitive effects; namely, the foreclosure of competition in the consumer telescopes market. Any possible procompetitive benefits for such conduct could have been obtained by less restrictive alternatives. 190. The Defendants’ willful acquisition or maintenance of its monopoly in the consumer telescopes market injured, and continues to injure, Plaintiff and members of the Nationwide Class in their property by: a. Restricting output and limiting consumer choice in the consumer telescope market; and b. Forcing Plaintiff and members of the Nationwide Class to pay artificially high, supracompetitive prices for telescopes. 191. The injury to Plaintiff and members of the Nationwide Class was a foreseeable consequence of the Defendants’ willful acquisition or maintenance of its monopoly in the consumer telescope market. 192. Plaintiff and members of the Nationwide Class have suffered irreparable harm and do not have an adequate remedy at law. Accordingly, Plaintiff and members of the Nationwide Class seek injunctive and equitable relief. Third Cause of Action Violation of Section 2 of the Sherman Act (15 U.S.C. § 2) Attempted Monopolization (on behalf of Plaintiff and the Nationwide Injunctive Class) 193. Plaintiff incorporates by reference the allegations in the preceding paragraphs. 194. The relevant market is the consumer telescope manufacturing market globally and distribution market in the United States. 195. The Defendants have attempted to monopolize the consumer telescope market through: a. Synta’s acquisition of Celestron in 2005; Meade as a competitor manufacturer and distributor and increasing market concentration; c. Synta and Sunny agreeing to allocating the consumer telescope market such that Synta manufacturers higher-end products and Sunny manufacturers lower-end products; d. Synta and Sunny agreeing to not to bid on RFQs for each other’s product offerings; e. Synta and Sunny exchanging their intellectual property and material, non- public information with each other, thereby enabling them to coordinate prices and strategies; and f. Synta and Sunny exchanging their competitors’ (e.g., Orion’s) intellectual property and material, non-public information with each other, thereby enabling them to coordinate prices and strategies. 196. The Defendants have willfully engaged in predatory or anticompetitive conduct with the specific intent of monopolizing the consumer telescope market through the aforementioned conduct plus: a. Colluding to prevent Jinghua from acquiring Meade; b. Making false representations to the FTC regarding Synta’s involvement in Sunny’s acquisition of Meade; and c. Colluding to sabotage Orion’s acquisition of the Hayneedle Assets. 197. The anticompetitive conduct described herein undertaken by the Defendants create a dangerous probability that the Defendants will achieve monopoly power in the consumer telescope market. Any possible procompetitive benefits for such conduct could have been obtained by less restrictive alternatives. 198. The Defendants’ predatory and anticompetitive conduct described herein, which was done with the intent of monopolizing the consumer telescope market, injured, and continues to injure, Plaintiff and members of the Nationwide Class in their property by: market; and b. Forcing Plaintiff and members of the Nationwide Class to pay artificially high, supracompetitive prices for telescopes. 199. The injury to Plaintiff and members of the Nationwide Class was a foreseeable consequence of the Defendants’ predatory and unlawful conduct, described herein, which was done with the intent of monopolizing the consumer telescope market. 200. Plaintiff and members of the Nationwide Class have suffered irreparable harm and do not have an adequate remedy at law. Accordingly, Plaintiff and members of the Nationwide Class seek injunctive and equitable relief. Fourth Cause of Action Violation of Section 7 of the Clayton Act (15 U.S.C. § 18) (on behalf of Plaintiff and the Nationwide Injunctive Class) 201. Plaintiff incorporates by reference the allegations in the preceding paragraphs. 202. As a result of Sunny’s acquisition of Meade and Synta’s facilitation thereof, Synta and Sunny has been able to exercise market power in the consumer telescope manufacturing and distribution markets. The acquisition created the largest syndicates of telescope manufacturers globally and telescope distributors in the United States. Both markets are highly concentrated and the acquisition further significantly increased market concentration. 203. It is unlikely that entry into the market would remedy, in a timely manner, the anticompetitive effects from Sunny’s acquisition of Meade in 2013. Entry is difficult and likely to take years because of the intellectual property needed to manufacture telescopes, the time required to plan for and to complete manufacturing facilities, and the time required to plan for and establish the distribution channels. 204. The effect of the mergers substantially lessens competition in the provision of in violation of Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18, in the following ways: a. Eliminating actual, direct, and substantial competition between Synta and Sunny in the consumer telescope manufacturing and distribution markets; b. Increasing the ability of the merged entities to unilaterally raise prices of c. Eliminating Meade as a substantial and independent competitor in the consumer telescope manufacturing and distribution market; d. Eliminating the diversity of product offerings by Defendants; e. Increasing the prices of telescopes to consumers; and f. Reducing incentives to improve product quality in the relevant markets. 205. Sunny’s acquisition of Meade has substantially lessened competition in the consumer telescope manufacturing and distribution markets in violation of Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18 as well as decreased telescope product options and increased telescope prices to consumers. Fifth Cause of Action Violation of the State Antitrust Laws (on behalf of Plaintiff and the Damages Class or, Alternatively, on Behalf of the State Damages Classes) 206. Plaintiff incorporates by reference the allegations in the preceding paragraphs. 207. During the Class Period, the Defendants and their co-conspirators engaged in a continuing contract, combination or conspiracy with respect to the sale of telescopes in unreasonable restraint of trade and commerce and in violation of the various state antitrust and other statutes set forth below. 208. The contract, combination, or conspiracy consisted of an agreement among the Defendants and its co-conspirators to fix, raise, inflate, stabilize, and/or maintain at artificially supra-competitive prices for telescopes and to allocate products and customers in the United States. 209. In formulating and effectuating this conspiracy, the Defendants and their co- conspirators performed acts in furtherance of the combination and conspiracy, including: a. participating in meetings and conversations among themselves in the United States and elsewhere during which they agreed to price telescopes at certain levels, and otherwise to fix, increase, inflate, maintain, or stabilize effective prices paid by Plaintiff and members of the Damages Class with respect to b. allocating products and customers in the United States in furtherance of their agreements; and c. participating in meetings and conversations among themselves in the United States and elsewhere to implement, adhere to, and police the unlawful agreements they reached. 210. The Defendants and their co-conspirators engaged in the actions described above for the purpose of carrying out their unlawful agreements to fix, maintain, increase, or stabilize prices and to allocate products and customers. 211. The Defendants’ anticompetitive acts described above were knowing and willful and constitute violations or flagrant violations of the following state antitrust statutes. 212. The Defendants have entered into an unlawful agreement in restraint of trade in violation of the Arizona Revised Statutes, §§ 44-1401, et seq. a. The Defendants’ combination or conspiracy had the following effects: (1) telescope price competition was restrained, suppressed, and eliminated throughout Arizona; (2) telescope prices were raised, fixed, maintained and stabilized at artificially high levels throughout Arizona; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiffs and members of the Damages Class paid supracompetitive, artificially inflated prices for telescopes. b. During the Class Period, the Defendants’ illegal conduct substantially affected Arizona commerce. c. As a direct and proximate result of the Defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured in their business and property and are threatened with further injury. d. By reason of the foregoing, the Defendants entered into agreements in restraint of trade in violation of Ariz. Rev. Stat. §§ 44-1401, et seq. Accordingly, Plaintiff and members of the Damages Class seek all forms of 213. The Defendants have entered into an unlawful agreement in restraint of trade in violation of the California Business and Professions Code, §§ 16700, et seq. a. During the Class Period, the Defendants and their co-conspirators entered into and engaged in a continuing unlawful trust in restraint of the trade and commerce described above in violation of Section 16720, California Business and Professions Code. The Defendants have acted in violation of Section 16720 to fix, raise, stabilize, and maintain prices of, and allocate markets for, telescopes at supra-competitive levels. b. The aforesaid violations of Section 16720, California Business and Professions Code, consisted, without limitation, of a continuing unlawful trust and concert of action among the Defendants and their co-conspirators, the substantial terms of which were to fix, raise, maintain, and stabilize the prices of, and to allocate markets for, telescopes. c. For the purpose of forming and effectuating the unlawful trust, the Defendants and their co-conspirators have done those things which they combined and conspired to do, including but not limited to the acts, practices and course of conduct set forth above and the following: (1) Fixing, raising, stabilizing, and pegging the price of telescopes; and (2) Allocating among themselves the production of telescopes. d. The combination and conspiracy alleged herein has had, inter alia, the following effects: (1) Price competition in the sale of telescopes has been restrained, suppressed, and/or eliminated in the State of California; (2) Prices for telescopes sold by the Defendants and their co-conspirators have been fixed, raised, stabilized, and pegged at artificially high, non- competitive levels in the State of California and throughout the United States; and (3) Those who purchased telescopes directly or indirectly from the Defendants and their co-conspirators have been deprived of the benefit e. As a direct and proximate result of the Defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured in their business and property in that they paid more for telescopes than they otherwise would have paid in the absence of the Defendants’ unlawful conduct. As a result of the Defendants’ violation of Section 16720 of the California Business and Professions Code, Plaintiff and members of the Damages Class seek treble damages and their cost of suit, including a reasonable attorney’s fee, pursuant to Section 16750(a) of the California Business and Professions Code. 214. The Defendants have entered into an unlawful agreement in restraint of trade in violation of Conn. Gen. Stat. § 35-26. a. Connecticut’s legislature conferred broad standing under the Connecticut Antitrust Act based on an important principle of protecting the public from anticompetitive behavior and of promoting competition in the marketplace. b. Under the Connecticut Antitrust Act, indirect purchasers have standing to maintain an action for damages based on the facts alleged in this Complaint. Conn. Gen. Stat. § 35-46a. c. Every contract, combination, or conspiracy in restraint of any part of trade or commerce is unlawful. Conn. Gen. Stat. § 35-26. d. Every contract, combination, or conspiracy that has the purpose of effect of fixing, controlling, or maintaining prices in any part of trade or commerce; or of fixing, controlling, maintaining, limiting, or discontinuing the production, manufacture, sale, or supply of any part of trade or commerce, is also unlawful. Conn. Gen. Stat. § 35-28. e. Defendants made contracts or engaged in a combination or conspiracy with each other by maintaining, limiting, or discontinuing the production, manufacture, sale, or supply of telescopes for the purpose of, and which had within the intrastate commerce of Connecticut. f. Plaintiff purchased telescopes within the State of Connecticut during the Class Period. But for Defendants’ conduct set forth herein, the price of telescopes would have been lower, in an amount to be determined at trial. g. Plaintiff and members of the Class were injured with respect to purchases of telescopes in Connecticut and are entitled to all forms of relief, including actual damages, treble damages, reasonable attorneys’ fees and costs, and injunctive relief. h. Sec. 35-44b. Judicial construction of Connecticut Antitrust Act. It is the intent of the General Assembly that in construing sections 35-24 to 35-46, inclusive, the courts of this state shall be guided by interpretations given by the federal courts to federal antitrust statutes. 215. The Defendants have entered into an unlawful agreement in restraint of trade in violation of the District of Columbia Code Annotated §§ 28-4501, et seq. a. The Defendants’ combination or conspiracy had the following effects: (1) telescope price competition was restrained, suppressed, and eliminated throughout the District of Columbia; (2) telescope prices were raised, fixed, maintained and stabilized at artificially high levels throughout the District of Columbia; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supra-competitive, artificially inflated prices for telescopes. b. During the Class Period, the Defendants’ illegal conduct substantially affected District of Columbia commerce. c. As a direct and proximate result of the Defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured in their business and property and are threatened with further injury. d. By reason of the foregoing, the Defendants have entered into agreements in et seq. Accordingly, Plaintiff and members of the Damages Class seek all forms of relief available under District of Columbia Code Ann. §§ 28-4501, et seq. 216. The Defendants have entered into an unlawful agreement in restraint of trade in violation of the Illinois Antitrust Act, 740ILCS10/1, et seq. a. The Illinois Antitrust Act,740ILCS10/1, et seq., aims to promote the unhampered growth of commerce and industry throughout the State by prohibiting restraints of trade which are secured through monopolistic or oligarchic practices and which act or tend to act to decrease competition between and among persons engaged in commerce and trade . . . .” 740 ILCS 10/2. b. Plaintiff purchased telescopes within the State of Illinois during the Class Period. But for Defendants’ conduct set forth herein, the price for telescopes would have been lower, in an amount to be determined at trial. c. Under the Illinois Antitrust Act, indirect purchasers have standing to maintain an action for damages based on the facts alleged in this Complaint. 740 ILCS 10/7(2). d. Defendants made contracts or engaged in a combination or conspiracy with each other, though they would have been competitors but for their prior agreement, for the purpose of fixing, controlling, or maintaining prices for telescopes sold, and/or for allocating products and customers within the intrastate commerce of Illinois. e. Defendants further unreasonably restrained trade or commerce and established, maintained or attempted to acquire monopoly power over the market for telescopes in Illinois for the purpose of excluding competition, in violation of 740 ILCS 10/1, et seq. 217. The Defendants have entered into an unlawful agreement in restraint of trade in a. The Defendants’ combination or conspiracy had the following effects: (1) telescope price competition was restrained, suppressed, and eliminated throughout Iowa; (2) telescope prices were raised, fixed, maintained and stabilized at artificially high levels throughout Iowa; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supra-competitive, artificially inflated prices for telescopes. b. During the Class Period, the Defendants’ illegal conduct substantially affected Iowa commerce. c. As a direct and proximate result of the Defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured in their business and property and are threatened with further injury. d. By reason of the foregoing, the Defendants have entered into agreements in restraint of trade in violation of Iowa Code §§ 553.1, et seq. Accordingly, Plaintiff and members of the Damages Class seek all forms of relief available under Iowa Code §§ 553.1, et seq. 218. The Defendants have entered into an unlawful agreement in restraint of trade in violation of the Kansas Statutes Annotated, §§ 50-101, et seq. a. The Defendants’ combination or conspiracy had the following effects: (1) telescope price competition was restrained, suppressed, and eliminated throughout Kansas; (2) telescope prices were raised, fixed, maintained and stabilized at artificially high levels throughout Kansas; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supra-competitive, artificially inflated prices for telescopes. b. During the Class Period, the Defendants’ illegal conduct substantially affected Kansas commerce. Plaintiff and members of the Damages Class have been injured in their business and property and are threatened with further injury. d. By reason of the foregoing, the Defendants have entered into agreements in restraint of trade in violation of Kansas Stat. Ann. §§ 50-101, et seq. Accordingly, Plaintiff and members of the Damages Class seek all forms of relief available under Kansas Stat. Ann. §§ 50-101, et seq. 219. The Defendants have entered into an unlawful agreement in restraint of trade in violation of the Maine Revised Statutes, Maine Rev. Stat. Ann. 10, §§ 1101, et seq. a. The Defendants’ combination or conspiracy had the following effects: (1) telescope price competition was restrained, suppressed, and eliminated throughout Maine; (2) telescope prices were raised, fixed, maintained and stabilized at artificially high levels throughout Maine; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supra-competitive, artificially inflated prices for telescopes. b. During the Class Period, the Defendants’ illegal conduct substantially affected Maine commerce. c. As a direct and proximate result of the Defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured in their business and property and are threatened with further injury. d. By reason of the foregoing, the Defendants have entered into agreements in restraint of trade in violation of Maine Rev. Stat. Ann. 10, §§ 1101, et seq. Accordingly, Plaintiff and members of the Damages Class seek all relief available under Maine Rev. Stat. Ann. 10, §§ 1101, et seq. 220. The Defendants have entered into an unlawful agreement in restraint of trade in violation of the Michigan Compiled Laws Annotated §§ 445.771, et seq. a. The Defendants’ combination or conspiracy had the following effects: (1) throughout Michigan; (2) telescope prices were raised, fixed, maintained and stabilized at artificially high levels throughout Michigan; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supra-competitive, artificially inflated prices for telescopes. b. During the Class Period, the Defendants’ illegal conduct substantially affected Michigan commerce. c. As a direct and proximate result of the Defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured in their business and property and are threatened with further injury. d. By reason of the foregoing, the Defendants have entered into agreements in restraint of trade in violation of Michigan Comp. Laws Ann. §§ 445.771, et seq. Accordingly, Plaintiff and members of the Damages Class seek all relief available under Michigan Comp. Laws Ann. §§ 445.771, et seq. 221. The Defendants have entered into an unlawful agreement in restraint of trade in violation of the Minnesota Annotated Statutes §§ 325D.49, et seq. a. The Defendants’ combination or conspiracy had the following effects: (1) telescope price competition was restrained, suppressed, and eliminated throughout Minnesota; (2) telescope prices were raised, fixed, maintained and stabilized at artificially high levels throughout Minnesota; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supracompetitive, artificially inflated prices for telescopes. b. During the Class Period, the Defendants’ illegal conduct substantially affected Minnesota commerce. c. As a direct and proximate result of the Defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured in their d. By reason of the foregoing, the Defendants have entered into agreements in restraint of trade in violation of Minnesota Stat. §§ 325D.49, et seq. Accordingly, Plaintiff and members of the Damages Class seek all relief available under Minnesota Stat. §§ 325D.49, et seq. 222. The Defendants have entered into an unlawful agreement in restraint of trade in violation of the Mississippi Code Annotated §§ 75-21-1, et seq. a. The Defendants’ combination or conspiracy had the following effects: (1) telescope price competition was restrained, suppressed, and eliminated throughout Mississippi; (2) telescope prices were raised, fixed, maintained and stabilized at artificially high levels throughout Mississippi; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supracompetitive, artificially inflated prices for telescopes. b. During the Class Period, the Defendants’ illegal conduct substantially affected Mississippi commerce. c. As a direct and proximate result of the Defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured in their business and property and are threatened with further injury. d. By reason of the foregoing, the Defendants have entered into agreements in restraint of trade in violation of Mississippi Code Ann. §§ 75-21-1, et seq. Accordingly, Plaintiff and members of the Damages Class seek all relief available under Mississippi Code Ann. §§ 75-21-1, et seq. 223. The Defendants have entered into an unlawful agreement in restraint of trade in violation of the Nebraska Revised Statutes §§ 59-801, et seq. a. The Defendants’ combination or conspiracy had the following effects: (1) telescope price competition was restrained, suppressed, and eliminated throughout Nebraska; (2) telescope prices were raised, fixed, maintained and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supra-competitive, artificially inflated prices for telescopes. b. During the Class Period, the Defendants’ illegal conduct substantially affected Nebraska commerce. c. As a direct and proximate result of the Defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured in their business and property and are threatened with further injury. d. By reason of the foregoing, the Defendants have entered into agreements in restraint of trade in violation of Nebraska Revised Statutes §§ 59-801, et seq. Accordingly, Plaintiff and members of the Damages Class seek all relief available under Nebraska Revised Statutes §§ 59-801, et seq. 224. The Defendants have entered into an unlawful agreement in restraint of trade in violation of the Nevada Revised Statutes Annotated §§ 598A.010, et seq. a. The Defendants’ combination or conspiracy had the following effects: (1) telescope price competition was restrained, suppressed, and eliminated throughout Nevada; (2) telescope prices were raised, fixed, maintained and stabilized at artificially high levels throughout Nevada; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supra-competitive, artificially inflated prices for telescopes. b. During the Class Period, the Defendants’ illegal conduct substantially affected Nevada commerce. c. As a direct and proximate result of the Defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured in their business and property and are threatened with further injury. d. By reason of the foregoing, the Defendants have entered into agreements in Accordingly, Plaintiff and members of the Damages Class seek all relief available under Nevada Rev. Stat. Ann. §§ 598A.010, et seq. 225. The Defendants have entered into an unlawful agreement in restraint of trade in violation of the New Hampshire Revised Statutes §§ 356:1, et seq. a. The Defendants’ combination or conspiracy had the following effects: (1) telescope price competition was restrained, suppressed, and eliminated throughout New Hampshire; (2) telescope prices were raised, fixed, maintained and stabilized at artificially high levels throughout New Hampshire; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supra-competitive, artificially inflated prices for telescopes. b. During the Class Period, the Defendants’ illegal conduct substantially affected New Hampshire commerce. c. As a direct and proximate result of the Defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured in their business and property and are threatened with further injury. d. By reason of the foregoing, the Defendants have entered into agreements in restraint of trade in violation of New Hampshire Revised Statutes §§ 356:1, et seq. Accordingly, Plaintiff and members of the Damages Class seek all relief available under New Hampshire Revised Statutes §§ 356:1, et seq. 226. The Defendants have entered into an unlawful agreement in restraint of trade in violation of the New Mexico Statutes Annotated §§ 57-1-1, et seq. a. The Defendants’ combination or conspiracy had the following effects: (1) telescope price competition was restrained, suppressed, and eliminated throughout New Mexico; (2) telescope prices were raised, fixed, maintained and stabilized at artificially high levels throughout New Mexico; (3) Plaintiff and members of the Damages Class were deprived of free and open supra-competitive, artificially inflated prices for telescopes. b. During the Class Period, the Defendants’ illegal conduct substantially affected New Mexico commerce. c. As a direct and proximate result of the Defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured in their business and property and are threatened with further injury. d. By reason of the foregoing, the Defendants have entered into agreements in restraint of trade in violation of New Mexico Stat. Ann. §§ 57-1-1, et seq. Accordingly, Plaintiff and members of the Damages Class seek all relief available under New Mexico Stat. Ann. §§ 57-1-1, et seq. 227. The Defendants have entered into an unlawful agreement in restraint of trade in violation of the New York General Business Laws §§ 340, et seq. a. The Defendants’ combination or conspiracy had the following effects: (1) telescope price competition was restrained, suppressed, and eliminated throughout New York; (2) telescope prices were raised, fixed, maintained and stabilized at artificially high levels throughout New York; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supra-competitive, artificially inflated prices for telescopes when they purchased telescopes, or purchased products that were otherwise of lower quality than they would have been absent the Defendants’ and their co- conspirators’ illegal acts, or were unable to purchase products that they otherwise would have purchased absent the illegal conduct. b. During the Class Period, the Defendants’ illegal conduct substantially affected New York commerce. c. As a direct and proximate result of the Defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured in their d. By reason of the foregoing, the Defendants have entered into agreements in restraint of trade in violation of the New York Donnelly Act, §§ 340, et seq. The conduct set forth above is a per se violation of the Act. Accordingly, Plaintiff and members of the Damages Class seek all relief available under New York Gen. Bus. Law §§ 340, et seq. 228. The Defendants have entered into an unlawful agreement in restraint of trade in violation of the North Carolina General Statutes §§ 75-1, et seq. a. The Defendants’ combination or conspiracy had the following effects: (1) telescope price competition was restrained, suppressed, and eliminated throughout North Carolina; (2) telescope prices were raised, fixed, maintained and stabilized at artificially high levels throughout North Carolina; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supra-competitive, artificially inflated prices for telescopes. b. During the Class Period, the Defendants’ illegal conduct substantially affected North Carolina commerce. c. As a direct and proximate result of the Defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured in their business and property and are threatened with further injury. d. By reason of the foregoing, the Defendants have entered into agreements in restraint of trade in violation of North Carolina Gen. Stat. §§ 75-1, et seq. Accordingly, Plaintiff and members of the Damages Class seek all relief available under North Carolina Gen. Stat. §§ 75-1, et. seq. 229. The Defendants have entered into an unlawful agreement in restraint of trade in violation of the North Dakota Century Code §§ 51-08.1-01, et seq. a. The Defendants’ combination or conspiracy had the following effects: (1) telescope price competition was restrained, suppressed, and eliminated and stabilized at artificially high levels throughout North Dakota; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supra-competitive, artificially inflated prices for telescopes. b. During the Class Period, the Defendants’ illegal conduct had a substantial effect on North Dakota commerce. c. As a direct and proximate result of the Defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured in their business and property and are threatened with further injury. d. By reason of the foregoing, the Defendants have entered into agreements in restraint of trade in violation of North Dakota Cent. Code §§ 51-08.1-01, et seq. Accordingly, Plaintiff and members of the Damages Class seek all relief available under North Dakota Cent. Code §§ 51-08.1-01, et seq. 230. The Defendants have entered into an unlawful agreement in restraint of trade in violation of the Oregon Revised Statutes §§ 646.705, et seq. a. The Defendants’ combination or conspiracy had the following effects: (1) telescope price competition was restrained, suppressed, and eliminated throughout Oregon; (2) telescope prices were raised, fixed, maintained and stabilized at artificially high levels throughout Oregon; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supra-competitive, artificially inflated prices for telescopes. b. During the Class Period, the Defendants’ illegal conduct had a substantial effect on Oregon commerce. c. As a direct and proximate result of the Defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured in their business and property and are threatened with further injury. restraint of trade in violation of Oregon Revised Statutes §§ 646.705, et seq. Accordingly, Plaintiff and members of the Damages Class seek all relief available under Oregon Revised Statutes §§ 646.705, et seq. 231. The Defendants have entered into an unlawful agreement in restraint of trade in violation of the South Dakota Codified Laws §§ 37-1-3.1, et seq. a. The Defendants’ combination or conspiracy had the following effects: (1) telescope price competition was restrained, suppressed, and eliminated throughout South Dakota; (2) telescope prices were raised, fixed, maintained and stabilized at artificially high levels throughout South Dakota; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiffs and members of the Damages Class paid supra-competitive, artificially inflated prices for telescopes. b. During the Class Period, the Defendants’ illegal conduct had a substantial effect on South Dakota commerce. c. As a direct and proximate result of the Defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured in their business and property and are threatened with further injury. d. By reason of the foregoing, the Defendants have entered into agreements in restraint of trade in violation of South Dakota Codified Laws Ann. §§ 37-1, et seq. Accordingly, Plaintiff and members of the Damages Class seek all relief available under South Dakota Codified Laws Ann. §§ 37-1, et seq. 232. The Defendants have entered into an unlawful agreement in restraint of trade in violation of the Tennessee Code Annotated §§ 47-25-101, et seq. a. The Defendants’ combination or conspiracy had the following effects: (1) telescope price competition was restrained, suppressed, and eliminated throughout Tennessee; (2) telescope prices were raised, fixed, maintained and stabilized at artificially high levels throughout Tennessee; (3) Plaintiffs competition; and (4) Plaintiffs and members of the Damages Class paid supra-competitive, artificially inflated prices for telescopes. b. During the Class Period, the Defendants’ illegal conduct had a substantial effect on Tennessee commerce. c. As a direct and proximate result of the Defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured in their business and property and are threatened with further injury. d. By reason of the foregoing, the Defendants have entered into agreements in restraint of trade in violation of Tennessee Code Ann. §§ 47-25-101, et seq. Accordingly, Plaintiff and members of the Damages Class seek all relief available under Tennessee Code Ann. §§ 47-25-101, et seq. 233. The Defendants have entered into an unlawful agreement in restraint of trade in violation of the Utah Code Annotated §§ 76-10-3101, et seq. a. The Defendants’ combination or conspiracy had the following effects: (1) telescope price competition was restrained, suppressed, and eliminated throughout Utah; (2) telescope prices were raised, fixed, maintained and stabilized at artificially high levels throughout Utah; (3) Plaintiffs and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supra-competitive, artificially inflated prices for telescopes. b. During the Class Period, the Defendants’ illegal conduct had a substantial effect on Utah commerce. c. As a direct and proximate result of the Defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured in their business and property and are threatened with further injury. d. By reason of the foregoing, the Defendants’ have entered into agreements in restraint of trade in violation of Utah Code Annotated §§ 76-10-3101, et seq. available under Utah Code Annotated §§ 76-10-3101, et seq. 234. The Defendants have entered into an unlawful agreement in restraint of trade in violation of the Vermont Stat. Ann. 9 §§ 2453, et seq. a. The Defendants’ combination or conspiracy had the following effects: (1) telescope price competition was restrained, suppressed, and eliminated throughout Vermont; (2) telescope prices were raised, fixed, maintained and stabilized at artificially high levels throughout Vermont; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supra-competitive, artificially inflated prices for telescopes. b. During the Class Period, the Defendants’ illegal conduct had a substantial effect on Vermont commerce. c. As a direct and proximate result of the Defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured in their business and property and are threatened with further injury. d. By reason of the foregoing, the Defendants have entered into agreements in restraint of trade in violation of Vermont Stat. Ann. 9 §§ 2453, et seq. Accordingly, Plaintiff and members of the Damages Class seek all relief available under Vermont Stat. Ann. 9 §§ 2453, et seq. 235. The Defendants have entered into an unlawful agreement in restraint of trade in violation of the West Virginia Code §§ 47-18-1, et seq. a. The Defendants’ combination or conspiracy had the following effects: (1) telescope price competition was restrained, suppressed, and eliminated throughout West Virginia; (2) telescope prices were raised, fixed, maintained and stabilized at artificially high levels throughout West Virginia; (3) Plaintiffs and members of the Damages Class were deprived of free and open competition; and (4) Plaintiffs and members of the Damages b. During the Class Period, the Defendants’ illegal conduct had a substantial effect on West Virginia commerce. c. As a direct and proximate result of the Defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured in their business and property and are threatened with further injury. d. By reason of the foregoing, the Defendants have entered into agreements in restraint of trade in violation of West Virginia Code §§ 47-18-1, et seq. Accordingly, Plaintiff and members of the Damages Class seek all relief available under West Virginia Code §§ 47-18-1, et seq. 236. The Defendants have entered into an unlawful agreement in restraint of trade in violation of the Wisconsin Statutes §§ 133.01, et seq. a. The Defendants’ combination or conspiracy had the following effects: (1) telescope price competition was restrained, suppressed, and eliminated throughout Wisconsin; (2) telescope prices were raised, fixed, maintained and stabilized at artificially high levels throughout Wisconsin; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supra-competitive, artificially inflated prices for telescopes. b. During the Class Period, the Defendants’ illegal conduct had a substantial effect on Wisconsin commerce. c. As a direct and proximate result of the Defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured in their business and property and are threatened with further injury. d. By reason of the foregoing, the Defendants have entered into agreements in restraint of trade in violation of Wisconsin Stat. §§ 133.01, et seq. Accordingly, Plaintiff and members of the Damages Class seek all relief available under Wisconsin Stat. §§ 133.01, et seq. injured in their business and property by reason of the Defendants’ unlawful combination, contract, conspiracy and agreement. Plaintiff and members of the Damages Class have paid more for telescopes than they otherwise would have paid in the absence of the Defendants’ unlawful conduct. This injury is of the type the antitrust laws of the above states were designed to prevent and flows from that which makes the Defendants’ conduct unlawful. 238. In addition, the Defendants have profited significantly from the aforesaid conspiracy. The Defendants’ profits derived from its anticompetitive conduct come at the expense and detriment of the Plaintiff and the members of the Damages Class. 239. Accordingly, Plaintiff and the members of the Damages Class in each of the above jurisdictions seek damages (including statutory damages where applicable), to be trebled or otherwise increased as permitted by a particular jurisdiction’s antitrust law, and costs of suit, including reasonable attorneys’ fees, to the extent permitted by the above state laws. Sixth Cause of Action Violation of State Consumer Protection Laws (on behalf of Plaintiff and the Damages Class or, Alternatively, on Behalf of the State Damages Classes) 240. Plaintiff incorporates by reference the allegations in the preceding paragraphs. 241. The Defendants engaged in unfair competition or unfair, unconscionable, deceptive or fraudulent acts or practices in violation of the state consumer protection statutes listed below. 242. The Defendants have knowingly entered into an unlawful agreement in restraint of trade in violation of the Arkansas Code Annotated, § 4-88-101, et seq. a. The Defendants knowingly agreed to, and did in fact, act in restraint of trade or commerce by affecting, fixing, controlling, and/or maintaining at non- competitive and artificially inflated levels, the prices at which telescopes were sold, distributed, or obtained in Arkansas and took efforts to conceal its agreements from Plaintiff and members of the Damages Class. b. The aforementioned conduct on the part of the Defendants constituted “unconscionable” and “deceptive” acts or practices in violation of Arkansas c. The Defendants’ unlawful conduct had the following effects: (1) telescope Products price competition was restrained, suppressed, and eliminated throughout Arkansas; (2) telescope Products prices were raised, fixed, maintained, and stabilized at artificially high levels throughout Arkansas; (3) Plaintiff and the members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and the members of the Damages Class paid supra-competitive, artificially inflated prices for telescopes. d. During the Class Period, the Defendants’ illegal conduct substantially affected Arkansas commerce and consumers. e. As a direct and proximate result of the unlawful conduct of the Defendants, Plaintiff and the members of the Damages Class have been injured in their business and property and are threatened with further injury. f. The Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of Arkansas Code Annotated, § 4-88-107(a)(10) and, accordingly, Plaintiff and the members of the Damages Class seek all relief available under that statute. 243. The Defendants have engaged in unfair competition or unfair, unconscionable, deceptive or fraudulent acts or practices in violation of California Business and Professions Code § 17200, et seq. a. During the Class Period, the Defendants marketed, sold, or distributed telescopes in California, and committed and continue to commit acts of unfair competition, as defined by Sections 17200, et seq. of the California Business and Professions Code, by engaging in the acts and practices specified above. b. This claim is instituted pursuant to Sections 17203 and 17204 of the California Business and Professions Code, to obtain restitution from the Defendants for acts, as alleged herein, that violated Section 17200 of the Competition Law. c. The Defendants’ conduct as alleged herein violated Section 17200. The acts, omissions, misrepresentations, practices and non-disclosures of the Defendants, as alleged herein, constituted a common, continuous, and continuing course of conduct of unfair competition by means of unfair, unlawful, and/or fraudulent business acts or practices within the meaning of California Business and Professions Code, Section 17200, et seq., including, but not limited to, the following: (1) the violations of Section 1 of the Sherman Act, as set forth above; (2) the violations of Section 16720, et seq., of the California Business and Professions Code, set forth above; d. The Defendants’ acts, omissions, misrepresentations, practices, and non- disclosures, as described above, whether or not in violation of Section 16720, et seq., of the California Business and Professions Code, and whether or not concerted or independent acts, are otherwise unfair, unconscionable, unlawful or fraudulent; e. The Defendants’ acts or practices are unfair to purchasers of telescopes in the State of California within the meaning of Section 17200, California Business and Professions Code; f. The Defendants’ acts and practices are fraudulent or deceptive within the meaning of Section 17200 of the California Business and Professions Code. g. Plaintiff and members of the Damages Class are entitled to full restitution and/or disgorgement of all revenues, earnings, profits, compensation, and benefits that may have been obtained by the Defendants as a result of such business acts or practices. h. The illegal conduct alleged herein is continuing and there is no indication that the Defendants will not continue such activity into the future. i. The unlawful and unfair business practices of the Defendants have caused pay supra-competitive and artificially-inflated prices for telescopes. Plaintiff and the members of the Damages Class suffered injury in fact and lost money or property as a result of such unfair competition. j. The conduct of the Defendants as alleged in this Complaint violates Section 17200 of the California Business and Professions Code. k. As alleged in this Complaint, the Defendants and their co-conspirators have been unjustly enriched as a result of their wrongful conduct and by the Defendants’ unfair competition. Plaintiff and the members of the Damages Class are accordingly entitled to equitable relief including restitution and/or disgorgement of all revenues, earnings, profits, compensation, and benefits that may have been obtained by the Defendants as a result of such business practices, pursuant to the California Business and Professions Code, Sections 17203 and 17204. 244. The Defendants have engaged in unfair competition or unfair, unconscionable, or deceptive acts or practices in violation of District of Columbia Code § 28-3901, et seq. a. The Defendants agreed to, and did in fact, act in restraint of trade or commerce by affecting, fixing, controlling and/or maintaining, at artificial and/or non-competitive levels, the prices at which telescopes were sold, distributed or obtained in the District of Columbia. b. The foregoing conduct constitutes “unlawful trade practices,” within the meaning of D.C. Code § 28-3904. Plaintiff were not aware of the Defendants’ price-fixing conspiracy and were therefore unaware that they were being unfairly and illegally overcharged. There was a gross disparity of bargaining power between the parties with respect to the price charged by the Defendants for telescopes. The Defendants had the sole power to set that price and Plaintiff had no power to negotiate a lower price. Moreover, Plaintiff lacked any meaningful choice in purchasing telescopes because source of supply through which Plaintiff could avoid the overcharges. The Defendants’ conduct with regard to sales of telescopes, including its illegal conspiracy to secretly fix the price of telescopes at supra-competitive levels and overcharge consumers, was substantively unconscionable because it was one-sided and unfairly benefited the Defendants at the expense of Plaintiff and the public. The Defendants took grossly unfair advantage of Plaintiff. The suppression of competition that has resulted from the Defendants’ conspiracy has ultimately resulted in unconscionably higher prices for consumers so that there was a gross disparity between the price paid and the value received for telescopes. c. The Defendants’ unlawful conduct had the following effects: (1) telescope price competition was restrained, suppressed, and eliminated throughout the District of Columbia; (2) telescope prices were raised, fixed, maintained, and stabilized at artificially high levels throughout the District of Columbia; (3) Plaintiff and the Damages Class were deprived of free and open competition; and (4) Plaintiff and the Damages Class paid supra- competitive, artificially inflated prices for telescope. d. As a direct and proximate result of the Defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured and are threatened with further injury. The Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of District of Columbia Code § 28-3901, et seq., and, accordingly, Plaintiff and members of the Damages Class seek all relief available under that statute. 245. The Defendants have engaged in unfair competition or unfair, unconscionable, or deceptive acts or practices in violation of the Florida Deceptive and Unfair Trade Practices Act, Fla. Stat. §§ 501.201, et seq. a. The Defendants’ unlawful conduct had the following effects: (1) telescope Florida; (2) telescope prices were raised, fixed, maintained, and stabilized at artificially high levels throughout Florida; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supra-competitive, artificially inflated prices for telescopes. b. During the Class Period, the Defendants’ illegal conduct substantially affected Florida commerce and consumers. c. As a direct and proximate result of the Defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured and are threatened with further injury. d. The Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of Florida Stat. § 501.201, et seq., and, accordingly, Plaintiff and members of the Damages Class seek all relief available under that statute. 246. The Defendants have engaged in unfair competition or unfair, unconscionable, or deceptive acts or practices in violation of the Hawaii Revised Statutes Annotated §§ 480-1, et seq. a. The Defendants’ unlawful conduct had the following effects: (1) telescope price competition was restrained, suppressed, and eliminated throughout Hawaii; (2) telescope prices were raised, fixed, maintained, and stabilized at artificially high levels throughout Hawaii; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supra-competitive, artificially inflated prices for telescopes. b. During the Class Period, the Defendants’ illegal conduct substantially affected Hawaii commerce and consumers. c. As a direct and proximate result of the Defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured and are d. The Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of Hawaii Rev. Stat. § 480, et seq., and, accordingly, Plaintiff and members of the Damages Class seek all relief available under that statute. 247. The Defendants have engaged in unfair competition or unfair, unconscionable, or deceptive acts or practices in violation of Mass. G.L. c. 93A, §2. a. The Defendants were engaged in trade or commerce as defined by G.L. c. 93A. b. The Defendants agreed to, and did in fact, act in restraint of trade or commerce in a market which includes Massachusetts, by affecting, fixing, controlling and/or maintaining at artificial and non-competitive levels, the prices at which telescopes were sold, distributed, or obtained in Massachusetts and took efforts to conceal its agreements from Plaintiff and members of the Damages Class. c. The Defendants’ unlawful conduct had the following effects: (1) telescopes price competition was restrained, suppressed, and eliminated throughout Massachusetts; (2) telescopes prices were raised, fixed, maintained, and stabilized at artificially high levels throughout Massachusetts; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supra-competitive, artificially inflated prices for telescopes. d. As a direct and proximate result of the Defendants’ unlawful conduct, Plaintiff and members of the Damages Class were injured and are threatened with further injury. e. The Defendants have been or will be served with a demand letter in accordance with G.L. c. 93A, § 9, or, upon information and belief, such service of a demand letter was unnecessary due to the Defendants not or not keeping assets within the Commonwealth. More than thirty days has passed since such demand letters were served, and each of the Defendants served has failed to make a reasonable settlement offer. f. By reason of the foregoing, the Defendants engaged in unfair competition and unfair or deceptive acts or practices, in violation of G.L. c. 93A, §2. The Defendants and their co-conspirators’ violations of Chapter 93A were knowing or willful, entitling Plaintiff and members of the Damages Class to multiple damages. 248. The Defendants have engaged in unfair competition or unfair, unconscionable, or deceptive acts or practices in violation of the Missouri Merchandising Practices Act, Mo. Rev. Stat. § 407.010, et. seq. a. Plaintiff and the Damages Class purchased telescopes for personal, family, or household purposes. b. The Defendants engaged in the conduct described herein in connection with the sale of telescopes in trade or commerce in a market that includes Missouri. c. The Defendants agreed to, and did in fact, affect, fix, control, and/or maintain, at artificial and non-competitive levels, the prices at which telescopes were sold, distributed, or obtained in Missouri, which conduct constituted unfair practices in that it was unlawful under federal and state law, violated public policy, was unethical, oppressive and unscrupulous, and caused substantial injury to Plaintiff and members of the Damages Class. d. The Defendants concealed, suppressed, and omitted to disclose material facts to Plaintiff and members of the Damages Class concerning its unlawful activities and artificially inflated prices for telescopes. It concealed, suppressed, and omitted facts that would have been important to Plaintiff and members of the Damages Class as they related to the cost of telescopes e. The Defendants misrepresented the real cause of price increases and/or the absence of price reductions in telescopes by making public statements that were not in accord with the facts. f. The Defendants’ statements and conduct concerning the price of telescopes were deceptive as they had the tendency or capacity to mislead Plaintiff and members of the Damages Class to believe that they were purchasing telescopes at prices established by a free and fair market. g. The Defendants’ unlawful conduct had the following effects: (1) telescope price competition was restrained, suppressed, and eliminated throughout Missouri; (2) telescope prices were raised, fixed, maintained, and stabilized at artificially high levels throughout Missouri; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supra-competitive, artificially inflated prices for telescopes. h. The foregoing acts and practices constituted unlawful practices in violation of the Missouri Merchandising Practices Act. i. As a direct and proximate result of the above-described unlawful practices, Plaintiff and members of the Damages Class suffered ascertainable loss of money or property. j. Accordingly, Plaintiff and members of the Damages Class seek all relief available under Missouri’s Merchandising Practices Act, specifically Mo. Rev. Stat. § 407.020, which prohibits “the act, use or employment by any person of any deception, fraud, false pretense, false promise, misrepresentation, unfair practice or the concealment, suppression, or omission of any material fact in connection with the sale or advertisement of any merchandise in trade or commerce…,” as further interpreted by the Missouri Code of State Regulations, 15 CSR 60-7.010, et seq., 15 CSR 60- which provides for the relief sought in this count. 249. The Defendants have engaged in unfair competition or unfair, unconscionable, or deceptive acts or practices in violation of the Montana Consumer Protection Act of 1973, Mont. Code, §§ 30-14-101, et seq. a. The Defendants’ unlawful conduct had the following effects: (1) telescope price competition was restrained, suppressed, and eliminated throughout Montana; (2) telescope prices were raised, fixed, maintained, and stabilized at artificially high levels throughout Montana; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supra-competitive, artificially inflated prices for telescopes. b. During the Class Period, The Defendants’ illegal conduct substantially affected Montana commerce and consumers. c. As a direct and proximate result of The Defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured and are threatened with further injury. d. The Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of Mont. Code, §§ 30-14-101, et seq., and, accordingly, Plaintiff and members of the Damages Class seek all relief available under that statute. 250. The Defendants have engaged in unfair competition or unfair, unconscionable, or deceptive acts or practices in violation of the New Mexico Stat. § 57-12-1, et seq. a. The Defendants agreed to, and did in fact, act in restraint of trade or commerce by affecting, fixing, controlling and/or maintaining at non- competitive and artificially inflated levels, the prices at which telescopes were sold, distributed or obtained in New Mexico and took efforts to conceal its agreements from Plaintiff and members of the Damages Class. “unconscionable trade practices,” in violation of N.M.S.A. Stat. § 57-12-3, in that such conduct, inter alia, resulted in a gross disparity between the value received by Plaintiff and the members of the Damages Class and the prices paid by them for telescopes as set forth in N.M.S.A., § 57-12-2E. Plaintiff was not aware of the Defendants’ price-fixing conspiracy and was therefore unaware that he were being unfairly and illegally overcharged. There was a gross disparity of bargaining power between the parties with respect to the price charged by the Defendants for telescopes. The Defendants had the sole power to set that price and Plaintiff had no power to negotiate a lower price. Moreover, Plaintiff lacked any meaningful choice in purchasing telescopes because they were unaware of the unlawful overcharge and there was no alternative source of supply through which Plaintiff could avoid the overcharges. The Defendants’ conduct with regard to sales of telescopes, including its illegal conspiracy to secretly fix the price of telescopes at supra-competitive levels and overcharge consumers, was substantively unconscionable because it was one-sided and unfairly benefited the Defendants at the expense of Plaintiff and the public. the Defendants took grossly unfair advantage of Plaintiff. The suppression of competition that has resulted from the Defendants’ conspiracy has ultimately resulted in unconscionably higher prices for consumers so that there was a gross disparity between the price paid and the value received for telescopes. c. The Defendants’ unlawful conduct had the following effects: (1) telescope price competition was restrained, suppressed, and eliminated throughout New Mexico; (2) telescope prices were raised, fixed, maintained, and stabilized at artificially high levels throughout New Mexico; (3) Plaintiff and the members of the Damages Class were deprived of free and open supra-competitive, artificially inflated prices for telescopes. d. During the Class Period, the Defendants’ illegal conduct substantially affected New Mexico commerce and consumers. e. As a direct and proximate result of the unlawful conduct of the Defendants, Plaintiff and the members of the Damages Class have been injured and are threatened with further injury. f. The Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of New Mexico Stat. § 57-12-1, et seq., and, accordingly, Plaintiff and the members of the Damages Class seek all relief available under that statute. 251. The Defendants have engaged in unfair competition or unfair, unconscionable, or deceptive acts or practices in violation of N.Y. Gen. Bus. Law § 349, et seq. a. The Defendants agreed to, and did in fact, act in restraint of trade or commerce by affecting, fixing, controlling and/or maintaining, at artificial and non-competitive levels, the prices at which telescopes were sold, distributed or obtained in New York and took efforts to conceal its agreements from Plaintiff and members of the Damages Class. b. The Defendants and their co-conspirators made public statements about the prices of telescopes and products containing telescopes that the Defendants knew would be seen by New York consumers; such statements either omitted material information that rendered the statements that they made materially misleading or affirmatively misrepresented the real cause of price increases for telescopes and products containing telescopes; and the Defendants alone possessed material information that was relevant to consumers, but failed to provide the information. c. Because of the Defendants’ unlawful trade practices in the State of New York, New York consumer class members who indirectly purchased telescopes or the price increases for telescopes were for valid business reasons; and similarly situated consumers were potentially affected by the Defendants’ conspiracy. d. The Defendants knew that its unlawful trade practices with respect to pricing telescopes would have an impact on New York consumers and not just the Defendants’ direct customers. e. The Defendants knew that their unlawful trade practices with respect to pricing telescopes would have a broad impact, causing consumer class members who indirectly purchased telescopes to be injured by paying more for telescopes than they would have paid in the absence of the Defendants’ unlawful trade acts and practices. f. The conduct of the Defendants described herein constitutes consumer- oriented deceptive acts or practices within the meaning of N.Y. Gen. Bus. Law § 349, which resulted in consumer injury and broad adverse impact on the public at large, and harmed the public interest of New York State in an honest marketplace in which economic activity is conducted in a competitive manner. g. The Defendants’ unlawful conduct had the following effects: (1) telescope price competition was restrained, suppressed, and eliminated throughout New York; (2) telescope prices were raised, fixed, maintained, and stabilized at artificially high levels throughout New York; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supra-competitive, artificially inflated prices for telescopes. h. During the Class Period, the Defendants marketed, sold, or distributed telescopes in New York, and the Defendants’ illegal conduct substantially affected New York commerce and consumers. indirectly and through affiliates they dominated and controlled, manufactured, sold and/or distributed telescopes in New York. j. Plaintiff and members of the Damages Class seek all relief available pursuant to N.Y. Gen. Bus. Law § 349 (h). 252. The Defendants have engaged in unfair competition or unfair, unconscionable, or deceptive acts or practices in violation of North Carolina Gen. Stat. § 75-1.1, et seq. a. The Defendants agreed to, and did in fact, act in restraint of trade or commerce by affecting, fixing, controlling and/or maintaining, at artificial and non-competitive levels, the prices at which telescopes were sold, distributed or obtained in North Carolina and took efforts to conceal its agreements from Plaintiff and members of the Damages Class. b. The Defendants’ price-fixing conspiracy could not have succeeded absent deceptive conduct by the Defendants to cover up its illegal acts. Secrecy was integral to the formation, implementation and maintenance of the Defendants’ price-fixing conspiracy. The Defendants committed inherently deceptive and self-concealing actions, of which Plaintiff could not possibly have been aware. The Defendants and their co-conspirators publicly provided pre-textual and false justifications regarding their price increases. The Defendants’ public statements concerning the price of telescopes created the illusion of competitive pricing controlled by market forces rather than supra-competitive pricing driven by the Defendants’ illegal conspiracy. Moreover, the Defendants deceptively concealed its unlawful activities by mutually agreeing not to divulge the existence of the conspiracy to outsiders, conducting meetings and conversations in secret, confining the plan to a small group of higher-level officials at each company and avoiding the creation of documents which would reveal the antitrust violations. c. The conduct of the Defendants described herein constitutes consumer- law, which resulted in consumer injury and broad adverse impact on the public at large, and harmed the public interest of North Carolina consumers in an honest marketplace in which economic activity is conducted in a competitive manner. d. The Defendants’ unlawful conduct had the following effects: (1) telescope price competition was restrained, suppressed, and eliminated throughout North Carolina; (2) telescope prices were raised, fixed, maintained, and stabilized at artificially high levels throughout North Carolina; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supra-competitive, artificially inflated prices for telescopes. e. During the Class Period, the Defendants marketed, sold, or distributed telescopes in North Carolina, and the Defendants’ illegal conduct substantially affected North Carolina commerce and consumers. f. During the Class Period, the Defendants, directly, or indirectly and through affiliates they dominated and controlled, manufactured, sold and/or distributed telescopes in North Carolina. g. Plaintiff and members of the Damages Class seek actual damages for their injuries caused by these violations in an amount to be determined at trial and are threatened with further injury. The Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of North Carolina Gen. Stat. § 75-1.1, et seq., and, accordingly, Plaintiff and members of the Damages Class seek all relief available under that statute. 253. The Defendants have engaged in unfair competition or unfair, unconscionable, or deceptive acts or practices in violation of the Rhode Island Unfair Trade Practice and Consumer Protection Act, R.I. Gen. Laws §§ 6-13.1-1, et seq. a. Members of this Damages Class purchased telescopes for personal, family, b. The Defendants agreed to, and did in fact, act in restraint of trade or commerce in a market that includes Rhode Island, by affecting, fixing, controlling, and/or maintaining, at artificial and non-competitive levels, the prices at which telescopes were sold, distributed, or obtained in Rhode Island. c. The Defendants deliberately failed to disclose material facts to Plaintiff and members of the Damages Class concerning its unlawful activities and artificially inflated prices for telescopes. The Defendants owed a duty to disclose such facts, and considering the relative lack of sophistication of the average, non-business consumer, it breached that duty by its silence. The Defendants misrepresented to all consumers during the Class Period that its telescope prices were competitive and fair. d. The Defendants’ unlawful conduct had the following effects: (1) telescope price competition was restrained, suppressed, and eliminated throughout Rhode Island; (2) telescope prices were raised, fixed, maintained, and stabilized at artificially high levels throughout Rhode Island; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supra-competitive, artificially inflated prices for telescopes. e. As a direct and proximate result of the Defendants’ violations of law, Plaintiff and members of the Damages Class suffered an ascertainable loss of money or property as a result of the Defendants’ use or employment of unconscionable and deceptive commercial practices as set forth above. That loss was caused by the Defendants’ willful and deceptive conduct, as described herein. f. The Defendants’ deception, including its affirmative misrepresentations and omissions concerning the price of telescopes, likely misled all consumers purchasing telescopes at prices set by a free and fair market. The Defendants’ affirmative misrepresentations and omissions constitute information important to Plaintiff and members of the Damages Class as they related to the cost of telescopes they purchased. The Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of Rhode Island Gen. Laws. § 6-13.1-1, et seq., and, accordingly, Plaintiff and members of the Damages Class seek all relief available under that statute. 254. The Defendants have engaged in unfair competition or unfair, unconscionable, or deceptive acts or practices in violation of South Carolina Unfair Trade Practices Act, S.C. Code Ann. §§ 39-5-10, et seq. a. The Defendants’ combination or conspiracy had the following effects: (1) telescopes price competition was restrained, suppressed, and eliminated throughout South Carolina; (2) telescopes prices were raised, fixed, maintained, and stabilized at artificially high levels throughout South Carolina; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supra-competitive, artificially inflated prices for telescopes. b. During the Class Period, the Defendants’ illegal conduct had a substantial effect on South Carolina commerce. c. As a direct and proximate result of the Defendants’ unlawful conduct, Plaintiff and members of the Damages Class have been injured in their business and property and are threatened with further injury. d. The Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of S.C. Code Ann. §§ 39-5-10, et seq., and, accordingly, Plaintiff and the members of the Damages Class seek all relief available under that statute. deceptive acts or practices in violation of 9 Vermont § 2451, et seq. a. The Defendants agreed to, and did in fact, act in restraint of trade or commerce in a market that includes Vermont by affecting, fixing, controlling, and/or maintaining, at artificial and non-competitive levels, the prices at which telescopes were sold, distributed, or obtained in Vermont. b. The Defendants deliberately failed to disclose material facts to Plaintiff and members of the Damages Class concerning its unlawful activities and artificially inflated prices for telescopes. The Defendants owed a duty to disclose such facts, and considering the relative lack of sophistication of the average, non-business consumer, The Defendants breached that duty by its silence. The Defendants misrepresented to all consumers during the Class Period that its telescope prices were competitive and fair. c. The Defendants’ unlawful conduct had the following effects: (1) telescope price competition was restrained, suppressed, and eliminated throughout Vermont; (2) telescope prices were raised, fixed, maintained, and stabilized at artificially high levels throughout Vermont; (3) Plaintiff and members of the Damages Class were deprived of free and open competition; and (4) Plaintiff and members of the Damages Class paid supra-competitive, artificially inflated prices for telescopes. d. As a direct and proximate result of the Defendants’ violations of law, Plaintiff and members of the Damages Class suffered an ascertainable loss of money or property as a result of the Defendants’ use or employment of unconscionable and deceptive commercial practices as set forth above. That loss was caused by the Defendants’ willful and deceptive conduct, as described herein. e. The Defendants’ deception, including its affirmative misrepresentations and omissions concerning the prices of telescopes, likely misled all purchasers purchasing telescopes at prices set by a free and fair market. The Defendants’ misleading conduct and unconscionable activities constitutes unfair competition or unfair or deceptive acts or practices in violation of 9 Vermont § 2451, et seq., and, accordingly, Plaintiff and members of the Damages Class seek all relief available under that statute. Seventh Cause of Action Against All Defendants Unjust Enrichment (on behalf of Plaintiff and the Damages Class or, Alternatively, on Behalf of the State Damages Classes) 256. Plaintiff incorporates by reference the allegations in the preceding paragraphs. 257. Plaintiff brings this claim under the laws of each of the Indirect Purchaser States. 258. As a result of its unlawful conduct described above, the Defendants have and will continue to be unjustly enriched. The Defendants have been unjustly enriched by the receipt of, at a minimum, unlawfully inflated prices and unlawful profits on sales of telescopes. 259. The Defendants have benefited from its unlawful acts and it would be inequitable for the Defendants to be permitted to retain any of the ill-gotten gains resulting from the overpayments made by Plaintiff and the members of the Damages Class for telescopes. 260. Plaintiff and the members of the Damages Class are entitled to the amount of the Defendants’ ill-gotten gains resulting from its unlawful, unjust, and inequitable conduct. Plaintiff and the members of the Damages Class are entitled to the establishment of a constructive trust consisting of all ill-gotten gains from which Plaintiff and the members of the Damages Class may make claims on a pro rata basis. 261. Pursuit of any remedies against the firms from which Plaintiff and the members of the Damages Class purchased telescopes subject to the Defendants’ conspiracy would have been futile. IX. PRAYER FOR RELIEF 262. Accordingly, Plaintiff respectfully request that: 263. The Court determine that this action may be maintained as a class action under Rules member of the Class as provided by Rule 23(c)(2). 264. That the unlawful conduct, contract, conspiracy, or combination alleged herein be adjudged and decreed: a. An unreasonable restraint of trade or commerce in violation of Section 1 of the Sherman Act; b. A per se violation of Section 1 of the Sherman Act; c. An unlawful combination, trust, agreement, understanding and/or concert of action in violation of the state antitrust and consumer protection laws as set forth herein; and d. Acts of unjust enrichment by the Defendants as set forth herein. 265. Plaintiff and the members of the Damages Class recover damages, to the maximum extent allowed under such laws, and that a joint and several judgment in favor of Plaintiff and the members of the Damages Class be entered against the Defendants in an amount to be trebled to the extent such laws permit; 266. Plaintiff and the members of the Damages Class recover damages, to the maximum extent allowed by such laws, in the form of restitution and/or disgorgement of profits unlawfully gained from them; 267. The Defendants, their affiliates, successors, transferees, assignees and other officers, directors, partners, agents and employees thereof, and all other persons acting or claiming to act on their behalf or in concert with them, be permanently enjoined and restrained from in any manner continuing, maintaining or renewing the conduct, contract, conspiracy, or combination alleged herein, or from entering into any other contract, conspiracy, or combination having a similar purpose or effect, and from adopting or following any practice, plan, program, or device having a similar purpose or effect; 268. Plaintiff and the members of the Damages Class be awarded restitution, including disgorgement of profits the Defendants obtained as a result of its acts of unfair competition and acts of unjust enrichment; as provided by law, and that such interest be awarded at the highest legal rate from and after the date of service of this Complaint; 270. Plaintiff and the members of the Classes recover their costs of suit, including reasonable attorneys’ fees, as provided by law; and 271. Plaintiff and members of the Classes have such other and further relief as the case may require and the Court may deem just and proper. Plaintiff demands a jury trial on all claims so triable. DATED: September 17, 2020 Respectfully submitted, /s/ Dennis J. Stewart Dennis J. Stewart GUSTAFSON GLUEK PLLC 600 B Street 17th Floor San Diego, CA 92101 Telephone: (619) 595-3299 dstewart@gustafsongluek.com Daniel E. Gustafson Daniel C. Hedlund Michelle J. Looby Joshua J. Rissman Daniel J. Nordin Mary M. Nikolai GUSTAFSON GLUEK PLLC Canadian Pacific Plaza 120 South Sixth Street, Suite 2600 Minneapolis, MN 55402 Telephone: (612) 333-8844 mlooby@gustafsongluek.com dhedlund@gustafsongluek.com jrissman@gustafsongluek.com dnordin@gustafsongluek.com mnikolai@gustafsongluek.com David S. Corwin Corwin Law Group, LLC 1034 S. Brentwood Blvd. Suite 1490 St. Louis, MO 63117 Telephone: (314) 685-8849 Facsimile: (314) 287-4583 dcorwin@corwinlawgroup.com

antitrust

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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA CASE NO.: 0:20-cv-60004 JOHN LUCA, individually and on behalf of all those similarly situated, Plaintiff, v. COMPLAINT – CLASS ACTION KUDULIS, REISINGER, AND PRICE, LLC, Defendant. ____________________________________/ CLASS ACTION COMPLAINT SEEKING INJUNCTIVE RELIEF AND STATUTORY DAMAGES Plaintiff JOHN LUCA (“Plaintiff”), individually and on behalf of all those similarly situated, sues Defendant KUDULIS, REISINGER, AND PRICE, LLC (“Defendant”) for violations of 15 U.S.C. § 1692 et seq., the Fair Debt Collection Practices Act (“FDCPA”), and Fla. Stat. § 559.55 et seq., the Florida Consumer Collection Practices Act (“FCCPA”). 1. JURISDICTION AND VENUE 1. Jurisdiction of this Court arises under 15 U.S.C. § 1692k(d), 28 U.S.C § 1331, and 28 U.S.C § 1337. Further, and with respect to all counts, jurisdiction of this Court also arises under 28 U.S.C. § 1332(d), as the total amount in controversy exceeds five million dollars ($5,000,000.00) exclusive of interest and costs. 2. Venue in this District is proper because Plaintiff resides here, Defendant transacts business here, and the complained conduct of Defendant occurred here. PAGE | 1 of 9 LAW OFFICES OF JIBRAEL S. HINDI, PLLC 2. PARTIES 3. Plaintiff is a natural person, and a citizen of the State of Florida, residing in Broward County, Florida. 4. Defendant is a Alabama limited liability company, with its principal place of business located in Birmingham, Alabama. 5. Defendant engages in interstate commerce by regularly using telephone and mail in a business whose principal purpose is the collection of debts. 6. At all times material, Defendant was acting as a debt collector in respect to the collection of Plaintiff’s debts. 3. DEMAND FOR JURY TRIAL 7. Plaintiff is entitled to, and hereby respectfully demands, a trial by jury on all alleged counts and any issues so triable. 4. ALLEGATIONS 8. On a date better known by Defendant, Defendant began attempting to collect a debt (the “Consumer Debt”) from Plaintiff. 9. The Consumer Debt is an obligation allegedly had by Plaintiff to pay money arising from a transaction between Plaintiff and South Atlantic Federal Credit Union, the creditor of the consumer debt (the “Creditor”), involving a line-of-credit afforded to Plaintiff by the Creditor for Plaintiff’s personal use and benefit (the “Subject Service”). 10. The Subject Service was primarily for personal, family, or household purposes. 11. Defendant is a business entity engaged in the business of soliciting consumer debts for collection. PAGE | 2 of 9 LAW OFFICES OF JIBRAEL S. HINDI, PLLC 12. Defendant is a business entity engaged in the business of collecting consumer debts. 13. Defendant regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another. 14. On a date better known to Defendant, Defendant sent a collection letter, internally dated October 30, 2019, to Plaintiff (the “Collection Letter”) in an attempt to collect the Consumer Debt. A copy of the Collection Letter is attached hereto as Exhibit “A.” 15. The Collection Letter is a communication from Defendant to Plaintiff in connection with the collection of a debt. 16. The Collection Letter is an action to collect a debt by Defendant. 17. Defendant is an entity required to register as a consumer collection agency with the Florida Department of State, as per Fla. Stat. § 559.553(1), to lawfully collect consumer debts from Florida consumers. 18. Defendant does not maintain all the records specified in Rule 69V-180.080, Florida Administrative Code. 19. The records specified by Rule 69V-180.080, Florida Administrative Code, of which Defendant does maintain, are not current to within one week of the current date. 20. Defendant has never registered, or otherwise been licensed, to collect consumer debts from Florida consumers in accordance with Fla. Stat. § 559.553. 21. Defendant does not fall within any of the exemptions contained within Fla. Stat. § 559.553(3). 22. Defendant cannot legally collect, or attempt to collect, the Consumer Debt from Plaintiff without first registering, and thereafter maintaining, a valid consumer collection agency license in accordance with Fla. Stat. §§ 559.553(1) & (2). PAGE | 3 of 9 LAW OFFICES OF JIBRAEL S. HINDI, PLLC 23. Defendant’s collection activities against Plaintiff constitute a criminal misdemeanor under Florida law. See Fla. Stat. § 559.785. 5. CLASS ALLEGATIONS 24. This action is brought on behalf of the following two classes: the “FDCPA Class” and the “FCCPA Class.” 25. The “FDCPA Class” consists of: [1] all persons with Florida addresses [2] that Defendant mailed a letter to [3] in an attempt to collect a consumer debt [4] while Defendant was not registered or otherwise in possession of a valid consumer collection agency license from and/or with the Florida Department of State [5] during the twelve (12) months preceding the filing of this Complaint. 26. The “FCCPA Class” consists of: [1] all persons with Florida addresses [2] that Defendant mailed a letter to [3] in an attempt to collect a consumer debt [4] while Defendant was not registered or otherwise in possession of a valid consumer collection agency license from and/or with the Florida Department of State [5] during the twenty-four (24) months preceding the filing of this Complaint. 27. Plaintiff alleges, on information and belief, each class is so numerous that joinder of all members is impracticable because Defendant has dispatched thousands of identical letters to addresses in Florida in an attempt to collect a consumer debt while Defendant was without a valid consumer collection agency license from and/or with the Florida Department of State. 5.1 EXISTENCE AND PREDOMINANCE OF COMMON QUESTIONS OF LAW & FACT 28. Common questions of law and fact exist as each of the proposed classes and otherwise predominate over any issues involving only individual class members. PAGE | 4 of 9 LAW OFFICES OF JIBRAEL S. HINDI, PLLC 29. The factual issues common to the FDCPA and FCCPA Class are whether members received a letter from Defendant, whether said letter attempts to collect a consumer debt, whether Defendant was required to register as a consumer collection agency with the Florida Department of State, and whether Defendant failed to register as such. 30. The principal legal issue for the FDCPA and FCCPA Class is whether Defendant, by mailing a collection letter to a Florida consumer in an attempt to collect a consumer debt while Defendant was not validly registered as a consumer collection with the Florida Department of State, violated § 1692e, § 1692e(2)(A), § 1692e(5), and § 1692e(10) of the FDCPA. 31. The principal legal issue for the FCCPA Class is whether Defendant, by violating the FDCPA as proscribed above, Defendant violated § 559.72(9) of the FCCPA. 32. Excluded from the class is Defendant’s agents and employees, Plaintiff’s attorney(s) and their employees, the Judge to whom this action is assigned, and any member of the Judge’s staff and immediate family. 5.2 TYPICALITY 33. Plaintiff’s claims are typical of the claims of each class member and are based on the same facts and legal theories. 5.3 ADEQUACY 34. Plaintiff is an adequate representative of each of the classes. 35. Plaintiff will fairly and adequately protect the interests of the classes. 36. Plaintiff has retained counsel experienced in handling actions involving unlawful practices under the FDCPA, FCCPA, TCPA, and consumer-based class actions. Neither Plaintiff nor Plaintiff’s counsel have any interests which might cause them (Plaintiff or Plaintiff’s counsel) to not vigorously pursue this action. PAGE | 5 of 9 LAW OFFICES OF JIBRAEL S. HINDI, PLLC 5.4 PREDOMINANCE AND SUPERIORITY 37. Certification of the classes under Rule 23(b)(3) of the Federal Rules of Civil Procedure is also appropriate in that: (a) The questions of law or fact common to the members of the class predominate over any questions affecting an individual member. (b) A class action is superior to other available methods for the fair and efficient adjudication of the controversy. 38. Certification of a classes under Rule 23(b)(2) of the Federal Rules of Civil Procedure is also appropriate, in that, Defendant has acted on grounds generally applicable to the class thereby making appropriate declaratory relief with respect to the class as a whole. Plaintiff request certification of a hybrid class under Rule 23(b)(3) for monetary damages and to Rule 23(b)(2) for injunctive and equitable relief. COUNT I. VIOLATION OF 15 U.S.C. § 1692e, e(2)(A), e(5), & § 1692e(10) 39. On behalf of the FDCPA Class, Plaintiff incorporates by reference paragraphs 1-38 as though fully set forth herein. 40. Defendant is liable to Plaintiff and the FDCPA Class for attempting to collect consumer debts from Florida consumers without first registering and, thereafter, maintaining a valid consumer collection agency license in accordance with Florida law. Fla. Stat. § 559.553. 41. Here, Defendant mailed the Collection Letter to Plaintiff in an attempt to collect the Consumer Debt, and in so doing, Defendant engaged in activity which Florida requires licensure to be valid and otherwise lawful; however, at all times relevant, Defendant was not registered as a consumer collection agency with the Florida Department of State, as required by Fla. Stat. § 559.553. PAGE | 6 of 9 LAW OFFICES OF JIBRAEL S. HINDI, PLLC 42. Defendant’s failure to obtain a consumer debt collection license, as mandated by Florida Statutes § 559.553, while actively engaging in debt collection in the State of Florida violates 15 U.S.C § 1692e & e(10) because attempting to collect a debt while not licensed as required by Florida law is a false, deceptive, and misleading practice. 43. Defendant’s failure to obtain a consumer debt collection license as mandated by Florida Statutes § 559.553, while actively engaging in debt collection in the State of Florida, violates 15 U.S.C § 1692e(2)(A) because attempting to collect a debt and/or actually collecting a debt while not licensed as required by Florida law constitutes a false representation of the character and legal status of the underlying debt. 44. Defendant’s failure to obtain a consumer collection agency license, as mandated by Florida Statutes § 559.553, while attempting to collect consumer debts from Florida consumers is a violation of 15 U.S.C § 1692e(5) because the Collection Letter is a threat to take action that cannot legally be taken. For example, the Collection Letter causes the least sophisticated consumer to believe that Defendant may lawfully collect or even attempt to collect the Consumer Debt when, in reality, Defendant had no such authority or lawful ability. 45. WHEREFORE, Plaintiff, individually and on behalf of the FDCPA Class, requests the Court enter judgment in favor of Plaintiff and the FDCPA Class and against Defendant for: (a) Statutory damages, as provided under 15 U.S.C. §1692k; (b) Costs and attorneys’ fees, as provided by 15 U.S.C. §1692k; and (c) Such other or further relief as the Court deems proper. COUNT II. VIOLATION OF FLA. STAT. § 559.72(9) 46. On behalf of the FCCPA Class, Plaintiff incorporates by reference paragraphs 1-45 as though fully set forth herein. PAGE | 7 of 9 LAW OFFICES OF JIBRAEL S. HINDI, PLLC 47. Pursuant to § 559.72(9) of the FCCPA, in collecting consumer debts, no person shall: “[c]laim, attempt, or threaten to enforce a debt when such person knows that the debt is not legitimate, or assert the existence of some other legal right when such person knows that the right does not exist.” Fla Stat. § 559.72(9) (emphasis added). 48. Here, as stated above, by mailing the Collection Letter to Plaintiff, Defendant engaged in collection activity that Florida law requires licensure. Fla. Stat. §§ 559.553(1) & (2), and at all times material hereto, Defendant was not validly registered as a consumer collection agency with the Florida Department of State. Defendant knew it was required to register as a consumer collection agency to lawfully collect or attempt to collect consumer debts from Florida consumers, and Defendant knew did not possess or otherwise maintain a valid consumer collection agency license with the Florida Department of State when it (Defendant) mailed collection letters to Florida consumers. As such, by and through the collection letters it (Defendant) mailed to Florida consumers in an attempt to collect a debt, Defendant violated Fla. Stat. § 559.72(9) because Defendant was asserting the existence of a legal right, namely, the ability to lawfully collect or attempt to collect the underlying debt, when Defendant knew it (Defendant) had no such right. 49. WHEREFORE, Plaintiff, individually and on behalf of the FCCPA Class, requests the Court enter judgment in favor of Plaintiff and the FCCPA Class and against Defendant for: (a) Statutory damages, as provided under Fla. Stat. § 559.7(2); (b) Attorney’s fees, litigation expenses and costs of the instant suit, as provided under Fla. Stat. §559.77(2); (c) An injunction prohibiting Defendant from engaging in further collection activities directed at Plaintiff that are in violation of the FCCPA; and (d) Such other or further relief as the Court deems proper. PAGE | 8 of 9 LAW OFFICES OF JIBRAEL S. HINDI, PLLC DATED: January 2, 2020 Respectfully Submitted, /s/ Jibrael S. Hindi . JIBRAEL S. HINDI, ESQ. Florida Bar No.: 118259 E-mail: jibrael@jibraellaw.com THOMAS J. PATTI, ESQ. Florida Bar No.: 118377 E-mail: tom@jibraellaw.com The Law Offices of Jibrael S. Hindi 110 SE 6th Street, Suite 1744 Fort Lauderdale, Florida 33301 Phone: 954-907-1136 Fax: 855-529-9540 COUNSEL FOR PLAINTIFF PAGE | 9 of 9 LAW OFFICES OF JIBRAEL S. HINDI, PLLC

consumer fraud

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LEE LITIGATION GROUP, PLLC C.K. Lee (CL 4086) Anne Seelig (AS 3976) 148 West 24th Street, Eighth Floor New York, NY 10011 Tel.: 212-465-1188 Fax: 212-465-1181 Attorneys for Plaintiffs, FLSA Collective Plaintiffs and the Class UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK STEPHANIA RUIZ GUEVARA, on behalf of herself, FLSA Collective Plaintiffs Case No: and the Class, Plaintiff, CLASS AND COLLECTIVE v. ACTION COMPLAINT NY ROMANTICOS INC. d/b/a ROMANTICOS NIGHT CLUB, KAZ ENTERPRISES, INC. d/b/a CLUB EVOLUTION, FLAMINGO TAVERN CORP. d/b/a FRIENDS TAVERN, MARIA DUTAN, EDUARDO VALENTIN, and CASIMIRO VILLA, Jury Trial Demanded Defendants. Plaintiff STEPHANIA RUIZ GUEVARA (“Plaintiff”), on behalf of herself and others similarly situated, by and through her undersigned attorneys, hereby file this Class and Collective Action Complaint against NY ROMANTICOS INC. d/b/a ROMANTICOS NIGHT CLUB, KAZ ENTERPRISES, INC. d/b/a CLUB EVOLUTION, FLAMINGO TAVERN CORP. d/b/a FRIENDS TAVERN, (“Corporate Defendants”), MARIA DUTAN, EDUARDO VALENTIN, and CASIMIRO VILLA (“Individual Defendants,” and together with the Corporate Defendants, “Defendants”) and, upon information and belief, states as follows: INTRODUCTION 1. Plaintiff alleges, pursuant to the Fair Labor Standards Act, as amended, 29 U.S.C. §§201 et. seq. (“FLSA”), that she and others similarly situated are entitled to recover from Defendants: (1) unpaid minimum wages (2) unpaid overtime, (2) liquidated damages, and (3) attorneys’ fees and costs. 2. Plaintiffs further allege that, pursuant to the New York Labor Law (“NYLL”), she and others similarly situated are entitled to recover from Defendants: (1) unpaid minimum wages (2) unpaid overtime, (3) unpaid spread of hours premium, (4) statutory penalties, (5) liquidated damages, and (6) attorneys’ fees and costs. JURISDICTION AND VENUE 3. This Court has jurisdiction over this controversy pursuant to 29 U.S.C. §216(b), 28 U.S.C. §§1331, 1337 and 1343, and has supplemental jurisdiction over Plaintiff’s state law claims pursuant to 28 U.S.C. §1367. 4. Venue is proper in the Eastern District pursuant to 28 U.S.C. §1391. PARTIES 5. Plaintiff STEPHANIA RUIZ GUEVARA, for all relevant time periods, was a resident of Queens County, New York. 6. Defendants collectively own and operate a group of bars at the following locations in New York State: (a) 76-07 Roosevelt Ave., Jackson Heights, NY 11372 (“Romanticos); (b) 76-19 Roosevelt Ave., Jackson Heights, NY 11372 (“Club Evolution”); and (c) 78-11 Roosevelt Ave., Jackson Heights, NY 11372 (“Friend’s Tavern”); (collectively, the “Bars”). The Bars are operated as a single integrated enterprise, under the common control of the Individual Defendants, MARIA DUTAN, EDUARDO VALENTIN, and CASIMIRO VILLA. Specifically, the Bars are engaged in related activities, share common ownership, and have a common business purpose: (a) The Bars are commonly owned and operated by Individual Defendants, MARIA DUTAN, EDUARDO VALENTIN, and CASIMIRO VILLA. See Exhibit A for the liquor licenses that exhibit Individual Defendants’ names as principals of the Corporate Defendants. (b) Prior to opening, all new Bars must be approved by the Individual Defendants. (c) The Bars have a common look and feel. In particular, Friend’s Tavern and Club Evolution have the common “gay village for Latinos” theme, as advertised on their social media. See Exhibit B for the advertisements of the Bars. (d) Individual Defendants, EDUARDO VALENTIN and CASIMIRO VILLA, are personal partners who publicly hold themselves out as a couple that jointly run the historic gay bars, Friend’s Tavern and Club Evolution. See Exhibit C for the history of the two Bars, including the personal relationship between the two Individual Defendants, EDUARDO VALENTIN and CASIMIRO VILLA. (e) Food, beverages and other supplies are interchangeable amongst the Bars. 7. Corporate Defendant NY ROMANTICOS INC. d/b/a ROMANTICOS NIGHT CLUB , is a domestic limited liability company organized under the laws of the State of New York with an address for service of process and a principal place of business located at 76-07 Roosevelt Ave., Jackson Heights, NY 11372. 8. Corporate Defendant KAZ ENTERPRISES, INC. d/b/a CLUB EVOLUTION is a domestic limited liability company organized under the laws of the State of New York with an address for service of process at 35-55 73rd Street, Jackson Heights, NY 11372 and a principal place of business at 76-19 Roosevelt Ave., Jackson Heights, NY 11372. 9. Corporate Defendant FLAMINGO TAVERN CORP. d/b/a FRIENDS TAVERN, is a domestic limited liability company organized under the laws of the State of New York with an address for service of process at 78-11 Roosevelt Ave, Jackson Heights, NY 11372, and a principal place of business at 23 East 40th Street, New York, NY 10017. 10. Individual Defendant MARIA DUTAN is an owner and principal of each of the Corporate Defendants. MARIA DUTAN exercises operational control as it relates to all employees including Plaintiffs, FLSA Collective Plaintiffs and the Class. Individual Defendant frequently visits each of the Bars. Individual Defendant exercises the power to (and also delegates to managers and supervisors the power to) fire and hire employees, supervise and control employee work schedules and conditions of employment, and determine the rate and method of compensation of employees including those of Plaintiffs, FLSA Collective Plaintiffs and the Class. At all times, employees of the Bars could complain to MARIA DUTAN directly regarding any of the terms of their employment, and MARIA DUTAN would have the authority to effect any changes to the quality and terms of employees’ employment, including changing their schedule, compensation, or terminating or hiring such employees. 11. Individual Defendant EDUARDO VALENTIN is an owner and principal of each of the Corporate Defendants. EDUARDO VALENTIN exercises operational control as it relates to all employees including Plaintiffs, FLSA Collective Plaintiffs and the Class. Individual Defendant frequently visits each of the Bars. EDUARDO VALENTIN exercises the power to (and also delegates to managers and supervisors the power to) fire and hire employees, supervise and control employee work schedules and conditions of employment, and determine the rate and method of compensation of employees including those of Plaintiffs, FLSA Collective Plaintiffs and the Class. At all times, employees of the Bars could complain to EDUARDO VALENTIN directly regarding any of the terms of their employment, and EDUARDO VALENTIN would have the authority to effect any changes to the quality and terms of employees’ employment, including changing their schedule, compensation, or terminating or hiring such employees. 12. Individual Defendant CASIMIRO VILLA is an owner and principal of each of the Corporate Defendants. CASIMIRO VILLA exercises operational control as it relates to all employees including Plaintiffs, FLSA Collective Plaintiffs and the Class. Individual Defendant frequently visits each of the Bars. CASIMIRO VILLA exercises the power to (and also delegates to managers and supervisors the power to) fire and hire employees, supervise and control employee work schedules and conditions of employment, and determine the rate and method of compensation of employees including those of Plaintiffs, FLSA Collective Plaintiffs and the Class. At all times, employees of the Bars could complain to CASIMIRO VILLA directly regarding any of the terms of their employment, and CASIMIRO VILLA would have the authority to effect any changes to the quality and terms of employees’ employment, including changing their schedule, compensation, or terminating or hiring such employees. 13. At all relevant times, the Corporate Defendant was and continues to be an “enterprise engaged in commerce” within the meaning of the FLSA and New York Labor Law and the Regulations thereunder. 14. At all relevant times, the work performed by Plaintiff, FLSA Collective Plaintiffs and Class members was directly essential to the business operated by Defendants. FLSA COLLECTIVE ACTION ALLEGATIONS 15. Plaintiff brings claims for relief as a collective action pursuant to FLSA Section 16(b), 29 U.S.C. § 216(b), on behalf of all current and former non-exempt employees (including but not limited to servers, waiters, bartenders, barbacks, bussers, runners) employed by Defendants on or after the date that is six years before the filing of the Complaint in this case as defined herein (“FLSA Collective Plaintiffs”). 16. At all relevant times, Plaintiffs and other FLSA Collective Plaintiffs are and have been similarly situated, have had substantially similar job requirements and pay provisions, and are and have been subjected to Defendants’ decisions, policies, plans, programs, practices, procedures, protocols, routines, and rules, all culminating in a willful failure and refusal to pay them (i) their proper wages due to time shaving. The claims of Plaintiffs stated herein are essentially the same as those of other FLSA Collective Plaintiffs. 17. The claims for relief are properly brought under and maintained as an opt-in collective action pursuant to § 16(b) of the FLSA, 29 U.S.C. 216(b). The FLSA Collective Plaintiffs are readily ascertainable. For purposes of notice and other purposes related to this action, their names and addresses are readily available from the Defendants. Notice can be provided to FLSA Collective Plaintiffs via first class mail to the last address known to Defendants. RULE 23 CLASS ALLEGATIONS – NEW YORK 18. Plaintiff brings claims for relief as a collective action pursuant to the Federal Rules of Civil Procedure (“F.R.C.P.”) Rule 23, on behalf of all current and former non-exempt employees (including but not limited to servers, waiters, bartenders, barbacks, bussers, runners) employed by Defendants on or after the date that is six years before the filing of the Complaint in this case as defined herein (“Class” or “Class Members”). 19. All said persons, including Plaintiff, are referred to herein as the “Class.” The Class members are readily ascertainable. The number and identity of the Class members are determinable from the records of Defendants. The hours assigned and worked, the position held, and rates of pay for each Class member are also determinable from Defendants’ records. For purposes of notice and other purposes related to this action, their names and addresses are readily available from Defendants. Notice can be provided by means permissible under F.R.C.P. 23. 20. The proposed Class is so numerous that a joinder of all members is impracticable, and the disposition of their claims as a class will benefit the parties and the Court. Although the precise number of such persons is unknown, the facts on which the calculation of that number are presently within the sole control of Defendants, there is no doubt that there are more than forty (40) members of the Class. 21. Plaintiff’s claims are typical of those claims, which could be alleged by any member of the Class, and the relief sought is typical of the relief, which would be sought by each member of the Class in separate actions. All Class members were subject to Defendants’ corporate practices of (i) failing to pay minimum wages, (ii) failing to pay spread of hours premium, (iii) failing to provide wage statements per requirements of the New York Labor Law, and (iv) failing to properly provide wage notices to Class members, at date of hiring and annually, per requirements of the New York Labor Law. Defendants’ corporate-wide policies and practices affected all Class members similarly, and Defendants benefited from the same type of unfair and/or wrongful acts as to each Class member. Plaintiff and other Class members sustained similar losses, injuries and damages arising from the same unlawful policies, practices and procedures. 22. Defendants’ company-wide policies and practices affected all Class Members similarly, and Defendants benefited from the same type of unfair and/or wrongful acts as to each Class member. Plaintiff and Class Members sustained similar losses, injuries and damages arising from the same unlawful policies, practices and procedures. 23. Plaintiff is able to fairly and adequately protect the interests of the Class and have no interests antagonistic to the Class. Plaintiff is represented by attorneys who are experienced and competent in both class action litigation and employment litigation and have previously represented plaintiffs in wage and hour cases. 24. A class action is superior to other available methods for the fair and efficient adjudication of the controversy – particularly in the context of the wage and hour litigation where individual class members lack the financial resources to vigorously prosecute a lawsuit against corporate defendants. Class action treatment will permit a large number of similarly situated persons to prosecute common claims in a single forum simultaneously, efficiently, and without the unnecessary duplication of efforts and expense that numerous individual actions engender. Because losses, injuries and damages suffered by each of the individual Class members are small in the sense pertinent to a class action analysis, the expenses and burden of individual litigation would make it extremely difficult or impossible for the individual Class members to redress the wrongs done to them. On the other hand, important public interests will be served by addressing the matter as a class action. The adjudication of individual litigation claims would result in a great expenditure of Court and public resources; however, treating the claims as a class action would result in a significant saving of these costs. The prosecution of separate actions by individual members of the Class would create a risk of inconsistent and/or varying adjudications with respect to the individual members of the Class, establishing incompatible standards of conduct for Defendants and resulting in the impairment of class members’ rights and the disposition of their interests through actions to which they were not parties. The issues in this action can be decided by means of common, class-wide proof. In addition, if appropriate, the Court can, and is empowered to, fashion methods to efficiently manage this action as a class action. 25. Defendants and other employers throughout the state violate the New York Labor Law. Current employees are often afraid to assert their rights out of fear of direct or indirect retaliation. Former employees are fearful of bringing claims because doing so can harm their employment, future employment, and future efforts to secure employment. Class actions provide class members who are not named in the Complaint a degree of anonymity, which allows for the vindication of their rights while eliminating or reducing these risks. 26. There are questions of law and fact common to the Class which predominate over any questions affecting only individual class members, including: (a) Whether Defendants employed Plaintiff and the Class members within the meaning of the New York law; (b) What are and were the policies, practices, programs, procedures, protocols and plans of Defendants regarding the types of work and labor for which Defendants did not pay the Class members properly; (c) At what common rate, or rates subject to common methods of calculation, was and are Defendants required to pay the Class members for their work; (d) Whether Defendants properly notified Plaintiff and the Class members of their hourly rates and overtime rates; (e) Whether Defendants paid Plaintiffs and Class members the proper wage for all hours worked; (f) Whether Defendants paid Plaintiffs and Class members the New York State “spread of hours” premium when their workdays exceeded ten hours; (g) Whether Defendants provided proper wage statements informing non-exempt employees of information required to be provided on wage statements under the New York Labor Law; and (h) Whether Defendants provided proper wage notice, at date of hiring and annually thereafter, to all non-exempt employees per requirements of the New York Labor Law. STATEMENT OF FACTS 27. In or around September 2018, Plaintiff STEPHANIA RUIZ GUEVARA was hired by Defendants to work as a server at Defendants’ night club, ROMANTICOS NIGHT CLUB (“Romanticos”), located at 76-07 Roosevelt Ave., Jackson Heights, NY 11372. In or around October 2019, Plaintiff’s employment was terminated. 28. Throughout her employment, by Defendants, Plaintiff STEPHANIA RUIZ GUEVARA was scheduled to work five (5) to six (6) days per week. On the days that Plaintiff worked, her shift ran from 9:00 p.m. to 4:00 a.m. About once a week, Plaintiff worked a double- shift. On these days, Plaintiff’s schedule ran from 3:00 p.m. to 4:00 a.m. Plaintiff worked approximately forty-one (41) hours per week. 29. Throughout her employment, Plaintiff STEPHANIA RUIZ GUEVARA worked over ten (10) hours per day about once per week. However, Plaintiff never received any spread of hours payments for the days she worked over ten hours. Similarly, Class members failed to receive their spread of hours premiums when working days of ten (10) or more hours. 30. Throughout her employment, Plaintiff was paid at a flat rate of forty dollars ($40) per shift, and sixty dollars ($60) for a double-shift. 31. Plaintiff and the Class were not compensated at minimum wage, never given compensation for overtime, and never provided a spread of hours premium. 32. Plaintiff and Class members regularly worked days that exceed ten (10) hours in length, but Defendants unlawfully failed to pay Plaintiff and Class members the spread of hours premium for workdays that exceeded ten hours in length. 33. Defendants failed to provide Plaintiff and the Class members with proper wage notices at hiring and annually thereafter. Plaintiff did not receive proper wage notices either upon being hired or annually since the date of hiring in violation of the New York Labor Law. 34. Plaintiff and Class members never received wage statements, which are required under the New York Labor Law. 35. Defendants knowingly and willfully operated their business with a policy of not paying the required New York State minimum wage, to Plaintiff, FLSA Collective Plaintiffs, and the Class under the FLSA or NYLL. 36. Defendants knowingly and willfully operated their business with a policy of failing to pay Plaintiff, FLSA Collective Plaintiffs, and Class members for all hours worked. 37. Defendants knowingly and willfully operated their business with a policy of not paying the New York State “spread of hours” premium to Plaintiff and Class members, in violation of the NYLL. 38. Defendants knowingly and willfully operated their business with a policy of not providing employees proper wage statements as required under the New York Labor Law. 39. Defendants knowingly and willfully operated their business with a policy of not providing a proper wage notice to Plaintiff and Class members at the beginning of employment and annually thereafter, in violation of the NYLL. 40. Plaintiff retained Lee Litigation Group, PLLC to represent Plaintiff, FLSA Collective Plaintiffs and Class members, in this litigation and have agreed to pay the firm a reasonable fee for its services. STATEMENT OF CLAIM COUNT I VIOLATION OF THE FAIR LABOR STANDARDS ACT ON BEHALF OF PLAINTIFF AND FLSA COLLECTIVE PLAINTIFFS 41. Plaintiff realleges and reavers Paragraphs 1 through 40 of this Class and Collective Action Complaint as if fully set forth herein. 42. At all relevant times, Defendants were and continue to be employers engaged in interstate commerce and/or the production of goods for commerce within the meaning of the FLSA, 29 U.S.C. §§ 206(a) and 207(a). Further, Plaintiff and FLSA Collective Plaintiffs are covered individuals within the meaning of the FLSA, 29 U.S.C. §§ 206(a) and 207(a). 43. At all relevant times, Defendants employed Plaintiff and FLSA Collective Plaintiffs within the meaning of the FLSA. 44. At all relevant times, each Corporate Defendant had gross annual revenues in excess of $500,000.00. 45. At all relevant times, the Defendants engaged in a policy and practice of refusing to compensate Plaintiff and FLSA Collective Plaintiffs for all hours that they worked each week due to a policy of time-shaving. 46. Plaintiff is in possession of certain records concerning the number of hours worked by Plaintiff and FLSA Collective Plaintiffs and the actual compensation paid to Plaintiff and FLSA Collective Plaintiffs. Further records concerning these matters should be in the possession and custody of the Defendants. Plaintiff intends to obtain all records by appropriate discovery proceedings to be taken promptly in this case and, if necessary, will then seek leave of Court to amend this Complaint to set forth the precise amount due. 47. Defendants failed to properly disclose or apprise Plaintiff and FLSA Collective Plaintiffs of their rights under the FLSA. 48. As a direct and proximate result of Defendants’ willful disregard of the FLSA, Plaintiff and FLSA Collective Plaintiffs are entitled to liquidated (i.e., double) damages pursuant to the FLSA. 49. Due to the intentional, willful and unlawful acts of Defendants, Plaintiff and FLSA Collective Plaintiffs suffered damages in an amount not presently ascertainable of unpaid wages due to time-shaving, and an equal amount as liquidated damages. 50. Plaintiff and FLSA Collective Plaintiffs are entitled to an award of their reasonable attorneys’ fees and costs pursuant to 29 U.S.C. §216(b). COUNT II VIOLATION OF THE NEW YORK LABOR LAW ON BEHALF OF PLAINTIFF AND CLASS MEMBERS 51. Plaintiff realleges and reavers Paragraphs 1 through 50 of this Class and Collective Action Complaint as if fully set forth herein. 52. At all relevant times, Plaintiff and Class members were employed by the Defendants within the meaning of the New York Labor Law, §§2 and 651. 53. Defendants willfully violated Plaintiff’s and Class members’ rights by failing to pay them the proper wages for all of their hours worked due to Defendants’ policy of time shaving. 54. Defendants willfully violated Plaintiff’s and the Tipped Subclass members’ rights by failing to pay them minimum wages in the lawful amount for hours worked. Defendants were not entitled to claim any tip credits. 55. Defendants willfully violated Plaintiff’s and Class members’ rights by failing to pay “spread of hours” premium to them for each workday that exceeded ten (10) or more hours. 56. Defendants failed to provide a proper wage and hour notice, at the date of hiring and annually, to all non-exempt employees per requirements of the New York Labor Law. 57. Defendants failed to provide proper wage statements with correct payment as required by New York Lab. Law § 195(3). 58. Due to the Defendants’ New York Labor Law violations, Plaintiff and Class members are entitled to recover from Defendants their unpaid wages due time shaving, unpaid wages due to invalid tip credit, unpaid spread of hours premium, reasonable attorneys’ fees, liquidated damages, statutory penalties and costs and disbursements of the action, pursuant to New York Labor Law. PRAYER FOR RELIEF WHEREFORE, Plaintiff on behalf of himself, FLSA Collective Plaintiffs and Class members, respectfully request that this Court grant the following relief: a. A declaratory judgment that the practices complained of herein are unlawful under the FLSA and the New York Labor Law; b. An injunction against Defendants and their officers, agents, successors, employees, representatives and any and all persons acting in concert with them as provided by law, from engaging in each of the unlawful practices, policies and patterns set forth herein; c. An award for failure to pay proper minimum and overtime wages as mandated by New York Labor Law and FLSA; d. An award of unpaid spread of hours premium due under the NYLL; e. An award of statutory penalties as a result of Defendants’ failure to comply with New York Labor Law wage notice and wage statement requirements; f. An award of liquidated and/or punitive damages as a result of Defendants’ willful failure to pay overtime compensation, pursuant to 29 U.S.C. § 216; g. An award of liquidated and/or punitive damages as a result of Defendants’ willful failure to pay overtime compensation, and compensation for all hours of work, pursuant to the New York Labor Law; h. An award of prejudgment and post judgment interest, costs and expenses of this action together with reasonable attorneys’ and expert fees and statutory penalties; i. Designation of Plaintiff as Representative of the FLSA Collective Plaintiffs; j. Designation of this action as a class action pursuant to F.R.C.P. 23; k. Designation of Plaintiff as Representative of Class; and l. Such other and further relief as this Court deems just and proper. JURY DEMAND Pursuant to Rule 38(b) of the Federal Rules of Civil Procedure, Plaintiff demands trial by jury on all issues so triable as of right by jury. Dated: July 27, 2020 Respectfully submitted, LEE LITIGATION GROUP, PLLC C.K. Lee (CL 4086) Anne Seelig (AS 3976) 148 West 24th Street, 8th Floor New York, NY 10011 Tel.: 212-465-1188 Fax: 212-465-1181 Attorneys for Plaintiff, FLSA Collective Plaintiffs and the Class By: /s/ C.K. Lee . C.K. Lee (CL 4086)

employment & labor

wQ2AFocBD5gMZwczYM1y

BARSHAY SANDERS, PLLC 100 Garden City Plaza, Suite 500 Garden City, New York 11530 Tel: (516) 203-7600 Fax: (516) 706-5055 Email: ConsumerRights@BarshaySanders.com Attorneys for Plaintiff Our File No.: 117243 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK NEW YORK DIVISION Jasmin Colon, individually and on behalf of all others similarly situated, Plaintiff, Docket No: CLASS ACTION COMPLAINT vs. JURY TRIAL DEMANDED Pressler, Felt & Warshaw, LLP f/k/a Pressler & Pressler, LLP, Defendant. Jasmin Colon, individually and on behalf of all others similarly situated (hereinafter referred to as “Plaintiff”), by and through the undersigned counsel, complains, states and alleges against Pressler, Felt & Warshaw, LLP f/k/a Pressler & Pressler, LLP (hereinafter referred to as “Defendant”), as follows: INTRODUCTION 1. This action seeks to recover for violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq. (the “FDCPA”). JURISDICTION AND VENUE 2. This Court has federal subject matter jurisdiction pursuant to 28 U.S.C. § 1331 and 15 U.S.C. § 1692k(d). 3. Venue is proper under 28 U.S.C. § 1391(b) because a substantial part of the events or omissions giving rise to the claim occurred in this Judicial District. 4. At all relevant times, Defendant conducted business within the State of New PARTIES 5. Plaintiff Jasmin Colon is an individual who is a citizen of the State of New York residing in Kings County, New York. 6. Plaintiff is a natural person allegedly obligated to pay a debt. 7. Plaintiff is a “consumer” as defined by 15 U.S.C. § 1692a(3). 8. On information and belief, Defendant Pressler, Felt & Warshaw, LLP f/k/a Pressler & Pressler, LLP, is a New York Limited Liability Partnership with a principal place of business in New York County, New York. 9. Defendant regularly collects or attempts to collect debts asserted to be owed to others. 10. Defendant is regularly engaged, for profit, in the collection of debts allegedly owed by consumers. 11. The principal purpose of Defendant's business is the collection of such debts. 12. Defendant uses the mails in its debt collection business. 13. Defendant is a “debt collector” as defined by 15 U.S.C. § 1692a(6). THE FDCPA AS IT RELATES TO THE CLAIMS HEREIN 14. Congress enacted the FDCPA upon finding that debt collection abuse by third party debt collectors was a widespread and serious national problem. See S. Rep. No. 95-382, at 2 (1977), reprinted in U.S.C.C.A.N. 1695, 1696; 15 U.S.C § 1692(a). 15. The purpose of the FDCPA is to protect consumers from deceptive or harassing actions taken by debt collectors, with the aim of limiting the suffering and anguish often inflicted by independent debt collectors. Kropelnicki v. Siegel, 290 F.3d 118, 127 (2d Cir. 2002); Russell v. Equifax A.R.S., 74 F.3d 30, 34 (2d Cir. 1996). 16. To further these ends, “the FDCPA enlists the efforts of sophisticated consumers ... as 'private attorneys general' to aid their less sophisticated counterparts, who are unlikely themselves to bring suit under the Act, but who are assumed by the Act to benefit from the deterrent effect of civil actions brought by others.” Jacobson v. Healthcare Fin. Servs., Inc., 516 F.3d 85, 91 (2d Cir. 2008). 17. As such, the circumstances of the particular debtor in question have no bearing as to the question of whether there has been a violation of the FDCPA. See Easterling v. Collecto, Inc., 692 F.3d 229, 234 (2d Cir. 2012). Indeed, it is not necessary for a plaintiff to show that he or she was confused by the communication received. Jacobson, 516 F.3d at 91. Likewise, the plaintiff consumer's actions or inaction in response to a communication from a debt collector are irrelevant. Thomas v. Am. Serv. Fin. Corp., 966 F. Supp. 2d 82, 90 (E.D.N.Y. 2013). 18. Instead, “the test is how the least sophisticated consumer—one not having the astuteness of a 'Philadelphia lawyer' or even the sophistication of the average, everyday, common consumer—understands the notice he or she receives.” Russell, 74 F.3d at 34. 19. If a debt collector's communication is “reasonably susceptible to an inaccurate reading” by the least sophisticated consumer, it violates the FDCPA. DeSantis v. Computer Credit, Inc., 269 F.3d 159, 161 (2d Cir. 2001). Similarly, a communication violates the FDCPA if it is “open to more than one reasonable interpretation, at least one of which is inaccurate,” or if the communication “would make the least sophisticated consumer uncertain as to her rights.” Clomon v. Jackson, 988 F.2d 1314, 1319 (2d Cir. 1993); Jacobson, 516 F.3d at 90. 20. The FDCPA is a strict liability statute, and a debt collector's intent may only be considered as an affirmative defense. 15 U.S.C. § 1692k(c); Ellis v. Solomon & Solomon, P.C., 591 F.3d 130, 135 (2d Cir. 2010). Likewise, “the degree of a defendant's culpability may only be considered in computing damages.” Bentley v. Great Lakes Collection Bureau, 6 F.3d 60, 63 (2d Cir. 1993). A single violation of the FDCPA to establish civil liability against the debt collector. Id. ALLEGATIONS SPECIFIC TO PLAINTIFF 21. Defendant alleges Plaintiff owes a debt (“the alleged Debt”). 22. The alleged Debt is an alleged obligation of Plaintiff to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes. 23. The alleged Debt does not arise from any business enterprise of Plaintiff. 24. The alleged Debt is a “debt” as defined by 15 U.S.C. § 1692a(5). 25. At an exact time known only to Defendant, the alleged Debt was assigned or otherwise transferred to Defendant for collection. 26. At the time the alleged Debt was assigned or otherwise transferred to Defendant for collection, the alleged Debt was in default. 27. In its efforts to collect the alleged Debt, Defendant contacted Plaintiff by letter (“the Letter”) dated December 11, 2018. (A true and accurate copy is annexed hereto as “Exhibit 1.”) 28. The Letter conveyed information regarding the alleged Debt. 29. The Letter is a “communication” as defined by 15 U.S.C. § 1692a(2). 30. The Letter was received and read by Plaintiff. 31. 15 U.S.C. § 1692e protects Plaintiff's concrete interests. Plaintiff has the interest and right to be free from deceptive and/or misleading communications from Defendant. As set forth herein, Defendant deprived Plaintiff of this right. 32. 15 U.S.C. § 1692e provides, generally, that a debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt. 33. 15 U.S.C. § 1692e(2)(A) prohibits the false representation of the character, amount, or legal status of any debt. 34. 15 U.S.C. § 1692e(10) prohibits the use of any false representation or deceptive means to collect or attempt to collect any debt. 35. A debt collection practice can be a “false, deceptive, or misleading” practice in violation of 15 U.S.C. § 1692e even if it does not fall within any of the subsections of 15 U.S.C. § 1692e. Clomon, 988 F.2d at 1318. 36. A collection letter violates 15 U.S.C. § 1692e if, in the eyes of the least sophisticated consumer, it is open to more than one reasonable interpretation, at least one of which is inaccurate. Clomon, 988 F.2d at 1319. 37. A collection letter also violates 15 U.S.C. § 1692e if it is reasonably susceptible to an inaccurate reading by the least sophisticated consumer. DeSantis, 269 F.3d at 161. 38. A statement of an amount due, without notice that the amount may increase, can mislead the least sophisticated consumer into believing that payment of the amount stated will clear her account. 39. For this reason, 15 U.S.C. § 1692e requires debt collectors, when they notify consumers of their account balance, to disclose that the balance may increase, or to state that payment of a sum certain by a specified date will fully satisfy the debt. Avila v. Riexinger & Assocs., LLC, 817 F.3d 72, 74 (2d Cir. 2016). 40. The failure to provide the aforementioned disclosure makes the collection letter deceptive under 15 U.S.C. § 1692e. 41. The amount of the alleged Debt was increasing at the time it was assigned or otherwise transferred to Defendant for collection. 42. The amount of the alleged Debt was increasing at the time Defendant sent Plaintiff the Letter. 43. The amount of the alleged Debt was increasing at the time Plaintiff received the Letter. 44. The Letter fails to advise Plaintiff that the amount of the alleged Debt was increasing. 45. The Letter fails to advise Plaintiff that payment of a sum certain by a specified date will fully satisfy the debt. 46. For the foregoing reasons, Defendant violated 15 U.S.C. §§ 1692e, 1692e(2)(A) and 1692e(10) and is liable to Plaintiff therefor. CLASS ALLEGATIONS 47. Plaintiff brings this action individually and as a class action on behalf of all persons similarly situated in the State of New York. 48. Plaintiff seeks to certify a class of: All consumers to whom Defendant sent a collection letter substantially and materially similar to the Letter sent to Plaintiff, which letter was sent on or after a date one year prior to the filing of this action to the present. 49. This action seeks a finding that Defendant's conduct violates the FDCPA, and asks that the Court award damages as authorized by 15 U.S.C. § 1692k. 50. The Class consists of more than thirty-five persons. 51. Plaintiff's claims are typical of the claims of the Class. Common questions of law or fact raised by this action affect all members of the Class and predominate over any individual issues. Common relief is therefore sought on behalf of all members of the Class. A class action is superior to other available methods for the fair and efficient adjudication of this controversy. 52. The prosecution of separate actions by individual members of the Class would create a risk of inconsistent or varying adjudications with respect to the individual members of the Class, and a risk that any adjudications with respect to individual members of the Class would, as a practical matter, either be dispositive of the interests of other members of the Class not party to the adjudication, or substantially impair or impede their ability to protect their interests. Defendant has acted in a manner applicable to the Class as a whole such that declaratory relief is warranted. 53. Plaintiff will fairly and adequately protect and represent the interests of the Class. The management of the class is not extraordinarily difficult, and the factual and legal issues raised by this action will not require extended contact with the members of the Class, because Defendant's conduct was perpetrated on all members of the Class and will be established by common proof. Moreover, Plaintiff has retained counsel experienced in actions brought under consumer protection laws. JURY DEMAND 54. Plaintiff hereby demands a trial of this action by jury. PRAYER FOR RELIEF WHEREFORE, Plaintiff respectfully requests judgment be entered: a. Certifying this action as a class action; and b. Appointing Plaintiff as Class Representative and Plaintiff's attorneys as Class Counsel; c. Finding Defendant's actions violate the FDCPA; and d. Granting damages against Defendant pursuant to 15 U.S.C. § 1692k; and e. Granting Plaintiff's attorneys' fees pursuant to 15 U.S.C. § 1692k; and f. Granting Plaintiff's costs; all together with g. Such other relief that the Court determines is just and proper. DATED: October 25, 2019 BARSHAY SANDERS, PLLC By: _/s/ Craig B. Sanders Craig B. Sanders, Esquire 100 Garden City Plaza, Suite 500 Garden City, New York 11530 Tel: (516) 203-7600 Fax: (516) 706-5055 csanders@barshaysanders.com Attorneys for Plaintiff Our File No.: 117243

consumer fraud

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IN THE UNITED STATES DISTRICT COURT WESTERN DISTRICT OF PENNSYLVANIA DENISE M. HENNING, CPA LLC, individually and on behalf of all others similarly situated, 2:-cv-905 Civil Action No. ___________ Plaintiff, v. CLASS ACTION (Jury Trial Demanded) THE PNC FINANCIAL SERVICES GROUP, INC.; PNC BANK, N.A.; and DOES 1 through 100, inclusive, Defendants. CLASS ACTION COMPLAINT Plaintiff Denise M. Henning, CPA LLC (“Ms. Henning” or “Plaintiff”) brings this Class Action Complaint and Demand for Jury Trial against Defendant The PNC Financial Services Group, Inc., Defendant PNC Bank, N.A. (collectively, “PNC”), and Does 1 through 100, inclusive (collectively with PNC, the “Defendants”), seeking compensation from Defendants, who refuse to comply with the CARES Act that requires it to pay out of the compensation it received for processing PPP loans, for services Plaintiff Ms. Henning and a large number of other agents rendered on behalf of recipients of Small Business Administration (“SBA”) emergency loans. Plaintiff alleges as follows upon personal knowledge as to itself and its own acts and experiences, and, as to all other matters, upon information and belief. NATURE OF THE ACTION 1. In response to the shut-down of virtually every business across all non-essential industries due to COVID-19, the federal government has raced over the past few months to ease the impact of the shut-down on the U.S. economy. In order to keep afloat small businesses, and to encourage those businesses to avoid massive worker layoffs and furloughs further damaging the economy, Congress decided to create an economic relief program to distribute money to small businesses. 2. In order to distribute the money swiftly to small businesses, Congress decided to utilize the nation’s financial institutions to take applications and distribute the funds that would be fully guaranteed by the federal government. However, in order to avoid delay, Congress decided that the financial institutions would not be required to verify the accuracy of the applications. Instead, the burden to provide accurate information was put directly and solely on the small businesses submitting applications. 3. The applications would need to be simple and the amount of the economic relief would be based on historical payroll information with specific limitations. However, as the lenders would not be verifying the information, there would need to be a number of representations and certifications, and specific warnings because that failure to provide true and accurate information could subject the small business owner to five years in prison and a $250,000 fine. 4. In order for these small businesses to be able to make timely, truthful and accurate applications, Congress understood that small businesses would need assistance from the nation’s professional accountants, tax preparers, financial advisors, attorneys, and other such agents normally relied upon by small businesses. 5. On March 27, 2020, Congress passed the SBA’s Paycheck Protection Program (“PPP”) which initially authorized up to $349 billion in forgivable loans to small businesses to cover payroll and other expenses (PPP I). After the initial funds quickly dried up, Congress added $310 billion additional dollars to the program (PPP II). 6. The PPP was designed to be fast and straightforward, allowing business to apply through SBA-approved lenders and await approval. Once approved, lenders would be compensated in the form of a generous origination fee paid by the federal government, with the requirement that the lender would be responsible for paying the fee owed to the loan applicant’s agent (e.g., attorney or accountant). Both the lender and the agents were specifically forbidden by the PPP from charging the small business borrower any amounts for the loan or the assistance in preparing the application for the loan. The amount of the total compensation and the allocation between the lender and the agents assisting the borrowers in preparing the application was specifically set out in the PPP. For the majority of loans (those under $350,000), the lender would receive an amount equal to 5% of the loan as compensation, and if the borrower used an agent such as a CPA or accountant, the lender was to pay an amount equal to 1% of the loan amount to the agent. In other words, compensation from the federal government to the lender and the borrower’s agent was allocated as 80% to the lender and 20% to the CPA or attorney assisting the small business borrower. 7. Defendants are one of the largest banks headquartered in Pennsylvania. They have more than 357 offices in 197 cities and among their many financial offerings, they specialize in small business banking. Defendants recently reported their approval of 70,500 PPP applications totaling over $14 billion in borrowed funds during the first round of funding (PPP I).1 Defendants have not reported how the number of applications or amount of funds they have lent during the second round of funding (PPP II), but it is expected to be billions more. To date, the average PPP loan Defendants have approved is approximately $200,000. Assuming a conservative average fee of four percent, they have, accordingly, been allocated over $560 million in origination fees, from which they were required to pay the agents who assisted the borrowers in submitting applications. 1 See PNC Update On Paycheck Protection, available at https://pnc.mediaroom.com/2020- 05-01-PNC-Update-On-Paycheck-Protection-Program-Support (last visited May 28, 2020). 8. However, Defendants apparently decided that they do not need to complete the final step of the process and based on information and belief have refused to pay the agents who assisted PPP loan recipients with their applications. This practice seemed to be a deliberate scheme from the beginning as even though they were required to pay agents that assisted in the application process, Defendants did not set up a structure or ask any questions to determine whether borrowers utilized an agent in completing applications. It appears that this scheme was to claim ignorance of the existence of the agent as an excuse not to pay the agent its share of the compensation. This refusal is harming accountants, attorneys, and other agents who dropped everything (in the midst of tax season) to assist their customers in filling out these vital loan applications correctly and in compliance with the PPP, and who were specifically only allowed to be paid for these services out of the compensation paid to the lender. The Defendants’ failure to pay agents is in blatant violation of PPP regulations stating that agent fees “will be paid by the lender out of the fees the lender receives from SBA.” 9. These agents, including Plaintiff, have no other recourse for collecting fees for assisting borrowers on PPP loan applications because the PPP regulations delegate the responsibility for paying agents to the lenders alone. And yet, Defendants have disregarded the regulations and refused to pay agents who assisted small businesses in receiving PPP funds. 10. Plaintiff has been harmed by Defendants’ practice. As a CPA that does small business support functions, Plaintiff assisted a small business client who submitted an application to Defendant and was then funded through the PPP program. Based on information and belief, Defendants have received the 5% compensation related to that loan but have not paid Plaintiff its 1% agent fee related to the loan. 11. As a result of Defendants’ acts and omissions, Plaintiff and a large number of others like it have been deprived of payment for their critical work in supporting their clients’ PPP loan applications. As such, Plaintiff brings this Class Action Complaint and Demand for Jury Trial in order to vindicate its rights and those of agents everywhere who are similarly situated, and to force Defendants to account for their blatant violation of the PPP and to pay agents their portion of the compensation. PARTIES 12. Plaintiff Denise M. Henning, CPA LLC is a Certified Public Accountant (“CPA”) firm organized in Pennsylvania, with its principal place of business located in Pittsburgh, Pennsylvania. 13. Defendant The PNC Financial Services Group, Inc., is a financial services and bank holding corporation incorporated in Pennsylvania and headquartered at The Tower at PNC Plaza, 300 Fifth Avenue, Pittsburgh, Pennsylvania. PNC offers many financial services, including banking services to small businesses in the Pennsylvania counties of Allegheny, Erie, Lackawanna, Lehigh and Philadelphia as well as mid-Atlantic markets such as West Virginia, Ohio, New York and New Jersey. 14. Defendant PNC Bank, N.A., is a national banking association organized under the laws of the United States and headquartered at The Tower at PNC Plaza, 300 Fifth Avenue, Pittsburgh, Pennsylvania. 15. In this Complaint, references made to any act of any Defendant shall be deemed to mean that officers, directors, agents, employees, or representatives of the Defendants named in this lawsuit committed or authorized such acts, or failed and/or omitted to adequately supervise or properly control or direct their employees while engaged in the management, direction, operation or control of the affairs of the Defendants and did so while acting within the scope of their employment or agency. 16. Plaintiff is unaware of the names, identities or capacities of the Defendants sued as Doe Defendants 1 through 100, but is informed and believes and thereon alleges that such fictitiously-named defendants are responsible in some manner for the damages and unfair business practices and violation of rights as described herein. Plaintiff will amend this Complaint to state the true names, identities, or capacities of such fictitiously-named Defendants when ascertained. JURISDICTION AND VENUE 17. This Court has subject matter jurisdiction over this action under the Class Action Fairness Act, 28 U.S.C. § 1332(d), because, as to the proposed Class and Subclasses, (a) at least one member of the proposed Class, which consists of at least 100 members, is a citizen of a different state than Defendants; (b) the claims of the proposed Class Members exceed $5,000,000 in the aggregate, exclusive of interest and costs, and (c) none of the exceptions under that subsection apply to this action. 18. Personal jurisdiction over Defendants is proper because Defendants’ transact business in the State of Pennsylvania and a substantial number of the events giving rise to the claims alleged herein took place in Pennsylvania. 19. This Court has jurisdiction to grant declaratory relief under 28 U.S.C. § 2201 because an actual controversy exists between the parties as to their respective rights and obligations under 85 Fed. Reg. 20816 § (4)(c) (hereinafter, the “PPP regulations”). 20. Venue is proper in this judicial district pursuant to 28 U.S.C. § 1391(b)(2) because a substantial part of the events, acts or omissions giving rise to the claim occurred in this judicial district, including work performed by Plaintiff on behalf of business clients within this District. Further, Defendants are headquartered in this judicial district. FACTUAL BACKGROUND 21. The spread of COVID-19 was declared a pandemic by the World Health Organization (“WHO”) on March 11, 2020. 22. On March 13, 2020, President Donald Trump issued the Coronavirus Disease 2019 (COVID-19) Emergency Declaration, which declared that the pandemic was of “sufficient severity and magnitude to warrant an emergency declaration for all states, territories and the District of Columbia.” 23. The Federal Government expressly recognized that with the COVID-19 emergency, “many small businesses nationwide are experiencing economic hardship as a direct result of the Federal, State and local public health measures that are being taken to minimize the public’s exposure to the virus.” 2 24. The economic fallout from COVID-19, and the national response to it, was immediate and enormous. As “stay at home” issues were ordered by states across the nation, countless businesses were forced by law to overhaul their business models, scale back their business dramatically, or shutter–either temporarily or permanently. Business were further harmed as the public began to avoid all public spaces. Furloughs and layoffs were rampant in the private sector. 25. On March 25, 2020, in response to the economic damage caused by the COVID- 19 crisis and to overwhelming public pressure, the U.S. Senate passed the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act. The CARES Act was passed by the House of Representatives the following day and signed into law by President Trump on March 27, 2020. Amounting to approximately $2 trillion, the CARES Act was the single-largest economic stimulus bill in American history. 26. Critically, the CARES Act created a $659 billion loan program for business with fewer than five hundred employees, called the “Paycheck Protection Program” (“PPP”)3. The goal of the PPP was to provide American small businesses with eight weeks of cash-flow assistance, with a certain percentage forgivable if utilized to retain employees and fund payrolls. The loans are fully federally guaranteed and administered by the Small Business Administration (“SBA”).4 27. Basically, PPP loans operate more like grants if the recipient follows certain rules, including that at least 75 percent of the loan goes toward payroll.5 Businesses that follow the 2 See Business Loan Program Temporary Changes; Paycheck Protection Program, 13 CFR Part 120, Interim Final Rule (“SBA PPP Final Rule”). 3 The first phase of the PPP was for $349 billion, and when that quickly ran out, a second phase was funded for $310 billion. 4 Small Bus. Admin., Docket No. SBA-2020-0015, 13 CFR Part 120, Paycheck Protection Program 3245-AH34, Interim Final Rule, 85 Fed. Reg. 20814 § (2)(o) (Apr. 15, 2020). 5 85 Fed. Reg. 20812 § (2)(e); id. at 20813 § (2)(o). rules are permitted to submit a request to their SBA lender for total forgiveness. Otherwise, the loan matures in two years and carries a one percent interest rate.6 28. The SBA was charged with creating the PPP implementing regulations. It issued the first interim final rule (“Initial Rule”) on April 2, 2020, allowing businesses to begin applying for PPP loans with all SBA lenders on April 3, 2020. 29. An important piece of the PPP was that applications were to be processed and funded on a “first-come, first-served” basis—that is, the SBA was to process applications and distribute funds based on the order in which they were received. This made the SBA’s list of approved lenders key gatekeepers in this process, which the lenders certainly understood. Because the PPP was to be administered only through SBA-approved lenders, and because applicants were applying for funds from the single pot allocated for the program, submitting an accurate application for a loan through the SBA-approved lender as quickly as possible was critical. 30. Congress added an incentive for the SBA-affiliated lenders, knowing they would face a crush of PPP loan applications: for each loan processed and approved, the bank would receive an origination fee of five percent for loans up to $350,000; three percent for loans between $350,000 and $2 million; and one percent for loans between $2 million and $10 million.7 31. With similar incentives in mind, Congress and the SBA also carved out a specific benefit for the countless accountants, attorneys, and advisors who would need to lead or assist their clients in preparing and filing PPP loan applications. These individuals and entities are referred to as “agents” in the CARES Act and PPP implementing regulations. 32. As explained in an Information Sheet provided for “lenders,” the SBA states that ‘[a]n ‘Agent’ is an authorized representative and can be: an attorney; an accountant; a consultant; someone who prepares an applicant’s application for financial assistance and is employed and 6 Id. at 20813 § (2)(j). 7 Id. compensated by the applicant; someone who assists a lender with originating, disbursing, servicing, liquidating, or litigating SBA loans; a loan broker; or any other individual or entity representing an applicant by conducting business with the SBA.”8 33. In addition, the SBA Regulations provide that “Agent fees will be paid out of lender fees. The lender will pay the agent. Agents may not collect any fees from the applicant. The total amount that an agent may collect from the lender for assistance in preparing an application for a PPP” (emphasis added) loan is as follows (“Agent Fees”): one percent (1%) for loans up to $350,000; 0.50% for loans between $350,000 and $2 million; and 0.25% for loans between $2 million and $10 million.9 34. Within this context, Congress and the SBA set up a straightforward system for the disbursement of PPP loan funds where the applicant is assisted by an agent: (i) the agent prepares the application and/or necessary supporting documents for the client’s application; (ii) the client applies for the PPP loan through the lender; (iii) the lender submits the application to the SBA; (iv) the SBA approves the loan and sends the client the money, through the lender, and eventually pays the lender’s origination fee; and (v) the agent submits the request for fee payment to the lender with the agent’s fee based upon (a) the work performed for the client and (b) the caps on agent fees provided by the SBA’s PPP regulations. 35. Unfortunately, based on information and belief, Defendants are refusing to pay the fees of agents for their assistance in providing an accurate and truthful application for funding. 36. Upon information and belief, this refusal is a company-wide policy. Further, the fact that Defendants set up the application process without even asking the borrower if they utilized the assistance of an agent, suggests that the Defendants did not want to have any record of the agent information in their files. 8 U.S. Dep’t of Treasury, Paycheck Protection Program (PPP) Information Sheet Lenders, https://home.treasury.gov/system/files/136PPP%20%Lender%20Information%20Fact%20Sheet. pdf (last accessed May 25, 2020). 9 85 Fed. Reg. 20816 § (4)(c). 37. This policy of refusal to pay to agents “Agent Fees” that are due, and that only the lenders are authorized to pay, stands as an immediate threat to these agents’ abilities to receive payment. In the midst of an unprecedented economic/pandemic crisis, this policy represents short-sighted profit-padding at best, and blatantly illegal conduct, at worst. 38. Defendants also flaunted their success and the value PPP added to PNC Bank, noting that the bank had efficiently “registered more than 70,500 Paycheck Protection Program loans totaling $14 billion for PNC’s small business customers” that “are estimated to employ more than 1 million people.”10 39. Refusing to pay Agent Fees is also inconsistent with agreements Defendants made in order to become approved PPP lenders. Specifically, based on information and belief, Defendants were required to fill out and sign the “CARES Act Section 1102 Lender Agreement” for each loan.11 This submission requires each putative PPP lender to certify, under penalty of perjury, that it (i) “is in compliance and will maintain compliance with all applicable requirements of the [PPP], and PPP Loan Program Requirements[,]” (ii) will “service and liquidate all covered loans made under the Paycheck Protection Program in accordance with PPP Loan Requirements[,] and (iii) will “close and disburse each covered loan in accordance with the terms and conditions of the PPP Authorization and PPP Loan Requirements.” 40. To the extent Defendants had to certify, at any point, that they would follow the PPP’s regulations in making PPP loans, they were not being truthful. Defendants’ policy to refuse to pay Agent Fees directly violates the PPP’s implementing regulations. 41. It is pursuant to these representations that Defendants were able to process over 70,500 of PPP applications worth over $14 billion just during the first phase of PPP funding, and likely billions of dollars in the second phase. Defendants’ average loan was approximately 10 See PNC Update On Paycheck Protection, available at https://pnc.mediaroom.com/2020- 05-01-PNC-Update-On-Paycheck-Protection-Program-Support (last visited May 28, 2020). 11 U.S. Small Bus. Admin., CARES Act Section 1102 Lender Agreement, https://www.sba.gov/sites/default/files/2020-04/PP--Agreement-for-New-Lenders-Banks-Credit- Unions-FCS-w-seal-fillable.pdf (last accessed May 25, 2020). $200,000. Assuming a conservative average fee of four percent, Defendants have, accordingly, been allocated over $560 million in origination fees, from which they were required to pay agents. 42. Knowing that they were required to pay agents a percentage of PPP loan origination fees if an agent assisted an applicant in preparing and submitting the application, Defendants elected not to ask borrowers whether they utilized an “agent” to assist them in the application process and have not paid Plaintiff or similarly situated agents compensation from funded PPP loans. PLAINTIFF HENNING’S EXPERIENCE 43. Plaintiff Henning is a Pennsylvania CPA firm providing financial services to clients in the Mid-Atlantic area. In March, Plaintiff became aware that the CARES Act had been signed into law. Plaintiff, knowing that the COVID-19 crisis would significantly impact clients’ businesses, sought to obtain PPP loans through various SBA-approved lenders on behalf of clients. 44. Plaintiff spent considerable time familiarizing itself with the Act and the related SBA Regulations, in particular, (a) Section 1102, which permits the SBA to guarantee 100% of Section 7(a) loans under the PPP and (b) Section 1106 of the Act, which provides forgiveness of up to the full principal amount of qualifying loans guaranteed under the PPP. 45. In or about March, April, and May, 2020, Plaintiff assisted clients in the gathering and analysis of their documents, as well as the calculations and preparation of the loan applications. 46. Based on the SBA Regulations, Plaintiff understood that it was not allowed to charge clients a fee relating to the application process. The agents were only allowed to receive compensation from the agents’ share of the estimated $20 billion in fees that the Federal Government paid the Lenders for originating the PPP loans. 47. For its clients, Plaintiff had the primary role in calculating the payroll information needed for the application, and providing the clients’ accounting information, advice, documentation in support of the PPP loan application. Plaintiff will have ongoing responsibility for advising clients on the forgiveness of the PPP loan. 48. Plaintiff provided all of these services to a client who obtained a PPP loan from PNC Bank in the amount of $56,469. Based on information and belief, PNC Bank was paid or will be paid, an origination fee of $2,823.45, of which Plaintiff is entitled to $564.69 (1% of total loan amount) of that fee for its work as the agent of the borrower in submitting the application and documentation. 49. Defendants did not comply with the SBA Regulations because they have not paid Plaintiff the agent fees to which it is entitled despite awarding PPP loans to Plaintiff’s client for whom Plaintiff acted as a PPP agent. Instead, Defendants retained all of the Agent Fees for themselves. 50. As a result of Defendants’ unlawful and unfair actions, Plaintiff and the Class have suffered financial harm by being deprived of the statutorily mandated compensation for the professional services provided to clients in assisting them with obtaining PPP loans. CLASS ALLEGATIONS 51. Plaintiff brings this action on behalf of itself and all others similarly situated as a nationwide Class, defined as follows: All persons and businesses who served as an agent in relation to, and provided assistance to a client in relation to, the preparation and/or submission of a client’s PPP loan application to PNC Bank which resulted in a loan being funded under the PPP. Plaintiff further brings this action on behalf of a subclass of individuals defined as follows: Pennsylvania Subclass. All persons and businesses in Pennsylvania who served as an agent in relation to, and provided assistance to a client in relation to, the preparation and/or submission of a client’s PPP loan application to PNC Bank which resulted in a loan being funded under the PPP. 52. Excluded from this Class and Subclass (hereinafter “the Class” unless otherwise indicated) are: (1) any Judge or Magistrate presiding over this action and members of their families; (2) Defendants, Defendants’ subsidiaries, parents, successors, predecessors, and any entity in which Defendants or its parents have a controlling interest and its current or former employees, officers and directors; (3) persons who properly execute and file a timely request for exclusion from the Class; (4) persons whose claims in this matter have been finally adjudicated on the merits of otherwise released; (5) Plaintiff’s counsel and Defendants’ counsel; and (6) the legal representatives, successors, and assigns of any such excluded persons. 53. Plaintiff reserves the right to expand, limit, modify, or amend this Class definition, including the addition of one or more subclasses, in connection with Plaintiff’s motion for class certification, or any other time, based upon new facts obtained during discovery. 54. Numerosity: The Class is composed of hundreds of Agents (“Class Members”) whose joinder in this action would be impracticable. The disposition of their claims through this class action will benefit all Class Members, the parties, and the courts. 55. Commonality and Predominance: There is a commonality in questions of law and fact affecting the Class. These questions of law and fact predominate over individual questions affecting individual Class Members, including, but not limited to, the following: a. Whether Defendants’ conduct violates the CARES Act and/or its implementing regulations; b. Whether Defendants are required to compensate Plaintiff out of the origination fees obtained from SBA through the PPP; c. Whether Plaintiff is entitled to compensation by Defendants for its work assisting in its client’s PPP loan application; d. Whether Defendants’ conduct was willful and knowing; e. Whether Defendants submission of completed Form 2484 constituted an agreement; f. Whether Defendants breached that agreement; g. Whether Defendants’ conduct was pursuant to a company-wide policy or policies; and h. Whether Defendants’ conduct constitutes unjust enrichment. 56. Superiority: This case is also appropriate for class certification because class proceedings are superior to all other available methods for the fair and efficient adjudication of this controversy given that joinder of all parties is impracticable. The damages suffered by the individual members of the Class will likely be relatively small, especially given the burden and expense of individual prosecution of the complex litigation necessitated by Defendants’ actions. Thus, it would be difficult and not economical for the individual members of the Class to obtain effective relief from Defendants’ misconduct. Even if members of the Class could sustain such individual litigation, it would still not be preferable to a class action, because individual litigation would increase the delay and expense to all parties due to the complex legal and factual controversies presented in this Complaint. By contrast, a class action presents far fewer management difficulties and provides the benefits of single adjudication, economy of scale, and comprehensive supervision by a single court. Economies of time, effort and expense will be fostered and uniformity of decisions ensured. 57. Typicality: Plaintiff’s claims are typical of, and are not antagonistic to, the claims of all Class Members, in that Plaintiff and members of the Class sustained damages arising out of Defendants’ uniform wrongful conduct. 58. Adequacy: Plaintiff will fairly and adequately represent and protect the interests of the Class and has retained counsel with substantial experience in litigating complex cases, including consumer fraud and class actions. Plaintiff’s claims are representative of the claims of the other members of the Class. That is, Plaintiff and members of the Class sustained damages as a result of Defendants’ uniform conduct. Plaintiff also has no interests antagonistic to those of the Class, and Defendants have no defenses unique to Plaintiff. Both Plaintiff and its counsel will vigorously prosecute this action on behalf of the Class and have the financial ability to do so. Neither Plaintiff nor counsel have any interest adverse to other Class Members. 59. Ascertainability: Plaintiff is informed and believes that Defendants keep extensive computerized records of their loan applications through, inter alia, computerized loan application systems and federally-mandated record-keeping practices. Defendants have one or more databases through which all of the borrowers may be identified and ascertained, and it maintains contact information, including electronic mail and mailing address. From this information, the existence of the Class Members (i.e., borrowers’ Agents) can be determined, and thereafter, a notice of this action can be disseminated in accordance with due process requirements. 60. Defendants have acted, and refused to act, on grounds generally applicable to the Class, thereby making appropriate final equitable relief with respect to the Class as a whole. CAUSES OF ACTION COUNT I – DECLARATORY RELIEF 61. Plaintiff incorporates by reference each preceding and succeeding paragraph as though fully set forth at length herein. 62. Plaintiff and the Class represent individuals who are “agents” as defined by the SBA regulations for the PPP. 63. Plaintiff and the putative Class have assisted clients with the process of preparing applications, and applying for, PPP loan funds. Defendants, despite the clear command of the SBA’s PPP regulations, have refused to make these payments. An actual controversy has arisen between Plaintiff and the Class, on one hand, and Defendants on the other, wherein Defendants deny by their refusal to pay that they are obligated to pay Plaintiff’s and the Class’s “agent” fees pursuant to PPP regulations. 64. Plaintiff and the Class seek a declaration, in accordance with SBA regulations and pursuant to the Declaratory Judgment Act, 28 U.S.C. § 2201, that Defendants are obligated to set aside money to pay, and pay third-party agents –within the SBA-approved limits—for the work performed on behalf of a client in relation to the preparation and/or submission of a PPP loan application that resulted in a funded PPP loan. COUNT II – BREACH OF CONTRACT, THIRD PARTY BENEFICIARY 65. Plaintiff incorporates by reference each preceding and succeeding paragraph as though fully set forth at length herein. 66. Based on information and belief, Defendants entered into an agreement with the SBA in connection with the loans funded in the PPP. 67. The agreements required that Defendants would adhere to all PPP rules and regulations and incorporate these requirements by reference. Defendants and the SBA understood that agents involved in the preparation and submission of PPP loan applications would need to be compensated. 68. The SBA’s PPP regulations specifically require that PPP lenders pay the fees of any “agent” that assists with the PPP loan application process, within limits. 69. Defendants understood that Plaintiff and the Class were intended beneficiaries in this agreement. Nevertheless, Defendants have refused to live up to their end of the bargain, and have uniformly refused to pay agent fees to Plaintiff and the Class. 70. By refusing to pay agent fees in accordance with SBA regulations, Defendants are violating the terms of their agreement, thereby damaging Plaintiff and the Class. Plaintiff and the class thus ask this Court to award them damages sufficient to make them whole, and compensate them for work they did in preparing clients’ PPP loan application for loans that were funded, consequential damages, and all other damages available at law. COUNT III - VIOLATIONS OF THE PENNSYLVANIA UNFAIR TRADE PRACTICES AND CONSUMER PROTECTION LAW (73 P.S. § 201-1, et seq.) 71. Plaintiff incorporates by reference each preceding and succeeding paragraph as though fully set forth at length herein. 72. Defendants’ conduct as set forth herein constitutes unfair or deceptive acts or practices, including, but not limited to, failing to adhere to the PPP’s rules and regulations in withholding payment from agents who assisted in the preparation of PPP loans. 73. The SBA’s PPP regulations specifically provide that “lenders” who provide loans under the program will be responsible for paying “agent” fees, within prescribed limits. 74. Defendants’ actions as set forth above occurred in the conduct of trade or commerce. 75. Defendants’ actions impact the public interest because Plaintiff and Class members incurred hours of manpower and costs to assist small businesses in satisfying the SBA’s demands in submitting timely and accurate information in the middle of a deadly pandemic and the worst economic conditions since the Great Depression. Defendants’ refusal to recompense agents for their efforts disincentivizes agents from assisting the public with future SBA and PPP requirements, including those requirements necessary to obtain partial loan forgiveness under the PPP program. 76. Plaintiff and the Class members suffered ascertainable loss as a result of Defendants’ conduct. Plaintiff has not been paid as legally required by the PPP. All of the wrongful conduct alleged herein occurred, and continues to occur, in the conduct of Defendants’ business. 77. Defendants’ conduct proximately caused the injuries to Plaintiffs and the Class. 78. Defendants are liable to Plaintiff and the Class for damages in amounts to be proven at trial, including attorneys’ fees, costs, and treble damages. COUNT IV – UNJUST ENRICHMENT 79. Plaintiff incorporates by reference each preceding and succeeding paragraph as though fully set forth at length herein. 80. Unjust enrichment, or restitution, may be alleged where a Defendant unjustly obtains and retains a benefit to the Plaintiff’s detriment, where such retention violates fundamental principles of equity, justice, and good conscience. 81. Here, Defendants have obtained millions of dollars in benefits in the form of PPP loan origination fees. A portion of those fees were to be paid to agents, like and including Plaintiff, who assisted in their clients’ PPP loan applications. But Defendants are refusing to pay those fees, in contravention of PPP regulations. 82. Principles of justice, equity, and good conscience demand that Defendants not be allowed to retain these agent fees. Defendants have fallen short in their duties as lenders, and during a crisis no less. As a result, Plaintiff and the putative Class have been unable to obtain the agent fees due to them. 83. Accordingly, Defendants must disgorge the portion of any and all PPP origination fees that they have retained to the extent they are due to Plaintiff and the putative Class in their capacities as agents. COUNT V – CONVERSION 84. Plaintiff incorporates by reference each preceding and succeeding paragraph as though fully set forth at length herein. 85. Under the SBA regulations, Plaintiff and the Class, as PPP agents, have a right to agent fees that must be paid from the amount of lender fees provided to Defendants for processing the funded PPP loan applications of Plaintiff’s clients and the Class’s clients. 86. The SBA regulations state that “[a]gent fees will be paid out of lender fees” (emphasis added) and provide guidelines on the amount of agent fees that should be paid to the PPP agent, based upon the size of the PPP loan. 87. Additionally, the SBA regulations require that lenders, not loan recipients, pay the agent fees. The SBA regulations unequivocally state that “[a]gents may not collect fees from the applicant.” 88. Plaintiff and the Class assisted clients with applying for PPP loans, including gathering and curating information necessary for completing PPP loan applications that were subsequently funded. Due to Plaintiff’s and the Class’s efforts, their clients were awarded PPP loans, through applications made with Defendants. As such, Plaintiff and the members of the Class have a right to immediate possession of the agent fees. 89. Although Plaintiff and the Class are entitled to agent fees under the SBA regulations, Defendants have refused to provide those fees to Plaintiff and the Class, thus keeping the agent fees that were paid to it for purposes of being passed on to the agents. By withholding these fees, Defendants have maintained wrongful control over Plaintiff’s and the Class’s property inconsistent with Plaintiff’s and the Class’s entitlements under the SBA regulations. 90. Defendants committed civil conversion by retaining monies owed to Plaintiff and Class members. 91. Plaintiff and the Class have been injured as a direct and proximate cause of Defendants’ misconduct. Plaintiff and the Class, as such, seek recovery from Defendants in the amount of the owed agent fees, and all other relief afforded under the law. DEMAND FOR JURY TRIAL 92. Plaintiff demands a trial by jury on all issues to the fullest extent permitted under applicable law. PRAYER FOR RELIEF WHEREFORE, Plaintiff Denise M. Henning, CPA LLC, individually and on behalf of the Class, respectfully prays for the following relief: (a) An order certifying the Class as defined above, appointing Plaintiff as the representative of the Class, and appointing its counsel as Class Counsel; (b) An order declaring that Defendants’ actions, as set out above, constitute unjust enrichment, conversion, breach of contract on behalf of third-party beneficiary, violate Pennsylvania Unfair Trade Practices and Consumer Protection Law (P.S. § 201-1, et seq.), and violate the SBA’s PPP regulations; (c) An award of all economic, monetary, actual, consequential, compensatory, and punitive damages available under the law and caused by Defendants’ conduct, including without limitation, actual damages for past, present and future expenses caused by Defendants’ misconduct, lost time and interest, and all other damages suffered, including any damages likely to be incurred by Plaintiff and the Class; (d) An award of reasonable litigation expenses and attorneys’ fees; (e) An award of pre- and post-judgment interest, to the extent allowable; (f) The entry of an injunction and/or declaratory relief as necessary to protect the interests of the Plaintiff and the Class; and (g) Such other further relief that the Court deems reasonable and just. Dated: June 17, 2020 Respectfully submitted, GOLOMB & HONIK, P.C. By: /s/ Kenneth Grunfeld Kenneth Grunfeld, PA ID #84121 GOLOMB & HONIK, P.C. 1835 Market Street, Suite 2900 Philadelphia, PA 19103 Telephone: (215) 985-9177 Facsimile: (215) 985-4169 Email: kgrunfeld@golombhonik.com Elaine S. Kusel, PA ID #328238 MCCUNE WRIGHT AREVALO LLP One Gateway Center, Suite 2600 Newark, New Jersey 07102 Telephone: (973) 737-9981 Email: esk@mccunewright.com Richard D. McCune, CA Bar #132124* Michele M. Vercoski, CA Bar #244010* Tuan Q. Nguyen, CA Bar #312153* MCCUNE WRIGHT AREVALO LLP 18565 Jamboree Road, Suite 550 Irvine, California 92612 Telephone: (909) 557-1250 Facsimile: (909) 557-1275 Email: rdm@mccunewright.com mmv@mccunewright.com tqn@mccunewright.com *Pro Hac Vice applications to be submitted Attorneys for Plaintiff and Putative Class JURY DEMAND Plaintiff, on behalf of itself and the putative Class, demands a trial by jury on all issues so triable. GOLOMB & HONIK, P.C. By: /s/ Kenneth Grunfeld Kenneth Grunfeld, PA ID #84121 GOLOMB & HONIK, P.C. 1835 Market Street, Suite 2900 Philadelphia, PA 19103 Telephone: (215) 985-9177 Facsimile: (215) 985-4169 Email: kgrunfeld@golombhonik.com Elaine S. Kusel, PA ID #328238 MCCUNE WRIGHT AREVALO LLP One Gateway Center, Suite 2600 Newark, New Jersey 07102 Telephone: (973) 737-9981 Email: esk@mccunewright.com Richard D. McCune, CA Bar #132124 Michele M. Vercoski, CA Bar #244010 Tuan Q. Nguyen, CA Bar #312153 MCCUNE WRIGHT AREVALO LLP 18565 Jamboree Road, Suite 550 Irvine, California 92612 Telephone: (909) 557-1250 Facsimile: (909) 557-1275 Email: rdm@mccunewright.com mmv@mccunewright.com tqn@mccunewright.com Attorneys for Plaintiff and Putative Class

healthcare

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THE WEISER LAW FIRM, P.C. KATHLEEN A. HERKENHOFF (168562) 12707 High Bluff Drive, Suite 200 San Diego, CA 92130 Telephone: (858) 794-1441 Facsimile: (858) 794-1450 kah@weiserlawfirm.com Lead Counsel for Plaintiffs [Additional Counsel on Signature Page] UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO DIVISION In re VELTI PLC SECURITIES LITIGATION ) ) ) ) ) ) This Document Relates To: All Actions Master File No. 3:13-cv-03889-WHO Consolidated with Case Nos. 13-cv-03954-WHO 13-cv-04140-WHO 13-cv-04606-WHO SECOND AMENDED CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE SECURITIES ACT OF 1933 AND THE SECURITIES EXCHANGE ACT OF 1934 CLASS ACTION ) ) ) ) ) ) ) ) ) TABLE OF CONTENTS I.  INTRODUCTION AND FACTUAL BACKGROUND ..................................................... 1  II.  JURISDICTION AND VENUE ........................................................................................13  III.  INTRADISTRICT ASSIGNMENT...................................................................................14  IV.  PARTIES ...........................................................................................................................14  V.  THE FRAUD AT VELTI ..................................................................................................17  A.  Velti’s Accounting Misrepresented the Company’s Financial Results .................17  1.  Applicable Standards .................................................................................17 2.  Velti Violated GAAP by Failing to Record an Adequate Allowance for Doubtful Accounts .............................................................18  3.  Velti’s Accrued Contract Receivables .......................................................22  4.  Velti Violated Its Own Revenue Recognition Policy ................................24  VI.  DEFENDANTS VIOLATED THE SECURITIES ACT ...................................................24  A.  The IPO ..................................................................................................................26  B.  The SPO .................................................................................................................35  VII.  BAKER TILLY VIOLATED THE EXCHANGE ACT ...................................................41  A.  Baker Tilly Made False and Misleading Statements .............................................42  B.  Baker Tilly’s Statements Were Knowingly or Recklessly False and Misleading..............................................................................................................49 1.  Red Flags ...................................................................................................50  2.  Baker Tilly’s Audits ...................................................................................53  i.  Accrued Receivables ......................................................................54  ii.  Concentration of Credit Risk .........................................................55 iii.  Velti’s Lack of a Formula for Reserves .........................................55  iv.  Internal Controls ............................................................................55 v.  Access to Documents .....................................................................56 3.  Deloitte’s Review...................................................................................................57  TABLE OF CONTENTS C.  Additional Allegations of Baker Tilly’s Scienter ..................................................59  1.  SpinCo........................................................................................................59  2.  Velti’s DSO Number Prior to May 2012 ...................................................61  3.  The Company’s Collection Problems Were Apparent ...............................61  D.  The Greek and Cypriot Economic Crises Cannot Excuse Baker Tilly ..................65  VIII.  THE CLASS PERIOD ENDING DISCLOSURES ...........................................................67  IX.  LOSS CAUSATION ..........................................................................................................68  X.  SCIENTER ........................................................................................................................69  XI.  UNDISCLOSED ADVERSE FACTS ...............................................................................69  XII.  APPLICABILITY OF PRESUMPTION OF RELIANCE WITH RESPECT TO EXCHANGE ACT CLAIMS ............................................................................................70  XIII.  NO SAFE HARBOR .........................................................................................................72  XIV.  CLASS ACTION ALLEGATIONS ..................................................................................72  XV.  CLAIMS FOR RELIEF .....................................................................................................74  COUNT I ...........................................................................................................................74  COUNT II ..........................................................................................................................76  COUNT III .........................................................................................................................78  PRAYER FOR RELIEF ................................................................................................................80  Lead Plaintiff Bobby Yadegar/Ygar Capital LLC and additional plaintiffs Frank Borreani, St. Paul Teachers’ Retirement Fund Association, Newport News Employees’ Retirement Fund and Oklahoma Firefighters Pension and Retirement System (collectively “Plaintiffs”), by and through their attorneys, allege the following upon information and belief, except as to those allegations concerning Plaintiffs, which are alleged upon personal knowledge. Plaintiffs’ information and belief is based upon, among other things, their counsel’s investigation, which includes without limitation, a review and analysis of: (a) regulatory filings made by Velti plc (“Velti” or the “Company”), with the United States Securities and Exchange Commission (“SEC”); (b) interviews with and documents produced by the Settling Defendants (defined herein);1 (c) research reports by financial analysts; (d) transcripts of investor conference calls; (e) press releases and media reports issued by and disseminated by Velti; (f) other publicly available information concerning Velti; and (g) documents and information obtained by Lead Counsel from former Velti employees through the course of Lead Counsel’s investigation. Lead Counsel’s investigation into the factual allegations contained herein is continuing, and many of the relevant facts are known only by Defendants (defined herein) or are exclusively within their custody or control. Plaintiffs believe that substantial additional evidentiary support will exist for the allegations set forth herein after a reasonable opportunity for further investigation or discovery. I. INTRODUCTION AND FACTUAL BACKGROUND 1. This is a securities class action on behalf of: (1) persons or entities who purchased or otherwise acquired the securities of Velti pursuant and/or traceable to the Company’s registration statement and prospectus (the “IPO Registration Statement”) issued in connection with the Company’s January 28, 2011 initial public offering (the “IPO”) and/or to the Company’s registration statement and prospectus (the “SPO Registration Statement”) issued in 1 Counsel for Plaintiffs interviewed: 1) David W. Mann (“Mann”) and David C. Hobley (“Hobley”), members of the Company’s Audit Committee; 2) Wilson W. Cheung (“Cheung”); 3) Winnie W. Tso (“Tso”); 4) Jeffrey G. Ross (“Ross”); and 5) Alex Moukas (“Moukas”). Further, counsel for Plaintiffs reviewed certain documents produced by the Settling Defendants. connection with the Company’s June 14, 2011 secondary public offering (the “SPO”),2 seeking to pursue remedies under the Securities Act of 1933 (the “Securities Act”); and (2) persons or entities who purchased or otherwise acquired Velti’s securities between January 27, 2011 and August 20, 2013, inclusive (the “Class Period”), seeking to pursue remedies under the Securities Exchange Act of 1934 (the “Exchange Act’’) (hereinafter collectively the “Class”).3 2. Plaintiffs allege liability, negligence, and non-fraud based claims under the Securities Act. These claims are brought against Baker Tilly Virchow Krause, LLP (“Baker Tilly”), Velti’s accounting firm, which issued audit reports certifying the Company’s financial statements contained in the IPO and SPO Registration Statements, and the Underwriter Defendants (defined herein) who are statutorily responsible for material misstatements of facts and omissions in the IPO Registration Statement and SPO Registration Statement by virtue of having endorsed the Offerings. 3. Plaintiffs expressly disclaim any allegations of fraud or intentional misconduct in connection with these non-fraud claims, which are pleaded separately in this Complaint from Plaintiffs’ Exchange Act claims. Further, any challenged statements of opinion or belief made in connection with the Offerings are alleged to have been actionably materially misstated statements of opinion when made by virtue of the fact that the speaker omitted to disclose facts material to a reasonable investor and that the speaker lacked a basis (that a reasonable investor would expect) for making such statements. 4. Separately, Plaintiffs allege a claim for violation of Section 10(b) of the Exchange Act against Baker Tilly. Specifically, Plaintiffs allege that Baker Tilly knowingly, or with deliberate recklessness, issued false and misleading “Report[s] of Independent Registered Public Accounting Firm” during the Class Period. 2 The IPO and SPO are referred to herein collectively as the “Offerings.” 3 Collectively, the IPO Registration Statement and the SPO Registration Statement are referred to herein as the “Registration Statements.” 5. Velti was a provider of mobile marketing and advertising technology and solutions for brands, advertising agencies, mobile operators, and media companies primarily in Europe (especially Greece, where the Company was founded), the Americas, Asia, and Africa. Velti claimed that its products and services allowed customers to create targeted, interactive, and measurable marketing and advertising campaigns directed to consumers via their mobile devices. Velti sold its services to customers pursuant to written contracts that set forth the payment terms. 6. It was Velti’s stated policy to recognize revenue when “all of the following conditions are satisfied: (i) there is persuasive evidence of an arrangement; (ii) the service has been rendered or delivery has occurred; (iii) the fee to be paid by the customer is fixed or determinable; and (iv) collectability of the fee is reasonably assured….” Velti did not get paid, however, until after the work done pursuant to a given contract was completed and the customer was invoiced. Between the time of completion of work and the ultimate receipt of payment by the Company, the amount due to Velti represented an account receivable. 7. Velti recorded two key types of receivables: “accrued contracts receivables” (or “accrued receivables”) and “trade receivables.” Velti booked revenue that had not been invoiced or reconciled with the customers as accrued contracts receivable. Once an invoice had been issued, the receivable was then moved from being an accrued contract receivable to a trade receivable. 8. The relationship between Velti’s accounts receivable and revenue is particularly important in the context of this case, because Velti frequently represented that its criteria for recognizing revenue on a particular contract was satisfied long (usually months or even years) before the receivable was actually paid and even before the amount was reconciled with and invoiced to the customer. Thus, Velti recorded revenue from a given contract long before the underlying customer actually paid Velti. This meant Velti was often able to publicly portray extremely healthy revenue and earnings growth when it reported financial results, but, in reality, the underlying revenue was based on what amounted to, at most, “a promise to pay” instead of cash in hand, and the tenuous relationship between promises and cash-in-hand meant that the Company’s growth could evaporate at any moment. 9. Velti was founded in Athens in 2000, and, up to and including the Class Period, maintained the most significant portion of its customer base in Greece. Velti’s contracts in Greece (and the Balkan/Southeastern region of Europe) typically had much longer payment terms than those in other geographic regions, particularly when compared to the U.S. and Western Europe. Velti’s Greek ties would pose a challenge in April 2010 when Greek government debt was downgraded, setting off a chain reaction throughout the country (which eventually spread to the entire Balkan region). Dramatically tightening credit led companies within Greece to substantially delay (already slow, even before the issues in Greece’s economy were exposed) payments to creditors and led multinational companies to reduce their exposure to the country’s deteriorating economic situation. 10. As the Greek economic crisis continued, Velti quickly began feeling the pinch. Already saddled with slow payments (by U.S. commercial standards) due to the Company’s large Greek customer base (and Greece’s “slow pay” business culture), Velti’s invoices remained unpaid. While the Company continued to report robust revenue growth at the time of the IPO, the truth was that the historical gap between the work performed by Velti and actual cash in hand was growing to such a degree that it was unclear that the Company would ever be paid on many accounts. 11. Indeed, even as early as the end of 2009, according to the Company’s former Senior Manager of Global Financial Planning and Analysis (who was interviewed by Plaintiffs’ counsel), 19.8% of the Company’s accounts receivables were more than 90 days “overdue,” and 8.3% of the Company’s accounts receivables were “overdue” by more than 365 days. “Overdue,” according to this employee, was a term used by Velti to designate an account that had not been paid within 6 months. Thus, an account that was overdue by 90 days was an account that had been outstanding and unpaid for 9 months, and an account overdue by 365 days had been outstanding and unpaid for over 18 months. 12. Such problems were even more pronounced in Greece and Southeastern Europe. A February 8, 2011 report prepared by Velti just days after the IPO, and given to Baker Tilly, identifies each and every customer from the region, the amounts billed to each customer, and the dates that each customer was billed. This report further shows that despite some €23 million (or, at the time, approximately $32 million) in overdue invoiced trade receivables (just a subset of the Company’s total receivables) on the Company’s books (32% of which was more than 90 days overdue) from Greece, the Company had virtually no bad debt provision. 13. The Company’s former Senior Manager of Global Financial Planning and Analysis states that a similar astonishing document (prepared by Velti and dated February 4, 2011) shows that 95% of €62 million (or, at the time, approximately $82 million) worth of Velti’s accounts receivables in the region were 90+ days overdue, 77% were 180+ days overdue, and 35% were 300+ days overdue.4 Again, using the Company’s terminology, this meant that 95% of the Company’s receivables in the region were more than 270 days overdue, 77% were more than 360 days overdue, and 35% were more than 460 days overdue. But, according to this former employee, instead of disclosing the serious problems presented by the foregoing, the Company instead stretched its definition of a “normal” payment time frame in certain countries. This allowed the Company to characterize outstanding and otherwise overdue accounts – while long aged in terms of actual time – as not unusual or uncollectible. But the Company’s characterization did nothing to change the fact that it was highly unlikely that the Company would ever collect these monies. 14. Further, in a May 14, 2012 presentation to Velti’s Audit Committee that Baker Tilly made just a month before the SPO, Baker Tilly stated that the comprehensive DSO5 (trade 4 That the Underwriter Defendants should have, in the exercise of reasonable care, been aware of this, as well, is certain: according to this former employee, the Underwriter Defendants (in particular defendant Jefferies), created a detailed model of the Company’s receivables and collections running from 2007 through 2012 that formed the pillar of the Company’s modelling both pre and post IPO. 5 Velti’s operating metric of days sales outstanding (“DSO”) – the length of time it took the Company to actually collect cash for work completed on a contract – was a critical metric for both the Company and investors. receivables, accrued receivables (that is, accounts receivables that have not yet been invoiced) and post-dated checks) for Velti SA – which is the Greek subsidiary responsible for the majority of the ultimate write-off and accounted for roughly half of Velti’s receivables in Q1 2012 – was 649 days. As this information is as of the end of Q1 2012 on average these receivables had been outstanding since approximately June, 2010, over six months before the IPO and over a year before the SPO. Given that the Company’s accounts receivable were so overdue, there was no reasonable basis to continue to recognize them as revenue, rendering the Company’s financials materially false and misleading. 15. But it is more than that; instead of candidly informing the market (which would have dramatically reduced the proceeds reaped in the IPO and likely spelled an early doom for the SPO), Velti instead represented to the market that its accounts receivable collections were actually improving. Moreover, the Company continued to deceive investors by failing to increase its reserves in a material way to protect against the significantly increasing risks of non- payment by customers, particularly those in Greece. 16. Independent auditors and underwriters of public offerings owe special duties to the investing public; they are, at core, the gatekeepers to the securities markets, and are recognized by courts and the law as having a special role to protect the markets from misstatements by the corporations with whom they contract. Despite these duties, Baker Tilly and the Underwriter Defendants did nothing to uncover, stop or disclose Velti’s conduct. Instead they endorsed the Company’s Offerings. 17. Had they performed their duties, they would have easily discovered and been able to stop Velti’s conduct as evidenced by the fact that an independent accounting firm that was asked to review the Company’s receivables at the end of the Class Period by the new Chief Financial Officer (“CFO”) who started to get very concerned about the Company’s receivables, was able to identify the fatal condition of the Company’s financials with minimal effort. In or about June 2013, the Company retained Deloitte LLP (“Deloitte”), to perform an independent review of the collectability of the receivables from Velti’s Greek and Cypriot businesses that Baker Tilly had certified as correct, and that the Company had reported in its financial statements. 18. According to Ross, then the Company’s new CFO, just two Deloitte employees were dispatched by Deloitte to perform the review. It took these two employees (both of whom had no prior knowledge of the Company) just two weeks to conclude that $111 million worth of the Company’s reported $286 million worth of receivables were uncollectible and would need to be written-off almost immediately. 19. The preliminary results of the Deloitte review were presented to Velti’s Board of Directors on July 11, 2013, and almost immediately passed on to Baker Tilly. Baker Tilly’s response to Deloitte’s findings, which disagreed with virtually everything Baker Tilly had been telling Velti about the collectability of the Company’s receivables, was, according to the Settling Defendants, to agree with Deloitte! Baker Tilly did not even object or argue with Deloitte’s conclusions. It simply accepted the fact that Deloitte had concluded that the Company would need to write-off $111 million worth of receivables (a decision that would almost certainly doom the Company) and carried on as usual. 20. After this report, the Company never filed any further financial statements. While it apparently struggled for survival for a short period, the Company’s U.S. entities filed for Bankruptcy protection on November 4, 2013 and its European operations followed a month later. 21. This is especially supportive of Plaintiffs’ claims: according to witnesses interviewed by Plaintiffs, just weeks (or at the most, months) earlier than the Deloitte report, Baker Tilly had purportedly reviewed nearly all of the Company’s outstanding receivables (and had billed the Company accordingly), and now Deloitte was recommending that 43% of them be written-off after a two week review by two professionals who had not previously done any work for Velti. In fact, Moukas stated that he believed that Deloitte’s post-review focus would be on improving the collectability of outstanding receivables. In other words, he thought he was “walking into one type of meeting”, but it turned out to be something quite different; he was going to be told that he should write down nearly half the value of the business, shortly after Baker Tilly said the exact opposite. As revealed by the various reports discussed, above, by the former Senior Manager of Global Financial Planning and Analysis the vastly aged receivables was well-known to Baker Tilly, as far back as February, 2011. 22. As a result of Baker Tilly’s and the Underwriter Defendants’ failure to fulfill their responsibilities throughout the Class Period, Velti was able to (and did) continue raising and borrowing cash when it had no business doing so. For example, in August 2012, Velti entered into a $50 million multi-currency senior revolving credit facility with HSBC. The Company also entered into “factoring arrangements”6 in order to monetize its outstanding accounts receivables. On November 14, 2012 the Company announced that due to its continued inability to timely collect from certain of its customers in the Greek, Balkan, and select North African and Middle Eastern regions, it was divesting certain assets and customers in those regions. By the time this decision was made, DSO for these customers had climbed to an astonishing 450 days. However, Velti blunted the impact of this news by falsely and repeatedly stating that Velti had successfully transitioned its new business away from those regions to the U.S. and Western Europe. But this was false; Velti did not, in actuality, materially shift business away from the Greek region. 23. Velti’s desire to shift operations away from Greece was front and center in the Company’s own public statements, as it stated in August 2012 that only 10% of its revenues came from Greece or the Balkans. Given Greek customers’ reputation as “slow payers,” combined with the region’s critical economic condition, it was welcomed news that allegedly the Company was shifting to a more U.S.-focused business strategy where receivables were paid at more commercially-reasonable intervals. Yet, despite Velti’s repeated representations to investors that the Company was successfully migrating its business away from Greece and into the U.S., it was not, as revealed by Velti’s own later admissions. 24. Indeed, as evidenced by information provided by the Settling Defendants, even by the end of the Class Period, at least 65% of the Company’s reported accounts receivables (which were reportedly $293 million as of March 31, 2013) originated from sales from Greek and 6 Generally, “factoring” is the sale of receivables to a third party at a discount. Cyprus operations. Because Baker Tilly had access to Velti’s accounts receivables (and, in early 2011, reports identifying and tracking the amount and time each bill to the Company’s customers were outstanding) it should have known that the Company had been misleading the market and that the Company’s receivables were far more problematic than publicly represented (given the situation in Greece and Cyprus, as well as specific additional information about the Company’s customers in this region), and should not have been recognized as revenue. 25. Compounding the Company’s problems, HSBC, the Company’s primary lender, would soon begin to express serious reservations concerning its dealings with Velti. Indeed, by the end of March 2013, the Company had violated a covenant with HSBC which required it to maintain certain leverage ratios. This breach granted HSBC the right to accelerate the Company’s obligations under its existing credit facility, rendering them immediately due and payable. In the Company’s June 10, 2013 Current Report filed with the SEC on Form 6-K, the Company explained that as of March 31, 2013 “substantially all our assets including our accounts receivable were pledged as a security against borrowings from HSBC.” Not surprisingly, as a result, Velti was unable to find lenders willing to extend the Company any additional credit. 26. HSBC’s decision, and Velti’s inability to find other financing is unsurprising as, unbeknownst to the public, Velti’s financial condition and reported financial results were materially misstated. These misstatements were largely the product of the misconduct of Baker Tilly, who gave the Company incorrect and inaccurate advice time and again and who falsely attested that the Company’s financial statements reported on Velti’s Forms 20-F filed with the SEC on April 12, 2011, April 26, 2012, and April 11, 2013, gave a true and accurate presentation of the Company’s financial position, in violation of Generally Accepted Auditing Standards (“GAAS”). 27. Baker Tilly’s audit reports were untrue and misleading because they failed to require the Company to take reserves for doubtful accounts receivables despite the growing evidence of collectability problems and misrepresented that Velti’s financials complied with Generally Accepted Accounting Principles (“GAAP”). Indeed, Velti’s reserves for doubtful accounts receivables were inadequate as demonstrated by the fact that the Deloitte report (the “Deloitte Report”) evidences that over 85% of the $192 million in Greek and Cyprus receivables were owed by just 26 customers and over 65% was owed by 10 customers. As discussed in more detail below, Deloitte further found that these 10 customers were actually just 2 related customers. As the Q1 2013 accounts receivables were only $293 million, this means that a significant portion of the receivables was owed by a few customers. According to Hobley and Mann, by early 2013, Baker Tilly was testing a “large” percentage of the Company’s receivables, a number that reached 90% of the receivables reported by the Company by the Spring of 2013. 28. Further, Baker Tilly accepted management’s representations, particularly representations by the Greek sales force, that these accounts were collectible simply because the Company had never had any collection issues in the past. It did so, despite the well-known financial crisis in Greece and Cyprus. And Baker Tilly continued to rely on these representations even after the Company’s present experience was different from past historical performance, in that DSOs and accounts receivables were growing at the same time. 29. Finally, according to the Company’s former Senior Manager of Global Financial Planning and Analysis, Baker Tilly received and reviewed reports (as early as the end of 2010 and February, 2011) showing that the Company’s accounts receivable balances were comprised of dangerously aged and overdue balances, yet it still certified the Company’s reporting of these balances as revenue (in violation of both GAAP and the Company’s stated revenue recognition policies) and certified the Company’s decision to set its reserves against uncollectible receivables at a fraction of the real uncollectible amounts. 30. Pursuant to GAAS, Baker Tilly was obliged to exercise professional skepticism and take additional steps to verify the collectability of the accounts receivables, especially in light of the severe red flags, including, inter alia, that (i) receivables were owed by a small number of companies; (ii) these companies were located in the troubled countries of Greece and Cyprus; and (iii) the Company’s DSOs and accounts receivable were increasing significantly and materially. Yet they clearly did not, as demonstrated by the fact that when Velti’s new CFO hired Deloitte, Deloitte immediately recommended a $110 million write-down of receivables. 31. Any suggestion that these receivables had only recently become uncollectible is belied by the limited evidence uncovered to date and detailed herein. According to the Company’s former Senior Manager of Global Financial Planning and Analysis, and documents in his possession, early as February 4, 2011, 95% of the €62 million (or, at the time, approximately $82 million) worth of Velti’s accounts receivables on the books for southeastern Europe were 90+ days overdue, 77% were 180+ days overdue, and 35% were 300+ days overdue. Even if one were to focus solely on the 300+ day overdue segment of these receivables, this represents €21.7 million worth of dead receivables as of February, 2011. In other words: this amount represents over 20% of the amount written-off at the direction of Deloitte nearly two years later!7 32. The Class Period ends on August 20, 2013 when the Company reported its Q2 2013 financial results and revealed the shocking news that it was writing off approximately $111 million of its trade receivables and accrued contract receivables. And, when it did so, the Company simultaneously made a stunning disclosure. 33. Ross revealed, on August 20, 2013, that the receivables were “substantially old” and had been on Velti’s books since before 2012; a de facto admission that the write-off was long overdue. A chart identifying Company’s 26 top customers (by name), which owed 85% of the $192 million in Greek and Cyprus receivables (i.e. to subsidiaries Velti SA and Velti PS), of which 10 customers owed 65% is set forth herein. This chart also details the types of accounts these customers represent, as well as the exact amounts owed. 34. That the Company’s receivables were substantially old, had been on Velti’s books since prior to the IPO and should have been written-off far earlier, is confirmed by Baker Tilly’s 7 Thus, giving Baker Tilly and the Underwriter Defendants the greatest benefit of doubt, even if one were to consider only the value of the Company’s receivables that were 300+ days overdue as amounts against which a reserve should be taken, the Company had €21.7 million (approximately $29 million) worth of receivables sitting on its books against a reserve of just $135,000. presentations to Velti’s Audit Committee. For example, in Baker Tilly’s May 14, 2012 presentation to the Audit Committee regarding Q1 2012, Baker Tilly stated that the comprehensive DSO (trade receivables, accrued receivables and post-dated checks) for Velti SA – which is the Greek subsidiary responsible for the majority of the ultimate write-off and accounted for roughly half of Velti’s receivables in Q1 2012 – was 649 days. As this information is as of the end of Q1 2012, on average these receivables had been outstanding since approximately June, 2010, over six months before the IPO and over a year before the SPO. 35. Baker Tilly’s May 14, 2012 presentation further confirms that Velti was extremely under-reserved as, according to the presentation, a large portion of Velti SA’s receivables were accrued (unbilled) and even older on average than 649 days. That is, the May 14, 2012 presentation states that trade receivables for Velti SA had a DSO of 191 days. As the DSO of 191 days is included in Velti SA’s total DSO, the age of the accrued receivable and check receivables must be older than the 649 days. This means that not only were there significant receivables over 649 days, but much of these were not even invoiced or reconciled with the customers – yet Velti had no reserve for accrued receivable at this time. 36. On the Company’s August 20, 2013 disclosures, shares of Velti’s stock price declined by $0.66 per share, more than 66%, to close on August 21, 2013, at $0.34 per share, on heavy trading volume. 37. In sum, throughout the Class Period, Velti made material misstatements and omissions about the Company’s business, operations, and prospects, misstating or failing to disclose that: (i) the Company was experiencing difficulties collecting material receivables; (ii) a significant portion of the Company’s receivables were uncollectible; (iii) as a result, the Company’s revenues and receivables were overstated during the Class Period; (iv) the Company’s allowance for doubtful accounts was understated; (v) the Company lacked adequate internal and financial controls over its financial reporting; (vi) Velti’s financial statements hid the true length of time it took the Company to collect recognized revenue and misled investors about the quality and collectability of its receivables; and (vii) as a result of the foregoing, the Company’s statements and reported financial results were materially false and misleading at all relevant times. 38. The foregoing could not have occurred but for the actions of Baker Tilly and the Underwriter Defendants who endorsed the IPO and SPO and/or who certified the financials included therein and, as to Baker Tilly, throughout the Class Period. Baker Tilly and the Underwriter Defendants failed to exercise the necessary reasonable care to ensure the Company’s DSOs and financials conformed to Generally Accepted Accounting Principles (“GAAP”), and properly represented its financials, an act that infected both the IPO and SPO and misled investors throughout the Class Period. II. JURISDICTION AND VENUE 39. The claims asserted herein arise under Sections 11 and 12 of the Securities Act (15 U.S.C. §§77k and 77l(a) and Section 10(b) of the Exchange Act (15 U.S.C. §§78j(b)) and Rule 10b-5 promulgated thereunder by the SEC (17 C.F.R. §240.10b-5). 40. This Court has jurisdiction over the subject matter of this action pursuant to 28 U.S.C. §1331, Section 22 of the Securities Act (15 U.S.C. §77v) and Section 27 of the Exchange Act (15 U.S.C. §78aa). 41. Venue is proper in this Judicial District pursuant to 28 U.S.C. §1391(b) and Section 27 of the Exchange Act (15 U.S.C. §78aa(c)). Substantial acts in furtherance of the alleged fraud or the effects of the fraud have occurred in this Judicial District. Many of the acts charged herein, including the preparation and dissemination of materially false and/or misleading information, occurred in substantial part in this Judicial District. Additionally, the Company maintained corporate, sales, marketing, product development, professional services, support and administrative facilities in San Francisco, California. The Company also has maintained, at various relevant times, a registered agent at One Market Street, Suite 600, San Francisco, California 94105. 42. In connection with the acts, transactions, and conduct alleged herein, Defendants directly and indirectly used the means and instrumentalities of interstate commerce, including the United States mail, interstate telephone communications, and the facilities of a national securities exchange. III. INTRADISTRICT ASSIGNMENT 43. A substantial part of the events or omissions which give rise to the claims in this action occurred in the City of San Francisco, in the County of San Francisco, and as such this action is properly assigned to the San Francisco Division of this Court. IV. PARTIES 44. Court appointed Lead Plaintiff Bobby Yadegar controls Ygar Capital LLC (“YGAR”), is its sole owner, and has full authority to act for and on its behalf. YGAR purchased or acquired Velti common stock8 during the Class Period, and suffered damages as a result of the federal securities law violations and false and/or misleading statements and/or material omissions alleged herein. YGAR’s certification was previously filed herein on October 21, 2013. (ECF No. 44-2.) YGAR has also been assigned the right to prosecute claims on behalf of certain additional parties, who also suffered damages, as set forth in its previously filed certifications. 45. Additional Plaintiff Frank Borreani (“Borreani”) purchased Velti common stock both pursuant to and traceable to the Company’s January 28, 2011 IPO Registration Statement. On February 4, 2011 Borreani purchased 1,400 shares traceable to the IPO and purchased additional shares throughout the Class Period. As a consequence of his purchases of Velti common stock, Borreani has suffered damages as a result of the federal securities law violations and false and/or misleading statements and/or material omissions alleged herein. 46. Additional Plaintiff St. Paul Teachers’ Retirement Fund Association (“St. Paul”) purchased Velti common stock pursuant to and traceable both to (a) the Company’s January 28, 8 The term “common stock” is used herein to refer to any and all Velti equity securities that traded on any securities exchange in the United States. 2011 IPO Registration Statement, and (b) the Company’s June 14, 2011 SPO Registration Statement. St. Paul purchased 96 shares in the IPO directly from the Underwriter Defendants and 6,460 shares in the SPO directly from the Underwriter Defendants. Further, St. Paul purchased or acquired additional Velti common stock during the Class Period. As a consequence of its purchases of Velti common stock, St. Paul has suffered damages as a result of the federal securities law violations and false and/or misleading statements and/or material omissions alleged herein. 47. Additional Plaintiff Newport News Employees’ Retirement Fund (“NNERF”) purchased or acquired Velti common stock during the Class Period, and suffered damages as a result of the federal securities law violations and false and/or misleading statements and/or material omissions alleged herein. 48. Additional Plaintiff Oklahoma Firefighters Pension and Retirement System (“Oklahoma Firefighters”) purchased or acquired Velti common stock during the Class Period, and suffered damages as a result of the federal securities law violations and false and/or misleading statements and/or material omissions alleged herein. 49. Non-Party Velti was a Jersey corporation with its principal executive offices located at First Floor, 28-32 Pembroke Street Upper, Dublin 2, Republic of Ireland. Velti maintained an office in the United States offices in San Francisco, and its registered agent was located at One Market Street, Suite 600 San Francisco, California 94105. Velti described itself as the “leading global provider” of mobile marketing and advertising technology and solutions that enables brands, advertising agencies, mobile operators, and media to implement highly targeted, interactive, and measurable campaigns by communicating with and engaging consumers via their mobile devices. Velti sold its customers an “integrated, easy-to-use, end-to- end software platform,” and generated revenue from its software-as-a-service (“SaaS”) model, from licensing its software to customers and from providing managed services to customers. 50. Non-parties Moukas, Cheung, Ross, Tso, Chris Kaskavelis (“Kaskavelis”), Mann, Hobley, Jerry Goldstein (“Goldstein”) and Nicholas P. Negroponte (“Negroponte”) are collectively referred to herein as the “Non-Party Individual Defendants.” Velti, Moukas, Cheung, Ross, Tso, Kaskavelis, Mann, Hobley, Goldstein, and Negroponte are collectively herein referred to as the “Settling Defendants.” 51. Velti and the Non-Party Individual Defendants reached a settlement with the Class for $9.5 million and have been released from the case. As partial consideration for the settlement, Non- Party Individual Defendants Tso, Ross, Cheung, Hobley, Mann, and Moukas agreed to be interviewed by Plaintiffs for purposes of the continued litigation of claims by the Class against Baker Tilly and the Underwriter Defendants (defined herein). They are referred to herein, collectively, as the “Released Defendants.” 52. Defendant Jefferies LLC (f/k/a Jefferies & Company, Inc.) (“Jefferies”) served as an underwriter in connection with the IPO and the SPO. 53. Defendant RBC Capital Markets, LLC (“RBC”) served as an underwriter in connection with the IPO and the SPO. 54. Defendant Needham & Company, LLC (“Needham”) served as an underwriter in connection with the IPO and the SPO. 55. Defendant Canaccord Genuity Inc. (“Canaccord”) served as an underwriter in connection with the IPO and the SPO. 56. Defendants Jefferies, RBC, Needham, and Canaccord are collectively referred to hereinafter as the “Underwriter Defendants.” 57. Defendant Baker Tilly served as the Company’s accounting firm and certified the Company’s consolidated financial statements and issued audit reports, which were included in both the IPO Registration Statement and SPO Registration Statement (the “Registration Statements”), and in the Company’s Annual Reports filed with the SEC on Form 20-F on April 12, 2011, April 26, 2012 and April 11, 2013. Baker Tilly also expressly consented to the use of its name and its audit reports in the IPO and SPO Registration Statements and provided letters dated August 3, 2010 and September 3, 2010 for inclusion in the Registration Statements, which consented to reference to Baker Tilly and to the incorporation by reference of the Baker Tilly Report (defined herein). Baker Tilly is located at 225 South Sixth Street, Suite 2300, Minneapolis, Minnesota 55402. V. THE FRAUD AT VELTI A. Velti’s Accounting Misrepresented the Company’s Financial Results 1. Applicable Standards 58. Throughout the Class Period, the Company’s accounts receivable, net income and shareholder equity were materially overstated as described above and herein. In particular, Velti’s receivables were overstated because it failed to record either a timely write-off or an adequate allowance for doubtful accounts. This inflated the Company’s receivables, and, thus, its net income and shareholder equity for GAAP and non-GAAP purposes, rendering them materially false and misleading. 59. GAAP rules required Velti to record a reserve for the uncertainty associated with the collectability of its outstanding receivables, particularly in light of its customers’ economic condition and age of such receivables. FASB Accounting Standard Codification (“ASC”) 450- 20-25-2 Recognition of Loss Contingencies requires that: An estimated loss from a loss contingency shall be accrued by a charge to income if both of the following conditions are met: a. Information available before the financial statements are issued or are available to be issued (as discussed in Section 855-10-25) indicates that it is probable that an asset had been impaired or a liability had been incurred at the date of the financial statements. Date of the financial statements means the end of the most recent accounting period for which financial statements are being presented. It is implicit in this condition that it must be probable that one or more future events will occur confirming the fact of the loss. b. The amount of loss can be reasonably estimated. 60. When current information and events make it probable that an entity will be unable to collect amounts due according to the contractual terms of a receivable, a loss contingency should be accrued, ASC 310-10-35-10 Receivables: If, based on current information and events, it is probable that the entity will be unable to collect all amounts due according to the contractual terms of the receivable, the condition in paragraph 450-20-25-2(a) is met. As used here, all amounts due according to the contractual terms means that both the contractual interest payments and the contractual principal payments will be collected as scheduled according to the receivable’s contractual terms. However, a creditor need not consider an insignificant delay or insignificant shortfall in amount of payments as meeting the condition in paragraph 450-20-25-2(a). Whether the amount of loss can be reasonably estimated (the condition in paragraph 450-20- 25-2(b)) will normally depend on, among other things, the experience of the entity, information about the ability of individual debtors to pay, and appraisal of the receivables in light of the current economic environment. In the case of an entity that has no experience of its own, reference to the experience of other entities in the same business may be appropriate. 2. Velti Violated GAAP by Failing to Record an Adequate Allowance for Doubtful Accounts 61. According to statements from Ross during his interview by Plaintiffs, prior to his arrival at Velti in January 2013, the Company’s only methodology for calculating or allocating reserves against uncollectible receivables was just based on never having a bad debt before and representations by Velti employees that the customers would pay. Because the Company’s clients had always eventually paid, the presumption was that they always would.9 According to Ross, the Company’s presumption that its customers would always eventually pay was condoned and supported by Baker Tilly, and would ultimately doom the Company. He said they should have a mathematical formula, so he adopted a formula. 62. Indeed, throughout the Class Period, the Company increasingly struggled to collect receivables. This is evidenced by the Company’s growing receivables balances, swelling DSO numbers, numerous financial reports prepared by the Company (detailing each individual account, its amounts, and the amount of time by which each was outstanding and overdue), and the decision, announced on November 14, 2012, to divest certain assets in Greece and the Balkans, and the necessity of reclaiming $5.1 million in factored receivables announced at the same time. These allegations are bolstered by the Company’s own financials, the Deloitte Report, reports prepared by the Company and reviewed by Plaintiffs, and by defendant Ross’ admission at the end of the Class Period, a significant amount of Velti’s receivables were “substantially old” and had been on Velti’s books since before 2012. 9 Moreover, that the Company never had bad debt before is likely because it refused to write off old receivables regardless of how old and uncollectible they were. 63. Indeed, as of December 31, 2010, the Company’s allowance for doubtful accounts was a mere $135,000 against a total receivable balance of over $101 million; the allowance for doubtful accounts as a percentage of total receivables was only 0.13%. Receivables accounted for 87% of Velti’s total reported revenue for fiscal year 2010; in other words, the receivables were Velti’s business. Velti’s failure to adequately reserve for the uncertainty associated with collecting these receivables allowed the Company to claim an adjusted net income for fiscal 2010 of $3 million and adjusted earnings per share of $0.07. 64. That the Company’s reserves were vastly understated by any reasonable measure is clear from the statements of the Company’s Senior Manager of Global Financial Planning and Analysis, who stated that on February 4, 2011, Velti produced a report showing that 95% of €62 million (or, at the time, approximately $82 million) worth of Velti’s accounts receivables in southeastern Europe were 90+ days overdue (that is, 225+ days outstanding), 77% were 180+ days overdue (that is, 295+ days outstanding), and 35% were 300+ days overdue (that is, 435+ days outstanding) as of December 31, 2010. Again, despite the fact that 95% of the Company’s receivables from Greece (worth approximately $82 million, or over 80% of the Company’s total receivables) were overdue by even the Company’s lenient six month standard, the Company had reserved just $135,000 against doubtful accounts. 65. The following year, on December 31, 2011, Velti’s allowance for doubtful accounts had crept up to $808,000, but the total receivable balance had catapulted to an astonishing $224 million; the allowance for doubtful accounts as a percentage of total receivables was 0.36%. In other words, even well-after the Greek crisis had begun, Velti was effectively telling the market that it would be perfect, that it would nearly collect every cent it was owed. Receivables accounted for 119% of Velti’s total reported revenue for fiscal year 2011. Velti’s failure to adequately reserve for the uncertainty associated with collecting these receivables allowed the Company to claim an adjusted net income for fiscal 2011 of $29 million and adjusted earnings per share of $0.50. Again, as already noted, above, the Company’s reserves paled in the face of the outstanding and extremely aged accounts receivables on the Company’s books. 66. By year-end 2012, Velti’s allowance for doubtful accounts was still only $8 million against a total receivable balance of over $303 million; the allowance for doubtful accounts as a percentage of total receivables was 2.64%. Thus, while the allowance for doubtful accounts was slowing increasing (in terms of a percentage of revenues), it really was like pushing back the ocean with a broom. Receivables accounted for 112% of Velti’s total reported revenue for fiscal year 2012. Velti’s failure to adequately reserve for the uncertainty associated with collecting these receivables allowed the Company to claim an adjusted net income for fiscal year 2012 of $22.2 million and adjusted EPS of $.34. Given that the Company’s total receivable balance was now multiples of what it had been in the report prepared by Velti on February 4, 2011, it is even more credibly indisputable that the Company’s recognition of such revenue was in violation of both GAAP and the Company’s revenue recognition policy. That is, the substantial growth illustrates that it was highly improbable that the Company would ever be able to collect that which it had billed. 67. After new CFO Ross joined the Company in January 2013, Velti’s allowance for doubtful accounts slowly began creeping up. In the March 12, 2013 earnings call, Ross alluded to the fact that he had concerns about relying on the Company’s purported prior history to assess what the receivables should so he started applying a mathematical testing to require a larger reserve: The company has had very, very limited experience with bad debts. We’ve had very few instances where customers have ultimately been unable to pay, or even bankruptcy or something else. Often times it takes a heck of a long time, but very little experience. So if you sort of come up with a reserve based on your past experience, It’s a rather – it’s pretty dang closed to nothing. I – just looking at it, there – you look at the DSOs of the company and sort of say, they’re a little bit older. I just pressure tested some of the assumptions, took mathematical percentages of balances over certain ages and came up with an amount that I felt more comfortable with, that provided us some cushion, when and if something happens. There wasn’t much in the specific area that led me to say, oh my gosh, we have a huge problem. I want a big additional reserve. But with the magnitude of the reserve – with the AR on the company’s books, I just thought it was more prudent to have a little bit more cushion with respect to those numbers. 68. During conversations with counsel, upon seeing the large DSOs, Ross explained that he determined that it was appropriate to apply a mathematical methodology to adequately reserve for doubtful accounts, despite representations from sales departments that the customers had always paid their accounts, and despite the fact that the Company had not done so before. By March 12, 2013, when the Company announced its Q4 2012 and year-end 2012 results, the figure was $8 million against a total receivable balance of over $303 million. The next quarter, Q1 2013, the allowance was raised to $10 million against a total receivable balance of nearly $306 million; the allowance for doubtful accounts as a percentage of total receivables was 3.3%. Receivables accounted for 118% of the Company’s total reported revenue for the four quarters preceding and including Q1 2013, meaning that accumulated receivables were greater than the Company’s total reported revenue for the four quarters preceding Q1 2013. According to Ross, almost immediately upon joining Velti he became concerned about the Company’s accounts receivable balance and advocated that Company should take a minimal reserve. Others in the Company resisted, suggesting his reserve calculations were too conservative. 69. However, Ross explained to counsel, when the sales departments’ collection forecasts were not being met by Q2 2013, he determined that he needed an independant third party accounting firm to analyze the accounts receivables for the Greece and Cyprus divisions for the Company. He confirmed in discussions with counsel that he did not ask Baker Tilly to perform this analysis, but rather Velti retained Deloitte in June 2013. 70. On August 20, 2013, Velti announced that it had (unbeknownst to the market until then) engaged Deloitte to undertake a formal review of its outstanding accounts receivable and that, as a result of Deloitte’s review, the Company would write off $111 million worth of its then $286 million worth of receivables. The Company’s allowance for doubtful accounts as a percentage of total receivables skyrocketed to 43% – thirteen times what it had been in the previous quarter. The Company blamed the write-off on customers with business activities in Greece and Cyprus, saying the economic uncertainty in the region was contributing to a deterioration in collections. 71. Although this statement (and the conduct; a huge one-time write-down) was meant to suggest that Velti had been hit by a tidal wave, the truth was the waters had been, for years by this point, rising around them. As already noted above, despite the fact that this information was only publicly disclosed at the end of the Class Period, these problems existed far earlier.10 3. Velti’s Accrued Contract Receivables 72. Velti also misled the market with respect to the reporting of its accounts receivable. Velti recorded two key types of receivables: accrued contracts receivable and trade receivables. Velti booked revenue that had not been invoiced but for which it claimed all revenue recognition criteria had been met into accrued contracts receivable. Once an invoice had been issued, the receivable was then moved from being an accrued contract receivable to a trade receivable. Velti claimed that this two-tiered process was necessary because the amounts recorded in the accrued contracts receivable required reconciliation with the Company’s customer before an invoice was sent. Wilson Cheung explained this reconciliation process during the Company’s Q2 2011 investor conference call: So, what a typical campaign we normally run is that after the campaign has ended, then we would begin to recognize that revenue assuming that all of the requirements have been met, so they would be recognized as revenue and accrued receivables. Some of these campaigns, once they have ended usually it will take a couple of weeks for us to reconcile the data with our customers before we can actually invoice them. So, we would start to see what we actually repocket some of the accrued receivables through trade receivables. A lot of this change is between the two buckets is primarily due to timing of when the campaign actually ended. 73. If the Company followed the reconciliation process as disclosed by Cheung and described in Velti’s annual report on Form 20-F, it would take only a few weeks after the end of 10 As just one example in addition to those already discussed above, the Deloitte Report concluded that customers Virtual Trip Ltd., Epignosis Ltd., Next Generation Learning Services S.A., MVision S.A., Infomap S.A., and IT Center S.A. were actually one affiliated customer, referred to as the the “VTRIP Entities” and their contracts were archetypical of the uncollectible nature of the Company’s contracts overall. In presenting the Deloitte Report to the Board on July 11, 2013 Deloitte concluded that the aggregate size of the outstanding accounts receivable represented by the VTRIP Entities was an issue. Such a high concentration of receivables from a single customer that represented so much of Velti’s overall receivables was particularly problematic because the average DSO of the VTRIP Entities was over 700 days. a campaign for Velti to invoice its customers. Once the invoice was issued, the receivable should move from the accrued contract receivable category to the trade receivable category. Any differences between Velti’s numbers included in the accrued contract receivable and the ultimate number agreed to with its customer should have been immediately been written-off. 74. From January 27, 2011 to August 20, 2013, however, Velti provided little to no reserve for its trade receivables, and completely failed to record any type of reserve for its accrued contract receivables until the last quarter of 2012. Even then, the Company only recorded a $1 million reserve for an accrued contract receivable balance of $134 million. This represented a reserve of less than 1%. In other words, Velti historically had left almost no margin for error; if even a handful of its customers did not pay, it would have had a material effect on the Company’s balance sheet and reported growth rates. 75. Because the accrued contract receivable balance should only be a temporary account whereby the balance would be reclassified to trade receivables once the reconciliation process between Velti and its customers was completed, Velti especially shocked the market when it announced an increase in the allowance for doubtful accounts reserves for its accrued contract receivables from $1.4 million on an accrued contract receivable balance of $137.5 million, or 1%, to $77.8 million on an accrued contract receivable balance of $118.6 million, or a whopping 65.6%. Simply, 70% of the $111 million write-off announced on August 20, 2013 was directed at the Company’s accrued contract receivables. 76. Again, as revealed by the Deloitte Report, a host of the Company’s accrued contract receivables were uncollectible and should have been reserved against far earlier. For example, the Deloitte Report concluded that the aggregate size of the outstanding accounts receivable represented by the VTRIP Entities was an issue of particular concern because it both represented a high concentration of receivables from a single customer, and because the average DSO of the VTRIP Entities was over 700 days. Any one of these facts was more than sufficient to preclude such amounts from being recorded as revenue, under GAAP, without a substantial reserve. 4. Velti Violated Its Own Revenue Recognition Policy 77. In addition to violating GAAP by failing to properly reserve for uncollectible accounts, Velti violated its own publicly stated revenue recognition policy by booking revenue when collectability was not reasonably assured. In its Forms 20-F for fiscal years 2010, 2011 and 2012, Velti explained that it recognized revenue when the following conditions were satisfied: (a) there was persuasive evidence of an arrangement; (b) the service had been rendered or delivery had occurred; (c) the fee to be paid by the customer was fixed or determinable; and (d) collectability of the fee was reasonably assured. 78. The assurances Velti provided that it had satisfied its revenue recognition policy were false. Specifically, Velti did not satisfy the fourth prong of the test – i.e, that collectability of the fee was reasonably assured. Accordingly, Velti’s reported revenue numbers were materially inflated, and its allowance for doubtful accounts was materially understated. 79. As already discussed, above, according to the Company’s former Senior Manager of Global Financial Planning and Analysis a document reflecting the Company’s accounts receivable as of December 31, 2010 (produced by Velti and dated February 4, 2011) shows that 95% of €62 million (or, at the time, approximately $82 million) worth of Velti’s accounts receivables were 90+ days overdue (that is, 225+ days outstanding), 77% were 180+ days overdue (that is, 295+ days outstanding), and 35% were 300+ days overdue (that is, 435+ days outstanding) as of December 31, 2010. Given as much, that these revenues never should have been booked in the first place necessarily follows. VI. DEFENDANTS VIOLATED THE SECURITIES ACT 80. Plaintiffs allege claims under the Securities Act against Baker Tilly and the Underwriter Defendants. 81. Baker Tilly and the Underwriter Defendants are statutorily liable under Section 11 of the Securities Act for the materially inaccurate statements and omissions contained in the IPO Registration Statement and SPO Registration Statement. 82. Specifically, Baker Tilly is liable for the statements it personally made in the Registration Statements, described herein because it expressly consented to the use of its name and inclusion of its audit reports in the Registration Statements and provided a letter dated August 3, 2010 and September 3, 2010 for inclusion in the Registration Statements and, which consented to the reference to Baker Tilly and to the incorporation by reference of the Baker Tilly audit reports. 83. Its statements are both misrepresentations of material fact and omitted facts necessary to make the statements made in the Registration Statements not misleading. To the extent that any of Baker Tilly’s statements are opinions, they are actionable because (i) they were both objectively and subjectively false; and/or (ii) they implied facts regarding its inquiry or knowledge underlying such opinions, including its compliance with GAAS in performing its audit. 84. Similarly, the Underwriter Defendants are statutorily liable because the Registrations Statements contained (i) false statements regarding Velti’s financial situation or omitted facts necessary to make the statements made not misleading; and (ii) any statements of opinion regarding Velti’s financials were both objectively and subjectively false and/or implied facts regarding its inquiry or knowledge underlying such opinions. Specifically, the Underwriter Defendants are liable under §§ 11 and 12 for their role in underwriting Velti’s IPO and SPO. 85. Plaintiffs also allege claims under Section 12(a)(2) of the Securities Act against the Underwriter Defendants for their role in underwriting Velti’s IPO and SPO and selling and soliciting sales of Velti shares pursuant to the misleading Registration Statements. 86. Plaintiffs expressly disclaim any allegations of intentional fraud in these non- fraud claims, which are pleaded separately in this Complaint from Plaintiffs’ Exchange Act claims. A. The IPO 87. On January 27, 2011, the Company’s final Registration Statement for its IPO was declared effective by the SEC. The final Prospectus for the IPO was filed with the SEC on January 28, 2011, prior to the opening of the market, and was dated January 27, 2011. The offering was for 11,092,300 ordinary shares of Velti at $12 per share plus any over-allotment. 88. Velti’s financial statements for the three years in the period ended December 31, 2009 were incorporated by reference in the IPO Registration Statement. 89. The IPO Registration Statement was negligently prepared and, as a result, contained untrue statements of material facts or omitted to state other facts necessary to make the statements made not misleading and was not prepared in accordance with the rules and regulations governing its preparation. To the extent any statements or omissions alleged to be false and misleading are included in the IPO Registration Statements are statements of opinion, Plaintiffs allege herein that such statements or omissions were false and misleading by omission in that the speaker omitted to disclose facts material to a reasonable investor and that the speaker lacked a basis (that a reasonable investor would expect) for making such statements. 90. The untrue statements of material fact and omitted material facts in the IPO Registration Statement relate to: (i) the difficulty the Company was having collecting certain receivables; (ii) the fact that certain of the Company’s receivables were uncollectible; (iii) the fact that the Company’s revenues and receivables were overstated during the Class Period; (iv) that the Company lacked adequate internal and financial controls; and (v) as a result of the foregoing, the Company’s financial results were materially false and misleading at all relevant times. 91. Velti’s January 27, 2011 IPO Registration Statement contained a host of actionably false and misleading statements. The “'who, what, when, where and how” of each false statement is set forth, below. 92. Baker Tilly (who) certified the Company’s financial results for the nine months ended September 30, 2010, which represented revenue of $58.8 million, a net loss of $17.7 million, adjusted EBITDA of $4.7 million, EPS of $(0.47) and DSO of 110 days as of September 30, 2010 (what) on January 27, 2011 (when) in the IPO Registration Statement (where). These statements were false (how) because they overstated the company’s accounts receivable, and, thus, revenue, income and shareholder equity in violation of GAAP and the Company failed to record a proper allowance for doubtful accounts in violation of GAAP. 93. Baker Tilly’s statements were further false and misleading by omission in that it omitted to disclose facts material to a reasonable investor and that Baker Tilly lacked a basis (that a reasonable investor would expect) for making such statements. That is, it had access to information regarding Velti’s receivables, was aware of the DSO of such receivables and knew that only two related customers accounted for the majority of the Company’s business. Indeed, the statements failed to disclose that a host of problematic contracts identified in the Deloitte Report confirm that the Company’s financials were false because Velti customers Virtual Trip Ltd., Epignosis Ltd., Next Generation Learning Services S.A., MVision S.A., Infomap S.A., and IT Center S.A. were actually one affiliated customer, referred to as the the “VTRIP Entities.” Such contracts were archetypical of the uncollectible nature of the Company’s contracts overall. That is, the VTRIP Entities were affiliated and therefore represent a significant concentration of receivables from a single party concluded that the aggregate size of the outstanding accounts receivable represented by the VTRIP Entities was an issue because it both represented a high concentration of receivables from a single customer and because the average DSO of the VTRIP Entities was over 700 days. Accordingly, the Company’s receivables were overstated, and its allowance for doubtful accounts was understated. 94. The Underwriter Defendants (who) are responsible for the statements11 (what) made on January 27, 2011 (when) in the IPO Registration Statement (where). These statements were false (how) because they overstated the company’s accounts receivable, and, thus, revenue, income and shareholder equity in violation of GAAP and the Company failed to record a proper 11 Pursuant to the Securities Act, underwriters of an offering are strictly liable for all statements made in offering documents. allowance for doubtful accounts in violation of GAAP. These statements were further false and misleading by omission in that the speaker omitted to disclose facts material to a reasonable investor and that the speaker lacked a basis (that a reasonable investor would expect) for making such statements. That is, the statements failed to disclose that a host of problematic contracts identified in the Deloitte Report confirm that the Company’s financials were false because Velti customers Virtual Trip Ltd., Epignosis Ltd., Next Generation Learning Services S.A., MVision S.A., Infomap S.A., and IT Center S.A. were actually one affiliated customer, referred to as the the “VTRIP Entities.” Such contracts were archetypical of the uncollectible nature of the Company’s contracts overall. That is, the VTRIP Entities were affiliated and therefore represent a significant concentration of receivables from a single party concluded that the aggregate size of the outstanding accounts receivable represented by the VTRIP Entities was an issue because it both represented a high concentration of receivables from a single customer and because the average DSO of the VTRIP Entities was over 700 days. Accordingly, the Company’s receivables were overstated, and its allowance for doubtful accounts was understated. 95. Moreover, the IPO Registration Statement included Baker Tilly’s audit report providing an unqualified Report of Independent Registered Public Accounting Firm with respect to the financial statements for the three years ended December 31, 2009. It also included a statement by Baker Tilly stating that: We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements and financial statement schedule are free of material misstatement. The Group is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. 96. Baker Tilly (who) is responsible for these statements (what) made on January 27, 2011 (when) in the IPO Registration Statement (where). The statements that Baker Tilly’s testing of the items on the Company’s financial statements was a reasonably held belief are false and misleading (how) because the evidence discussed herein demonstrates that the statements of “opinions” could not be reasonably held when made. 97. Next, the IPO Registration Statement falsely represented that Velti’s financial results were prepared in accordance with GAAP: Beginning with the year ended December 31, 2009, we changed the preparation of our financial statements from being in accordance with international financial reporting standards, or IFRS, as adopted by the EU to being in accordance with accounting principles generally accepted in the United States, or U.S. GAAP. 98. Further, Baker Tilly expressly certified that it had audited the Company’s financial results, and that those results were presented “in conformity with accounting principles generally accepted in the United States of America.” 99. Baker Tilly (who) is responsible for these statements (what) made on January 27, 2011 (when) in the IPO Registration Statement (where). The statements that Velti’s financial results were prepared in accordance with GAAP were false (how) because they overstated the company’s accounts receivable, and, thus, revenue, income and shareholder equity in violation of GAAP and the Company failed to record a proper allowance for doubtful accounts in violation of GAAP. These statements were further false and misleading by omission in that the speaker omitted to disclose facts material to a reasonable investor and that the speaker lacked a basis (that a reasonable investor would expect) for making such statements. More specifically, as already discussed, above, at minimum, several of the contracts identified in the Deloitte Report confirm that the Company’s financials were false (in violation of GAAP) because the VTRIP Entities were affiliated and therefore represented a significant concentration of receivables from a single customer because the average DSO of the VTRIP Entities was over 700 days. 100. The Company also stated that it recognized revenue only when collectability of the fee was reasonably assured, among other factors: Revenue Recognition We recognize revenue when all of the following conditions are satisfied: (i) there is persuasive evidence of an arrangement; (ii) the service has been rendered or delivery has occurred; (iii) the fee to be paid by the customer is fixed or determinable; and (iv) collectability of the fee is reasonably assured. … 101. The Underwriter Defendants (who) are responsible for these statements (what) made on January 27, 2011 (when) in the IPO Registration Statement (where). 102. This statement was false (how) because the Company regularly recognized and reported revenue despite the fact that collectability was not reasonably assured. These statements were further false and misleading by omission in that the speakers omitted to disclose facts material to a reasonable investor and that the speaker lacked a basis (that a reasonable investor would expect) for making such statements. 103. The Underwriter Defendants are responsible for this false statement because underwriters of an offering are liable for all statements made in offering documents unless they establish that they exercised due diligence. 104. The IPO Registration Statement further stated that the Company accrued an allowance for doubtful accounts if there was “strong evidence” that the amounts due are unlikely to be collectible: Allowance for Doubtful Accounts We evaluate the collectability of accounts receivable based on a combination of factors; an allowance for doubtful accounts is provided based on estimates developed using standard quantitative measures, which include historical write offs and current economic conditions. We also make a specific allowance if there is strong evidence indicating that the amounts due are unlikely to be collectible. As of September 30, 2010 and December 31, 2009 and 2008, the allowance for doubtful accounts was $135,000 (unaudited), $135,000 and $131,000, respectively 105. Both Baker Tilly and the Underwriter Defendants (who) are responsible for these statements (what) made on January 27, 2011 (when) in the IPO Registration Statement (where). These statements were false (how) because the allowance for doubtful accounts – while literally true – was materially false and misleading because it was understated. Had such allowances been accurately stated, they would have been much higher, rendering the other derivative financial results (such as assets) reported on the Company’s balance sheet materially false and misleading. These statements were further false and misleading by omission in that the speakers omitted to disclose facts material to a reasonable investor and that the speaker lacked a basis (that a reasonable investor would expect) for making such statements. 106. Baker Tilly and the Underwriter Defendants are accountable for these statements, under the Securities Act. Baker Tilly is responsible for its statements certifying the financials reported on the Company’s balance sheet and representing that it performed its audit in compliance with GAAS. The Underwriter Defendants are responsible because, as underwriters, they are subject to liability under Section 11 of the Securities Act for all statements in registration statements. 107. The IPO Registration Statement assured investors that the Company always collected outstanding amounts due from its customers: [W]e have not determined that any slow-paying customers will require an allowance for bad debt against accounts receivable. In addition, our trade receivables balance increased from $24.4 million in June 30, 2010 to $38.2 million (excluding the impact of newly acquired Mobclix) in September 30, 2010 due to the timing of completing our campaigns and billing of our customers. As a result, our DSOs increased during the third quarter of 2010. However, we expect our DSOs to improve by the end of 2010 due to the increase in our fourth quarter collection efforts. 108. Both Baker Tilly and the Underwriter Defendants (who) are responsible for these statements (what) made on January 27, 2011 (when) in the IPO Registration Statement (where). These statements were false (how) because the Company’s trade receivables were overstated in that they were uncollectible because, among others, the VTRIP Entities were not six separate customers, but rather a single affiliated customer which comprised a significant amount of the Company’s receivable. Such a concentration of outstanding receivables with a single customer increases the risk to the Company if the customer fails to pay and the Company failed to increase reserves to protect against its exposure to the VTRIP Entities and their average 700 days DSO. These statements were further false and misleading by omission in that the speakers omitted to disclose facts material to a reasonable investor and that the speaker lacked a basis (that a reasonable investor would expect) for making such statements. 109. Baker Tilly and the Underwriter Defendants are accountable for these statements, under the Securities Act. Baker Tilly is responsible because the Company’s trade receivables balance is a balance sheet item, and Baker Tilly certified the financials reported on the Company’s balance sheet. The Underwriter Defendants are responsible because, as underwriters, they are subject to liability under Section 11 of the Securities Act for all statements in registration statements. 110. The IPO Registration Statement stated the following regarding the Company’s accounts receivable: We have not historically incurred bad debt expense, none of our significant customers have historically failed to pay amounts due to us, and we do not believe that any of the customers contributing to our increased accounts receivable aging will fail to pay us in full. Accordingly, we have not determined that any slow- paying customers will require an allowance for bad debt against accounts receivable. 111. Both Baker Tilly and the Underwriter Defendants (who) are responsible for these statements (what) made on January 27, 2011 (when) in the IPO Registration Statement (where). These statements were false (how) because Baker Tilly tested the Company’s receivables and certified that no allowance for bad debt against the accounts receivable were necessary when that was not the case. These statements were further false and misleading by omission in that the speakers omitted to disclose facts material to a reasonable investor and that the speaker lacked a basis (that a reasonable investor would expect) for making such statements. 112. Baker Tilly and the Underwriter Defendants are accountable for these statements, under the Securities Act. Baker Tilly is responsible because accounts receivable is a balance sheet item, and Baker Tilly certified the financials reported on the Company’s balance sheet. The Underwriter Defendants are responsible because, as underwriters, they are subject to liability under Section 11 of the Securities Act for all statements in registration statements. 113. The IPO Registration Statement further stated under the heading “Liquidity and Capital Resources”: In addition, our trade receivables balance increased from $24.4 million in June 30, 2010 to $38.2 million (excluding the impact of newly acquired Mobclix) in September 30, 2010 due to the timing of completing our campaigns and billing of our customers. As a result, our DSOs increased during the third quarter of 2010. However, we expect our DSOs to improve by the end of 2010 due to the increase in our fourth quarter collection efforts. We believe that our increase in DSOs is temporary and will improve as the economic climate improves and as we expand our geographic reach into North America and Asia. 114. The Underwriter Defendants (who) are responsible for these statements (what) made on January 27, 2011 (when) in the IPO Registration Statement (where). 115. These statements were false (how) because there was no reasonable basis, as explained herein, to state that the Company’s DSO increase was temporary or would improve in time. These statements were further false and misleading by omission in that the speakers omitted to disclose facts material to a reasonable investor and that the speaker lacked a basis (that a reasonable investor would expect) for making such statements. 116. The Underwriter Defendants are accountable for these statements, under the Securities Act. The Underwriter Defendants are responsible because, as underwriters, they are subject to liability under Section 11 of the Securities Act for all statements in registration statements. 117. The IPO Registration Statement also included the Report of Independent Registered Public Accounting Firm Defendant Baker Tilly, that falsely informed investors that the IPO Registration Statement was prepared in accordance with GAAP: In our opinion, the consolidated financial statements and financial statement schedule referred to above present fairly, in all material respects, the consolidated financial position of Velti plc and its subsidiaries as of December 31, 2009 and 2008, and the results of their operations and cash flows for each of the three years ended December 31, 2009, in conformity with accounting principles generally accepted in the United States of America. 118. Baker Tilly (who) is responsible for these statements (what) made on January 27, 2011 (when) in the IPO Registration Statement. These statements that Velti’s financial results were prepared in accordance with GAAP were false (how), as explained in more detail herein, because they overstated the company’s accounts receivable, and, thus, revenue, income and shareholder equity in violation of GAAP and the Company failed to record a proper allowance for doubtful accounts in violation of GAAP. 119. Baker Tilly’s Report of Independent Registered Public Accounting Firm was further false and misleading because, in conducting its audit, Baker Tilly failed to exercise due professional care as required by GAAS AU Section 230. By failing to approach their work with the required skepticism the auditors failed to perform the audit in accordance with GAAS AU 230. This failure resulted in a build-up of uncollectable receivables which ultimately necessitated the $111 million write-off. Through its report, Baker Tilly falsely assured investors that Velti’s financial statements were prepared in accordance with GAAP, when in fact they were not. Baker Tilly failed to examine the credit worthiness of Velti’s customers in the PIIGS12 regions in the face of numerous red flags, a critical inquiry in determining whether collectability would be reasonably assured under GAAP. Even the most cursory of examinations or audit testing of the reconciliation process between accrued accounts receivable and trade accounts receivable would have revealed the rapidly burgeoning accrued accounts receivables balance, and an obvious failure to take an adequate reserve against or write-off those uncollectable accounts. These statements were further false and misleading by omission in that the speakers omitted to disclose facts material to a reasonable investor and that the speaker lacked a basis (that a reasonable investor would expect) for making such statements. 120. In sum, the statements contained in the Company’s IPO Registration Statement concerning its financial results, its factoring activities, its revenue recognition procedures, its DSO, and its accounting for its allowance for doubtful accounts were false and misleading and falsely assured and comforted the market that its receivables were collectible and within normal operating ranges given the Company’s revenue and net income for the same period. The true facts regarding these statements were as follows: (a) the Company was having difficulty collecting its receivables; (b) a significant portion of the Company’s receivables were owed by customers in dubious financial condition and were uncollectible; (c) as a result, the Company’s revenues and receivables were materially overstated; and (d) the Company’s allowance for doubtful accounts was materially understated. 12 PIIGS is an economists’ term used to refer collectively to Portugal, Italy, Ireland, Greece and Spain. B. The SPO 121. On June 15, 2011, the Company issued its final Prospectus for the SPO, which was declared effective by the SEC on June 14, 2011. The offering was for 8,000,000 ordinary shares of Velti at $15.25 per share plus any over-allotment. 122. The SPO incorporated the consolidated balance sheets of Velti plc and subsidiaries (the “Group”) as of December 31, 2010 and 2009, and the related consolidated statements of operations, shareholders’ equity and comprehensive income (loss), and cash flows for each of the three years in the period ended December 31, 2010. 123. The SPO Registration Statement was negligently prepared and, as a result, contained untrue statements of material facts or omitted to state other facts necessary to make the statements made not misleading and was not prepared in accordance with the rules and regulations governing its preparation. To the extent any statements or omissions alleged to be false and misleading are included in the SPO Registration Statement are statements of opinion, Plaintiffs allege herein that such statements or omissions were false and misleading by omission in that the speaker omitted to disclose facts material to a reasonable investor and that the speaker lacked a basis (that a reasonable investor would expect) for making such statements. 124. As discussed, below, the untrue statements of material fact and omitted material facts in the SPO Registration Statement relate to (i) the difficulty the Company was having collecting certain receivables; (ii) the fact that certain of the Company’s receivables were uncollectible; (iii) the fact that the Company’s revenues and receivables were overstated during the Class Period; (iv) that the Company lacked adequate internal and financial controls; and (v) as a result of the foregoing, the Company’s financial results were materially false and misleading at all relevant times. 125. On June 15, 2011, the Company issued the SPO Registration Statement, which was declared effective by the SEC on June 14, 2011. The SPO Registration Statement contained a host of actionably false and misleading statements. The “'who, what, when, where and how” of each false statement is set forth, below. 126. The SPO Registration Statement included Velti’s financial results. Baker Tilly (who) certified the Company’s financial results (what) on January 27, 2011 (when) in the IPO Registration Statement (where). These statements were false (how) because they overstated the company’s accounts receivable, and, thus, revenue, income and shareholder equity in violation of GAAP and the Company failed to record a proper allowance for doubtful accounts in violation of GAAP. 127. The Underwriter Defendants are also accountable for these statements, under the Securities Act because, as underwriters, they are subject to liability under Section 11 of the Securities Act for all statements in registration statements. 128. Moreover, the SPO Registration Statement included Baker Tilly’s audit report providing an unqualified Report of Independent Registered Public Accounting Firm with respect to these financial statements. It also included a statement by Baker Tilly stating that: We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements and financial statement schedule are free of material misstatement. The Group is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. 129. Baker Tilly (who) is responsible for these statements (what) made on June 15, 2011 (when) in the SPO Registration Statement (where). The statements that Baker Tilly’s testing of the items on the Company’s financial statements was a reasonably held belief are false and misleading (how) because the evidence discussed herein demonstrates that the statements of “opinions” could not be reasonably held when made. 130. In its audit report, Baker Tilly also represented that: In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Velti plc and its subsidiaries as of December 31, 2010 and 2009, and the results of their operations and cash flows for each of the three years in the period ended December 31, 2010, in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule presents fairly, in all material respects, the information set forth therein when read in conjunction with the related financial statements. 131. Baker Tilly (who) is responsible for these statements (what) made on June 15, 2011 (when) in the SPO Registration Statement (where). The statements that Baker Tilly’s testing of the items on the Company’s financial statements was a reasonably held belief are false and misleading (how) because the evidence discussed herein demonstrates that the statements of “opinions” could not be reasonably held when made. 132. Velti acknowledged in its SPO Registration Statement that there were some material weaknesses in Velti’s internal control over financial reporting relating to its financial statement close process, but informed investors that it had taken steps to remediate those weaknesses including implementing additional control procedures in connection with its review of key financial estimates including accounts receivable and its allowance for doubtful accounts. 133. The SPO Registration Statement represented that under the terms of the Company’s revenue recognition policy the Company only recognized revenue when certain criteria were met, including the existence of evidence to support the recognition of revenue as of the reporting date. The Company also stated that revenue would only be recognized as accrued contract receivable when all of the revenue recognition criteria had been met: Revenue Recognition We account for our revenue for these services and licenses in accordance with Accounting Standards Codification (ASC) Topic 605 — Revenue Recognition and ASC Topic 985-605 — Certain Revenue Arrangements that Include Software Elements. We recognize revenue when all of the following conditions are satisfied: (i) there is persuasive evidence of an arrangement; (ii) the service has been rendered or delivery has occurred; (iii) the fee to be paid by the customer is fixed or determinable; and (iv) collectability of the fee is reasonably assured. 134. The Underwriter Defendants (who) are responsible for these statements (what) made on June 15, 2011 (when) in the IPO Registration Statement (where). 135. This statement was false (how) because the Company regularly recognized and reported revenue despite the fact that collectability was not reasonably assured. These statements were further false and misleading by omission in that the speakers omitted to disclose facts material to a reasonable investor and that the speaker lacked a basis (that a reasonable investor would expect) for making such statements. 136. The Underwriter Defendants are responsible for this false statement because underwriters of an offering are strictly liable for all statements made in offering documents. 137. The SPO Registration Statement also reported a $419,000 increase to its allowance for doubtful accounts, but downplayed the small increase reassuring investors that the Company had always collected from its customers even from customers with old balances: Some of our business is in emerging markets where payment terms on amounts due to us may be longer than on our contracts with customers in other markets. …. Our DSOs have historically decreased during the first and second quarter, and increased during the third and fourth quarters, due to the seasonal nature of our business. DSOs based on trailing 12 months’ revenue were 113 as of March 31, 2011 compared to 121 and 131 as of December 31, 2010 and 2009, respectively. We have historically collected all amounts due from our customers, even from those customers with balances with longer aging, as evidenced by our insignificant bad debt expense for 2010, 2009 and 2008. We do evaluate receivables on a customer specific basis and record a reserve based on relevant facts and circumstances as deemed necessary. Accordingly, during the three months ended March 31, 2011 we recorded an increase in the provision for doubtful accounts by $419,000 primarily related to one customer subject to currency control restrictions. 138. Both Baker Tilly and the Underwriter Defendants (who) are responsible for these statements (what) made on June 15, 2011 (when) in the SPO Registration Statement (where). These statements were false because the allowance for doubtful accounts – while literally true – was materially false and misleading because it was understated. Had such allowances been accurately stated, they would have been much higher, rendering the other derivative financial results (such as assets) reported on the Company’s balance sheet materially false and misleading. 139. The SPO Registration Statement explained that Velti takes “historical write offs and current economic conditions” into account when setting an allowance for doubtful accounts as follows: Allowance for Doubtful Accounts We evaluate the collectability of accounts receivable based on a combination of factors; an allowance for doubtful accounts is provided based on estimates developed using standard quantitative measures, which include historical write offs and current economic conditions. We also make a specific allowance if there is strong evidence indicating that the amounts due are unlikely to be collectible. The allowance for doubtful accounts was $554,000, $135,000 and $135,000, as of March 31, 2011, and December 31, 2010 and 2009, respectively. 140. Both Baker Tilly and the Underwriter Defendants (who) are responsible for these statements (what) made on June 15, 2001 (when) in the IPO Registration Statement (where). These statements were false (how) because the allowance for doubtful accounts – while literally true – was materially false and misleading because it was understated. Had such allowances been accurately stated, they would have been much higher, rendering the other derivative financial results (such as assets) reported on the Company’s balance sheet materially false and misleading. These statements were further false and misleading by omission in that the speakers omitted to disclose facts material to a reasonable investor and that the speaker lacked a basis (that a reasonable investor would expect) for making such statements. 141. Baker Tilly and the Underwriter Defendants are accountable for these statements, under the Securities Act. Baker Tilly is responsible because the allowance for doubtful accounts impacts derivative balance sheet items, and Baker Tilly certified the financials reported on the Company’s balance sheet. The Underwriter Defendants are responsible because, as underwriters, they are subject to liability under Section 11 of the Securities Act for all statements in registration statements. 142. The SPO Registration Statement further stated that as of March 31, 2011 Velti had factored $6.1 million in receivables noting that its credit risk with regard to its accounts receivable “is limited as we have policies in place to ensure that sales are made to customers with a high credit standing, and we enter into factoring arrangements with local banks for a material portion of our accounts receivable.” 143. The Underwriter Defendants (who) are responsible for these statements (what) made on June 15, 2011 (when) in the IPO Registration Statement (where). These statements were false (how) because in reality, Velti’s borrowing arrangements from its factors with recourse and at high interest rates were highly unusual and confirm that the factors themselves had little confidence in the collectability of these accounts receivable as adequate security for their loans. Given as much, it follows that Velti’s accounts receivable were of dubious quality. Further, by pledging its accounts receivable and agreeing to these terms, and not having to write off its worthless accounts receivable, Velti was able to defer the day of reckoning when it could no longer use this source of asset based financing. As such, the Underwriter Defendants should have caused the Company to disclose this information, and their failure to do so rendered such statements further false and misleading by omission in that the speakers omitted to disclose facts material to a reasonable investor and that the speaker lacked a basis (that a reasonable investor would expect) for making such statements. 144. The statements contained in the SPO Registration Statement concerning Velti’s financial results, its factoring activities, its revenue recognition procedures and its accounting for its allowance for doubtful accounts deceptively assured and comforted the market that Velti’s receivables were within normal operating ranges given the Company’s revenue and net income for the same period. But these statements were false, and the truth was: (a) that the Company was having difficulty collecting its receivables; (b) that a significant portion of the Company’s receivables were owed by customers in dubious financial condition and were uncollectible; (c) that, as a result, the Company’s revenues and receivables were overstated; (d) that the Company’s allowance for doubtful accounts was understated; and (e) that by revealing only the DSO number for its trade receivables and excluding the DSO number associated with its accrued contracts receivables, Velti hid the true length of time it took the company to collect recognized revenue and misled investors about the quality and collectability of its receivables. 145. As a result of the Company’s failure to follow GAAP and its own revenue recognition policy, the Company’s reported financial results were materially false and misleading. 146. The Company’s Auditors, Baker Tilly, issued a clean audit report, included in the SPO Registration Statement, informing investors that the Company’s financial statements were prepared in accordance with GAAP: In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Velti plc and its subsidiaries as of December 31, 2010 and 2009, and the results of their operations and cash flows for each of the three years ended December 31, 2010, in conformity with accounting principles generally accepted in the United States of America. 147. Defendant Baker Tilly’s (who) report (what) set forth in the SPO Registration Statement (where) on June 15, 2011 (when). Baker Tilly’s report was false and misleading because Baker Tilly failed to exercise due professional care as required by GAAS AU Section 230. By failing to approach their work with the required skepticism the auditors failed to perform the audit in accordance with GAAS. A failure which resulted in a build-up of uncollectable receivables and which ultimately necessitated the $111 million write-down. 148. By issuing a clean audit report, Baker Tilly assured investors that Velti’s financial statements were prepared in accordance with GAAP, when in fact they were not. Even the most cursory of examinations or audit testing of the reconciliation process between accrued accounts receivable and trade accounts receivable would have revealed the rapidly burgeoning accrued accounts receivables balance, and an obvious failure to take an adequate reserve against these uncollectable accounts. The report was further false and misleading by omission in that the speakers omitted to disclose facts material to a reasonable investor and that the speaker lacked a basis (that a reasonable investor would expect) for making such statements. VII. BAKER TILLY VIOLATED THE EXCHANGE ACT 149. During the Class Period, Velti’s financial reports filed with the SEC: (i) overstated the company’s accounts receivable, and, thus, revenue, income and shareholder equity in violation of GAAP; (ii) failed to record a proper allowance for doubtful accounts in violation of GAAP; and (iii) mislead investors regarding the quality and collectability of Velti’s receivables by reporting false and issued misleading figures for the days sales outstanding, which is one of Velti’s primary business metrics and is an important measure of the Company’s overall financial health. 150. As a result, the Company’s Class Period financial statements were materially misleading and not presented in accordance with GAAP. GAAP consists of those principles recognized by the accounting profession as conventions, rules and procedures necessary to define accounting practices at a particular time. The SEC has the statutory authority for the promulgation of GAAP for public companies and has delegated that authority to the Financial Accounting Standards Board (“FASB”). The FASB issues concept statements, which are the fundamental building blocks of GAAP. SEC Regulation S-X (17 C.F.R. §210.4-01(a)(1)) provides that financial statements filed with the SEC that are not presented in accordance with GAAP will be presumed to be misleading. 151. Despite the foregoing, during the Class Period Baker Tilly certified that it had audited the Company, pursuant to GAAS, and found that Velti’s financials were fairly presented in accordance with GAAP. By so doing, Baker Tilly violated Rule 10b-5 and Section 10(b) of the Exchange Act. 152. Each of the false and misleading statements are set forth below, followed by a detailed recitation of the bases for Plaintiffs’ allegations that not only were these statements false and misleading when made, but also the reasons why Baker Tilly knew or was severely reckless in not knowing as much. A. Baker Tilly Made False and Misleading Statements13 153. On April 12, 2011, Velti filed its Annual Report on Form 20-F with the SEC for the 2010 fiscal year (“2010 Annual Report”). The Company reported fiscal year 2010 revenue of $116.3, an increase of $26.3 or 29% compared to 2009, and trade and accrued contract receivables of $39 million and $33.6 million respectively. 154. Baker Tilly (who) is responsible for these statements (what) made in the April 12, 2011 (when) Annual Report on Form 20-F (where). 155. These statements were false (how) because: (a) the Company was having difficulty collecting its receivables; (b) a significant portion of the Company’s receivables were owed by customers in dubious financial condition and were uncollectible and thus should not have been recognized and recorded on the Company’s balance sheet; 13 The statements made in the Registration Statements are also actionable, against Baker Tilly, under the Exchange Act. To minimize redundancy, they are not repeated here. (c) as a result, the Company’s revenues and receivables were overstated; and (d) the Company’s allowance for doubtful accounts was understated. 156. Indeed, as the Deloitte Report noted several of the contracts identified in the Deloitte Report confirm that the Company’s financials were false because the VTRIP Entities were affiliated and therefore represented a significant concentration of receivables from a single customer because the average DSO of the VTRIP Entities was over 700 days. 157. Baker Tilly is responsible for these statements because accounts receivable is a balance sheet item, and Baker Tilly certified the financials reported on the Company’s balance sheet. 158. Velti’s fiscal year 2010 Form 20-F also contained the Report of Independent Registered Public Accounting Firm from, Baker Tilly, and representations that it had “conducted [its] audits in accordance with the standards of the Public Company Accounting Oversight Board” and that “the consolidated financial statements . . . present fairly, in all material respects, the consolidated financial position of Velti.” 159. Baker Tilly’s Report of Independent Registered Public Accounting Firm was false and misleading because Baker Tilly failed to exercise due professional care as required by GAAS AU Section 230. By failing to approach their work with the required skepticism the auditors failed to perform the audit in accordance with GAAS. This failure resulted in a build-up of uncollectable receivables – already over $20 million in southeastern Europe that were almost a year overdue by February, 2011 – and which ultimately necessitated the $111 million write- down in 2013. By issuing the clean audit report Baker Tilly falsely assured investors that Velti’s 2010 Annual Report filed with the SEC on Form 20-F was prepared in accordance with GAAP, when in fact it was not. Even the most cursory of examinations or audit testing of the reconciliation process between accrued accounts receivable and trade accounts receivable would have revealed the rapidly burgeoning accrued accounts receivables balance, and an obvious failure to take an adequate reserve against these uncollectable accounts. Accordingly, Baker Tilly either knew, or, at the barest minimum, was deliberately recklessness in not knowing and not disclosing that Velti’s financial statements had not been prepared in accordance with GAAP. 160. On April 26, 2012, Velti filed its Annual Report on Form 20-F for the year ended December 31, 2011 on Form 20-F with the SEC (“2011 Annual Report”). The Company reported fiscal year 2011 revenue of $189.2 million and trade and accrued contract receivables of $70.9 million and $98.2 million, respectively. This compared with $39.1 million of trade receivables and $33.6 million of accrued contract receivables as of December 31, 2010. 161. Baker Tilly (who) is responsible for these statements (what) made in the April 26, 2012 (when) Annual Report on Form 20-F (where). 162. These statements were false (how), as set forth in more detail herein, because: (a) the Company was having difficulty collecting its receivables; (b) a significant portion of the Company’s receivables were owed by customers in dubious financial condition and were uncollectible and thus should not have been recognized and recorded on the Company’s balance sheet; (c) as a result, the Company’s revenues and receivables were overstated; and (d) the Company’s allowance for doubtful accounts was understated. 163. Despite the growing receivables figure, the 2011 Annual Report assured investors that the Company had evaluated the collectability of accounts receivable and that where there is “…strong evidence indicating that the amounts due are unlikely to be collectable, the Company makes a specific allowance for doubtful accounts” and had concluded that “[a]s of December 31, 2011 and 2010, the allowance for doubtful accounts was $808,000 and $135,000, respectively.” Allowance for Doubtful Accounts We evaluate the collectability of accounts receivable based on a combination of factors; an allowance for doubtful accounts is provided based on estimates developed using standard quantitative measures, which include historical write offs and current economic conditions. We also make a specific allowance if there is strong evidence indicating that the amounts due are unlikely to be collectible. As of December 31, 2011 and 2010, the allowance for doubtful accounts was $808,000 and $135,000, respectively. 164. Baker Tilly (who) is responsible for this statement (what) in the April 26, 2012 (when) Form 20-F (where). 165. This statement was false (how) because: (a) the Company was having difficulty collecting its receivables; (b) a significant portion of the Company’s receivables were owed by customers in dubious financial condition and were uncollectible and thus should not have been recognized and recorded on the Company’s balance sheet; (c) as a result, the Company’s revenues and receivables were overstated; and (d) the Company’s allowance for doubtful accounts was understated. 166. Velti’s 2011 Form 20-F contained representations from Defendant Baker Tilly, the Company’s auditors, that the audit had been conducted “in accordance with the standards of the Public Company Accounting Oversight Board.” The auditors also issued the following report on Velti’s financial results and internal controls over financial reporting: We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements and the financial statement schedule are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. * * * In our opinion, the consolidated financial statements and financial statement schedule referred to above present fairly, in all material respects, the financial position of the Velti plc as of December 31, 2011 and 2010, and the consolidated results of their operations and cash flows for each of the three years in the period ended December 31, 2011 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule, in all material respects, presents fairly the information set forth therein when read in conjunction with the related consolidated financial statements. Also in our opinion, the accompanying financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein. Also in our opinion, Velti plc maintained, in all material respects, effective internal control over financial reporting as of December 31, 2011, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. 167. Defendant Baker Tilly’s (who) statements in the Report of Independent Registered Public Accounting Firm (what) in the April 26, 2012 (where) Form 20-F (where) was false and misleading (how) because: (i) in auditing Velti, Baker Tilly failed to exercise due professional care as required by GAAS AU Section 230; and (ii) the Company’s internal controls were ineffective. 168. By failing to approach their work with the required skepticism the auditors failed to perform the audit in accordance with GAAS, failing both to properly test for collectability. By issuing a clean audit report Baker Tilly falsely assured investors that Velti’s 2010 Annual Report filed with the SEC on Form 20-F was prepared in accordance with GAAP and that Velti had appropriate internal controls in place to ensure the accuracy of their financial statements. 169. Defendant Baker Tilly’s statements regarding the Company’s internal controls were further false and misleading. Indeed, even the most cursory of examinations or audit testing of the reconciliation process between accrued accounts receivable and trade accounts receivable would have revealed the rapidly burgeoning accrued accounts receivables balance, and an obvious failure to take an adequate reserve against these uncollectable accounts. Accordingly, Baker Tilly either knew, or, at the barest minimum, was deliberately recklessness in not knowing and not disclosing that Velti’s financial statements had not been prepared in accordance with GAAP. 170. On April 11, 2013, Velti filed its Annual Report for the year ended December 31, 2012 on Form 20-F with the SEC (“2012 Annual Report”). The Company’s 2012 Annual Report was signed by defendants Moukas and Cheung, and repeated the Company’s financial results previously announced on March 12, 2013. 171. The 2012 Annual Report falsely informed investors that under the terms of the Company’s revenue recognition policy, the Company only recognized revenue when certain criteria were met, including the existence of evidence to support the recognition of revenue as of the reporting date. 172. The 2012 Annual Report assured investors that the Company evaluated the collectability of accounts receivable and mad a specific allowance if there was “strong evidence indicating that the amounts due are unlikely to be collectible.” 173. As of December 31, 2012 the Company’s allowance for doubtful accounts for trade receivables and accrued contract receivables was $7 million and $0.8 million respectively. The Company also explained that it maintains an allowance for doubtful accounts to reflect the expected non-collection of accounts receivable and accrued contract receivables and writes off accounts receivable when it considers them uncollectible. 174. Baker Tilly (who) is responsible for these statements (what) made on April 11, 2013 (when) in the Form 20-F (where). These statement were false (how), as set forth in more detail herein, because the allowance for doubtful accounts – while literally true – was materially false and misleading because it was understated. Had such allowances been accurately stated, they would have been much higher, rendering the other derivative financial results (such as assets) reported on the Company’s balance sheet materially false and misleading. 175. The statements contained in the Company’s 2012 Annual Report concerning the Company’s financial results, factoring and accounting for doubtful accounts, deceptively assured and comforted the market that its receivables were within normal operating ranges given the Company’s revenue and net income for the same period. The true facts, which were known to and/or disregarded with deliberate recklessness by Defendants but concealed from the investing public, were as follows: (a) that the Company was having difficulty collecting its receivables; (b) that a significant portion of the Company’s receivables were owed by customers in dubious financial condition and were uncollectible and had been on Velti’s books since 2011; (c) that, as a result, the Company’s revenues and receivables were overstated; and (d) that the Company’s allowance for doubtful accounts was understated. 176. Baker Tilly (who) is responsible for these statements (what) made on April 11, 2013 (when) in the Form 20-F (where). The statements regarding the Company’s internal controls were also false and misleading because: (i) the Company did not disclose the fraudulent scheme alleged herein; and (ii) Defendants wholly failed to maintain effective internal controls over financial reporting designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP. These statements that Velti’s financial results were prepared in accordance with GAAP were false (how), as set forth in more detail herein, because they overstated the company’s accounts receivable, and, thus, revenue, income and shareholder equity in violation of GAAP and the Company failed to record a proper allowance for doubtful accounts in violation of GAAP. 177. Velti’s fiscal year 2012 Form 20-F also contained representations from the Company’s auditors that “we conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board” and that “the financial statements . . . present fairly, in all material respects, the consolidated financial position of Velti.” 178. Defendant Baker Tilly’s (who) Report of Independent Registered Public Accounting Firm (what) made on April 11, 2013 (when) in the Form 20-F (where) was false and misleading (how), as set forth in more detail below at herein, because Baker Tilly failed to exercise due professional care as required by AU Section 230 and GAAS. By failing to approach their work with the required skepticism the auditors failed to perform the audit in accordance with GAAS. A failure which resulted in a build-up of uncollectable receivables and which ultimately necessitated the $111 million write-down. Even the most cursory of examinations or audit testing of the reconciliation process between accrued accounts receivable and trade accounts receivable would have revealed the rapidly burgeoning accrued accounts receivables balance, and an obvious failure to take an adequate reserve against these uncollectable accounts. Accordingly, Baker Tilly either knew, or, at the barest minimum, was deliberately recklessness in not knowing and not disclosing that Velti’s financial statements had not been prepared in accordance with GAAP. 179. Indeed, in the Report of Independent Registered Public Accounting Firm, Baker Tilly expressly (and finally) noted that the Company’s internal controls had material weaknesses and that, “because of the effect of the material weakness described above on the achievement of the objectives of the control criteria, Velti plc has not maintained effective internal control over financial reporting as of December 31, 2012, based on the COSO criteria.” B. Baker Tilly’s Statements Were Knowingly or Recklessly False and Misleading 180. As discussed above, during the Class Period, Baker Tilly issued three categories of false and misleading statements which give rise to liability under Section 10(b) of the Exchange Act. 181. First, Baker Tilly issued audit reports on the Company’s financial statements for the years ended 2009, 2010, 2011 and 2012, thereby falsely assuring investors that the Company’s financial statements were prepared in accordance with GAAP and accurately presented the financial position of the Company. 182. As discussed, above, these statements were false and misleading because Velti did not comply with GAAP and its financials did not accurately represent the Company’s financial condition. Indeed, GAAP rules required Velti to record a reserve for the uncertainty associated with the collectability of its outstanding receivables, particularly in light of its customers’ economic condition and age of such receivables. See ASC 450-20-25-2 Recognition of Loss Contingencies. When current information and events make it probable that an entity will be unable to collect amounts due according to the contractual terms of a receivable, a loss contingency should be accrued as set forth in ASC 310-10-35-10 Receivables. Velti’s financial statements did not comply with GAAP as they did not provide for a mechanism to calculate reserves. They also did not provide for adequate reserves, which in turn inflated revenues, income and earnings per share. 183. Second, Baker Tilly also issued an opinion attesting to the efficacy of the Company’s internal controls over financial reporting in the financial report for fiscal year 2011. As discussed herein Velti’s internal controls were not effective. 184. Third, Baker Tilly falsely represented that it conducted its audits in compliance with GAAS. However, for the reasons discussed below, Baker Tilly did not properly conduct its audits in compliance with GAAS. 185. The Public Company Accounting Oversight Board (“PCAOB”) was established by Congress to oversee the audits of public companies in order to protect investors and the public interest by promoting informative, accurate, and independent audit reports. Audits in the U.S. must adhere to GAAS expressed by the PCAOB. 186. Auditors are required to exercise due professional care in the planning of the audit and the preparation of the report, GAAS Interim Auditing Standards (“AU”) Section 230.07: Due professional care requires the auditor to exercise professional skepticism. Professional skepticism is an attitude that includes a questioning mind and a critical assessment of audit evidence. The auditor uses the knowledge, skill, and ability called for by the profession of public accounting to diligently perform, in good faith and with integrity, the gathering and objective evaluation of evidence. 187. Meeting this standard requires the independent corroboration of financial information when certain red flags are uncovered and more than the unquestioning acceptance of a company’s anecdotal representations. 188. In order to comply with GAAS, auditors must always test and question the adequacy of the allowance for doubtful accounts, as such reserves are recorded at the discretion of management. Yet, Baker Tilly did not exercise due professional care and professional skepticism in auditing the collectability of the Company’s accounts receivables and the adequacy of its reserves for the following reasons. 1. Red Flags 189. Baker Tilly was aware of or was deliberate in ignoring numerous red flags that should have triggered a heightened scrutiny regarding Velti’s accounts receivable and reserves, including: (1) As relayed by former CFO Ross, prior to his arrival at the Company in January, 2013, Velti lacked did not have mathematical formula for calculating reserves – any reserves were just based on never having had a “bad debt” before and representations by Velti employees that the customers would pay. (2) As referenced above, Velti had extremely small reserves despite the fact that its accounts receivable was very old – indeed, measured in months, if not years, for example: a. As early as the end of 2009, according to the Company's former Senior Manager of Global Financial Planning and Analysis, 19.8% of the Company's accounts receivables were more than 90 days overdue (meaning they had been outstanding for 9 months), and 8.3% of the Company's accounts receivables were older than 365 days (meaning they had been outstanding for over 18 months). b. As of December 31, 2010, according to a report produced by Velti and given to Baker Tilly dated February 8, 2011 that identifies each and every customer from the region, the amounts billed to each customer and the dates the each customer was billed – the Company had €23 million (or, at the time, approximately $32 million) in overdue invoiced trade receivables (just a subset of the Company's total receivables) on the Company's books (32% of which was more than 90 days overdue) from Greece – the Company had virtually no bad debt provision. c. As of December 31, 2010, a similar document (prepared by Velti and dated February 4, 2011) shows that 95% of €62 million (or, at the time, approximately $82 million) worth of Velti's accounts receivables were 90+ days overdue, 77% were 180+ days overdue, and 35% were 300+ days overdue. d. In Baker Tilly’s May 14, 2012 presentation to the Audit Committee regarding Q1 2012, Baker Tilly stated that the comprehensive DSO (trade AR, accrued contracts accounts receivable and post dated checks) for Velti SA – which is the Greek subsidiary responsible for the vast majority of the ultimate write-off – was 649 days. Yet, Velti’s reserve was less than $1 million at this time. Moreover, as this information is as of Q1 2012, 649 days before March 31, 2012 would be June 21, 2010. Thus, on average these receivables had been outstanding since approximately June 21, 2010, six months before the IPO and over a year before the SPO. Moreover, as DSO is an average, many receivables were even older. Moreover, the May 14, 2012 presentation states that Trade AR for Velti SA had a DSO of 191 days. Since the DSO of 191 days is included in Velti SA’s total DSO, which was 649 days, the age of the accrued receivable and check receivable must be older than the 649 days. This means that not only were there significant receivables over 649 days much of these were not even invoiced yet – and thus utterly untested by Baker Tilly. Yet, Velti had no reserve for accrued/unbilled, accounts receivable at this time. e. As relayed by Deloitte at the July 11, 2013 Board of Director meeting, the VTRIP Group, which represented Velti’s largest combined outstanding accounts receivable balance – which was $74.2 million – was over 700 days old. Therefore, on average these receivables had been outstanding since approximately July to November, 2011 and, some of which were even older as the 700 days is the average. (3) Velti had very small reserves for doubtful accounts as set forth above. (4) Velti’s accrued (i.e. unbilled) receivables were very large – accounting for approximately half of the outstanding receivables at any given time – and old – where as these receivables should have had short DSOs and been smaller as they should have been quickly reconciled and invoiced and, thus, moved to trade receivables. Yet, Velti did not record any reserves for these large accrued contract receivables until Q4 2012 and then, it only recorded a $1 million reserved on a balance of $134 million. (5) A very small number of customers made up the majority of the Company’s outstanding accounts receivable balance, and those few customers were affiliated with each other. Moreover, those customers were all in the Greece and Cyprus area and the Greek economic crisis had commenced before April 2010. Indeed, 85% of the Greek and Cyprus accounts receivable were owed by just 26 customers and over 65% was owned by just two customers that were interrelated, all of whom were quickly determined to be uncollectable by Deloitte. (6) Despite contrary representations to the investing public, the vast majority of Velti’s income came from countries (Greece and Cyprus) suffering from a significant financial crisis. Indeed, as disclosed at the end of the Class Period, customers in Greece and Cyprus “still held approximately two-thirds of [Velti’s] outstanding receivable and accrued revenues.” (7) Velti had identified internal control problems and several of the Individual Defendants stated in their SOX certifications that they had disclosed their evaluations of the controls to Baker Tilly. Indeed, Baker Tilly had recognized that Velti had internal control problems in 2010 and 2012. 2. Baker Tilly’s Audits 190. Yet, in the face of this, and even though, as reflected in the Audit Committee meeting minutes and Baker Tilly’s presentations to the Audit Committee, Baker Tilly repeatedly identified the Company’s account receivables as a key risk, Baker Tilly utterly failed to exercise due professional care and professional skepticism in auditing the collectability of the Company’s accounts receivables. 191. Baker Tilly’s presentations to the Audit Committee that were produced by the Settling Defendants, dated from March 15, 2011 to May 8, 2013, indicate that Baker Tilly tested a sampling of accounts receivable through customer confirmation of debt (often with minimal confirmation); contract review (i.e. looking at the contracts to see what the terms were) and cash collections (i.e., the percentage of invoices that is paid) to ascertain the collectability of Velti’s accounts receivables. The presentations further indicate that Baker Tilly relied primarily on cash collections. Yet, cash collection on some receivables does not support the future cash collection of the remaining balance. Further, customer confirmation of debt (if any was even received) and contract review not support collectability or ability of the customers to pay such debt. Indeed, Baker Tilly did not look at collectability or ability of the customers to pay such debt. i. Accrued Receivables 192. Moreover, and significantly, a cash collection review ignored a large (and increasing) portion of Velti’s accounts receivables, namely the accrued accounts receivable (i.e. receivables that have not yet been invoiced) as since these were unbilled there was extremely limited cash collection history to review. Likewise, debt confirmation is not possible as the customers have not yet been billed in order to confirm the outstanding accounts receivable. 193. As evidenced by Velti’s 20-Fs for 2010, 2011 and 2012, the accrued accounts receivables represented $33.6 million out of $101 million of total receivables for 2010, $98.6 million out of $224 million of total receivables for 2011, and $134 million out of $303.3 million of total receivables for 2012. Although the reported accrued contract receivables balance made up a sizable portion of the Company’s outstanding accounts receivable (a fact that Baker Tilly could not ignore), a review Baker Tilly’s presentations to the Audit Committee between March 15, 2011 to May 8, 2013 indicate that Baker Tilly did not perform additional audit procedures to assess the collectability of the Company’s accrued contract receivables. 194. Ultimately, approximately 69% of the final reserves were recorded for the Company’s accrued contract receivables as evidenced by Velti’s Form 6-K filed with the SEC on August 20, 2013. Baker Tilly’s failure to pursue additional investigation and utter ignorance of the accrued contract receivables in the face of the foregoing represented yet another violation of GAAS. ii. Concentration of Credit Risk 195. Further, the Baker Tilly’s presentations to the Audit Committee from March 15, 2011 to May 8, 2013 are devoid of any indication that Baker Tilly analyzed the financial health, including creditworthiness, of customers regarding the accounts receivable. This is in the face of the high concentration of credit risk as the majority of the receivables were owned by a few customers and in a region of economic turmoil. Indeed, Deliotte’s conclusion that $111 million need to be written off was after it determined, as it presented to the Board, that Deloitte “many of the companies had reported troubling financial information, including evidence of bounced checks, legal orders against them, and other evidence of financial instability.” iii. Velti’s Lack of a Formula for Reserves 196. Even in the face of Velti’s lack of a formula for setting reserves, Baker Tilly failed to perform independent audit work to assess the collectability of both the Company’s accounts receivables and the adequacy of the Company’s reserves and instead relied on the representation of Velti sales employees that the Company had no historical collection problems and the outstanding receivables would be collected. 197. This blind reliance is even more inadequate in the face of the fact that the Company’s accounts receivables and DSOs were accelerating during the Class Period from already very high levels as of December 31, 2010. Given the increasing DSOs, it is clear that the historical performance of other receivables at Velti was not a valid metric for determining collectability and it was prudent for Baker Tilly to perform additional audit work to assess the collectability of the Company’s accounts receivables independently rather than to rely on the Company’s representation as to the collectability of the Company’s receivables. iv. Internal Controls 198. Moreover, Baker Tilly certified that Velti’s internal controls were effective in 2011 and that the problems previously identified had been fixed. Yet, internal control problems identified in 2010 were the same that led to the ultimate need to write-off $111 million in receivables, including the failure to properly reserve for uncollectable accounts receivable or to identify and calculate bad debts. Baker Tilly did not expand its review or heighten its scrutiny of Velti’s financial reporting in 2011, even when the Company itself had acknowledged material problems with its internal controls. v. Access to Documents 199. Baker Tilly had access to all appropriate information as suggested by its presentations to the Audit Committee. Indeed, that Baker Tilly had all appropriate documentation necessary to reach an informed and proper professional opinion is confirmed by CW 1, a former Director of Revenue from December 2009 through September 2012, traveled to Athens, Greece three times during 2010 for the express purpose of gathering Velti’s customer contracts for Baker Tilly, so that Baker Tilly could review the accounting for the contracts and conform it to U.S. GAAP. Baker Tilly was in the process of preparing the Company’s financials for the IPO. Likewise, former CFO Ross relayed that accounts receivable aging reports were provided to Baker Tilly on quarterly basis. These reports would identify the Greek receivables, by customers, and aged into brackets. 200. There can be no credible argument that Baker Tilly was anything other than clearly aware of the quarter-to-quarter reconciliations that the Company undertook concerning its accrued receivables and its trade receivables, because the Company announced periodically in public statements that it had engaged in these reconciliations. Even the most cursory of examinations or audit testing of the reconciliation process – again, as evidenced by Deloitte’s conclusions – would have revealed the rapidly burgeoning accrued receivables balances from troubled businesses in admittedly troubled regions, and an obvious failure to take an adequate reserve against these uncollectable accounts. 201. Moreover, according to interviews with directors on the Company’s Audit Committee, Baker Tilly was testing a large percentage of the Company’s receivables (as high as 90% by the Spring of 2013). Any suggestion that Baker Tilly did not know the origin, geographic concentration, or payment history of the Company’s customers defies credulity. Accordingly, Baker Tilly either knew, or, at the barest minimum, was deliberately recklessness in not knowing and not disclosing these material failures. 202. Had Baker Tilly followed GAAS and exercised due professional care in discharging their duties, they would have uncovered the Company’s collectability problems and insufficient reserves for trade receivables – as Deloitte was swiftly able to do with only the barest modicum of effort. By failing to approach their work with the required diligence – or even minimal skepticism – Baker Tilly failed to perform the audit in accordance with GAAS, a failure which resulted in a build-up of uncollectable receivables and which ultimately necessitated the $111 million write-off. 3. Deloitte’s Review 203. An additional indictment of Baker Tilly’s recklessness was how quickly Deloitte was able to complete its review and ascertain the need for Velti to write-down more than $111 million in receivables as uncollectible 204. Specifically, by December 2012, the Company’s cash flow situation had become dire. Indeed, at a December 14, 2012 Board meeting Moukas told the board that cash flow was “management’s first priority.” The Company’s cash flow problems did not improve; instead they extended into 2013, when they were noticed by the Company’s core lender, HSBC. The minutes of the Audit Committee’s June 3, 2013 meeting (where, almost ironically, it was agreed that a resolution reappointing Baker Tilly as the Company’s auditors would be proposed at the Company’s Annual General Meeting of Shareholders), state that a “lengthy discussion” took place surrounding a financial review of the Company’s books and records by HSBC. Additionally, HSBC had already requested the Company retain a financial advisor.14 205. As a result, shortly thereafter, Deloitte was hired by Velti to review and evaluate the Company’s Greek and Cyprus operations, with a specific eye to determining the 14 According to Ross, Hobley and Mann, upon his arrival at Velti, Ross planned to ultimately replace Baker Tilly as the Company’s auditor, believing the Company needed a “Big 4” auditing firm to give confidence to the market. Ross never had time – the Company was in crisis and battling to survive during his entire tenure. collectability of the Company’s outstanding receivables. According to Ross, the engagement stemmed from pressure by HSBC to ensure the Company complied with loan covenants, the failure of the Company’s internal cash collection efforts, and HSBC’s desire for an independent assessment of the Company’s receivables. In other words, by that point, it appeared that HSBC no longer trusted Velti’s reporting on accounts receivables as signed off by Baker Tilly. Moreover, within just months of joining Velti, Ross noted that a large red flag in that the top ten customers of Velti represented 65% of the Company’s outstanding receivables – a dangerous business concentration that radically heightened the Company’s exposure. 206. In two weeks, with access to the same information available to Baker Tilly, Deloitte presented its preliminary findings, which were ultimately confirmed in the final report. The Deloitte Report concluded, among other things, that: (i) a large amount of the Company’s receivables were very old; (ii) 85% of the outstanding receivables in Greece and Cyprus were owed by twenty-six customers; (iii) these receivables were uncollectible; and (iv) many of these customers were related. 207. According to interviews with the Settling Defendants, the Board was “shocked” at the findings of the Deloitte Report. Members of the Board claimed they were never told that such a large number of the outstanding receivables were held by incredibly small affiliated Greek companies. Nor had they been told – despite Baker Tilly’s review of 90% of the Company’s receivables – that $111 million of these same receivables were uncollectible and functionally worthless.15 208. The Deloitte Report recommended the $111 million write-down. According to the Settling Defendants, Baker Tilly signed off on the write-down without a fight. 15 Any suggestion that that the differing conclusions reached by Baker Tilly and Deloitte during their respective reviews was due to changes in market conditions in Greece and Cypress is implausible. First, Baker Tilly was and had been reviewing the receivables on an ongoing basis for years; it thus could not have been surprised by Deloitte’s findings. Second, the financial collapse in Greece and Cypress occurred years before, and were, if anything, winding down by the time of Deloitte’s review. C. Additional Allegations of Baker Tilly’s Scienter 1. SpinCo 209. According to the interviews of Mann and Hobley, Baker Tilly expressly approved of the “SpinCo” transaction, a proposed divestment intended to move assets from Greece, the Balkans, and select North African and Middle Eastern geographies for a minimum cash consideration. The receivables to be divested would come from customers with similar characteristics; high DSOs, rapidly deteriorating revenue and heavy capital expenditure requirements. Baker Tilly informed the Audit Committee that it would successfully help the Company achieve two goals. First, it would allow the Company to then focus on stable and quicker-paying high growth markets such as the U.S., the U.K., Western Europe and Asia. Second, it would permit the Company to move the divested assets off of the Company’s balance sheet. 210. Baker Tilly’s blessing of the plan to use SpinCo started a massive undertaking by the Company. According to interviews with directors on the Audit Committee and Moukas, throughout the summer of 2012, thousands of man-hours, from all levels of the Company including senior management and directors, were dedicated to the painstaking effort of sifting through the Company’s receivables to determine which would be spun off and therefore no longer weigh down the Company’s financials. 211. In furtherance of executing the SpinCo transaction, the Company created a committee consisting of Mann, Phokion Potamianos, Mari Baker and Moukas to consider and approve the divestment. After hundreds (if not thousands) of man hours were spent on the SpinCo transaction, Velti eventually retained KPMG to opine on it. 212. Stunningly, and in contrast to the representations and advice of Baker Tilly, according to Mann and Hobley, in late 2012, KPMG informed the Company that, while the SpinCo transaction could go forward, the divested assets could not be moved off the Company’s financial statements. Instead, according to KPMG, they would still need to be reported in the Company’s consolidated financials, a result which obviated the very purpose underlying the transaction; divestiture of unfavorable customers from Velti’s books. It is inconceivable that an audit firm would be unable to advise a company regarding a sale of a subsidiary. 213. The bombshell precipitated a flood of action at the Company. The Audit Committee met on September 6, 2012 to discuss the “balance sheet classification impact” of the news, and the Audit Committee further discussed the “changes to the structure” of the SpinCo transaction at an October 8, 2012 meeting. Finally, even Baker Tilly admitted that the SpinCo transaction could only proceed as described by KPMG. Specifically, according to Audit Committee meeting minutes from May 8, 2013, Baker Tilly acknowledged that Starcapital (the name for the entity that would serve as the parent of the SpinCo assets) was required to be reported as a variable interest entity (“VIE”) and its results were to be consolidated with Velti’s. 214. According to directors on the Audit Committee interviewed by Lead Counsel, no less than $11 million of the eventual $111 million write-down is traceable directly to SpinCo. Further, that during the contemplation of the Spinco Sale the average DSO for SpinCo was 450 days; by the time of the write-off approximately a year from the proposed transaction, the DSO for Spinco was approximately 800 Days. 215. Other facts support a strong inference that Baker Tilly knew and/or was deliberately reckless in disregarding that the Company was improperly accounting for receivables. 216. First, the sheer size of Velti’s write-down provides additional evidence of Baker Tilly’s scienter. In fact, the $111 million write-off was greater than the total revenue recognized by the Company year to date. Such problems do not merely appear overnight, and were so obvious that they could not have been missed by a reasonably diligent (or any) auditor. 217. Second, on November 14, 2012, Velti announced that it was taking back $5.1 million in factored receivables. This indicates that senior management was aware that receivables were uncollectable and served as an inescapably obvious red flag – for Baker Tilly – with respect to the problems afflicting the balance of Velti’s receivables. Indeed, it is highly unusual for a Company to reclaim factored receivables and it is an indication that the receivable was not collectable. 2. Velti’s DSO Number Prior to May 2012 218. Prior to May 2012, Velti understated its DSO number by using only the time between when the customer was actually invoiced and payment was made (its trade receivables). Critically, Velti excluded receivables for the significant period of time (which was constantly growing throughout the Class Period) between when Velti booked a sale as revenue and when the customer was actually invoiced (its accrued receivables). The Company was thereby able to portray a materially shorter DSO, which misled investors to believe that Velti was converting sales into cash much faster than it actually was. 3. The Company’s Collection Problems Were Apparent 219. As already discussed, the Deloitte Report confirms that Velti’s collection problems were easily identifiable and had been severe and ongoing for years. This is not inconsistent with the very reports that Baker Tilly received as early as February, 2011. Further, Deloitte concluded that the VTRIP Entities were related and should be treated as a single customer. A single customer that accounted for a majority of the Company’s receivables with an average DSO of over 700 days required larger reserves. This was more than sufficient to illustrate to any auditor that the Company had serious collection problems that were not going to improve. 220. Indeed, according to the Deloitte Report, the Company’s write-down was due to the vast majority of receivables of Velti’s top 26 customers which owed 85% of the $192 million in Greek and Cyprus receivables (i.e. to subsidiaries Velti SA and Velti PS), of which 10 customers owed 65%. Moreover, 8 of these 10 customers were actually just 2 related customers. As detailed in the charts accompanying the Deloitte Report, these top 26 customers and the accounts receivable attributed to them as of June 10, 2013 were: CUSTOMER TOTAL ACCRUED RECEIVABLE16 TOTAL TRADE RECEIVABLE17 TOTAL ACCOUNTS RECEIVABLE $45.3 million $28.9 million $74.2 million The VTRIP Group (consisting of Virtual Trip Ltd., Epignosis Ltd., Next Generation Learning Services S.A., MVision S.A., Infomap S.A., and IT Center S.A) $15.6 million $11.3 million $26.9 million The GLOBO Group (consisting of Globo Group and Profitel S.A.) Docusystems SA $2.3 million $16.6 million $18.9 million Trollectoria $1.1 million $4.1 million $5.2 million TS Consulting LTD $3.3 million $1.5 million $4.8 million Ministry of Development $4.4 million $4.4 million Voda Fone – Pana Fon SA $2.8 million $.3 million $3.1 million $2.9 million $2.9 million General Secretary of Research & Development Data Concept SA $1.8 million $.4 million $2.2 million H&S Technology $2.3 million $.5 million $2.8 million MD Newray Consulting Limited Cyprus $.3 million $1.8 million $2.1 million Toxilero Trading Ltd – Cyprus $.3 million $1.7 million $2 million Brfolg Holding Ltd $2 million $2 million Senecio Enterprises Ltd – Cyprus $.3 million $1.8 million $2.1 million Para Do Poulos Nikolaob $.4 million $1.5 million $1.9 million Kripo Tes Georgios Ltd $.4 million $1.1 million $1.5 million Tesseris Dimitrios Ltd $.4 million $1 million $1.4 million Praeus Bank $1.4 million $.1 million $1.5 million 16 This includes accrued receivables for non-government as of May 31, 2013 and accrued receivable for government as of May 31, 2013. 17 This includes post dated checks as of June 10, 2013 and outstanding open receivables as of June 10, 2013. Amplus SA $.8 million $1.7 million $2.5 million Information Society $1.2 million $1.2 million TOTAL $79 million $84.8 million $163. 8 million 221. The fact that almost half of these receivables were accrued - thus unbilled and not yet reconciled with the customers – is significant as Baker Tilly’s procedures primarily tested trade receivables, not accrued receivables. Indeed, Baker Tilly’s Audit Committee presentations indicate that Baker Tilly’s review for collectability primarily consisted of cash collections - i.e., the percentage of invoices that is paid – which could not be used for unbilled receivables. Therefore, even the insufficient testing of receivables Baker Tilly performed did not test accrued receivables. Yet, Velti did not have any reserve for accrued receivables until Q4 2012 and thereafter, only a minimal $1 million reserve for accrued receivables. 222. Furthermore, as stated in Velti’s minutes of the July 11, 2013 Board of Directors meeting, Deloitte informed the board that “Deloitte had reviewed the data [for these top customers] by category, including post-dated checks, accrued receivables and outstanding amounts, as well as public information available about the financial health of each customer, and the status of the days sales outstanding (DSO).” Deloitte “confirmed that many of the companies had reported troubling financial information, including evidence of bounced checks, legal orders against them, and other evidence of financial instability.” Yet, Baker Tilly’s presentations to the Audit Committee are devoid of any indication that Baker Tilly analyzed the financial health, including creditworthiness, of customers. 223. Furthermore, at the July 11, 2013 Board of Director meeting, Deloitte stated that “the average DSO of the VTRIP group is over 700 days…” (emphasis added). Thus, the average of the $74.2 million in receivables owed from VTRIP was over 700 days old. Therefore, on average these receivables had been outstanding since approximately July 2011, some of which were even older as the 700 days is the average. Moreover $45.3 million of these old receivables was accrued receivables, which, as discussed above, were subject to minimal, if any, testing. 224. Baker Tilly’s conduct is even more improper in the face of the fact that the Company’s accounts receivables and DSOs were accelerating during the Class Period, particularly in the first quarter of 2012. Based on these continuous increases which were red flags that Baker Tilly ignored – it was prudent for Baker Tilly to perform additional audit work to assess the collectability of the Company’s accounts receivables independently rather than to rely on the Company’s representation as to the collectability of the Company’s receivables. The below chart reflects the increase in accounts receivables and DSO: Quarter DSO Comprehensive DSO Accrued Trade and Accrued AR in millions Q4-2010 121 N/A 33.6 72.7 Q1-2011 113 N/A 34.9 75.7 Q2-2011 79 N/A 34.1 66.0 Q3-2011 82 N/A 42.4 79.0 Q4-2011 86 261 98.2 170.0 Q1-2012 116 272 103.3 188.8 Q2-2012 N/A 266 75.1 183.2 Q3-2012 N/A 242 72.0 181.5 Q4-2012 N/A 311 134.0 291.0 Q1-2013 N/A 309 137.5 293.0 Q2-2013 N/A N/A 118.6 271.7 225. While checking the creditworthiness of customers might not be standard or necessary in all cases, given the increasing DSOs, it becomes clear that the historical performance of other receivables at Velti was not a valid metric for determining collectability. Indeed, when Deloitte checked the collectability of these same receivables, it determined that a huge write down was necessary. 226. Baker Tilly also ignored the Company’s growing accrued contract receivable balance. Although the reported accrued contract receivables balance made up a sizable portion of the Company’s outstanding accounts receivable in 2012 and 2013 (a fact that Baker Tilly could not ignore), it nevertheless did not perform additional audit procedures to assess the collectability of the Company’s accrued contract receivables. Ultimately, approximately 69% of the reserves were recorded for the Company’s accrued contract receivables as evidenced, according to the Velti’s June 30, 2013 press release. Baker Tilly’s failure to pursue additional investigation in the face of the foregoing represented yet another violation of GAAS. 227. Had Baker Tilly followed GAAS and exercised due professional care in discharging its duties, it would have uncovered the Company’s collectability problems and insufficient reserves for trade receivables – as Deloitte was swiftly able to do with only the barest modicum of effort. By failing to approach its work with the required diligence – or even minimal skepticism – Baker Tilly failed to perform the audit in accordance with GAAS, a failure which resulted in a build-up of uncollectable receivables and which ultimately necessitated the $111 million write-off. D. The Greek and Cypriot Economic Crises Cannot Excuse Baker Tilly 228. Any suggestion that Baker Tilly did not know of the impact of the Greek and Cypriot economic crises until at or after the end of the Class Period is nonsense. The Cypriot banking crisis was in full force and widely reported by the start of 2013 and the Greek economic crisis was in full swing by 2010, well before the IPO. The Greek economic crisis did not suddenly occur in 2013; it was well known to anyone paying even passing attention to the news – and certainly inescapable to any business operating in the region, let alone one that relies on the region for two thirds of its revenues. Velti’s suggestion that the sudden need for a massive write-off in 2013 was due to a rapidly emergent financial crisis at that time simply belies even the most generous credibility. In truth, what really happened is that by August 2013, after Deloitte properly evaluated the Company’s accounts receivables (including the collectability of these customers), these problems could no longer be concealed, and the Company had to disclose them. Indeed, such problems were well-known by Baker Tilly as early as February, 2011. 229. On November 14, 2012, Velti announced that it had decided to divest its Greek and Balkan subsidiaries attributing the move to the troubled economies of these regions, and emphasized that the majority of Velti’s revenue was now derived from customers in the U.S. and the U.K. According to the press release: Velti also announced today that it has entered into an agreement to divest certain declining assets, focused on geographies and customers with worsening economic and demand characteristics, to a group led by local, non-executive management and comprising approximately 75 employees in total. These assets are characterized by very long revenue collection cycles (DSOs: approximately 450 days),18 are located in troubled economies, and have heavy capital expenditure requirements. Key aspects of the transaction: * * * • Revenue from geographies characterized by high-DSOs, including the PIIGS countries, and other North African and Middle Eastern countries is expected to decline to 2 to 3 percent of total revenue for fiscal year 2013; * * * • As a result of the divestiture and other operational improvements, Velti is targeting comprehensive DSOs below 180 days by Dec. 31, 2013; • Revenue from the Americas and U.K., as a percentage of total revenue, are expected to increase to 55 to 60 percent in fiscal year 2012 and to 65 to 70 percent of total revenue in fiscal year 2013; and • Velti’s 2013 and 2014 revenue growth rates are expected to increase to the mid-30 percent range in both years (2013 versus pro forma 2012, excluding divested assets). (emphasis added). 230. In the same press release former defendant Moukas represented that the move was intended to remove “economically challenged geographies” from the Company’s books, specifically Greece and the Balkans. 231. Given that Baker Tilly was the Company’s auditor (and represented that it reviewed the collectability of the accounts of the Company’s customers and received reports showing just how overdue those accounts were), it follows that it knew the location of the Company’s customers and the impact that the Greek and Cypriot crises would have on Velti. By knowing this information, yet still certifying the Company’s financial results and failing to apprise the public of this lie and its impact, Baker Tilly actionably violated the Exchange Act. 18 All emphasis added unless otherwise noted. VIII. THE CLASS PERIOD ENDING DISCLOSURES 232. On August 20, 2013, Velti issued a press release announcing 2Q2013 financial results. In the release, former defendant Moukas revealed that during the quarter, Velti “began a major restructuring effort” to cut costs and reduce capital expenditures. Moukas also delivered the stunning news that notwithstanding Velti’s previously announced divestiture of its business with customers in Greece and Cyprus, those customers “continued to account for a significant portion of the Company’s outstanding receivables,” and “[d]ue to a deterioration in collections from these customers, and indications that future payments were at risk, we made the decision to write-down more than $100 million in outstanding receivables.” 233. The press release further revealed that Velti engaged an investment bank to help sell Mobclix, its supply-side U.S. advertising business, that Velti engaged Deloitte Financial Advisory Services to evaluate the collectability of receivable due from customers in Greece and Cyprus. Moreover, the Company revealed that 2Q2013 revenues and free cash flow were substantially below prior quarters. 234. That same day, Velti held a conference call with investors after the market close to discuss its second quarter 2013 results in which the Company made additional shocking revelations. Specifically, former defendant Ross revealed for the first time, and contrary to prior Defendants’ representations, that customers in Greece and Cyprus “still held approximately two- thirds of our outstanding accounts receivable and accrued revenues.” 235. On the call, a Wells Fargo Securities, LLC analyst questioned Defendant Ross about the seeming inconsistence between Moukas’ prior statements, and the Company’s latest revelations: Q: Peter Stabler – Wells Fargo Securities, LLS – Analyst … A couple of questions for Jeff. Can you help me reconcile a couple of things here, or at least tell me what I’m misunderstanding here? In the past, Alex, you referred to your exposure to Greece from a revenue perspective as being in the high-single-digit percent. Yet, with the write-down here, we’re being told that it’s attributable almost entirely to Greek-related revenues. . . Can you help me reconcile why this is such a large number tied to such a small economy? . . . In response, Ross made the further shocking admissions: (i) that the $111 million in receivables being written off were “substantially old” and had been on Velti’s books since “before even 2012,” and (ii) that Velti, at worst blatantly lied in its SEC filings and public statements, and at best blatantly misled investors by presenting revenue and receivables based on the location or jurisdiction of the parent corporation rather than the country where the subsidiaries or business was located: A: Jeff Ross – Velti PLC - CFO … These receivables, in many instances, are substantially old, accounting for our significant overall DSO. Many of the receivables we’re writing off relate to time periods before even 2012, although some relate into 2012. When we have internally and in SEC filings consistent with guidance reported revenue, it’s been based on the location, the jurisdiction of the corporation of most of the companies, especially when we did business with them in multiple geographies. The revenue exposure from a technical SEC perspective was less than probably the business exposure that was at a higher level, along with the fact that some of these are significantly old. 236. Thus, Ross admitted that Velti’s SEC filings and press releases misrepresented the true source of Velti’s revenue, understated Velti’s true exposure to its business in Greece and Cyprus, and that Velti was carrying a very large balance of uncollectable receivable from customers in Greece and Cyprus on its books for the entire Class Period. 237. Moreover, the Company revealed on the conference call, and contrary to prior public statements, that Velti was not having success growing its North American business, particularly its advertising business. Defendants attributed that failure in substantial part to Velti’s “failure to make timely payments to publishers on [its] Mobclix ad exchange business, which resulted in a substantial decline in that business.” Defendants also announced that Velti engaged an investment banker “to sell the remainder of [its] U.S. advertising business also known as Mobclix.” 238. Velti is now defunct. IX. LOSS CAUSATION 239. Baker Tilly’s and the Underwriter Defendants’ wrongful conduct, as alleged herein, directly and proximately caused the economic loss suffered by Plaintiffs and the Class. 240. During the Class Period, Plaintiffs and the Class purchased or acquired Ve1ti’s securities at artificially inflated prices and were damaged thereby. The price of the Company’s securities significantly declined when the misrepresentations made to the market, and/or the information alleged herein to have been concealed from the market, and/or the effects thereof, were revealed, causing investors’ losses. Following the disclosure of the massive $111 million write-down, Velti common stock declined by more than 66% to close on August 21, 2013, at $0.34 per share, on heavy trading volume. X. SCIENTER 241. As alleged herein, and except as with respect to Plaintiffs’ claims alleged under and/or pursuant to the Securities Act, which are expressly disclaimed with respect to scienter, Baker Tilly acted with scienter, as discussed herein, in that Baker Tilly knew that the public documents and statements issued or disseminated in the name of the Company were materially false and/or misleading; knew that such statements or documents would be issued or disseminated to the investing public; and knowingly and substantially participated or acquiesced in the issuance or dissemination of such statements or documents as primary violations of the federal securities laws. As set forth elsewhere herein in detail, Baker Tilly, by virtue of their receipt of information reflecting the true facts regarding Velti, and their certification of the Company’s financial results, internal controls, and compliance with GAAP, participated in the fraudulent scheme alleged herein. XI. UNDISCLOSED ADVERSE FACTS 242. The market for Velti’s securities was open, well-developed and efficient at all relevant times. As a result of these materially false and/or misleading statements, and/or failures to disclose, Velti’s securities traded at artificially inflated prices during the Class Period. Plaintiffs and other members of the Class purchased or otherwise acquired Velti’s securities relying upon the integrity of the market price of the Company’s securities and market information relating to Velti, and have been damaged thereby. 243. During the Class Period, the investing public was materially misled, thereby inflating the price of Velti’s securities, by publicly issuing false and/or misleading statements and/or omitting to disclose material facts necessary to make Baker Tilly’s and the Underwriter Defendants’ statements, as set forth herein, not false and/or misleading. Said statements and omissions were materially false and/or misleading in that they failed to disclose material adverse information and/or misrepresented the truth about Velti’s business, operations, and prospects as alleged herein. 244. At all relevant times, the material misrepresentations and omissions particularized in this Complaint directly or proximately caused or were a substantial contributing cause of the damages sustained by Plaintiffs and other members of the Class. As described herein, during the Class Period, Baker Tilly and the Underwriter Defendants made or caused to be made a series of materially false and/or misleading statements about Velti’s financial well-being and prospects. These material misstatements and/or omissions had the cause and effect of creating in the market an unrealistically positive assessment of the Company and its financial well-being and prospects, thus causing the Company’s securities to be overvalued and artificially inflated at all relevant times. Defendants’ materially false and/or misleading statements during the Class Period results in Plaintiffs and other members of the Class purchasing the Company’s securities at artificially inflated prices, thus causing the damages complained of herein. XII. APPLICABILITY OF PRESUMPTION OF RELIANCE WITH RESPECT TO EXCHANGE ACT CLAIMS 245. Plaintiffs are entitled to a presumption of reliance under Affiliated Ute Citizens of Utah v. United States, 406 U.S. 1288 (1972) because the claims asserted herein against Defendants are predicated upon omissions of material fact which there was a duty to disclose. 246. In the alternative, Plaintiffs are entitled to a presumption of reliance on the material misrepresentations and omissions at issue in this case pursuant to the fraud on the market doctrine for the following reasons set forth below. 247. The market for Velti’s securities was open, well-developed and efficient at all relevant times. As a result of the materially false and/or misleading statements and/or failures to disclose, Velti’s securities traded at artificially inflated prices during the Class Period, Plaintiffs and other members of the Class purchased or otherwise acquired the Company’s securities relying upon the integrity of the market price of Velti’s securities and market information relating to Velti, and have been damaged thereby. 248. During the Class Period, the artificial inflation of Velti’s stock was caused by the material misrepresentation and omissions particularized in this Complaint caused the damages sustained by Plaintiffs and other members of the Class. As described herein, during the Class Period, Baker Tilly and the Underwriter Defendants made or caused to be made a series of materially false and/or misleading statements about Velti’s business, prospects, and operations. These material misstatements and/or omissions created an unrealistically positive assessment of Velti and its business, operations, and prospects, thus causing the price of the Company’s securities to be artificially inflated at all relevant times, and when disclosed negatively affected the value of the Company stock. These materially false and/or misleading statements during the Class Period resulted in Plaintiffs and other members of the Class purchasing the Company’s securities at such artificially inflated prices, and each of them has been damaged as a result. 249. At all relevant times, the market for Velti’s securities was an efficient market for the following reasons, among others: (a) Velti stock met the requirements for listing, and was listed and actively traded on the NASDAQ, a highly efficient and automated market; (b) As a regulated issuer, Velti filed periodic public reports with the SEC and/or the NASDAQ; (c) Velti regularly communicated with public investors via established market communication mechanisms, including through regular dissemination of press releases on the national circuits of major newswire services and through other wide-ranging public disclosures, such as communications with the financial press and other similar reporting services; and/or (d) Velti was followed by securities analysts employed by brokerage firms who wrote reports about the Company, and these reports were distributed to the sales force and certain customers of their respective brokerage firms. Each of these reports was publicly available and entered the public marketplace. 250. As a result of the foregoing, the market for Velti’s securities promptly digested current information regarding Velti from all publicly available sources and reflected such information in Velti’s stock price. Under these circumstances, all purchasers of Velti’s securities during the Class Period suffered similar injury through their purchase of Velti’s securities at artificially inflated prices and a presumption of reliance applies. XIII. NO SAFE HARBOR 251. The statutory safe harbor provided for forward-looking statements under certain circumstances does not apply to any of the allegedly false statements pleaded in this Complaint. The statements alleged to be false and misleading herein all relate to then-existing facts and conditions. In addition, to the extent certain of the statements alleged to be false may be characterized as forward looking, they were not identified as “forward-looking statements” when made and there were no meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those in the purportedly forward-looking statements. In the alternative, to the extent that the statutory safe harbor is determined to apply to any forward-looking statements pleaded herein, Baker Tilly is liable for those false forward- looking statements because at the time each of those forward-looking statements was made, the speaker had actual knowledge that the forward-looking statement was materially false or misleading. In addition, no safe harbor protection is available for oral or written statements (including the IPO Registration Statements) made in connection with the IPO. XIV. CLASS ACTION ALLEGATIONS 252. Plaintiffs bring this action as a class action pursuant to Federal Rules of Civil Procedure, rules 23(a) and (b)(3) on behalf of all persons who purchased or otherwise acquired Velti’s securities between January 27, 2011 and August 20, 2013, inclusive, the Class Period, seeking to pursue remedies under the Exchange Act. Plaintiffs also bring this action as a class action pursuant to Rules 23(a) and (b)(3) on behalf of a class consisting of all persons who purchased or otherwise acquired the securities of Velti pursuant and/or traceable to the Company’s registration statements and prospectuses issued in connection with the Company’s January 28, 2011 IPO, and/or pursuant and/or traceable to the Company’s registration statement and prospectuses issued in connection with the Company’s June 14, 2011 SPO, seeking to pursue remedies under the Securities Act, collectively the Class. Excluded from the Class are the former Defendants, Baker Tilly and the Underwriter Defendants, as well as the officers and directors of the Company, at all relevant times, members or their immediate families and their legal representatives, heirs, successors or assigns and any entity in which Baker Tilly and the Underwriter Defendants or former Defendants have or had a controlling interest. 253. The members of the Class are so numerous that joinder of all members is impracticable. Throughout the Class Period, Velti’s securities were actively traded on the NASDAQ Stock Exchange (the “NASDAQ”). While the exact number of Class members is unknown to Plaintiffs at this time and can only be ascertained through appropriate discovery, Plaintiffs believe that there are hundreds or thousands of members in the proposed Class. Millions of Velti shares were traded publicly during the Class Period on the NASDAQ. As of March 31, 2013, the Company had 65,622,141 shares of common stock outstanding. Record owners and other members of the Class may be identified from records maintained by Velti or its transfer agent and may be notified of the pendency of this action by mail, using the form of notice similar to that customarily used in securities class actions. 254. Plaintiffs’ claims are typical of the claims of the members of the Class as all members of the Class are similarly affected by Baker Tilly’s and the Underwriter Defendants’ wrongful conduct in violation of federal law that is complained of herein. 255. Plaintiffs will fairly and adequately protect the interests of the members of the Class and have retained counsel competent and experienced in class and securities litigation. 256. Common questions of law and fact exist as to all members of the Class and predominate over any questions solely affecting individual members of the Class. Among the questions of law and fact common to the Class are: (a) Whether Baker Tilly and the Underwriter Defendants violated the federal securities laws by their acts as alleged herein; (b) Whether statements made Baker Tilly and the Underwriter Defendants to the investing public during the Class Period omitted and/or contained untrue material facts; and (c) To what extent the members of the Class have sustained damages and the proper measure of damages. 257. A class action is superior to all other available methods for the fair and efficient adjudication of this controversy since joinder of all members is impracticable. Furthermore, as the damages suffered by individual Class members may be relatively small, the expense and burden of individual litigation makes it impossible for members of the Class to individually redress the wrongs done to them. There will be no difficulty in the management of this action as a class action. XV. CLAIMS FOR RELIEF COUNT I Violation of Section 11 of the Securities Act (Against Baker Tilly and the Underwriter Defendants) 258. Plaintiffs repeat and re-allege each and every allegation above except for those alleging fraud. 259. This Count is brought pursuant to Section 11 of the Securities Act, 15 U.S.C. §77k, on behalf of the Class, against Baker Tilly and the Underwriter Defendants. This particular cause of action is based on Baker Tilly and the Underwriter Defendants’ lack of reasonable care, not fraud or intentional or reckless misconduct. 260. The Registration Statements for the IPO and SPO were inaccurate and misleading, contained untrue statements of material facts, omitted to state other facts necessary to make the statements made not misleading, and omitted to state material facts required to be stated therein. 261. Velti was the registrant for the IPO and SPO. Baker Tilly and the Underwriter Defendants were responsible for the contents and dissemination of the IPO and SPO Registration Statements. 262. Further, Baker Tilly audited Velti’s financial statements for the three years in the period ended December 31, 2009, and provided an unqualified Report of Independent Registered Public Accounting Firm with respect to the financial statements and financial statement schedule of Velti, dated August 3, 2010 and September 3, 2010 (the “Baker Tilly Report”), which was incorporated by reference in the Registration Statements. Baker Tilly expressly consented to the use of its name and the Baker Tilly Report in the Registration Statements and provided a letter dated August 3, 2010 and September 3, 2010 for inclusion in the Registration Statements and, which consented to the reference to Baker Tilly and to the incorporation by reference of the Baker Tilly Report. 263. Neither Baker Tilly nor the Underwriter Defendants made a reasonable investigation or possessed reasonable grounds for the belief that the statements contained in the IPO and SPO Registration Statements were true and without omissions of any material facts and were not misleading. This claim is not based on and does not sound in fraud. For purposes of asserting this claim under the Securities Act, Plaintiffs do not allege that Baker Tilly and the Underwriter Defendants acted with fraudulent intent, which are not elements of a Section 11 claim. 264. By reasons of the conduct herein alleged, Baker Tilly and the Underwriter Defendants violated, and/or controlled a person who violated Section 11 of the Securities Act. 265. Plaintiffs assert this claim on behalf of the members of the Class who purchased and/or acquired Velti shares pursuant and/or traceable to the Registration Statement for the IPO and/or the SPO. 266. The Class has sustained damages. The value of Velti common stock has declined substantially subsequent to and due to Defendants’ violations. On or about December 16, 2013, Velti stock was voluntarily delisted from NASDAQ. 267. Less than one year elapsed between the time that Plaintiffs discovered or reasonably could have discovered the facts upon which this complaint is based and the time that the first complaint was filed asserting claims arising out of the falsity of each of the Registration Statements. Less than three years elapsed between the time that the securities at issue were bona fide offered to the public and the time that the first complaint was filed asserting claims arising out of the falsity of each of the Registration Statements. COUNT II For Violations of Section 12(a)(2) of the Securities Act (Against The Underwriter Defendants) 268. Plaintiffs repeat and re-allege each and every allegation above except for those alleging fraud. 269. This Count is asserted against the Underwriter Defendants for violations of Section 12(a)(2) of the Securities Act, 15 U.S.C. § 771(a)(2), on behalf of all members of the Class who purchased or otherwise acquired Velti common stock in the Offerings and were damaged thereby. 270. This particular cause of action is based on Underwriter Defendants lack of reasonable care, not fraud or intentional or reckless misconduct. For purposes of asserting this claim under the Securities Act, Plaintiffs do not allege that the Underwriter Defendants acted with scienter or fraudulent intent which are not elements of a Section 12(a)(2) claim. 271. The Underwriter Defendants were sellers of Velti common stock within the meaning of the Securities Act because they: (i) transferred title to St. Paul, Borreani, and/or other members of the Class who purchased in the IPO and SPO; and (ii) solicited the purchase of the common stock by St. Paul, Borreani, and other members of the Class and were financially benefitted thereby, including but not limited to receiving underwriting fees, commissions or discounts in connection with the IPO and SPO. The Registration Statements contained untrue statements of material fact and omitted other facts necessary to make the statements not misleading, and failed to disclose material facts, as set forth herein. 272. The Underwriter Defendants used the means and instrumentalities of interstate commerce and the U.S. mail. 273. The Underwriter Defendants are unable to establish an affirmative defense based upon a reasonable or diligent investigation of the statements contained in the Registration Statements. The Underwriter Defendants did not make a reasonable investigation or possess reasonable grounds to believe that the statements contained therein and incorporated by reference in the Registration Statements at the time of the IPO and SPO were true and that there were no omissions of any material fact. Accordingly, each of the Underwriter Defendants are liable to St. Paul, Borreani, and/or other members of the Class who purchased in the IPO and SPO in which that Defendant acted as an underwriter. 274. St. Paul, Borreani, and other members of the Class purchased or otherwise acquired Velti common stock issued in the IPO and SPO and sold by the Underwriter Defendants pursuant to materially inaccurate Registration Statements and did not know, or in the exercise of reasonable diligence could not have known, of the untruths and omissions contained therein. 275. The value of Velti common stock declined substantially subsequent to the consummation of the IPO and SPO and St. Paul, Borreani, and the other members of the Class have sustained damages. Further, and as noted, above, Velti stock has been delisted from NASDAQ. 276. Less than one year elapsed between the time that Plaintiffs discovered or reasonably could have discovered the facts upon which this complaint is based and the time that the first complaint was filed asserting claims arising out of the falsity of each of the Registration Statements. Less than three years elapsed between the time that the securities at issue were bona fide offered to the public and the time that the first complaint was filed asserting claims arising out of the falsity of each of the Registration Statements. 277. By reason of the foregoing, the Underwriter Defendants are liable under Section 12(a)(2) of the Securities Act to St. Paul, Borreani, and the other members of the Class who purchased in the IPO and SPO. St. Paul, Borreani, and other members of the Class have the right to rescind and recover the consideration paid for their securities on which they suffered damages. In addition, St. Paul, Borreani and the members of the Class who have sold and suffered damages on their securities that they originally purchased through the IPO and SPO are entitled to rescissory damages. COUNT III Violation of Section 10(b) of The Exchange Act and Rule 10b-5 Promulgated Thereunder (Against Baker Tilly) 278. Plaintiffs repeat and re-allege each and every allegation above. 279. During the Class Period, Baker Tilly carried out a plan, scheme and course of conduct which was intended to and, throughout the Class Period, did: (i) deceive the investing public, including Plaintiffs and other Class members, as alleged herein; and (ii) cause Plaintiffs and other members of the Class to purchase Velti’s securities at artificially inflated prices. In furtherance of this unlawful scheme, plan and course of conduct, Defendants, and each of them, took the actions set forth herein. 280. Baker Tilly: (i) employed devices, schemes, and artifices to defraud; (ii) made untrue statements of material filet and/or omitted to state material facts necessary to make the statements not misleading; and (iii) engaged in acts, practices, and a course of business which operated as a fraud and deceit upon the purchasers of the Company’s securities in an effort to maintain artificially high market prices for Velti’s securities in violation of Section 10(b) of the Exchange Act and Rule 10b-5. Defendants Velti, Baker Tilly and the Officer Defendants are sued either as primary participants in the wrongful and illegal conduct charged herein or as controlling persons as alleged below. 281. Baker Tilly directly and indirectly, by the use, means or instrumentalities of interstate commerce and/or of the mails, engaged and participated in a continuous course of conduct to conceal adverse material information about Velti’s financial well-being and prospects, as specified herein. 282. Baker Tilly employed devices, schemes and artifices to defraud, while in possession of material adverse non-public information and engaged in acts, practices, and a course of conduct as alleged herein in an effort to assure investors of Velti’s value and performance and continued substantial growth, which included the making of or the participation in the making of untrue statements of material facts and/or omitting to state material facts necessary in order to make the statements made about Velti and its business operations and future prospects in light of the circumstances under which they were made, not misleading, as set forth more particularly herein, and engaged in transactions, practices and a course of business which operated as a fraud and deceit upon the purchasers of the Company’s securities during the Class Period. 283. Baker Tilly had actual knowledge of the misrepresentations and/or omissions of material facts set forth herein, or acted with deliberate recklessness and disregard for the truth in that they failed to ascertain and to disclose such facts, even though such facts were available to them. Such Defendants’ material misrepresentations and/or omissions were done knowingly or with deliberate recklessness and for the purpose and effect of concealing Velti’s financial well- being and prospects from the investing public and supporting the artificially inflated price of its securities. As demonstrated by Baker Tilly’s overstatements and/or misstatements of the Company’s business, operations, financial well-being, and prospects throughout the Class Period, Baker Tilly if it did not have actual knowledge of the misrepresentations and/or omissions alleged, was deliberately reckless in failing to obtain such knowledge by deliberately refraining from taking those steps necessary to discover whether those statements were false or misleading. 284. As a result of the dissemination of the materially false and/or misleading information and/or failure to disclose material facts, as set forth above, the market price of Velti’s securities was artificially inflated during the Class Period. In ignorance of the fact that market prices of the Company’s securities were artificially inflated, and relying directly or indirectly on the false and misleading statements made by Baker Tilly, or upon the integrity of the market in which the securities trades, and/or in the absence of material adverse information that was known or with deliberate recklessness disregarded by Baker Tilly but not disclosed in public statements by them during the Class Period, Plaintiffs and the other members of the Class acquired Velti’s securities during the Class Period at artificially high prices and were damaged thereby. 285. At the time of said misrepresentations and/or omissions, Plaintiffs and other members of the Class were ignorant of their falsity, and believed them to be true. Had Plaintiffs and the other members of the Class and the marketplace known the truth regarding the problems that Velti was experiencing, which were not disclosed by Baker Tilly, Plaintiffs and other members of the Class would not have purchased or otherwise acquired their Velti securities, or, if they had acquired such securities during the Class Period, they would not have done so at the artificially inflated prices which they paid. 286. By virtue of the foregoing, Baker Tilly has violated Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder. 287. As a direct and proximate result of Baker Tilly’s wrongful conduct, Plaintiffs and the other members of the Class suffered damages in connection with their respective purchases and sales of the Company’s securities during the Class Period. 288. Less than two years elapsed between the time that Plaintiffs discovered or reasonably could have discovered the facts upon which this complaint is based and the time that the first complaint was filed asserting claims arising out of the conduct alleged herein. Less than five years elapsed between the time that Defendants’ actionable conduct occurred and the time that the first complaint was filed asserting claims in connection therewith. PRAYER FOR RELIEF WHEREFORE, Plaintiffs pray for relief and judgment, as follows: A. Determining that this action is a proper class action under Rule 23 of the Federal Rules of Civil Procedure; B. Awarding compensatory damages in favor of Plaintiffs and the other Class members, injunctive relief, rescission, and disgorgement of all ill-gotten gains and/or proceeds of stock sales against all Defendants, jointly and severally, for all damages sustained as a result of Defendants’ wrongdoing in an amount to be proven at trial, including interest thereon; C. Awarding Plaintiffs, the Class their reasonable costs and expenses incurred in this action, including counsel fees and expert fees; D. Requiring the imposition of additional corporate governance measures at Velti to prevent future recurrences of the conduct alleged herein; and E. Such other and further relief as the Court may deem just and proper. JURY TRIAL DEMANDED Pursuant to Rule 38(b) of the Federal Rules of Civil Procedure, Plaintiffs hereby demand a trial by jury of all issues that may be so tried. DATED: April 13, 2015 THE WEISER LAW FIRM, P.C. /s/ Christopher L. Nelson Christopher L. Nelson Christopher L. Nelson (admitted Pro Hac Vice) Robert B. Weiser (admitted Pro Hac Vice) James M. Ficaro 22 Cassatt Avenue, First Floor Berwyn, PA 19312 Telephone: (610) 225-2677 Facsimile: (610) 408-8062 rbw@weiserlawfirm.com cln@weiserlawfirm.com jmf@weiserlawfirm.com -- and -- Kathleen A. Herkenhoff 12707 High Bluff Drive, Suite 200 San Diego, CA 92130 Telephone: (858) 794-1441 Facsimile: (858) 794-1450 kah@weiserlawfirm.com Lead Counsel for Lead Plaintiff Bobby Yadegar/Ygar Capital LLC and Frank Borreani Joseph J. Tabacco, Jr. Nicole Lavallee BERMAN DEVALERIO One California Street, Suite 900 San Francisco, CA 94111 Telephone: (415) 433-3200 Facsimile: (415) 433-6382 jtabacco@bermandevalerio.com cheffelfinger@bermandevalerio.com nlavallee@bermandevalerio.com -- and -- Wendy Zoberman (admitted Pro Hac Vice) 3507 Kyoto Gardens Drive, Suite 200 Palm Beach Gardens, FL 33410 Telephone: (561) 835-9400 Facsimile: (561) 835-0322 wzoberman@bermandevalerio.com Liaison Counsel and Attorneys for Plaintiff St. Paul Teachers’ Retirement Fund Association Jonathan Gardner (admitted Pro Hac Vice) Paul Scarlato Carol Villegas LABATON SUCHAROW LLP 140 Broadway, 34th Floor New York, NY 10005 Telephone: (212) 907-0700 Facsimile: (212) 818-0470 jgardner@labaton.com pscarlato@labaton.com cvillegas@labaton.com Attorneys for Plaintiffs Newport News Employees’ Retirement Fund and Oklahoma Firefighters Pension and Retirement System CERTIFICATE OF SERVICE I hereby certify that on April 13, 2015, I authorized the electronic filing of the foregoing with the Clerk of the Court using the CM/ECF system which will send notification of such filing to the e-mail addresses denoted on the attached Electronic Mail Notice List. I certify under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. Executed on April 13, 2015. By: /s/ Christopher L. Nelson Dated: April 13, 2015 Christopher L. Nelson THE WEISER LAW FIRM, P.C. 22 Cassatt Avenue, First Floor Berwyn, PA 19312 Telephone: (610) 225-2677 Facsimile: (610) 408-8062 Email: cln@weiserlawfirm.com AYM Aggressive Value Fund, LP asteyer@steyerlaw.com Joseph Daniel Cohen  jcohen@scott­scott.com Hal Davis Cunningham  hcunningham@scott­scott.com,efile@scott­scott.com Patrick Norton Downes  pdownes@loeb.com,ptaylor@loeb.com Christine M. Fox  cfox@labaton.com,lmehringer@labaton.com,electroniccasefilings@labaton.com,fmalonzo@labaton.com Jonathan Gardner  jgardner@labaton.com,jjohnson@labaton.com,cvillegas@labaton.com,acoquin@labaton.com,lmehringer@labaton.com,fmalonzo@labaton.com,acarpio@labaton.com,agreenbaum@labaton.com Lionel Z. Glancy  info@glancylaw.com,lboyarsky@glancylaw.com,lglancy@glancylaw.com Michael M. Goldberg  mmgoldberg@glancylaw.com,csadler@glancylaw.com,info@glancylaw.com,rprongay@glancylaw.com Joseph P. Guglielmo  jguglielmo@scott­scott.com Christopher T. Heffelfinger  cheffelfinger@bermandevalerio.com,ysoboleva@bermandevalerio.com Kathleen Ann Herkenhoff  kah@weiserlawfirm.com,jmf@weiserlawfirm.com,hl@weiserlawfirm.com Reed R. Kathrein  reed@hbsslaw.com,peterb@hbsslaw.com,pashad@hbsslaw.com,sf_filings@hbsslaw.com Nicole Catherine Lavallee  nlavallee@bermandevalerio.com,ysoboleva@bermandevalerio.com Luke Anthony Liss  lliss@wsgr.com,dakivalles@wsgr.com Robert Alan Meyer  rmeyer@loeb.com,ptaylor@loeb.com Donald Anthony Miller  dmiller@loeb.com,vmanssourian@loeb.com Matthew C Moehlman  mmoehlman@labaton.com Christopher Leigh Nelson  cln@weiserlawfirm.com Park West Investors Market Fund, Limited asteyer@steyerlaw.com Park West Investors Master Fund, Limited asteyer@steyerlaw.com Park West Partners International Limited asteyer@steyerlaw.com Anthony David Phillips  aphillips@archernorris.com,dtatmon@archernorris.com Joseph Mark Profy  jmp@weiserlawfirm.com Robert Vincent Prongay  rprongay@glancylaw.com,info@glancylaw.com,echang@glancylaw.com,bmurray@glancylaw.com Mark Punzalan  markp@punzalanlaw.com,office@punzalanlaw.com,aapton@zlk.com Evan Jason Smith  esmith@brodsky­smith.com Allan Steyer  asteyer@steyerlaw.com,lrorem@steyerlaw.com Michael Walter Stocker  mstocker@labaton.com,drogers@labaton.com,ElectronicCaseFiling@labaton.com,lmehringer@labaton.com Jon A Tostrud  jtostrud@tostrudlaw.com,acarter@tostrudlaw.com Diane Marie Walters  dwalters@wsgr.com,vshreve@wsgr.com Lucy Han Wang  lucy.wang@morganlewis.com,andrew.obach@morganlewis.com Robert Brian Weiser  rw@weiserlawfirm.com Wendy Hope Zoberman  wzoberman@bermandevalerio.com The following is the list of attorneys who are not on the list to receive e­mail notices for this case (who therefore require manual noticing). You may wish to use your mouse to select and copy this list into your word processing program in order to create notices or labels for these recipients.

securities

U_aKE4cBD5gMZwcz9QJj

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF FLORIDA GAINESVILLE DIVISION 1:18-cv-00152 Case No. MARTA VALENTINA RIVERA MADERA, on behalf of herself and all others similarly situated; FAITH IN FLORIDA, HISPANIC FEDERATION, MI FAMILIA VOTA EDUCATION FUND, UNIDOSUS, and VAMOS4PR, PLAINTIFFS, v. KEN DETZNER, in his official capacity as Secretary of State for the State of Florida; and KIM A. BARTON, in her official capacity as Alachua County Supervisor of Elections, on behalf of herself and similarly-situated County Supervisors of Elections, DEFENDANTS. CLASS COMPLAINT FOR INJUNCTIVE AND DECLARATORY RELIEF INTRODUCTION 1. This is an action for injunctive and declaratory relief, including immediate preliminary injunctive relief before Florida’s November 6, 2018 general election, seeking to enjoin Defendants to comply with Section 4(e) of the federal Voting Rights Act of 1965 (“VRA”), 52 U.S.C. §10303(e), by providing Spanish- language ballots, registration and other election materials, and assistance in the following thirty-two (32) Florida counties for the November 6, 2018 election and future elections: Alachua, Bay, Brevard, Charlotte, Citrus, Clay, Columbia, Duval, Escambia, Flagler, Hernando, Highlands, Indian River, Jackson, Lake, Leon, Levy, Manatee, Marion, Martin, Monroe, Okaloosa, Okeechobee, Pasco, Putnam, St. Johns, St. Lucie, Santa Rosa, Sarasota, Sumter, Taylor, and Wakulla Counties (hereinafter, “the Counties”). 2. Section 4(e) of the VRA protects the voting rights of American citizens educated in Spanish-speaking Puerto Rican schools. 52 U.S.C. §10303(e). Section 4(e) requires that Spanish-language ballots, registration, and election materials, instructions, and assistance be provided to these citizens so that they may effectively exercise their right to vote. See id. 3. Section 4(e)’s protections apply to thousands of Spanish-speaking Puerto Ricans who reside and are eligible to vote in the Counties. But Defendants intend to conduct the upcoming 2018 general election in the Counties entirely or predominantly in English, in direct contravention of those protections. 4. Accordingly, Plaintiff Marta Valentina Rivera Madera, an individual resident of the Counties who will be unable to meaningfully exercise her right to vote unless Spanish-language materials and assistance are provided, as well as Plaintiffs Faith in Florida, Hispanic Federation, Mi Familia Vota Education Fund, UnidosUS, Vamos4PR (collectively, “Organizational Plaintiffs”), bring this action seeking preliminary injunctive relief to require Defendants to comply with the VRA and provide Spanish-language ballots, other registration and election materials, and assistance for the upcoming November 6, 2018 general election, as well as declaratory relief and permanent injunctive relief covering subsequent elections. 5. Plaintiff Rivera seeks to bring this action on behalf of herself and a class of all others similarly situated, pursuant to Federal Rule of Civil Procedure 23(b)(2). 6. Plaintiff Mi Familia Vota Education Fund brings this action on its own behalf and also on behalf of its members, who include members of the proposed plaintiff class. 7. Plaintiffs Faith in Florida, Hispanic Federation, UnidosUS, and Vamos4PR each bring this action on their own behalf. (Plaintiff Rivera and the Organizational Plaintiffs are collectively referred to as “Plaintiffs”). 8. Plaintiffs bring their claims against Florida’s chief election officer, Defendant Secretary of State Ken Detzner, and against a proposed defendant class consisting of the thirty-two (32) Supervisors of Elections in the Counties, represented by Defendant Alachua County Supervisor of Elections Kim A. Barton. JURISDICTION AND VENUE 9. This action for declaratory and injunctive relief arises under the Voting Rights Act of 1965 as amended, 52 U.S.C. §§10101 et seq., and the Civil Rights Act of 1871, 42 U.S.C. §1983. 10. This Court has subject matter jurisdiction under 28 U.S.C. §1331 because this action arises under the laws of the United States, under 52 U.S.C. §10101(d) because this action arises under the Voting Rights Act, and under 28 U.S.C. §§1343(a)(3)-(4) and 1357 because this action seeks equitable and other relief pursuant to an act of Congress providing for the protection of the right to 11. This Court has authority to issue declaratory relief under 28 U.S.C. §§2201 and 2202. 12. Venue is proper in this District pursuant to 28 U.S.C. §1391(b) because, among other things, a substantial part of the events or omissions giving rise to the claim have occurred and will continue to occur in this District, because Plaintiff Rivera resides in this district, and because Defendants Ken Detzner and Kim A. Barton have their principal places of business in this District. 13. Under N.D. Fla. Local Rule 3.1(A)-(B), this case is properly filed in the Gainesville Division of this District because, among other things, a substantial part of the events or omissions giving rise to the claim have occurred and will continue to occur in counties included in the Gainesville Division, because Plaintiff Rivera resides in a county included in the Gainesville Division, and because Defendant Alachua County Supervisor of Elections Kim A. Barton has her principal place of business in a county included in the Gainesville Division. PARTIES Plaintiffs 14. Plaintiff MARTA VALENTINA RIVERA MADERA is an adult U.S. citizen who is a resident of Alachua County, Florida. Ms. Rivera is eligible to vote in Alachua County, Florida. Ms. Rivera attended elementary through high school in San Juan, Puerto Rico, in which the predominant classroom language was Spanish. Spanish is Ms. Rivera’s primary language, and she cannot read, speak, or understand English well. She wants and intends to vote in Florida’s November 6, 2018 general election. She is not able to exercise her right to vote effectively in an English-only election. 15. Plaintiff FAITH IN FLORIDA is a statewide, nonpartisan, community organizing and advocacy nonprofit organization based in Florida. Ensuring voters within Faith in Florida’s member congregations, including Puerto Rican, Spanish- speaking members, are able to vote effectively is an important part of Faith in Florida’s organizational mission. In furtherance of that mission, Faith in Florida has a nonpartisan voter engagement campaign which visits Latino faith congregations, including in the Counties, to provide voter education and materials to Spanish-language voters and to help register Spanish-language voters. As a result of Defendants’ and defendant class members’ failure to ensure the provision of Spanish-language election materials and assistance to Spanish-speaking Puerto Ricans, including in the Florida 2018 general election, Faith in Florida will divert a portion of its limited resources to translate election information and provide support for Spanish-speaking voters within the Counties. 16. Plaintiff HISPANIC FEDERATION is a nonpartisan, nonprofit community organizing and advocacy organization, with an office in Florida, whose purpose is to empower and advance the Hispanic community, including by promoting and facilitating increased civic engagement. In furtherance of that mission, Hispanic Federation has a voter engagement advocacy program that works to mobilize and educate Spanish-speaking Floridians, including those within the Counties, to ensure those who are eligible and want to vote are able to do so. As a result of Defendants’ and defendant class members’ failure to ensure the provision of Spanish-language election materials and assistance to Spanish- speaking Puerto Ricans, including in the Florida 2018 general election, Hispanic Federation will divert a portion of its limited resources to providing Spanish language services to the Latino community within the Counties, including through community educational forums and support at the polls for Spanish-language voters. 17. Plaintiff MI FAMILIA VOTA EDUCATION FUND is a nonpartisan, nonprofit civic engagement organization, with offices in Florida, dedicated to empowering and engaging the Latino community in the democratic process. Mi Familia Vota Education Fund’s mission is to facilitate civic engagement by the Latino community. In furtherance of that mission, Mi Familia Vota Education Fund, among other things, is one of the leading Latino outreach voter registration groups in Florida, and conducts voter registration efforts, education, and citizen workshops throughout Florida, including within the Counties. Mi Familia Vota Education Fund has members within the Counties who are eligible to vote, attended school in Puerto Rico in which the predominant classroom language was Spanish, and cannot vote effectively in English. As a result of Defendants’ and defendant class members’ failure to ensure the provision of Spanish-language election materials and assistance to Spanish-speaking Puerto Ricans, including in the Florida 2018 general election, Mi Familia Vota Education Fund will divert a portion of its limited resources to translating voting materials into Spanish, staffing a Spanish-language hotline, and providing one-on-one support for affected Spanish-language speakers within the Counties. Mi Familia Vota Education Fund brings this suit on its own behalf and on behalf of its members, in order to ensure that they are not denied their right to vote. 18. Plaintiff UNIDOSUS is a nonprofit organization and the nation’s largest Latino civil rights and advocacy organization. UnidosUS has offices in Florida and has 15 member organizations in Florida, including member organizations based or working in the Counties. UnidosUS works to build a stronger America by creating opportunities for Latinos, including by conducting a voter engagement campaign to mobilize and educate Spanish-speaking potential voters in the Counties and throughout Florida. As a result of Defendants’ and defendant class members’ failure to ensure the provision of Spanish-language election materials and assistance to Spanish-speaking Puerto Ricans, including in the Florida 2018 general election, UnidosUS is diverting its limited resources from other projects to translate voting materials and provide other Spanish-language assistance to Spanish-language voters within the Counties. 19. Plaintiff VAMOS4PR is a project of the Center for Popular Democracy, a nonpartisan, nonprofit organization. Vamos4PR is a national coalition, with offices in Florida, dedicated to empowering and engaging the Puerto Rican community in the democratic process. In furtherance of that mission, Vamos4PR works to ensure that Spanish-speaking voters in Florida have access to the necessary information and can exercise their right to vote. As a result of Defendants’ and defendant class members’ failure to ensure the provision of Spanish-language election materials and assistance to Spanish-speaking Puerto Ricans, including in the Florida 2018 general election, Vamos4PR will divert some of its limited resources to providing Spanish-language voter education materials to voters in the Counties. 20. If Defendants and the proposed defendant class comply with Section 4(e) of the VRA and provide Spanish-language ballots, election materials, and assistance, Plaintiffs Faith in Florida, Hispanic Federation, Mi Familia Vota Education Fund, UnidosUS, and Vamos4PR could and would expend their resources on other voting rights and/or civic engagement projects leading up to the 2018 election. 21. Plaintiff Rivera brings this action on behalf of herself and the following proposed plaintiff class: American citizens who attended some school in Puerto Rico, who have no or limited proficiency in English, and who are eligible to vote in any of the following Florida counties: Alachua, Bay, Brevard, Charlotte, Citrus, Clay, Columbia, Duval, Escambia, Flagler, Hernando, Highlands, Indian River, Jackson, Lake, Leon, Levy, Manatee, Marion, Martin, Monroe, Okaloosa, Okeechobee, Pasco, Putnam, St. Johns, St. Lucie, Santa Rosa, Sarasota, Sumter, Taylor, and Wakulla Counties. 22. The proposed plaintiff class is adequately defined by objective criteria that are not vague, ambiguous, or amorphous. 23. The proposed plaintiff class is so numerous that separate joinder of all members is impracticable. A conservative estimate is that the proposed class includes more than 30,000 members. 24. There are questions of law or fact common to the proposed plaintiff class. Defendants and the proposed defendant class have engaged in a standardized course of conduct against all plaintiff class members by conducting English-only elections without providing sufficient Spanish-language materials or assistance. That course of conduct affects all class members in the same way by making voting more difficult or effectively impossible. In addition, at least the following questions of law or fact are amenable to class-wide resolution, and therefore common to the class: a. Whether Plaintiffs are entitled to relief under Section 4(e) of the VRA requiring Defendant Secretary of State Ken Detzner (“Secretary”) to take action, including but not limited to issuing directives and other orders, to ensure that the Florida counties in which class members reside will provide Spanish-language election materials, including but not limited to ballots, sample ballots, voting guides, and registration materials, and will make available bilingual assistance for voter registration in advance of the voter registration deadline and bilingual poll workers to assist voters with absentee voting, at early voting sites, and on election day; b. Whether Plaintiffs are entitled to relief under Section 4(e) of the VRA requiring Supervisors of Elections in Florida counties in which class members reside to provide Spanish-language election materials, including but not limited to ballots, sample ballots, voting guides, and registration materials, and to make available bilingual assistance for voter registration in advance of the voter registration deadline and bilingual poll workers to assist voters with absentee voting, at early voting sites, and on election day; c. Whether the Court should provide declaratory relief holding that Section 4(e) of the VRA requires the provision of Spanish-language ballots, registration and other election materials to Spanish-speaking Puerto Rican voters and requires that bilingual assistance with voter registration in advance of the voter registration deadline and bilingual assistance during early voting, with absentee voting, and on election day be provided in the Florida counties in which class members reside; and d. Whether the Court should enter preliminary and permanent injunctive relief requiring the Secretary and the Supervisors of Elections in the counties in which class members reside to ensure the provision of Spanish-language election materials, including but not limited to ballots, sample ballots, voter guides, and registration materials, and to ensure the provision of bilingual Spanish-language assistance with voter registration, with absentee voting, and at the polls. 25. Plaintiff Rivera’s claims are typical of the claims of the proposed plaintiff class. Plaintiff Rivera’s claims arise from the same pattern or practice of Defendants and the proposed defendant class failing to provide sufficient Spanish- language election materials and assistance and are based on the exact same legal theory under Section 4(e) of the VRA. 26. Plaintiff Rivera will fairly and adequately represent the interests of the plaintiff class. Plaintiff Rivera has no conflicts with the proposed plaintiff class, and has retained qualified and experienced litigators to represent her. 27. A plaintiff class is appropriate under Federal Rule of Civil Procedure 23(b)(2) because Defendants and the proposed defendant class have acted on grounds that apply generally to the class, so that final injunctive relief or declaratory relief is appropriate respecting the plaintiff class as a whole. A single injunction or declaratory judgment will provide relief to each member of the proposed plaintiff class. If the Court orders Defendants and the proposed defendant class to ensure that Spanish-language election materials and assistance are provided in the counties where plaintiff class members reside, that order would provide relief to every plaintiff class member and eliminate a barrier to each plaintiff class member’s ability to effectively exercise his or her right to vote. Defendants 28. Defendant KEN DETZNER is sued in his official capacity as Secretary of State of Florida (“Secretary”). The Secretary is the chief election officer of the state of Florida and is charged with supervising and administering the election laws. Fla. Stat. §§15.13, 97.012. The Secretary is responsible for issuing regulations to ensure the “proper and equitable … implementation of” the election laws. Fla. Stat. §97.012(1). The Secretary’s regulations require that “[b]allots shall be translated into other languages that are required by law or court order.” Fla. Admin. Code R. 1S-2.032(3)(b). The Secretary has the authority to advise County Supervisors of Elections as to the proper methods for conducting elections and to direct County Supervisors of Elections to perform specific duties. Fla. Stat. §97.012(14), (16). The Secretary is also expressly authorized to enforce the County Supervisors of Elections’ performance of their election duties and compliance with the Secretary’s rules in state court. Fla. Stat. §97.012(14). The Secretary has the authority to direct and require that the County Supervisors of Elections comply with Section 4(e) of the VRA, translate and provide ballots and other election materials in Spanish, and implement any orders issued by this Court. 29. Defendant KIM A. BARTON is sued in her official capacity as Alachua County Supervisor of Elections. Supervisor Barton is sued on her own behalf and as a representative of all other similarly-situated County Supervisors of Elections in the Counties. As the Alachua County Supervisor of Elections, Supervisor Barton is responsible for the administration of elections in Alachua County. Like all County Supervisors of Elections, her responsibilities in that regard include printing ballots, translating ballots, preparing sample ballots and voter guides, and hiring poll workers. Fla. Stat. §§101.20, 101.21, 102.012, 102.014; Fla. Admin. Code R. 1S-2.033, 1S-2.032(3). 30. In addition to bringing claims against Defendant Secretary Detzner and Defendant Supervisor Barton, Plaintiffs also bring this proceeding as a class action against the following proposed defendant class, as represented by Defendant Supervisor Barton: Supervisors of Elections for the following counties, in their official capacities: Alachua, Bay, Brevard, Charlotte, Citrus, Clay, Columbia, Duval, Escambia, Flagler, Hernando, Highlands, Indian River, Jackson, Lake, Leon, Levy, Manatee, Marion, Martin, Monroe, Okaloosa, Okeechobee, Pasco, Putnam, St. Johns, St. Lucie, Santa Rosa, Sarasota, Sumter, Taylor, and Wakulla Counties. 31. The proposed defendant class is adequately defined by objective criteria. The members of the defendant class are specific elected officials easily identifiable from government records. 32. The proposed defendant class is so numerous that separate joinder of all members is impracticable. Joining 32 individual County Supervisors of Elections from across the state would cause inefficient and duplicative proceedings that would be difficult and impracticable to manage. 33. There are questions of law or fact common to the proposed defendant class. The proposed defendant class members have all engaged in and intend to engage in the same course of conduct against Plaintiffs: conducting English-only elections without providing sufficient Spanish-language materials or assistance. That common course of conduct gives rise to several questions of law or fact that are amenable to class-wide resolution, including the questions listed supra in paragraph 24. 34. Defendant Supervisor Barton’s defenses are typical of the claims or defenses of the proposed defendant class. Defendant Supervisor Barton and the class member County Supervisors of Elections are public officers with identical public duties under Florida election law and regulations and Section 4(e) of the VRA. 35. Defendant Supervisor Barton will fairly and adequately represent the interests of the defendant class. Because Defendant Supervisor Barton is empowered with the same election law enforcement and oversight functions as every other county Supervisor of Elections, she can fairly and adequately protect the interests of the Defendant class of Supervisors. As a public officer, Defendant Supervisor Barton can be expected to litigate this action with the vigor and forthrightness required of a representative party. 36. A defendant class is appropriate under Federal Rule of Civil Procedure 23(b)(1)(A) because the prosecution of separate lawsuits against each county’s Supervisor of Elections would create a risk of inconsistent or varying adjudications that would establish incompatible standards of conduct for voters as well as the County Supervisors of Elections. Such separate actions would create a substantial risk of incompatible standards for the provision of Spanish-language election materials and assistance that vary depending upon the county in which voters and Supervisors reside. Different standards for voters in different counties would raise equal protection issues. See Bush v. Gore, 531 U.S. 98, 104 (2000); Fla. State Conference of N.A.A.C.P. v. Browning, 522 F.3d 1153, 1185 (11th Cir. 2008). 37. A defendant class is independently appropriate under Federal Rule of Civil Procedure 23(b)(1)(B) because adjudications with respect to individual class members, as a practical matter, would be dispositive of the interests of the other members not parties to the individual adjudications or would substantially impair or impede the ability of the other nonparty members to protect their interests. All of the proposed defendant class members have identical election-related responsibilities, and all serve counties where a significant number of voters protected by Section 4(e) reside. Thus, if this case were brought only against Defendant Supervisor Barton, all County Supervisors of Elections in the proposed defendant class would risk running afoul of federal law if they failed to provide Spanish-language election materials and assistance in a manner consistent with any court order in this case. 38. A defendant class is also independently appropriate under Federal Rule of Civil Procedure 23(b)(2), because the relief Plaintiffs and the proposed plaintiff class seek—namely, a declaratory judgment and order to provide Spanish- language election materials and assistance—is identical as to each member of the defendant class, thereby making appropriate preliminary and final injunctive and corresponding declaratory relief with respect to the defendant class as a whole. LEGAL BACKGROUND 39. Section 4(e) of the Voting Rights Act of 1965 (52 U.S.C. §10303(e)) protects the voting rights of persons educated in “American-flag schools” in languages other than English, by prohibiting the States from conditioning the right to vote of such individuals on the ability to read or understand English. 40. Section 4(e) provides that no one who completed sixth grade in any “school in … any state, territory, the District of Columbia, or the Commonwealth of Puerto Rico in which the predominant classroom language was other than English, shall be denied the right to vote in any Federal, State, or local election because of his inability to read, write, understand, or interpret any matter in the English language.” 52 U.S.C. §10303(e)(2). 41. Congress’s main purpose in enacting Section 4(e) was to protect the rights of Spanish-speaking Puerto Ricans to vote stateside. Katzenbach v. Morgan, 384 U.S. 641, 645 & n.3, 652 (1966). 42. Congress later eliminated the sixth-grade education requirement from Section 4(e). See 52 U.S.C. §10501(a); Arroyo v. Tucker, 372 F. Supp. 764, 766 (E.D. Pa. 1974). 43. As a result, Section 4(e) now applies to all “persons who attended any number of years of school in Puerto Rico.” Puerto Rican Org. for Political Action v. Kusper, 490 F.2d 575, 579 (7th Cir. 1973) (“Kusper II”). 44. Under Section 4(e), States must provide Spanish-language voting materials and assistance to all persons who attended school in Puerto Rico and are unable to vote effectively in English. United States v. Berks Cty., 277 F. Supp. 2d 570, 579 (E.D. Pa. 2003) (collecting cases). FACTUAL ALLEGATIONS 45. Plaintiff Rivera, plaintiff class members, and members of Mi Familia Vota Education Fund were educated in schools in Puerto Rico in which the classroom language was predominately Spanish. 46. Although Plaintiff Rivera, plaintiff class members, and members of Mi Familia Vota Education Fund now reside in the Counties, they do not understand, read, speak, or write English sufficiently to be able to vote effectively in an English-only election. 47. Plaintiff Rivera, plaintiff class members, and members of Mi Familia Vota Education Fund are eligible – and many want and intend – to vote in Florida’s elections, including in the upcoming November 6, 2018 general election. 48. But unless registration and election instructions, ballots, voter education and outreach materials, and assistance are provided in the Spanish language, Plaintiff Rivera, plaintiff class members, and members of Mi Familia Vota Education Fund will be unable to vote effectively. 49. The Counties are each home to a substantial population of citizens who are eligible to vote, attended school in Puerto Rico in which the classroom language was predominately Spanish, and are unable to vote effectively in English. 50. The U.S. Census Bureau’s 2011-2015 American Community Survey (ACS) estimated that 143,559 adults aged 18 years-old and over of Puerto Rican heritage reside in the Counties. An estimated 97,355 of these adults of Puerto Rican heritage speak Spanish at home. Among these Puerto Rican adults who speak Spanish at home, an estimated 30,302 are not proficient in English, meaning they are “unable to speak or understand English adequately enough to participate in the electoral process.” 52 U.S.C. §10503(b)(3)(B). 51. Many of these individuals attended at least some school in Puerto Rico in which the primary language of instruction was not English, because “[t]he primary language of classroom instruction in Puerto Rico is Spanish.” Berks Cty., 277 F. Supp. 2d at 574; see P.R. Regs. DE REG. 8115, Art. III, §B. 52. In addition, data from the Florida Division of Elections reflects that more than 36,500 registered voters in the Counties identified themselves on their voter registration forms as being born in Puerto Rico. The Counties include many more adults who were born in Puerto Rico and are eligible to vote, but who have not yet registered, as well as additional registered Puerto Ricans who did not volunteer their birthplace because it is not required on the registration form. Many of these individuals have limited English proficiency. 53. The Counties’ first-generation Puerto Rican population has increased significantly in the wake of Hurricane Maria in September 2017. 54. Most of those recently-arrived residents were educated at Spanish- language schools in Puerto Rico, and many are not proficient in English. 55. Like Plaintiff Rivera and members of Mi Familia Vota Education Fund, the plaintiff class of thousands of Spanish-speaking Puerto Ricans who currently reside and are eligible to vote in the Counties but who are not proficient in English will not be able to vote effectively unless they have access to Spanish- language ballots, election materials, and assistance. 56. The “right to vote means the right to effectively register the voter’s political choice.” Puerto Rican Org. For Political Action v. Kusper, 350 F. Supp. 606, 610 (N.D. Ill. 1972) (“Kusper I”), aff’d, Kusper II, 490 F.2d 575, 580 (7th Cir. 1973). 57. If the Counties’ registration materials and assistance, voting guides, voting instructions, ballots or ballot labels on voting machines, and other election materials are provided only in English, the ability to vote effectively of Plaintiff Rivera, members of Mi Familia Vota Education Fund, and the class of similarly- situated citizens who have limited or no English proficiency will be seriously impaired. 58. Plaintiff Rivera, members of Mi Familia Vota Education Fund, and all other similarly-situated class members in the Counties are therefore entitled to such materials and assistance as may be necessary to enable them to vote effectively, including bilingual ballots, registration and other election materials, and assistance. 59. The Counties in the defendant class conduct English-only elections and do not provide Spanish-language ballots, or sufficient other Spanish-language election materials or assistance. 60. By not providing Spanish-language ballots or sufficient other Spanish- language election materials and assistance, the Counties condition the right to vote of plaintiff class members on their ability to read, write, understand, or interpret the English language. 61. Although many of the Counties have been repeatedly requested to do so, the Counties will not and/or have not made binding commitments to provide Spanish-language ballots or sufficient Spanish-language registration and other election materials or assistance at the polls for the upcoming November 2018 general election. 62. In April 2018, Plaintiffs Mi Familia Vota Education Fund, UnidosUS, Vamos4PR, and a coalition of other groups sent letters to the Supervisors of Elections of 13 of the largest Counties in the defendant class, including Defendant Supervisor Barton, with copies to Defendant Secretary Detzner and to the President of the Florida State Association of Supervisors of Elections, Inc., demanding that they provide Spanish-language materials and assistance under Section 4(e) for the upcoming 2018 elections. 63. In June 2018, Plaintiffs Mi Familia Vota Education Fund, UnidosUS, Vamos4PR, and the other members of the coalition sent follow-up letters to the Supervisors of Election of those 13 Counties, including Defendant Supervisor Barton, with copies to Defendant Secretary Detzner and to the President of the Florida State Association of Supervisors of Elections, Inc., reiterating that demand. 64. Despite these efforts, the Counties have stated that they will not provide Spanish-language ballots for the 2018 elections. In addition, none of the Counties has formally committed to provide sufficient Spanish-language election materials and assistance for the 2018 elections. 65. If the Counties do not provide Spanish-language ballots, other election materials, and assistance for the 2018 and subsequent Florida elections, Plaintiff Rivera, members of Mi Familia Vota Education Fund, and all similarly-situated individuals in the plaintiff class will effectively be disenfranchised. 66. The right to vote is a precious and fundamental right that is the heart of our democracy. The loss of that right for the 2018 general election, and any subsequent elections, for Plaintiff Rivera, members of Mi Familia Vota Education Fund, and the members of the proposed plaintiff class, is an irreparable injury. 67. The Organizational Plaintiffs’ diversion of resources, including staff and volunteer time, during the run-up to the November 6, 2018 elections to support plaintiff class members who are entitled to Spanish-language materials and assistance under Section 4(e) are also irreparable injuries. Even if those Plaintiff organizations could be compensated for their expenditures, they will not be able to regain the opportunity to use their resources to educate and mobilize voters prior to the 2018 election. The Organizational Plaintiffs will suffer similar irreparable injury for every election in which Spanish-language materials and assistance are not provided as required by Section 4(e) of the VRA. 68. Because the registration deadline for the 2018 general election is October 9, 2018, and the election is November 6, 2018, the irreparable injury to Plaintiff Rivera, affected members of Mi Familia Vota Education Fund, and plaintiff class members is imminent. 69. Requiring Defendants to ensure that the Counties provide Spanish- language ballots, materials, and election assistance for the 2018 general and other upcoming elections serves the public’s strong interest in ensuring that every qualified voter is able to participate equally in the electoral process. 70. The irreparable injuries and fundamental right to vote of Plaintiff Rivera, affected members of Mi Familia Vota Education Fund, and the thousands of members of the plaintiff class far outweigh any hardship that Defendants might contend they face in ensuring the provision of Spanish-language election materials and assistance. CAUSES OF ACTION COUNT I (Violation of the Voting Rights Act, 52 U.S.C. §10303(e)) 71. Plaintiffs repeat and reallege the allegations in all the preceding paragraphs as if fully set forth herein. 72. Section 4(e) of the Voting Rights Act, 52 U.S.C. §10303(e), prohibits denying the right to vote to any person who attended a school in Puerto Rico in which the predominant classroom language was other than English, because of his or her inability to read, write, understand, or interpret any matter in the English language. 73. Plaintiff Rivera, members of Mi Familia Vota Education Fund, and the thousands of members of the plaintiff class attended school in Puerto Rico in which the predominant classroom language was other than English, and are not able to vote effectively in English. 74. Defendant Secretary Detzner authorizes and permits the Counties to provide English-only ballots, registration and election materials, instructions, and assistance, and does not require the Counties to provide bilingual ballots or Spanish-language election materials, instructions, or assistance. 75. Defendant Supervisor Barton and the members of the defendant class have failed to provide Spanish-language ballots, and fail to provide sufficient other Spanish-language election materials and assistance. 76. By failing to require and provide Spanish-language ballots and sufficient Spanish-language registration and election materials and assistance to Plaintiff Rivera, affected members of Mi Familia Vota Education Fund, and plaintiff class members, Defendants Detzner, Barton, and the members of the defendant class are denying these thousands of American citizens the right to vote because of their inability to read, write, understand, or interpret any matter in the English language, in violation of 52 U.S.C. §10303(e). 77. Defendants’ and defendant class members’ conduct disenfranchises Plaintiff Rivera, affected members of Mi Familia Vota Education Fund, and the members of the plaintiff class. Absent this Court’s intervention, Plaintiff Rivera, affected members of Mi Familia Vota Education Fund, and the thousands of plaintiff class members will suffer irreparable harm as a result of Defendants’ and the defendant class members’ conduct. 78. To avoid imminent and irreparable harm, Defendants’ and the defendant class members’ conduct must be preliminarily and permanently enjoined and Defendants and the defendant class members must be ordered to comply with 52 U.S.C. §10303(e) forthwith, as set forth infra in the Prayer for Relief. PRAYER FOR RELIEF THEREFORE, Plaintiffs pray that the Court order the following relief and remedies: 1. Declare and adjudge that Defendants’ and the defendant class members’ conducting of English-only elections in the Counties violates 52 U.S.C. §10303(e). 2. Grant a preliminary and permanent injunction (a) enjoining Defendants and the defendant class from conducting or allowing the conducting of elections without Spanish-language ballots and sufficient Spanish-language election materials and assistance in the Counties and (b) requiring Defendants and the defendant class to issue directives and take all other measures necessary to ensure that all election materials provided in English in the Counties—including but not limited to paper ballots, voting machine ballots, sample ballots, absentee ballots, voting guides, voting instructions, registration materials, polling place signage, and websites—are also provided in Spanish for the 2018 general election and all subsequent elections; and that Spanish-speaking poll workers are provided at the polls to assist voters during the 2018 general election and all subsequent elections, and Spanish speakers are made available to assist with voter registration and absentee voting before the 2018 general election and all subsequent elections. 3. Award Plaintiffs’ attorneys’ fees and costs, including pursuant to 52 U.S.C. §10310(e) and 42 U.S.C. §1988; and 4. Award all such other and further relief as the Court deems to be just and equitable. Dated: August 16, 2018 Respectfully submitted, By: /s/ Kira Romero-Craft Kira Romero-Craft STEPHEN P. BERZON (pro hac vice forthcoming) STACEY M. LEYTON (pro hac vice forthcoming) MATTHEW J. MURRAY (pro hac vice forthcoming) CORINNE F. JOHNSON (pro hac vice forthcoming) MEGAN C. WACHSPRESS (pro hac vice forthcoming) Altshuler Berzon LLP 177 Post Street, Suite 300 San Francisco, CA 94108 (415) 421-7151 sberzon@altber.com sleyton@altber.com mmurray@altber.com cjohnson@altber.com mwachspress@altber.com Attorneys for Plaintiffs KATHERINE ROBERSON-YOUNG (FL SBN 38169) Service Employees International Union 11687 NE 18th Dr. North Miami, FL 33181-3278 (954) 804-2710 katherine.roberson-young@seiu.org NICOLE G. BERNER (pro hac vice forthcoming) Service Employees International Union 1800 Massachusetts Ave, NW Washington, D.C. 20036 (202) 730-7383 nicole.berner@seiu.org Attorneys for Plaintiffs Mi Familia Vota Education Fund and Vamos4PR KIRA ROMERO-CRAFT (FL SBN 49927) LatinoJustice PRLDEF 523 West Colonial Drive Orlando, FL 32804 (321) 418-6354 kromero@latinojustice.org ESPERANZA SEGARRA (FL SBN 527211) JACKSON CHIN (pro hac vice forthcoming) LatinoJustice PRLDEF 99 Hudson Street, 14th Floor New York, NY 10013 (212) 219-3360 esegarra@latinojustice.org jchin@latinojustice.org Attorneys for Plaintiffs CHIRAAG BAINS* (pro hac vice forthcoming) Demos 740 6th Street NW, 2nd Floor Washington, DC 20001 cbains@demos.org * Not admitted in the District of Columbia; practice limited pursuant to D.C. App. R. 49(c)(3). STUART NAIFEH (pro hac vice forthcoming) Demos 80 Broad St., 4th Floor New York, NY 10004 (212) 485-6055 snaifeh@demos.org Attorneys for Plaintiffs

civil rights, immigration, family

euVwEYcBD5gMZwczmhZ8

IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK CARA NASISI & ROBIN CHERNOFF, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, Plaintiffs, Civil Action No. v. WELLCARE HEALTH PLANS, INC., Defendant. ORIGINAL CLASS AND COLLECTIVE ACTION COMPLAINT Plaintiffs Cara Nasisi and Robin Chernoff (“Plaintiffs”) file this Class and Collective Action Complaint (“Complaint”) against Wellcare Health Plans, Inc. (“Defendant”), and in support state the following: Nature of This Lawsuit 1. Defendant is a Fortune 200 Company that provides “government sponsored managed care services to [health plan participants] through Medicare, Medicare Advantage, and Medicare Prescription Drug Plans.”1 2. Defendant employed Plaintiffs to perform utilization review and case management functions to attempt to reduce the costs of medical care. 3. Defendant employed Plaintiffs and other individuals to perform similar job duties under various job titles in Defendant’s “Clinical” job family, including but not 1 www.wellcare.com/Corporate/CSR-Website (last visited April 19, 2019). limited to the following: job titles that include some variation of “Care Manager” or “Case Manager,” including but not limited to “Field Care Manager,” “Pediatric Field Care Manager,” “Pediatric Case Manager,” “Behavioral Care Manager,” and “Pediatric Case Manager;” job titles that contain some variation of “Review Nurse,” including but not limited to “Utilization Review Nurse,” “Clinical Appeals Review Nurse,” “Inpatient Clinical Appeals Review Nurse,” “Clinical Claims Review Nurse,” and “Prior Authorization Nurse;” and the job titles “Clinical Social Worker,” “Service Coordinator,” and “Field Service Coordinator” (collectively, “Care Management Employees”).2 4. Defendant paid Care Management Employees a salary. 5. Defendant’s Care Management Employees regularly worked over 40 hours per week. 6. Defendant classified Care Management Employees as exempt from state and federal overtime laws and did not pay them overtime when they worked over 40 hours in an individual workweek. 7. In fact, Defendant’s Care Management Employees primarily performed non- exempt work, including asking health plan participants standardized questions to document their medical circumstances (“Data Collection”), inputting answers to those questions into Defendant’s computer system (“Data Input”), following established guidelines designed to 2 The practice of assigning arbitrary job titles to individuals performing substantially the same work is a pervasive practice in the managed care industry. See Deakin v. Magellan Health, Inc., 328 F.R.D. 427, 433 (D.N.M. 2018) (conditionally certifying class of managed care workers employed under job titles that included the terms “Care Coordinator” or “Care Manager” and rejecting defendant’s argument that certification was inappropriate because defendant employed non-supervisory employees in thirty-six job titles containing the terms “Care Coordinator” or “Care Manager”). maximize utilization of health plan resources through application of predetermined criteria (“Care Utilization”), coordinating care by performing ministerial tasks like arranging appointments, referrals, and obtaining necessary authorizations from individuals (“Care Coordination”), supplying health plan participants with additional information and resources to allow them to educate themselves about their health plan (“Plan Information”), and other similar work (collectively, “Care Management Work”). 8. Plaintiffs bring this action on behalf of themselves and other similarly situated Care Management Employees, who, due to Defendant’s misclassification scheme, were not paid all earned overtime pay for time they worked in excess of forty (40) hours in individual work weeks in violation of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201, et seq. 9. Plaintiff Nasisi also brings class action claims under New York state law under New York Minimum Wage Act, Labor Law § 650 et seq., the New York Wage Payment Act, Labor Law § 190 et seq., and the supporting Department of Labor Regulations, 12 N.Y.C.R.R. Part 142 (together, the “NYLL”). 10. Plaintiff Nasisi brings her state law claims pursuant to Fed. R. Civ. P. 23(b)(3) and 23(c)(4) for Defendant’s failure to pay her and other Care Management Employees for all earned overtime pay. The Parties 11. Plaintiff Nasisi worked for Defendant as a Care Management Employee in this Judicial District from June 2010 to June 2018. 12. Plaintiff Chernoff worked for Defendant as a Care Management Employee in New Jersey from March 2015 to March 2017. 13. Defendant is a Florida corporation. 14. Defendant’s principal place of business is in Tampa, Florida. Jurisdiction and Venue 15. This Court has subject matter jurisdiction under 28 U.S.C. § 1331 because Plaintiffs’ FLSA claims arise under federal law. See U.S.C. § 216(b). 16. This Court has supplemental jurisdiction over Plaintiffs’ state law claims under 28 U.S.C. § 1367(a) because they arise out of the same facts as their FLSA claims. 17. Venue is proper in this District under 28 U.S.C. § 1391 because the events forming the basis of this suit occurred in this District. Factual Allegations 18. Plaintiffs worked as Care Management Employees for Defendant. 19. During her employment with Defendant, Plaintiff Nasisi primarily performed Care Management Work. 20. During her employment with Defendant, Plaintiff Chernoff primarily performed Care Management Work. 21. During her employment, Plaintiff Nasisi’s job duties were routine and rote and did not include the exercise of discretion and judgment with respect to matters of significance. 22. During her employment, Plaintiff Chernoff’s job duties were routine and rote and did not include the exercise of discretion and judgment with respect to matters of significance. 23. During her employment, Plaintiff Nasisi’s job duties did not include engaging in bedside nursing or providing medical advice to patients or other individuals with health issues. 24. During her employment, Plaintiff Chernoff’s job duties did not include engaging in bedside nursing or providing medical advice to patients or other individuals with health issues. 25. During her employment, Plaintiff Nasisi’s job duties did not involve providing traditional nursing care in a clinical setting or providing direct medical care to patients or other individuals with health issues. 26. During her employment, Plaintiff Chernoff’s job duties did not involve providing traditional nursing care in a clinical setting or providing direct medical care to patients or other individuals with health problems. 27. During her employment, Plaintiff Nasisi’s job duties did not involve making medical decisions in order to select the appropriate medical care for patients or other individuals to treat their medical issues or ailments. 28. During her employment, Plaintiff Chernoff’s job duties did not involve making medical decisions to select the appropriate medical care for patients or other individuals to treat their medical issues or ailments. 29. During her employment, Plaintiff Nasisi’s job duties did not include administering patients’ medicine or treatments, operating or monitoring medical equipment, helping perform diagnostic tests or analyzing the results from diagnostic tests, diagnosing human responses to actual or potential health problems, monitoring and reporting whether patients were receiving medical services, interviewing patients to consider or advise them regarding alternative treatments, providing medical opinions on treatment and medication, assessing whether requested treatments were related to the original compensable injury, or determining whether an issue should be referred for an independent medical evaluation. 30. During her employment, Plaintiff Chernoff’s job duties did not include administering patients’ medicine or treatments, operating or monitoring medical equipment, helping perform diagnostic tests or analyzing the results from diagnostic tests, diagnosing human responses to actual or potential health problems, monitoring and reporting whether patients were receiving medical services, providing medical opinions on treatment and medication, or assessing whether requested treatments were related to the original compensable injury. 31. Defendant required Plaintiff Nasisi to work over 40 hours in one or more individual workweeks during the last three (3) years. 32. Defendant required Plaintiff Chernoff to work over 40 hours in one or more individual workweeks during the last three (3) years. 33. During her employment with Defendant, Plaintiff Nasisi worked over 40 hours in one or more individual workweeks during the last three (3) years. 34. During her employment with Defendant, Plaintiff Chernoff worked over 40 hours in one or more individual workweeks during the last three (3) years. 35. Defendant classified Plaintiff Nasisi as exempt from the overtime provisions of the FLSA and NYLL. 36. Defendant classified Plaintiff Chernoff as exempt from the overtime provisions of the FLSA. 37. Defendant paid Plaintiff Nasisi a salary. 38. Defendant paid Plaintiff Chernoff a salary. 39. When Plaintiff Nasisi worked over 40 hours in individual workweeks, Defendant did not pay Plaintiff Nasisi overtime at one-and-one-half times her regular rate of pay. 40. When Plaintiff Chernoff worked over 40 hours in individual workweeks, Defendant did not pay Plaintiff Chernoff overtime at one-and-one-half times her regular rate of pay. 41. Defendant is an “enterprise” as defined by the FLSA in 29 U.S.C. § 203(r)(1). 42. Defendant is an enterprise engaged in commerce or in the production of goods for commerce as defined by the FLSA in 29 U.S.C. § 203(s)(1)(A). 43. Defendant has made more than $500,000 in sales made or business done in each of the last three calendar years. 44. During her employment, Plaintiff Nasisi was an “employee” of Defendant as defined by the FLSA in 29 U.S.C. § 203(e). 45. During her employment, Plaintiff Chernoff was an “employee” of Defendant as defined by the FLSA in 29 U.S.C. § 203(e). 46. During her employment, Plaintiff Nasisi was an “employee” of Defendant as defined by the NYLL § 196.1(b). 47. During her employment, Defendant was Plaintiff Nasisi’s “employer” as defined under the FLSA in § 203(d). 48. During her employment, Defendant was Plaintiff Chernoff’s “employer” as defined under the FLSA in § 203(d). 49. During her employment, Defendant was Plaintiff Nasisi’s “employer” as defined by the NYLL in § 2(6). Collective Action Allegations 50. Plaintiffs bring their FLSA claims as a collective action. 51. Plaintiffs’ consent forms to participate in this collective action are attached to this Complaint as Exhibits A-B. 52. The collective action is defined as follows: All individuals employed by Defendant as Care Management Employees in the last three years who were paid salary, who worked more than 40 hours in one or more individual workweeks, who were classified as exempt, and who file consent forms to participate in this lawsuit (“Collective Action Members”). 53. Plaintiffs are similarly situated to the potential Collective Action Members because they were paid in the same manner and performed the same primary job duties. 54. In the last three years, Defendant employed individuals who performed the same primary duties as Plaintiffs. 55. Of Defendant’s employees who performed the same primary job duties as Plaintiffs in the last three years, Defendant classified some or all as exempt from the overtime provisions of the FLSA and paid them a salary. 56. Of employees classified as exempt and who performed the same primary duties as Plaintiffs in the last three years, some or all worked over 40 hours in individual workweeks. 57. Defendant maintained one or more common job descriptions for Care Management Employees. 58. Defendant has names and addresses for potential Collective Action Members in its payroll or personnel records. 59. Defendant has email addresses for potential Collective Action Members in its payroll or personnel records. 60. Defendant has phone numbers for potential Collective Action Members in its payroll or personnel records. 61. Defendant is aware or should have been aware that the FLSA required it to pay potential Collective Action Members overtime if they primarily performed non-exempt Class Action Allegations 62. Plaintiff Nasisi also seek class certification under Fed. R. 23 of the following state law sub-class: a. All individuals employed by Defendant in New York as Care Management Employees in the last six years who were paid salary, who were classified as exempt, and who worked more than 40 hours in one or more individual workweeks (the “New York Class”). 63. The New York Class has more than 40 members. 64. As a result, the New York Class is so numerous that joinder of all members is not practical. 65. There are questions of law or fact common to the New York Class, including (1) whether the New York Class primarily performed non-exempt work; (2) whether Defendant violated the NYLL by refusing to pay the New York Class overtime pay; and (3) the proper measure of damages if Defendant misclassified the New York Class as exempt from the overtime provisions of the NYLL. 66. Plaintiff Nasisi’s overtime claims are typical of those of the New York Class because they arise out of Defendant’s uniform compensation practices. 67. Defendant’s defenses to Plaintiff Nasisi’s NYLL claims are typical of its defenses to those of the New York Class because they are grounded in the same compensation practices. 68. Plaintiff Nasisi can fairly and adequately protect the interests of the New York Class because she is asserting the same claims as the New York Class. 69. Plaintiff Nasisi can fairly and adequately protect the interests of the New York Class because she has no interests adverse to the New York Class. 70. Plaintiff Nasisi can fairly and adequately protect the interests of the New York Class because she has retained counsel experienced in class action employment litigation. 71. The common questions of law and fact predominate over the variations which may exist between members of the New York Class, if any. 72. Plaintiff Nasisi and the members of the New York Class on the one hand, and Defendant on the other, have a commonality of interest in the subject matter and remedy sought, namely back wages, interest, penalties, attorneys’ fees and costs. 73. If individual actions were required to be brought by each member of the New York Class injured or affected, it would necessarily result in a multiplicity of lawsuits, creating a hardship to the individuals and to this Court, as well as to the Defendant. 74. Accordingly, a class action is an appropriate method for the fair and efficient adjudication of this lawsuit and distribution of the common fund to which the New York Class is entitled. 75. The books and records of Defendant are material to the New York Class’s claims because they disclose the hours worked by each member of the Class and the rate of pay for that work. COUNT I Violation of the Fair Labor Standards Act (Collective Action) 76. Plaintiffs incorporate here the previous allegations of this Complaint. 77. This count arises from Defendant’s violations of the FLSA by failing to pay overtime to Plaintiffs and the Collective Action Members when they worked over 40 hours in individual workweeks. 78. Plaintiff Nasisi was not exempt from the overtime provisions of the FLSA. 79. Plaintiff Chernoff was not exempt from the overtime provisions of the FLSA. 80. Collective Action Members were not exempt from the overtime provisions of the FLSA. 81. Plaintiff Nasisi was directed by Defendant to work, and did work, over 40 hours in one or more individual workweeks. 82. Plaintiff Chernoff was directed by Defendant to work, and did work, over 40 hours in one or more individual workweeks. 83. Other Collective Action Members were directed to work, and did work, over 40 hours in one or more individual workweeks. 84. Defendant paid Plaintiff Nasisi a salary and no overtime compensation. 85. Defendant paid Plaintiff Chernoff a salary and no overtime compensation. 86. Defendant paid other Collective Action Members a salary and no overtime compensation. 87. Defendant violated the FLSA by failing to pay overtime to Plaintiff Nasisi at one and one-half times her regular rate of pay when she worked over 40 hours in one or more individual workweeks. 88. Defendant violated the FLSA by failing to pay overtime to Plaintiff Chernoff at one and one-half times her regular rate of pay when she worked over 40 hours in one or more individual workweeks. 89. Defendant violated the FLSA by failing to pay overtime to other Collective Action Members at one and one-half times their regular rates of pay when they worked over 40 hours in one or more individual workweeks. 90. Defendant’s failure to pay Plaintiffs and other similarly situated persons one and one-half times their regular rate for all time worked over 40 hours in a workweek was willful. WHEREFORE, Plaintiffs, on behalf of themselves and the Collective Action Members, seek a judgment against Defendant as follows: A. All unpaid overtime wages due to Plaintiffs and the Collective Action Members; B. Pre-judgment and post-judgment interest; C. Liquidated damages equal to the unpaid overtime compensation due; D. Reasonable attorneys’ fees and costs incurred in filing and prosecuting this lawsuit; and E. Such other relief as the Court deems appropriate. COUNT II Violation of the New York Labor Law (Class Action) 91. Plaintiff Nasisi incorporates here the previous allegations of this Complaint. 92. This count arises from Defendant’s violations of the NYLL by failing to pay overtime to Plaintiff Nasisi and the New York Class when they worked over 40 hours in individual workweeks. 93. Defendant classified Plaintiff Nasisi as exempt from the overtime provisions of the NYLL. 94. Defendant classified members of the New York Class as exempt from the overtime provisions of the NYLL. 95. Plaintiff Nasisi was not exempt from the overtime provisions of the NYLL. 96. Members of the New York Class were not exempt from the overtime provisions of the NYLL. 97. Plaintiff Nasisi was regularly directed to work by Defendant, and did work, over 40 hours in individual workweeks. 98. Defendant violated the NYLL by failing to pay Plaintiff Nasisi and the New York Class overtime at one and one-half times their regular rates of pay when they worked over 40 hours in individual workweeks. WHEREFORE, Plaintiff Nasisi, on behalf of herself and the New York Class, seeks a judgment against Defendant as follows: A. All unpaid overtime wages due to Plaintiff Nasisi and the New York Class; B. Pre-judgment and post-judgment interest; C. Liquidated damages equal to the unpaid overtime compensation due; D. Reasonable attorneys’ fees and costs incurred in filing and prosecuting this lawsuit; and E. Such other relief as the Court deems appropriate. Jury Demand Plaintiffs demand a trial by jury. Respectfully submitted, /s/ Ravi Sattiraju Ravi Sattiraju, Esq. (S.D.N.Y. No.: RS3273) THE SATTIRAJU LAW FIRM, P.C. 116 Village Blvd., Suite 200 Princeton, New Jersey 08540 Telephone: (609) 799-1266 Facsimile: (609) 228-5649 Email: rsattiraju@sattirajulawfirm.com DOUGLAS M. WERMAN MAUREEN A. SALAS* Werman Salas P.C. 77 West Washington, Suite 1402 Chicago, Illinois 60602 (312) 419-1008 dwerman@flsalaw.com msalas@flsalaw.com TRAVIS M. HEDGPETH* Texas Bar No. 24074386 THE HEDGPETH LAW FIRM, PC 3050 Post Oak Blvd., Suite 510 Houston, Texas 77056 Telephone: (281) 572-0727 Facsimile: (281) 572-0728 travis@hedgpethlaw.com JACK SIEGEL* Texas Bar No. 24070621 Siegel Law Group PLLC 2820 McKinnon, Suite 5009 Dallas, Texas 75201 P: (214) 790-4454 www.4overtimelawyer.com *Application for admission pro hac vice forthcoming Attorneys for Plaintiffs and Others Similarly Situated

employment & labor

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Jennifer Pafiti (SBN 282790) POMERANTZ LLP 468 North Camden Drive Beverly Hills, CA 90210 Telephone: (310) 285-5330 E-mail: jpafiti@pomlaw.com Jeremy A. Lieberman Matthew L. Tuccillo Francis P. McConville POMERANTZ LLP 600 Third Avenue, 20th Floor New York, New York 10016 Telephone: (212) 661-1100 Facsimile: (212) 661-8665 E-mail: jalieberman@pomlaw.com mltuccillo@pomlaw.com fmcconville@pomlaw.com Patrick V. Dahlstrom POMERANTZ LLP Ten South La Salle Street, Suite 3505 Chicago, Illinois 60603 Telephone: (312) 377-1181 Facsimile: (312) 377-1184 E-mail: pdahlstrom@pomlaw.com Attorneys for Plaintiff UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA TRENTON GLORE, Individually and On Behalf of All Others Similarly Situated, Plaintiff, v. No. CLASS ACTION COMPLAINT FOR VIOLATION OF THE FEDERAL SECURITIES LAWS DEMAND FOR JURY TRIAL SANDISK CORP., SANJAY MEHROTRA, and JUDY BRUNER, Defendants. : : : : : : : : : : : : : : : situated, by his undersigned attorneys, for his complaint against defendants, alleges the following based upon personal knowledge as to himself and his own acts, and information and belief as to all other matters, based upon, inter alia, the investigation conducted by and through his attorneys, which included, among other things, a review of the defendants’ public documents, conference calls and announcements made by defendants, United States Securities and Exchange Commission (“SEC”) filings, wire and press releases published by and regarding SanDisk Corp. (“SanDisk” or the “Company”), analysts’ reports and advisories about the Company, and information readily obtainable on the Internet. Plaintiff believes that substantial evidentiary support will exist for the allegations set forth herein after a reasonable opportunity for discovery. NATURE OF THE ACTION 1. This is a federal securities class action on behalf of a class consisting of all persons other than Defendants (defined below) who purchased or otherwise acquired SanDisk securities between October 16, 2014 and March 25, 2015, both dates inclusive (the “Class Period”), seeking to recover damages caused by Defendants’ violations of the federal securities laws and to pursue remedies under §§ 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder against the Company and certain of its top officials. 2. SanDisk purports to design, develop, manufacture, and market data storage solutions in the United States and internationally. The Company offers removable cards, which are used in various applications and consumer devices, including digital cameras, camcorders, smartphones, tablets, and eReaders under the SanDisk Ultra, SanDisk Extreme, and SanDisk Extreme PRO brands; and embedded products that are used in mobile phones, tablets, notebooks, and other portable and wearable devices, as well as in automotive and connected home applications under the brand name iNAND. 2 regarding quality control within the corporate organizational structure. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (1) the Company was experiencing certain production qualification delays on certain of its key products; (2) the Company was experiencing lower than expected sales of enterprise products; (3) the Company was vulnerable to lower pricing in some areas of the business; and (4) as a result of the foregoing, the Company would be forced to announce drastically lower first quarter revenue estimates compared to prior forecasts, and withdraw 2015 forecasts for the Company’s financial results in their entirety. 4. On March 26, 2015, before the market opened, the Company issued a press release announcing that it expects revenue for the fiscal first quarter “to be approximately $1.3 billion, depending on final sell-through results, compared to the previously forecasted revenue range of $1.40 billion to $1.45 billion.” As the Company disclosed, this reduction in guidance was “primarily due to certain product qualification delays, lower than expected sales of enterprise products and lower pricing in some areas of the business.” Moreover, the Company announced that it expects continued impact to its 2015 financial results from these factors as well as the previously identified supply challenges, and now forecasts 2015 revenue to be lower than the previously forecast. 5. On this news, shares of SanDisk declined $14.98 per share, or 18.45%, to close on March 26, 2015, at $66.20 per share, on unusually heavy volume. 6. As a result of Defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the Company's securities, Plaintiff and other Class members have suffered significant losses and damages. 3 7. The claims asserted herein arise under and pursuant to Sections 10(b) and 20(a) of the Exchange Act (15 U.S.C. § 78j(b) and 78t(a)) and Rule 10b-5 promulgated thereunder (17 C.F.R. § 240.10b-5). 8. This Court has jurisdiction over the subject matter of this action pursuant to § 27 of the Exchange Act (15 U.S.C. § 78aa) and 28 U.S.C. § 1331. 9. Venue is proper in this District pursuant to §27 of the Exchange Act, 15 U.S.C. §78aa and 28 U.S.C. §1391(b), as the Company maintains corporate offices in this District. 10. In connection with the acts, conduct and other wrongs alleged in this Complaint, Defendants, directly or indirectly, used the means and instrumentalities of interstate commerce, including but not limited to, the United States mail, interstate telephone communications and the facilities of the national securities exchange. PARTIES 11. Plaintiff, as set forth in the attached Certification, acquired SanDisk securities at artificially inflated prices during the Class Period and was damaged upon the revelation of the alleged corrective disclosures. 12. SanDisk Corporation designs, develops, manufactures, and markets data storage solutions in the United States and internationally. SanDisk Corporation was founded in 1988 and is headquartered in Milpitas, California. The Company trades on the NASDAQ under the ticker symbol “SNDK”. 13. Defendant Sanjay Mehrotra (“Mehrotra”) has served as the President and Chief Executive Officer of SanDisk at all relevant times. 14. Defendant Judy Bruner (“Bruner”) has served as the Executive Vice President, Administration and Chief Financial Officer of SanDisk at all relevant times. 4 “Individual Defendants.” 16. Defendant SanDisk and the Individual Defendants are referred to herein, collectively, as the “Defendants.” SUBSTANTIVE ALLEGATIONS Background 17. SanDisk purports to be a global leader in flash storage solutions. The Company designs, develops and manufactures data storage solutions in a variety of form factors using flash memory, controller, firmware and software technologies. 18. Most of the Company’s products are made by combining NAND flash memory with a controller and firmware. SanDisk purchases substantially all of its NAND flash supply through joint venture relationships with Toshiba Corporation, which produces and provides the Company with NAND wafers. The Company uses controllers designed in-house as well as controllers purchased from third-parties, while the vast majority of products designed in-house. Materially False And Misleading Statements Issued During the Class Period 19. On October 16, 2014, the first day of the Class Period, SanDisk issued a press release announcing third quarter 2014 results. According to the press release, third quarter revenue of $1.75 billion increased 7 percent on a year-over-year basis and increased 7 percent sequentially. On a GAAP basis, third quarter net income was $263 million, or $1.09 per share, compared to net income of $277 million, or $1.18 per share, in the third quarter of fiscal 2013 and $274 million, or $1.14 per share, in the second quarter of fiscal 2014. Moreover, defendant Mehrotra stated the following: Third quarter results reflect the strength of our diversified product portfolio, broad customer engagements and solid execution. Demand for NAND flash continues to be strong across mobile, client and enterprise, where SanDisk’s innovations are creating significant opportunities. As we focus on closing a record 2014, we also look forward to building upon our success in 2015. 5 20. On October 16, 2014, the Company held a conference call to discuss the financial results for the third quarter 2014. During the call, the issue of “product qualification” came up repeatedly without any indication of problems. For example, defendant Mehrotra stated: We are delighted to report first revenue shipments of ULLtraDIMM, our high- performance, low-latency SSDs to leading server and storage OEMs. [Design] traction for ULLtraDIMM SSDs continues to grow with successful qualifications at Super Micro Computer and Huawei, achieve in the third quarter. . . . The Fusion-io business performed in line with our expectations post- acquisition. On the product front, multiple OEMs have now qualified and are offering our next-generation Fusion-io PCIe products. Our plan is to continue supporting the majority of Fusion-io products on non-captive NANDs in 2015. . . . We also began shipment of our 1Y nanometer X2 SSDs and qualification efforts for our 1Y nanometer X3 SSDs are underway with multiple OEM customers. 21. On November 3, 2014, the Company filed a Form 10-Q with the SEC which was signed by defendant Bruner, and reiterated the Company’s previously announced quarterly financial results and financial position. In addition, the Form 10-Q contained signed certifications pursuant to the Sarbanes- Oxley Act of 2002 (“SOX”) by defendants Bruner and Mehrotra, stating that the financial information contained in the Form 10-Q was accurate and disclosed any material changes to the Company’s internal control over financial reporting. 22. On January 21, 2015, the Company issued a press release announcing fourth quarter and fiscal 2014 financial results. The Company announced that fourth quarter revenue of $1.74 billion was slightly higher on a year-over-year basis and decreased 1 percent sequentially. Total revenue for fiscal 2014 was a record $6.63 billion, a 7 percent increase from $6.17 billion in fiscal 2013. On a GAAP basis, fourth quarter net income was $202 million, or $0.86 per share, compared to net income of $338 million, or $1.45 per share, in the fourth quarter of fiscal 2013 and $263 million, or $1.09 per share, in the third 6 $1.04 billion, or $4.34 per share, in fiscal 2013. Moreover, defendant Mehrotra stated the following: We delivered record revenue in 2014 with continued progress in shifting our portfolio towards high value solutions. Our SSD solutions reached 29 percent of revenue in 2014, with strong growth from both client and enterprise SSDs. We are disappointed with our fourth quarter results, which were impacted primarily by supply constraints. We believe that NAND flash industry fundamentals are healthy, and we expect our financial results to improve as we move through 2015. 23. On January 21, 2015, the Company held a conference call to discuss the financial results for the fourth quarter and fiscal 2014. During the call, the issue of “product qualification” was raised without any indication of problems. For example, defendant Mehrotra stated, “Corporate adoption of our client SSDs continues to accelerate, driven by an increasing attach rate of SSD in notebooks. I am pleased to note that qualification for our 1Y nanometer X3 SSDs is nearing completion with multiple OEM customers.” 24. On March 9, 2015, the Company issued press release announcing April 15, 2015 as the date set to discuss first quarter 2015 financial results. However, the Company made no mention of the negative news to be disclosed less than three weeks later. 25. The statements referenced in ¶¶ 19 – 24 above were materially false and/or misleading because they misrepresented and failed to disclose the following adverse facts pertaining to quality control matters within the corporate organizational structure. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (1) the Company was experiencing certain production qualification delays on certain of its products; (2) the Company was experiencing lower than expected sales of enterprise products; (3) the Company was vulnerable to lower pricing in some areas of the business; and (4) as a result of the foregoing, the Company would be forced to announce drastically lower first quarter revenue estimates compared to prior forecasts, and withdraw entirely 2015 forecasts for the Company’s financial results. 7 26. On March 26, 2015, before the market opened, the Company issued a press release announcing that it expects revenue for the fiscal first quarter “to be approximately $1.3 billion, depending on final sell-through results, compared to the previously forecasted revenue range of $1.40 billion to $1.45 billion.” As the Company disclosed, this reduction in guidance was “primarily due to certain product qualification delays, lower than expected sales of enterprise products and lower pricing in some areas of the business.” Moreover, the Company announced that it expects continued impact to its 2015 financial results from these factors as well as the previously identified supply challenges, and now forecasts 2015 revenue to be lower than the previous guidance. 27. Specifically, the press release disclosed: MILPITAS, Calif.--(BUSINESS WIRE)--Mar. 26, 2015-- SanDisk Corporation (NASDAQ:SNDK), a global leader in flash storage solutions, today announced that it expects its revenue for the first fiscal quarter, which will end on March 29, 2015, to be approximately $1.3 billion, depending on final sell-through results, compared to the previously forecasted revenue range of$1.40 billion to $1.45 billion. The change in first quarter revenue estimate is primarily due to certain product qualification delays, lower than expected sales of enterprise products and lower pricing in some areas of the business. The Company expects continued impact to its 2015 financial results from these factors as well as the previously identified supply challenges, and now forecasts 2015 revenue to be lower than the previous guidance. Other forecasts for the quarter and the year are withdrawn, and the Company will provide an update during its first quarter earnings call on April 15, 2015. SanDisk will also reschedule its previously announced May 2015 Investor Day to a later date. “We are disappointed with our financial outlook,” said Sanjay Mehrotra, president and chief executive officer, SanDisk. “We will work through these headwinds, leveraging our compelling product roadmap and broadening customer base. We believe our growth prospects remain strong and we are encouraged by the progress we are making in our 3D NAND technology.” 28. Analysts registered surprise at the announcement. Noting that this was SanDisk’s second consecutive negative pre-announcement, a Citigroup analyst noted that it was “currently reassessing our 8 visibility.” A Deutsche Bank analyst, after cutting the price target, stated he was “surprised and disappointed by the revenue miss” where SanDisk “mis-executes for two consecutive quarters.” 29. On this news, shares of SanDisk declined $14.98 per share, or 18.45%, to close on March 26, 2015, at $66.20 per share, on unusually heavy volume. 30. As a result of Defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the Company’s securities, Plaintiff and other Class members have suffered significant losses and damages. PLAINTIFF’S CLASS ACTION ALLEGATIONS 31. Plaintiff brings this action as a class action pursuant to Federal Rule of Civil Procedure 23(a) and (b)(3) on behalf of a Class, consisting of all those who purchased or otherwise acquired SanDisk securities during the Class Period (the “Class”); and were damaged upon the revelation of the alleged corrective disclosures. Excluded from the Class are Defendants herein, the officers and directors of the Company, at all relevant times, members of their immediate families and their legal representatives, heirs, successors or assigns and any entity in which Defendants have or had a controlling interest. 32. The members of the Class are so numerous that joinder of all members is impracticable. Throughout the Class Period, SanDisk securities were actively traded on the NASDAQ. While the exact number of Class members is unknown to Plaintiff at this time and can be ascertained only through appropriate discovery, Plaintiff believes that there are hundreds or thousands of members in the proposed Class. Record owners and other members of the Class may be identified from records maintained by SanDisk or its transfer agent and may be notified of the pendency of this action by mail, using the form of notice similar to that customarily used in securities class actions. 9 the Class are similarly affected by Defendants’ wrongful conduct in violation of federal law that is complained of herein. 34. Plaintiff will fairly and adequately protect the interests of the members of the Class and has retained counsel competent and experienced in class and securities litigation. Plaintiff has no interests antagonistic to or in conflict with those of the Class. 35. Common questions of law and fact exist as to all members of the Class and predominate over any questions solely affecting individual members of the Class. Among the questions of law and fact common to the Class are:  whether the federal securities laws were violated by Defendants’ acts as alleged herein;  whether statements made by Defendants to the investing public during the Class Period misrepresented material facts about the business, operations and management of SanDisk;  whether the Individual Defendants caused SanDisk to issue false and misleading financial statements during the Class Period;  whether Defendants acted knowingly or recklessly in issuing false and misleading financial statements;  whether the prices of SanDisk securities during the Class Period were artificially inflated because of the Defendants’ conduct complained of herein; and  whether the members of the Class have sustained damages and, if so, what is the proper measure of damages. 36. A class action is superior to all other available methods for the fair and efficient adjudication of this controversy since joinder of all members is impracticable. Furthermore, as the damages suffered by individual Class members may be relatively small, the expense and burden of individual litigation make it impossible for members of the Class to individually redress the wrongs done to them. There will be no difficulty in the management of this action as a class action. 10 the-market doctrine in that:  Defendants made public misrepresentations or failed to disclose material facts during the Class Period;  the omissions and misrepresentations were material;  SanDisk securities are traded in an efficient market;  the Company’s shares were liquid and traded with moderate to heavy volume during the Class Period;  the Company traded on the NASDAQ and was covered by multiple analysts;  the misrepresentations and omissions alleged would tend to induce a reasonable investor to misjudge the value of the Company’s securities; and  Plaintiff and members of the Class purchased, acquired and/or sold SanDisk securities between the time the Defendants failed to disclose or misrepresented material facts and the time the true facts were disclosed, without knowledge of the omitted or misrepresented facts. 38. Based upon the foregoing, Plaintiff and the members of the Class are entitled to a presumption of reliance upon the integrity of the market. 39. Alternatively, Plaintiff and the members of the Class are entitled to the presumption of reliance established by the Supreme Court in Affiliated Ute Citizens of the State of Utah v. United States, 406 U.S. 128, 92 S. Ct. 2430 (1972), as Defendants omitted material information in their Class Period statements in violation of a duty to disclose such information, as detailed above. COUNT I (Against All Defendants For Violations of Section 10(b) And Rule 10b-5 Promulgated Thereunder) 40. Plaintiff repeats and realleges each and every allegation contained above as if fully set forth herein. 41. This Count is asserted against Defendants and is based upon Section 10(b) of the Exchange Act, 15 U.S.C. § 78j(b), and Rule 10b-5 promulgated thereunder by the SEC. 11 conduct, pursuant to which they knowingly or recklessly engaged in acts, transactions, practices and courses of business which operated as a fraud and deceit upon Plaintiff and the other members of the Class; made various untrue statements of material facts and omitted to state material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; and employed devices, schemes and artifices to defraud in connection with the purchase and sale of securities. Such scheme was intended to, and, throughout the Class Period, did: (i) deceive the investing public, including Plaintiff and other Class members, as alleged herein; (ii) artificially inflate and maintain the market price of SanDisk securities; and (iii) cause Plaintiff and other members of the Class to purchase or otherwise acquire SanDisk securities and options at artificially inflated prices. In furtherance of this unlawful scheme, plan and course of conduct, Defendants, and each of them, took the actions set forth herein. 43. Pursuant to the above plan, scheme, conspiracy and course of conduct, each of the Defendants participated directly or indirectly in the preparation and/or issuance of the quarterly and annual reports, SEC filings, press releases and other statements and documents described above, including statements made to securities analysts and the media that were designed to influence the market for SanDisk securities. Such reports, filings, releases and statements were materially false and misleading in that they failed to disclose material adverse information and misrepresented the truth about SanDisk’s finances and business prospects. 44. By virtue of their positions at SanDisk, Defendants had actual knowledge of the materially false and misleading statements and material omissions alleged herein and intended thereby to deceive Plaintiff and the other members of the Class, or, in the alternative, Defendants acted with reckless disregard for the truth in that they failed or refused to ascertain and disclose such facts as would reveal the materially false and misleading nature of the statements made, although such facts were readily 12 disregard for the truth. In addition, each defendant knew or recklessly disregarded that material facts were being misrepresented or omitted as described above. 45. Defendants were personally motivated to make false statements and omit material information necessary to make the statements not misleading in order to personally benefit from the sale of SanDisk securities from their personal portfolios. 46. Information showing that Defendants acted knowingly or with reckless disregard for the truth is peculiarly within Defendants’ knowledge and control. As the senior managers and/or directors of SanDisk, the Individual Defendants had knowledge of the details of SanDisk’s internal affairs. 47. The Individual Defendants are liable both directly and indirectly for the wrongs complained of herein. Because of their positions of control and authority, the Individual Defendants were able to and did, directly or indirectly, control the content of the statements of SanDisk. As officers and/or directors of a publicly-held company, the Individual Defendants had a duty to disseminate timely, accurate, and truthful information with respect to SanDisk’s businesses, operations, future financial condition and future prospects. As a result of the dissemination of the aforementioned false and misleading reports, releases and public statements, the market price of SanDisk securities was artificially inflated throughout the Class Period. In ignorance of the adverse facts concerning SanDisk’s business and financial condition which were concealed by Defendants, Plaintiff and the other members of the Class purchased or otherwise acquired SanDisk securities at artificially inflated prices and relied upon the price of the securities, the integrity of the market for the securities and/or upon statements disseminated by Defendants, and were damaged thereby. 48. During the Class Period, SanDisk securities were traded on an active and efficient market. Plaintiff and the other members of the Class, relying on the materially false and misleading statements described herein, which the Defendants made, issued or caused to be disseminated, or relying upon the 13 inflated by Defendants’ wrongful conduct. Had Plaintiff and the other members of the Class known the truth, they would not have purchased or otherwise acquired said securities, or would not have purchased or otherwise acquired them at the inflated prices that were paid. At the time of the purchases and/or acquisitions by Plaintiff and the Class, the true value of SanDisk securities was substantially lower than the prices paid by Plaintiff and the other members of the Class. The market price of SanDisk securities declined sharply upon public disclosure of the facts alleged herein to the injury of Plaintiff and Class members. 49. By reason of the conduct alleged herein, Defendants knowingly or recklessly, directly or indirectly, have violated Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder. 50. As a direct and proximate result of Defendants’ wrongful conduct, Plaintiff and the other members of the Class suffered damages in connection with their respective purchases, acquisitions and sales of the Company’s securities during the Class Period, upon the disclosure that the Company had been disseminating misrepresented financial statements to the investing public. COUNT II (Violations of Section 20(a) of the Exchange Act Against The Individual Defendants) 51. Plaintiff repeats and realleges each and every allegation contained in the foregoing paragraphs as if fully set forth herein. 52. During the Class Period, the Individual Defendants participated in the operation and management of SanDisk, and conducted and participated, directly and indirectly, in the conduct of SanDisk’s business affairs. Because of their senior positions, they knew the adverse non-public information about SanDisk’s misstatement regarding the quality controls within the corporate 14 fraudulent transfer requests. 53. As officers and/or directors of a publicly owned company, the Individual Defendants had a duty to disseminate accurate and truthful information with respect to SanDisk’s business practices, and to correct promptly any public statements issued by SanDisk which had become materially false or misleading. 54. Because of their positions of control and authority as senior officers, the Individual Defendants were able to, and did, control the contents of the various reports, press releases and public filings which SanDisk disseminated in the marketplace during the Class Period concerning the quality controls within the corporate organization and the Company’s requisite ability to detect and prevent employee impersonation and fraudulent transfer requests. Throughout the Class Period, the Individual Defendants exercised their power and authority to cause SanDisk to engage in the wrongful acts complained of herein. The Individual Defendants therefore, were “controlling persons” of SanDisk within the meaning of Section 20(a) of the Exchange Act. In this capacity, they participated in the unlawful conduct alleged which artificially inflated the market price of SanDisk securities. 55. Each of the Individual Defendants, therefore, acted as a controlling person of SanDisk. By reason of their senior management positions and/or being directors of SanDisk, each of the Individual Defendants had the power to direct the actions of, and exercised the same to cause, SanDisk to engage in the unlawful acts and conduct complained of herein. Each of the Individual Defendants exercised control over the general operations of SanDisk and possessed the power to control the specific activities which comprise the primary violations about which Plaintiff and the other members of the Class complain. 56. By reason of the above conduct, the Individual Defendants are liable pursuant to Section 20(a) of the Exchange Act for the violations committed by SanDisk. 15 WHEREFORE, Plaintiff demand judgment against Defendants as follows: A. Determining that the instant action may be maintained as a class action under Rule 23 of the Federal Rules of Civil Procedure, and certifying Plaintiff as the Class representative; B. Requiring Defendants to pay damages sustained by Plaintiff and the Class by reason of the acts and transactions alleged herein; C. Awarding Plaintiff and the other members of the Class prejudgment and post-judgment interest, as well as his reasonable attorneys’ fees, expert fees and other costs; and D. Awarding such other and further relief as this Court may deem just and proper. DEMAND FOR TRIAL BY JURY Plaintiff hereby demands a trial by jury. Dated: March 30, 2015 Respectfully submitted, POMERANTZ LLP By: s/ Jennifer Pafiti Jennifer Pafiti (SBN 282790) 468 North Camden Drive Beverly Hills, CA 90210 Telephone: (310) 285-5330 E-mail: jpafiti@pomlaw.com POMERANTZ LLP Jeremy A. Lieberman Matthew L. Tuccillo Francis P. McConville 600 Third Avenue, 20th Floor New York, New York 10016 Telephone: (212) 661-1100 Facsimile: (212) 661-8665 POMERANTZ LLP Patrick V. Dahlstrom 10 South La Salle Street, Suite 3505 Chicago, Illinois 60603 Telephone: (312) 377-1181 Facsimile: (312) 377-1184 16 SANDISK CORP (SNDK) Glore, Trenton LIST OF PURCHASES AND SALES PURCHASE NUMBER OF PRICE PER DATE OR SALE SHS/UTS SH/UT May 01 2015 79.00 Put 03/20/2015 SAL 1 $1.6200 May 01 2015 77.00 Put 03/23/2015 SAL 1 $0.8500

securities

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UNITED STATES DISTRICT COURT Case No.: 15-cv-2756 EASTERN DISTRICT OF NEW YORK --------------------------------------------------------------------------- X KRISHNA MANSINGH, on behalf of himself and all others similarly situated, Plaintiff, CLASS AND COLLECTIVE ACTION COMPLAINT - against - MACY’S, INC., JOSEPH ELETTO TRANSFER, INC., and I. WILLIAMS ASSOCIATES, INC., Defendants. --------------------------------------------------------------------------- : : : : : : : : : : X Plaintiff Krishna Mansingh, on behalf of himself and all others similarly situated, by and through his attorneys Shulman Kessler LLP, Lichten & Liss-Riordan, P.C., and the Law Offices of James W. Simpson, Jr. P.C., complaining of the Defendants Macy’s, Inc. (“Macy’s”), Joseph Eletto Transfer, Inc. (“Eletto”), and I. Williams Associates, Inc. (“IWA”) alleges as follows: INTRODUCTION 1. This lawsuit seeks unpaid wages for Plaintiff and similarly situated drivers who have worked for Defendants Macy’s, Eletto, and IWA (collectively “Defendants”) as delivery drivers, in violation of Massachusetts General Law (“M.G.L.”), Massachusetts common law, or in the alternative, and assuming but not conceding same, in violation of the New York Labor Law (“N.Y. Lab. Law” or “NYLL”). 2. Macy’s sells home furnishing goods to customers. 3. Defendants employ Plaintiff and similarly situated drivers to deliver the Macy’s merchandise to residential homes. 4. Plaintiff and similarly situated drivers work full-time, five to seven days per week as delivery drivers exclusively for Defendants in Massachusetts. 1 5. Although Defendants purported to classify Plaintiff and the other similarly situated drivers as independent contractors rather than as employees pursuant to an Independent Contractor Agreement (“ICA”), Plaintiff and other similarly situated drivers were Defendants’ employees under Massachusetts law or in the alternative, and assuming but not conceding same, in violation of NYLL. 6. Defendants did not pay Plaintiff and other similarly situated drivers proper wages as a result of the improper deductions from their wages, in violation of the Massachusetts law. 7. In the alternative, and assuming but not conceding same, if the Court were to apply the New York choice of law provision contained in the ICA, Plaintiff alleges that he and similarly situated drivers were employees pursuant to NYLL, and that Defendants made improper deductions pursuant to N.Y. Lab. Law § 193 and N.Y. Lab. Law § 198-b. 8. Plaintiff brings this action on behalf of himself and on behalf of a class of similarly situated persons who have worked as delivery drivers in Massachusetts for statutory and common law violations. PARTIES Plaintiff 9. Plaintiff Krishna Mansingh is an adult resident of Brockton, County of Plymouth, Commonwealth of Massachusetts. 10. Krishna Mansingh worked for Defendants as a driver. 11. At all times relevant, Krishna Mansingh was an “employee” within the meaning of M.G.L. c. 149, § 148B, or alternatively, but not conceding same, pursuant to N.Y. Lab. Law §§ 190(2) and 862-b. 2 Defendants 12. Macy’s is a corporation organized under the laws of the State of Delaware, with a principal office located in Cincinnati, Ohio. 13. Macy’s does business in the Commonwealth of Massachusetts. 14. Macy’s operates department stores throughout the nation under the “Macy’s” and “Bloomingdale’s” names. 15. Upon information and belief, Macy’s maintains control, oversight, and direction over its operations and employment practices. 16. At all times hereinafter mentioned, Macy’s was and still is an “employer” within the meaning of M.G.L. c. 149, or alternatively, but not conceding same, pursuant to N.Y. Lab. Law § 190(3). 17. At all relevant times, Macy’s maintained control, oversight, and direction over Plaintiff and similarly situated drivers, including timekeeping, payroll and other employment practices that applied to them. 18. Macy’s applied the same employment policies, practices, and procedures to all drivers throughout Massachusetts, including policies, practices, and procedures with respect to unlawful wage deductions. 19. Eletto is a corporation organized under the laws of the State of New York with a principal office located in Hicksville, New York. 20. Eletto does business in the Commonwealth of Massachusetts. 21. Upon information and belief, Eletto maintains control, oversight, and direction over its operations and employment practices. 3 22. At all times hereinafter mentioned, Eletto was and still is an “employer” within the meaning of M.G.L. c. 149, or alternatively, but not conceding same, pursuant to N.Y. Lab. Law § 190(3). 23. At all relevant times, Eletto maintained control, oversight, and direction over Plaintiff and similarly situated drivers, including timekeeping, payroll and other employment practices that applied to them. 24. Eletto applied the same employment policies, practices, and procedures to all drivers throughout Massachusetts, including policies, practices, and procedures with respect to unlawful wage deductions. 25. IWA is a corporation organized under the laws of the State of New York with a principal office located in Hicksville, New York. 26. IWA does business in the Commonwealth of Massachusetts. 27. Upon information and belief, IWA maintains control, oversight, and direction over its operations and employment practices. 28. At all times hereinafter mentioned, IWA was and still is an “employer” within the meaning of M.G.L. c. 149, or alternatively, but not conceding same, pursuant to N.Y. Lab. Law § 190(3). 29. At all relevant times, IWA maintained control, oversight, and direction over Plaintiff and similarly situated drivers, including timekeeping, payroll and other employment practices that applied to them. 30. IWA applied the same employment policies, practices, and procedures to all drivers throughout Massachusetts, including policies, practices, and procedures with respect to unlawful wage deductions. 4 31. Defendants Macy’s, Eletto, and IWA constitute a unified operation. 32. Defendants Macy’s, Eletto, and IWA constitute a common enterprise. 33. Defendants Macy’s, Eletto, and IWA have interrelated operations. 34. Defendants Macy’s, Eletto, and IWA have common management. 35. Defendants Macy’s, Eletto, and IWA have a centralized control of labor relations. 36. Defendants Eletto and IWA have common ownership. 37. Defendants Eletto and IWA hire employees who are supervised by Defendant Macy’s. 38. Defendants Macy’s and Eletto direct the day to day work of the drivers who are hired by Defendants Eletto and IWA. 39. Defendants Macy’s, Eletto, and IWA share employees. 40. Defendants Macy’s, Eletto, and IWA share the same physical addresses in Massachusetts. 41. Defendants Eletto and IWA share the same physical address in Hicksville, New 42. Defendants Macy’s, Eletto, and IWA constitute a joint employer. 43. Eletto provides residential delivery services for merchants in the home furnishings industries, including Defendant Macy’s. 44. In order to provide delivery services, Eletto enters into ICA’s with individuals such as the Plaintiff and similarly situated drivers, to deliver retail merchandise to customers’ residences. 5 45. Macy’s maintains a warehouse in Dedham, Massachusetts (“Dedham warehouse”) from which Plaintiff and similarly situated drivers deliver Macy’s merchandise to residences in Massachusetts as well as in other states. 46. Eletto maintains an office in the Dedham warehouse for organizing and conducting delivery operations along with the managers employed by Macy’s. 47. Macy’s employees perform a variety of functions in the Dedham warehouse, including but not limited to, warehousing functions, i.e., unloading and storing merchandise that is transported to the warehouse for final delivery to retail customers. 48. Eletto and Macy’s classify Plaintiff and similarly situated drivers as independent contractors and require all drivers, including Plaintiff, enter into ICA’s with Eletto upon hiring. 49. In order to work for Defendants as a driver, Plaintiff and similarly situated drivers were required to incorporate a limited liability corporation. 50. Eletto required that Plaintiff and similarly situated drivers provide their own truck, which the drivers either own or lease. 51. Defendants required that Plaintiff’s and similarly situated drivers’ trucks bear Macy’s logos on the back and side of the trailers along with the Eletto or IWA logo on the truck cab. The trucks also must bear Eletto’s or IWA’s Department of Transportation number. 52. Plaintiff and similarly situated drivers make regular deliveries from the Dedham warehouse five to six days a week exclusively for Macy’s. Approximately thirty to forty trucks make deliveries from the Dedham warehouse each day. 6 JURISDICTION AND VENUE 53. Jurisdiction of the Court over this controversy is based upon 28 U.S.C. § 1332, as complete diversity exists between Plaintiff and Defendants, and because the amount in controversy is greater than the sum of $75,000.00. 54. Venue is proper pursuant to 28 U.S.C. § 1391, as the principal place of business of Defendants Eletto and IWA is located within Nassau County in the State of New York. FEDERAL RULE OF CIVIL PROCEDURE RULE 23 CLASS ALLEGATIONS 55. Plaintiff brings this action on behalf of himself and all similarly situated current and former drivers, namely, all other individuals who have performed courier and/or delivery services for the Defendants and/or their parent organizations, successors and assigns within Massachusetts, and who were not paid proper wages and had improper deductions made from their wages. Plaintiff’s proposed class meets all of the requirements of Rule 23 of the Federal Rules of Civil Procedure. 56. Plaintiff brings his First, Second, and Third Causes of Action, or in the alternative, and assuming but not conceding same, his Fourth, Fifth and Sixth Causes of Action, on his own behalf and as a class action, pursuant to Fed. R. Civ. P. 23 (a), on behalf of the following class of persons: All delivery drivers who are currently or have been employed by Defendants as independent contractors in Massachusetts at any time during the 3 years prior to the filing of this Complaint to the entry of the judgment in the case (hereinafter referred to as the “Massachusetts Class” and the “Massachusetts Class Period,” respectively.) 57. The persons in the Massachusetts Class are so numerous that joinder of all members is impracticable. Although, the precise number of such persons is unknown, and facts 7 on which the calculation of that number can be based on presently within the sole control of Defendants. 58. Upon information and belief, the size of the Massachusetts Class is at least 60 individuals. 59. The First, Second, Third Causes of Action, or in the alternative, and assuming but not conceding same, his Fourth, Fifth, and Sixth Causes of Action, are properly maintainable as a class action under Fed. R. Civ. Pro. 23(b)(3). There are questions of law and fact common to the Massachusetts Class that predominate over any questions solely affecting individual members of the Massachusetts Class, including but not limited to: a. whether the Massachusetts Class Representative and the Massachusetts Class were Defendants’ employees under M.G.L. c. 149, § 148B, or alternatively, but not conceding same, pursuant to N.Y. Lab. Law § 862-b; b. whether Defendants made unlawful deductions from the Massachusetts Class Representative and the Massachusetts Class pay; and c. the nature and extent of Massachusetts Class-wide injury and the appropriate measure of damages sustained by the Massachusetts Class Representative and the Massachusetts Class for unlawful deductions. 60. The Massachusetts Class Representative fairly and adequately protects the interests of the Massachusetts Class and has no interests antagonistic to the class. The named Plaintiff is represented by attorneys who are experienced and competent in both class litigation and employment litigation. 61. A class action is superior to other available methods for the fair and efficient adjudication of this litigation – particularly in the context of wage litigation like the present action, where individual plaintiffs may lack the financial resources to vigorously prosecute a lawsuit in federal court against a corporate defendant. The members of the Massachusetts Class have been damaged and are entitled to recovery as a result of Defendants’ common and uniform policies, 8 practices, and procedures. Although the relative damages suffered by individual members of the Massachusetts Class are not de minimis, such damages are small compared to the expense and burden of individual prosecution of this litigation. In addition, class treatment is superior because it will obviate the need for unduly duplicative litigation that might result in inconsistent judgments about Defendants’ practices. 62. The Massachusetts Class Representative and the Massachusetts Class have been equally affected by the Defendants’ failure to pay proper wages. Moreover, members of the Massachusetts Class still employed by Defendants may be reluctant to raise individual claims for fear of retaliation. 63. Defendants have acted or refused to act on grounds generally applicable to the Massachusetts Class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class was a whole. 64. Plaintiff’s claims are typical of those of the Massachusetts Class. Plaintiff and the other Massachusetts Class members were subjected to the Defendants’ policies, practices, programs, procedures, protocols and plans alleged herein concerning the failure to pay proper wages. Plaintiff’s job duties are typical of those of the class members. CLASS-WIDE FACTUAL ALLEGATIONS 65. Plaintiff and similarly situated drivers (“Class Members”) have been victims of Defendants’ unlawful policy of making deductions from Plaintiff’s and Class Members’ pay. 66. Defendants failed to furnish Plaintiff and Class Members with an accurate statement of, inter alia, wages, hours worked, rates paid as required by the NYLL. 67. As part of its regular business practice, Defendants intentionally, willfully, and repeatedly engaged in a pattern, practice, and/or policy that violates the Massachusetts statutory 9 and common law, alternatively, and assuming but not conceding same, violates the NYLL. Defendants’ policy and pattern or practice includes but is not limited to: a. willfully making improper deductions from Plaintiff’s and Class Members’ pay; and b. willfully failing to keep payroll records as required by the NYLL. 68. Defendants’ failure to properly pay Plaintiff and Class Members their proper wages was willful, intentional and in bad faith. 69. Defendants’ unlawful conduct has been widespread, repeated, and consistent. INDIVIDUAL FACTUAL ALLEGATIONS 70. Krishna Mansingh was employed by Defendants from in or about September 2013 through in or about March 2015. 71. Krishna Mansingh was an employee of Defendants, working under their direct supervision. 72. Although Krishna Mansingh was classified by the Defendants as an independent contractor, he was the Defendants’ employee under G.L. c. 149, § 148B, and in the alternative, and assuming but not conceding same, under N.Y. Lab. Law §§ 190(2) and 862-b. 73. Defendants made unlawful wage deductions from Krishna Mansingh’s wages for reasons that include, but are not limited to: workers’ compensation insurance, liability insurance, other job related insurance, damage or problems with any delivery, uniforms, and truck lease payments. 74. Defendants unlawfully received kick-backs from Krishna Mansingh’s previously agreed upon wage. 10 75. Defendants made a statement, representation or understanding to Krishna Mansingh that failure to provide a kick-back will result in Krishna Mansingh’s termination. 76. Defendants failed to furnish Krishna Mansingh with a wage notice containing his rate of pay and basis thereof, hourly rates of pay and overtime rates of pay, the designated pay day, the name of the employer, the employer’s address and telephone number, and any other material and necessary information. 77. Defendants failed to furnish Krishna Mansingh with an accurate statement of wages listing hours worked, rates paid, gross wages, allowances, and deductions taken, and net wages 78. Upon information and belief, Defendants did not keep accurate records of hours worked by Krishna Mansingh. PLAINTIFF WAS AN EMPLOYEE - FACTUAL ALLEGATIONS 79. Although Plaintiff and the similarly situated drivers were classified as independent contractors of Eletto and IWA, both Eletto and Macy’s retained the right to control and did control nearly every aspect of the delivery drivers’ work. Such control includes, but is not limited to, the following: a. Eletto required Plaintiff and similarly situated drivers to use helpers whom Defendants must approve to assist them in making deliveries. Eletto has required Plaintiff and similarly situated drivers terminate certain helpers; b. Plaintiff and similarly situated drivers were required to report to the Dedham warehouse by 5:00 a.m. each work day, at which time, Defendants provided Plaintiff and other similarly situated drivers with manifests listing the deliveries to be made that day; c. Defendants issued manifests to Plaintiff and similarly situated drivers to determine what goods were delivered, where the deliveries were to be made, and the timeframes within which deliveries were to be made. Plaintiff and similarly situated drivers have no control with respect to the number of deliveries made, 11 the order in which deliveries are made, or the time frames within which deliveries must be made; d. Plaintiff and similarly situated drivers then loaded their trucks with the merchandise to be delivered that day. They were required to leave the Dedham warehouse by a certain time each day. If they did not, they could be subjected to “fines” or otherwise disciplined by Defendants; e. Plaintiff and similarly situated drivers did not negotiate with retail customers regarding the rates charged for their services, and they did not contract with the customers independent of Defendants; f. Macy’s trained Plaintiff and similarly situated drivers how to make deliveries and interact with retail customers. Before leaving the Dedham warehouse, Plaintiff and other similarly situated drivers were required to meet with a Macy’s general manager to obtain gate passes to allow them to leave the premises. During these meetings, Macy’s typically required Plaintiff and similarly situated drivers to “role-play” deliveries; g. Plaintiff and similarly situated drivers must comply with Macy’s grooming standards. Macy’s evaluated Plaintiff and similarly situated drivers’ appearances and required they alter their appearances if deemed unsatisfactory; h. Plaintiff and similarly situated drivers were required to wear uniforms with the Macy’s logo and specific colored shoes during deliveries. If deliveries were being made for Bloomingdale’s merchandise, a uniform bearing the Bloomingdale’s logo had to be worn; i. Plaintiff and similarly situated drivers deliveries were monitored by Macy’s and Eletto. Plaintiff and similarly situated drivers were required to be in contact with Eletto dispatchers regarding the status of deliveries throughout the day and carry Macy’s issued tablets with apps that were used to keep Macy’s and Eletto informed of their progress. For each delivery stop, Plaintiff and similarly situated drivers were required to advise Eletto when they arrived and left a delivery. If drivers encountered any problems with a delivery, they were required to communicate with Eletto for instructions. The tablet also included a GPS system, which Eletto and Macy’s used to track Plaintiff and similarly situated drivers; j. Plaintiff and similarly situated drivers were required to get signatures from customers when deliveries were made; and k. Defendants evaluated Plaintiff’s and similarly situated drivers’ performance and graded them accordingly, using performance matrices. 80. Plaintiff and similarly situated drivers were paid a per stop rate for deliveries. 12 81. Plaintiff and similarly situated drivers were required to pay for their own workers’ compensation insurance, liability insurance and other job related insurance. These amounts were deducted from Plaintiff’s weekly settlement statements by Eletto. In addition, Eletto required all drivers, including Plaintiff, to place monies into an escrow account purportedly to cover damage claims made by third parties. 82. Defendants deducted costs of any damage from Plaintiff’s and similarly situated drivers’ compensation if Defendants determine that a delivery was unsatisfactory (e.g. damaged goods, damage to customer property). 83. Macy’s and Eletto advertise on their websites that the delivery of merchandise as a major business component. Macy’s specifically touts its “white glove treatment” delivery services. 84. Plaintiff provided transportation of commercial goods for Defendants. 85. Plaintiff and similarly situated drivers performed services that are not outside the usual course of Defendants’ business and are integral to Defendants’ business. 86. Plaintiff and similarly situated drivers are not customarily engaged in an independently established trade, occupation, profession or business. Plaintiff and similarly situated drivers could not engage in an independent business given the full-time nature of their work for Defendants and Defendants’ logos on their trucks. Plaintiff and similarly situated drivers are dependent upon Defendants for their work and are unable to offer delivery services to other companies. EXHAUSTION OF ADMINISTRATIVE REMEDIES 87. Plaintiff has filed his statutory claims with the Massachusetts Office of the Attorney General. 13 FIRST CAUSE OF ACTION Massachusetts General Law – Unlawful Wage Deductions (Brought on behalf of Plaintiff and the Massachusetts Class) 88. Plaintiff realleges and incorporates by reference herein all allegations in all preceding paragraphs. 89. Pursuant to M.G.L. c. 149, § 148B, Defendants were the joint employers of Plaintiff and the Massachusetts Class. 90. Defendants violated M.G.L. c. 149, § 148 by requiring that Plaintiff and the Massachusetts Class be subject to deductions from their compensation checks for any alleged damage or problem with any delivery, as well as to deductions for insurance, uniforms, and truck lease payments. 91. Plaintiff asserts these claims under M.G.L. c. 149, § 150. SECOND CAUSE OF ACTION Massachusetts Common Law – Unjust Enrichment (Brought on behalf of Plaintiff and the Massachusetts Class) 92. Plaintiff realleges and incorporates by reference herein all allegations in all preceding paragraphs. 93. Defendants unjustly enriched themselves to the detriment of Plaintiff and the Massachusetts Class members by taking unlawful deductions from the wages of Plaintiff and the Massachusetts Class, in violation of the common law of Massachusetts, or, in the alternative, in violation of the common law of New York. 14 THIRD CAUSE OF ACTION Massachusetts Common Law – Quantum Meruit (Brought on behalf of Plaintiff and the Massachusetts Class) 94. Plaintiff realleges and incorporates by reference herein all allegations in all preceding paragraphs. 95. Plaintiff and the Massachusetts Class members have been deprived by Defendants of the fair value of their services, as described above, and are, therefore, entitled to recover in quantum meruit, the value of their services pursuant to the common law of Massachusetts, or, in the alternative, pursuant to the common law of New York. FOURTH CAUSE OF ACTION In the Alternative, NYLL – Unlawful Wage Deductions (Brought on behalf of Plaintiff and the Massachusetts Class) 96. Plaintiff realleges and incorporates by reference herein all allegations in all preceding paragraphs. 97. Alternatively to the First Cause of Action, assuming but not conceding that the ICA’s New York choice of law provision is enforceable, Plaintiff and similarly situated drivers were employees of Defendants pursuant to N.Y. Lab. Law §§ 190(2) and 862-b. 98. Assuming but not conceding that the ICA’s New York choice of law provision is enforceable, Defendants knowingly, willfully, and intentionally violated N.Y. Lab. Law § 193 by requiring that Plaintiff and the Massachusetts Class be subject to deductions from their compensation checks for any alleged damage or problem with any delivery, as well as to deductions for insurance, uniforms, and truck lease payments. 15 FIFTH CAUSE OF ACTION In the Alternative, NYLL – Illegal Kick-Back of Wages (Brought on behalf of Plaintiff and the Massachusetts Class) 99. Plaintiff realleges and incorporates by reference herein all allegations in all preceding paragraphs. 100. Assuming but not conceding that the ICA’s New York choice of law provision is enforceable, Plaintiff and similarly situated drivers were employees of Defendants, pursuant to N.Y. Lab. Law § 190(2) and 862-b. 101. Assuming but not conceding that the ICA’s New York choice of law provision is enforceable, Defendants violated N.Y. Lab. Law § 198-b by requiring that Plaintiff and the Massachusetts Class be subject to deductions from their compensation checks for any alleged damage or problem with any delivery, as well as to deductions for insurance, uniforms, and truck lease payments. SIXTH CAUSE OF ACTION In the Alternative, NYLL – Notice and Record-Keeping Requirement Violation (Brought on behalf of Plaintiff and the Massachusetts Class) 102. Plaintiff realleges and incorporates by reference herein all allegations in all preceding paragraphs. 103. Assuming but not conceding that the ICA’s New York choice of law provision is enforceable, Defendants failed to supply Plaintiff and similarly situated drivers with a notice as required by N.Y. Lab. Law § 195, in English or in the language identified by Plaintiff as his primary language, containing Plaintiff’s rate or rates of pay and basis thereof, whether paid by the hour, shift, day, week, salary, piece, commission, or other; hourly rate or rates of pay and overtime rate or rates of pay if applicable; the regular pay day designated by the employer in accordance with N.Y. Lab. Law § 191; the name of the employer; any “doing business as” names 16 used by the employer; the physical address of the employer's main office or principal place of business, and a mailing address if different; the telephone number of the employer; plus such other information as the commissioner deems material and necessary. 104. Assuming but not conceding that the ICA’s New York choice of law provision is enforceable, Defendants failed to supply Plaintiff and similarly situated drivers with an accurate statement of wages as required by N.Y. Lab. Law § 195, containing the dates of work covered by that payment of wages; name of employee; name of employer; address and phone number of employer; rate or rates of pay and basis thereof, whether paid by the hour, shift, day, week, salary, piece, commission, or other; gross wages; hourly rate or rates of pay and overtime rate or rates of pay if applicable; the number of hours worked, including overtime hours worked if applicable; deductions; and net wages. 105. Assuming but not conceding that the ICA’s New York choice of law provision is enforceable, due to Defendants’ violations of N.Y. Lab. Law § 195, Plaintiff and similarly situated drivers are entitled to damages of $50 for each workweek that Defendants failed to provide a wage notice, or a total of $2,500 per class member, and damages of $100 for each workweek that Defendants failed to provide accurate wage statements, or a total of $2,500 per class member, as provided for by N.Y. Lab. Law § 198, reasonable attorneys’ fees, costs, and injunctive and declaratory relief. 17 PRAYER FOR RELIEF WHEREFORE, Plaintiff, on behalf of himself and the Massachusetts Class, seeks the following relief: A. Certification of this case as a class action pursuant to Rule 23 of the Federal Rules of Civil Procedure and Mass. Gen. L. c. 149 § 150; B. Designation of Plaintiff as representative of the Rule 23 Class, and counsel of record as Class Counsel; C. Pre-judgment interest and post-judgment interest as provided by law; D. Appropriate equitable and injunctive relief to remedy violations, including but not necessarily limited to an order enjoining Defendants from continuing their unlawful practices; E. Attorneys’ fees and costs of the action; F. Alternatively, and assuming but not conceding same, statutory damages, as provided for by N.Y. Lab. Law § 198, for Defendants’ violations of the notice and recordkeeping requirements pursuant to N.Y. Lab. Law § 195; G. Alternatively, and assuming but not conceding same, issuance of a declaratory judgment that the practices complained of in this action are unlawful under N.Y. Lab. Law § 198 H. Appropriate equitable and injunctive relief to remedy violations, including but not necessarily limited to an order enjoining Defendants from continuing their unlawful practices; I. Reasonable incentive awards for Plaintiff to compensate him for the time he spent attempting to recover wages for the Class and for the risks he took in doing so; J. Plaintiff’s damages as proved at trial, including damages for the deductions taken from Plaintiff’s compensation checks; 18 K. Statutory trebling of all wage-related damages and/or the application of liquidated damages; and L. Such other relief as this Court shall deem just and proper. Dated: Melville, New York May 12, 2014 Respectfully submitted, By: /s/ Troy L. Kessler Troy L. Kessler SHULMAN KESSLER LLP Troy L. Kessler Marijana Matura 510 Broadhollow Road, Suite 110 Melville, New York 11747 Telephone: (631) 499-9100 Harold Lichten, Esq. (Pro hac vice forthcoming) Thomas Fowler, Esq. (Pro hac vice forthcoming) LICHTEN & LISS-RIORDAN, P.C. 729 Boylston Street, Suite 2000 Boston, MA 02116 (617) 994-5800 hlichten@llrlaw.com tfowler@llrlaw.com James W. Simpson, Jr., Esq. (Pro hac vice forthcoming) LAW OFFICES OF JAMES W. SIMPSON, JR. P.C. 100 Concord Street, Suite 3B Framingham, MA 01702 (508) 872-0002 Attorneys for Plaintiff and the Putative Massachusetts Class 19

employment & labor

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UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WISCONSIN 823 Civil Action 19-CV-_____ CLASS ACTION COMPLAINT AND JURY DEMAND GWYNETH GILBERT and MICHAEL MARTE, on behalf of themselves and the Putative Class, Plaintiffs, v. LANDS’ END, INC., Defendant. Plaintiffs, by their attorneys, Hawks Quindel S.C., Nagel Rice LLP and Cerasia & Del Rey- Cone LLP, on behalf of themselves and all others similarly situated, make the following allegations on personal knowledge and information and belief: I. NATURE OF THE ACTION 1. Plaintiffs Gwyneth Gilbert and Michael Marte bring this action on behalf of themselves and all similarly-situated individuals (the “Class”) who are “above-the-wing” – flight attendants and customer service agents (gate agents) – and “below-the wing” – ramp agents - working for Delta Air Lines (“Delta”) and who have been required to wear Passport Plum or similar red-colored uniforms (the “Uniforms”) manufactured by Lands’ End, Inc. and Lands’ End Business Outfitters (herein collectively referred to as “Lands’ End” or “Defendant”). 2. Wearing the Uniforms has resulted in Delta employees, including the Plaintiffs, suffering from skin rashes, headaches, fatigue, breathing difficulties, hair loss, low white blood cell counts and nausea. Additionally, the Passport Plum uniforms are not colorfast and result in crocking and bleeding, staining the wearer and/or their possessions purple. The purple dye comes off on the wearer’s skin and then stains the bathtub when they try to wash it off. The dyes in the fabric ‘bleed’ onto the wearer’s clothes, sheets and towels and permanently stain their possessions. 3. As Plaintiffs and the proposed Class Members at Delta are non-union, at-will employees, many are reluctant to complain about the problems with their Uniforms and suffer in silence, and Mr. Marte and some flight attendants wear undergarments or long underwear to protect themselves from new Uniforms. 4. A total of approximately 24,000 flight attendants and approximately 40,000 gate and ramp agents are required to wear the Uniforms while working for Delta. 5. Plaintiffs and the Class seek actual damages, injunctive relief, attorneys’ fees, costs, and all other relief available to Plaintiffs and the Class. II. PARTIES 6. Plaintiff Gwyneth Gilbert is a Georgia citizen who resides in Sandy Springs, Georgia. 7. Plaintiff Michael Marte is a Georgia citizen who resides in Newnan, Georgia. 8. Defendant Lands’ End, Inc. is a Delaware corporation with its headquarters at 1 Lands’ End Way, Dodgeville, Wisconsin. 9. At all relevant times, Lands’ End was engaged in the business of manufacturing, marketing, advertising, distributing, selling, and warranting Lands’ End products, including the uniforms manufactured for Delta, specifically for Delta’s Flight attendants and gate agents, throughout the United States of America. III. JURISDICTION AND VENUE 10. This Court has subject matter jurisdiction over this action under 28 U.S.C. § 1331. This Court also has subject matter jurisdiction pursuant to the Class Action Fairness Act of 2005, 28 U.S.C. § 1332(d)(2), as the Class contains more than 100 members, at least one of whom maintains citizenship in a state diverse from Defendant, and seeks in the aggregate more than five million dollars ($5,000,000.00), exclusive of costs and interest. 11. Lands’ End is amenable to personal jurisdiction in Wisconsin, given that it is a citizen of Wisconsin, a substantial portion of the wrongdoing alleged to have occurred took place in Wisconsin, and Lands’ End conducts business within Wisconsin. 12. Venue is proper in this District pursuant to 28 U.S.C. § 1391 because Lands’ End is a citizen and resident within this District and a substantial part of the events giving rise to the claims set forth herein occurred in and emanated from this District. IV. FACTUAL BACKGROUND A. Delta Decides to Provide New Employee Uniforms from Lands’ End 13. On its website, Lands’ End describes itself as “a leading multi-channel international retailer of casual clothing, accessories . . . legendary for high-quality products at an exceptional value, plus a commitment to world-class customer service and an unconditional guarantee.” Business Outfitters by Lands’ End is described as a trusted brand partner providing “quality, high- value apparel and promotional products.” 14. In 2016, Delta selected Lands’ End to provide new employee uniforms designed by Zac Posen of Bravo’s Project Runway for its above-the-wing employees. This line of uniforms for above-the-wing employees at Delta, which are bright purple, technically known as “Passport Plum,” consist of various articles of clothing, including a v-neck signature dress, a skirt and blouse, a mock turtleneck, a vest, a sweater set and a pants suit. Delta requires its ramp agents (i.e., below- the-wing employees) to wear red shirts from Lands’ End, including a red button-up polo shirt, a red and black quarter-zip polo shirt and a short-sleeve button down red and black cargo shirt (herein collectively referred to as the “Uniforms”). 15. The Uniforms, which are worn by approximately 24,000 flight attendants and approximately 40,000 gate and ramp agents, were designed to turn Delta employees into walking advertisements for the airline. Delta even encouraged its flight attendants to promote the new Uniforms on their social media pages. 16. The official launch of the new Uniforms occurred on May 29, 2018. 17. Delta describes the Uniforms as high stretch, wrinkle- and stain-resistant, waterproof, anti-static and deodorizing. Various chemical additives and finishes are required to ensure these characteristics. 18. Once the Uniforms became available, flight attendants and gate agents had to go to a “fit clinic” to get measured for the new Uniforms. Delta offered a kit consisting of certain pieces which were “purchased” with Delta “points” provided by Delta, rather than cash. If an employee wanted additional pieces, such as the sweater set, it could be purchased by the employee directly from Lands’ End using the employee’s own funds. 19. Female flight attendants have several articles to choose from for a Uniform: a v- neck dress, IFS Signature dress, skirt, pants, blouse, vest or blazer. Female gate agents have a color-block dress with an accent of Cruising Cardinal or a purple pants suit, and flight attendants and gate agents get a warming sweater. Male flight attendants wear a three-piece suit in Groundspeed Graphite with a thistle pink button-up shirt with a tie, sweater, or a cardigan and mock turtleneck. Delta Employees Experience Adverse Health Reactions 20. Shortly after the Uniforms were introduced, some female flight attendants said that they started getting sick, reporting skin rashes, shortness of breath, heart palpitations and hair loss. 21. As reported in an article in The Guardian dated April 4, 2019: “On a private Facebook group used by over 2,000 flight attendants viewed by The Guardian, hundreds of flight attendants have complained of health problems as a result of wearing the new uniforms. The health concerns over the uniforms are serious enough that some doctors have instructed Delta flight attendants to bring EpiPens to work in case they break out in rashes. See https://www.theguardian.com/business/2019/apr/03/delta-flight-attendants-uniforms-rash-claims 22. One flight attendant interviewed by The Guardian stated: “I noticed right away after I put the uniforms on that I had shortness of breath and I have been a runner my whole life . . . I don’t smoke or anything like that, so when I couldn’t get up the stairs without being extremely winded, I know there was some sort of problem.” Id. 23. Another flight attendant said she noticed huge rashes all over her body that made it impossible for her to sleep. The rash looked alike chemical burns and took weeks for it to go away. She had to take antibiotic because a patch of the rash got infected. Id. 24. According to the Guardian article, many doctors believe that formaldehyde and Teflon chemical finishing put on the uniforms to make them stain resistant and durable are likely the culprit. 25. In March 2019, Delta informed some flight attendants that if they did not want to wear the new Uniforms, they would need to request a disability job accommodation with the option of going on short-term disability leave. Under short-term disability leave, they would only make two-thirds of their pay and would have to either return to their jobs or quit after a year. 26. Because Delta flight attendants are non-union, many flight attendants are afraid to complain about the adverse health consequences they are experiencing from the new Uniforms. As of August 30, 2019, Delta announced that only “1,900” employees have complained about adverse health reactions associated with the Uniforms. 27. It has been reported that the National Institute of Occupational Safety and Health (NIOSH), which is part of the Center for Disease Control (CDC), is expected start an official inquiry into the Passport Plum Uniforms in the near future. 28. On August 30, 2019, Delta announced to its employees that it “has hired an independent toxicologist to perform comprehensive testing on the new above-wing [Purple Plum] uniform testing as part of [its] efforts to ensure the safety of [its] employees.” Delta further reported that this study and testing is an “additional $3.5 million [] investment,” along with “the routine tests Lands’ End continuously performs and detailed testing prior to any wear test.” Plaintiffs’ Experiences Gwyneth Gilbert 29. Plaintiff Gwyneth Gilbert is a Delta flight attendant who has experienced rashes and skin irritations from wearing the Uniforms. Ms. Gilbert’s kit included two dresses and a pant suit. Additionally, she purchased a sweater set directly from Lands’ End. 30. As early as June or July 2018, Ms. Gilbert found that wearing the mock turtleneck caused a rash on her skin. Then, in September and through the fall of 2018, she wore the pants and blouse part of the Uniform and she broke out in a rash. 31. The rash which caused irritation on the back of Ms. Gilbert’s neck, the collarbone area and chest was red and painful to the touch. She experienced a burning sensation, which made it difficult for her to complete her normal job duties due to the pain. 32. Ms. Gilbert contacted Lands’ End about these symptoms and Lands’ End promised to send her a “custom” replacement shirt, which was allegedly “untreated.” The replacement shirt was worse, making her skin feel as though she had experienced a burn. 33. A photo of Ms. Gilbert’s rash appears below: 34. In late fall to December 2018, Ms. Gilbert wore the Passport Plum dress, resulting in sore throats, headaches, body aches and fatigue. She had these symptoms each time she worked a flight wearing the Uniform. 35. In January 2019, Ms. Gilbert contacted Delta’s Uniform Committee, which advised her to file an on-the-job injury report (i.e., workers’ compensation claim), which she filed in January 2019. 36. On February 25, 2019, Ms. Gilbert was sent to a dermatology center in Atlanta for “patch” testing by Sedgwick, the worker’s compensation administrator, and she had to stay out of work for the whole week. She became sick after the patch test, developing a sore throat, headache and body aches, which lasted almost two weeks. A copy of a photo of Ms. Gilbert while the patch test was being administered is set forth below. 37. On March 1, 2019, the dermatologist who conducted the patch test on Ms. Gilbert using her Uniform concluded that she is highly allergic to the “disperse dyes” and Formaldehyde in the Uniform. The dermatologist recommended that her uniform be changed. 38. Ms. Gilbert was placed on short-term disability leave by Delta from March 5 through April 2, 2019. While on short-term disability leave, she was required to use her “certified time” in order to receive her pay. 39. Ms. Gilbert returned to work on April 3, 2019 and is now allowed to wear a black pants suit and white blouse, rather than the Passport Plum Uniform. Since then, she has experienced no physical symptoms. Michael Marte 40. Plaintiff Michael Marte is employed by Delta as a ramp agent in Atlanta, Georgia. He has been employed by Delta for over 21 years. 41. Mr. Marte has experienced significant rashes, skin irritation and permanent scaring on his face, head, arms, torso and back from wearing the red-colored Uniforms. 42. Photos of Mr. Marte’s skin rashes, irritation and scaring appear below: 43. In August 2018, Mr. Marte started seeking treatment from dermatologists for his symptoms. He has continually received treatment from a dermatologist to date. 44. Mr. Marte’s dermatologist conducted a patch test on him. The results of the patch test, which were issued in September 2019, show that Mr. Marte is allergic to certain allergens associated with the red-color Uniforms that he is required to wear as a Delta employee. In particular, the testing results indicate that he has a “contact allergy to Dimethylol dihydroxy ethylene urea,” which is a type of textile resin. Mr. Marte’s dermatologist has recommended that he wear an alternative uniform in order to continue his employment at Delta. 44. Mr. Marte has communicated with Delta and Lands’ End about his skin conditions resulting from the red-colored Uniforms. Delta originally contact Mr. Marte’s wife after seeing a post she made on the Facebook page of a group of Delta flight attendants who communicate about the adverse health issues associated with their Uniforms. Delta originally informed Mr. Marte that he did not have to wear the Uniforms, but then required him to do so again after about two weeks. Lands’ End sent him three new sets of red-colored Uniforms, but he has continued to have adverse skin reactions to those new Uniforms, too. Mr. Marte also has worn a white undershirt under his red-colored Uniform shirts, but that has not helped him or alleviated his skin conditions. V. CLASS ACTION ALLEGATIONS 45. Plaintiffs brings this action on behalf of themselves and all other persons similarly situated, pursuant to Rules 23(b)(2) and 23(b)(3) of the Federal Rules of Civil Procedure on behalf of the following Class: All flight attendants, gate agents and ramp agents employed by Delta in the United States who were required to wear Passport Plum and red-colored uniforms manufactured by Defendant. Excluded from the Class Excluded from the Class are: (a) Defendant, any entity in which Defendant has a controlling interest, and its legal representatives, officers, directors, employees, assigns, and successors; (b) the judge to whom this case is assigned and any member of the judge’s immediate family; and (c) any employee of Delta who resides in the State of the New York and is included with the definition of the class in the case of Monica DeCresentis, et al. v. Lands’ End, Inc., U.S.D.C., S.D.N.Y., 19-CV-4717 (LGS). 46. Numerosity/Impracticability of Joinder/Ascertainability: The members of the Class are so numerous that joinder of all members would be impracticable. The Class is believed to include approximately 64,000 members. The Class is composed of an easily ascertainable, self-identifying set of individuals and entities that work or have worked for Delta and were or are required to wear the Uniforms. Lands’ End has the contact information for each class member, who were or are required to select among the several items manufactured by Defendant. The precise number of Class members can be ascertained by reviewing documents in Defendant’s possession, custody and control. 47. Commonality and Predominance: There are common questions of law and fact that predominate over any questions affecting only individual members of the Class. These common legal and factual questions, include, but are not limited to, the following: a. Whether the Uniforms caused serious adverse health reactions to Class Members; b. Whether the Uniforms bleed and crock resulting in purple or red coloring leaching into Class Members skin, staining their clothing and other possessions, resulting in permanent damage to their possessions that come in contact with the Uniforms. c. Whether the conduct of Lands’ End violates warranty laws, and other laws as asserted herein; d. Whether the conduct of Lands’ End was negligent; e. Whether Lands’ End should be strictly liable for producing dangerous uniforms; f. Whether Class Members are entitled to monetary and equitable relief from Lands’ End. 48. Typicality: Plaintiffs’ claims are typical of the claims of the members of the Class. Plaintiffs and the other members of the Class have suffered similar injury by the same wrongful practices by Lands’ End. The claims of Plaintiffs and the other members of the Class all arise from the same wrongful practices and course of conduct, and are based on the same legal and remedial theories. 49. Adequacy Of Representation: Plaintiffs will fully and adequately assert and protect the interests of the members of the Class, and have retained class counsel who are experienced and qualified in prosecuting class actions. Neither Plaintiffs nor their attorneys have any interests that are contrary to or conflicting with the members of the Class. 50. Superiority Of Class Action And Impracticability Of Individual Actions: A class action is superior to all other available methods for the fair and efficient adjudication of this lawsuit, because individual litigation of the claims of all members of the Class is not economically feasible and is procedurally impracticable. While the aggregate damages sustained by the members of the Class are in the millions of dollars, and are no less than $5,000,000, upon information and belief, the individual damages incurred by each member of the Class resulting from Lands’ End’s wrongful course of conduct are too small to warrant the expense of individual lawsuits. The likelihood of individual members of the Class prosecuting their own separate claims is remote, and, even if every Class member could afford individual litigation, the court system would be unduly burdened by individual litigation of such cases. Individual members of the Class do not have a significant interest in individually controlling the prosecution of separate actions, and individualized litigation would also present the potential for varying, inconsistent, or contradictory judgments and would magnify the delay and expense to all of the parties and to the court system because of multiple trials of the same factual and legal issues. Plaintiffs know of no difficulty to be encountered in the management of this action that would preclude its maintenance as a class action. In addition, Lands’ End has acted or refused to act on grounds generally applicable to the members of the Class and, as such, final injunctive relief or corresponding declaratory relief with regard to the members of the Class as a whole is appropriate. VI. CLAIMS FOR RELIEF FIRST COUNT (NEGLIGENCE) 51. Plaintiffs on behalf of themselves and all others similarly situated, incorporate by reference the allegations contained in the preceding paragraphs of this Complaint. 52. This claim is brought on behalf of Plaintiffs and the Class. 53. Defendant owes a duty to individuals, including Plaintiffs and the Class, to use reasonable care in designing, manufacturing, marketing, labeling and selling the Uniforms. 54. Defendant was negligent in failing to use reasonable care in designing, manufacturing, marketing, labeling and selling the Uniforms. Defendant breached their aforementioned duty by: a. Failing to design the Uniforms so as to avoid an unreasonable risk of harm to Delta flight attendants, gate agents and ramp agents bringing the Uniforms into their homes and wearing the Uniforms, including the Plaintiffs; b. Failing to use reasonable care in the testing of the Uniforms so as to avoid unreasonable risk of harm to Delta flight attendants, gate agents and ramp agents bringing the Uniforms into their homes and wearing the Uniforms, including the Plaintiffs; c. Failing to use reasonable care in inspecting the Uniforms so as to avoid an unreasonable risk of harm to Delta flight attendants, gate agents and ramp agents bringing the Uniforms into their homes and wearing the Uniforms, including the Plaintiffs; d. Failing to use reasonable care in collecting and/or analyzing adverse event reports by Delta flight attendants, gate agents and ramp agents reporting issues with the Uniforms; e. Otherwise negligently or carelessly designing, manufacturing, marketing and selling the Uniforms. 55. As a direct and proximate result of Lands’ End’s negligence, Plaintiffs and the Class have suffered and/or in the future will suffer personal injuries, pain and suffering, severe emotional distress, financial or economic loss, including but not limited to, medical services and expenses, lost income and other damages. WHEREFORE, Plaintiffs demand judgment against Defendant for compensatory and injunctive relief, together with interest, costs of suit, attorneys’ fees, and such other relief as the Court deems proper. SECOND COUNT (DESIGN DEFECT) 56. Plaintiffs on behalf of themselves and all others similarly situated, incorporate by reference the allegations contained in the preceding paragraphs of this Complaint. 57. This claim is brought on behalf of Plaintiffs and the Class. 58. At all times material to this action, Defendant was responsible for designing, developing, manufacturing, testing, promoting, packaging, marketing, distributing and selling the Uniforms. 59. The Uniforms are defective and unreasonably dangerous to Plaintiffs and the members of the Class. 60. The Uniforms are defective in their design or formulation in that it they are not reasonably fit, suitable, or safe their intended purpose and/or its foreseeable risks exceed the benefits associated with their design and formulation. 61. At all times material to this action, the Uniforms were not safe and were not suited for the purposes for which Defendant, directly and indirectly, advertised, marketed, and promoted them at the time Defendant designed, manufactured, distributed, and sold the Uniforms and placed the Uniforms in the stream of commerce. 62. The Uniforms were defective and unreasonably dangerous when they left control of Defendant in one or more of the following manners: a. The risk associated with wearing the Uniforms far outweighed the utility derived from wearing them; b. Defendant failed to provide adequate warnings regarding the hazards associated with wearing the Uniforms; c. Defendant’s Uniforms were defectively designed and unreasonably dangerous in design and composition in that other products could achieve similar results without the risks presented by the Uniforms; d. The Uniforms failed to comply with the implied warranty that the product was safe when used for its intended purpose. 63. At the time the Uniforms left the control of Defendant, there were practical and feasible alternative designs that would have prevented and/or significantly reduced the risk to the Plaintiffs’ and the Class members of injuries without impairing the reasonably anticipated or intended function of the Uniforms. These safer alternative designs were economically and technologically feasible, and would have prevented or significantly reduced the risk of injuries to Plaintiffs and the Class Members without substantially impairing the Uniforms’ utility. 64. As a direct and proximate result of the Uniforms’ defective design, the Plaintiffs and Class Members suffered severe adverse health reactions and physical injuries, as well as damage to personal property in the form of clothing and furniture permanently stained purple. 65. As a direct and proximate consequence of Lands’ End’s defectively designed Uniforms, Plaintiffs and the Class Members sustained personal injuries and related losses as detailed more fully herein. WHEREFORE, Plaintiffs demand judgment against Defendant for compensatory damages and injunctive relief, together with interest, costs of suit, attorneys’ fees, and such other relief as the Court deems proper. THIRD COUNT (MANUFACTURING DEFECT) 66. Plaintiffs on behalf of themselves and all others similarly situated, incorporate by reference the allegations contained in the preceding paragraphs of this Complaint. 67. This claim is brought on behalf of Plaintiffs and the Class. 68. The Uniforms manufactured by Lands’ End, which Plaintiffs and the Members of the Class were required to wear during working hours, were not reasonably safe for their intended use and were defective as a matter of law with respect to their manufacture. 69. As a direct and proximate result of the Uniforms’ aforementioned defects, Plaintiffs and the members of the Class were caused to suffer and /or in the future will be caused to suffer adverse health consequences, pain and suffering, emotional distress, financial or economic loss, including but not limited to, obligations for medical services and expenses, lost income and other damages. 70. Defendant is strictly liable to Plaintiffs and the members of the class for designing, manufacturing, marketing, labeling, packaging and selling defective Uniforms. WHEREFORE, Plaintiffs demand judgment against Defendant for compensatory damages and injunctive relief, together with interest, costs of suit, attorneys’ fees, and such other relief as the Court deems proper. FOURTH COUNT (FAILURE TO WARN) 71. Plaintiffs on behalf of themselves and all others similarly situated, incorporate by reference the allegations contained in the preceding paragraphs of this Complaint. 72. This claim is brought on behalf of Plaintiffs and the Class. 73. The Uniforms manufactured by Lands’ End to be worn by Plaintiffs and all Delta flight attendants, gate agents and ramp agents were not reasonably safe for their intended use and were defective as a matter of law due to their lack of appropriate and necessary warnings. 74. Defendant had a duty to warn Plaintiffs and the members of the Class of the risks and/or defects about which it knew or should have known. 75. Defendant failed to adequately warn Plaintiffs and the members of the Class that the Uniforms were unreasonably dangerous and defective because they could result in severe adverse health effects, including, but not limited to, rashes and skin irritations, hair loss, headache and fatigue, and nausea. 76. At all times relevant hereto, Defendant intended the Delta flight attendant, gate agents and ramp agents, including Plaintiffs, to wear the Uniforms and knew or should have known that the Uniforms were defective and dangerous. 77. The Uniforms were used/worn by Plaintiffs and the Class members in a reasonably anticipated and foreseeable manner, and in the manner for which the Uniforms were intended. 78. At all relevant times hereto, Defendant was situated in the chain of commerce and transferred, sold, marketed, advertised, or distributed the Uniforms in the regular course of business. 79. At all times relevant hereto, the Uniforms were in the same or substantially the same, defective and unreasonably dangerous condition when put to its reasonably anticipated and foreseeable use. 80. Defendant knew or should have known of the risk of injury from the Uniforms, but failed to provide adequate warning to users/wearers of the product, failed to immediately recall the Uniforms and continued to sell the Uniforms to be worn by Delta flight attendants, gate agents and ramp agents. As a direct result, the Uniforms manufactured and/or supplied by Defendant were defective due to inadequate post marketing warnings or instructions. 81. Had Defendant adequately warned Plaintiffs and the Class Members they would have been alerted to the problem and would have taken steps to avoid the adverse health consequences before they occurred. 82. As a direct and proximate consequence of Defendant’s defectively designed product, Plaintiffs and the members of the Class sustained serious personal injuries and injuries to property and losses as detailed more fully herein. WHEREFORE, Plaintiffs demand judgment against Defendants for compensatory damages and injunctive relief, together with interest, costs of suit, attorneys’ fees, and such other relief as the Court deems proper. FIFTH COUNT (BREACH OF EXPRESS WARRANTY) 83. Plaintiffs on behalf of themselves and all others similarly situated, incorporate by reference the allegations contained in the preceding paragraphs of this Complaint. 84. This claim is brought on behalf of Plaintiffs and the Class. 85. Defendant made assurances to Delta and Delta’s employees that the Uniforms would be safe and comfortable and reasonably fit for their intended purpose. 86. Plaintiffs and the Class are the intended third party beneficiaries of Lands’ End’s warranties because there is a valid and binding contract between Delta and Lands’ End, the contract was intended for the benefit of Delta’s flight attendants, gate agents and ramp agents who would be required to wear the Uniforms, and the benefit to the flight attendants, gate agents and ramp agents is sufficiently immediate, rather than incidental, to indicate the assumption by the contracting parties of a duty to compensate the Delta employees if the benefit of the warranty is lost. Consequently, Plaintiffs and the Class Members are in privity with Defendant. 87. Accordingly, Lands’ End made express warranties under state law. 88. Plaintiffs and the Class reasonably relied upon Lands’ End’s express warranties and guarantees that the Uniforms were safe, merchantable, and reasonably fit for their intended purpose. 89. Defendant breached their express warranties by selling to Delta and the Plaintiffs and the Class unreasonably dangerous and defective Uniforms jeopardizing the health and safety of Plaintiffs and the Class Members and resulting in the permanent staining of their clothes and other products. 90. Plaintiffs notified Lands’ End of the breach. Lands’ End was on notice of the breach of warranty well before Plaintiffs began this litigation. 91. As a direct and proximate result of Lands’ End’s breach of its express warranties, Plaintiffs and the Class Members have suffered personal injuries, pain and suffering, damage to property, emotional distress, financial and economic loss, including obligations for medical services and expenses, lost income, and other damages. WHEREFORE, Plaintiffs demand judgment against Defendant for compensatory damages and injunctive relief, together with interest, costs of suit, attorneys’ fees, and such other relief as the Court deems proper. SIXTH COUNT (BREACH OF IMPLIED WARRANTY) 92. Plaintiffs on behalf of themselves and all others similarly situated, incorporate by reference the allegations contained in the preceding paragraphs of this Complaint. 93. This claim is brought on behalf of Plaintiffs and the Class. 94. Plaintiffs and the Class are the intended third party beneficiaries of Lands’ End’s warranties because there is a valid and binding contract between Delta and Lands’ End, the contract was intended for the benefit of Delta’s flight attendants, gate agents and ramp who would be required to wear the Uniforms, and the benefit to the flight attendants, gate agents and ramp agents is sufficiently immediate, rather than incidental, to indicate the assumption by the contracting parties of a duty to compensate the Delta employees if the benefit of the warranty is lost. Consequently, Plaintiffs and the Class Members are in privity with Defendant. 95. The Lands’ End Uniforms are “goods” under the Uniform Commercial Code (“UCC”). 96. Lands’ End is a “merchant” under the UCC. 97. Lands’ End made numerous implied warranties to Delta and Plaintiffs and the members of the Class about the merchantable quality of the Uniforms and that they were fit for the ordinary purpose for which Uniforms are intended. 98. Plaintiffs and the Class relied upon Lands’ Ends’ implied warranties of merchantability in wearing and purchasing the Uniforms. 99. Defendant breached the implied warranties of merchantability because the Uniforms were neither merchantable nor suited for their intended use as warranted. 100. Defendant breached the implied warranties by selling to Delta and the Plaintiffs and the Class unreasonably dangerous and defective Uniforms jeopardizing the health and safety of Plaintiffs and the class and resulting in the permanent staining of their clothes and other products. 101. As a direct and proximate result of Lands’ End’s breach of its implied warranties Plaintiffs and the Class have suffered personal injuries, pain and suffering, damage to property, emotional distress, financial and economic loss, including obligations for medical services and expenses, lost income, and other damages. WHEREFORE, Plaintiffs demand judgment against Defendant for compensatory damages and injunctive relief, together with interest, costs of suit, attorneys’ fees, and such other relief as the Court deems proper. SEVENTH COUNT (VIOLATIONS OF THE MAGNUSON-MOSS WARRANTY ACT, 15 U.S.C. § 2301 et. seq.) 102. Plaintiffs on behalf of themselves and all others similarly situated, incorporate by reference the allegations contained in the preceding paragraphs of this Complaint. 103. This claim is brought on behalf of Plaintiffs and the Class. 104. Plaintiff and the Class are “consumers” within the meaning of the Magnuson-Moss Warranty Act, 15 U.S.C. § 2301(3). 105. Lands’ End is a “supplier[]” and “warrantor[]” within the meaning of 15 U.S.C. §§ 2301(4)-(5). 106. The Lands’ End Uniforms are “consumer products” within the meaning of 15 U.S.C. § 2301(1). 107. Defendant’s written affirmations of fact, promises, and descriptions as alleged created a “written warranty” as to the Uniforms. There was an implied warranty for the sale of such product within the meaning of the MMWA. Such warranties were further described in the express and implied warranty counts above. 108. As detailed herein, Defendant breached these express and implied warranties, as the Uniforms were not fit for their intended use, were not defect free, and were harmful to Plaintiffs and the Class Members. 109. The defects existed when the Uniforms left the Defendant’s control. 110. Despite reasonable opportunity to honor its disclosure and remedy obligations, Lands’ End violated these obligations under the Magnuson-Moss Act, causing injury to the Plaintiffs and the Class. 111. The amount in controversy with respect to the Class Plaintiff’ individual claims meets or exceeds the sum or value of $25. There are more than 100 individuals in the Class. In addition, the amount in controversy meets or exceeds the sum or value of $50,000 (exclusive of interest and costs) computed on the basis of all claims to be determined in this suit. 112. As a direct and proximate result of Lands’ End’s breach of warranty, Plaintiffs and the members of the Class sustained damages and other losses in an amount to be determined at WHEREFORE, Plaintiffs demand judgment against Defendant for compensatory damages, together with interest, costs of suit, attorneys’ fees, and such other relief as the Court deems proper. VII. PRAYER FOR RELIEF WHEREFORE, Plaintiffs on behalf of themselves and on behalf of the members of the Class, pray for judgment against Lands’ End granting the following relief: 1. Certification of the proposed Class, and appointing Plaintiffs to represent the Class and Plaintiffs’ co-counsel as co-lead class counsel; 2. All recoverable compensatory, statutory and other damages sustained by Plaintiffs and the other members of the Class; 3. Injunctive and declaratory relief; 4. Statutory pre-judgment and post-judgment interest on the damages; 5. Payment of reasonable attorneys’ fees and costs as may be allowable under applicable law; and 6. Such other relief as the Court may deem just and proper. VIII. DEMAND FOR JURY TRIAL Plaintiffs demand a trial by jury on all causes of action so triable. Dated: October 3, 2019 HAWKS QUINDEL S.C. By /s/ David Zoeller David C. Zoeller (Bar No. 1052017) Nicholas E. Fairweather (Bar No. 1036681) Caitlin M. Madden (Bar No. 1089238) 409 E. Main Street Madison, Wisconsin 53701 608.257.0040 dzoeller@hq-law.com nfairweather@hq-law.com cmadden@hq-law.com -and- NAGEL RICE, LLP By /s/ Bruce H. Nagel Bruce H. Nagel (To Be Admitted Pro Hac Vice) Randee M. Matloff (To Be Admitted Pro Hac Vice) 103 Eisenhower Parkway Roseland, New Jersey 07068 973-618-0400 bnagel@nagelrice.com rmatloff@nagelrice.com -and- CERASIA & DEL REY-CONE LLP By /s/ Edward Cerasia II Edward Cerasia II (To Be Admitted Pro Hac Vice) 150 Broadway, Suite 1517 New York, New York 10038 646-525-4231 ed@cdemploymentlaw.com Attorneys for Plaintiffs and the Putative Class

products liability and mass tort

XFSBBIkBRpLueGJZdn0n

Case No.: 13 CV 317 CLASS ACTION COMPLAINT Jury Trial Demanded ) ) ) ) ) ) ) ) ) ) ) UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF WISCONSIN MILWAUKEE DIVISION GINA ALLENDE, Individually and on Behalf of All Others Similarly Situated, Plaintiff, vs. BUREAU OF COLLECTION RECOVERY, LLC. Defendant. INTRODUCTION 1. This class action seeks redress for collection practices that violate the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. (the “FDCPA”), and the Wisconsin Consumer Act, Chapters 421-427, Wisconsin Statutes (the “WCA”). JURISDICTION AND VENUE 2. The court has jurisdiction to grant the relief sought by the Plaintiff pursuant to 15 U.S.C. § 1692k and 28 U.S.C. §§ 1331 and 1337. Venue in this District is proper in that Defendant directed its collection efforts into the District. PARTIES 3. Plaintiff Gina Allende is an individual who resides in the Eastern District of Wisconsin (Kenosha County). 4. Plaintiff is a “consumer” as defined in the FDCPA, 15 U.S.C. § 1692a(3), in that Defendant sought to collect from her a debt allegedly incurred for personal, family or household purposes. The alleged debt was allegedly owed to “AT&T Mobility” (“AT&T”) for personal cellular telephone services. 5. Plaintiff is also a “customer” as defined in the WCA in that she engaged in a consumer credit transaction by acquiring cellular telephone services for personal, family or household purposes. Wis. Stat. § 421.301(17). 6. Defendant Bureau of Collection Recovery, LLC, (“BCR”) is a foreign limited liability company with its principal place of business located at 7575 Corporate Way, Eden Prairie, Minnesota 55344. 7. BCR is engaged in the business of a collection agency, using the mails and telephone to collect consumer debts originally owed to others. 8. BCR is engaged in the business of collecting debts owed to others and incurred for personal, family or household purposes. BCR is a debt collector as defined in 15 U.S.C. § 1692a and Wis. Stat. § 427.103(3). FACTS 9. Plaintiff entered into a consumer credit transaction with AT&T, or an affiliate or predecessor corporation, for cellular telephone service. 10. On or about February 13, 2013, BCR mailed a debt collection letter to Plaintiff regarding an alleged debt placed with BCR. Upon information and belief, this was the first letter Plaintiff was sent by BCR. A copy of this letter is attached to this complaint as Exhibit A. 11. Upon information and belief, Exhibit A is a form letter, generated by computer, and with the information specific to Plaintiff inserted by computer. 12. Exhibit A attempts to collect “Collection Fees” of $317.28. 13. Upon information and belief, $317.28 is 18 percent of the listed “Original Balance” of $2,079.97. 14. Plaintiff’s cellular service contract with AT&T was for services, specifically AT&T cellular phone services, and involved agreements to render services and defer payment, under which finance charges, including but not limited to early termination fees, were or could be imposed. Such agreements are “consumer credit transactions” under the WCA, Wis. Stat. § 421.104(10). 15. Wis. Stat. § 421.301(10) defines a “consumer credit transaction”: a consumer transaction between a merchant and a customer in which real or personal property, services or money is acquired on credit and the customer's obligation is payable in installments or for which credit a finance charge is or may be imposed, whether such transaction is pursuant to an open-end credit plan or is a transaction involving other than open-end credit. The term includes consumer credit sales, consumer loans, consumer leases and transactions pursuant to open- end credit plans. 16. Plaintiff’s cellular phone contract was for “services,” namely cellular telephone service. 17. Plaintiff’s cellular phone contract was not a pre-paid contract. 18. Plaintiff’s cellular phone service contract was an extension of “credit.” Wis. Stat. § 421.301(14); Murray v. New Cingular Wireless Servs., 432 F. Supp. 2d 788, 791 (N.D. Ill. 2006): [C]onsumers who sign up for a wireless phone plan are extended credit because they pay for service at the end of the month rather than buying the minutes in advance. ... At a minimum, a consumer must sign up for a plan that is $29.99, but this credit can extend into hundreds or thousands of dollars depending on the consumer's actual use and the plan selected. Virtually 100% of the wireless phone service purchased by the consumer would be on credit. 19. Upon information and belief, Plaintiff paid an amount monthly for a set number of minutes and paid extra for minutes he used exceeding their monthly allotment. The ability to use cellular minutes above the number designated by the customer’s plan and to pay for those minutes later, is clearly incurring debt and deferring its payment. Wis. Stat. § 421.301(14). 20. Plaintiff’s cellular service contract was payable in installments. 21. Under a cellular phone service contract, the consumer incurs an obligation to pay the entire amount of the contract monthly, over the contract’s term. 22. For example, under a cellular plan labeled “$50 per month” with a 2-year term, the consumer is obligated to pay, at a minimum, $1,200.00. The payments are made in $50 monthly installments, plus charges for additional use over the number of “minutes” in the contract, over 24 months. 23. Plaintiff’s cellular service contract also included “finance charges” that “may be imposed.” See Wis. Stat. §§ 421.301(10), 421.301(20). 24. Wis. Stat. § 421.30(20) defines a “finance charge” as: the sum of all charges, payable directly or indirectly by the customer as an incident to or as a condition of the extension of credit, whether paid or payable by the customer, the creditor or any other person on behalf of the customer to the creditor or to a 3rd party unless the creditor had no notice or knowledge of the charges paid or payable to the 3rd party. The term does not include any charge with respect to a motor vehicle consumer lease. The term includes the following types of charges to the extent they are not permitted additional charges under s. 422.202, delinquency charges under s. 422.203 or deferral charges under s. 422.204: 25. Upon information and belief, Plaintiff’s cellular service contract with AT&T included an early termination fee, which Plaintiff would have to pay if she canceled the service contract prior to the expiration of the term. 26. Early termination fees are “finance charges” that “may be imposed,” in that they are payable directly by the customer and are not permitted additional charges under Wis. Stat. §§ 422.202-422.210. 27. Further, to the extent that Plaintiff’s cellular service contract was an “other than open-end credit plan,” BCR’s 18 percent charge exceeds the maximum delinquency charge permitted under the WCA. Wis. Stat. §§ 422.203(1) (“…amount not to exceed $10 or 5% of the unpaid amount of the installment, whichever is less.”); 421.301(27)(c). 28. The WCA treats delinquency charges in excess of the amount permitted by Wis. Stat. § 422.203(1) as finance charges. Wis. Stat. § 421.30(20). 29. Upon information and belief, Plaintiff’s AT&T’s service contract was not a pre- paid contract, and it included an early termination fee and other fees incidental to the payments for phone service. 30. The WCA specifically prohibits the attachment of collection fees and other “default charges” on consumer credit transactions, even if the fee is separately negotiated. Wis. Stat. § 422.413(1) provides: no term of a writing evidencing a consumer credit transaction may provide for any charges as a result of default by the customer other than reasonable expenses incurred in the disposition of collateral and such other charges as are specifically authorized by chs. 421 to 427. See also Patzka v. Viterbo College, 917 F. Supp. 654, 659 (W.D. Wis. 1996). 31. Neither Wis. Stat. § 422.202, entitled “Additional charges,” nor any other section of the WCA, lists collection fees as a permissible fee a creditor may charge in connection with a consumer credit transaction. 32. Moreover, even if Plaintiff’s contract with AT&T did specifically allow for reimbursement of AT&T’s collection costs, and if Wis. Stat. § 422.413(1) did not apply, upon information and belief BCR’s flat, 18 percent fee is neither a measure of AT&T’s incidental or consequential damages, nor a measure of BCR’s costs of collection. Seeger v. Afni, Inc., 548 F.3d 1107, 1112-13 (7th Cir. 2008). A flat percentage fee necessarily varies with each account and cannot plausibly be a measure of costs of collection. COUNT I – FDCPA 33. Plaintiff incorporates by reference as if fully set forth herein the allegations contained in the preceding paragraphs of this Complaint. 34. BCR’s attempt to collect prohibited collection fees violates 15 U.S.C. § 1692f. See also Seeger, 548 F.3d at 1111. 35. BCR’s representation that collection fees are owed violates 15 U.S.C. §§ 1692e, 1692e(2)(A), and 1692e(5). 36. BCR failed to state the true amount of the debt owed, in violation of 15 U.S.C. § 1692g(a)(1). COUNT II – WCA 37. Plaintiff incorporates by reference as if fully set forth herein the allegations contained in the preceding paragraphs of this Complaint. 38. Plaintiff’s service contract with AT&T was a consumer credit transaction. 39. Collection fees on consumer credit transactions are prohibited by the Wisconsin Consumer Act. Wis. Stat. §§ 422.202, 422.413; Patzka, 917 F. Supp. at 659. 40. BCR’s attempt to collect prohibited collection fees violates Wis. Stat. § 427.104(1)(j). COUNT III -- WCA 41. Plaintiff incorporates by reference as if fully set forth herein the allegations contained in the preceding paragraphs of this Complaint. 42. Nothing in Plaintiff’s contract with AT&T or Wisconsin Law purports to permit BCR to add a collection fee that is a flat percentage of the balance. 43. The 18 percent of the balance fee is not a measure of AT&T’s incidental or consequential damages or a measure of BCR’s costs of collection. 44. BCR’s attempt to collect prohibited collection fees violates Wis. Stat. § 427.104(1)(j). CLASS ALLEGATIONS 45. Plaintiff brings this action on behalf of a Class, consisting of (a) all natural persons in the State of Wisconsin (b) who were sent a collection letter by BCR claiming a collection fee, (c) for AT&T cellular phone service obtained for personal, family or household purposes, (d) on or after March 20, 2012, (e) that was not returned by the postal service. 46. The Class is so numerous that joinder is impracticable. On information and belief, there are more than 50 members of the Class. 47. There are questions of law and fact common to the members of the class, which common questions predominate over any questions that affect only individual class members. The predominant common question is whether Exhibit A violates the FDCPA and the WCA. 48. Plaintiff’s claims are typical of the claims of the Class members. All are based on the same factual and legal theories. 49. Plaintiff will fairly and adequately represent the interests of the Class members. Plaintiff has retained counsel experienced in consumer credit and debt collection abuse cases. 50. A class action is superior to other alternative methods of adjudicating this dispute. Individual cases are not economically feasible. JURY DEMAND 51. Plaintiff hereby demands a trial by jury. PRAYER FOR RELIEF WHEREFORE, Plaintiff requests that the Court enter judgment in favor of Plaintiff and the Class and against Defendant for: (a) actual damages; (b) statutory damages; (c) attorneys’ fees, litigation expenses and costs of suit; and (d) such other or further relief as the Court deems proper. Dated: March 20, 2013 ADEMI & O’REILLY, LLP By: /s/ John D. Blythin Shpetim Ademi (SBN 1026973) David J. Syrios (SBN 1045779) John D. Blythin (SBN 1046105) 3620 East Layton Avenue Cudahy, WI 53110 (414) 482-8000 (414) 482-8001 (fax) sademi@ademilaw.com dsyrios@ademilaw.com jblythin@ademilaw.com

consumer fraud

YLIxC4cBD5gMZwcznsEa

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x EDWIN DIAZ, on behalf of himself and all others similarly situated, Plaintiffs, CLASS ACTION COMPLAINT v. AND DEMAND FOR JURY TRIAL GARNIER LLC, Defendant. : : : : : : : : : : : : - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x INTRODUCTION 1. Plaintiff EDWIN DIAZ, on behalf of himself and others similarly situated, asserts the following claims against Defendant GARNIER LLC (hereinafter, “GARNIER”) as follows. 2. Plaintiff is a visually-impaired and legally blind person who requires screen- reading software to read website content using his computer. Plaintiff uses the terms “blind” or “visually-impaired” to refer to all people with visual impairments who meet the legal definition of blindness in that they have a visual acuity with correction of less than or equal to 20 x 200. Some blind people who meet this definition have limited vision. Others have no vision. 3. Based on a 2010 U.S. Census Bureau report, approximately 8.1 million people in the United States are visually impaired, including 2.0 million who are blind, and according to the American Foundation for the Blind’s 2015 report, approximately 400,000 visually impaired persons live in the State of New York. 4. Plaintiff brings this civil rights action against Defendant for its failure to design, construct, maintain, and operate its website to be fully accessible to and independently usable by Plaintiff and other blind or visually-impaired people. Defendant’s denial of full and equal access to its website, and therefore denial of its goods and services offered thereby, is a violation of Plaintiff’s rights under the Americans with Disabilities Act (“ADA”). 5. Because Defendant’s website, www.garnierusa.com (the “Website” or “Defendant’s website”), is not equally accessible to blind and visually-impaired consumers, it violates the ADA. Plaintiff seeks a permanent injunction to cause a change in Defendant’s corporate policies, practices, and procedures so that Defendant’s website will become and remain accessible to blind and visually- impaired consumers. JURISDICTION AND VENUE 6. This Court has subject-matter jurisdiction over this action under 28 U.S.C. § 1331 and 42 U.S.C. § 12181, as Plaintiff’s claims arise under Title III of the ADA, 42 U.S.C. § 1281, et seq., and 28 U.S.C. § 1332. 7. This Court has supplemental jurisdiction under 28 U.S.C. § 1367 over Plaintiff’s New York State Human Rights Law, N.Y. Exec. Law Article 15, (“NYSHRL”) and New York City Human Rights Law, N.Y.C. Admin. Code § 8-101 et seq., (“NYCHRL”) claims. 8. Venue is proper in this district under 28 U.S.C. §1391(b)(1) and (2) because Defendant conducts and continues to conduct a substantial and significant amount of business in this District, and a substantial portion of the conduct complained of herein occurred in this District because Plaintiff attempted to utilize, on a number of occasions, the subject Website within this Judicial District. 9. Defendant is subject to personal jurisdiction in this District. Defendant has been and is committing the acts or omissions alleged herein in the Southern District of New York that caused injury, and violated rights the ADA prescribes to Plaintiff and to other blind and other visually impaired-consumers. A substantial part of the acts and omissions giving rise to Plaintiff’s claims occurred in this District: on several separate occasions, Plaintiff has been denied the full use and enjoyment of the facilities, goods and services offered to the general public, on Defendant’s Website in New York County. These access barriers that Plaintiff encountered have caused a denial of Plaintiff’s full and equal access multiple times in the past, and now deter Plaintiff on a regular basis from accessing the Defendant’s Website in the future. 10. This Court is empowered to issue a declaratory judgment under 28 U.S.C. §§ 2201 and 2202. THE PARTIES 11. Plaintiff EDWIN DIAZ, at all relevant times, is a resident of Bronx, New York. Plaintiff is a blind, visually-impaired handicapped person and a member of member of a protected class of individuals under the ADA, under 42 U.S.C. § 12102(1)-(2), and the regulations implementing the ADA set forth at 28 CFR §§ 36.101 et seq., the NYSHRL and NYCHRL. 12. Defendant is and was at all relevant times a New York Limited Liability Company doing business in the United States, including New York. 13. Defendant’s Website, and its facilities, goods, and services offered thereupon, is a public accommodation within the definition of Title III of the ADA, 42 U.S.C. § 12181(7). NATURE OF ACTION 14. The Internet has become a significant source of information, a portal, and a tool for conducting business, doing everyday activities such as shopping, learning, banking, researching, as well as many other activities for sighted, blind and visually- impaired persons alike. 15. In today’s tech-savvy world, blind and visually-impaired people have the ability to access websites using keyboards in conjunction with screen access software that vocalizes the visual information found on a computer screen or displays the content on a refreshable Braille display. This technology is known as screen-reading software. Screen-reading software is currently the only method a blind or visually- impaired person may independently access the internet. Unless websites are designed to be read by screen-reading software, blind and visually-impaired persons are unable to fully access websites, and the information, products, goods and contained thereon. 16. Blind and visually-impaired users of Windows operating system-enabled computers and devices have several screen reading software programs available to them. Some of these programs are available for purchase and other programs are available without the user having to purchase the program separately. Job Access With Speech, otherwise known as “JAWS” is currently the most popular, separately purchased and downloaded screen-reading software program available for a Windows computer. 17. For screen-reading software to function, the information on a website must be capable of being rendered into text. If the website content is not capable of being rendered into text, the blind or visually-impaired user is unable to access the same content available to sighted users. 18. The international website standards organization, the World Wide Web Consortium, known throughout the world as W3C, has published version 2.0 of the Web Content Accessibility Guidelines (“WCAG 2.0”). WCAG 2.0 are well- established guidelines for making websites accessible to blind and visually- impaired people. These guidelines are universally followed by most large business entities and government agencies to ensure their websites are accessible. 19. Non-compliant websites pose common access barriers to blind and visually- impaired persons. Common barriers encountered by blind and visually impaired persons include, but are not limited to, the following: a. A text equivalent for every non-text element is not provided; b. Title frames with text are not provided for identification and navigation; c. Equivalent text is not provided when using scripts; d. Forms with the same information and functionality as for sighted persons are not provided; e. Information about the meaning and structure of content is not conveyed by more than the visual presentation of content; f. Text cannot be resized without assistive technology up to 200% without losing content or functionality; g. If the content enforces a time limit, the user is not able to extend, adjust or disable it; h. Web pages do not have titles that describe the topic or purpose; i. The purpose of each link cannot be determined from the link text alone or from the link text and its programmatically determined link context; j. One or more keyboard operable user interface lacks a mode of operation where the keyboard focus indicator is discernible; k. The default human language of each web page cannot be programmatically determined; l. When a component receives focus, it may initiate a change in context; m. Changing the setting of a user interface component may automatically cause a change of context where the user has not been advised before using the component; n. Labels or instructions are not provided when content requires user input, which include captcha prompts that require the user to verify that he or she is not a robot; o. In content which is implemented by using markup languages, elements do not have complete start and end tags, elements are not nested according to their specifications, elements may contain duplicate attributes, and/or any IDs are not unique; p. Inaccessible Portable Document Format (PDFs); and, q. The name and role of all User Interface elements cannot be programmatically determined; items that can be set by the user cannot be programmatically set; and/or notification of changes to these items is not available to user agents, including assistive technology. STATEMENT OF FACTS Defendant’s Barriers on Its Website 20. Defendant is a beauty and skincare retail company that operates www.garnierusa.com (its “Website”), offering features which should allow all consumers to access the goods and services and which Defendant ensures the delivery of such goods throughout the United States, including New York State. 21. Defendant operates and distributes its products throughout the United States, including New York. 22. Defendant’s Website provides consumers with access to an array of goods and services, including the ability to browse products for delivery, including makeup and related cosmetic products, find information on promotions, as well as related goods and services available online. 23. Defendant offers the commercial website, www.garnierusa.com, to the public. The website offers features which should allow all consumers to access the goods and services whereby Defendant allows for the delivery of those ordered goods to consumers throughout the United States, including New York State. The goods and services offered by Defendant include, but are not limited to the following: the ability to browse specific beauty and skincare products available for purchase and delivery, find information on promotions, and related goods and services available online. 24. It is, upon information and belief, Defendant’s policy and practice to deny Plaintiff, along with other blind or visually-impaired users, access to Defendant’s website, and to therefore specifically deny the goods and services that are offered to the general public. Due to Defendant’s failure and refusal to remove access barriers to its website, Plaintiff and visually-impaired persons have been and are still being denied equal access to Defendant’s Website, and the numerous goods and services and benefits offered to the public through the Website. 25. Plaintiff is a visually-impaired and legally blind person, who cannot use a computer without the assistance of screen-reading software. Plaintiff is, however, a proficient JAWS screen-reader user and uses it to access the Internet. Plaintiff has visited the Website on separate occasions using the JAWS screen-reader. 26. During Plaintiff’s visits to the Website, the last occurring in November 2018, Plaintiff encountered multiple access barriers that denied Plaintiff full and equal access to the facilities, goods and services offered to the public and made available to the public; and that denied Plaintiff the full enjoyment of the facilities, goods and services of the Website, by being unable to learn more information, the ability to browse beauty and skincare products available for delivery, find information on promotions, and related goods and services available online. 27. While attempting to navigate the Website, Plaintiff encountered multiple accessibility barriers for blind or visually-impaired people that include, but are not limited to, the following: a. Lack of Alternative Text (“alt-text”), or a text equivalent. Alt-text is an invisible code embedded beneath a graphical image on a website. Web accessibility requires that alt-text be coded with each picture so that screen- reading software can speak the alt-text where a sighted user sees pictures, which includes captcha prompts. Alt-text does not change the visual presentation, but instead a text box shows when the mouse moves over the picture. The lack of alt-text on these graphics prevents screen readers from accurately vocalizing a description of the graphics. As a result, visually- impaired prospective customers are unable to determine what is on the website, browse, look for Station locations and hours, the ability to browse the products, find information on promotions, and related goods and services available both in Website and online. b. Empty Links That Contain No Text causing the function or purpose of the link to not be presented to the user. This can introduce confusion for keyboard and screen-reader users; c. Redundant Links where adjacent links go to the same URL address which results in additional navigation and repetition for keyboard and screen-reader users; and d. Linked Images Missing Alt-text, which causes problems if an image within a link contains no text and that image does not provide alt-text. A screen reader then has no content to present the user as to the function of the link, including information contained in PDFs. Defendant Must Remove Barriers To Its Website 28. Due to the inaccessibility of Defendant’s Website, blind and visually-impaired customers such as Plaintiff, who need screen-readers, cannot fully and equally use or enjoy the facilities, products, and services Defendant offers to the public on its Website. The access barriers Plaintiff encountered have caused a denial of Plaintiff’s full and equal access in the past, and now deter Plaintiff on a regular basis from visiting the Website, presently and in the future. 29. These access barriers on Defendant’s Website have deterred Plaintiff from learning about those specific Beauty and skincare products available for purchase and delivery, and enjoying them equal to sighted individuals because: Plaintiff was unable to determine and or purchase items from its Website, among other things. 30. If the Website was equally accessible to all, Plaintiff could independently navigate the Website and complete a desired transaction as sighted individuals do. 31. Through his attempts to use the Website, Plaintiff has actual knowledge of the access barriers that make these services inaccessible and independently unusable by blind and visually-impaired people. 32. Because simple compliance with the WCAG 2.0 Guidelines would provide Plaintiff and other visually-impaired consumers with equal access to the Website, Plaintiff alleges that Defendant has engaged in acts of intentional discrimination, including but not limited to the following policies or practices: a. Constructing and maintaining a website that is inaccessible to visually-impaired individuals, including Plaintiff; b. Failure to construct and maintain a website that is sufficiently intuitive so as to be equally accessible to visually-impaired individuals, including Plaintiff; and, c. Failing to take actions to correct these access barriers in the face of substantial harm and discrimination to blind and visually-impaired consumers, such as Plaintiff, as a member of a protected class. 33. Defendant therefore uses standards, criteria or methods of administration that have the effect of discriminating or perpetuating the discrimination of others, as alleged herein. 34. The ADA expressly contemplates the injunctive relief that Plaintiff seeks in this action. In relevant part, the ADA requires: In the case of violations of . . . this title, injunctive relief shall include an order to alter facilities to make such facilities readily accessible to and usable by individuals with disabilities . . . Where appropriate, injunctive relief shall also include requiring the . . . modification of a policy . . . 42 U.S.C. § 12188(a)(2). 35. Because Defendant’s Website have never been equally accessible, and because Defendant lacks a corporate policy that is reasonably calculated to cause its Website to become and remain accessible, Plaintiff invokes 42 U.S.C. § 12188(a)(2) and seeks a permanent injunction requiring Defendant to retain a qualified consultant acceptable to Plaintiff (“Agreed Upon Consultant”) to assist Defendant to comply with WCAG 2.0 guidelines for Defendant’s Website. Plaintiff seeks that this permanent injunction requires Defendant to cooperate with the Agreed Upon Consultant to: a. Train Defendant’s employees and agents who develop the Website on accessibility compliance under the WCAG 2.0 guidelines; b. Regularly check the accessibility of the Website under the WCAG 2.0 guidelines; c. Regularly test user accessibility by blind or vision-impaired persons to ensure that Defendant’s Website complies under the WCAG 2.0 guidelines; and, d. Develop an accessibility policy that is clearly disclosed on Defendant’s Websites, with contact information for users to report accessibility-related problems. 36. If the Website was accessible, Plaintiff and similarly situated blind and visually- impaired people could independently view service items, shop for and otherwise research related goods and services available via the Website. 37. Although Defendant may currently have centralized policies regarding maintaining and operating its Website, Defendant lacks a plan and policy reasonably calculated to make them fully and equally accessible to, and independently usable by, blind and other visually-impaired consumers. 38. Defendant has, upon information and belief, invested substantial sums in developing and maintaining their Website and has generated significant revenue from the Website. These amounts are far greater than the associated cost of making their Website equally accessible to visually impaired customers. 39. Without injunctive relief, Plaintiff and other visually-impaired consumers will continue to be unable to independently use the Website, violating their rights. CLASS ACTION ALLEGATIONS 40. Plaintiff, on behalf of himself and all others similarly situated, seeks to certify a nationwide class under Fed. R. Civ. P. 23(a) and 23(b)(2): all legally blind individuals in the United States who have attempted to access Defendant’s Website and as a result have been denied access to the equal enjoyment of goods and services, during the relevant statutory period. 41. Plaintiff, on behalf of himself and all others similarly situated, seeks certify a New York State subclass under Fed. R. Civ. P. 23(a) and 23(b)(2): all legally blind individuals in the State of New York who have attempted to access Defendant’s Website and as a result have been denied access to the equal enjoyment of those services, during the relevant statutory period. 42. Plaintiff, on behalf of himself and all others similarly situated, seeks certify a New York City subclass under Fed. R. Civ. P. 23(a) and 23(b)(2): all legally blind individuals in the City of New York who have attempted to access Defendant’s Website and as a result have been denied access to the equal enjoyment of goods and services offered, during the relevant statutory period. 43. Common questions of law and fact exist amongst Class, including: a. Whether Defendant’s Website is a “public accommodation” under the ADA; b. Whether Defendant’s Website is a “place or provider of public accommodation” under the NYSHRL or NYCHRL; c. Whether Defendant’s Website denies the full and equal enjoyment of its products, services, facilities, privileges, advantages, or accommodations to people with visual disabilities, violating the ADA; and d. Whether Defendant’s Website denies the full and equal enjoyment of its products, services, facilities, privileges, advantages, or accommodations to people with visual disabilities, violating the NYSHRL or NYCHRL. 44. Plaintiff’s claims are typical of the Class. The Class, similarly to the Plaintiff, are severely visually impaired or otherwise blind, and claim that Defendant has violated the ADA, NYSYRHL or NYCHRL by failing to update or remove access barriers on its Website so either can be independently accessible to the Class. 45. Plaintiff will fairly and adequately represent and protect the interests of the Class Members because Plaintiff has retained and is represented by counsel competent and experienced in complex class action litigation, and because Plaintiff has no interests antagonistic to the Class Members. Class certification of the claims is appropriate under Fed. R. Civ. P. 23(b)(2) because Defendant has acted or refused to act on grounds generally applicable to the Class, making appropriate both declaratory and injunctive relief with respect to Plaintiff and the Class as a whole. 46. Alternatively, class certification is appropriate under Fed. R. Civ. P. 23(b)(3) because fact and legal questions common to Class Members predominate over questions affecting only individual Class Members, and because a class action is superior to other available methods for the fair and efficient adjudication of this litigation. 47. Judicial economy will be served by maintaining this lawsuit as a class action in that it is likely to avoid the burden that would be otherwise placed upon the judicial system by the filing of numerous similar suits by people with visual disabilities throughout the United States. FIRST CAUSE OF ACTION VIOLATIONS OF THE ADA, 42 U.S.C. § 1281 et seq. 48. Plaintiff, on behalf of himself and the Class Members, repeats and realleges every allegation of the preceding paragraphs as if fully set forth herein. 49. Section 302(a) of Title III of the ADA, 42 U.S.C. § 12101 et seq., provides: No individual shall be discriminated against on the basis of disability in the full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations of any place of public accommodation by any person who owns, leases (or leases to), or operates a place of public accommodation. 42 U.S.C. § 12182(a). 50. Defendant’s Website is a public accommodations within the definition of Title III of the ADA, 42 U.S.C. § 12181(7). The Website is a service that is offered to the general public, and as such, must be equally accessible to all potential consumers. 51. Under Section 302(b)(1) of Title III of the ADA, it is unlawful discrimination to deny individuals with disabilities the opportunity to participate in or benefit from the products, services, facilities, privileges, advantages, or accommodations of an entity. 42 U.S.C. § 12182(b)(1)(A)(i). 52. Under Section 302(b)(1) of Title III of the ADA, it is unlawful discrimination to deny individuals with disabilities an opportunity to participate in or benefit from the products, services, facilities, privileges, advantages, or accommodation, which is equal to the opportunities afforded to other individuals. 42 U.S.C. § 12182(b)(1)(A)(ii). 53. Under Section 302(b)(2) of Title III of the ADA, unlawful discrimination also includes, among other things: [A] failure to make reasonable modifications in policies, practices, or procedures, when such modifications are necessary to afford such goods, services, facilities, privileges, advantages, or accommodations to individuals with disabilities, unless the entity can demonstrate that making such modifications would fundamentally alter the nature of such goods, services, facilities, privileges, advantages or accommodations; and a failure to take such steps as may be necessary to ensure that no individual with a disability is excluded, denied services, segregated or otherwise treated differently than other individuals because of the absence of auxiliary aids and services, unless the entity can demonstrate that taking such steps would fundamentally alter the nature of the good, service, facility, privilege, advantage, or accommodation being offered or would result in an undue burden. 42 U.S.C. § 12182(b)(2)(A)(ii)-(iii). 54. The acts alleged herein constitute violations of Title III of the ADA, and the regulations promulgated thereunder. Plaintiff, who is a member of a protected class of persons under the ADA, has a physical disability that substantially limits the major life activity of sight within the meaning of 42 U.S.C. §§ 12102(1)(A)-(2)(A). Furthermore, Plaintiff has been denied full and equal access to the Website, has not been provided services that are provided to other patrons who are not disabled, and has been provided services that are inferior to the services provided to non-disabled persons. Defendant has failed to take any prompt and equitable steps to remedy its discriminatory conduct. These violations are ongoing. 55. Under 42 U.S.C. § 12188 and the remedies, procedures, and rights set forth and incorporated therein, Plaintiff, requests relief as set forth below. SECOND CAUSE OF ACTION VIOLATIONS OF THE NYSHRL 56. Plaintiff, on behalf of himself and the New York State Sub-Class Members, repeats and realleges every allegation of the preceding paragraphs as if fully set forth herein. 57. N.Y. Exec. Law § 296(2)(a) provides that it is “an unlawful discriminatory practice for any person, being the owner, lessee, proprietor, manager, superintendent, agent or employee of any place of public accommodation . . . because of the . . . disability of any person, directly or indirectly, to refuse, withhold from or deny to such person any of the accommodations, advantages, facilities or privileges thereof.” 58. Defendant’s Website and its’ sale of goods to the general public, constitute sales establishments and public accommodations within the definition of N.Y. Exec. Law § 292(9). Defendant’s Website is a service, privilege or advantage of Defendant. 59. Defendant is subject to New York Human Rights Law because it owns and operates its Website. Defendant is a person within the meaning of N.Y. Exec. Law § 292(1). 60. Defendant is violating N.Y. Exec. Law § 296(2)(a) in refusing to update or remove access barriers to its Website, causing its Website to be completely inaccessible to the blind. This inaccessibility denies blind patrons full and equal access to the facilities, services that Defendant makes available to the non-disabled public. 61. Under N.Y. Exec. Law § 296(2)(c)(i), unlawful discriminatory practice includes, among other things, “a refusal to make reasonable modifications in policies, practices, or procedures, when such modifications are necessary to afford facilities, privileges, advantages or accommodations to individuals with disabilities, unless such person can demonstrate that making such modifications would fundamentally alter the nature of such facilities, privileges, advantages or accommodations being offered or would result in an undue burden". 62. Under N.Y. Exec. Law § 296(2)(c)(ii), unlawful discriminatory practice also includes, “a refusal to take such steps as may be necessary to ensure that no individual with a disability is excluded or denied services because of the absence of auxiliary aids and services, unless such person can demonstrate that taking such steps would fundamentally alter the nature of the facility, privilege, advantage or accommodation being offered or would result in an undue burden.” 63. Readily available, well-established guidelines exist on the Internet for making websites accessible to the blind and visually impaired. These guidelines have been followed by other large business entities and government agencies in making their website accessible, including but not limited to: adding alt-text to graphics and ensuring that all functions can be performed using a keyboard. Incorporating the basic components to make its Website accessible would neither fundamentally alter the nature of Defendant’s business nor result in an undue burden to Defendant. 64. Defendant’s actions constitute willful intentional discrimination against the class on the basis of a disability in violation of the NYSHRL, N.Y. Exec. Law § 296(2) in that Defendant has: a. constructed and maintained a website that is inaccessible to blind class members with knowledge of the discrimination; and/or b. constructed and maintained a website that is sufficiently intuitive and/or obvious that is inaccessible to blind class members; and/or c. failed to take actions to correct these access barriers in the face of substantial harm and discrimination to blind class members. 65. Defendant has failed to take any prompt and equitable steps to remedy their discriminatory conduct. These violations are ongoing. 66. Defendant discriminates, and will continue in the future to discriminate against Plaintiff and New York State Sub-Class Members on the basis of disability in the full and equal enjoyment of the products, services, facilities, privileges, advantages, accommodations and/or opportunities of Defendant’s Website under § 296(2) et seq. and/or its implementing regulations. Unless the Court enjoins Defendant from continuing to engage in these unlawful practices, Plaintiff and the Sub-Class Members will continue to suffer irreparable harm. 67. Defendant’s actions were and are in violation of New York State Human Rights Law and therefore Plaintiff invokes his right to injunctive relief to remedy the discrimination. 68. Plaintiff is also entitled to compensatory damages, as well as civil penalties and fines under N.Y. Exec. Law § 297(4)(c) et seq. for each and every offense. 69. Plaintiff is also entitled to reasonable attorneys’ fees and costs. 70. Under N.Y. Exec. Law § 297 and the remedies, procedures, and rights set forth and incorporated therein Plaintiff prays for judgment as set forth below. THIRD CAUSE OF ACTION VIOLATION OF THE NEW YORK STATE CIVIL RIGHTS LAW 71. Plaintiff, on behalf of himself and the New York State Sub-Class Members, repeats and realleges every allegation of the preceding paragraphs as if fully set forth herein. 72. Plaintiff served notice thereof upon the attorney general as required by N.Y. Civil Rights Law § 41. 73. N.Y. Civil Rights Law § 40 provides that “all persons within the jurisdiction of this state shall be entitled to the full and equal accommodations, advantages, facilities and privileges of any places of public accommodations, resort or amusement, subject only to the conditions and limitations established by law and applicable alike to all persons. No persons, being the owner, lessee, proprietor, manager, superintendent, agent, or employee of any such place shall directly or indirectly refuse, withhold from, or deny to any person any of the accommodations, advantages, facilities and privileges thereof . . .” 74. N.Y. Civil Rights Law § 40-c(2) provides that “no person because of . . . disability, as such term is defined in section two hundred ninety-two of executive law, be subjected to any discrimination in his or her civil rights, or to any harassment, as defined in section 240.25 of the penal law, in the exercise thereof, by any other person or by any firm, corporation or institution, or by the state or any agency or subdivision.” 75. Defendant’s Website is a service, privilege or advantage of Defendant and its Website which offers such goods and services to the general public is required to be equally accessible to all. 76. Defendant is subject to New York Civil Rights Law because it owns and operates their Website, and Defendant is a person within the meaning of N.Y. Civil Law § 40-c(2). 77. Defendant is violating N.Y. Civil Rights Law § 40-c(2) in refusing to update or remove access barriers to its Website, causing its Website and the goods and services integrated with such Website to be completely inaccessible to the blind. This inaccessibility denies blind patrons full and equal access to the facilities, goods and services that Defendant makes available to the non-disabled public. 78. N.Y. Civil Rights Law § 41 states that “any corporation which shall violate any of the provisions of sections forty, forty-a, forty-b or forty-two . . . shall for each and every violation thereof be liable to a penalty of not less than one hundred dollars nor more than five hundred dollars, to be recovered by the person aggrieved thereby . . .” 79. Under NY Civil Rights Law § 40-d, “any person who shall violate any of the provisions of the foregoing section, or subdivision three of section 240.30 or section 240.31 of the penal law, or who shall aid or incite the violation of any of said provisions shall for each and every violation thereof be liable to a penalty of not less than one hundred dollars nor more than five hundred dollars, to be recovered by the person aggrieved thereby in any court of competent jurisdiction in the county in which the defendant shall reside ...” 80. Defendant has failed to take any prompt and equitable steps to remedy its discriminatory conduct. These violations are ongoing. 81. Defendant discriminates, and will continue in the future to discriminate against Plaintiff and New York State Sub-Class Members on the basis of disability are being directly or indirectly refused, withheld from, or denied the accommodations, advantages, facilities and privileges thereof in § 40 et seq. and/or its implementing regulations. 82. Plaintiff is entitled to compensatory damages of five hundred dollars per instance, as well as civil penalties and fines under N.Y. Civil Law § 40 et seq. for each and every offense. FOURTH CAUSE OF ACTION VIOLATIONS OF THE NYCHRL 83. Plaintiff, on behalf of himself and the New York City Sub-Class Members, repeats and realleges every allegation of the preceding paragraphs as if fully set forth herein. 84. N.Y.C. Administrative Code § 8-107(4)(a) provides that “It shall be an unlawful discriminatory practice for any person, being the owner, lessee, proprietor, manager, superintendent, agent or employee of any place or provider of public accommodation, because of . . . disability . . . directly or indirectly, to refuse, withhold from or deny to such person, any of the accommodations, advantages, facilities or privileges thereof.” 85. Defendant’s Website is a sales establishment and public accommodations within the definition of N.Y.C. Admin. Code § 8-102(9). 86. Defendant is subject to NYCHRL because it owns and operates its Website, making it a person within the meaning of N.Y.C. Admin. Code § 8-102(1). 87. Defendant is violating N.Y.C. Administrative Code § 8-107(4)(a) in refusing to update or remove access barriers to Website, causing its Website and the services integrated with such Website to be completely inaccessible to the blind. This inaccessibility denies blind patrons full and equal access to the facilities, products, and services that Defendant makes available to the non-disabled public. 88. Defendant is required to “make reasonable accommodation to the needs of persons with disabilities . . . any person prohibited by the provisions of [§ 8-107 et seq.] from discriminating on the basis of disability shall make reasonable accommodation to enable a person with a disability to . . . enjoy the right or rights in question provided that the disability is known or should have been known by the covered entity.” N.Y.C. Admin. Code § 8-107(15)(a). 89. Defendant’s actions constitute willful intentional discrimination against the Sub- Class on the basis of a disability in violation of the N.Y.C. Administrative Code § 8-107(4)(a) and § 8-107(15)(a) in that Defendant has: a. constructed and maintained a website that is inaccessible to blind class members with knowledge of the discrimination; and/or b. constructed and maintained a website that is sufficiently intuitive and/or obvious that is inaccessible to blind class members; and/or c. failed to take actions to correct these access barriers in the face of substantial harm and discrimination to blind class members. 90. Defendant has failed to take any prompt and equitable steps to remedy their discriminatory conduct. These violations are ongoing. 91. As such, Defendant discriminates, and will continue in the future to discriminate against Plaintiff and members of the proposed class and subclass on the basis of disability in the full and equal enjoyment of the products, services, facilities, privileges, advantages, accommodations and/or opportunities of its Website under § 8-107(4)(a) and/or its implementing regulations. Unless the Court enjoins Defendant from continuing to engage in these unlawful practices, Plaintiff and members of the class will continue to suffer irreparable harm. 92. Defendant’s actions were and are in violation of the NYCHRL and therefore Plaintiff invokes his right to injunctive relief to remedy the discrimination. 93. Plaintiff is also entitled to compensatory damages, as well as civil penalties and fines under N.Y.C. Administrative Code § 8-120(8) and § 8-126(a) for each offense as well as punitive damages pursuant to § 8-502. 94. Plaintiff is also entitled to reasonable attorneys’ fees and costs. 95. Under N.Y.C. Administrative Code § 8-120 and § 8-126 and the remedies, procedures, and rights set forth and incorporated therein Plaintiff prays for judgment as set forth below. FIFTH CAUSE OF ACTION DECLARATORY RELIEF 96. Plaintiff, on behalf of himself and the Class and New York State and City Sub- Classes Members, repeats and realleges every allegation of the preceding paragraphs as if fully set forth herein. 97. An actual controversy has arisen and now exists between the parties in that Plaintiff contends, and is informed and believes that Defendant denies, that its Website contains access barriers denying blind customers the full and equal access to the products, services and facilities of its Website, which Defendant owns, operations and controls, fails to comply with applicable laws including, but not limited to, Title III of the Americans with Disabilities Act, 42 U.S.C. §§ 12182, et seq., N.Y. Exec. Law § 296, et seq., and N.Y.C. Admin. Code § 8-107, et seq. prohibiting discrimination against the blind. 98. A judicial declaration is necessary and appropriate at this time in order that each of the parties may know their respective rights and duties and act accordingly. PRAYER FOR RELIEF WHEREFORE, Plaintiff respectfully requests this Court grant the following relief: a. A preliminary and permanent injunction to prohibit Defendant from violating the Americans with Disabilities Act, 42 U.S.C. §§ 12182, et seq., N.Y. Exec. Law § 296, et seq., N.Y.C. Administrative Code § 8-107, et seq., and the laws of New York; b. A preliminary and permanent injunction requiring Defendant to take all the steps necessary to make its Website into full compliance with the requirements set forth in the ADA, and its implementing regulations, so that the Website is readily accessible to and usable by blind individuals; c. A declaration that Defendant owns, maintains and/or operates its Website in a manner that discriminates against the blind and which fails to provide access for persons with disabilities as required by Americans with Disabilities Act, 42 U.S.C. §§ 12182, et seq., N.Y. Exec. Law § 296, et seq., N.Y.C. Administrative Code § 8-107, et seq., and the laws of New York d. An order certifying the Class and Sub-Classes under Fed. R. Civ. P. 23(a) & (b)(2) and/or (b)(3), appointing Plaintiff as Class Representative, and his attorneys as Class Counsel; e. Compensatory damages in an amount to be determined by proof, including all applicable statutory and punitive damages and fines, to Plaintiff and the proposed class and subclasses for violations of their civil rights under New York State Human Rights Law and City Law; f. Pre- and post-judgment interest; g. An award of costs and expenses of this action together with reasonable attorneys’ and expert fees; and h. Such other and further relief as this Court deems just and proper. DEMAND FOR TRIAL BY JURY Pursuant to Fed. R. Civ. P. 38(b), Plaintiff demands a trial by jury on all questions of fact the Complaint raises. Dated: Brooklyn, New York November 21, 2018 COHEN & MIZRAHI LLP By: ___________________ Joseph H. Mizrahi, Esq. Joseph@cml.legal 300 Cadman Plaza West, 12th Fl. Brooklyn, New York 11201 Tel: (929) 575-4175 Fax: (929) 575-4195 GOTTLIEB & ASSOCIATES Jeffrey M. Gottlieb (JG7905) nyjg@aol.com Dana L. Gottlieb (DG6151) danalgottlieb@aol.com 150 East 18th Street, Suite PHR New York, N.Y. 10003-2461 Telephone: (212) 228-9795 ATTORNEYS FOR PLAINTIFF

civil rights, immigration, family

yQc0M4cBD5gMZwczh1N4

THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA Case No.: CLASS ACTION COMPLAINT DEMAND FOR JURY TRIAL FELICIA DURGAN, on behalf of herself and all others similarly situated, Plaintiff, v. U-HAUL INTERNATIONAL, INC., Defendant. Plaintiff Felicia Durgan (“Plaintiff”) brings this Class Action Complaint against U-Haul International, Inc. (“U-Haul” or “Defendant”), individually and on behalf of all others similarly situated (“Class Members”), and alleges, upon personal knowledge as to her own actions and her counsels’ investigations, and upon information and belief as to all other matters, as follows: I. INTRODUCTION 1. Plaintiff brings this class action against Defendant for its failure to properly secure and safeguard personal identifiable information (“PII”)1 for past and current customers of Defendant, including, but not limited to, name, date of birth, and driver’s license number or state identification number. 2. According to Defendant’s website, Defendant is “is an American moving truck, trailer, and self-storage rental company, based in Phoenix, Arizona, that has been in operation 1 Personally identifiable information generally incorporates information that can be used to distinguish or trace an individual’s identity, either alone or when combined with other personal or identifying information. 2 C.F.R. § 200.79. At a minimum, it includes all information that on its face expressly identifies an individual. 1 since 1945.”2 3. Prior to and through April 5, 2022, Defendant obtained the PII of Plaintiff and Class Members, including the PII of Plaintiff, who was a customer of Defendant, and stored that PII, unencrypted, in an Internet-accessible environment on Defendant’s network. 4. Defendant’s Privacy Policy (the “Privacy Policy”), posted on its website, represents that it “[w]e use commercially reasonable physical, managerial, and technical safeguards to preserve the integrity and security of your Information and our systems. We cannot, however, ensure or warrant the security of any information you transmit to Us and you do so at your own risk. However, please note that this is not a guarantee that such information may not be accessed, disclosed, altered, or destroyed by breach of any of our physical, technical, or managerial safeguards.”3 5. On or before August 1, 2022, Defendant learned of a data security incident on its network (the “Data Breach”). 6. Defendant determined that, during the Data Breach, an unknown actor compromised two unique passwords for accessing Defendant’s contract search tool and accessed the contracts of Defendant’s past and current customers, including Plaintiff and Class Members. 7. On or around September 9, 2022, Defendant notified the U.S. Securities and Exchange Commission (“SEC”) of the Data Breach. 8. On or around September 9, 2022, Defendant began notifying Plaintiff and Class Members of the Data Breach. 9. By obtaining, collecting, using, and deriving a benefit from the PII of Plaintiff and 2 See https://www.uhaul.com/About/History/ (last visited Sept. 12, 2022). 3 Exhibit 1, available at https://www.uhaul.com/Legal/PrivacyPolicy/#Security (last visited Sept. 12, 2022). 2 Class Members, Defendant assumed legal and equitable duties to those individuals to protect and safeguard that information from unauthorized access and intrusion. Defendant admits that the unencrypted PII accessed by an unauthorized actor included name, date of birth, and driver’s license number or state identification number. 10. The exposed PII of Plaintiff and Class Members can be sold on the dark web. Hackers can access and then offer for sale the unencrypted, unredacted PII to criminals. Plaintiff and Class Members now face a lifetime risk of (i) identity theft, which is heightened here by the loss of driver’s license numbers or state identification number, and (ii) the sharing and detrimental use of their sensitive information. 11. The PII was compromised due to Defendant’s negligent and/or careless acts and omissions and the failure to protect the PII of Plaintiff and Class Members. In addition to Defendant’s failure to prevent the Data Breach, Defendant waited several months after the Data Breach occurred to report it to the SEC and affected individuals. Defendant has also purposefully maintained secret the specific vulnerabilities and root causes of the breach and has not informed Plaintiff and Class Members of that information. 12. As a result of this delayed response, Plaintiff and Class Members had no idea their PII had been compromised, and that they were, and continue to be, at significant risk of identity theft and various other forms of personal, social, and financial harm, including the sharing and detrimental use of their sensitive information. The risk will remain for their respective lifetimes. 13. Plaintiff brings this action on behalf of all persons whose PII was compromised as a result of Defendant’s failure to: (i) adequately protect the PII of Plaintiff and Class Members; (ii) warn Plaintiff and Class Members of Defendant’s inadequate information security practices; and (iii) effectively secure hardware containing protected PII using reasonable and effective 3 security procedures free of vulnerabilities and incidents. Defendant’s conduct amounts to negligence and violates federal and state statutes. 14. Plaintiff and Class Members have suffered injury as a result of Defendant’s conduct. These injuries include: (i) lost or diminished value of PII; (ii) out-of-pocket expenses associated with the prevention, detection, and recovery from identity theft, tax fraud, and/or unauthorized use of their PII; (iii) lost opportunity costs associated with attempting to mitigate the actual consequences of the Data Breach, including but not limited to lost time, (iv) the disclosure of their private information, and (v) the continued and certainly increased risk to their PII, which: (a) remains unencrypted and available for unauthorized third parties to access and abuse; and (b) may remain backed up in Defendant’s possession and is subject to further unauthorized disclosures so long as Defendant fails to undertake appropriate and adequate measures to protect the PII. 15. Defendant disregarded the rights of Plaintiff and Class Members by intentionally, willfully, recklessly, or negligently failing to take and implement adequate and reasonable measures to ensure that the PII of Plaintiff and Class Members was safeguarded, failing to take available steps to prevent an unauthorized disclosure of data, and failing to follow applicable, required and appropriate protocols, policies and procedures regarding the encryption of data, even for internal use. As the result, the PII of Plaintiff and Class Members was compromised through disclosure to an unauthorized third party. Plaintiff and Class Members have a continuing interest in ensuring that their information is and remains safe, and they should be entitled to injunctive and other equitable relief. II. PARTIES 16. Plaintiff Felicia Durgan is a citizen of Virginia residing in Stafford, Virginia. 17. Defendant is a Nevada corporation with a principal place of business in Phoenix, 4 Arizona. 18. The true names and capacities of persons or entities, whether individual, corporate, associate, or otherwise, who may be responsible for some of the claims alleged herein are currently unknown to Plaintiff. Plaintiff will seek leave of court to amend this complaint to reflect the true names and capacities of such other responsible parties when their identities become known. 19. All of Plaintiff’s claims stated herein are asserted against Defendant and any of its owners, predecessors, successors, subsidiaries, agents and/or assigns. III. JURISDICTION AND VENUE 20. This Court has subject matter and diversity jurisdiction over this action under 28 U.S.C. § 1332(d) because this is a class action wherein the amount of controversy exceeds the sum or value of $5 million, exclusive of interest and costs, there are more than 100 members in the proposed class, and at least one Class Member, including Plaintiff, is a citizen of a state different from Defendant to establish minimal diversity. 21. Defendant is a citizen of Nevada and Arizona because it is a corporation formed under Nevada law and its principal place of business is in Phoenix, Arizona. 22. The District of Arizona has personal jurisdiction over Defendant because it conducts substantial business in Arizona and this District. 23. Venue is proper in this District under 28 U.S.C. §1391(b) because Defendant operates in this District and a substantial part of the events or omissions giving rise to Plaintiff’s claims occurred in this District. IV. FACTUAL ALLEGATIONS Background 24. Plaintiff and Class Members, who are past and current customers of Defendant, 5 provided and entrusted Defendant with sensitive and confidential information, including name, date of birth, and driver’s license number or state identification number. 25. Plaintiff and Class Members relied on this sophisticated Defendant to keep their PII confidential and securely maintained, to use this information for business purposes only, and to make only authorized disclosures of this information. Plaintiff and Class Members demand security to safeguard their PII. 26. Defendant had a duty to adopt reasonable measures to protect the PII of Plaintiff and Class Members from involuntary disclosure to third parties. The Data Breach 27. On or about September 9, 2022, Defendant sent Plaintiff and Class Members a Notice of Recent Security Incident. Defendant informed Plaintiff and other Class Members that: What Happened? We detected a compromise of two unique passwords that were used to access a customer contract search tool that allows access to rental contracts for U-Haul customers. The search tool cannot access payment card information; no credit card information was accessed or acquired. Upon identifying the compromised passwords, we promptly changed the passwords to prevent any further unauthorized access to the search tool and started an investigation. Cybersecurity experts were engaged to identify the contracts and data that were involved. The investigation determined an unauthorized person accessed the customer contract search tool and some customer contracts. None of our financial, payment processing or U-Haul email systems were involved; the access was limited to the customer contract search tool. What Information Was Involved? On August 1, 2022, our investigation determined some rental contracts were accessed between November 5, 2021, and April 5, 2022. After an in-depth analysis, our investigation determined on September 7, 2022, the accessed information includes your name and driver's license or state identification number. 6 What We Are Doing? The safety and trust of our customers, including the protection of personal information, is a top priority for U-Haul Company and we take that responsibility very seriously. While the information accessed in this incident did not include payment card information, we fully understand this is an inconvenience to you. We sincerely apologize for that. Please know we are working diligently to further augment our security measures to guard against such incidents and implementing additional security safeguards and controls on the search tool. 28. Defendant also filed a notice with the SEC advising that the PII impacted included name, date of birth, and driver’s license number.4 29. Defendant admitted in the Notice of Recent Security Incident and the SEC filing that an unauthorized actor accessed sensitive information about Plaintiff and Class Members, including name, date of birth, and driver’s license number or state identification number. 30. In response to the Data Breach, Defendant claims that cybersecurity experts are “are implementing additional security safeguards and controls to prevent further such incidents.”5 However, the details of the root cause of the Data Breach, the vulnerabilities exploited, and the remedial measures undertaken to ensure a breach does not occur again have not been shared with regulators or Plaintiff and Class Members, who retain a vested interest in ensuring that their information remains protected. 31. The unencrypted PII of Plaintiff and Class Members may end up for sale on the dark web, or simply fall into the hands of companies that will use the detailed PII for targeted marketing without the approval of Plaintiff and Class Members. Unauthorized individuals can easily access the PII of Plaintiff and Class Members. 4 Exhibit 2. 5 Id. 7 32. Defendant did not use reasonable security procedures and practices appropriate to the nature of the sensitive, unencrypted information it was maintaining for Plaintiff and Class Members, causing the exposure of PII for Plaintiff and Class Members. 33. Because Defendant had a duty to protect Plaintiff’s and Class Members’ PII, Defendant should have accessed readily available and accessible information about potential threats for the unauthorized exfiltration and misuse of such information. 34. In the years immediately preceding the Data Breach, Defendant knew or should have known that Defendant’s computer systems were a target for cybersecurity attacks because warnings were readily available and accessible via the internet. 35. In October 2019, the Federal Bureau of Investigation published online an article titled “High-Impact Ransomware Attacks Threaten U.S. Businesses and Organizations” that, among other things, warned that “[a]lthough state and local governments have been particularly visible targets for ransomware attacks, ransomware actors have also targeted health care organizations, industrial companies, and the transportation sector.”6 36. In April 2020, ZDNet reported, in an article titled “Ransomware mentioned in 1,000+ SEC filings over the past year,” that “[r]ansomware gangs are now ferociously aggressive in their pursuit of big companies. They breach networks, use specialized tools to maximize damage, leak corporate information on dark web portals, and even tip journalists to generate negative news for companies as revenge against those who refuse to pay.”7 6 FBI, High-Impact Ransomware Attacks Threaten U.S. Businesses and Organizations (Oct. 2, 2019) (emphasis added), available at https://www.ic3.gov/Media/Y2019/PSA191002 (last visited Jan. 25, 2022). 7 ZDNet, Ransomware mentioned in 1,000+ SEC filings over the past year (Apr. 30, 2020) (emphasis added), available at https://www.zdnet.com/article/ransomware-mentioned-in-1000- sec-filings-over-the-past-year/ (last visited Jan. 25, 2022). 8 37. In September 2020, the United States Cybersecurity and Infrastructure Security Agency published online a “Ransomware Guide” advising that “[m]alicious actors have adjusted their ransomware tactics over time to include pressuring victims for payment by threatening to release stolen data if they refuse to pay and publicly naming and shaming victims as secondary forms of extortion.”8 38. This readily available and accessible information confirms that, prior to the Data Breach, Defendant knew or should have known that (i) cybercriminals were targeting big companies such as Defendant, (ii) cybercriminals were ferociously aggressive in their pursuit of big companies such as Defendant, (iii) cybercriminals were leaking corporate information on dark web portals, and (iv) cybercriminals’ tactics included threatening to release stolen data. 39. In light of the information readily available and accessible on the internet before the Data Breach, Defendant, having elected to store the unencrypted PII of Plaintiff and Class Members in an Internet-accessible environment, had reason to be on guard for the exfiltration of the PII and Defendant’s type of business had cause to be particularly on guard against such an 40. Prior to the Data Breach, Defendant acknowledged, in its parent company’s annual report filed with the SEC in July 2021, as follows: Our information systems are largely Internet-based, including our point-of-sale reservation system, payment processing and telephone systems. While our reliance on this technology lowers our cost of providing service and expands our abilities to better serve customers, it exposes us to various risks including natural and man- made disasters, terrorist attacks and cyber-attacks. We have put into place extensive security protocols, backup systems and alternative procedures to mitigate these risks. However, disruptions or 8 U.S. CISA, Ransomware Guide – September 2020, available at https://www.cisa.gov/sites/default/files/publications/CISA_MS ISAC_Ransomware%20Guide_S508C_.pdf (last visited Jan. 25, 2022). 9 breaches, detected or undetected by us, for any period of time in any portion of these systems could adversely affect our results of operations and financial condition and inflict reputational damage. In addition, the provision of service to our customers and the operation of our networks and systems involve the storage and transmission of proprietary information and sensitive or confidential data, including personal information of customers, system members and others. Our information technology systems may be susceptible to computer viruses, attacks by computer hackers, malicious insiders, or catastrophic events. Hackers, acting individually or in coordinated groups, may also launch distributed denial of service attacks or ransom or other coordinated attacks that may cause service outages or other interruptions in our business and access to our data. In addition, breaches in security could expose us, our customers, or the individuals affected, to a risk of loss or misuse of proprietary information and sensitive or confidential data. The techniques used to obtain unauthorized access, disable or degrade service or sabotage systems change frequently, may be difficult to detect for a long time and often are not recognized until launched against a target. As a result, we may be unable to anticipate these techniques or to implement adequate preventative measures. Any of these occurrences could result in disruptions in our operations, the loss of existing or potential customers, damage to our brand and reputation, and litigation and potential liability for the Company. In addition, the cost and operational consequences of implementing further data or system protection measures could be significant and our efforts to deter, identify, mitigate and/or eliminate any security breaches may not be successful.9 41. Prior to the Data Breach, Defendant knew or should have known that there was a foreseeable risk that Plaintiff’s and Class Members’ PII could be accessed, exfiltrated, and published as the result of a cyberattack. 42. Prior to the Data Breach, Defendant knew or should have known that it should have encrypted the driver’s license numbers and other sensitive data elements within the PII to protect against their publication and misuse in the event of a cyberattack. 9 AMERCO 2021 Annual Report, available at https://www.amerco.com/reports.aspx (last visited Sept. 12, 2022). AMERCO is the parent company of Defendant. 10 Defendant Acquires, Collects, and Stores the PII of Plaintiff and Class Members. 43. As a condition of being a past or current customers of Defendant, Defendant required that Plaintiff and Class Members entrust Defendant with highly confidential PII. 44. Defendant acquired, collected, and stored the PII of Plaintiff and Class Members. 45. By obtaining, collecting, and storing the PII of Plaintiff and Class Members, Defendant assumed legal and equitable duties and knew or should have known that it was responsible for protecting the PII from disclosure. 46. Plaintiff and Class Members have taken reasonable steps to maintain the confidentiality of their PII and relied on Defendant to keep their PII confidential and securely maintained, to use this information for business purposes only, and to make only authorized disclosures of this information. Securing PII and Preventing Breaches 47. Defendant could have prevented this Data Breach by properly securing and encrypting the folders, files, and or data fields containing the PII of Plaintiff and Class Members. Alternatively, Defendant could have destroyed the data it no longer had a reasonable need to maintain or only stored data in an Internet-accessible environment when there was a reasonable need to do so. 48. Defendant’s negligence in safeguarding the PII of Plaintiff and Class Members is exacerbated by the repeated warnings and alerts directed to protecting and securing sensitive data. 49. Despite the prevalence of public announcements of data breach and data security compromises, Defendant failed to take appropriate steps to protect the PII of Plaintiff and Class Members from being compromised. 50. The Federal Trade Commission (“FTC”) defines identity theft as “a fraud 11 committed or attempted using the identifying information of another person without authority.”10 The FTC describes “identifying information” as “any name or number that may be used, alone or in conjunction with any other information, to identify a specific person,” including, among other things, “[n]ame, Social Security number, date of birth, official State or government issued driver’s license or identification number, alien registration number, government passport number, employer or taxpayer identification number.”11 51. The ramifications of Defendant’s failure to keep secure the PII of Plaintiff and Class Members are long lasting and severe. Once PII is stolen, particularly driver’s license numbers, fraudulent use of that information and damage to victims may continue for years. Value of Personal Identifiable Information 52. The PII of individuals remains of high value to criminals, as evidenced by the prices they will pay through the dark web. Numerous sources cite dark web pricing for stolen identity credentials. For example, personal information can be sold at a price ranging from $40 to $200, and bank details have a price range of $50 to $200.12 Experian reports that a stolen credit or debit card number can sell for $5 to $110 on the dark web.13 Criminals can also purchase access to entire company data breaches from $900 to $4,500.14 10 17 C.F.R. § 248.201 (2013). 12 Your personal data is for sale on the dark web. Here’s how much it costs, Digital Trends, Oct. 16, 2019, available at: https://www.digitaltrends.com/computing/personal-data-sold-on-the- dark-web-how-much-it-costs/ (last accessed Jan. 26, 2022). 13 Here’s How Much Your Personal Information Is Selling for on the Dark Web, Experian, Dec. 6, 2017, available at: https://www.experian.com/blogs/ask-experian/heres-how-much-your- personal-information-is-selling-for-on-the-dark-web/ (last accessed Jan. 26, 2022). 14 In the Dark, VPNOverview, 2019, available at: https://vpnoverview.com/privacy/anonymous- browsing/in-the-dark/ (last accessed Dec. 29, 2020). 12 53. Based on the foregoing, the information compromised in the Data Breach is significantly more valuable than the loss of, for example, credit card information in a retailer data breach because, there, victims can cancel or close credit and debit card accounts. The information compromised in this Data Breach is impossible to “close” and difficult, if not impossible, to change. 54. This data demands a much higher price on the black market. Martin Walter, senior director at cybersecurity firm RedSeal, explained, “Compared to credit card information, personally identifiable information and Social Security numbers are worth more than 10x on the black market.”15 55. Among other forms of fraud, identity thieves may obtain driver’s licenses, government benefits, medical services, and housing or even give false information to police. 56. The fraudulent activity resulting from the Data Breach may not come to light for 57. There may be a time lag between when harm occurs versus when it is discovered, and also between when PII is stolen and when it is used. According to the U.S. Government Accountability Office (“GAO”), which conducted a study regarding data breaches: [L]aw enforcement officials told us that in some cases, stolen data may be held for up to a year or more before being used to commit identity theft. Further, once stolen data have been sold or posted on the Web, fraudulent use of that information may continue for years. As a result, studies that attempt to measure the harm resulting from data breaches cannot necessarily rule out all future harm.16 15 Time Greene, Anthem Hack: Personal Data Stolen Sells for 10x Price of Stolen Credit Card Numbers, IT World, (Feb. 6, 2015), available at: https://www.networkworld.com/article/2880366/anthem-hack-personal-data-stolen-sells-for-10x- price-of-stolen-credit-card-numbers.html (last accessed Jan. 26, 2022). 16 Report to Congressional Requesters, GAO, at 29 (June 2007), available at: https://www.gao.gov/assets/gao-07-737.pdf (last accessed Mar. 15, 2021). 13 58. At all relevant times, Defendant knew, or reasonably should have known, of the importance of safeguarding the PII of Plaintiff and Class Members, including driver’s license numbers, and of the foreseeable consequences that would occur if Defendant’s data security system was breached, including, specifically, the significant costs that would be imposed on Plaintiff and Class Members as a result of a breach. 59. Plaintiff and Class Members now face years of constant surveillance of their financial and personal records, monitoring, and loss of rights. The Class is incurring and will continue to incur such damages in addition to any fraudulent use of their PII. 60. Defendant was, or should have been, fully aware of the unique type and the significant volume of data contained in Defendant’s contract search tool, amounting to potentially tens of thousands of individuals’ detailed, personal information and, thus, the significant number of individuals who would be harmed by the exposure of the unencrypted data. 61. To date, Defendant has offered Plaintiff and Class Members only one year of credit monitoring and identity theft detection through Equifax. The offered service is inadequate to protect Plaintiff and Class Members from the threats they face for years to come, particularly in light of the PII at issue here. 62. The injuries to Plaintiff and Class Members were directly and proximately caused by Defendant’s failure to implement or maintain adequate data security measures for the PII of Plaintiff and Class Members. Plaintiff’s Experience 63. On several occasions from 2014 to 2022, Plaintiff was a customer of Defendant. As a condition of being a customer of Defendant, Defendant required that she provide and entrust her PII. 14 64. Plaintiff received Defendant’s Notice of Recent Security Incident, dated September 9, 2022, on or about that date. The notice stated that Plaintiff’s name, date of birth, and driver’s license number or state identification number were accessed by an unauthorized actor. 65. As a result of the Data Breach, Plaintiff’s sensitive information was acquired by an unauthorized actor. The confidentiality of Plaintiff’s sensitive information has been irreparably harmed. For the rest of her life, Plaintiff will have to worry about when and how her sensitive information may be shared or used to her detriment. 66. As a result of the Data Breach notice, Plaintiff spent time dealing with the consequences of the Data Breach, which includes time spent verifying the legitimacy of the Notice of Recent Security Incident and self-monitoring her accounts. This time has been lost forever and cannot be recaptured. 67. Additionally, Plaintiff is very careful about sharing her sensitive PII. She has never knowingly transmitted unencrypted sensitive PII over the internet or any other unsecured source. 68. Plaintiff stores any documents containing her sensitive PII in a safe and secure location or destroys the documents. Moreover, she diligently chooses unique usernames and passwords for her various online accounts. 69. Plaintiff suffered lost time, annoyance, interference, and inconvenience as a result of the Data Breach and has anxiety and increased concerns for the loss of her privacy. 70. Plaintiff has suffered imminent and impending injury arising from the substantially increased risk of fraud, identity theft, and misuse resulting from her PII, especially her driver’s license number, being placed in the hands of unauthorized third parties and possibly criminals. 71. Plaintiff has a continuing interest in ensuring that her PII, which, upon information and belief, remains backed up in Defendant’s possession, is protected and safeguarded from future 15 breaches. V. CLASS ALLEGATIONS 72. Plaintiff brings this nationwide class action on behalf of herself and on behalf of all others similarly situated pursuant to Rule 23(b)(2), 23(b)(3), and 23(c)(4) of the Federal Rules of Civil Procedure. 73. The Nationwide Class that Plaintiff seeks to represent is defined as follows: All individuals whose PII was compromised in the data breach that is the subject of the Notice of Recent Security Incident that Defendant sent to Plaintiff and Class Members on or around September 9, 2022 (the “Nationwide Class”). 74. Excluded from the Class are the following individuals and/or entities: Defendant and Defendant’s parents, subsidiaries, affiliates, officers and directors, and any entity in which Defendant has a controlling interest; all individuals who make a timely election to be excluded from this proceeding using the correct protocol for opting out; any and all federal, state or local governments, including but not limited to their departments, agencies, divisions, bureaus, boards, sections, groups, counsels and/or subdivisions; and all judges assigned to hear any aspect of this litigation, as well as their immediate family members. 75. Plaintiff reserves the right to modify or amend the definition of the proposed classes before the Court determines whether certification is appropriate. 76. Numerosity, Fed R. Civ. P. 23(a)(1): The Nationwide Class (the “Class”) are so numerous that joinder of all members is impracticable. Defendant has identified numerous individuals whose PII was compromised in the Data Breach, and the Class is apparently identifiable within Defendant’s records. 77. Commonality, Fed. R. Civ. P. 23(a)(2) and (b)(3): Questions of law and fact common to the Classes exist and predominate over any questions affecting only individual Class 16 Members. These include: a. Whether and to what extent Defendant had a duty to protect the PII of Plaintiff and Class Members; b. Whether Defendant had duties not to disclose the PII of Plaintiff and Class Members to unauthorized third parties; c. Whether Defendant had duties not to use the PII of Plaintiff and Class Members for non-business purposes; d. Whether Defendant failed to adequately safeguard the PII of Plaintiff and Class Members; e. When Defendant actually learned of the Data Breach; f. Whether Defendant adequately, promptly, and accurately informed Plaintiff and Class Members that their PII had been compromised; g. Whether Defendant violated the law by failing to promptly notify Plaintiff and Class Members that their PII had been compromised; h. Whether Defendant failed to implement and maintain reasonable security procedures and practices appropriate to the nature and scope of the information compromised in the Data Breach; i. Whether Defendant adequately addressed and fixed the vulnerabilities which permitted the Data Breach to occur; j. Whether Defendant engaged in unfair, unlawful, or deceptive practices by failing to safeguard the PII of Plaintiff and Class Members; k. Whether Plaintiff and Class Members are entitled to actual, consequential, and/or nominal damages as a result of Defendant’s wrongful conduct; 17 l. Whether Plaintiff and Class Members are entitled to restitution as a result of Defendant’s wrongful conduct; and m. Whether Plaintiff and Class Members are entitled to injunctive relief to redress the imminent and currently ongoing harm faced as a result of the Data Breach. 78. Typicality, Fed. R. Civ. P. 23(a)(3): Plaintiff’s claims are typical of those of other Class Members because all had their PII compromised as a result of the Data Breach, due to Defendant’s misfeasance. 79. Policies Generally Applicable to the Class: This class action is also appropriate for certification because Defendant have acted or refused to act on grounds generally applicable to the Class, thereby requiring the Court’s imposition of uniform relief to ensure compatible standards of conduct toward the Class Members and making final injunctive relief appropriate with respect to the Class as a whole. Defendant’s policies challenged herein apply to and affect Class Members uniformly and Plaintiff’s challenge of these policies hinges on Defendant’s conduct with respect to the Class as a whole, not on facts or law applicable only to Plaintiff. 80. Adequacy, Fed. R. Civ. P. 23(a)(4): Plaintiff will fairly and adequately represent and protect the interests of the Class Members in that she has no disabling conflicts of interest that would be antagonistic to those of the other Members of the Class. Plaintiff seeks no relief that is antagonistic or adverse to the Members of the Class and the infringement of the rights and the damages they have suffered are typical of other Class Members. Plaintiff has retained counsel experienced in complex class action litigation, and Plaintiff intends to prosecute this action vigorously. 81. Superiority and Manageability, Fed. R. Civ. P. 23(b)(3): The class litigation is an appropriate method for fair and efficient adjudication of the claims involved. Class action 18 treatment is superior to all other available methods for the fair and efficient adjudication of the controversy alleged herein; it will permit a large number of Class Members to prosecute their common claims in a single forum simultaneously, efficiently, and without the unnecessary duplication of evidence, effort, and expense that hundreds of individual actions would require. Class action treatment will permit the adjudication of relatively modest claims by certain Class Members, who could not individually afford to litigate a complex claim against large corporations, like Defendant. Further, even for those Class Members who could afford to litigate such a claim, it would still be economically impractical and impose a burden on the courts. 82. The nature of this action and the nature of laws available to Plaintiff and Class Members make the use of the class action device a particularly efficient and appropriate procedure to afford relief to Plaintiff and Class Members for the wrongs alleged because Defendant would necessarily gain an unconscionable advantage since it would be able to exploit and overwhelm the limited resources of each individual Class Member with superior financial and legal resources; the costs of individual suits could unreasonably consume the amounts that would be recovered; proof of a common course of conduct to which Plaintiff was exposed is representative of that experienced by the Class and will establish the right of each Class Member to recover on the cause of action alleged; and individual actions would create a risk of inconsistent results and would be unnecessary and duplicative of this litigation. 83. The litigation of the claims brought herein is manageable. Defendant’s uniform conduct, the consistent provisions of the relevant laws, and the ascertainable identities of Class Members demonstrates that there would be no significant manageability problems with prosecuting this lawsuit as a class action. 84. Adequate notice can be given to Class Members directly using information 19 maintained in Defendant’s records. 85. Unless a Class-wide injunction is issued, Defendant may continue in its failure to properly secure the PII of Class Members, Defendant may continue to refuse to provide proper notification to Class Members regarding the Data Breach, and Defendant may continue to act unlawfully as set forth in this Complaint. 86. Further, Defendant have acted or refused to act on grounds generally applicable to the Classes and, accordingly, final injunctive or corresponding declaratory relief with regard to the Class Members as a whole is appropriate under Rule 23(b)(2) of the Federal Rules of Civil Procedure. 87. Likewise, particular issues under Rule 23(c)(4) are appropriate for certification because such claims present only particular, common issues, the resolution of which would advance the disposition of this matter and the parties’ interests therein. Such particular issues include, but are not limited to: a. Whether Defendant owed a legal duty to Plaintiff and Class Members to exercise due care in collecting, storing, using, and safeguarding their PII; b. Whether Defendant breached a legal duty to Plaintiff and Class Members to exercise due care in collecting, storing, using, and safeguarding their PII; c. Whether Defendant failed to comply with its own policies and applicable laws, regulations, and industry standards relating to data security; d. Whether an implied contract existed between Defendant on the one hand, and Plaintiff and Class Members on the other, and the terms of that implied contract; e. Whether Defendant breached the implied contract; f. Whether Defendant adequately and accurately informed Plaintiff and Class 20 Members that their PII had been compromised; g. Whether Defendant failed to implement and maintain reasonable security procedures and practices appropriate to the nature and scope of the information compromised in the Data Breach; h. Whether Defendant engaged in unfair, unlawful, or deceptive practices by failing to safeguard the PII of Plaintiff and Class Members; and, i. Whether Class Members are entitled to actual, consequential, and/or nominal damages, and/or injunctive relief as a result of Defendant’s wrongful conduct. COUNT I NEGLIGENCE (On Behalf of Plaintiff and the Nationwide Class) 88. Plaintiff and the Nationwide Class re-allege and incorporate by reference herein all of the allegations contained in paragraphs 1 through 87. 89. As a condition of being past and current customers of Defendant, Plaintiff and Class Members were obligated to provide and entrust Defendant with certain PII. 90. Plaintiff and the Nationwide Class provided and entrusted their PII to Defendant the premise and with the understanding that Defendant would safeguard their information, use their PII for business purposes only, and not disclose their PII to unauthorized third parties. 91. Defendant has full knowledge of the sensitivity of the PII and the types of harm that Plaintiff and the Nationwide Class could and would suffer if the PII were wrongfully disclosed. 92. Defendant knew or reasonably should have known that the failure to exercise due care in the collecting, storing, and using of the PII of Plaintiff and the Nationwide Class involved an unreasonable risk of harm to Plaintiff and the Nationwide Class, even if the harm occurred through the criminal acts of a third party. 21 93. Defendant had a duty to exercise reasonable care in safeguarding, securing, and protecting such information from being compromised, lost, stolen, misused, and/or disclosed to unauthorized parties. This duty includes, among other things, designing, maintaining, and testing Defendant’s security protocols to ensure that the PII of Plaintiff and the Nationwide Class in Defendant’s possession was adequately secured and protected. 94. Defendant also had a duty to exercise appropriate clearinghouse practices to remove from an Internet-accessible environment the PII it was no longer required to retain pursuant to regulations and had no reasonable need to maintain in an Internet-accessible environment. 95. Defendant also had a duty to have procedures in place to detect and prevent the improper access and misuse of the PII of Plaintiff and the Nationwide Class. 96. Defendant’s duty to use reasonable security measures arose as a result of the special relationship that existed between Defendant and Plaintiff and the Nationwide Class. That special relationship arose because Plaintiff and the Nationwide Class entrusted Defendant with their confidential PII, a necessary part of obtaining services from Defendant. 97. Defendant were subject to an “independent duty,” untethered to any contract between Defendant and Plaintiff or the Nationwide Class. 98. A breach of security, unauthorized access, and resulting injury to Plaintiff and the Nationwide Class was reasonably foreseeable, particularly in light of Defendant’s inadequate security practices. 99. Plaintiff and the Nationwide Class were the foreseeable and probable victims of any inadequate security practices and procedures. Defendant knew or should have known of the inherent risks in collecting and storing the PII of Plaintiff and the Nationwide Class, the critical importance of providing adequate security of that PII, and the necessity for encrypting PII stored 22 on Defendant’s systems. 100. Defendant’s own conduct created a foreseeable risk of harm to Plaintiff and the Nationwide Class. Defendant’s misconduct included, but was not limited to, its failure to take the steps and opportunities to prevent the Data Breach as set forth herein. Defendant’s misconduct also included its decisions not to comply with industry standards for the safekeeping of the PII of Plaintiff and the Nationwide Class, including basic encryption techniques freely available to Defendant. 101. Plaintiff and the Nationwide Class had no ability to protect their PII that was in, and possibly remains in, Defendant’s possession. 102. Defendant were in a position to protect against the harm suffered by Plaintiff and the Nationwide Class as a result of the Data Breach. 103. Defendant had and continue to have a duty to adequately disclose that the PII of Plaintiff and the Nationwide Class within Defendant’s possession might have been compromised, how it was compromised, and precisely the types of data that were compromised and when. Such notice was necessary to allow Plaintiff and the Nationwide Class to (i) take steps to prevent, mitigate, and repair any identity theft and the fraudulent use of their PII by third parties and (ii) prepare for the sharing and detrimental use of their sensitive information. 104. Defendant had a duty to employ proper procedures to prevent the unauthorized dissemination of the PII of Plaintiff and the Nationwide Class. 105. Defendant have admitted that the PII of Plaintiff and the Nationwide Class was wrongfully lost and disclosed to unauthorized third persons as a result of the Data Breach. 106. Defendant, through its actions and/or omissions, unlawfully breached its duties to Plaintiff and the Nationwide Class by failing to implement industry protocols and exercise 23 reasonable care in protecting and safeguarding the PII of Plaintiff and the Nationwide Class during the time the PII was within Defendant’s possession or control. 107. Defendant improperly and inadequately safeguarded the PII of Plaintiff and the Nationwide Class in deviation of standard industry rules, regulations, and practices at the time of the Data Breach. 108. Defendant failed to heed industry warnings and alerts to provide adequate safeguards to protect the PII of Plaintiff and the Nationwide Class in the face of increased risk of 109. Defendant, through its actions and/or omissions, unlawfully breached its duty to Plaintiff and the Nationwide Class by failing to have appropriate procedures in place to detect and prevent dissemination of the PII. 110. Defendant breached its duty to exercise appropriate clearinghouse practices by failing to remove from the Internet-accessible environment any PII it was no longer required to retain pursuant to regulations and which Defendant had no reasonable need to maintain in an Internet-accessible environment. 111. Defendant, through its actions and/or omissions, unlawfully breached its duty to adequately and timely disclose to Plaintiff and the Nationwide Class the existence and scope of the Data Breach. 112. But for Defendant’s wrongful and negligent breach of duties owed to Plaintiff and the Nationwide Class, the PII of Plaintiff and the Nationwide Class would not have been compromised. 113. There is a close causal connection between Defendant’s failure to implement security measures to protect the PII of Plaintiff and the Nationwide Class and the harm, or risk of 24 imminent harm, suffered by Plaintiff and the Nationwide Class. The PII of Plaintiff and the Nationwide Class was lost and accessed as the proximate result of Defendant’s failure to exercise reasonable care in safeguarding such PII by adopting, implementing, and maintaining appropriate security measures. 114. As a direct and proximate result of Defendant’s negligence, Plaintiff and the Nationwide Class have suffered and will suffer injury, including but not limited to: (i) actual identity theft; (ii) the loss of the opportunity of how its PII is used; (iii) the compromise, publication, and/or theft of its PII; (iv) out-of-pocket expenses associated with the prevention, detection, and recovery from identity theft, tax fraud, and/or unauthorized use of its PII; (v) lost opportunity costs associated with effort expended and the loss of productivity addressing and attempting to mitigate the actual and future consequences of the Data Breach, including but not limited to efforts spent researching how to prevent, detect, contest, and recover from tax fraud and identity theft; (vi) costs associated with placing freezes on credit reports; (vii) the continued risk to its PII, which remain in Defendant’s possession and is subject to further unauthorized disclosures so long as Defendant fail to undertake appropriate and adequate measures to protect the PII of Plaintiff and the Nationwide Class; and (viii) future costs in terms of time, effort, and money that will be expended to prevent, detect, contest, and repair the impact of the PII compromised as a result of the Data Breach for the remainder of the lives of Plaintiff and the Nationwide Class. 115. As a direct and proximate result of Defendant’s negligence, Plaintiff and the Nationwide Class have suffered and will continue to suffer other forms of injury and/or harm, including, but not limited to, anxiety, emotional distress, loss of privacy, and other economic and non-economic losses. 25 116. Additionally, as a direct and proximate result of Defendant’s negligence, Plaintiff and the Nationwide Class have suffered and will suffer the continued risks of exposure of their PII, which remain in Defendant’s possession and is subject to further unauthorized disclosures so long as Defendant fail to undertake appropriate and adequate measures to protect the PII in its continued possession. 117. As a direct and proximate result of Defendant’s negligence, Plaintiff and the Nationwide Class are entitled to recover actual, consequential, and nominal damages. COUNT II BREACH OF IMPLIED CONTRACT (On Behalf of Plaintiff and the Nationwide Class) 118. Plaintiff re-alleges and incorporate by reference herein all of the allegations contained in paragraphs 1 through 87. 119. Defendant’s Privacy Policy, posted on its website, represents that it “[w]e use commercially reasonable physical, managerial, and technical safeguards to preserve the integrity and security of your Information and our systems. We cannot, however, ensure or warrant the security of any information you transmit to Us and you do so at your own risk. However, please note that this is not a guarantee that such information may not be accessed, disclosed, altered, or destroyed by breach of any of our physical, technical, or managerial safeguards.”17 120. Defendant parent company’ s 2021 Annual Report, filed with the SEC in July 2021, represents that “Our information systems are largely Internet-based, including our point-of-sale reservation system, payment processing and telephone systems. While our reliance on this technology lowers our cost of providing service and expands our abilities to better serve customers, it exposes us to various risks including natural and man-made disasters, terrorist attacks and cyber- 17 Exhibit 1. 26 attacks. We have put into place extensive security protocols, backup systems and alternative procedures to mitigate these risks.”18 121. In being past and current customers of Defendant, Plaintiff and Nationwide Class Members provided and entrusted their PII to Defendant. 122. Defendant’s website confirms that Defendant intended to bind itself to protect the PII that Plaintiff and Nationwide Class Members submitted to Defendant. 123. Defendant required Plaintiff and Nationwide Class Members to provide and entrust their PII as condition of being past and current customers of Defendant. 124. As a condition of being past and current customers of Defendant, Plaintiff and Nationwide Class Members provided and entrusted their PII. In so doing, Plaintiff and Nationwide Class Members entered into implied contracts with Defendant by which Defendant agreed to safeguard and protect such PII, to keep such PII secure and confidential, and to timely and accurately notify Plaintiff and Nationwide Class Members if their PII had been compromised or 125. Plaintiff and the Nationwide Class Members fully performed their obligations under the implied contracts with Defendant. 126. Defendant breached the implied contracts it made with Plaintiff and Nationwide Class Members by (i) failing to use commercially reasonable physical, managerial, and technical safeguards to preserve the integrity and security of Plaintiff’s and Nationwide Class Members’ PII, (ii) failing to encrypt driver’s license numbers and other sensitive PII, (iii) failing to delete PII it no longer had a reasonable need to maintain, and (iv) otherwise failing to safeguard and protect 18 AMERCO 2021 Annual Report, available at https://www.amerco.com/reports.aspx (last visited Sept. 12, 2022). AMERCO is Defendant’s parent company. 27 their PII and by failing to provide timely and accurate notice to them that PII was compromised as a result of the data breach. 127. As a direct and proximate result of Defendant’s above-described breach of implied contract, Plaintiff and Nationwide Class Members have suffered (and will continue to suffer) the threat of the sharing and detrimental use of their sensitive information; ongoing, imminent, and impending threat of identity theft crimes, fraud, and abuse, resulting in monetary loss and economic harm; actual identity theft crimes, fraud, and abuse, resulting in monetary loss and economic harm; loss of the confidentiality of the stolen confidential data; the illegal sale of the compromised data on the dark web; expenses and/or time spent on credit monitoring and identity theft insurance; time spent scrutinizing bank statements, credit card statements, and credit reports; expenses and/or time spent initiating fraud alerts, decreased credit scores and ratings; lost work time; and other economic and non-economic harm. 128. As a direct and proximate result of Defendant’s above-described breach of implied contract, Plaintiff and Nationwide Class Members are entitled to recover actual, consequential, and nominal damages. COUNT III Violations of the Drivers Privacy Protection Act, 18 U.S.C. § 2721, et seq. (On Behalf of Plaintiff and the Nationwide Class) 129. Plaintiff re-alleges and incorporate by reference herein all of the allegations contained in paragraphs 1 through 87. 130. Defendant knowingly obtained Plaintiff’s and the Nationwide Class’s personal information, from a motor vehicle record, including their driver’s licenses. 28 131. Defendant voluntarily decided to populate its customer contracts when accessed via its contract search tool with Plaintiff’s and the Nationwide Class’s personal information, including their driver’s license numbers. 132. Defendant reasonably should have known that populating its customer contracts when accessed via its contract search tool would disclosure Plaintiff’s and the Nationwide Class’s driver’s license numbers to cybercriminals for impermissible purposes. 133. In failing implement reasonable measures to prevent the Data Breach, Defendant disclosed Plaintiff’s and the Nationwide Class’s driver’s license numbers for an impermissible purposes. 134. Each of Plaintiff and Class Members demands actual damages, but not less than liquidated damages in the amount of $2,500, punitive damages upon proof of willful or reckless disregard of the law, reasonable attorney’s fees and other litigation costs reasonable incurred, and such other preliminary and equitable relief as the court determines to be appropriate. COUNT IV Declaratory Judgment (On Behalf of Plaintiff and the Nationwide Class) 135. Plaintiff re-alleges and incorporate by reference herein all of the allegations contained in paragraphs 1 through 87. 136. Under the Declaratory Judgment Act, 28 U.S.C. § 2201, et seq., this Court is authorized to enter a judgment declaring the rights and legal relations of the parties and grant further necessary relief. Further, the Court has broad authority to restrain acts, such as here, that are tortious and violate the terms of the federal and state statutes described in this Complaint. 137. An actual controversy has arisen in the wake of the Data Breach regarding Plaintiff’s and Class Members’ PII and whether Defendant is currently maintaining data security 29 measures adequate to protect Plaintiff and Class Members from further data breaches that compromise their PII. Plaintiff allege that Defendant’s data security measures remain inadequate. Defendant publicly denies these allegations. Furthermore, Plaintiff continue to suffer injury as a result of the compromise of their PII and remains at imminent risk that further compromises of their PII will occur in the future. It is unknown what specific measures and changes Defendant has undertaken in response to the Data Breach. 138. Plaintiff and Class Members have an ongoing, actionable dispute arising out of Defendant’s inadequate security measures, including (i) Defendant’s failure to encrypt Plaintiff’s and Class Members’ PII, including driver’s license numbers, while storing it in an Internet- accessible environment and (ii) Defendant’s failure to delete PII it has no reasonable need to maintain in an Internet-accessible environment, including the driver’s license number of Plaintiff. 139. Pursuant to its authority under the Declaratory Judgment Act, this Court should enter a judgment declaring, among other things, the following: a. Defendant owes a legal duty to secure the PII of past and current customers of Defendant; b. Defendant continues to breach this legal duty by failing to employ reasonable measures to secure consumers’ PII; and c. Defendant’s ongoing breaches of its legal duty continue to cause Plaintiff harm. 140. This Court also should issue corresponding prospective injunctive relief requiring Defendant to employ adequate security protocols consistent with law and industry and government regulatory standards to protect consumers’ PII. Specifically, this injunction should, among other things, direct Defendant to: 30 d. engage third party auditors, consistent with industry standards, to test its systems for weakness and upgrade any such weakness found; e. audit, test, and train its data security personnel regarding any new or modified procedures and how to respond to a data breach; f. regularly test its systems for security vulnerabilities, consistent with industry standards; g. implement an education and training program for appropriate employees regarding cybersecurity. 141. If an injunction is not issued, Plaintiff will suffer irreparable injury, and lack an adequate legal remedy, in the event of another data breach at Defendant. The risk of another such breach is real, immediate, and substantial. If another breach at Defendant occurs, Plaintiff will not have an adequate remedy at law because many of the resulting injuries are not readily quantified and they will be forced to bring multiple lawsuits to rectify the same conduct. 142. The hardship to Plaintiff if an injunction is not issued exceeds the hardship to Defendant if an injunction is issued. Plaintiff will likely be subjected to substantial identity theft and other damage. On the other hand, the cost to Defendant of complying with an injunction by employing reasonable prospective data security measures is relatively minimal, and Defendant has a pre-existing legal obligation to employ such measures. 143. Issuance of the requested injunction will not disserve the public interest. To the contrary, such an injunction would benefit the public by preventing another data breach at Defendant, thus eliminating the additional injuries that would result to Plaintiff and others whose confidential information would be further compromised. 31 PRAYER FOR RELIEF WHEREFORE, Plaintiff, on behalf of herself and Class Members, requests judgment against Defendant and that the Court grant the following: A. For an Order certifying the Nationwide Class and appointing Plaintiff and her Counsel to represent such Class; B. For equitable relief enjoining Defendant from engaging in the wrongful conduct complained of herein pertaining to the misuse and/or disclosure of the PII of Plaintiff and Class Members, and from refusing to issue prompt, complete, any accurate disclosures to Plaintiff and Class Members; C. For injunctive relief requested by Plaintiff, including but not limited to, injunctive and other equitable relief as is necessary to protect the interests of Plaintiff and Class Members, including but not limited to an order: i. prohibiting Defendant from engaging in the wrongful and unlawful acts described herein; ii. requiring Defendant to protect, including through encryption, all data collected through the course of its business in accordance with all applicable regulations, industry standards, and federal, state or local laws; iii. requiring Defendant to delete, destroy, and purge the personal identifying information of Plaintiff and Class Members unless Defendant can provide to the Court reasonable justification for the retention and use of such information when weighed against the privacy interests of Plaintiff and Class Members; iv. requiring Defendant to implement and maintain a comprehensive Information Security Program designed to protect the confidentiality and integrity of the PII 32 of Plaintiff and Class Members; v. prohibiting Defendant from maintaining the PII of Plaintiff and Class Members on a cloud-based database; vi. requiring Defendant to engage independent third-party security auditors/penetration testers as well as internal security personnel to conduct testing, including simulated attacks, penetration tests, and audits on Defendant’s systems on a periodic basis, and ordering Defendant to promptly correct any problems or issues detected by such third-party security auditors; vii. requiring Defendant to engage independent third-party security auditors and internal personnel to run automated security monitoring; viii. requiring Defendant to audit, test, and train its security personnel regarding any new or modified procedures; ix. requiring Defendant to segment data by, among other things, creating firewalls and access controls so that if one area of Defendant’s network is compromised, hackers cannot gain access to other portions of Defendant’s systems; x. requiring Defendant to conduct regular database scanning and securing checks; xi. requiring Defendant to establish an information security training program that includes at least annual information security training for all employees, with additional training to be provided as appropriate based upon the employees’ respective responsibilities with handling personal identifying information, as well as protecting the personal identifying information of Plaintiff and Class Members; xii. requiring Defendant to routinely and continually conduct internal training and 33 education, and on an annual basis to inform internal security personnel how to identify and contain a breach when it occurs and what to do in response to a breach; xiii. requiring Defendant to implement a system of tests to assess its respective employees’ knowledge of the education programs discussed in the preceding subparagraphs, as well as randomly and periodically testing employees compliance with Defendant’s policies, programs, and systems for protecting personal identifying information; xiv. requiring Defendant to implement, maintain, regularly review, and revise as necessary a threat management program designed to appropriately monitor Defendant’s information networks for threats, both internal and external, and assess whether monitoring tools are appropriately configured, tested, and updated; xv. requiring Defendant to meaningfully educate all Class Members about the threats that they face as a result of the loss of their confidential personal identifying information to third parties, as well as the steps affected individuals must take to protect themselves; xvi. requiring Defendant to implement logging and monitoring programs sufficient to track traffic to and from Defendant’s servers; and for a period of 10 years, appointing a qualified and independent third party assessor to conduct a SOC 2 Type 2 attestation on an annual basis to evaluate Defendant’s compliance with the terms of the Court’s final judgment, to provide such report to the Court and to counsel for the class, and to report any deficiencies with compliance of the 34 Court’s final judgment; D. For an award of damages, including actual, consequential, statutory, and nominal damages, as allowed by law in an amount to be determined; E. For an award of attorneys’ fees, costs, and litigation expenses, as allowed by law; F. For prejudgment interest on all amounts awarded; and G. Such other and further relief as this Court may deem just and proper. DEMAND FOR JURY TRIAL Plaintiff hereby demands that this matter be tried before a jury. Date: September 13, 2022 Respectfully Submitted, /s/ Rory Brian Riley Rory Brian Riley (ASB 03293) Morgan and Morgan Arizona PLLC 2355 E. Camelback Road Suite 335 Phoenix, AZ 85016 Phone: 602-735-0250 Email: briley@forthepeople.com John A. Yanchunis* Ryan D. Maxey* MORGAN & MORGAN COMPLEX BUSINESS DIVISION 201 N. Franklin Street, 7th Floor Tampa, Florida 33602 (813) 223-5505 jyanchunis@ForThePeople.com rmaxey@ForThePeople.com Attorneys for Plaintiff and the Proposed Class *pro hac vice applications pending 35 Civil Cover Sheet This automated JS-44 conforms generally to the manual JS-44 approved by the Judicial Conference of the United States in September 1974. The data is required for the use of the Clerk of Court for the purpose of initiating the civil docket sheet. The information contained herein neither replaces nor supplements the filing and service of pleadings or other papers as required by law. This form is authorized for use only in the District of Arizona. The completed cover sheet must be printed directly to PDF and filed as an attachment to the Complaint or Notice of Removal. FELICIA DURGAN Defendant(s): U-HAUL INTERNATIONAL, INC County of Residence: Outside the State of Arizona County of Residence: Maricopa County Where Claim For Relief Arose: Outside the State of Arizona Plaintiff's Atty(s): Defendant's Atty(s): Morgan and Morgan 2355 East Camelback Road, Ste. 335Phoenix, Arizona 85016602-735-0230 II. Basis of Jurisdiction: 3. Federal Question (U.S. not a party) III. Citizenship of Principal Parties (Diversity Cases Only) Plaintiff:-N/A Defendant:- N/A 1. Original Proceeding V. Nature of Suit: 890 Other Statutory Actions VI.Cause of Action: 28 U.S.C. § 1332(d) VII. Requested in Complaint Class Action:Yes Dollar Demand:5000000 Jury Demand:Yes VIII. This case is not related to another case. Privacy Policy We value Our customers and their privacy. We never sell your personal information. This Privacy Policy covers entities within the U-Haul System ("We", "Us", "Our"). For purposes of this Privacy Policy, the U-Haul System shall be de�ned as: U-Haul International, Inc. ("U-Haul"), and its parent, a�liated entities, related companies, subsidiaries, and agents who operate the U-Haul System, pursuant to which, among other things, Rental Equipment, self-storage rooms, and U-Boxes® are provided to the public, various services are rendered and products are When entering into any transaction with Us, or when using this website, which is operated by Web Team Associates, Inc. ("Web Team"), a subsidiary of U-Haul, you trust Us with information about you, including information that is directly connected to your name or personally identi�able information ("Information"). Your privacy is important to Us, and we believe it is important to share with you how We handle your information, and how you can control the collection, correction and/or deletion of information. We will not use or share your information with anyone except as described in this Privacy Policy. Please take the time to read this privacy policy carefully, and let Us know if you have any questions. This policy addresses the following: Information We Collect How We Use Information Information Sharing U-Haul Equipment Location Information Cookies and Similar Technologies Online Tracking Choice and Access Your California Privacy Rights Access to Speci�c Information, Data Portability Rights, and Deletion Rights Exercising Access, Data Portability, and Deletion Rights Links to Other Websites This website may contain links to other websites. Please be aware that We are not responsible for the content or privacy practices of such other websites. We encourage Our users to be aware when they leave this website and to read the privacy statements of any other website that collects information. Information We Collect The information collected may depend on the nature of how you choose to interact with Us and what services you use. We only collect information from you directly as you provide it to Us and as set forth in this Privacy Policy. The data we may collect includes: Identi�ers and contact information Home Address Phone Number E-mail Address Payment Information Driver License Date of birth Other forms of identi�cation Protected classi�cation information (from Driver License) Biometric information ® Images of your face (when renting using Our U-Haul Truck Share 24/7 program) Commercial information Records of personal property (if supplied for a storage contract or when �ling a claim) Records of products/services purchased or obtained Internet or other electronic network activity information Device / Browser Information Browsing history (see "Cookies and Similar Technologies" below) Log File Information such as web request, browser type, referring / exit pages and URLs, number of clicks, domain names, landing pages, pages viewed, and other such information. collect any personal information from children under the age of 13 or knowingly allow such persons to create an online account. 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Your IP address and email address are used to help identify you and your shopping cart and to gather broad demographic information. To respond to your request for roadside assistance or other service to the U-Haul Equipment. Information Sharing We engage certain trusted third parties to perform business functions and provide services to Us, including hosting and maintenance, error monitoring, debugging, performance monitoring, billing, customer relationship, database storage and management, and direct marketing campaigns. We may share your personal information with these third parties, including service providers and subsidiaries, but only to the extent necessary to perform these functions and provide such services. These third parties are prohibited from using information obtained in this manner for any purpose(s) other than to provide the services We have engaged them to perform. 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U-Haul Equipment Location Information Your U-Haul Vehicle, Towable Equipment or U-Box Container(s) (hereinafter "U-Haul Equipment") may be equipped with a device which collects location data of the U-Haul Equipment ("Location Detection Device"). We will only access and use the Location Detection Device in the event: Your U-Haul Equipment is not returned at the time and location as stated on Your U-Haul Equipment Contract; If the Customer reports the U-Haul Equipment stolen to law enforcement or an entity within the U-Haul System; If the Customer agrees for the purposes of roadside assistance or other related services to the U-Haul Equipment; If requested by law enforcement or appropriate governmental agency; or If the Customer agrees for any other purpose. Your U-Haul Equipment location will not be tracked, for any purpose, other than stated above. We will not share or sell any data from the Location Detection Device with any external third-party other than stated in this Privacy Policy Cookies and Similar Technologies Cookies also provide a smoother shopping experience by helping Us to uniquely identify shopping carts and nearby locations to provide custom, personalized content and information. Cookies cannot pro�le your system or collect information from your device. We do not use cookies to store payment card numbers or any other personal identi�cation. We also use these technologies to monitor the effectiveness of our service and aggregate metrics such as total number of visitors and tra�c, as well as to diagnose or �x technology problems. We use both session cookies and persistent cookies. A persistent cookie remains on your device after you close your browser. Persistent cookies may be used by your browser on subsequent visits to the website. Persistent cookies can be removed by following your web browser’s directions. A session cookie is temporary and disappears after you close your browser. You may reset your browser to clear cookies or choose to set your browser to block all cookies, including cookies associated with this website, but know that some of the website's functionality may not function properly. Our website uses on-premises and third-party web analytics services, such as Google Analytics, to help Us analyze how visitors use the website. To learn more about opting out of data collection through Google Analytics, click here (https://support.google.com/analytics/answer/181881?hl=en). Certain third parties may collect Personal Information about your online activities over time and across different websites when you use Our website. Your browser settings may allow you to automatically transmit a "Do Not Track" signal to websites and online services you visit. Like many websites and online services, We do not alter Our practices when We receive a "Do Not Track" signal from a visitor's browser. We use commercially reasonable physical, managerial, and technical safeguards to preserve the integrity and security of your Information and our systems. We cannot, however, ensure or warrant the security of any information you transmit to Us and you do so at your own risk. However, please note that this is not a guarantee that such information may not be accessed, disclosed, altered, or destroyed by breach of any of our physical, technical, or managerial safeguards. To protect your privacy and security, We take reasonable steps to verify your identity before granting you access to your account. You are responsible for maintaining the secrecy of your unique password and account information, and for controlling access to your email communications from Us, at all times. In the event that personal information is compromised as a result of a breach of security, We will promptly notify those persons whose personal information has been compromised, in accordance with the noti�cation procedures set forth in this Privacy Policy, or as otherwise required by applicable law. Further, We reserve the right to retain data as required by applicable law; and for so long as reasonably necessary to ful�ll the purposes for which the data is retained except to the extent prohibited by applicable law. You may also write to Our Data Privacy & Security 2727 N. Central Ave Phoenix, AZ 85004 You choose whether you wish to receive promotional emails and SMS messages. To stop receiving promotional emails, send an email asking to be removed or click "Unsubscribe" in a promotional email you received. To stop receiving SMS messages, text "STOP" to 84285. After you send the SMS message "STOP" to Us, you should receive an SMS message to con�rm that you have been unsubscribed. 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To obtain this information, please send an email message to privacy@uhaul.com (mailto:privacy@uhaul.com) with "Request for California Privacy Information" on the subject line and in the body of your message or by sending a letter to: Data Privacy & Security 2727 N. Central Ave Phoenix, AZ 85004 Access to Speci�c Information, Data Portability Rights, and Deletion Rights The California Consumer Privacy Act (CCPA), and similar privacy laws in other states and provinces, provide their residents with speci�c rights regarding their personal information. This section describes your privacy rights and explains how to exercise those rights. You have the right to request that We disclose certain information to you about Our collection and use of your personal information over the past 12 months. 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The veri�able request must: Provide su�cient information that allows Us to reasonably verify you are the person about whom We collected personal information or an authorized representative Describe your request with su�cient detail that allows Us to properly understand, evaluate, and respond to it We will only use personal information provided in a veri�able consumer request to verify the requestor's identity or authority to make the request. Links to Other websites We are not responsible for the practices employed by websites linked to or from Our website nor the information or content contained therein. Please remember that when you use a link to go from our website to another website, our Privacy Policy is no longer in effect. Your browsing and interaction on any other website, including those that have a link on Our website, is subject to that website's own rules and policies. Please read over those rules and policies before We reserve the right to revise, modify, add, or remove portions and reissue this Privacy Policy at any time to keep you aware of what information We collect, how We use it and under what circumstances We may disclose it. Any changes will be effective immediately upon posting of the revised Privacy Policy and your continued use of the website indicates your consent to the Privacy Policy then posted. Contact Information If you have any questions or concerns about Our privacy practices, you can contact online (/Contact/Email.aspx) or by Data Privacy & Security 2727 N. Central Ave Phoenix, AZ 85004 AMERCO /NV/ FORM 8-K (Current report filing) Filed 09/09/22 for the Period Ending 09/09/22 Address 5555 KIETZKE LANE STE 100 RENO, NV, 89511 Telephone 7756886300 CIK 0000004457 Symbol UHAL SIC Code 7510 - Services-Auto Rental and Leasing (No Drivers) Industry Ground Freight & Logistics Sector Industrials Fiscal Year 03/31 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 September 9, 2022 Date of Report (Date of earliest event reported) AMERCO (Exact name of registrant as specified in its charter) Nevada 001-11255 88-0106815 (State or other jurisdiction of incorporation) (Commission File Number) (I.R.S. Employer Identification No.) 5555 Kietzke Lane , Ste. 100 Reno , NV 89511 (Address of Principal Executive Offices) 775 668-6300 (Registrant’s telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol Name of each exchange on which registered Common Stock, $0.25 par value UHAL NASDAQ Global Select Market Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: ☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) ☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) ☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) ☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ technology network. U-Haul detected a compromise of two unique passwords for accessing U-Haul’s contract search tool. U-Haul took immediate steps to contain the incident. Upon identifying the compromised passwords, U-Haul promptly enhanced its security measures to prevent any further unauthorized access and began an investigation. Cybersecurity experts were engaged to investigate the impact of the incident and are implementing additional security safeguards and controls to prevent further such incidents. None of U-Haul’s financial, payment processing or email systems were involved. On August 1, 2022, the investigation by U-Haul into the incident determined certain customer contracts, including names, dates of birth and driver’s license numbers of some customers, were accessed using the compromised contract search tool between November 5, 2021 and April 5, 2022. U-Haul is taking steps to notify impacted customers, in addition to the appropriate governmental authorities. Impacted customers will be offered identity protection services at no charge. The Company does not believe that the incident will have a material impact on its business or financial condition. Security, in all forms, remains a critical priority at AMERCO, and the Company will continue to take all appropriate measures to safeguard the integrity of its information technology infrastructure. Item 9.01. Financial Statements and Exhibits. (d) Exhibits. Exhibit No. Description 104 Cover Page Interactive Data File (embedded within the Inline XBRL documents) Forward-Looking Statements This Current Report on Form 8-K includes statements that may constitute “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, the accuracy of which are necessarily subject to risks, uncertainties, and assumptions as to future events that may not prove to be accurate. The words “will,” “seek,” “believe,” and similar expressions, as they relate to the Company or U-Haul, its operations and/or its information technology infrastructure, data and employee, customer and vendor information, are intended to identify forward-looking statements. These statements include, but are not limited to, express or implied forward- looking statements relating to the Company’s expectations regarding the potential impact to its information technology infrastructure and on its financial performance and business operations, including any related costs, fines or lawsuits, and its ability to contain the incident, continue ongoing operations and safeguard the integrity of its information technology infrastructure, data, and employee, customer and vendor information from similar future incidents. These statements are neither promises nor guarantees, but are subject to a variety of risks and uncertainties, many of which are beyond the Company’s or U-Haul’s control, which could cause actual results to differ materially from those contemplated in these forward-looking statements. Existing and prospective investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Factors that could cause actual results to differ materially from those expressed or implied include the ongoing assessment of the data security incident, legal, reputational and financial risks resulting from this and/or additional cybersecurity incidents, the effectiveness of the additional security safeguards, and the other factors discussed in the Company’s Annual Report on Form 10-K for the year ended March 31, 2022 and Quarterly Report on Form 10-Q for the quarter ended June 30, 2022. These forward-looking statements speak only as of the date of this report or as of the date to which they refer, and the Company or U-Haul assumes no obligation to update any forward-looking statements as a result of new information or future events or developments, except as required by law. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Dated: September 9, 2022 Exhibit Index Exhibit No. Description 104 Cover Page Interactive Data File (embedded within the Inline XBRL documents)

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IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION CIVIL ACTION NO. 4:18-cv-4818 JURY TRIAL DEMANDED BETTY COOPER, CHRISTINE CHAMPAGNE, CLEMETEAN WILLIAMS, NAKIA HOLMES JUPITER, DOMINIQUE COLEMAN, KEIA WALKER, LATONJA JONES, BRITTANY DUPAR, CAROL WALKER, and BARBARA JACKSON, On Behalf of Themselves and All Others Similarly Situated, Plaintiffs, RULE 23 CLASS ACTION VS. BAY AREA REGIONAL MEDICAL CENTER LLC, MEDISTAR SLN GP LLC, and MONZER HOURANI. Defendants. § § § § § § § § § § § § § § § § § § PLAINTIFFS’ ORIGINAL CLASS ACTION COMPLAINT Plaintiffs, BETTY COOPER, CHRISTINE CHAMPAGNE, CLEMETEAN WILLIAMS, NAKIA HOLMES JUPITER, DOMINIQUE COLEMAN, KEIA WALKER, LATONJA JONES, BRITTANY DUPAR, CAROL WALKER, and BARBARA JACKSON (“Plaintiffs”), on behalf of themselves and all other similarly situated employees, file this Complaint against BAY AREA REGIONAL MEDICAL CENTER LLC, MEDISTAR SLN GP LLC, and MONZER HOURANI (“BARMC” or “Defendants”), showing in support as follows: I. NATURE OF THE CASE 1. This is a civil action brought by Plaintiffs pursuant to the Worker Adjustment and Retraining Notification Act of 1988, 29 U.S.C. §§ 2101-2109 et seq., (the “WARN Act”) for Defendants’ failure to give the required WARN Act written notice to Plaintiff and similarly situated individuals (the “Class Members”) in connection with a recent Mass Layoff and/or Plant Closing at Defendants’ single site of employment/operational units within that single site of employment at/from/through which Plaintiffs and the Class Members were employed during the relevant time period. 2. Accordingly, Defendants are liable under the WARN Act for failing to provide Plaintiffs and the Class Members written notice, including 60 days’ advance written notice, as required by the WARN Act. II. THE PARTIES, JURISDICTION AND VENUE 3. Plaintiff Betty Cooper is an individual residing in Harris County, Texas. Plaintiff was previously employed in Defendants’ facility located at 200 Blossom St, Webster, TX 77598 and was terminated on or about May 4, 2018. Plaintiff earned regular compensation and other employee benefits and was damaged by Defendants’ acts in violation of the WARN Act. 4. Plaintiff Christine Champagne is an individual residing in Galveston County, Texas. Plaintiff was previously employed in Defendants’ facility located at 200 Blossom St, Webster, TX 77598 and was terminated on or about May 4, 2018. Plaintiff earned regular compensation and other employee benefits and was damaged by Defendants’ acts in violation of the WARN Act. 5. Plaintiff Clemetean Williams is an individual residing in Harris County, Texas. Plaintiff was previously employed in Defendants’ facility located at 200 Blossom St, Webster, TX 77598 and was terminated on or about May 4, 2018. Plaintiff earned regular compensation and other employee benefits and was damaged by Defendants’ acts in violation of the WARN 6. Plaintiff Nakia Holmes Jupiter is an individual residing in Fort Bend County, Texas. Plaintiff was previously employed in Defendants’ facility located at 200 Blossom St, Webster, TX 77598 and was terminated on or about May 4, 2018. Plaintiff earned regular compensation and other employee benefits and was damaged by Defendants’ acts in violation of the WARN Act. 7. Plaintiff Dominique Coleman is an individual residing in Harris County, Texas. Plaintiff was previously employed in Defendants’ facility located at 200 Blossom St, Webster, TX 77598 and was terminated on or about May 4, 2018. Plaintiff earned regular compensation and other employee benefits and was damaged by Defendants’ acts in violation of the WARN 8. Plaintiff Keia Walker is an individual residing in Harris County, Texas. Plaintiff was previously employed in Defendants’ facility located at 200 Blossom St, Webster, TX 77598 and was terminated on or about May 4, 2018. Plaintiff earned regular compensation and other employee benefits and was damaged by Defendants’ acts in violation of the WARN Act. 9. Plaintiff LaTonja Jones is an individual residing in Harris County, Texas. Plaintiff was previously employed in Defendants’ facility located at 200 Blossom St, Webster, TX 77598 and was terminated on or about May 4, 2018. Plaintiff earned regular compensation and other employee benefits and was damaged by Defendants’ acts in violation of the WARN Act. 10. Plaintiff Brittany Dupar is an individual residing in Brazoria County, Texas. Plaintiff was previously employed in Defendants’ facility located at 200 Blossom St, Webster, TX 77598 and was terminated on or about May 4, 2018. Plaintiff earned regular compensation and other employee benefits and was damaged by Defendants’ acts in violation of the WARN 11. Plaintiff Carol Walker is an individual residing in Harris County, Texas. Plaintiff was previously employed in Defendants’ facility located at 200 Blossom St, Webster, TX 77598 and was terminated on or about May 4, 2018. Plaintiff earned regular compensation and other employee benefits and was damaged by Defendants’ acts in violation of the WARN Act. 12. Plaintiff Barbara Jackson is an individual residing in Harris County, Texas. Plaintiff was previously employed in Defendants’ facility located at 200 Blossom St, Webster, TX 77598 and was terminated on or about May 4, 2018. Plaintiff earned regular compensation and other employee benefits and was damaged by Defendants’ acts in violation of the WARN 13. The Class Members are affected employees who are similarly situated to Plaintiffs, and who were or may reasonably be expected to experience an employment loss as a consequence of Defendants’ Mass Layoff at its single site of employment made the subject matter of this lawsuit in the 30 day or 90 day period from Plaintiffs’ employment loss. 14. Alternatively, the Class Members are affected employees who are similarly situated to Plaintiffs, and who were or may reasonably be expected to experience an employment loss as a consequence of Defendants’ Plant Closing at Defendants’ single site of employment/operational units at/within that single site of employment made the subject matter of this lawsuit in the 30 day or 90 day period from Plaintiff’s employment loss. 15. On information and belief, the single site of employment for purposes of the WARN Act is Defendants’ principal place of business in 200 Blossom St, Webster, TX 77598. 16. Alternatively, should discovery reveal that there is more than one single site of employment for Plaintiffs and the Class Members, then Plaintiffs reserve the right to modify the class definition or establish sub-classes in connection with any amended pleading and/or motion for class certification. 17. Defendant Bay Area Regional Medical Center, LLC (“Bay Area”) is a Texas corporation located at 200 Blossom St, Webster, Harris County, Texas. Defendant may be served via service upon its registered agent for service, Monzer Hourani, 7670 Woodway, Suite 160, Houston, Texas 77063. 18. Defendant Medistar SLN GP, LLC (“Medistar”) is a Texas limited liability company with its principal place of business located at 7670 Woodway Drive, Suite No. 160 Houston, Texas 77063. 19. Defendant Monzer Hourani (“Housrani”) is a Texas resident that can be served with service at his principal place of business located at 7670 Woodway Drive, Suite No. 160 Houston, Texas 77063. 20. The Court has personal jurisdiction over Defendants based on both general and specific jurisdiction. 21. During all times relevant to this lawsuit, Defendants have done business in the State of Texas and continue to do business in the State of Texas. 22. The Court has subject matter jurisdiction over this case based on federal question jurisdiction, 28 U.S.C. § 1331, because Plaintiffs base their claim, and the claims of the Class Members, on federal law, namely 29 U.S.C. §§ 2101-2109. 23. Venue is proper in the United States District Court for the Southern District of Texas because a substantial part of the events giving rise to the claims in this lawsuit occurred in this District. Moreover, pursuant to the WARN Act’s venue provision, venue is proper in this District because, at all relevant times, Defendants transact/transacted business in this District as identified above. 29 U.S.C. § 2104(a)(5). 24. Venue is proper in the Houston Division of the United States District Court for the District of Texas because a substantial part of the events giving rise to the claims in this lawsuit occurred in this Division. Moreover, pursuant to the WARN Act’s venue provision, venue is proper in this Division because, at all relevant times, Defendant transacts/transacted business in this Division as identified above. III. FACTUAL BACKGROUND 25. Plaintiffs incorporate the preceding paragraphs by reference as if set forth fully in this section. 26. Defendants Bay Area and Medistar operated BARMC in Webster, Texas. Defendant Hourani is the director and manager of Bay Area and the President of Medistar. Bay Area and Medistar are both 100% owned by Hourani through subsidiary corporations. Hourani maintained sole control over all decisions made by Bay Area and Medistar. BARMC began operations in July 2014 and employed approximately 900 employees. 27. Hourani frequently visited the facilities, interacted with and requested reports from BARMC employees. 28. Upon information and belief, Hourani operated Bay Area and Medistar as a single corporate entity and comingled corporate funds with his own funds. 29. On or about May 4, 2018, Plaintiffs and the Class Members employed at BARMC were notified of their immediate termination effective 5:00 p.m. that day. On information and belief, Plaintiffs allege that Defendants terminated approximately nine hundred (900) employees at BARMC, constituting the entirety of Defendants’ BARMC workforce. Defendants closed the BARMC facility. 30. Upon information and belief, there were substantial distributions made to Hourani and other corporate officers in the weeks leading to the May 4, 2018 layoff. Furthermore, substantial amounts were paid out to entities and individuals related to Defendants for services that were never performed. 31. Accordingly, this mass termination qualifies as a plant closing and/or mass layoff under the WARN Act. 32. Based upon the operation of the business and commingling of funds, the shutting down of BARMC was made by all of the Defendants as a single employer. 33. Plaintiffs were “affected employees” and “aggrieved employees” as defined by 29 U.S.C. §§2101(a)(5)& (a)(7) of the WARN Act entitled to receive notice. 34. As a result, Plaintiffs suffered employment losses because of Defendants and did not receive the 60-day notice required by the WARN Act. 35. Defendants did not inform Plaintiffs, the Texas Workforce Commission or the Mayor’s office in Webster, Texas of the closing as required. 36. Upon information and belief, shortly upon closing the BARMC facility, Defendants began selling its assets to other entities in which Hourani holds an interest. Such sale is not conducted on an arm’s length basis. IV. WARN ACT CLAIMS 37. Plaintiffs incorporate the preceding paragraphs by reference as if set forth fully in this section. 38. At material times, Plaintiffs and the Class Members were “full-time employees” of Defendants as that term is used in the Warn Act. 39. At all material times, Defendants were and are an employer under the WARN Act. 29 C.F.R. § 639.3(a). 40. At material times, Defendants employed, and continue to employ, 100 or more employees, excluding part-time employees. 41. On information and belief, Defendants’ 200 Blossom St, Webster, TX 77598 location constitutes/constituted a single site of employment for Plaintiffs and the Class Members. 29 C.F.R. § 639.3(i). 42. The hospital operating at/from/through the single site of employment made the subject matter of this lawsuit constitutes/constituted an operational unit within that single site of employment of Defendants. 29 C.F.R. § 639.3(j). 43. Plaintiffs maintain this action on behalf of themselves and on behalf of each other similarly situated employee. 44. Each Class Member is similarly situated to Plaintiffs with respect to his or her rights under the WARN Act. 29 U.S.C. § 2104(a)(5). A. Mass Layoff 45. During a 30 day or 90 day period from Plaintiffs’ employment loss, Defendants ordered/executed a “Mass Layoff” at the single site of employment made the subject matter of this lawsuit. 29 C.F.R. §§ 639.3(c) & 639.5(a)(1). 46. Plaintiffs and the Class Members suffered an employment loss in connection with Defendants’ “Mass Layoff” made the subject matter of this lawsuit. 29 C.F.R. § 639.3(f). 47. On information and belief, 100% of the employees at the single site of employment made the subject matter of this lawsuit, totaling 50 or more employees, suffered an employment loss as a result of that Mass Layoff. 48. Plaintiffs and the Class Members are aggrieved and affected employees under the WARN Act in connection with Defendants’ Mass Layoff made the subject matter of this lawsuit. 29 U.S.C. § 2101(5); 29 C.F.R. § 639(e). Plaintiffs and the Class Members were employees of Defendants who did not receive the written notice required by 29 U.S.C. § 2102 and were reasonably expected by Defendants and/or should have been reasonably expected by Defendants to experience an employment loss as a result of Defendants’ Mass Layoff made the subject matter of this lawsuit. B. Plant Closing 49. Pleading in the alternative, and on information and belief, Plaintiffs and the Class Members experienced a “Plant Closing.” 29 C.F.R. §§639.3(b) & 639.5(a). “Plant Closing” means the “permanent or temporary shutdown of a ‘single site of employment’, or one or more ‘facilities or operating units’ within a single site of employment, if the shutdown results in an ‘employment loss’ during any 30-day period at the single site of employment for 50 or more employees, excluding any part-time employees.” 29 C.F.R. § 639.3(b). The hospital made the basis of this lawsuit was an operational unit of that single site of employment. 29 C.F.R. § 639.3(j). 50. Plaintiffs and the Class Members are aggrieved and affected employees under the WARN Act in connection with Defendants’ Plant Closing made the subject matter of this lawsuit. 29 U.S.C. § 2101(5); 29 C.F.R. § 639(e). Plaintiffs and the Class Members were employees of Defendants who did not receive the written notice required by 29 U.S.C. § 2102 and were reasonably expected by Defendants and/or should have been reasonably expected by Defendants to experience an employment loss as a result of Defendants’ Plant Closing made the subject matter of this lawsuit. C. No Written Notice of Mass Layoff and/or Plant Closing 51. Plaintiffs and the Class Members were not provided with 60 calendar days’ advance written notice by Defendants of their planned/upcoming employment loss, Mass Layoff and/or Plant Closing. 52. Plaintiffs and the Class Members were not provided with any written notice by Defendants prior to their employment loss, Mass Layoff and/or Plant Closing. 53. Plaintiffs and the Class Members were not provided with written notice, at any time prior to their employment loss, of each and every of the following items in connection with their employment loss, Mass Layoff and/or Plant Closing: (a) A statement as to whether the planned action is expected to be permanent or temporary and, if the entire plant is to be closed, a statement to that effect; (b) The expected date when the plant closing or mass layoff will commence and the expected date when the individual employee will be separated; (c) An indication whether or not bumping rights exist; (d) The name and telephone number of a company official to contact for further information. 54. On information and belief, Defendants did not notify the Texas agencies responsible for dislocated workers with the notice provisions required by 29 U.S.C. § 2102(a) and 29 C.F.R. § 639.7(e) in connection with the Mass Layoff and/or Plant Closing made the subject matter of this lawsuit. D. Damages 55. As a result of Defendants’ violations of the WARN Act, Plaintiffs and the Class Members have suffered damages. Plaintiffs and the Class Members seek all damages available to them in connection with the claims set forth in this lawsuit, including 60 days’ wages and benefits as provided by the WARN Act. 29 U.S.C. § 2104. V. CLASS ACTION ALLEGATIONS 56. Plaintiffs incorporate the preceding paragraphs by reference as if set forth fully in this section. 57. Plaintiffs bring this action as a class action under Federal Rule of Civil Procedure 23(a), (b)(1) and (3) and the WARN Act 29 U.S.C. § 2104(a)(5). 58. Plaintiffs bring this action on behalf of themselves and all other similarly situated employees. Plaintiffs seek to represent a Class initially defined as: “All of Defendants’ employees working at 200 Blossom St, Webster, TX 77598 that were terminated on or about May 4, 2018 without 60 days’ advance written notice required by the WARN Act.” Plaintiffs request the opportunity to expand, narrow or modify the class definition pursuant to a motion for class certification and/or amended pleading to the extent discovery reveals that there is more than one single site of employment for Defendants’ medical facilities. 59. Plaintiffs and the Class Members are “affected employee(s)” subject to an “employment loss,” as those terms are defined in the WARN Act at 29 U.S.C. § 2101(a)(5) and 60. Plaintiffs’ claims satisfy the numerosity, commonality, typicality, adequacy and superiority requirements of a class action. 61. On information and belief, the Class Members exceed 500 in number, and joinder is therefore impracticable. The precise number of Class Members and their addresses are readily determinable from Defendants’ records. 62. There are common questions of fact and law as to the class that predominate over any questions affecting only individual class members. The questions of law and fact common to the class arising from Defendants’ actions/omissions include, but are not limited to, the following: a. Whether the provisions of the WARN Act apply; b. Whether Defendants’ employees at the single site of employment the subject of this lawsuit experienced an employment loss in connection with a “Mass Layoff” and/or “Plant Closing” under the WARN Act; c. Whether Defendants failed to provide the notices required by the WARN Act; d. Whether Defendants can avail themselves of any provisions of the WARN Act permitting lesser periods of written notice; and e. The appropriate method to calculate damages under the WARN Act. 63. The questions above predominate over any questions affecting only individual persons, and a class action is superior with respect to considerations of consistency, economy, efficiency, fairness and equity, to other available methods for the fair and efficient adjudication of the WARN Act claims. 64. A class action is the superior method for the fair and efficient adjudication of this controversy. Defendants have acted or refused to act on grounds generally applicable to the class. The presentation of separate actions by individual class members could create a risk of inconsistent and varying adjudications, establish incompatible standards of conduct for Defendants, and/or substantially impair or impede the ability of class members to protect their interests. 65. Plaintiffs are affected former employees of Defendants who experienced an employment loss during the relevant 30 day and 90 day “look ahead” and “look behind” periods of the WARN Act, 20 C.F.R. § 639.5, without the required written notice. Plaintiffs are, therefore, members of the class. Plaintiffs are committed to pursuing this action and have retained counsel with extensive experience in prosecuting complex wage, employment, and class action litigation. Accordingly, Plaintiffs are adequate representatives of the class and have the same interests as all of its members. Further, Plaintiff’s claims are typical of the claims of all members of the Class, and Plaintiff will fairly and adequately protect the interests of the absent members of the class. Plaintiffs and their counsel do not have claims or interests that are adverse to the Class Members. 66. Furthermore, class action treatment of this lawsuit is authorized and appropriate under the WARN Act, 29 U.S.C. § 2104(a)(5), which provides that a plaintiff seeking to enforce liabilities under the Act may sue either on his or her behalf, for other persons similarly situated, or both. VI. JURY DEMAND 67. Plaintiffs demand a jury trial. VII. DAMAGES AND PRAYER 68. Plaintiffs ask that the Court issue a summons for Defendants to appear and answer, and that Plaintiffs and the Class Members be awarded a judgment against Defendants or order(s) from the Court for the following: a. An order certifying that this action may be maintained as a class action/class actions under Federal Rule of Civil Procedure 23; b. Designation of Todd Slobin and Ricardo Prieto of SHELLIST | LAZARZ | SLOBIN LLP, and of Galvin Kennedy and Carl Fitz of KENNEDY HODGES, LLP as Class Counsel; c. All damages allowed by the WARN Act, including back pay and benefits as provided by 20 U.S.C. § 2104; d. Pre-judgment and post-judgment interest; e. Costs; f. Reasonable attorney’s/attorneys’ fees; and g. All other relief to which Plaintiff and the Class Members are entitled. Respectfully submitted, SHELLIST | LAZARZ | SLOBIN LLP By: /s/ Todd Slobin Todd Slobin Texas Bar No. 24002953 tslobin@eeoc.net Ricardo J. Prieto Texas Bar No. 24062947 rprieto@eeoc.net 11 Greenway Plaza, Suite 1515 Houston, Texas 77046 Telephone: (713) 621-2277 Facsimile: (713) 621-0993 & KENNEDY HODGES, LLP By: /s/ Galvin B. Kennedy Galvin B. Kennedy gkennedy@kennedyhodges.com Texas Bar No. 00796870 Federal ID No. 20791 4409 Montrose Blvd. Suite 200 Houston, Texas 77006 Telephone: (713) 523-0001 Facsimile: (713) 523-1116 ATTORNEYS FOR PLAINTIFFS & CLASS MEMBERS

employment & labor

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ELIZABETH C. PRITZKER (SBN: 146267) BETHANY L. CARACUZZO (SBN: 190687) SHIHO YAMAMOTO (SBN: 264741) PRITZKER | LAW 633 Battery Street, Suite 110 San Francisco, CA 94111 Telephone: (415) 692-0772 Facsimile: (415) 366-6110 Email: ecp@pritzker-law.com; bc@pritzker-law.com; sy@pritzker-law.com BRUCE L. SIMON (SBN: 96241) ROBERT G. RETANA (SBN: 148677) AARON M. SHEANIN (SBN: 214472) PEARSON, SIMON & WARSHAW, LLP 44 Montgomery Street, Suite 2450 San Francisco, CA 94104 Telephone: (415) 433-9000 Facsimile: (415) 433-9008 Email: bsimon@pswlaw.com; rretana@pswlaw.com; asheanin@pswlaw.com Attorneys for Plaintiffs and the Proposed Class UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA Case No: CLASS ACTION COMPLAINT DEMAND FOR JURY TRIAL Il Fornaio (America) Corporation, Oliveto Partners, Ltd., and The Famous Enterprise Fish Company Of Santa Monica, Inc., on behalf of themselves and all others similarly situated, Plaintiffs, v. Lazzari Fuel Company, LLC, California Charcoal And Firewood, Inc., and Chef’s Choice Mesquite Charcoal, Defendants. Plaintiffs Il Fornaio (America) Corporation, Oliveto Partners, Ltd., and The Famous Enterprise Fish Company of Santa Monica, Inc., (“Plaintiffs”), on behalf of themselves and all others similarly situated (the “Class” as defined below), upon personal knowledge as to the facts pertaining to themselves and upon information and belief as to all other matters, and based on the investigation of counsel, bring this class action for damages, injunctive and other relief, and allege as follows: NATURE OF THE CASE 1. This is a class action lawsuit against Defendants Lazzari Fuel Company, LLC, California Charcoal and Firewood, Inc., and Chef’s Choice Mesquite Charcoal (all as defined below, and collectively referred to herein as “Defendants”), for engaging in at least a ten-year conspiracy to fix, raise and/or stabilize prices, and allocate the market and customers in the United States for Mesquite Lump Charcoal (defined below), in violation of state and federal antitrust laws. 2. Defendants are distributors of Mesquite Lump Charcoal for commercial food preparation and restaurant use in the United States. Mesquite charcoal is a natural charcoal made from the mesquite tree, a deciduous hardwood tree that grows primarily in the Sonoran Desert of Mexico. Mesquite charcoal is primarily produced in Mexico, where it is sold to charcoal brokers and transported to the United States. 3. Restaurants and commercial food preparation companies provide the primary market for mesquite charcoal in the United States. Mesquite charcoal is favored by restaurants and commercial chefs because it burns slowly, reaches a high heat desired for searing, and releases a rich scent that permeates grilled foods. 4. Most mesquite charcoal sold in the United States is packaged and sold in 40 pound bags for commercial or restaurant use. As used herein, the term “Mesquite Lump Charcoal” refers to mesquite charcoal that is packaged, distributed and sold in 40 pound bags for commercial or restaurant use. Defendants distribute and sell Mesquite Lump Charcoal directly to restaurants, commercial food preparers and restaurant supply companies. 5. Plaintiffs allege that, for at least the 10-year period from January 2000 through and including September 2010, Defendants conspired, combined, contracted for, or agreed: (a) to fix, raise or stabilize the price of Mesquite Lump Charcoal in the United States; (b) to not compete for each other’s customers; (c) to allocate specific customers or territories among themselves; (d) to sell only to customers in certain geographic areas; (e) to refrain from submitting bids for the sale of Mesquite Lump Charcoal to customers allocated to a co-conspirator company; and/or (f) to communicate with each other regarding what price to bid for the sale of Mesquite Lump Charcoal and then submit agreed-upon, noncompetitive bids to each other’s customers. 6. As described by William W. Lord—the owner of Chef’s Choice Mesquite Charcoal and a major participant in the conspiracy—in an audio tape recording obtained by federal prosecutors, the intent, purpose and effect of Defendants’ conspiratorial agreement was to give “respect” to each member of the conspiracy and to “get the price up” for Mesquite Lump Charcoal. Lord subsequently pleaded guilty to criminal antitrust charges, paid a $100,000 fine, and served a four-month prison term for his company’s role in the conspiracy. 7. Plaintiffs are restaurants and commercial food distributors that purchased Mesquite Lump Charcoal directly from one of the Defendants at artificially-inflated prices during the pendency of the conspiracy. As a direct and proximate result of the unlawful conduct and price-fixing of Defendants alleged herein, Plaintiffs and other members of the Class (defined below) have paid more for Mesquite Lump Charcoal than they otherwise would have paid in a competitive market, and therefore have been injured in their respective businesses or property. 8. Plaintiffs bring this class action lawsuit pursuant to Sections 4 and 16 of the Clayton Act, 15 U.S.C. §§ 15 and 26, to recover damages suffered by the Class (defined below) and the costs of suit, including reasonable attorneys’ fees; to enjoin Defendants’ anticompetitive conduct; and for such other relief as is afforded under the antitrust laws of the United States for Defendants’ violations of Section 1 of the Sherman Act, 15 U.S.C. § 1. Plaintiffs assert claims on behalf of themselves and the following proposed Class: “All persons in the United States who purchased Mesquite Lump Charcoal directly from any Defendant, and/or their subsidiaries and co-conspirators, during the period from and including January 2000 through at least September 30, 2011 (the ‘Class Period’). JURISDICTION AND VENUE 9. Plaintiffs bring this action to recover damages, including treble damages, costs of suit and reasonable attorneys’ fees, as well as injunctive relief, arising from Defendants’ violations of Section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1. 10. The Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331, 1337 and pursuant to 15 U.S.C. §§ 15, 26. 11. Venue is proper is this district pursuant to 28 U.S.C. §§ 15, 22 and 26, and pursuant to 28 U.S.C. 28 U.S.C. § 1391 (b), (c) and (d), because, at all times relevant to the Complaint, Defendants transacted business, were found, or had agents present in the district; (b) a substantial part of events giving rise to Plaintiffs’ claims occurred in this district; and (c) a substantial portion of the affected interstate trade and commerce described below has been carried out in the district. PARTIES A. Plaintiffs 12. Plaintiff Il Fornaio (America) Corporation (“Il Fornaio”) is a Delaware corporation its principal place of business located at 770 Tamalpais Drive, Suite 400, Corte Madera, CA 94925. Il Fornaio owns and operates 21 full service restaurants, including restaurants operating in the following cities: Burlingame, CA; Carmel, CA; Corte Madera, CA, Denver, CO; Irvine, CA; Las Vegas, NV; Manhattan Beach, CA; Palo Alto, CA; Portland, OR, Roseville, CA; Sacramento, CA; San Francisco, CA; San Jose, CA; and Walnut Creek, CA. During the Class Period, Il Fornaio purchased Mesquite Lump Charcoal directly from one or more of the Defendants and has suffered pecuniary injury as a result of the antitrust violations alleged herein. 13. Plaintiff Oliveto Partners, Ltd. (“Oliveto”) is a California limited partnership with its principal place of business located at 5681 Florence Terrace, Oakland, California, 94111, and operating as the restaurant, Oliveto Café & Restaurant, located in Oakland, California. During the Class Period, Oliveto purchased Mesquite Lump Charcoal directly from one or more of the Defendants and has suffered pecuniary injury as a result of the antitrust violations alleged herein. 14. Plaintiff The Famous Enterprise Fish Company of Santa Monica, Inc. (“Enterprise Fish”) is a California corporation with its principal place of business located at 174 Kinney Street, Santa Monica, California 90405, and operating under the restaurant name, Enterprise Fish Company. During the Class Period, Enterprise Fish purchased Mesquite Lump Charcoal directly from one or more of the Defendants and has suffered pecuniary injury as a result of the antitrust violations alleged herein. B. Defendants 16. Defendant Lazzari Fuel Company, LLC (“Lazzari”) is a California limited liability company founded in 1908, with its principal place of business located at 11 Industrial Way, Brisbane, CA, 94005. Lazzari holds itself out on its company website as the “nation’s leading supplier of premium natural charcoal,” including the company’s “most popular and best-selling food service Mesquite Lump Charcoal.” During the Class Period, Lazzari distributed and directly sold Mesquite Lump Charcoal in the United States. 17. Defendant California Charcoal and Firewood, Inc. (“California Charcoal”) is a California corporation with its principal place of business at 1518 S. Eastern Ave., City of Commerce, CA, 90022. During the Class Period, California Charcoal distributed and directly sold Mesquite Lump Charcoal and other cooking fuel products in the United States. 18. Defendant Chef’s Choice Mesquite Charcoal (“Chef’’s Choice”) is a sole proprietorship with its principal place of business located at 1729 Ocean Oaks Road, Carpinteria, CA, 93013. Chef’s Choice is owned and operated by William W. Lord (“Lord”). During the Class Period, Chef’s Choice distributed and directly sold Mesquite Lump Charcoal in the United States. CO-CONSPIRATORS 19. Various other persons, firms, corporations or entities may have participated as unnamed co-conspirators with Defendants in the violations and conspiracy alleged herein. In order to engage in the offenses charged and violations alleged herein, these co-conspirators have performed acts and made statements in furtherance of the antitrust violations and conspiracies alleged herein. 20. At all relevant times, each Defendant was an agent of each of the remaining defendants and, in doing the acts alleged herein, was acting within the course and scope of such agency. Each Defendant ratified and/or authorized the wrongful acts of each of the Defendants. Defendants, and each of them, are individually sued as participants and as aiders and abettors in the improper acts and transactions that are the subject of this action. INTERSTATE TRADE AND COMMERCE 21. The business activities of Defendants that are the subject of this action were within the flow of, and substantially affected, interstate trade and commerce. 22. During the Class Period, Defendants distributed and sold substantial quantities of Mesquite Lump Charcoal in a continuous and uninterrupted flow of interstate commerce throughout the United States. FACTUAL ALLEGATIONS A. The Mesquite Lump Charcoal Market 23. Mesquite charcoal is a natural charcoal derived from the mesquite tree, a deciduous hardwood tree that exists primarily in the Sonoran Desert of Mexico. Mesquite charcoal production occurs primarily in Mexico, where mesquite wood is collected and hauled, loaded into kilns, burned, unloaded, bagged, loaded into 44,000 pound containers, and transported to charcoal brokers for resale to distributors. According to industry reports, at least 95 percent of mesquite charcoal transported to and sold in the United States is removed from the Sonoran Desert. 24. Cooking with mesquite charcoal became popular in the mid-1980’s. Since then, many restaurants and popular commercial food producers advertise menus that include mesquite-grilled steaks, chicken or fish. 25. Mesquite charcoal is favored by chefs because it burns slowly, reaches a high heat desired for searing, and releases a rich scent that permeates grilled foods. Burning mesquite charcoal also is popular because it is a smokeless barbeque technique. 26. The primary market for mesquite charcoal in the United States is restaurants and commercial food producers. Mesquite charcoal is packaged and sold in 40 pound bags for commercial or restaurant use. This 40 pound-bag of commercial/restaurant grade mesquite charcoal is referred to herein as “Mesquite Lump Charcoal.” 27. At all relevant times, Defendants dominated the United States Mesquite Lump Charcoal market. Defendants accounted for roughly 75 percent of sales of Mesquite Lump Charcoal in the United States during the period January 2000 through September 2010. The total market share of the Defendants during that period was as follows: Lazzari – 42%; Chef’s Choice – 19%; and California Charcoal – 14%, for a total of 75% of sales during that period. Defendants’ collective revenues for Mesquite Lump Charcoal during this same period totaled between $6.0 million and $9.3 million, annually, for a total estimated revenue during the Class Period of approximately $100 million. B. The Conspiracy to Fix Mesquite Lump Charcoal Prices 28. Beginning as early as January 2000 and continuing until at least September 2010, Defendants abused their market dominance, and conspired, combined, contracted for or agreed to fix, raise or stabilize the price of Mesquite Lump Charcoal in the United States. 29. Starting in January 2000, Defendants established a practice where they would communicate and reach an understanding not to compete for each other’s customers. Plaintiffs are informed and believe that this agreement not to compete was reached and implemented by high- ranking officials for each Defendant, including William Lord (“Lord”), the owner of Chef’s Choice; Marvin Ring (“Ring”), CEO of California Charcoal; Robert Colbert (“Colbert”), Vice President and owner of Lazzari; and Richard Morgen (“Morgen”), Lazzari’s General Manager. 30. Defendants implemented the agreement and carried out the price-fixing conspiracy by (1) allocating existing customers based on existing relationships and agreeing not to compete for each other’s customers, (2) submitting intentionally non-competitive bids to each other’s customers if contacted, and (3) communicating with each other regarding what price to bid and then submitting the agreed-upon, noncompetitive bids to each other’s customers. This agreement allowed each Defendant and co-conspirator to continue a strong and profitable business relationship with its existing customers, without the need to compete on price in order to retain that customer’s business. 31. With respect to new customers, Defendants agreed that new purchases of Mesquite Lump Charcoal would be allocated to a particular Defendant or co-conspirator based on geographic location. For example, in accordance with the conspiracy, a new customer in the San Francisco Bay Area would be allocated to Lazzari, and Chef’s Choice and California Charcoal would then agree refrain from competing with Lazzari for the new customer’s business. Similarly, if a prospective client located in Northern California called California Charcoal, it was agreed by and among the Defendants and their co-conspirators that the customer would be directed to Lazzari. Thus, it was agreed that each Defendant had an allocated set of customers, and the other Defendants would not compete for these customers’ business. 32. The conspiracy was carried out primarily through telephone conversations among high-ranking executives from each Defendant company. The Defendants discussed the allocation of particular customers, communicated with each other regarding what price to quote a customer located in a co-conspirator’s geographic region, and discussed the amount of any agreed-upon noncompetitive bid provided to customers allocated to other Defendants or co-conspirators. These discussions took place on a regular basis, approximately once every quarter, as well as on specific, ad-hoc occasions, from approximately January 2000 until at least September 2010. C. Defendants’ High-Ranking Executives Explain How the Defendants Conspired to Allocate Customers, Rig Bids and Fix Prices for Mesquite Lump Charcoal 33. The owner of Chef’s Choice, William Lord, was the king pin of the conspiracy. Lord facilitated and directly participated in the long-running price-fixing and customer allocation conspiracy alleged herein relating to Mesquite Lump Charcoal. 34. Lord detailed his role implementing and participating in the price-fixing and customer allocation conspiracy in interviews and audio-taped recordings obtained by federal antitrust authorities. In an encrypted transcript of phone conversation with a confidential informant taped by federal investigators, Lord described his relationship with his co-conspirators, explaining: “I always, at least in the past, I’ve called [Individual A] and called, uh, [Individual B] at [Company B] whenever a situation came up prior to, you know, having to make a move or something like that.” On information and belief, and based on the investigation of counsel, Plaintiffs allege the person identified by Lord as “[Individual A]” in the above-described portion of the encrypted transcript is Marvin Ring, CEO of California Charcoal, and “[Individual B] at [Company B]” is Robert Colbert, the Vice President of Lazzari. 35. Lord expanded upon the operation of the conspiracy in the same phone call with the confidential informant recorded by federal prosecutors: A] and, uh, we all have kinda just left things alone throughout the years. Um, I know where his customers are, he knows where mine are, but for some reason, just a phone call or what should we, what should I quote so that it will, you know, make you look okay. Like that. That’s pretty much been the conversation through the years. Because, ahh, all of us have raised our prices before and what happens is the com-, the company calls and says can they get it at a better price. And so we’ve always, uh, kept each other’s backs in a sense.” On information and belief, and based on the investigation of counsel, Plaintiffs allege the person identified by Lord as “[Individual B]” is Robert Colbert, Vice President and co-owner of Lazzari; the person identified as “[Individual C]” is Richard Morgen, Lazzari’s General Manager and co-owner; and the person identified as “[Individual A]” is Marvin Ring, CEO of California Charcoal. 36. In the same recorded conversation, when the confidential informant asked Lord how he could “co-exist” with his competitor, Defendant Lazaari, Lord replied: “Simply by communicating with each other like I just did right now. I mean if he said, hey I’ve been selling this guy for 12 years, I’d say hey, I’m sorry, I didn’t…I didn’t know it, they called me and they asked me for a price, but that happened a long time ago. Now, when anybody calls me for a price, I call one of three…two people…two other people and ask ‘em, ‘Hey, are you selling to this person cause they’re pricing me out?” 37. When the confidential informant asked which “two other people” Lord would call, Lord’s answer, as described in the encrypted transcript recorded by federal prosecutors, was “either [Individual B] or [Individual A].” On information and belief, and based on the investigation of Lazzari Vice President/co-owner Robert Colbert, and “Individual A]” is Marvin Ring, the CEO of California Charcoal. 38. Lord [owner of Defendant Chef’s Choice] similarly described how he and his co- conspirators implemented the conspiracy over the years in a phone conversation with a co-conspirator that also was recorded by federal prosecutors: “And, you and I and [Individual A] have done this, we’ve talked to each other. And, you know what I mean we’ve done it, its noth— it’s nothing new…it’s nothing new…. And we’ve respected each other, and we call each other if something comes up. And…like that, like that. Like, every once in a while Modesto calls. I mean they look…and I just…I know how to high to ball it…you know…so that if you’ve raised your price, I – you probably have – they call me or somebody calls me. I just tell them something crazy.” 39. Lord reiterated during the call with his co-conspirator: “You know these guys, you give him a price increase and they go and look. Right? So they call…and I just…and [Individual A] does the same thing…he calls me up he says, ‘hey, I…I…what should I tell them?’ And I tell him…that’s that...it’s done.” 40. On information and belief, and based on the investigation of counsel, the co- conspirator on the call with Lord is Defendant Lazzari’s Vice President/co-owner, Robert Colbert, and the person identified by Lord as “[Individual A] in the encrypted transcript recorded by federal prosecutors is Marvin Ring, the CEO of California Charcoal. 41. Lord, the owner of Chef’s Choice, subsequently pleaded guilty to criminal antitrust charges stemming from his company’s role in the long-standing customer allocation, bid-rigging and Mesquite Lump Charcoal price-fixing conspiracy entered into by Defendants. In his plea agreement, Lord admits the long-standing nature and purpose of the conspiracy: During the relevant period, Defendant [Lord of Chef’s Choice] and C, as well as Companies A and B, the primary purpose of which was to suppress and restrain competition. In furtherance of the conspiracy, Defendant engaged in conversations with Individuals A, B, and C and Companies A, and B not to compete for each other’s customers for the sale of mesquite charcoal in the United States. The purpose of the conspiracy was to prevent conspirators from having to reduce prices in the face of competition in order to retain their customers. The agreement continued in operation until in or about September 2010. 1 42. Lord’s plea agreement identifies “Individual A” as the owner and president of “Company A, a Los Angeles-based company that sold and distributed mesquite charcoal,” and further identifies “Individual B” as the General Manager and part owner of “Company B, a San Francisco- based mesquite charcoal distributor.” “Individual C” is described in the plea agreement as “a part owner of, and executive with, Company B.” On information and belief, and based on counsel’s investigation, Plaintiffs allege that “Company A,” as referenced in the plea agreement, is Defendant California Charcoal, located in City of Commerce, and that “Individual A” is California Charcoal’s CEO, Marvin Ring. Plaintiffs further allege that the entity described as “Company B” in the plea agreement is Defendant Lazzari, located in Brisbane, California, and that the persons identified in the plea agreement as “Individuals B and C” are Robert Colbert and Richard Morgen, Lazzari’s Vice President and General Manager, respectively. 1 The plea agreement prepared for Lord by the U.S. Department of Justice suggests that Defendants California Charcoal and Lazzari “voluntarily withdrew” from the conspiracy in or about September 2010. Lord apparently was unaware that Defendants had done so and, when his conversations with co-conspirators were recorded by federal prosecutors in September 2011—one year later—Lord understood and believed that Defendants’ price-fixing conspiracy remained in full effect. Morgen, also have attested to Lazzari’s active involvement in the long-standing conspiracy. According to the Sentencing Memorandum prepared by the U.S. Department of Justice (“DOJ”) in the criminal antitrust proceedings against Chef’s Choice William Lord: “Individuals B and C both confirmed [Lord’s] involvement in the 2005 incident regarding the Modesto customer [referenced in the recorded phone conversation between Lord and a co-conspirator], and also detailed another incident from the Spring of 2007. At that time, [Lord] informed Individual C that Chef’s Choice had lost a long-time customer to a new competitor, and provided Individual C with the price Chef’s Choice had offered the customer. Individuals B and C decided that since [the] customer no longer belonged to Chef’s Choice, it no longer was subject to their agreement with [Lord]. Thus, they approached the customer, provided a quote slightly lower than [Lord] had offered, and won the business. [Lord] subsequently contacted Individual B, noted their relationship had been good for everyone, and explained that by bidding for the customer, Individuals B and C had ‘betrayed’ [Lord]. Shortly thereafter, Individual C contacted [Lord], provided him the price Company B quoted to the customer, and indicated that if [Lord] wished to quote the lower price, Company B would not fight to keep the account.” 44. On information and belief, and based on the investigation of counsel, Plaintiffs allege that the persons referenced in the DOJ’s Sentencing Memorandum as “Individuals B and C” are Robert Colbert, Lazzari’s Vice President, and Richard Morgen, Lazzari’s General Manager, respectively, and that “Company B” is Defendant Lazzari. 45. Plaintiffs further allege, on information and belief, and based on the investigation of counsel, that the Modesto customer referenced in the Sentencing Memorandum is Sysco Central California, Inc., of Modesto, California. Pursuant to the long-standing conspiracy, Defendants conspired, combined and agreed among themselves to allocate the Mesquite Lump Charcoal business of Sysco Central California, Inc. to Defendant Chef’s Choice. In furtherance of said conspiracy, Defendants shared commercially-sensitive bids and pricing information for Mesquite Lump Charcoal, communicated with each other regarding what price for Mesquite Lump Charcoal to quote customers they had agreed to allocate, discussed the amount of any agreed-upon noncompetitive bids to be provided to the customer, and agreed not to compete for the Mesquite Lump Charcoal business of customers allocated to other co-conspirators. 46. In addition to the specific acts of the conspiracy referenced in the DOJ’s Sentencing Memorandum, based on the independent investigation of counsel, Plaintiffs are aware of at least two additional specific communications among the Defendants that reveal the nature and purpose of Defendants’ price-fixing conspiracy for Mesquite Lump Charcoal, and the manner in which the Defendants carried out the conspiracy. 47. For example, Plaintiffs allege that, in or about 2004, William Lord, owner of Defendant Chef’s Choice and Marvin Ring, CEO of California Charcoal had a phone conversation in which Lord told Ring that he was going to submit a bid for Mesquite Lump Charcoal to El Torito Grill, located in Brea, California. Ring emphasized with Lord that El Torito Grill was an existing Mesquite Lump Charcoal customer of Defendant California Charcoal and that, pursuant to the Defendants’ long-standing customer allocation and price-fixing agreement, Lord should not submit a competitively-priced bid to El Torito Grill. Plaintiffs further allege, on information and belief, and based on the investigation of counsel, that Chef’s Choice abided by the terms of the parties’ conspiracy and agreed with California Charcoal that Chef’s Choice would not submit a competitive bid for Mesquite Lump Charcoal to El Torito Grill. 48. Similarly, in, or about November or December 2009, a sales representative from Defendant Lazzari, unbeknownst to Lazzari senior management, scheduled a meeting with food distributor, Rohrer Brothers, Inc., in an attempt to gain the company’s Mesquite Lump Charcoal business for Lazzari. At the time, pursuant to the Defendants’ long-standing customer allocation and price-fixing agreement, Rohrer Brothers was an allocated customer of Defendant Chef’s Choice. Upon learning of the sales representative’s contact, Chef’s Choice’s owner, William Lord, phoned Richard Morgen, Lazzari’s General Manager, to reiterate that Rohrer Brothers was a Chef’s Choice customer, stating, “Are we at war?” or words to that effect. Morgen assured Lord that the two companies were not “at war,” that Lazzari’s sales representative had scheduled the meeting with Rohrer Brothers solely for the purpose of discussing the sales potential of products other than Mesquite Lump Charcoal. After assuring Lord that the parties’ agreed-upon market allocation and price-fixing agreement was still in place, Morgen instructed the Lazzari sales representative to “never contact” Rohrer Brothers again, because “that’s the way it works.” On information and belief, based on the investigation of counsel, Plaintiffs allege that Morgen’s statement, “that’s the way it works,” was intended to acknowledge and underscore that Defendants had a pre-existing agreement to allocate customers and not complete for each other’s Mesquite Lump Charcoal business. D. The Conspiracy Was Long-Standing and Enabled Defendants and Their Co- Conspirators to Inflate Mesquite Lump Charcoal Prices for at Least a Decade 49. The conspiracy in this case lasted at least 10 years – and possibly longer. 50. As stated at the outset of this Complaint, and as detailed in the preceding paragraphs, Plaintiffs allege that, for at least the 10-year period from January 2000 through and including September 2010, Defendants conspired, combined, contracted for, or agreed: (a) to fix, raise or stabilize the price of Mesquite Lump Charcoal in the United States; (b) to not compete for each other’s customers; (c) to allocate specific customers or territories among themselves; (d) to sell only to customers in certain geographic areas; (e) to refrain from submitting bids for the sale of Mesquite Lump Charcoal to customers allocated to a co-conspirator; and (f) to communicate with each other regarding what price to bid for the sale of Mesquite Lump Charcoal and then submit agreed-upon, noncompetitive bids to each other’s customers. 51. Moreover, Defendants’ conspiracy affected millions of dollars in Mesquite Lump Charcoal sales. The conspiracy allowed Defendants and their co-conspirators to maintain inflated prices for Mesquite Lump Charcoal sales and avoid a pricing war. 52. Chef’s Choice’s owner, William Lord, admitted in the plea agreement in which he pleaded guilty to criminal antitrust charges that “the purpose” of the Defendants’ long-standing conspiracy “was to prevent the conspirators from having to reduce prices [for Mesquite Lump Charcoal] in the face of competition in order to retain their customers.” 53. As described in a phone conversation recorded by federal prosecutors, moreover, Defendants’ long-standing price-fixing and customer allocation arrangement achieved its goal. During a call with Robert Colbert, Lazzari’s Vice President, captured on audio tape by federal prosecutors, Chef’s Choice’s owner, William Lord, complained that the proposed entrance into the market of a new competitor [the confidential informant] would make it difficult for Defendants to maintain the high prices for Mesquite Lump Charcoal they had enjoyed during the long-standing pendency of the conspiracy: “I mean, I’ve taken time to push the price up and, the only three people involved are you, me and [Individual A]. And so now we have somebody else [the confidential informant] who’s trying to low ball and make it hard. *** “We’re good for years, and years, and years, and I don’t see any reason for [us] not to continue…. Especially in these economic times. It’s not time to have a war, I’ll tell ya.” On information and belief, and based on the investigation of counsel, Plaintiffs allege that the person identified as “[Individual A]” in the encrypted audio recording captured by federal prosecutors is Marvin Ring, CEO of California Charcoal. 54. Similarly, in a separate phone call between Lord and the confidential informant captured on tape by federal prosecutors, Chef’s Choice’s owner, William Lord, explained the dangers of letting customers leverage Mesquite Lump Charcoal prices by having Defendants compete with one another on price, stating: “[M]e and [Company B] and [Individual A] have kept the price up and not let that happen.” On information and belief, and based on the investigation of counsel, Plaintiffs allege that the entity identified as “[Company B]” in the federal prosecutors’ encrypted transcript is Defendant Lazzari, and that the person identified as “[Individual A]” is Marvin Ring, CEO of California Charcoal. E. Market Factors A Support the Existence of a Conspiracy 55. Various market factors made the market for Mesquite Lump Charcoal highly susceptible to anti-competitive practices, collusion and price-fixing, which allowed Defendants to implement and maintain their long-standing, anticompetitive conspiracy. 1) Limited Competition 56. As a result of Mesquite Lump Charcoal’s characteristics – a natural charcoal, harvested from mesquite forests primarily located in the Sonoran Desert of Mexico, with burning and food flavoring qualities – it is a product favored by restaurants and commercial food purveyors that rely on Mesquite Lump Charcoal for their mesquite-grilled and barbequed foods. 57. Defendants—all of whom are based in California—collectively represent the overwhelming majority (75%) of Mesquite Lump Charcoal distributors in the United States. 2) Inelastic Demand Due to Lack of Substitutes 58. “Elasticity” is a term used to describe the sensitivity of supply and demand to changes in one or the other. For example, demand is said to be “inelastic” if an increase in the price of a product results in little or no decline in the quantity sold of that product. In other words, customers have nowhere to turn for alternative, cheaper products of similar quality, and so continue to purchase despite a price increase. 59. For a cartel to profit from raising prices above competitive levels, demand must be relatively inelastic at competitive prices. Otherwise, increase prices would result in declining sales, revenues and profits, as customers purchased substitute products or declined to buy altogether. 60. Demand for Mesquite Lump Charcoal is relatively inelastic. While other natural hardwood charcoals—such as white oak or hickory—are available, these alternative charcoals have burn rates and impart a flavor into grilled meats, poultry, fish and other foods that differs from Mesquite Lump Charcoal. Comparing Mesquite Lump Charcoal to alternative hardwood charcoals in terms of quality, burn characteristics and flavor profiles, there is not an acceptable substitute product. DEFENDANTS' ACTIVE CONCEALMENT OF THE CONSPIRACY TOLLED THE STATUTE OF LIMITATIONS 61. Plaintiffs did not discover and could not discover through the exercise of reasonable diligence the existence of the price-fixing conspiracy alleged herein until, at the earliest, approximately September 2012. At that time, admissions and other information were contained in the plea agreement entered in the criminal proceedings involving Chef’s Choice’s owner, William Lord. 62. Since the start of the Class Period, Defendants and their co-conspirators committed continuing violations of the antitrust laws resulting in monetary injury to Plaintiffs and Class members. These violations each constituted injurious acts. 63. In addition, Defendants kept secret their agreement, understanding and conspiracy to: (a) inflate the price of Mesquite Lump Charcoal; (b) not compete for each other’s customers; (c) allocate specific customers or territories among themselves; (d) sell only to customers in certain geographic areas; (e) refrain from submitting bids for the sale of Mesquite Lump Charcoal to customers allocated to a co-conspirator; and/or (f) communicate with each other regarding what price to bid for the sale of Mesquite Lump Charcoal and then submit agreed-upon, noncompetitive bids to each other’s customers. As a result, Plaintiffs and Class members were unaware of Defendants’ unlawful conduct alleged herein and did not know that they were paying artificially high prices for Mesquite Lump Charcoal in the United States throughout the Class Period. 64. Neither Defendants nor their co-conspirators told Plaintiffs or other Class members that they were fixing prices and allocating customers for Mesquite Lump Charcoal, or engaging in the other unlawful collusive practices alleged herein. By its very nature, the conspiracy by Defendants, which was conducted using telephonic or other private communications, was inherently self- concealing. 65. In the alternative, application of the doctrine of fraudulent concealment tolled the statute of limitations on the claims asserted herein by Plaintiffs and the Class. 66. Defendants and their co-conspirators affirmatively and fraudulent concealed their unlawful conduct. Plaintiffs and Class members did not discover, nor could have discovered through reasonable diligence, that Defendants and their co-conspirators were violating the antitrust laws until, at the earliest, approximately September 2012--when the plea agreement in the criminal proceedings against Chef’s Choice’s owner, William Lord, first shed light on the nature, extent and means by which Defendants effectuated the conspiracy—because Defendants and their co-conspirators used deceptive and secret methods, including telephonic and other private communications, to affirmatively conceal their violations. Before that time, Plaintiffs and Class members were unaware of Defendants’ unlawful conduct, and did not know they were paying inflated prices for Mesquite Lump Charcoal during the Class Period. 67. Additionally, as described above, the affirmative acts of the Defendants and their co- conspirator as alleged herein, including acts in furtherance of the conspiracy, were wrongfully concealed and carried out in a manner that precluded detection. Plaintiffs and members of the Class could not have discovered the price-fixing, customer allocation and bid-rigging conspiracy alleged herein at any time prior to September 2012, at the earliest, by the exercise of reasonable diligence because of the Defendants’ deceptive practices and techniques of secrecy employed by Defendants and their co-conspirators to avoid detention of and/or fraudulently conceal their conspiracy. 68. For these reasons, the statute of limitations as to Plaintiffs and the Class’ claims did not begin to run, and has been tolled with respect to the claims that Plaintiffs and the members of the Class have alleged in this Complaint. ANTI-TRUST INJURY 69. During the Class Period, the unlawful contract, combination, agreement and/or conspiracy alleged in this Complaint had, inter alia, the following effects: a. Prices charged by Defendants and their co-conspirators to Plaintiffs and members of the Class for Mesquite Lump Charcoal have been inflated and/or maintained at artificially high and supracompetitive levels; b. Plaintiffs and members of the Class have been required to pay more for Mesquite Lump Charcoal than they would have paid in a competitive marketplace unfettered by Defendants’ collusive and unlawful price-fixing; c. Plaintiffs and members of the Class have been deprived of the benefits of free, open and unrestricted competition in the market for Mesquite Lump Charcoal; 70. During and throughout the Class Period, Plaintiffs and members of the Class directly purchased Mesquite Lump Charcoal in the United States. 71. Plaintiffs and the other Class members paid more for Mesquite Lump Charcoal than they would have paid under conditions of free and open competition. 72. As a direct and proximate result of the illegal combination, contract or conspiracy alleged in this Complaint, Plaintiffs and the members of the Class were injured and financially damaged in their businesses and property, in amounts to be determined at trial. 73. Plaintiffs and members of the Class suffered the type of antitrust injury that the federal laws were meant to punish and prevent. CLASS ACTION ALLEGATIONS 74. Plaintiffs bring this action on behalf of themselves and as a class action pursuant to Federal Rules of Civil Procedure 23 on behalf of the following Class: All persons in the United States who purchased Mesquite Lump Charcoal directly from any Defendant, and/or their subsidiaries and co-conspirators, during the period from and including January 2000 through at least September 20, 2011 (the “Class Period”). 75. Excluded from the Class are (1) Defendants and their co-conspirators; (2) any entity in which Defendants have or had a controlling interest; (3) Defendants’ officers, directors, and employees; (4) members of Defendants’ immediate families and legal representatives, successors, and assigns; and (5) any judge assigned to this matter, together with his or her immediate family members. 76. This action has been brought and may properly be maintained on behalf of the Class proposed above under the criteria of Rule 23 of the Federal Rules of Civil Procedure. 77. Numerosity. Members of the Class are so numerous that their individual joinder is impracticable. While the exact number of Class members is unknown to Plaintiffs at this time and can only be ascertained through appropriate discovery, Plaintiffs believe that there are thousands of Class members. Plaintiffs also believe that Class members are sufficiently numerous and geographically dispersed that joinder of all Class members is impracticable. 78. Existence and predominance of common questions. Common questions of law and fact exist as to all members of the Class and predominate over questions affecting only individual Class members. These common questions include: a. Whether Defendants engaged in a contract, combination or conspiracy to fix, maintain or stabilize the prices of, or allocate the market for, Mesquite Lump Charcoal distributed and sold in the United States; b. Whether the alleged contract, combination or conspiracy violated Section 1 of the Sherman Act as alleged in the Prayer for Relief below; c. Whether Defendants’ conduct as alleged herein caused Plaintiffs and Class members to pay more for Mesquite Lump Charcoal than they otherwise would have paid in an unrestrained, competitive market; and d. Whether Plaintiff and other members of the Class were injured by the conduct of Defendants and, if so, the appropriate class-wide measure of damages and appropriate relief. 79. Typicality. Plaintiffs’ claims are typical of the claims of the Class in that Plaintiffs, like other Class members, purchased Mesquite Lump Charcoal directly from one of the Defendants; lost money or property and/or was damaged as a result of the same wrongful conduct of the Defendants as alleged herein; and seeks relief common to the Class. 80. Adequacy. Plaintiffs are an adequate representative of the Class because their interests do not conflict with the interests of the members of the Class they seek to represent. Plaintiffs have retained counsel competent and experienced in complex class action litigation, and intend to prosecute this action vigorously. The interests of the members of the Class will be fairly and adequately protected by Plaintiffs and their counsel. 81. Superiority. A class action is superior to all other available methods for the fair and efficient adjudication of this controversy because joinder of all members is impracticable. Furthermore, while the damages suffered by individual Class members may be relatively small, the expense and burden of individual litigation makes it impossible for members of the Class to individually redress the wrongs done to them. 82. Even if the Class members could afford such individualized litigation, the court system could not. Individualized litigation would create the danger of inconsistent or contradictory judgments and increase the delay and expense to all parties and the court system. By contrast, the class action device presents far fewer management difficulties, is in fact manageable, and provides the benefits of single adjudication, economies of scale, and comprehensive supervision by a single court. The benefits of adjudicating this controversy as a class action far outweigh any difficulties that may occur in managing the Class. 83. In the alternative, the Class may be certified under the provisions of Federal Rules of Civil Procedure 23(b)(1) and 23(c)(4) because: a. The prosecution of separate actions by the individual members of the Class would create a risk of inconsistent or varying adjudications with respect to individual Class members and would establish incompatible standards of conduct for Defendants; b. The prosecution of separate actions by individual Class members would create a risk of adjudications with respect to them that would, as a practical matter, be dispositive of the interests of other Class members not parties to the adjudications, or substantially impair or impede the ability of other Class members to protect their interests; c. Defendants have acted or refused to act on grounds generally applicable to the Class, making final injunctive relief or corresponding declaratory relief with respect to the members of the Class as a whole an appropriate form of relief; and d. The claims of Class members are comprised of common issues that are appropriate for certification under Rule 23(c)(4). CLAIM FOR RELIEF Violation of Section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1 (Against All Defendants) 84. Plaintiffs hereby incorporate by reference each preceding paragraph as though fully set forth herein. 85. Beginning at time presently unknown to Plaintiffs, but at least as early as January 1, 2000 and continuing through the Class Period, Defendants and their co-conspirators entered into a continuing contract, combination or conspiracy to unreasonably restrain trade and commerce in violation of Section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1, and Section 4 of the Clayton Act, 15 U.S.C. § 15. 86. Defendants' acts in furtherance of their combination or conspiracy were authorized, ordered, or done by their officers, agents, employees or representatives while actively engaged in the management of Defendants' affairs. 87. At least as early as January of 2000, and continuing until such time as the anticompetitive effects of Defendants' conduct ceased, the exact dates being unknown to Plaintiffs, Defendants and their co-conspirators entered into a continuing agreement, understanding and conspiracy in restraint of trade to fix, stabilize, and maintain prices for Mesquite Lump Charcoal. 88. In furtherance of the unlawful contract, combination or conspiracy, each of the Defendants and their co-conspirators has committed overt acts, including, inter alia: a. Agreeing to charges prices at certain levels and otherwise to fix, increase, maintain and/or stabilize prices of Mesquite Lump Charcoal sold in the United States; b. Participating in meetings, conversations and communications with co- conspirators regarding prices to be charged for Mesquite Lump Charcoal; c. Agreeing to allocate customers; d. Agreeing not to compete for each other’s customers; e. Refraining from submitting bids for the sale of Mesquite Lump Charcoal to customers allocated to a co-conspirator; and/or f. Communicating with each other regarding what price to bid for the sale of Mesquite Lump Charcoal and then submitting agreed-upon, noncompetitive bids to each other’s customers. 89. The contract, combination or conspiracy alleged herein has had the following effects, among others: a. Price competition in the sale of Mesquite Lump Charcoal has been restrained, suppressed and/or eliminated; b. Prices for Mesquite Lump Charcoal sold by Defendants and their co- conspirators have been fixed, raised, maintained and stabilized at artificially high, non-competitive levels; c. Plaintiffs and members of the Class have been deprived of the benefits of free and open competition. 90. As a direct and proximate result of Defendants’ illegal agreement, contact, combination and/or conspiracy, Plaintiffs and the members of the Class have been injured and damages in their respective businesses and property in an amount to be determined according to proof and are entitled to recover threefold damages sustained pursuant to Section 4 of the Clayton Act, 15 U.S.C. § 15. 91. The conduct of Defendants and their co-conspirators constitutes a per se violation of Section 1 of the Sherman Act, 15 U.S.C. § 1. PRAYER FOR RELIEF WHEREFORE, Plaintiffs pray that: A. The Court determines that his action may be maintained as a class action pursuant to Rule 23 of the Federal Rules of Civil Procedure, and enter an order directing that reasonable notice of this action, as provided by Rule 23(c)(2) of the Federal Rules of Civil Procedure, be given to each and every member of the Class, and appointing Plaintiffs as class representatives for the Class and appointing Plaintiffs’ counsel as Class Counsel; B. The Court adjudge and decree that the acts of the Defendants are illegal and unlawful, including the agreement, contract, combination and/or conspiracy, and the acts done in furtherance thereof by Defendants and their co-conspirators be adjudged to have violated Section 1 of the Shearman Act, 15 U.S.C. § 1, and that Judgment be entered against Defendants, jointly and severally, and in favor of Plaintiffs and the Class for damages to the maximum extent allowed under federal antitrust laws, together with the costs of the action, including reasonable attorneys’ fees, and pre- and post-judgment interest as provided by law, and that such interest be awarded at the highest legal rate from and after the date of service of this Complaint; C. Each of the Defendants, and their respective successors, assigns, parent, subsidiaries, affiliates and transferees, and their officers, directors, agents and representatives, and all other persons acting or claiming to act on behalf of Defendants or in concert with them, be permanently enjoined and restrained from, in any manner, directly or indirectly, continuing or maintaining or renewing the combination, conspiracy, agreement, contract, understanding or concert of action as alleged herein; and D. The Court award Plaintiffs and members of the Class such other and further relief as may be necessary and appropriate. // // DEMAND FOR JURY TRIAL Pursuant to Rule 38(b) of the Federal Rules of Civil Procedure, Plaintiffs hereby demand a trial by jury on all claims and issues that can be tried to a jury. DATED: November 7, 2013 Respectfully submitted, PRITZKER | LAW By: ________________________________ Elizabeth C. Pritzker (SBN: 146267) Bethany L. Caracuzzo (SBN: 190687) Shiho Yamamoto (SBN: 264741) 633 Battery Street, Suite 110 San Francisco, CA 94111 Telephone: (415) 692-0772 Facsimile: (415) 366-6110 Email: ecp@pritzker-law.com; bc@pritzker-law.com; sy@pritzker-law.com PEARSON, SIMON & WARSHAW, LLP Bruce L. Simon (SBN: 96241) Robert G. Retana (SBN: 148677) Aaron M. Sheanin (SBN: 214472) 44 Montgomery Street, Suite 2450 San Francisco, CA 94104 Telephone: (415) 433-9000 Facsimile: (415) 433-9008 Email: bsimon@pswlaw.com; rretana@pswlaw.com; asheanin@pswlaw.com Attorneys for Plaintiffs and the Proposed Class

antitrust

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Todd M. Friedman (SBN 216752) Adrian R. Bacon (SBN 280332) Meghan E. George (SBN 274525) Tom E. Wheeler (SBN 308789) LAW OFFICES OF TODD M. FRIEDMAN, P.C. 21550 Oxnard St., Suite 780 Woodland Hills, CA 91367 Phone: 323-306-4234 Fax: 866-633-0228 tfriedman@ toddflaw.com abacon@ toddflaw.com mgeorge@toddflaw.com twheeler@toddflaw.com Attorneys for Plaintiff UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA ABANTE ROOTER AND PLUMBING, individually and on behalf of all others similarly situated, Case No. CLASS ACTION COMPLAINT FOR VIOLATIONS OF: Plaintiff, vs. 1. NEGLIGENT VIOLATIONS OF THE TELEPHONE CONSUMER PROTECTION ACT [47 U.S.C. §227(b)] 2. WILLFUL VIOLATIONS OF THE TELEPHONE CONSUMER PROTECTION ACT [47 U.S.C. §227(b)] STRAIGHT LINE SOURCE INC.; MERCHANT ADVANCE EXPRESS INC., and DOES 1 through 10, inclusive, and each of them, Defendant. 3. NEGLIGENT VIOLATIONS OF THE TELEPHONE CONSUMER PROTECTION ACT [47 U.S.C. §227(c)] 4. WILLFUL VIOLATIONS OF THE TELEPHONE CONSUMER PROTECTION ACT [47 U.S.C. §227(c)] DEMAND FOR JURY TRIAL ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Plaintiff ABANTE ROOTER AND PLUMBING (“Plaintiff”), individually and on behalf of all others similarly situated, alleges the following upon information and belief based upon personal knowledge: NATURE OF THE CASE 1. Plaintiff brings this action individually and on behalf of all others similarly situated seeking damages and any other available legal or equitable remedies resulting from the illegal actions of STRAIGHT LINE SOURCE INC. and MERCHANT ADVANCE EXPRESS INC., (“Defendants”), in negligently, knowingly, and/or willfully contacting Plaintiff on Plaintiff’s cellular telephone in violation of the Telephone Consumer Protection Act, 47. U.S.C. § 227 et seq. (“TCPA”) and related regulations, specifically the National Do-Not-Call provisions, thereby invading Plaintiff’s privacy. JURISDICTION & VENUE 2. Jurisdiction is proper under 28 U.S.C. § 1332(d)(2) because Plaintiff, a resident of California, seeks relief on behalf of a Class, which will result in at least one class member belonging to a different state than that of Defendants, two New York companies. Plaintiff also seeks up to $1,500.00 in damages for each call in violation of the TCPA, which, when aggregated among a proposed class in the thousands, exceeds the $5,000,000.00 threshold for federal court jurisdiction. Therefore, both diversity jurisdiction and the damages threshold under the Class Action Fairness Act of 2005 (“CAFA”) are present, and this Court has jurisdiction. 3. Venue is proper in the United States District Court for the Northern District of California pursuant to 28 U.S.C. § 1391(b) and because Defendants do business within the State of California and Plaintiff resides within the County of Alameda. PARTIES 4. Plaintiff, ABANTE ROOTER AND PLUMBING (“Plaintiff”), a corporation of the State of California, whose principal place of business is in the county of Alameda, and is a “person” as defined by 47 U.S.C. § 153 (39). 5. Defendant, STRAIGHT LINE SOURCE INC. (“Straight Line”) is a credit card merchant services company, and is a “person” as defined by 47 U.S.C. § 153 (39). 6. Defendant, MERCHANT ADVANCE EXPRESS INC. (“Merchant Advance”) is a financial services company, and is a “person” as defined by 47 U.S.C. § 153 (39). 7. The above named Defendants, and its subsidiaries and agents, are collectively referred to as “Defendants.” The true names and capacities of the Defendants sued herein as DOE DEFENDANTS 1 through 10, inclusive, are currently unknown to Plaintiff, who therefore sues such Defendants by fictitious names. Each of the Defendants designated herein as a DOE is legally responsible for the unlawful acts alleged herein. Plaintiff will seek leave of Court to amend the Complaint to reflect the true names and capacities of the DOE Defendants when such identities become known. 8. Plaintiff is informed and believes that at all relevant times, each and every Defendant was acting as an agent and/or employee of each of the other Defendants and was acting within the course and scope of said agency and/or employment with the full knowledge and consent of each of the other Defendants. Plaintiff is informed and believes that each of the acts and/or omissions complained of herein was made known to, and ratified by, each of the other Defendants. FACTUAL ALLEGATIONS 9. Beginning in or around December 2015, Defendants began contacting Plaintiff on Plaintiff’s cellular telephone number ending in -1636, in an attempt to solicit Plaintiff to purchase Defendants’ services. 10. Defendants used an “automatic telephone dialing system” as defined by 47 U.S.C. § 227(a)(1) to place its call to Plaintiff seeking to solicit its services. 11. Defendants contacted or attempted to contact Plaintiff from telephone numbers (216) 202-5998 and (516) 418-8512 confirmed to be Defendants’ numbers. 12. Defendants’ calls constituted calls that were not for emergency purposes as defined by 47 U.S.C. § 227(b)(1)(A). 13. During all relevant times, Defendants did not possess Plaintiff’s “prior express consent” to receive calls using an automatic telephone dialing system or an artificial or prerecorded voice on its cellular telephone pursuant to 47 U.S.C. § 227(b)(1)(A). 14. Further, Plaintiff’s cellular telephone number ending in -1636 was added to the National Do-Not-Call Registry on or about July 14, 2005. 15. Defendants placed multiple calls soliciting its business to Plaintiff on its cellular telephone ending in -1636 in or around December 2015 and continuing through July 12, 2018. 16. Such calls constitute solicitation calls pursuant to 47 C.F.R. § 64.1200(c)(2) as they were attempts to promote or sell Defendants’ services. 17. Plaintiff received numerous solicitation calls from Defendants within a 12-month period. 18. Defendants continued to call Plaintiff in an attempt to solicit its services and in violation of the National Do-Not-Call provisions of the TCPA. 19. Upon information and belief, and based on Plaintiff’s experiences of being called by Defendants after being on the National Do-Not-Call list for several years prior to Defendants’ initial call, and at all relevant times, Defendants failed to establish and implement reasonable practices and procedures to effectively prevent telephone solicitations in violation of the regulations prescribed under 47 U.S.C. § 227(c)(5). CLASS ALLEGATIONS 20. Plaintiff brings this action individually and on behalf of all others similarly situated, as a member the two proposed classes (hereafter, jointly, “The Classes”). 21. The class concerning the ATDS claim for no prior express consent (hereafter “The ATDS Class”) is defined as follows: All persons within the United States who received any solicitation/telemarketing telephone calls from Defendants to said person’s cellular telephone made through the use of any automatic telephone dialing system or an artificial or prerecorded voice and such person had not previously consented to receiving such calls within the four years prior to the filing of this Complaint 22. The class concerning the National Do-Not-Call violation (hereafter “The DNC Class”) is defined as follows: All persons within the United States registered on the National Do-Not-Call Registry for at least 30 days, who had not granted Defendants prior express consent nor had a prior established business relationship, who received more than one call made by or on behalf of Defendants that promoted Defendants’ products or services, within any twelve-month period, within four years prior to the filing of the complaint. 23. Plaintiff represents, and is a member of, The ATDS Class, consisting of all persons within the United States who received any collection telephone calls from Defendants to said person’s cellular telephone made through the use of any automatic telephone dialing system or an artificial or prerecorded voice and such person had not previously not provided their cellular telephone number to Defendants within the four years prior to the filing of this Complaint. 24. Plaintiff represents, and is a member of, The DNC Class, consisting of all persons within the United States registered on the National Do-Not-Call Registry for at least 30 days, who had not granted Defendants prior express consent nor had a prior established business relationship, who received more than one call made by or on behalf of Defendants that promoted Defendants’ products or services, within any twelve-month period, within four years prior to the filing of the complaint. 25. Defendants, its employees and agents are excluded from The Classes. Plaintiff does not know the number of members in The Classes, but believes the Classes members number in the thousands, if not more. Thus, this matter should be certified as a Class Action to assist in the expeditious litigation of the matter. 26. The Classes are so numerous that the individual joinder of all of its members is impractical. While the exact number and identities of The Classes members are unknown to Plaintiff at this time and can only be ascertained through appropriate discovery, Plaintiff is informed and believes and thereon alleges that The Classes includes thousands of members. Plaintiff alleges that The Classes members may be ascertained by the records maintained by Defendants. 27. Plaintiff and members of The ATDS Class were harmed by the acts of Defendants in at least the following ways: Defendants illegally contacted Plaintiff and ATDS Class members via their cellular telephones thereby causing Plaintiff and ATDS Class members to incur certain charges or reduced telephone time for which Plaintiff and ATDS Class members had previously paid by having to retrieve or administer messages left by Defendants during those illegal calls, and invading the privacy of said Plaintiff and ATDS Class members. 28. Common questions of fact and law exist as to all members of The ATDS Class which predominate over any questions affecting only individual members of The ATDS Class. These common legal and factual questions, which do not vary between ATDS Class members, and which may be determined without reference to the individual circumstances of any ATDS Class members, include, but are not limited to, the following: a. Whether, within the four years prior to the filing of this Complaint, Defendants made any telemarketing/solicitation call (other than a call made for emergency purposes or made with the prior express consent of the called party) to a ATDS Class member using any automatic telephone dialing system or any artificial or prerecorded voice to any telephone number assigned to a cellular telephone service; b. Whether Plaintiff and the ATDS Class members were damaged thereby, and the extent of damages for such violation; and c. Whether Defendants should be enjoined from engaging in such conduct in the future. 29. As a person that received numerous telemarketing/solicitation calls from Defendants using an automatic telephone dialing system or an artificial or prerecorded voice, without Plaintiff’s prior express consent, Plaintiff is asserting claims that are typical of The ATDS Class. 30. Plaintiff and members of The DNC Class were harmed by the acts of Defendants in at least the following ways: Defendants illegally contacted Plaintiff and DNC Class members via their telephones for solicitation purposes, thereby invading the privacy of said Plaintiff and the DNC Class members whose telephone numbers were on the National Do-Not-Call Registry. Plaintiff and the DNC Class members were damaged thereby. 31. Common questions of fact and law exist as to all members of The DNC Class which predominate over any questions affecting only individual members of The DNC Class. These common legal and factual questions, which do not vary between DNC Class members, and which may be determined without reference to the individual circumstances of any DNC Class members, include, but are not limited to, the following: a. Whether, within the four years prior to the filing of this Complaint, Defendants or its agents placed more than one solicitation call to the members of the DNC Class whose telephone numbers were on the National Do-Not-Call Registry and who had not granted prior express consent to Defendants and did not have an established business relationship with Defendants; b. Whether Defendants obtained prior express written consent to place solicitation calls to Plaintiff or the DNC Class members’ telephones; c. Whether Plaintiff and the DNC Class member were damaged thereby, and the extent of damages for such violation; and d. Whether Defendants and its agents should be enjoined from engaging in such conduct in the future. 32. As a person that received numerous solicitation calls from Defendants within a 12-month period, who had not granted Defendants prior express consent and did not have an established business relationship with Defendants, Plaintiff is asserting claims that are typical of the DNC Class. 33. Plaintiff will fairly and adequately protect the interests of the members of The Classes. Plaintiff has retained attorneys experienced in the prosecution of class actions. 34. A class action is superior to other available methods of fair and efficient adjudication of this controversy, since individual litigation of the claims of all Classes members is impracticable. Even if every Classes member could afford individual litigation, the court system could not. It would be unduly burdensome to the courts in which individual litigation of numerous issues would proceed. Individualized litigation would also present the potential for varying, inconsistent, or contradictory judgments and would magnify the delay and expense to all parties and to the court system resulting from multiple trials of the same complex factual issues. By contrast, the conduct of this action as a class action presents fewer management difficulties, conserves the resources of the parties and of the court system, and protects the rights of each Classes member. 35. The prosecution of separate actions by individual Classes members would create a risk of adjudications with respect to them that would, as a practical matter, be dispositive of the interests of the other Classes members not parties to such adjudications or that would substantially impair or impede the ability of such non-party Class members to protect their interests. 36. Defendants have acted or refused to act in respects generally applicable to The Classes, thereby making appropriate final and injunctive relief with regard to the members of the Classes as a whole. FIRST CAUSE OF ACTION Negligent Violations of the Telephone Consumer Protection Act 47 U.S.C. §227(b). On Behalf of the ATDS Class 37. Plaintiff repeats and incorporates by reference into this cause of action the allegations set forth above at Paragraphs 1-36. 38. The foregoing acts and omissions of Defendants constitute numerous and multiple negligent violations of the TCPA, including but not limited to each and every one of the above cited provisions of 47 U.S.C. § 227(b), and in particular 47 U.S.C. § 227 (b)(1)(A). 39. As a result of Defendants’ negligent violations of 47 U.S.C. § 227(b), Plaintiff and the Class Members are entitled an award of $500.00 in statutory damages, for each and every violation, pursuant to 47 U.S.C. § 227(b)(3)(B). 40. Plaintiff and the ATDS Class members are also entitled to and seek injunctive relief prohibiting such conduct in the future. SECOND CAUSE OF ACTION Knowing and/or Willful Violations of the Telephone Consumer Protection Act 47 U.S.C. §227(b) On Behalf of the ATDS Class 41. Plaintiff repeats and incorporates by reference into this cause of action the allegations set forth above at Paragraphs 1-36. 42. The foregoing acts and omissions of Defendants constitute numerous and multiple knowing and/or willful violations of the TCPA, including but not limited to each and every one of the above cited provisions of 47 U.S.C. § 227(b), and in particular 47 U.S.C. § 227 (b)(1)(A). 43. As a result of Defendants’ knowing and/or willful violations of 47 U.S.C. § 227(b), Plaintiff and the ATDS Class members are entitled an award of $1,500.00 in statutory damages, for each and every violation, pursuant to 47 U.S.C. § 227(b)(3)(B) and 47 U.S.C. § 227(b)(3)(C). 44. Plaintiff and the Class members are also entitled to and seek injunctive relief prohibiting such conduct in the future. THIRD CAUSE OF ACTION Negligent Violations of the Telephone Consumer Protection Act 47 U.S.C. §227(c) On Behalf of the DNC Class 45. Plaintiff repeats and incorporates by reference into this cause of action the allegations set forth above at Paragraphs 1-36. 46. The foregoing acts and omissions of Defendants constitute numerous and multiple negligent violations of the TCPA, including but not limited to each and every one of the above cited provisions of 47 U.S.C. § 227(c), and in particular 47 U.S.C. § 227 (c)(5). 47. As a result of Defendants’ negligent violations of 47 U.S.C. § 227(c), Plaintiff and the DNC Class Members are entitled an award of $500.00 in statutory damages, for each and every violation, pursuant to 47 U.S.C. § 227(c)(5)(B). 48. Plaintiff and the DNC Class members are also entitled to and seek injunctive relief prohibiting such conduct in the future. FOURTH CAUSE OF ACTION Knowing and/or Willful Violations of the Telephone Consumer Protection Act 47 U.S.C. §227 et seq. On Behalf of the DNC Class 49. Plaintiff repeats and incorporates by reference into this cause of action the allegations set forth above at Paragraphs 1-36. 50. The foregoing acts and omissions of Defendants constitute numerous and multiple knowing and/or willful violations of the TCPA, including but not limited to each and every one of the above cited provisions of 47 U.S.C. § 227(c), in particular 47 U.S.C. § 227 (c)(5). 51. As a result of Defendants’ knowing and/or willful violations of 47 U.S.C. § 227(c), Plaintiff and the DNC Class members are entitled an award of $1,500.00 in statutory damages, for each and every violation, pursuant to 47 U.S.C. § 227(c)(5). 52. Plaintiff and the DNC Class members are also entitled to and seek injunctive relief prohibiting such conduct in the future. PRAYER FOR RELIEF WHEREFORE, Plaintiff requests judgment against Defendants for the following: FIRST CAUSE OF ACTION Negligent Violations of the Telephone Consumer Protection Act 47 U.S.C. §227(b)  As a result of Defendants’ negligent violations of 47 U.S.C. §227(b)(1), Plaintiff and the ATDS Class members are entitled to and request $500 in statutory damages, for each and every violation, pursuant to 47 U.S.C. 227(b)(3)(B).  Any and all other relief that the Court deems just and proper. SECOND CAUSE OF ACTION Knowing and/or Willful Violations of the Telephone Consumer Protection Act 47 U.S.C. §227(b)  As a result of Defendants’ willful and/or knowing violations of 47 U.S.C. §227(b)(1), Plaintiff and the ATDS Class members are entitled to and request treble damages, as provided by statute, up to $1,500, for each and every violation, pursuant to 47 U.S.C. §227(b)(3)(B) and 47 U.S.C. §227(b)(3)(C).  Any and all other relief that the Court deems just and proper. THIRD CAUSE OF ACTION Negligent Violations of the Telephone Consumer Protection Act 47 U.S.C. §227(c)  As a result of Defendants’ negligent violations of 47 U.S.C. §227(c)(5), Plaintiff and the DNC Class members are entitled to and request $500 in statutory damages, for each and every violation, pursuant to 47 U.S.C. 227(c)(5).  Any and all other relief that the Court deems just and proper. FOURTH CAUSE OF ACTION Knowing and/or Willful Violations of the Telephone Consumer Protection Act 47 U.S.C. §227(c)  As a result of Defendants’ willful and/or knowing violations of 47 U.S.C. §227(c)(5), Plaintiff and the DNC Class members are entitled to and request treble damages, as provided by statute, up to $1,500, for each and every violation, pursuant to 47 U.S.C. §227(c)(5).  Any and all other relief that the Court deems just and proper. 53. Pursuant to the Seventh Amendment to the Constitution of the United States of America, Plaintiff is entitled to, and demands, a trial by jury. Respectfully Submitted this 29th Day of November, 2018. LAW OFFICES OF TODD M. FRIEDMAN, P.C. By: /s/ Todd M. Friedman Todd M. Friedman Law Offices of Todd M. Friedman Attorney for Plaintiff

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UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF ILLINOIS SPRINGFIELD DIVISION SHAYNE EMERY, Case No.: Plaintiff, v. COMPLAINT ADVANCED MARKETING & PROCESSING, INC. d/b/a JURY DEMANDED PROTECT MY CAR Defendant. Now comes the Plaintiff, SHAYNE EMERY (“Plaintiff”), by and through his attorneys, and for his Complaint against the Defendant, ADVANCED MARKETING & PROCESSING, INC. d/b/a PROTECT MY CAR (“Defendant”), Plaintiff alleges and states as follows: PRELIMINARY STATEMENT 1. This is an action for damages, injunctive relief, and any other available legal or equitable remedies, for violations of the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227, et seq., resulting from the illegal actions of Defendant, in negligently, knowingly, and/or willfully placing, through its agent(s), sales, solicitation and/or other telephone calls to Plaintiff’s cellular telephone, in violation of the TCPA and related regulations, specifically the National Do- Not-Call and internal do-no-call provisions of 47 C.F.R. § 64.1200(c), thereby invading Plaintiff’s privacy. Plaintiff alleges as follows upon personal knowledge as to himself and his own acts and experiences, and, as to all other matters, upon information and belief, including investigation conducted by his attorneys. 2. According to the Federal Communications Commission’s website, accessed on August 28, 2020 at https://www.fcc.gov/consumers/guides/stop-unwanted-robocalls-and-texts: The national Do Not Call list protects landline and wireless phone numbers. You can register your numbers on the national Do Not Call list at no cost by calling 1-888-382-1222 (voice) or 1-866-290-4236 (TTY). You must call from the phone number you wish to register. You can also register at donotcall.gov. Telemarketers must remove your numbers from their call lists and stop calling you within 31 days from the date you register. Your numbers will remain on the list until you remove them or discontinue service – there is no need to re-register numbers. 3. The TCPA was designed to prevent automated telephone calls like the ones described herein, and to protect the privacy of citizens like Plaintiff. “Voluminous consumer complaints about abuses of telephone technology – for example, computerized calls dispatched to private homes – prompted Congress to pass the TCPA.” Mims v. Arrow Fin. Servs., LLC, 132 S. Ct. 740, 744 (2012). 4. In enacting the TCPA, Congress intended to give consumers a choice as to how corporate similar entities may contact them, and made specific findings that “[t]echnologies that might allow consumers to avoid receiving such calls are not universally available, are costly, are unlikely to be enforced, or place an inordinate burden on the consumer.” TCPA, Pub. L. No. 102– 243, § 11. In support of this, Congress found that: [b]anning such automated or prerecorded telephone calls to the home, except when the receiving party consents to receiving the call or when such calls are necessary in an emergency situation affecting the health and safety of the consumer, is the only effective means of protecting telephone consumers from this nuisance and privacy invasion. Id. at § 12; see also Martin v. Leading Edge Recovery Solutions, LLC, 2012 WL 3292838, at *4 (N.D.Ill. Aug. 10, 2012) (citing Congressional findings on the TCPA’s purpose). 5. Persons, like Plaintiff herein, have no control to stop unsolicited, unwanted calls to their cellular telephones. 6. Plaintiff and the members of the proposed Class defined below received telemarketing calls to their telephones despite having registered their telephone numbers on the National Do-Not-Call list, all because Defendant wished to advertise and market its products and/or services for its own benefit. JURISDICTION AND VENUE 7. This Court has jurisdiction pursuant to 28 U.S.C. § 1331, as this civil action arises under a law of the United States, the TCPA. 8. Venue is proper in this District pursuant to 28 U.S.C. § 1391(b) because a substantial part of the events and omissions giving rise to this claim occurred in this District. PARTIES 9. Plaintiff is an individual who was at all relevant times residing in Waverly, Illinois. 10. On information and belief, Defendant is a corporation of the State of Florida, which is not registered with the Secretary of State to do business in Illinois, and which has its principal place of business in Saint Petersburg, Florida. 11. On information and belief, at all times relevant hereto, Defendant was engaged in the sale of automotive warranty products and services. 12. Plaintiff is a “person” as defined in 47 U.S.C. § 153(39). 13. Defendant is a “person” as defined in 47 U.S.C. § 153(39). FACTS COMMON TO ALL COUNTS 14. On or about February 27, 2010, Plaintiff successfully registered his residential cellular telephone number ending in -2220 with the National Do Not Call Registry. 15. During or about January of 2017, Defendant began placing unsolicited telemarketing calls to Plaintiff’s cellular telephone. 16. Defendant contacted or attempted to contact Plaintiff from telephone number 727- 835-8332, confirmed to belong to Defendant. 17. Defendant’s unsolicited telemarketing calls to Plaintiff constitute solicitation calls pursuant to 47 C.F.R. § 64.1200(c)(2), as they were made in attempts to promote or sell Defendant’s products or services. 18. Plaintiff received at least nine such unsolicited telemarketing calls from Defendant between January and March of 2017. 19. Plaintiff did not provide his prior express invitation or permission to Defendant to place these solicitation telemarketing calls to his cellular telephone. 20. As a result of Defendant’s acts and omissions outlined above, Plaintiff has suffered concrete and particularized injuries and harm, which include, but are not limited to, the following: a. Invasion of privacy; b. Intrusion upon and occupation of the capacity of Plaintiff’s cellular telephones; c. Wasting Plaintiff’s time; d. Risk of injury due to interruption and distraction when receiving unwanted telemarketing calls from Defendant; e. Depletion of Plaintiff’s cellular telephone batteries; f. The cost of electricity to recharge Plaintiff’s cellular telephone batteries; and g. Aggravation, frustration, stress, emotional distress, and similar categories of damages. 21. In multiple instances, Defendant placed unsolicited telemarketing calls to Plaintiff after Plaintiff registered his telephone number ending in -2220 with the federal government’s Do Not Call List, in violation of the TCPA, 47 U.S.C. § 227, et seq., and 47 C.F.R. § 64.1200(c). 22. Defendant’s unsolicited telemarketing calls to Plaintiff after Plaintiff registered his telephone number ending in -2220 with the federal government’s Do Not Call List violated 47 C.F.R. § 64.1200(c) and 47 U.S.C. § 227(c)(5). CLASS ALLEGATIONS 23. Plaintiff brings this action on behalf of himself and all others similarly situated, as members of the proposed class defined as follows (the “Class”): All residential telephone subscribers within the United States whose telephone numbers were registered on the National Do-Not-Call Registry for at least 30 days, who had not granted Defendant prior express invitation or permission, nor had a prior established business relationship with Defendant, or who had revoked such invitation or permission or prior business relationship, who received more than one solicitation call made by or on behalf of Defendant within any 12-month period, within four years prior to the filing of this Complaint. 24. Defendant, its employees and agents are excluded from the Class. Plaintiff does not know the number of members in the Class, but believes the members of the Class number in the hundreds, if not thousands or more. Thus, this matter should be certified as a Class Action to assist in the expeditious litigation of the matter. 25. The Class is so numerous that the individual joinder of all of its members is impractical. While the exact number and identities of the Class members are unknown to Plaintiff at this time and can only be ascertained through appropriate discovery, Plaintiff is informed and believes and thereon alleges that the Class include hundreds, if not thousands of members. Plaintiff alleges that the Class members may be ascertained by the records maintained by Defendant. 26. This suit is properly maintainable as a class action pursuant to Fed. R. Civ. P. 23(a) because the is so numerous that joinder of its members is impractical and the disposition of their claims in the Class Action will provide substantial benefits both to the parties and to the Court. 27. There are questions of law and fact common to the Class affecting the parties to be represented. The questions of law and fact common to the Class predominate over questions which may affect individual members and include, but are not limited to, the following: a. Whether the Class members’ telephone numbers were called by Defendant more than once in a 12-month period after the Class members had registered such numbers on the National Do-Not-Call registry; b. Whether Defendant had any Class members’ prior express invitation or permission to place solicitation telephone calls to them, or had a prior established business relationship with any Class members; c. Whether the Class members are entitled to damages and if so, the proper measure of those damages; and d. Whether Defendant violated the TCPA, 47 U.S.C. § 227, et seq. 28. As a residential telephone subscriber who received multiple telephone calls in a 12- month period, made by or on behalf of Defendant, without his prior express invitation or permission and without a prior established business relationship with Defendant, after his telephone number was registered on the National Do-Not-Call Registry for at least 30 days, within four years prior to the filing of this Complaint, Plaintiff is asserting claims that are typical of the 29. Plaintiff has no interest adverse or antagonistic to the interests of the other members of the Class. 30. Plaintiff will fairly and adequately protect the interests of the members of the Class. Plaintiff has retained attorneys experienced in the prosecution of class actions. 31. A class action is superior to other available methods of fair and efficient adjudication of this controversy, since individual litigation of the claims of all Class members is impracticable. Even if every Class member could afford individual litigation, the court system could not. It would be unduly burdensome to the courts in which individual litigation of numerous issues would proceed. Individualized litigation would also present the potential for varying, inconsistent or contradictory judgments and would magnify the delay and expense to all parties, and to the court system, resulting from multiple trials of the same complex factual issues. By contrast, the conduct of this action as a class action presents fewer management difficulties, conserves the resources of the parties and of the court system, and protects the rights of each Class member. Class treatment will also permit the adjudication of relatively small claims by many Class members who could not otherwise afford to seek legal redress for the wrongs complained of herein. 32. The prosecution of separate actions by individual Class members would create a risk of adjudications with respect to them that would, as a practical matter, be dispositive of the interests of the other Class members not parties to such adjudications or that would substantially impair or impede the ability of such non-party Class members to protect their interests. 33. Defendant has acted or refused to act in respect generally applicable to the Class, thereby making appropriate final and injunctive relief with regard to the members of the Class as a whole. 34. Defendant failed to comply with the requirements of the TCPA, including but not limited to 47 U.S.C. § 227(c), and 47 C.F.R. § 64.1200(c), as to the Class members with respect to the above-alleged transactions. 35. The TCPA regulations, specifically 47 C.F.R. § 64.1200(c)(2), provide that: [n]o person or entity shall initiate any telephone solicitation to…[a] residential telephone subscriber who has registered his or her telephone number on the national do-not-call registry of persons who do not wish to receive telephone solicitations that is maintained by the Federal Government. 36. In multiple instances, Defendant placed solicitation telephone calls to the Class members after the members had registered their telephone numbers with the federal government’s Do-Not-Call Registry, and without the prior express invitation or permission of, or without a prior established business relationship with, the recipients, in violation of the TCPA, 47 U.S.C. § 227, et seq. and 47 C.F.R. 64.1200. 37. The size and definition of the Class can be identified through Defendant’s records and/or Defendant’s agents’ records. COUNT I NEGLIGENT VIOLATION OF THE TELEPHONE CONSUMER PROTECTION ACT 38. Plaintiff incorporates all of the allegations and statements made in paragraphs 1 through 37 above as if reiterated herein. 39. The foregoing acts and omissions of Defendant constitutes numerous and multiple negligent violations of the TCPA, including, but not limited to, each and every one of the above cited provisions of 47 U.S.C. § 227, et seq., including the implementing regulations of 47 C.F.R. 64.1200(c). 40. As a result of Defendant’s negligent violations of 47 U.S.C. § 227, et seq., Plaintiff is entitled to an award of $500.00 in statutory damages for each and every such violation of the TCPA, pursuant to 47 U.S.C. § 227(c)(5). 41. Plaintiff is also entitled to and seek injunctive relief prohibiting such conduct in the COUNT II KNOWING AND/OR WILLFUL VIOLATION OF THE TELEPHONE CONSUMER PROTECTION ACT 42. Plaintiff incorporates all of the allegations and statements made in paragraphs 1 through 37 above as if reiterated herein. 43. The foregoing acts and omissions of Defendant constitutes numerous and multiple knowing and/or willful violations of the TCPA, including, but not limited to, each and every one of the above-cited provisions of 47 U.S.C. § 227, et seq., including the implementing regulations of 47 C.F.R. 64.1200(c). 44. As a result of Defendant’s knowing and/or willful violations of 47 U.S.C. § 227, et seq., Plaintiff is entitled to an award of up to $1,500.00 in statutory damages for each and every such violation of the TCPA, pursuant to 47 U.S.C. § 227(c)(5). 45. Plaintiff is also entitled to and seek injunctive relief prohibiting such conduct in the PRAYER FOR RELIEF WHEREFORE, Plaintiff prays for a judgment against Defendant as follows: a. An order certifying the Class and appointing Plaintiff as Representative of the Class; b. An order certifying the undersigned counsel as Counsel for the Class; c. An order requiring Defendant, at its own cost, to notify all Class members of the unlawful conduct herein; d. Judgment against Defendant in the amount of $500.00 in statutory damages for each and every negligent violation of the TCPA by Defendant; e. Judgment against Defendant in an amount of up to $1,500.00 in statutory damages for each and every knowing and/or willful violation of the TCPA by Defendant; f. An order for injunctive relief prohibiting such conduct by Defendant in the future; g. Judgment against Defendant for Plaintiff’s court costs, witness fees, and other litigation costs; and h. Any other relief deemed just and proper by this Court. JURY DEMAND Plaintiff demands a trial by jury on all issues in this action which are so triable. RESPECTFULLY SUBMITTED, SHAYNE EMERY   By: /s/ David B. Levin Attorney for Plaintiff Illinois Attorney No. 6212141 Law Offices of Todd M. Friedman, P.C. 111 W. Jackson Blvd., Suite 103 Chicago, IL 60604 Phone: (224) 218-0882 Fax: (866) 633-0228 dlevin@toddflaw.com

privacy

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UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF OHIO EASTERN DIVISION NATALIE KELLY 5556 Carol Jean Blvd. Garfield Heights, Ohio 44125 On behalf of herself and all others similarly situated, Plaintiff, v. CASE NO. JUDGE PLAINTIFF’S CLASS AND COLLECTIVE ACTION COMPLAINT (Jury Demand Endorse Herein) JOHNNY’S TAVERN AND RESTAURANT, INC. c/o Statutory Agent Joseph Santosuosso 3164 Fulton Ave. Cleveland, Ohio 44109 and JOHNNY’S BURGESS GRAND CORPORATION, INC. c/o Statutory Agent 800 Leader Service Corp. 600 Superior Avenue East, Suite 1400 Cleveland, Ohio 44114 and JOSEPH SANTOSUOSSO 3164 Fulton Ave. Cleveland, Ohio 44109 Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Plaintiff Natalie Kelly, by and through counsel, respectfully files this Class and Collective Action Complaint against Defendant Johnny’s Tavern and Restaurant, Inc., Defendant Johnny’s Burgess Grand Corporation, Inc., and Defendant Joseph Santosuosso, and states and alleges the following: INTRODUCTION 1. Plaintiff brings this case to challenge policies and practices of Johnny’s Tavern and Restaurant, Inc., Johnny’s Burgess Grand Corporation, Inc., and Joseph Santosuosso (hereinafter also collectively referred to as “Defendants”) that violated the minimum wage provisions of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201-219, and Ohio wage law, Ohio Rev. Code Ann. § 4111.01 et seq., Art. II, Sec. 34a of the Ohio Constitution. Plaintiff brings this case as an FLSA “collective action” pursuant to 29 U.S.C. § 216(b), which provides that “[a]n action to recover the liability” prescribed by the FLSA “may be maintained against any employer … by any one or more employees for and in behalf of [herself] or themselves and other employees similarly situated” (the “FLSA Collective”). Plaintiff also brings this case as a class action under Fed. R. Civ. P. 23 on behalf of herself and other members of a class of persons who assert factually-related claims under Art. II, Sec. 34a of the Ohio Constitution (the “Ohio Class”). JURISDICTION AND VENUE 2. This Court has jurisdiction over Plaintiff’s FLSA claims pursuant to 28 U.S.C. § 1331 and 29 U.S.C. § 216(b). 3. This Court has supplemental jurisdiction over Plaintiff’s claims under the statutes and Constitution of the State of Ohio because those claims are so related to the FLSA claims as to form part of the same case or controversy. 2 4. Venue is proper in this judicial district and division pursuant to 28 U.S.C. § 1391(b) because one or more Defendant resides in this judicial district and division and all or a substantial part of the events or omissions giving rise to Plaintiff’s claims occurred here. PARTIES 5. At all times relevant, Plaintiff Natalie Kelly was a citizen of the United States and a resident of Cuyahoga County, Ohio. 6. Defendant Johnny’s Tavern and Restaurant, Inc. is an Ohio for-profit corporation1 with its principal place of business in Cuyahoga County, Ohio. Defendant Johnny’s Tavern and Restaurant, Inc. does business as “Johnny’s Bar.”2 According to records maintained by the Ohio Secretary of State, Defendant Johnny’s Tavern and Restaurant, Inc.’s (hereinafter “Defendant Johnny’s Bar”) statutory agent for service of process is Joseph Santosuosso, 3164 Fulton Ave., Cleveland, Ohio 44109. 3 7. Defendant Johnny’s Burgess Grand Corporation, Inc. is an Ohio for-profit corporation4 with its principal place of business in Cuyahoga County, Ohio. Defendant Johnny’s Burgess Grand Corporation, Inc. does business as “Johnny’s Downtown.” 5 6 According to records maintained by the Ohio Secretary of State, Defendant Johnny’s Burgess Grand Corporation, Inc.’s (hereinafter “Defendant Johnny’s Downtown”) statutory agent for service of 1 https://businesssearch.ohiosos.gov?=businessDetails/715699 (last accessed June 4, 2021). 2 http://www.johnnysonfulton.com/ (last accessed June 4, 2021). 3 https://businesssearch.ohiosos.gov?=businessDetails/715699 (last accessed June 4, 2021). 4 https://businesssearch.ohiosos.gov?=businessDetails/842531 (last accessed June 4, 2021). 5 https://www.dnb.com/business-directory/company- profiles.johnnys_burgess_grand_corporation_inc.2a6f1c0d29d5a13d9e350e1b82c41ae0.html (last accessed June 4, 2021). 6 https://www.johnnyscleveland.com/ (last accessed June 4, 2021). 3 process is 800 Leader Service Corp., 600 Superior Avenue East, Suite 1400, Cleveland, Ohio 44114.7 8. Defendant Joseph Santosuosso is an owner of Defendants Johnny’s Bar and Johnny’s Downtown.8 9 Upon information and belief, Defendant Joseph Santosuosso exercised daily operational control over Defendant Johnny’s Bar and Johnny’s Downtown business operations, including decisions over the hiring and firing of employees, scheduling employees for work, establishing payroll policies and procedures, establishing tip deduction policies and practices, establishing rates of pay for employees, and issuing payroll to employees. FACTUAL ALLEGATIONS Defendants’ Business 9. Defendants own and operate Johnny’s Bar and Johnny’s Downtown located at 3164 Fulton Rd, Cleveland, OH 44109, and 1406 W. 6th St, Cleveland, OH 44113, respectively, as well as Johnny’s Little Bar as 614 Frankfort Ave, Cleveland, OH 44113.10 11 Plaintiff’s, the FLSA Collective’s and the Ohio Class’s Employments with Defendants 10. Defendants have employed full and part-time hourly tipped wait staff during the relevant period, including servers and bartenders (“tipped employees”). 11. Plaintiff Natalie Kelly has been employed by Defendants from about December 2019 to the present as a tipped employee. 7 https://businesssearch.ohiosos.gov?=businessDetails/842531 (last accessed June 4, 2021). 8 https://www.prweb.com/releases/2017/11/prweb14864168.htm (last accessed June 4, 2021). 9 https://www.clevescene.com/scene-and-heard/archives/2013/03/21/for-killer-burgers-with- zero-cheese-hit-johnnys-little-bar (last accessed June 4, 2021). 10 Id. 11 https://www.facebook.com/pages/category/Bar/Johnnys-Little-Bar-271928709508691/ 4 12. At all times relevant, Plaintiff and other members of the FLSA Collective and the Ohio Class were employees within the meaning of 29 U.S.C. § 203(e), O.R.C. §§ 4111.01, et seq. and Art. II, Sec. 34a of the Ohio Constitution. 13. Plaintiff and other members of the FLSA Collective and the Ohio Class were classified by Defendants as non-exempt employees and paid on an hourly basis. 14. Part of Plaintiff’s, the FLSA Collective’s and the Ohio Class’s job duties included regularly processing credit card transactions involving out-of-state banks and financial institutions for Defendants’ customers, and regularly handling multiple goods and products that have been produced or moved in interstate commerce. 15. At all times relevant, Plaintiff and other members of the FLSA Collective and Ohio Class were employees engaged in commerce or in the production of goods for commerce within the meaning of 29 U.S.C. §§ 206-207. Defendants’ Statuses as Employers 16. At all times relevant, Defendants were employers within the meaning of the FLSA, 29 U.S.C. § 203(d), Ohio Const. Article II, Section 34a and O.R.C. §§ 4111.01, et seq., and employed hourly tipped employees, including Plaintiff and other members of the FLSA Collective and Ohio Class. 17. At all times relevant, Defendants were an enterprise engaged in commerce or in the production of goods for commerce within the meaning of 29 U.S.C. § 203(s)(1). 18. Defendants operate and control an enterprise engaged in commerce, with annual gross volume of business exceeding $500,000.00. 19. Defendant Joseph Santosuosso is an employer pursuant to 29 U.S.C. § 203(d) in that he is a “person [who] act[ed] directly or indirectly in the interest of an employer,” 5 Defendants Johnny’s Bar and Johnny’s Downtown, “in relation to employees,” including Plaintiffs and other members of the FLSA Collective and the Ohio Class. Defendant Joseph Santosuosso is also an employer pursuant to O.R.C. Chapter 4111 and Ohio Const. Article II, Section 34a, and had operational control over significant aspects of Johnny’s Bar’s and Johnny’s Downtown’s day-to-day functions, including compensation of employees. 20. Defendants were each employers of Plaintiff and other members of the FLSA Collective and Ohio Class as each Defendant exercised the power to hire or fire tipped employees; supervised and controlled tipped employees’ work schedules or conditions of employment; determined tipped employees’ rates and methods of payment; and maintained or were required to maintain records, including employment records. Defendants’ Statuses as a “Single Employer” and “Single Enterprise” 21. At all times relevant, Defendants were an enterprise within the meaning of 29 U.S.C. § 203(r). At all times relevant, Defendants have operated as a single enterprise within the meaning of Section 203(r)(1) of the FLSA. 29 U.S.C. § 203(r)(1). That is, Defendants perform related activities through unified operation and common control for a common business purpose; namely, the operation of “Johnny’s” restaurants in Northeast Ohio. 22. Defendants own and operate multiple Johnny’s restaurants in Northeast Ohio – Johnny’s Bar, Johnny’s Downtown and Johnny’s Little Bar. 23. Defendants are engaged in related activities, i.e. all activities which are necessary to the operation and maintenance of Defendants’ Johnny’s restaurants. 24. Defendants share employees between restaurant locations. 25. Defendants share common management between Johnny’s restaurant locations. 6 26. Defendants share common human resources, accounting and payroll services between Johnny’s restaurant locations. 27. Defendants provide similar products and services to customers at the Johnny’s restaurant locations. 28. Defendants represent themselves to the general public as a single entity – Johnny’s – operating at multiple locations. Defendants use the trade name “Johnny’s” at all of their restaurant locations. Defendants represent themselves, to the media, and are known regionally as sister restaurants. 12 13 29. Defendants constitute a unified operation because they have organized the performance of their related activities so that they are an organized business system which is an economic unit directed to the accomplishment of a common business purpose. 30. Defendants’ Johnny’s restaurants provide services and products to customers by using a set formula when conducting business. Part of that set formula is the deprivation of minimum wage and tips to their tipped employees as outlined in this Complaint. The FLSA and Ohio Law’s Tip Requirements 31. The FLSA incorporates state minimum wage laws when they include a higher minimum wage than the FLSA. 29 U.S.C. § 206. Ohio law provides the following requirements for Ohio’s minimum wage tip credit: “[a]n employer may pay an employee less than, but not less than half, the minimum wage rate required by this section if the employer is able to demonstrate that the employee receives tips that combined with the wages paid by the employer are equal to 12 https://www.onlyinyourstate.com/ohio/cleveland/general-store-restaurant-cle/ (last accessed June 4, 2021). 13 https://www.cleveland.com/dining/2013/06/johnnys_downtown_marks_20th_an.html (last accessed June 4, 2021). 7 or greater than the minimum wage rate for all hours worked.” Ohio Const. Article II, Section 32. Ohio’s minimum wage is adjusted annually as specified by Ohio Const. Article II, Section 34a, and for tipped employees was $4.15 per hour plus tips totaling at least $8.30 per hour in 2018; and was $4.30 plus tips totaling at least $8.55 per hour in 2019; and was $4.35 per hour plus tips totaling at least $8.70 per hour in 2020; and is $4.40 per hour plus tips totaling at least $8.80 per hour in 2021. 33. The tip-credit provisions of the FLSA and Ohio law allow employers to pay tipped employees less than the statutory minimum wage provided that the employer complies with the requirements of the tip-credit provisions of 29 U.S.C. § 203(m), Ohio Const. Article II, Section 34a. Defendants’ Impermissible Tip Credit Policies and Practices 34. Defendants compensated Plaintiff and other members of the FLSA Collective and Ohio Class as tipped employees during Plaintiff’s, the FLSA Collective’s and the Ohio Class’s employments; Defendants paid Plaintiff and other members of the FLSA Collective and Ohio Class less than the statutory minimum hourly wage, a sub-minimum wage, and took a “tip credit” against their minimum wage obligations. 35. Though Defendants paid Plaintiff and other members of the FLSA Collective and the Ohio Class a sub-minimum wage as tipped employees, Defendants did not comply with 29 U.S.C. § 203(m)’s and Ohio law’s tip credit requirements and were thus disqualified from taking a tip credit against Plaintiff’s, the FLSA Collective’s and the Ohio Class’s minimum wages. 36. Plaintiff and other members of the FLSA Collective and the Ohio Class routinely had their earned tips unlawfully withheld by Defendants. 8 37. Plaintiff and other members of the FLSA Collective and the Ohio Class were subject to unlawful deductions from their tips. Defendants unlawfully withheld approximately 4% of Plaintiff’s and other members of the FLSA Collective’s and the Ohio Class’s tips each pay period for “breakage.” Defendants withheld these amounts of tips earned without any agreement that complies with the FLSA and Ohio law, and without considering whether any breakage actually occurred. 38. A U.S. Department of Labor, Wage and Hour Division “Fact Sheet” on Tipped Employees expressly states as follows: When an employer claims an FLSA 3(m) tip credit, the tipped employee is considered to have been paid only the minimum wage for all non-overtime hours worked in a tipped occupation and the employer may not take deductions for walkouts, cash register shortages, breakage, cost of uniforms, etc., because any such deduction would reduce the tipped employee’s wages below the minimum wage. 680 Fact Sheet #15: Tipped Employees Under the FLSA, at page 3.14 (Emphasis in original). 39. Defendants were expressly prohibited from taking a tip credit when they withheld portions of tipped employees’ tips, including but not limited to for the purposes of for “breakage.” 40. Retaining or withholding tips for breakage does not constitute a valid tip sharing and/or pooling practice under the Department of Labor’s regulations and federal and state law. As a result of Defendants’ unlawful tip deduction and withholding practices, Defendants were disqualified from taking a tip credit. 41. As a result of the impermissible tip deduction and withholding policies or practices, Plaintiff and other members of the FLSA Collective and the Ohio Class were regularly 14 https://www.dol.gov/sites/dolgov/files/WHD/legacy/files/whdfs15.pdf (last accessed June 4, 2021). 9 paid less than the Ohio and federal minimum wage. As a result of Defendants’ unlawful tip deduction and withholding policies or practices, Plaintiff and other members of the FLSA Collective and the Ohio Class are entitled to receive the full non-tipped employee minimum wage plus tips for every hour of work that they performed for Defendants. Defendants’ Unlawful Taking of Tips 42. The FLSA further provides that “an employer may not keep tips received by its employees for any purposes, including allowing managers or supervisors to keep any portion of employees’ tips, regardless of whether or not the employer takes a tip credit.” 29 U.S.C. § 203(m). 43. By unlawfully deducting and withholding tips for breakage at Johnny’s Bar and Johnny’s Downtown/Johnny’s Little Bar, Defendants’ ownership, including Defendant Joseph Santosuosso, unlawfully received a portion of tips received by its employees in violation of 29 U.S.C. § 203(m). 44. Defendants violated 29 U.S.C. § 203(m) regardless of whether or not Defendants took a tip credit, and Plaintiff and other members of the FLSA Collective and the Ohio Class are entitled to the full amount of the tips unlawfully withheld, in addition to liquidated damages. Defendants’ Failure to Provide Tip-Credit Notice 45. The FLSA required Defendants to inform their tipped employees of the provisions of the tip-credit subsections of the FLSA and Ohio law. 29 U.S.C. § 203(m)(2), 29 C.F.R. § 531.59, O.R.C. § 4111.14(B) (incorporating FLSA standards). 46. Defendants were prohibited from taking a tip credit when they failed to inform their tipped employees of the provisions of the tip-credit subsections of the FLSA and Defendants’ compliant tip credit practices and policies. 29 U.S.C. § 203(m). 10 47. 29 C.F.R. § 531.59, for example, required Defendants to inform their tipped employees in advance of the Defendants’ use of the tip credit, including but not limited to: the amount of the cash wage that is to be paid to the tipped employees by the Defendants; that all tips received by the tipped employee must be retained by the employee except for a tip pooling arrangement limited to employees who customarily and regularly receive tips; and that the tip credit shall not apply to any employee who has not been informed of the tip credit requirements of the FLSA. 48. Defendants violated the FLSA by paying their employees subminimum wages without informing them of the tip-credit provisions of the FLSA. 49. Even if Defendants provided notice that they intended deduct and withhold tips for the purposes of “breakage,” Defendants’ tip notice would have nevertheless been invalid and not compliant with 29 U.S.C. § 203(m)(2) and 29 C.F.R. § 531.59. This is because the purpose of the deductions and withholdings would have nevertheless been unlawful as the tip deductions and withholdings were not limited to a valid tip pooling arrangement between employees who customarily and regularly receive tips. 50. As a result of Defendants’ failure to provide the required tip-credit notice, Defendants were disqualified from taking a tip credit, and Plaintiff and other members of the FLSA Collective and the Ohio Class are entitled to receive the non-tipped employees minimum wage plus tips for every hour of work that they performed for Defendants. The Willfulness of Defendants’ Violations 51. Defendants knew that Plaintiff and other members of the FLSA Collective and Ohio Class were entitled to tips and minimum wage under federal and state law or acted in reckless disregard for whether they were so entitled. 11 52. Plaintiff Natalie Kelly, for example, complained about and discussed Defendants’ unlawful tip deduction and withholding practices for “breakage” with Defendants’ company accountant, who told Plaintiff Kelly that the tip deduction practices and policies at the core of this litigation have been the standard practice at Johnny’s for years. 53. Notwithstanding Plaintiff Natalie Kelly’s discussion with Defendants’ company accountant about the tip deduction and withholding practices for “breakage,” Defendants have continued to unlawfully deduct from employee tips. 54. Defendants intentionally and willfully circumvented the requirements of the FLSA and Ohio law. 55. The above payroll practices and policies resulted in knowing and willful minimum wage and tip violations of the FLSA, 29 U.S.C. §§ 201-219; O.R.C. Chapter 4111, et seq.; and Ohio Const. Art. II, § 34a. COLLECTIVE ACTION ALLEGATIONS 56. Plaintiff incorporates by reference the foregoing allegations as if fully rewritten herein. 57. Plaintiff brings this case as an FLSA “collective action” pursuant to 29 U.S.C. § 216(b), which provides that “[a]n action to recover the liability” prescribed by the FLSA “may be maintained against any employer … by any one or more employees for and in behalf of [herself] or themselves and other employees similarly situated.” 58. The FLSA Collective consists of: All present and former hourly tipped employees and other employees with similar job titles and/or positions of Defendants during the period of three years preceding the commencement of this action to the present. 12 59. Such persons are “similarly situated” with respect to Defendants’ FLSA violations in that all were non-exempt tipped employees of Defendants, all were subjected to and injured by Defendants’ unlawful practice of failing to pay minimum wage for all hours worked, failing to properly pay tips, and all have the same claims against Defendants for unpaid tips and minimum wage as well as for liquidated damages, attorneys’ fees, and costs. 60. Conditional certification of this case as a collective action pursuant to 29 U.S.C. § 216(b) is proper and necessary so that such persons may be sent a Court-authorized notice informing them of the pendency of this action and giving them the opportunity to “opt in.” 61. Plaintiff cannot yet state the exact number of similarly-situated persons but avers, upon information and belief, that they consist of over 50 persons. Such persons are readily identifiable through the payroll records Defendants have maintained, and were required to maintain, pursuant to the FLSA and Ohio law. CLASS ACTION ALLEGATIONS 62. Plaintiff incorporates by reference the foregoing allegations as if fully rewritten 63. Plaintiff also brings this case as a class action pursuant to Fed. R. Civ. P. 23 on behalf of herself and other members of a class of persons who assert claims under the laws of the State of Ohio (the “Ohio Class”), defined as: All present and former hourly tipped employees and other employees with similar job titles and/or positions of Defendants during the period of two years preceding the commencement of this action to the present. 64. The Ohio Class is so numerous that joinder of all class members is impracticable. Plaintiff cannot yet state the exact number of class members but avers, upon information and belief, that they consist of over 50 persons. The number of class members, as well as their 13 identities, are ascertainable from the payroll records Defendants have maintained, and were required to maintain, pursuant to the FLSA and Ohio law. 29 U.S.C. § 211(c); 29 C.F.R. § 516.2; Ohio Const. Art. II, § 34a. 65. There are questions of law or fact common to the Ohio Class, including but not limited to: Whether Defendants’ conduct as described above violates Ohio law governing payment of minimum wage; Whether Defendants denied hourly tipped employees minimum wages where, among other things, tips of hourly tipped employees were withheld for the purposes of “breakage;” Whether Defendants denied hourly tipped employees minimum wages where, among other things, tips of hourly tipped employees were withheld and/or were ultimately retained by management and/or ownership; Whether Defendants denied hourly tipped employees minimum wage by, among other things, taking a tip credit when Defendants were not permitted to do so; Whether Defendants’ conduct violates the Ohio Minimum Fair Wage Standards Act; and Whether Defendants’ conduct violates Ohio Const. Art. II, § 34a. 66. Plaintiff’s claims are typical of the claims of other members of the Ohio Class. Plaintiff’s claims arise out of the same uniform course of conduct by Defendants, and are based on the same legal theories, as the claims of other class members. 67. Plaintiff will fairly and adequately protect the interests of the Ohio Class. Plaintiff’s interests are not antagonistic to, but rather are in unison with, the interests of other class members. Plaintiff’s counsel have broad experience in handling class action litigation, including wage-and-hour litigation, and are fully qualified to prosecute the claims of the Ohio Class in this case. 14 68. The questions of law or fact that are common to the Ohio Class predominate over any questions affecting only individual members. The primary questions that will determine Defendants’ liability to the class, listed above, are common to the class as a whole, and predominate over any questions affecting only individual class members. 69. A class action is superior to other available methods for the fair and efficient adjudication of this controversy. Requiring class members to pursue their claims individually would entail a host of separate suits, with concomitant duplication of costs, attorneys’ fees, and demands on court resources. Many class members’ claims are sufficiently small that they would be reluctant to incur the substantial cost, expense, and risk of pursuing their claims individually. Certification of this case as a class action pursuant to Fed. R. Civ. P. 23 will enable the issues to be adjudicated for all class members with the efficiencies of class litigation. COUNT ONE (FLSA Minimum Wage Violations) 70. Plaintiff incorporates by reference the foregoing allegations as if fully rewritten 71. The FLSA requires that “non-exempt” employees receive a minimum hourly wage for all work their employers suffer, permit or require them to perform. See 29 U.S.C. § 72. Defendants failed to comply with the requirements of 29 U.S.C. § 206 by paying employees less than the applicable Ohio minimum wage. Defendants have engaged in a series of unlawful acts, practices, policies, and procedures in violation of the FLSA, including refusing and/or failing to calculate and pay Plaintiff’s and other members of the FLSA Collective’s minimum wages as required by federal law. 29 U.S.C. § 206. 15 73. Defendants’ unlawful conduct directly and proximately caused Plaintiff and other members of the FLSA Collective to suffer damages for which they are entitled to judgment. 74. Defendants’ violations have been willful and/or in reckless disregard of Plaintiff’s and other members of the FLSA Collective’s rights, and entitle Plaintiff and other members of the FLSA Collective to liquidated damages. 29 U.S.C. § 216(b) further provides that “[t]he court … shall, in addition to any judgment awarded to the plaintiff or plaintiffs, allow a reasonable attorney’s fee to be paid by the defendant, and costs of the action.” COUNT TWO (Ohio Minimum Wage Violations) 75. Plaintiff incorporates by reference the foregoing allegations as if fully rewritten 76. Plaintiff brings this claim for violation of Ohio’s minimum wage provisions contained within Art. II, Sec. 34a of the Ohio Constitution on behalf of herself and other members of the FLSA Collective and Ohio Class. 77. Ohio law requires that employees receive a minimum hourly wage for all work their employers suffer, permit or require them to perform. Art. II, Sec. 34a of the Ohio Constitution. 78. Based on the improper practices and policies described herein, Defendants failed to comply with the requirements of Ohio law by paying employees less than the applicable minimum wage rate. 79. Defendants have engaged in a series of unlawful acts, practices, policies, and procedures in violation of Art. II, Sec. 34a of the Ohio Constitution, including by refusing and/or failing to calculate and pay Plaintiff’s and other members of the FLSA Collective’s and Ohio Class’s minimum wages as required by Ohio law. 16 80. Defendants’ unlawful conduct directly and proximately caused Plaintiff and other members of the FLSA Collective and the Ohio Class to suffer damages for which they are entitled to judgment. 81. Plaintiff and other members of the FLSA Collective and Ohio Class are entitled to “equitable and monetary relief” including “two times the amount of the back wages”, or triple damages, for Defendants’ minimum wage violations pursuant to Ohio Const. Art. II, Sec. 34a. COUNT THREE (FLSA Tip Violations) 82. Plaintiff incorporates by reference the foregoing allegations as if fully rewritten herein. 83. Plaintiff brings this claim for violation of the FLSA’s employer tip keeping prohibitions. 84. As a result of the impermissible keeping of tips received by Plaintiff and the FLSA Collective for any purpose, Defendants violated 29 U.S.C. § 203(m) and the regulations thereunder that have the force of law. 85. Defendants have engaged in a series of unlawful acts, practices, policies, and procedures in violation of the FLSA, including by keeping the tips of their tipped employees “for any purposes” not expressly permitted. 29 U.S.C. § 203(m). 86. Defendants’ unlawful conduct directly and proximately caused Plaintiff and the FLSA Collective to suffer damages for which they are entitled to judgment. 87. Defendants’ violations have been willful and/or in reckless disregard of Plaintiff’s and the FLSA Collective’s rights, and entitle Plaintiff and the FLSA Collective to the sum of any tip credit taken by Defendants, all tips unlawfully kept by Defendants, and liquidated damages. 17 PRAYER FOR RELIEF WHEREFORE, Plaintiff prays that this Honorable Court: A. Conditionally certify this case as an FLSA “collective action” pursuant to 29 U.S.C. § 216(b) and direct that Court-approved notice be issued to similarly- situated persons informing them of this action and enabling them to opt in; B. Certify this case as a class action pursuant to Fed. R. Civ. P. 23 on behalf of Plaintiff and other members of the Ohio Class; C. Enter judgment against Defendants and in favor of Plaintiff and the Opt-Ins who join this case pursuant to 29 U.S.C. § 216(b), and the members of the Ohio Class; D. Award compensatory damages to Plaintiff, the Opt-Ins who join this case pursuant to 29 U.S.C. § 216(b), and the members of the Ohio Class in the amount of their unpaid minimum wages, as well as statutory damages in an amount equal to twice the unpaid minimum wages under Ohio Law; E. Award compensatory damages to Plaintiff, the Opt-Ins who join this case pursuant to 29 U.S.C. § 216(b) and the members of the Ohio Class in the amount of the sum of any tip credit taken by Defendants and all tips unlawfully kept by Defendants; and F. Award Plaintiff her costs and attorneys’ fees incurred in prosecuting this action and such further relief as the Court deems equitable and just. 18 Respectfully submitted, s/ Ryan A. Winters Joseph F. Scott (0029780) Ryan A. Winters (0086917) Kevin M. McDermott II (0090455) SCOTT & WINTERS LAW FIRM, LLC The Caxton Building 812 Huron Rd. E., Suite 490 Cleveland, OH 44115 P: (216) 912-2221 | F: (216) 350-6313 jscott@ohiowagelawyers.com rwinters@ohiowagelawyers.com kmcdermott@ohiowagelawyers.com 19 JURY DEMAND Plaintiff hereby demands a trial by jury on all issues so triable. s/ Ryan A. Winters Ryan A. Winters (0086917) 20

employment & labor

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UNITED SATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF OHIO ) LAWRENCE R.GLAZER, ) individually and on behalf of all ) similarly situated individuals ) ) JUDGE BOYKO PLAINTIFF ) ) MAG. WHITE VS. ) ) CHASE HOME FINANCE LLC, ) A Delaware Limited Liability Company; ) COMPLAINT FOR DAMAGES CINDY A. SMITH, in her capacity as ) and Employee of CHASE HOME FINANCE ) DEMAND FOR JURY TRIAL LLC; REIMER, ARNOVITZ, CHERNEK ) & JEFFREY Co., an Ohio Legal ) Professional Association; ) RONALD CHERNEK Esq.; ) DARRYL GORMLEY Esq.; ) SAFEGUARD PROPERTIES Inc, ) an Ohio Corporation; and DOES 1-5 ) ) DEFENDANTS ) ) Plaintiff, on behalf of himself and one or more subclasses of those similarly situated, alleges and states as follows: 1. This is an action for damages, declaratory relief, and other equitable relief arising from Defendants' unfair and/or deceptive acts and practices in violation of the Fair Debt Collection Practices Act (hereinafter "FDCPA"), 15 U.S.C. §1692 et seq., as amended, the Ohio Fair Debt Collection Practices Act, ORC $1319.12 et seq., and other state statutes. JURISDICTION AND VENUE This Court has original subject matter jurisdiction over Plaintiff's FDCPA claims 3. This Court has supplemental jurisdiction over the remaining claims stated in this complaint pursuant to 28 U.S.C. 1367(a) because these claims form part of the same case or controversy under Article III of the United States Constitution. 4. Declaratory relief is available pursuant to 28 USC §§ 2201 and 2202. 5. Venue is proper in the United States District Court for the Northern District of Ohio pursuant to 28 U.S.C. $1391(b) and (c) because all defendants are either residents and/or conduct business within this district and many of the representations giving rise to Plaintiff's FDCPA claims were made within this district. PARTIES 6. Plaintiff, Lawrence R. Glazer is and at all times relevant to this complaint was an individual residing in La Quinta, California. Plaintiff is a "consumer" as defined in 16 U.S.C. 1692(a)(3). 7. Defendant Chase Home Finance LLC [hereinafter "Chase"] is a Delaware limited liability company and successor by merger to Chase Manhattan Mortgage Corporation, with its principal place of business in Iselin, New Jersey. Chase transacts business in this district. 8. Defendant Cindy A. Smith, a resident of Ohio, was at all times herein mentioned employed by Chase. 9. Defendant Reimer, Arnovitz, Chernek & Jeffrey Co, LPA [hereinafter 'RACJ'] is a law firm located in Twinsburg, Ohio. The principal purpose of the firm's legal practice Defendant Ronald Chernek Esq., a resident of Ohio, is a lawyer licensed to Defendant Darryl Gormley Esq., a resident of Ohio, is a lawyer licensed to Safeguard Properties Inc. is an Ohio corporation with its principal place of The true names or capacities, whether individual, corporate, associate or 14. At all times herein mentioned Defendants were "debt collectors" as defined in 15 15. Defendant Chase directs, controls, formulates, or participates in the acts and/or 16. At all times each Defendant, for their own individual and/or financial advantage, DEFENDANTS' BUSINESS PRACTICES 17. Defendant Chase plays a prominent role in the secondary market for residential mortgage loans by acquiring and servicing a large volume of such loans. 18. Chase is an approved seller and servicer for Fannie Mae and Freddie Mac. 19. During the explosive growth of the mortgage industry Chase acquired for implement sound internal policies and practices in order to maintain and safeguard the integrity of the process of handling, managing, and modifying consumer loans. As a direct result Chase failed to obtain timely and accurate information on the loans it serviced; neglected to update and/or correct its loan data in timely fashion; made inaccurate claims to consumers; and engaged in a pattern and practice of unlawful, deliberately deceptive collection and servicing practices. 20. During the recent residential mortgage crisis many of the loans serviced by Chase went into default because borrowers were unable to keep up with their payments; other loans were declared and treated as "accounts in default" solely due to wrongful acts and omissions of Chase employees. 21. In its capacity as a debt collector for "defaulted" loans owned by others and for loans acquired after having been declared in default, Chase routinely makes representations to consumers about their loans, including but not limited to the name of the creditor, the unpaid principal balance, the due date, the interest rate, the monthly payment amount, the delinquency status, fees, and assessed corporate advances. Chase routinely makes these representations in collection calls and notices, monthly statements, payoff statements, reinstatement quotes, foreclosure filings, and bankruptcy filings without obtaining hard copies of the documents relating to the alleged debts and the complete loan information from the actual creditor, prior servicer, and/or seller. Chase, RACJ, and their employees routinely make these representations to borrowers and thecourts without having conducted quality control and other data integrity checks to ensure the factual accuracy of their representations relating to consumer debts as defined in section 803(5) of the FDCPA, 15 USC § $1692a(5). 22. Defendants routinely lack a reasonable basis for their representations to borrowers, and their representations to the courts, because they fail to obtain accurate and complete information about consumers' loan accounts and alleged debts. Despite indications that loan data obtained from prior loan servicers and loaded onto Chase's servicing system was often inaccurate or unverified, Defendants have nonetheless used that data to make representations to borrowers and the courts about loans and alleged debts. As a result Defendants have made inaccurate claims to consumers and engaged in unlawful and deceptive collection practices. 23. In connection with debts owed another and loans that were in default when obtained by Chase, Defendants have failed to disclose in initial communications with consumers that Chase, in its capacity as debt collector, was attempting to collect a debt and that any information obtained would be used for that purpose. In addition, Defendants have failed to send consumers a written notice, or have sent untimely and/or defective notices, containing the amount of the debt, the creditor's name, and the consumer's right to dispute and obtain verification of the debt. 24. In connection with debts owed another and loans that were in default when obtained, Chase imposes capricious and unlawful restrictions on the manner, place, and form in which delinquent payments must be paid. Chase routinely and wrongfully rejects payments made by borrowers without sufficient legal or contractual basis. In connection with foreclosure filings, Defendants routinely rush to file As a debt collector Chase "advances" money to borrowers to pay for items such When borrowers request the amount of money required to reinstate or pay off SCHEME TO RUSH TO COURT AND MAKE EXTRA MONEY FROM THE CONSUMER IN THE PROCESS OF COLLECTING DEBTS 28. Commencing on an unknown date but not later than December 2007, and schemes and artifices designed to defraud borrowers of consumer loans through false, fraudulent, and deceptive pretenses, representations, and practices. 29. As part of this scheme, Defendants and others whose identities are not known to Plaintiff but are known to Defendants, agreed to and did knowingly and willfully target borrowers in default who had equity in properties secured by mortgages. 30. In furtherance of this scheme, Chase, in concert with the other Defendants, implemented internal systems, procedures, and policies designed to identify and refer to third party vendor accounts with arrears associated with properties that were not "up side down." The third party vendors would in turn refer the accounts to a regional law firm, such as Defendant RAJC, to initiate without delay a foreclosure lawsuit and bring the matter to a speedy decree of foreclosure. 31. In furtherance of their scheme Defendants agreed that, when a consumer loan was owned by a GSE (such as Fannie Mae) or an MBS trust, Defendants would conceal the identity of the actual owner of the loan and would falsely represent that Chase was the creditor on the loan and the owner and holder of the note.In furtherance of their scheme Defendants agreed that, in order to conceal the 33. In furtherance of their scheme and to deceive the consumer and the courts 34. Defendants further agreed that, in cases in which they did not have a copy of the promissory note, the foreclosure complaint would allege that the note had been lost or Cindy A. Smith, would execute a lost note affidavit alleging that Chase was the owner of the promissory note but that the note had been lost or destroyed, when in fact the note was held by a document custodian for the benefit of the actual creditor and owner. 35. In furtherance of their scheme, Defendants agreed with property management companies, including but not limited to Defendant Safeguard Properties Inc., to conduct unwarranted and unannounced home inspections, the true purpose of which was to collect the debt owed to the GSE. Defendants agreed that the "inspector" would seek to pressure In furtherance of their scheme, Defendants agreed to assess fees for inspections, Plaintiff believes and hereby alleges that Defendants' scheme capitalized on Plaintiff believes and hereby alleges that the scheme's purpose was to permit THE KLIE MATTER On or about 25 August 2003 Charles W. Klie purchased a residential property A dispute exists as to whether Ms. Deborah Klie, Mr. Klie's wife at the time, co-signed The assignment to Fannie Mae was never recorded. Coldwell Banker remained On no later than 19 October 2007 Coldwell Banker sold and/or transferred its Plaintiff believes and hereby alleges that no ownership rights with respect to the Pursuant to Fannie Mae's requirements, Coldwell Banker assigned its servicing 44. On 1 November 2007 Chase assumed the day to day servicing rights of the Klie loan on behalf of JP Morgan. Mr. Klie had no arrears with Coldwell Banker. Mr. Klie was credited with timely payments for the months of November and December 2007 and January 2008.45. Plaintiff believes and hereby alleges that Mr. Klie mailed his monthly payment in 46. Mr. Klie died suddenly on 31 January 2008. At the time of his death he had no arrears on his loan and was not in default. 47. On 11 February 2008 Ms. Susan Klie, Mr. Klie's sister, notified Chase of Mr. Klie's death. A Chase customer service representative advised Ms. Klie to fax the death certificate and proof of appointment of fiduciary to Chase's assumption department in order to facilitate the assumption of the loan by the fiduciary of Mr. Klie's estate. 48. On or about 24 April 2008 Chase received the requested death certificate and power of appointment of co-fiduciaries for Mr. Klie's estate. No assumption of loan/mortgage was ever processed. 49. On or about 24 April 2008 the fiduciaries for the estate advised Chase that all debts of Mr. Klie would be handled through the probate proceedings by the fiduciaries under the jurisdiction of the probate court in Franklin county. 50. No creditor claim relating to the Klie loan pursuant to ORC $2117.06 was ever filed with the probate court. No creditor claim relating to the Klie loan was ever made to the fiduciaries. On 31 July 2008 the time for making any such creditor claims lapsed. As of said date all unsecured debts not asserted by a creditor are barred and extinguished by operation of law. 51. On 16 May 2008 Chase, in its capacity as subservicer for JP Morgan, referred this matter to Defendant RACJ to initiate foreclosure proceedings. 52. On 2 June 2008 RACJ prepared an assignment of mortgage from JP Morgan purporting to sell, convey, and transfer all rights and interests in the Klie promissory note At the time the assignment form JP Morgan to Chase was executed and recorded Plaintiff believes and hereby alleges that on 2 June 2009 Chase acquired the status On 5 June 2008 Defendants filed a foreclosure action in Franklin County Court of 56. The complaint named Plaintiff Lawrence Glazer as a defendant in the foreclosure action. 57. On or about 13 June 2008 Chase returned three checks, totaling $3,143.45, that had been mailed by the fiduciary of Mr. Klie's estate to bring the account current. 58. Service of the complaint and its attachments was effected by delivery to Plaintiff on 17 June 2008. On 7 July 2008, within 30 days of receipt of the notice pursuant to section 809 of Defendants did not provide verification of the debt and did not provide the Plaintiff filed an answer to the complaint and asserted affirmative defenses. On 25 July 2008 the Probate Court approved the transfer of the 2498 Bristol Rd. On 26 August 2008 Defendants filed an amended complaint for foreclosure Plaintiff filed an answer to the amended complaint and asserted affirmative 65. On 26 November 2008 Defendants responded to discovery requests propounded by Plaintiff and included copies of the first three pages of a note allegedly signed by WITHOUT RECOURSE PAY TO THE ORDER OF Cendant Mortgage Corporation Michelle Krause, Vice PresidentIn the same discovery response Chase, RACJ, and Mr. Chernek represented that On 18 December 2008 Defendants filed a motion for summary judgment. Chase's officer and employee Beth Cottrell represented that the amount of the On 18 December 2008 Defendants filed a praecipe for an order of sale. On 22 December 2008 the court entered a decree of foreclosure in error. On 2 January 2009 Plaintiff, in response to a notice posted on the front door of the On 7 January 2009 the Honorable Judge David Fais vacated the decree of Defendants allowed Plaintiff to view the note on 20 March 2009. Upon viewing Defendants caused the Bristol property to be advertised and scheduled for a On 5 March 2009 the Court of Common Pleas ordered the withdrawal of the sale On 13 April 2009 Plaintiff, in response to a notice left on the front door of the 77. On 21 April 2009 Defendant Safeguard Properties, Inc. forcefully broke into the Bristol property through the side door and entered the premises without authorization. While on the premises Defendants and their employees, agents, and/or subcontractors "winterized" the bathroom, damaged the floor, damaged the furnace and other fixtures, sifted through and moved personal property belonging to Plaintiff and Mr. Klie's estate, changed the lock on the side door, placed a combination lock box on the door, and shut- off utilities. Defendants also pinned the following notice in the great room of the house: This sign in sheet is posted by Safeguard Properties, Inc. as a request of the mortgagee to track all persons entering the property. It is required that all persons entering this property provide an explanation of their visit and sign and date this form. 78. Since 5 June 2008 Defendants have made numerous visits to the Bristol property and have affixed to the front door assorted notices, including delinquent status notices, warning notices, and sheriff sale notices, fully aware that the borrower was deceased and The contested foreclosure matter is still pending. Plaintiff does not seek a review The debt Defendants seek to collect from Plaintiff arises out of a transaction that All debts Defendants seek to collect from one or more classes of individuals FIRST CAUSE OF ACTION VIOLATIONS OF THE FAIR DEBT COLLECTION PRACTICES ACT (Against all Defendants) Count I: Harassment or Abuse Plaintiff incorporates by reference all the foregoing paragraphs. 83. On numerous occasions in connection with the collection of debts owed another use force or other criminal means to harm the reputation and property of a person. 84. Specifically, on or about 21 April 2009, Defendants and their employees, subcontractors, and/or agents, intentionally and deliberately committed an unlawfulThe acts described in paragraph 84 were committed through the use of force, The acts described in paragraph 84 were done with malice and for the purpose of 87. The acts described in paragraph 84 resulted in harm to the reputation and property 88. Plaintiff believes and hereby alleges that the acts described above comprise a part individuals. Count II: False or Misleading Representations 89. Plaintiff incorporates by reference all the foregoing paragraphs. 90. On numerous occasions in connection with the collection of debts owed another and/or debts in default when obtained, Defendants have used false, deceptive, or misleading representations or means, in violation of Section 807 of the FDCPA, 15 U.S.C. § 1692e, including but not limited to the following: a. Falsely representing the character, amount, legal status and/or ownership of a debt, or any services rendered or compensation which may be lawfully received by a debt collector for collection of a debt, in violation of Sections 807(2)(A) and (B) of the FDCPA, 15 U.S.C. 1692e(2)(A) & (B). b. Using false representations or deceptive means to collect or attempt to collect a debt or to obtain information concerning a consumer, in violation of Section 807(10) of the FDCPA, 15 U.S.C. 1692e(10) . Specifically, as this claim relates to the named Plaintiff, Defendants falsely a. On 5 June 2008 Defendants Chase, RACJ, and Mr. Chernek filed and caused to be served on Plaintiff a complaint for foreclosure falsely representing that Chase owns and holds a note the whereabouts of which were unknown to Defendants and that the Klie loan was in default since 1 January 2008. b. On 5 June 2008 Defendants Chase, RACJ, and Mr. Chernek filed and served on Plaintiff a Fair Debt Collection Practices Act notice of validation falsely claiming that Chase was the creditor of the debt described in the foreclosure complaint. C. On 11 June 2008 Defendants caused Defendant Cindy A. Smith to sign and file a lost note affidavit with the Franklin County Court of Common Pleas falsely representing that the original note signed by Mr. Klie had been lost or destroyed; that the note could be accelerated upon default on any installment without further notice to the borrower; and that the mortgage note was assigned to Chase. d. On 30 June 2008 Defendants Chase, RACJ, and Mr. Chernek made a reinstatement quote demanding payment in the amount of $5,836.61, falsely representing the amount of the debt and corporate advances owed2. e. On 26 August 2008 Defendants Chase, RACJ, and Mr. Chernek filed and served on Plaintiff an amended complaint for foreclosure falsely representing that Chase owned and held a note the whereabouts of which were unknown to Defendants and that the Klie loan was in default since 1 January 2008. f. On 26 August 2008 Defendants Chase, RACJ, and Mr. Chernek filed a Fair Debt Collection Practices Act notice of validation falsely claiming that Chase was the creditor of the debt described in the amended complaint. g. On or about 26 November 2008 Defendants Chase, RACJ, and Mr. Chernek filed responses to admissions in which they falsely asserted that the whereabouts of the Klie note were not known to Defendants. h. On 18 December 2008 Defendants Chase, RACJ, and Mr. Chernek filed a Motion for Summary Judgment and attachments falsely representing that a three page note allegedly signed by Charles W. Klie represents a true and accurate copy of the original instrument they owned and held and that the Klie account was in default from either 1 January 2008 or I February 2008. i. On 25 March 2009 Defendants Chase, RACJ, and Mr. Gormley filed a reply brief in which they falsely represented that JP Morgan assigned the mortgage, together with any applicable note, to Chase on 2 June 2008; that the whereaboutsof the note were still unknown at the time of the filing of the amended complaint; that after the amended complaint was filed but before filing its motion for summary judgment Chase located the original note; that the note attached to their Motion for Summary Judgment is a complete copy of the instrument; and that all applicable assignments have been attached and disclosed to Plaintiff and the court. j. On 25 March 2009 Defendants Chase, RACJ, and Mr. Gormley falsely represented that the last payment made by Mr. Klie had his account current through 1 January 2008; that no other payments were made; and that the note was accelerated on 3 April 2008. The acts described in paragraph 91 constitute false, misleading, and/or deceptive The acts described in paragraph 91 constitute false and/or misleading The acts described in paragraph 91 were done intentionally and maliciously in The acts described in paragraph 91 were done for the purpose of collecting a debt Plaintiff believes and hereby alleges that the acts described above comprise a part Count III: Unfair Practices Plaintiff incorporates by reference all the foregoing paragraphs. On numerous occasions in connection with the collection of debts owed another Specifically, as this claim relates to the named Plaintiff, on 30 June 2008 A portion of the money Defendants attempted to collect was not due; a portion On or about 21 April 2009 Defendants, without a court order and in violation of At all time such notices were posted Defendants knew that the record mortgagor Count IV: Validation of Debts 111. Plaintiff incorporates by reference all the foregoing paragraphs. 112. On numerous occasions in connection with the collection of debts owed another 113. Specifically as this matter pertains to the named Plaintiff, Defendants continuedUntil 20 March 2009 Defendants deliberately and maliciously withheld the full SECOND CAUSE OF ACTION VIOLATIONS OF OHIO FAIR DEBT COLLECTION PRACTICES ACT (Against Chase Home Finance) a. Chase violated § 1319.12 by bringing a foreclosure action against Plaintiff in its own name without being a collection agency as defined by Section 1319.12(A)(2) b. Chase violated $1319.12 by engaging in the business of collecting debts and by attempting to collect alleged debts within the State of Ohio in its own name without being a collection agency as defined by section 1319.12(A)(2) c. Chase attempted to collect a debt and commenced litigation in its own name against Plaintiff for the collection of an assigned account without first obtaining a voluntary and properly executed assignment of indebtedness from Fannie Mae transferring title in the account and/or indebtedness allegedly in default and without a written agreement as required by ORC $1319.12(C)(1) &(3). Defendants' acts as described above were done intentionally for the purpose of As a result of the above violations of the state act the Defendants are liable to THIRD CAUSE OF ACTION CONSPIRACY (Against all Defendants) 125. As part of the conspiracy, Defendants made false and fraudulent pretenses, As part of the conspiracy, on or about 21 April 2009 Defendants wrongfully andAs a proximate result of the wrongful acts herein alleged Defendants caused In doing the things herein alleged Defendants acted willfully and with the intent FOURTH CAUSE OF ACTION INTENTIONAL MISREPRESENTATION OF MATERIAL FACTS (Against All Defendants) Plaintiff incorporates by reference all the foregoing paragraphs. 134. On numerous occasions, including but not limited to 5 June 2008, 11 June 2008, 137. The representations described above were made with the knowledge, 138. The representations described above were material to the matter asserted. 139. When Defendants made these representations, they knew them to be false; Defendants made these representations with the intention of deceiving and defrauding Plaintiff and inducing Plaintiff to act in reliance on these representations. 140. Plaintiff, at the time these representations were made, was ignorant of the falsity of Defendants' representations and believed them to be true. 141. Plaintiff acted to his detriment in justifiable reliance on the material misrepresentations uttered by Defendants. Had Plaintiff known the true facts, he would not have taken such actions. Plaintiff's reliance was justified under the circumstances. 142. As a proximate result of the wrongful acts herein alleged Defendants caused Plaintiff to suffer monetary damages, loss of business opportunity, loss of reputation, anguish, and emotional distress. 143. The aforementioned conduct of Defendants constituted an intentional material misrepresentation, depriving Plaintiff of property and legal rights or otherwise causing injury, and was despicable conduct that subjected Plaintiff to a cruel and unjust hardship in conscious disregard of Plaintiff's rights so as to justify an award of exemplary and punitive damages. FIFTH CAUSE OF ACTION NEGLIGENT MISREPRESENTATION OF MATERIAL FACTS (Against all Defendants) 144. Plaintiff incorporates by reference all the foregoing paragraphs. 145. When Defendants made the representations referenced in paragraphs 134 and 135 they had no reasonable ground for believing them to be true, in that at all times the Defendants knew that their representations were made to further the existing conspiracy. As a proximate result of the wrongful acts herein alleged Defendants caused SIXTH CAUSE OF ACTION CONCEALMENT OF MATERIAL FACTS (Against All Defendants) Plaintiff incorporates by reference all the foregoing paragraphs. On or about 5 June 2008, 26 August 2008, and 26 November 2008, Mr. Chernek 151. On 11 June 2008 Ms. Cindy A. Smith, an employee of Chase, represented to On 25 March 2009 Mr. Gormley falsely represented to Plaintiff that JP Morgan153. The representations and concealment of information herein alleged to have been made by Defendants Chernek, Smith, and Gormley, as agents of the other Defendants, were made with the intent to induce Plaintiff to act and in reliance thereon. The representations and the suppression of information herein alleged were done in furtherance of the conspiracy alleged in this complaint. 154. Plaintiff, at the time these failures to disclose and suppressions of facts occurred, was ignorant of the existence of the facts that Defendants suppressed and justifiably relied on the representations to his detriment. 155. As a proximate result of the wrongful acts herein alleged Defendants caused Plaintiff to suffer monetary damages, loss of business opportunity, loss of reputation, anguish, and emotional distress. 156. The aforementioned conduct of Defendants Chernek, Smith, and Gormley, as agents of the other Defendants, constitutes a concealment of material facts depriving Plaintiff of property and legal rights or otherwise causing injury, and was despicable Plaintiff's rights SO as to justify an award of exemplary and punitive damages. SEVENTH CAUSE OF ACTION TRESPASS (Against Safeguard Properties, Inc.) 157. Since 25 July 2008 Plaintiff has been the title owner and in possession of a real property, consisting of land and a single family dwelling with improvements and personal property, located at 2498 Bristol Rd., Upper Arlington, OH 43221 and more particularly described as follows: Being Lot Number Twenty-Four (24), in Block Number Nineteen (19), excepting therefrom Two (2) feet in width off the entire west side thereof, and excepting therefrom Two (2) feet in width off the entire east side thereof in THE ARLINGTON REALTY COMPANY'S RIVER RIDGE SUBDIVISION, as the same is numbered and delineated upon the recorded plat thereof, of record in Plat Book 19, page 2, 3, and 4, Recorder's Office, Franklin County, Ohio. Parcel number 070-006495. 158. The title transfer was approved and ordered by the Franklin County Probate Court as a distribution in kind under the will of Mr. Charles W. Klie and contains no reference or notation pursuant to ORC $2117.29. 159. On or about 21 April 2009 Defendant Safeguard Properties Inc. wrongfully and unlawfully entered the above described premises, "winterized" the bathroom, damaged the floor, damaged the furnace and other fixtures, sifted through and moved personal property belonging to Plaintiff and Mr. Klie's estate, changed the lock on the side door, placed a combination lock box on the door, shut-off utilities, and posted a notice on the wall stating as follows: This sign in sheet is posted by Safeguard Properties, Inc. as a request of the mortgagee to track all persons entering the property. It is required that all persons entering this property provide an explanation of their visit and sign and date this form. 160. As a proximate result of the entry of and damage to the interior and improvements necessary to restore the interior and improvements within the dwelling to their prior 161. As a further proximate result of Defendant's entry onto Plaintiff's land and property, Plaintiff suffered embarrassment, discomfort, and annoyance and experienced mental suffering caused by fear for the safety of the real and personal property. As a result of this mental distress, Plaintiff has suffered general damages. 162. The aforementioned acts of Defendant were willful and oppressive, or fraudulent, or malicious, in that Defendant forcibly entered the property, damaged fixtures and improvements, disabled the property, and intruded on Plaintiff's privacy and personal property, all with knowledge that Plaintiff had title, possession, and control of the property; that the property was not abandoned; and that the property was in the process of being remediated by contractors. Defendant acted in conscious disregard of Plaintiff's proprietary rights, privacy, safety, and mental well being: Plaintiff is thus entitled to punitive damages. 163. Defendant's wrongful conduct in maintaining a key box and unrestricted access to the dwelling will cause ongoing injury to the property, will interfere with Plaintiff's completion of the remediation and renovation work, and will deprive Plaintiff of thepeace of mind of a safe, secure dwelling. 164. Plaintiff has no adequate remedy at law for the injuries currently suffered in that Defendant will continue to maintain means and access to the property unless restrained by this Honorable Court. PRAYER FOR RELIEF WHEREFORE, Plaintiff respectfully prays that judgment be entered against the Defendants for the following: CAUSES OF ACTION ONE AND TWO A. Declaratory judgment that Defendants' conduct violated the FDCPA, and declaratory and injunctive relief for the Defendants' violations of the state act; B. Actual damages, the exact amount to be determined at trial and according to proof; C. Statutory damages pursuant to 15 U.S.C. § 1692k. E. Costs and reasonable attorney's fees pursuant to 15 U.S.C. § 1692k F. For such other and further relief as may be just and proper. CAUSES OF ACTION THREE, FOUR, FIVE, SIX, AND SEVEN A. Compensatory damages, including special damages, the exact amount to be determined at trial and according to proof; B. Interest as allowed by law; C. Punitive damages; D. Reasonable attorney's fees; E. Together with all costs and expenses, and such other further relief as the Court deems proper. For a temporary restraining order, a preliminary injunction, and a permanent Respectfully Submitted by Nicolette Glazer Esq. (PRO HAC VICE APPLICATION TO BE FILED) LAW OFFICES OF LARRY R GLAZER 1875 Century Park East #700 Century City, CA 90067 Attorney for PLAINTIFF JURY DEMAND Respectfully Submitted by Nicoletté Glazer Esq. M (PRO HAC VICE APPLICATION TO BE FILED) LAW OFFICES OF LARRY R GLAZER 1875 Century Park East #700 Century City, CA 90067 Attorney for PLAINTIFF PROSPECTIVE CLASS CERTIFICATION Respectfully Submitted by M Nicolette Glazer Esq. (PRO HAC VICE APPLICATION TO BE FILED) LAW OFFICES OF LARRY R GLAZER 1875 Century Park East #700 Century City, CA 90067 Attorney for PLAINTIFF

consumer fraud

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IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF ALABAMA SOUTHERN DIVISION JASON BENNETT, on behalf of himself * Civil Action No. 16-cv-291 and all others similarly situated, * * CLASS ACTION COMPLAINT FOR Plaintiff, * DAMAGES AND INJUNCTIVE * RELIEF PURSUANT TO 47 U.S.C. v. * § 227 et seq. (TELEPHONE * CONSUMER PROTECTION ACT) * GODADDY.COM, LLC, * PLAINTIFF DEMANDS TRIAL BY * STRUCK JURY. Defendant. * COMPLAINT This case arises from the intentional and repeated efforts of Defendant to market its business in plain violation of the Telephone Consumer Protection Act, 47 U.S.C. §227 et seq. (hereinafter referred to as the “TCPA”). Plaintiff and Class Members now come to this Honorable Court seeking injunctive relief, a judgment against Defendant for violations of the TCPA, statutory damages as set forth in the statute, the costs incurred in this action, and for such other, further and different relief to which Plaintiff and Class Members may be entitled under the circumstances. As more specific grounds therefore, Plaintiff and Class Members allege on personal knowledge, investigation of undersigned counsel, and on information and belief as follows: PARTIES PLAINTIFF 1. Plaintiff Jason Bennett (herein after referred to as “Plaintiff”) is a natural person who is a resident of Baldwin County, Alabama, and is over the age of 19. 2. Plaintiff is a “person” as that term is defined by 47 U.S.C. §153(39). 3. Defendant, Godaddy.com, LLC (herein after referred to as “Defendant”), is a Delaware corporation with its principal place of business in Arizona. 4. Defendant is, and at all relevant times was, a “person” as that term is defined by 47 U.S.C. §153(39). JURISDICTION AND VENUE 5. Plaintiff incorporates and realleges each and every allegation set forth above and incorporates the same herein by reference. 6. This Court has subject matter jurisdiction pursuant to the Class Action Fairness Act of 2005 (hereinafter referred to as the “CAFA”), codified as 28 U.S.C. §1332(d)(2). The matter in controversy exceeds $5,000,000.00, in the aggregate, exclusive of interest and costs, as each member of the proposed Class, of at least thousands, is entitled to damages of up to $1,500.00 for each call made by Defendant in violation of the TCPA. Further, Plaintiff alleges a national class, which will result in at least one Class member from a different state. 7. This Court has Federal Question jurisdiction pursuant to 28 U.S.C. §1332 and 47 U.S.C. §227. 8. Venue is proper in the United States District Court for the Southern District of Alabama, Southern Division because a substantial part of the events or omissions giving rise to this claim occurred, among other locations, in Baldwin County, Alabama. The event or omissions which took place in Baldwin County, Alabama, include the “telemarketing calls” or “telephone solicitation” calls placed by Defendant to Plaintiff in Alabama to promote Defendant’s business. 9. Venue is also proper in this District because Defendant is deemed to reside in any judicial district in which they are subject to personal jurisdiction at the time the action is Defendant to personal jurisdiction. PLAINTIFF’S FACTUAL ALLEGATIONS REGARDING TELEMARKETING CALLS 10. Plaintiff incorporates and realleges each and every allegation set forth above and incorporates the same herein by reference. 11. Plaintiff has used the same cellular telephone number [(251) 654-1830 (hereinafter referred to as “Plaintiff’s telephone”)] for many years. 12. Plaintiff has received more than five (5) telephone calls from Defendant within the past year. 13. The calls placed to Plaintiff’s cellular telephone were initiated by Defendant using an automatic telephone dialing system (ATDS), as defined in 47 U.S.C. §227(a)(1). 14. When connected, a representative of Defendant would inform Plaintiff that a service previously provided to Plaintiff by Defendant had recently expired, and the representative would offer to renew the expired service. 15. The calls placed to Plaintiff were each a “telemarketing call” or “telephone solicitation,” as defined in 47 U.S.C. § 227(a)(4). Each call was placed to promote Defendant’s business. Alternatively, each call served a dual purpose in that each call was placed to inform Plaintiff that the subject service had expired, and to encourage Plaintiff to purchase additional services from Defendant, and were each motivated by Defendant’s desire to sell additional services to Plaintiff. 16. The telemarketing calls made to Plaintiff’s phone were made by, on behalf of, and/or at the direction of Defendant. C.F.R. §64.1200, to be contacted by Defendant for telemarketing purposes using an ATDS or an artificial or prerecorded voice. 18. The calls placed to Plaintiff’s telephone by Defendant were not made for “emergency purposes,” as defined in 47 C.F.R. §64.1200. 19. All of the calls placed to Plaintiff’s telephone by Defendant were made intentionally, without Plaintiff’s prior express written consent, and in plain violation of the TCPA. 20. As a result of Defendant’s conduct in violation of the TCPA, Plaintiff is entitled to an award of minimum statutory damages of $500.00 for each of the telemarketing calls placed to Plaintiff’s cellular telephone using an ATDS or an artificial or prerecorded voice. 21. Because each of the telemarketing calls placed to Plaintiff’s telephone using an ATDS or an artificial or prerecorded voice were made intentionally, willfully and/or knowingly by Defendant, an award of statutory damages may be increased to as much as $1,500.00 for each of the subject telemarketing calls. 22. Plaintiff is entitled to injunctive relief to prohibit further telemarketing calls being placed to his telephone by Defendant using an ATDS or an artificial or prerecorded voice. CLASS ACTION ALLEGATIONS 23. Plaintiff incorporates and realleges each and every allegation set forth above and incorporates the same herein by reference. 24. Plaintiff brings this action individually and on behalf of all other persons similarly situated (hereinafter referred to as “the Class”) pursuant to Rule 23, Federal Rules of Civil Procedure. 25. Plaintiff proposes the following Class definition, subject to amendments as appropriate: All persons within the United States who, since two (2) year prior to the filing of this Complaint through the date of the certification of a class herein, received a call placed to a cellular telephone line by or on behalf of Defendant that included or introduced an advertisement or constituted telemarketing, and was initiated using an automatic telephone dialing system, absent the prior express written consent of the called party to receive such calls. Collectively all these persons will be referred to as “Class Members.” Plaintiff represents, and is a member of, the Class. 26. Excluded from this Class are all persons who have already settled or otherwise compromised their claims against Defendant. Also excluded from the Class are the Defendant, and any entity in which the Defendant has a controlling interest, the Defendant’s agents and employees, and Judge to whom this action is assigned and any member of such Judge’s staff and immediate family, and all people who submit timely and otherwise proper requests for exclusion from the Class. 27. Plaintiff does not know the exact number of members in the Class, but Plaintiff reasonably believes Class Members number, at minimum, in the thousands. 28. Plaintiff and all Class Members have been harmed by the acts of the Defendant. 29. This Class Action seeks injunctive relief and money damages. 30. The joinder of all Class members is impracticable due to the size of the Class and the relatively modest value of each individual claim. 31. The disposition of the claims in a class action will provide substantial benefit to the parties and the Court in avoiding a multiplicity of identical suits. 32. The Class can be identified easily through records maintained by Defendant. 33. There are well defined, nearly identical, questions of law and fact affecting all parties. following: a. Whether Defendant used an automatic telephone dialing system to place non-emergency telephone calls to Class Members’ telephones; b. Whether Defendant can meet its burden of showing that it obtained prior express written consent to use an automatic telephone dialing system to place non-emergency telephone calls to Class Members’ telephones; c. Whether the calls placed to Class Members were telemarketing calls or telephone solicitations, as defined in 47 U.S.C. § 227(a)(4); or alternatively, whether such calls served a dual purpose in what each call was placed to inform Class Members that a service had expired, and to encourage Class Members to purchase additional services from Defendant, and were motivated by Defendant’s desire to sell additional services to Class Members. d. Whether Defendant’s conduct was knowing and/or willful; e. Whether Defendant is liable for minimum statutory damages; f. Whether Defendant is liable for treble damages; and, g. Whether Defendant should be enjoined from engaging in such conduct in the future. 35. Plaintiff’s TCPA claim is typical of each Class Member. Plaintiff received non- emergency telemarketing call on his telephone promoting Defendant’s business, placed by or at the direction of Defendant and using an automatic telephone dialing system. The calls were made without Plaintiff’s prior express written consent as defined by the TCPA, 36. Plaintiff will fairly and adequately represent and protect the interests of the Class. 37. Plaintiff has no interests that are antagonistic to any Class Member. 38. Plaintiff has retained counsel experienced in handling claims involving violations of federal consumer protection statutes, including claims under the TCPA. 39. A class action is the superior method for the fair and efficient adjudication of this controversy. 41. The interest of the Class Members in individually pursuing claims against Defendant is slight because the statutory damages for an individual action are relatively small, and are therefore not likely to deter Defendant from engaging in the same behavior in the future. 42. Management of these claims is likely to present significantly fewer difficulties than are presented in many class claims because the calls at issue were all non-emergency telephone calls placed to Class Members’ telephones by Defendant, using an automatic telephone dialing system without Class Members’ prior express written consent as required by the TCPA. 43. Defendant has acted on grounds generally applicable to the Class, thereby making final injunctive relief and corresponding declaratory relief with respect to the Class as a whole appropriate. 44. Moreover, on information and belief, Plaintiff alleges that the TCPA violations complained of herein are substantially likely to continue in the future if an injunction is not entered. CAUSES OF ACTION FIRST COUNT STATUTORY VIOLATIONS OF THE TELEPHONE CONSUMER PROTECTION ACT, 47 U.S.C. §227 et seq. 45. Plaintiff incorporates and realleges each and every allegation set forth above and incorporates the same herein by reference. 46. The foregoing acts and omissions of Defendant constitute numerous and multiple violations of the TCPA, including, but not limited to, each of the above-cited provisions of 47 U.S.C. §227 et seq. Class Member is entitled to an award of $500.00 in statutory damages for each call made in violation of the statute, pursuant to 47 U.S.C. §227 (b)(3)(B). 48. Plaintiff and Class Members are also entitled to, and do seek, injunctive relief prohibiting Defendant from making future telemarketing calls in violation of the TCPA. SECOND COUNT KNOWING AND/OR WILLFUL VIOLATIONS OF THE TELEPHONE CONSUMER PROTECTION ACT, 47 U.S.C. §227 et seq. 49. Plaintiff incorporates and realleges each and every allegation set forth above and incorporates the same herein by reference. 50. The foregoing acts and omissions of Defendant constitute numerous and multiple knowing and/or willful violations of the TCPA, including, but not limited to, each of the above- cited provisions of 47 U.S.C. §227 et seq. 51. As a result of Defendant’s knowing and/or willful violations of 47 U.S.C. §227 et seq., Plaintiff and each Class Member is entitled to treble damages of up to $1,500.00 for each call made in violation of the statute, pursuant to 47 U.S.C. §227 (b)(3). 52. Plaintiff and Class Members are also entitled to and do seek injunctive relief prohibiting such conduct violating the TCPA by Defendant in the future. PRAYER FOR RELIEF WHEREFORE, the premises considered, Plaintiff prays that this Honorable Court grant Plaintiff and all Class Members the following relief: A. An Order certifying this action to be a proper class action pursuant to Federal Rule of Civil Procedure 23, establishing an appropriate Class and any Subclasses Class, and appointing the lawyers representing Plaintiff as counsel for the Class; B. As a result of Defendant’s statutory violations of 47 U.S.C. §2727(B)(1), Plaintiff seeks for himself and each Class Member $500.00 in statutory damages for each call that violated the TCPA; C. As a result of Defendant’s willful and/or knowing violations of 47 U.S.C. § 227(B)(1), Plaintiff seeks for himself and each Class Member treble damages, as provided by statute, of up to $1,500.00 for each call that violated the TCPA; D. Injunctive relief prohibiting such violations of the TCPA by Defendant in the future; E. Such other, further, and different relief to which Plaintiff and the Class Members may be entitled and that this Honorable Court may deem just and proper. JURY DEMAND Due to the intentional and premeditated actions of Defendant, Plaintiff, for himself and on behalf of the Class Members, has come to this Honorable Court and demanded judgment against Defendant for the aforesaid statutory damages, plus interest and the costs incurred in this action. Plaintiff, for himself and on behalf of the Class Members, also seeks such other, further, and different relief to which Plaintiff may be entitled and that this Honorable Court may deem just and proper. In order to fairly determine the validity of the facts set forth herein and determine the amounts due Plaintiff and Class Members from Defendant, Plaintiff, on behalf of himself and Class Members, hereby DEMANDS TRIAL BY STRUCK JURY. Respectfully submitted, s/ John R. Cox John R. Cox (COX030) Attorney for Plaintiff and Proposed Class 9786-A Timber Circle Spanish Fort, Alabama 36527 251.517.4753 jrc@jrcoxlaw.com Defendant to be served via certified mail as follows: GoDaddy.com, LLC c/o Go Daddy Operating Company LLC 14455 N. Hayden Road, #219 Scottsdale, AZ 85206

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UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF TEXAS Case No. BRIANNA WORMLEY, individually and on behalf of all others similarly situated, CLASS ACTION COMPLAINT JURY TRIAL DEMANDED Plaintiff, vs. SOUTHWEST CREDIT SYSTEMS, L.P., a Texas L.P., Defendant. CLASS ACTION COMPLAINT Plaintiff Brianna Wormley brings this action against Defendant Southwest Credit Systems, L.P. to secure redress for violations of the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227. NATURE OF THE ACTION 1. This is a putative class action pursuant to the Telephone Consumer Protection Act, 47 U.S.C. §§ 227, et seq. (the “TCPA”). 2. Defendant is a debt servicing and collections company. 3. Defendant also uses autodialers to attempt to collect debt, even after having been directed by those consumers to stop contacting them using autodialers. 4. Through this action, Plaintiff seeks injunctive relief to halt Defendant’s illegal conduct, statutory damages on behalf of themself and members of the Class, and any other available legal or equitable remedies. JURISDICTION AND VENUE 5. Jurisdiction is proper under 28 U.S.C. § 1331 as Plaintiff alleges violations of a federal statute. 6. Jurisdiction is also proper under 28 U.S.C. § 1332(d)(2) because Plaintiff alleges a national class, which will result in at least one class member belonging to a different state than that of Defendant. Plaintiff seeks up to $1,500.00 (one-thousand-five-hundred dollars) in damages for each call in violation of the TCPA, which, when aggregated among a proposed class numbering in the tens of thousands, or more, exceeds the $5,000,000.00 (five-million dollars) threshold for federal court jurisdiction under the Class Action Fairness Act (“CAFA”). Therefore, both the elements of diversity jurisdiction and CAFA jurisdiction are present. 7. The Court has personal jurisdiction over Defendant because Defendant directs, markets, and provides its business activities throughout the State of Texas. Further, this Court has personal jurisdiction over Defendant because Defendant’s tortious conduct against Plaintiff occurred in part within this District and, on information and belief, Defendant committed the same wrongful acts to other individuals within this judicial district, such that some of Defendant’s acts have occurred within this district, subjecting Defendant to jurisdiction here. 8. Venue is proper in this District pursuant to 28 U.S.C. §§ 1391(b) and (c) because Defendant is deemed to reside in any judicial district in which it is subject to personal jurisdiction, and because a substantial part of the events or omissions giving rise to the claim occurred in this District. PARTIES 9. Plaintiff is a natural person who, during all times relevant to this action, was a citizen of and domiciled in Tarrant County, Texas. 10. Defendant is a Texas limited partnership with its headquarters located at 4120 INTERNATIONAL PKWY STE 1100 CARROLLTON, TX 75007-1958. Defendant directs, markets, and provides its business activities throughout the state of Texas. 11. Unless otherwise indicated, the use of Defendant’s name in this Complaint includes all agents, employees, officers, members, directors, heirs, successors, assigns, principals, trustees, sureties, subrogees, representatives, vendors, and insurers of Defendant. THE TCPA 12. The TCPA prohibits: (1) any person from calling a cellular telephone number; (2) using an automatic telephone dialing system (“ATDS”); (3) without the recipient’s prior express consent. 47 U.S.C. § 227(b)(1)(A). 13. The TCPA exists to prevent communications like the ones described within this Complaint. See Mims v. Arrow Fin. Servs., LLC, 132 S. Ct. 740, 744 (2012). 14. In an action under the TCPA, a plaintiff must show only that the defendant “called a number assigned to a cellular telephone service using an automatic dialing system or prerecorded voice.” Breslow v. Wells Fargo Bank, N.A., 857 F. Supp. 2d 1316, 1319 (S.D. Fla. 2012), aff'd, 755 F.3d 1265 (11th Cir. 2014). 15. If a call is not deemed telemarketing, a defendant must nevertheless demonstrate that it obtained the plaintiff’s prior express consent. See In the Matter of Rules and Regulations Implementing the Tel. Consumer Prot. Act of 1991, 30 FCC Rcd. 7961, 7991-92 (2015) (requiring express consent “for non-telemarketing and non-advertising calls”). 16. Consent under the TCPA can be revoked. Osorio v. State Farm Bank, F.S.B., 746 F.3d 1242, 1255 (11th Cir. 2014) (holding that prior consent under 47 U.S.C. § 227(b)(1)(A)(iii) may be revoked orally; noting “that allowing consent to be revoked orally is consistent with the ‘government interest articulated in the legislative history of the Act [that] enabl[es] the recipient to contact the caller to stop future calls.’”); In the Matter of Rules and Regulations Implementing the Tel. Consumer Protection, 30 FCC Rcd. 7961, 7996 ¶¶47, 64 (“[A] called party may revoke consent at any time and through any reasonable means. A caller may not limit the manner in which revocation may occur. Moreover, we emphasize that regardless of the means by which a caller obtains consent, under longstanding Commission precedent, if any question arises as to whether prior express consent was provided by a call recipient, the burden is on the caller to prove that it obtained the necessary prior express consent. . . . Consumers have a right to revoke consent, using any reasonable method including orally or in writing.”). 17. In regards to what constitutes an ATDS, the Ninth Circuit has explained “that the statutory definition of ATDS includes device that stores telephone numbers to be called, whether or not those numbers have been generated by a random or sequential number generator.” Marks v. Crunch San Diego, LLC, 904 F. 3d 1041, 1043 (9th Cir. 2018). 18. The Ninth Circuit has further explained that “By referring to the relevant device as an ‘automatic telephone dialing system,’ Congress made clear that it was targeting equipment that could engage in automatic dialing, rather than equipment that operated without any human oversight or control.” Marks, 904 F. 3d at 1052 (citing 47 U.S.C. § 227(a)(1)) (emphasis in Marks). FACTS 19. Beginning in February 2020, Defendant began placing calls using an ATDS to Plaintiff’s cellular telephone number ending in 9758 (“9758 Number”). 20. Plaintiff has never given Defendant consent to call them using an ATDS. 21. In approximately June 2020, and after being subjected to numerous calls, Plaintiff instructed Defendant to no longer contact them at the 9758 Number. 22. Despite this, Defendant continued to call the 9758 Number using an ATDS. 23. Upon Plaintiff answering the phone for some of the calls place by Defendant, Plaintiff heard a pause before they were greeted by a live person. This pause is indicative of ATDS technology. 24. To place the calls, Defendant used a calling platform (the “Platform”) that permitted Defendant to transmit thousands of calls without any human involvement. 25. The Platform has the capacity to store telephone numbers, which capacity was in fact utilized by Defendant. 26. The Platform has the capacity to generate sequential numbers, which capacity was in fact utilized by Defendant. 27. The Platform has the capacity to dial numbers in sequential order, which capacity was in fact utilized by Defendant. 28. The Platform has the capacity to dial numbers from a list of numbers, which capacity was in fact utilized by Defendant. 29. The Platform has the capacity to dial numbers without human intervention, which capacity was in fact utilized by Defendant. 30. At the time Plaintiff received these calls Plaintiff was the subscriber and/or sole user of the 9758 Number. 31. Upon information and belief, Defendant caused similar calls to be placed to individuals residing within this judicial district and throughout the United States. 32. Defendant’s unsolicited calls caused Plaintiff additional harm, including invasion of privacy, aggravation, annoyance, intrusion on seclusion, trespass, and conversion. Defendant’s call also inconvenienced Plaintiff and caused disruption to her daily life. CLASS ALLEGATIONS PROPOSED CLASS 33. Plaintiff brings this case as a class action pursuant to Fed. R. Civ. P. 23, on behalf of themselves and all others similarly situated. 34. Plaintiff brings this case on behalf of the Class defined as follows: All persons within the United States to who, within the four years prior to the filing of this Complaint, Defendant or anyone on Defendant’s behalf, placed a telephone call, using the same type of equipment used to call Plaintiff, to said person’s cellular telephone number, without emergency purpose and without the recipient’s express consent and/or after having made a request to Defendant to not receive future calls. 35. Plaintiff reserves the right to modify the Class definitions as warranted as facts are learned in further investigation and discovery. 36. Defendant and its employees or agents are excluded from the Class. Plaintiff does not know the number of members in the Class but believes the Class members number in the several thousands, if not more. NUMEROSITY 37. Upon information and belief, Defendant has placed automated calls to telephone numbers belonging to thousands of consumers throughout the United States without their prior express consent. The members of the Class, therefore, are believed to be so numerous that joinder of all members is impracticable. 38. The exact number and identities of the members of the Class are unknown at this time and can only be ascertained through discovery. Identification of the Class members is a matter capable of ministerial determination from Defendant’s call records. COMMON QUESTIONS OF LAW AND FACT 39. There are numerous questions of law and fact common to members of the Class which predominate over any questions affecting only individual members of the Class. Among the questions of law and fact common to the members of the Class are: a) Whether Defendant made non-emergency calls to Plaintiff’s and Class members’ cellular or residential telephones using an ATDS; b) Whether Defendant can meet its burden of showing that it obtained prior express consent to make such calls; c) Whether Defendant’s conduct was knowing and willful; d) Whether Defendant is liable for damages, and the amount of such damages; and e) Whether Defendant should be enjoined from such conduct in the future. 40. The common questions in this case are capable of having common answers. TYPICALITY 41. Plaintiff’s claims are typical of the claims of the Class members, as they are all based on the same factual and legal theories. PROTECTING THE INTERESTS OF THE CLASS MEMBERS 42. Plaintiff is a representative who will fully and adequately assert and protect the interests of the Class, and has retained competent counsel. Accordingly, Plaintiff is an adequate representative and will fairly and adequately protect the interests of the Class. PROCEEDING VIA CLASS ACTION IS SUPERIOR AND ADVISABLE 43. A class action is superior to all other available methods for the fair and efficient adjudication of this lawsuit, because individual litigation of the claims of all members of the Class is economically unfeasible and procedurally impracticable. While the aggregate damages sustained by the Class are in the millions of dollars, the individual damages incurred by each member of the Class resulting from Defendant’s wrongful conduct are too small to warrant the expense of individual lawsuits. The likelihood of individual Class members prosecuting their own separate claims is remote, and, even if every member of the Class could afford individual litigation, the court system would be unduly burdened by individual litigation of such cases. 44. The prosecution of separate actions by members of the Class would create a risk of establishing inconsistent rulings and/or incompatible standards of conduct for Defendant. For example, one court might enjoin Defendant from performing the challenged acts, whereas another may not. Additionally, individual actions may be dispositive of the interests of the Class, although certain class members are not parties to such actions. COUNT I Violations of the TCPA, 47 U.S.C. § 227(b) (On Behalf of Plaintiff and the Classes) 45. Plaintiff re-alleges and incorporates the foregoing allegations as if fully set forth herein. 46. It is a violation of the TCPA to make “any call (other than a call made for emergency purposes or made with the prior express consent of the called party) using any … using any automatic telephone dialing system … to any telephone number assigned to a … cellular telephone service ….” 47 U.S.C. § 227(b)(1)(A)(iii). 47. Defendant – or third parties directed by Defendant – transmitted calls using an ATDS to the cellular telephone numbers of Plaintiff and members of the putative class. 48. These calls were made without regard to whether or not Defendant had the proper consent from the called party to make such calls. 49. In fact, Defendant did not have prior express consent to call the telephones of Plaintiff and the other members of the putative Class when its calls were made because any consent was explicitly revoked. 50. Defendant has also violated § 227(b)(1) of the TCPA by using an ATDS to make non-emergency telephone calls to the cell phones of Plaintiff and the other members of the putative Class without their prior express consent. 51. The violations were willful or knowing because Defendant knew that it did not have prior express consent to make these calls. 52. As a result of Defendant’s conduct and pursuant to § 227(b)(3) of the TCPA, Plaintiff and the other members of the putative Class were harmed and are each entitled to a minimum of $500.00 in damages for each violation. Plaintiff and the members of the Class are also entitled to an injunction against future calls. Id. 53. Because Defendant knew or should have known that Plaintiff and the other members of the putative Class had revoked any express consent to receive its messages to their telephones the Court should treble the amount of statutory damages available to Plaintiff and the other members of the putative Class pursuant to § 227(b)(3) of the TCPA. PRAYER FOR RELIEF WHEREFORE, Plaintiff, individually and on behalf of the Classes, prays for the following relief: a) An order certifying this case as a class action on behalf of the Class as defined above, and appointing Plaintiff as the representative of the Class and Plaintiff’s counsel as Class Counsel; b) An award of statutory damages for Plaintiff and each member of the Classes; c) As a result of Defendant’s negligent violations of 47 U.S.C. §§ 227, et seq., Plaintiff seeks for themselves and each member of the Class $500.00 in statutory damages for each and every violation pursuant to 47 U.S.C. § 227(b)(3). d) As a result of Defendant’s knowing and/or willful violations of 47 U.S.C. §§ 227, et seq., Plaintiff seeks for themselves and each member of the Class treble damages, as provided by statute, up to $1,500.00 for each and every violation pursuant to 47 U.S.C. § 227(b)(3). e) An order declaring that Defendant’s actions, as set out above, violate the TCPA; f) An injunction requiring Defendant to cease all unsolicited ATDS call activity, and to otherwise protect the interests of the Classes; and g) Such further and other relief as the Court deems necessary. JURY DEMAND Plaintiff hereby demands a trial by jury. DOCUMENT PRESERVATION DEMAND Plaintiff demands that Defendants take affirmative steps to preserve all records, lists, electronic databases or other itemizations associated with the allegations herein, including all records, lists, electronic databases or other itemizations in the possession of any vendors, individuals, and/or companies contracted, hired, or directed by Defendant to assist in sending the alleged communications. Dated: February 4, 2021 Respectfully submitted, /s/ Frank Harber Harber Law Group Frank Harber 771 E Southlake Blvd Suite 111 Southlake, Tx 76092, e. frank@harberlawgroup.com t. 817.886.3299 IJH Law Ignacio J. Hiraldo, Esq. Pro Hac Vice Application Forthcoming Florida Bar No. 0056031 1200 Brickell Ave Suite 1950 Miami, FL 33131 e. ijhiraldo@ijhlaw.com t. 786.496.4469 HIRALDO P.A. Manuel S. Hiraldo Pro Hac Vice Application Forthcoming Florida Bar No. 030380 401 E. Las Olas Boulevard Suite 1400 Ft. Lauderdale, Florida 33301 e. mhiraldo@hiraldolaw.com t. 954.400.4713 Attorneys for Plaintiff and the Proposed Class

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THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND GREENBELT DIVISION Case No.: CLASS ACTION COMPLAINT DEMAND FOR JURY TRIAL JANE DOE and JOHN DOE, on behalf of themselves and all others similarly situated, Plaintiffs, vs. US FERTILITY, LLC, a Maryland limited liability company, Defendant. Plaintiffs Jane Doe and John Doe (“Plaintiffs”), individually and on behalf of all others similarly situated, bring this Class Action Complaint against US Fertility, LLC (collectively, “US Fertility” or “Defendant”), and allege, upon personal knowledge as to their own actions and their counsels’ investigations, and upon information and belief as to all other matters, as follows: I. INTRODUCTION 1. Plaintiffs bring this class action against Defendant for its failure to properly secure and safeguard personal identifiable information and protected health information that Defendant acquired from or created for its patients. Defendant required this information from its patients or created this information for its patients as a condition or result of medical treatment, including without limitation, names, addresses, dates of birth, MPI (patient identification) numbers, Social Security numbers, driver’s license / state ID numbers, passport numbers, credit/debit card information, and financial account information (collectively, “personal identifiable information” or “PII”) as well as medical treatment/diagnosis information, medical record information, and 1 health insurance/claims information (collectively, “protected health information” or “PHI”). Plaintiffs also allege Defendant failed to provide timely, accurate, and adequate notice to Plaintiffs and similarly situated current and former patients (collectively, “Class Members”) that their PII and PHI had been lost and precisely what types of information was unencrypted and in the possession of unknown third parties. 2. According to its website, Defendant is the largest network of fertility centers in the United States. Defendant provides information technology platforms and services to infertility clinics in numerous States, including Alabama, California, Florida, Georgia, Idaho, Illinois, Maryland, Missouri, Nevada, New York, North Carolina, Pennsylvania, Utah, Virginia, and Washington. In order to obtain medical treatment, Plaintiffs and other patients of Defendant entrust and provide to Defendant an extensive amount of PII. Defendant also creates PII and PHI for its patients. Defendant retains this information on computer hardware—even after the treatment relationship ends. Defendant asserts that it understands the importance of protecting information. 3. On or before September 20, 2020, Defendant determined that an unauthorized actor acquired a limited number of files during a period of unauthorized access, which occurred between August 12, 2020 and September 14, 2020 (the “Data Breach”). 4. On or before November 13, 2020, Defendant learned that the files accessed and acquired during the Data Breach contained the PII of Defendant’s current and former patients, including Plaintiffs and Class Members. Defendant subsequently confirmed that these files also included PHI of Defendant’s current and former patients, including Plaintiffs and Class Members. 5. In a “Notice of Data Incident,” dated January 8, 2021, Defendant advised that it was informing its current and former patients of the Data Breach. 2 6. By obtaining, collecting, using, and deriving a benefit from Plaintiffs’ and Class Members’ PII and PHI, Defendant assumed legal and equitable duties to those individuals. Defendant admits that the unencrypted PII and PHI exposed to “unauthorized activity” included names, addresses, dates of birth, MPI numbers, Social Security numbers, driver’s license / state ID numbers, passport numbers, medical treatment/diagnosis information, medical record information, health insurance/claims information, credit/debit card information, and financial account information. 7. The exposed PII and PHI of Defendant’s current and former patients can be sold on the dark web. Hackers can access and then offer for sale the unencrypted, unredacted PII to criminals. Defendant’s current and former patients face a lifetime risk of identity theft, which is heightened here by the loss of Social Security numbers, driver’s license / state ID numbers, and passport numbers. 8. This PII and PHI was compromised due to Defendant’s negligent and/or careless acts and omissions and the failure to protect PII and PHI of Defendant’s current and former patients. In addition to Defendant’s failure to prevent the Data Breach, after discovering the breach, Defendant waited several months to report it to the states’ Attorneys General and affected individuals. 9. As a result of this delayed response, Plaintiffs and Class Members had no idea their PII and PHI had been compromised, and that they were, and continue to be, at significant risk of identity theft and various other forms of personal, social, and financial harm. The risk will remain for their respective lifetimes. 10. Plaintiffs bring this action on behalf of all persons whose PII and/or PHI was compromised as a result of Defendant’s failure to: (i) adequately protect the PII and PHI of 3 Defendant’s current and former patients; (ii) warn Defendant’s current and former patients of Defendant’s inadequate information security practices; and (iii) effectively secure hardware containing protected PII and PHI using reasonable and effective security procedures free of vulnerabilities and incidents. Defendant’s conduct amounts to negligence and violates federal and state statutes. 11. Plaintiffs and Class Members have suffered injury as a result of Defendant’s conduct. These injuries include: (i) lost or diminished value of PII and PHI; (ii) out-of-pocket expenses associated with the prevention, detection, and recovery from identity theft, tax fraud, and/or unauthorized use of their PII and PHI; (iii) lost opportunity costs associated with attempting to mitigate the actual consequences of the Data Breach, including but not limited to lost time, and significantly (iv) the continued and certainly an increased risk to their PII and PHI, which: (a) remains unencrypted and available for unauthorized third parties to access and abuse; and (b) may remain backed up in Defendant’s possession and is subject to further unauthorized disclosures so long as Defendant fails to undertake appropriate and adequate measures to protect the PII and PHI. 12. Defendant disregarded the rights of Plaintiffs and Class Members by intentionally, willfully, recklessly, or negligently failing to take and implement adequate and reasonable measures to ensure that Defendant’s current and former patients’ PII and PHI was safeguarded, failing to take available steps to prevent an unauthorized disclosure of data, and failing to follow applicable, required and appropriate protocols, policies and procedures regarding the encryption of data, even for internal use. As the result, the PII and PHI of Plaintiffs and Class Members was compromised through disclosure to an unknown and unauthorized third party. Plaintiffs and Class Members have a continuing interest in ensuring that their information is and remains safe, and they should be entitled to injunctive and other equitable relief. 4 II. PARTIES 13. Plaintiff Jane Doe is a Citizen of Florida residing in Hillsborough County, Florida. Ms. Doe received Defendant’s Notice of Data Incident, dated January 8, 2021, on or about that date. Because of the nature of the medical services provided to Plaintiff, she is filing this complaint under Jane Doe. 14. Plaintiff John Doe is a Citizen of Pennsylvania residing in Montgomery County, Pennsylvania. Mr. Doe received Defendant’s Notice of Data Incident, dated January 8, 2021, on or about that date. Because of the nature of the medical services provided to Plaintiff, he is filing this complaint under John Doe. 15. Defendant US Fertility, LLC. is a corporation organized under the laws of Delaware, headquartered at 9600 Blackwell Road, Suite 500, Rockville, MD, with its principal place of business in Rockville, MD. 16. The true names and capacities of persons or entities, whether individual, corporate, associate, or otherwise, who may be responsible for some of the claims alleged herein are currently unknown to Plaintiffs. Plaintiffs will seek leave of court to amend this complaint to reflect the true names and capacities of such other responsible parties when their identities become known. 17. All of Plaintiffs’ claims stated herein are asserted against Defendant and any of their owners, predecessors, successors, subsidiaries, agents and/or assigns. III. JURISDICTION AND VENUE 18. This Court has subject matter and diversity jurisdiction over this action under 28 U.S.C. § 1332(d) because this is a class action wherein the amount of controversy exceeds the sum or value of $5 million, exclusive of interest and costs, there are more than 100 members in the 5 proposed class, and at least one other Class Member (including named Plaintiff Jane Doe, a Citizen of Florida) is a citizen of a state different from Defendant to establish minimal diversity. 19. The District of Maryland has personal jurisdiction over Defendant named in this action because Defendant is headquartered in this District and Defendant conducts substantial business in Maryland and this District. 20. Venue is proper in this District under 28 U.S.C. §1391(b) because Defendant is headquartered in this District and a substantial part of the events or omissions giving rise to Plaintiffs’ claims occurred in this District. IV. FACTUAL ALLEGATIONS Background 21. Defendant is the largest network of fertility centers in the United States and provides information technology platforms and services to infertility clinics throughout the United 22. Plaintiffs and Class Members treated by Defendant were required to provide some of their most sensitive and confidential information, including names, addresses, dates of birth, Social Security numbers, driver’s license / state ID numbers, passport numbers, health insurance information, credit/debit card information, and financial account information and other personal identifiable information. This information is static, does not change, and can be used to commit myriad financial crimes. 23. In providing treatment to Plaintiffs and Class Members, Defendant created additional sensitive personal information about Plaintiffs and Class Members, including MPI numbers, medical treatment/diagnosis information, medical record information, and health claims information. 6 24. Plaintiffs and Class Members, as current and former patients, relied on Defendant to keep their PII and PHI confidential and securely maintained, to use this information for business purposes only, and to make only authorized disclosures of this information. Defendant’s current and former patients demand security to safeguard their PII and PHI. 25. Defendant had a duty to adopt reasonable measures to protect Plaintiffs’ and Class Members’ PII and PHI from involuntary disclosure to third parties. The Data Breach 26. Beginning on or about January 8, 2021, Defendant sent its current and former patients a Notice of Data Incident.1 Defendant informed the recipients of the notice that: We are writing to make you aware of a recent incident that may affect the privacy of some of your protected health information. What Happened? On September 14, 2020, USF experienced an IT security event (the “Incident”) that involved the inaccessibility of certain computer systems on our network as a result of a malware infection. We responded to the Incident immediately and retained third-party computer forensic specialists to assist in our investigation. Through our immediate investigation and response, we determined that data on a number of servers and workstations connected to our domain had been encrypted by ransomware. We proactively removed a number of systems from our network upon discovering the Incident. With the assistance of our third-party computer forensic specialists, we remediated the malware identified, ensured the security of our environment, and reconnected systems on September 20, 2020. We also notified federal law enforcement authorities of the Incident and continue to cooperate with their investigation. The forensic investigation is now concluded and confirmed that the unauthorized actor acquired a limited number of files during the period of unauthorized access, which occurred between August 12, 2020 and September 14, 2020, when the ransomware was executed. What Information Was Involved? We have been working diligently with a specialized team of third-party data auditors to perform a comprehensive review of all information contained in the 1 Ex. 1 (available at https://ago.vermont.gov/wp-content/uploads/2021/01/2021-01-08-US- Fertility-LLC-Notice-of-Data-Breach-to-Consumers.pdf) (last visited Jan. 28, 2021). 7 files accessed without authorization as a result of the Incident. The purpose of this review was to accurately identify any individuals whose personal information may have been present within the impacted files and therefore accessible to the unauthorized actor. We recently received the results of this review and determined on December 4, 2020 that the following information relating to you was included in the impacted files when they were accessed without authorization: name and <<Breached Elements>>. The impacted files may have also contained your date of birth. Please note, however, that we have no evidence of actual misuse of your information as a result of the Incident.2 27. On or about January 8, 2021, Defendant sent data breach notifications to various state Attorneys General, including Vermont’s Attorney General TJ Donovan, signed by Carrie Roll, Defendant’s General Counsel.3 28. Defendant admitted in the Notice of Data Incident and the letters to the Attorneys General that unauthorized third persons accessed files that contained sensitive information about current and former patients of Defendant, including names, addresses, dates of birth, MPI (patient identification) numbers, and/or Social Security numbers. 29. In response to the Data Breach, Defendant claims that it has taken the following actions to mitigate any risk of compromise to your information and to better prevent a similar event from recurring: (1) fortified the security of our firewall; (2) utilized the forensic specialists engaged to monitor network activity and remediate any suspicious activity; (3) provided notification to potentially impacted individuals as quickly as possible. We are also adapting our existing employee training protocols relating to data protection and security, including training targeted at recognizing phishing emails. We believe these steps will be effective in mitigating any potential harm to you. As always, we encourage you to review your account statements, explanations of benefits, and credit reports carefully for unexpected activity and to report any questionable activity to the associated institutions immediately. immediately launched an investigation, we engaged an independent computer forensics firm to determine what happened and whether personal information had been accesses or acquired without 2 Ex. 1, p.1. 3 Id. 8 authorization…. We have also implemented additional safeguards to help ensure the security of our email environment and to reduce the risk of a similar incident occurring in the future.4 30. In January 2021, Defendant posted an amended Notice of Data Security Incident on its website stating that, in addition to the information previously identified as exposed, the Data Breach also resulted in the exposure of PHI and other PII, including “driver’s license / state ID numbers, passport numbers, medical treatment/diagnosis information, medical record information, health insurance/claims information, credit/debit card information, and financial account information.”5 These items were not mentioned in the notice previously sent to Defendant’s current and former patients or in the notice previously published on Defendant’s website.6 31. Plaintiffs’ and Class Members’ unencrypted information may end up for sale on the dark web, or simply fall into the hands of companies that will use the detailed PII and PHI for targeted marketing without the approval of the affected current and former patients. Unauthorized individuals can easily access the PII and PHI of Defendant’s current and former patients. 32. Defendant did not use reasonable security procedures and practices appropriate to the nature of the sensitive, unencrypted information they were maintaining for current and former patients, causing Plaintiffs’ and Class Members’ PII and PHI to be exposed. Defendant Acquires, Collects, Creates, and Stores Plaintiffs’ and Class Members’ PII and PHI. 33. Defendant acquired, collected, created, and stored Defendant’s current and former patients’ PII and PHI. 34. As a condition of maintaining treatment with Defendant, Defendant requires that 4 Id. 5 Ex. 2 (available at https://www.usfertility.com/wp-content/uploads/2021/01/USF-Notice- Security.pdf) (last visited Jan. 28, 2021). 6 Ex. 3 (available at https://www.usfertility.com/wp-content/uploads/2020/11/Version- 4142340_2-Website-Notice-11.25.2020_Final.pdf) (last visited Jan. 28, 2021). 9 its patients entrust Defendant with highly confidential PII. 35. By obtaining, collecting, creating, and storing Plaintiffs’ and Class Members’ PII and PHI, Defendant assumed legal and equitable duties and knew or should have known that they were responsible for protecting Plaintiffs’ and Class Members’ PII and PHI from disclosure. 36. Plaintiffs and the Class Members have taken reasonable steps to maintain the confidentiality of their PII and PHI. Plaintiffs and the Class Members, as current and former patients, relied on the Defendant to keep their PII and PHI confidential and securely maintained, to use this information for business purposes only, and to make only authorized disclosures of this information. Securing PII and PHI and Preventing Breaches 37. Defendant could have prevented this Data Breach by properly securing and encrypting Plaintiffs’ and Class Members’ PII and PHI. Or Defendant could have destroyed the data, especially old data from former patients that Defendant had no legal duty to retain. 38. Defendant’s negligence in safeguarding Defendant’s current and former patients’ PII and PHI is exacerbated by the repeated warnings and alerts directed to protecting and securing sensitive data. 39. Despite the prevalence of public announcements of data breach and data security compromises, Defendant failed to take appropriate steps to protect the PII and PHI of Plaintiffs and the proposed Class from being compromised. 40. The Federal Trade Commission (“FTC”) defines identity theft as “a fraud committed or attempted using the identifying information of another person without authority.”7 The FTC describes “identifying information” as “any name or number that may be used, alone or 7 17 C.F.R. § 248.201 (2013). 10 in conjunction with any other information, to identify a specific person,” including, among other things, “[n]ame, Social Security number, date of birth, official State or government issued driver’s license or identification number, alien registration number, government passport number, employer or taxpayer identification number.”8 41. The ramifications of Defendant’s failure to keep secure Defendant’s current and former patients’ PII and PHI are long lasting and severe. Once PII and PHI is stolen, particularly Social Security numbers, fraudulent use of that information and damage to victims may continue for years. Value of Personal Identifiable Information 42. The PII of individuals remains of high value to criminals, as evidenced by the prices they will pay through the dark web. Numerous sources cite dark web pricing for stolen identity credentials. For example, personal information can be sold at a price ranging from $40 to $200, and bank details have a price range of $50 to $200.9 Experian reports that a stolen credit or debit card number can sell for $5 to $110 on the dark web.10 Criminals can also purchase access to entire company data breaches from $900 to $4,500.11 43. Social Security numbers, for example, are among the worst kind of personal information to have stolen because they may be put to a variety of fraudulent uses and are difficult for an individual to change. The Social Security Administration stresses that the loss of an 8 Id. 9 Your personal data is for sale on the dark web. Here’s how much it costs, Digital Trends, Oct. 16, 2019, available at: https://www.digitaltrends.com/computing/personal-data-sold-on-the- dark-web-how-much-it-costs/ (last accessed Jan. 26, 2021). 10 Here’s How Much Your Personal Information Is Selling for on the Dark Web, Experian, Dec. 6, 2017, available at: https://www.experian.com/blogs/ask-experian/heres-how-much-your- personal-information-is-selling-for-on-the-dark-web/ (last accessed Jan. 26, 2021). 11 In the Dark, VPNOverview, 2019, available at: https://vpnoverview.com/privacy/anonymous-browsing/in-the-dark/ (last accessed Jan. 26, 2021). 11 individual’s Social Security number, as is the case here, can lead to identity theft and extensive financial fraud: A dishonest person who has your Social Security number can use it to get other personal information about you. Identity thieves can use your number and your good credit to apply for more credit in your name. Then, they use the credit cards and don’t pay the bills, it damages your credit. You may not find out that someone is using your number until you’re turned down for credit, or you begin to get calls from unknown creditors demanding payment for items you never bought. Someone illegally using your Social Security number and assuming your identity can cause a lot of problems.12 44. What is more, it is no easy task to change or cancel a stolen Social Security number. An individual cannot obtain a new Social Security number without significant paperwork and evidence of actual misuse. In other words, preventive action to defend against the possibility of misuse of a Social Security number is not permitted; an individual must show evidence of actual, ongoing fraud activity to obtain a new number. 45. Even then, a new Social Security number may not be effective. According to Julie Ferguson of the Identity Theft Resource Center, “The credit bureaus and banks are able to link the new number very quickly to the old number, so all of that old bad information is quickly inherited into the new Social Security number.”13 46. Based on the foregoing, the information compromised in the Data Breach is significantly more valuable than the loss of, for example, credit card information in a retailer data breach, because, there, victims can cancel or close credit and debit card accounts. The information compromised in this Data Breach is impossible to “close” and difficult, if not impossible, to 12 Social Security Administration, Identity Theft and Your Social Security Number, available at: https://www.ssa.gov/pubs/EN-05-10064.pdf (last accessed Jan. 26, 2021). 13 Bryan Naylor, Victims of Social Security Number Theft Find It’s Hard to Bounce Back, NPR (Feb. 9, 2015), available at: http://www.npr.org/2015/02/09/384875839/data-stolen-by-anthem- s-hackers-has-millionsworrying-about-identity-theft (last accessed Jan. 26, 2021). 12 change—name, address, date of birth, and Social Security number. 47. This data demands a much higher price on the black market. Martin Walter, senior director at cybersecurity firm RedSeal, explained, “Compared to credit card information, personally identifiable information and Social Security numbers are worth more than 10x on the black market.”14 48. Among other forms of fraud, identity thieves may obtain driver’s licenses, government benefits, medical services, and housing or even give false information to police. 49. The PII of Plaintiffs and Class Members was taken by hackers to engage in identity theft or and or to sell it to others criminals who will purchase the PII for that purpose. The fraudulent activity resulting from the Data Breach may not come to light for years.. 50. There may be a time lag between when harm occurs versus when it is discovered, and also between when PII is stolen and when it is used. According to the U.S. Government Accountability Office (“GAO”), which conducted a study regarding data breaches: [L]aw enforcement officials told us that in some cases, stolen data may be held for up to a year or more before being used to commit identity theft. Further, once stolen data have been sold or posted on the Web, fraudulent use of that information may continue for years. As a result, studies that attempt to measure the harm resulting from data breaches cannot necessarily rule out all future harm.15 51. At all relevant times, Defendant knew, or reasonably should have known, of the importance of safeguarding Defendant’s current and former patients’ PII, including Social Security numbers and dates of birth, and of the foreseeable consequences that would occur if Defendant’s 14 Time Greene, Anthem Hack: Personal Data Stolen Sells for 10x Price of Stolen Credit Card Numbers, IT World, (Feb. 6, 2015), available at: https://www.networkworld.com/article/2880366/anthem-hack-personal-data-stolen-sells-for-10x- price-of-stolen-credit-card-numbers.html (last accessed Jan. 26, 2021). 15 Report to Congressional Requesters, GAO, at 29 (June 2007), available at: http://www.gao.gov/new.items/d07737.pdf (last accessed Jan. 26, 2021). 13 data security system was breached, including, specifically, the significant costs that would be imposed on Defendant’s current and former patients as a result of a breach. 52. Plaintiffs and Class Members now face years of constant surveillance of their financial and personal records, monitoring, and loss of rights. The Class is incurring and will continue to incur such damages in addition to any fraudulent use of their PII. 53. Defendant was, or should have been, fully aware of the unique type and the significant volume of data on Defendant’s network, amounting to potentially thousands or tens or hundreds of thousands of individuals’ detailed, personal information and thus, the significant number of individuals who would be harmed by the exposure of the unencrypted data. 54. To date, Defendant has offered their current and former patients only one year of credit monitoring and identity restoration services through a single provider, TransUnion. The offered service is inadequate to protect Plaintiffs and Class Members from the threats they face for years to come, particularly in light of the PII at issue here. 55. The injuries to Plaintiffs and Class Members were directly and proximately caused by Defendant’s failure to implement or maintain adequate data security measures for the PII of Defendant’s current and former patients. Plaintiff Jane Doe’s Experience 56. In or around 2009, Plaintiff Jane Doe was a patient of Defendant. As a condition for treatment, she was required to provide her PII, including but not limited to her name, address, date of birth, and Social Security number. 57. Ms. Doe received the Notice of Data Incident, dated January 8, 2021, on or about that date. The notice did not reveal that Ms. Doe’s PHI had been exposed. 58. As a result of the Notice of Data Incident, Ms. Doe spent time dealing with the 14 consequences of the Data Breach, which includes time spent verifying the legitimacy of the Notice of Data Incident, exploring credit monitoring and identity theft insurance options, signing up and routinely monitoring the credit monitoring offered by Defendant, and self-monitoring her accounts. This time has been lost forever and cannot be recaptured. 59. Additionally, Ms. Doe is very careful about sharing her PII. She has never knowingly transmitted unencrypted PII over the internet or any other unsecured source. 60. Ms. Doe stores any documents containing her PII or PHI in a safe and secure location or destroys the documents. Moreover, she diligently chooses unique usernames and passwords for her various online accounts. 61. Ms. Doe suffered actual injury in the form of damages to and diminution in the value of her PII—a form of intangible property that Ms. Doe entrusted to Defendant for the purpose of her treatment, which was compromised in and as a result of the Data Breach. 62. Ms. Doe suffered lost time, annoyance, interference, and inconvenience as a result of the Data Breach and has anxiety and increased concerns for the loss of her privacy. 63. Ms. Doe has suffered imminent and impending injury arising from the substantially increased risk of fraud, identity theft, and misuse resulting from her PII and PHI, especially her Social Security number, in combination with her name and date of birth, being placed in the hands of unauthorized third-parties and possibly criminals. 64. Ms. Doe has a continuing interest in ensuring that her PII and PHI, which, upon information and belief, remains backed up in Defendant’s possession, is protected and safeguarded from future breaches. Plaintiff John Doe’s Experience 65. In or around 2019, Plaintiff John Doe was a patient of Defendant. As a condition 15 for treatment, he was required to provide his PII, including but not limited to his name, address, date of birth, and Social Security number. 66. Mr. Doe received the Notice of Data Incident, dated January 8, 2021, on or about that date. The notice did not reveal that Mr. Doe’s PHI had been exposed. 67. As a result of the Notice of Data Incident, Mr. Doe spent time dealing with the consequences of the Data Breach, which includes time spent verifying the legitimacy of the Notice of Data Incident, exploring credit monitoring and identity theft insurance options, signing up and routinely monitoring the credit monitoring offered by Defendant, and self-monitoring his accounts. This time has been lost forever and cannot be recaptured. 68. Additionally, Mr. Doe is very careful about sharing his PII. He has never knowingly transmitted unencrypted PII over the internet or any other unsecured source. 69. Mr. Doe stores any documents containing his PII or PHI in a safe and secure location or destroys the documents. Moreover, he diligently chooses unique usernames and passwords for his various online accounts. 70. Mr. Doe suffered actual injury in the form of damages to and diminution in the value of his PII—a form of intangible property that Mr. Doe entrusted to Defendant for the purpose of his treatment, which was compromised in and as a result of the Data Breach. 71. Mr. Doe suffered lost time, annoyance, interference, and inconvenience as a result of the Data Breach and has anxiety and increased concerns for the loss of his privacy. 72. Mr. Doe has suffered imminent and impending injury arising from the substantially increased risk of fraud, identity theft, and misuse resulting from his PII and PHI, especially his Social Security number, in combination with his name and date of birth, being placed in the hands of unauthorized third-parties and possibly criminals. 16 73. Mr. Doe has a continuing interest in ensuring that his PII and PHI, which, upon information and belief, remains backed up in Defendant’s possession, is protected and safeguarded from future breaches. V. CLASS ALLEGATIONS 74. Plaintiffs bring this nationwide class action on behalf of themselves and on behalf of all others similarly situated pursuant to Rule 23(b)(2), 23(b)(3), and 23(c)(4) of the Federal Rules of Civil Procedure. 75. The Nationwide Class that Plaintiffs seek to represent is defined as follows: All individuals whose PII and/or PHI was compromised in the data breach first announced by Defendant on or about January 8, 2021 (the “Nationwide Class”). 76. Pursuant to Rule 23, and in the alternative to claims asserted on behalf of the Nationwide Class, Plaintiff Jane Doe asserts claims on behalf of a separate statewide subclass, defined as follows: All individuals who are residents of Florida and whose PII and/or PHI was compromised in the data breach first announced by Defendant on or about January 8, 2021 (the “Florida Class”). 77. Pursuant to Rule 23, and in the alternative to claims asserted on behalf of the Nationwide Class, Plaintiff John Doe asserts claims on behalf of a separate statewide subclass, defined as follows: All individuals who are residents of Pennsylvania and whose PII and/or PHI was compromised in the data breach first announced by Defendant on or about January 8, 2021 (the “Pennsylvania Class”). 78. Excluded from the Classes are the following individuals and/or entities: Defendant and Defendant’s parents, subsidiaries, affiliates, officers and directors, and any entity in which Defendant has a controlling interest; all individuals who make a timely election to be excluded 17 from this proceeding using the correct protocol for opting out; any and all federal, state or local governments, including but not limited to their departments, agencies, divisions, bureaus, boards, sections, groups, counsels and/or subdivisions; and all judges assigned to hear any aspect of this litigation, as well as their immediate family members. 79. Plaintiffs reserve the right to modify or amend the definition of the proposed classes before the Court determines whether certification is appropriate. 80. Numerosity, Fed R. Civ. P. 23(a)(1): The Nationwide Class (the “Class”) are so numerous that joinder of all members is impracticable. Defendant has identified thousands of current and former patients whose PII and PHI may have been improperly accessed in the Data Breach, and the Class is apparently identifiable within Defendant’s records. 81. Commonality, Fed. R. Civ. P. 23(a)(2) and (b)(3): Questions of law and fact common to the Classes exist and predominate over any questions affecting only individual Class Members. These include: a. Whether and to what extent Defendant had a duty to protect the PII and PHI of Plaintiffs and Class Members; b. Whether Defendant had respective duties not to disclose the PII and PHI of Plaintiffs and Class Members to unauthorized third parties; c. Whether Defendant had a duty not to use the PII and PHI of Plaintiffs and Class Members for non-business purposes; d. Whether Defendant failed to adequately safeguard the PII and PHI of Plaintiffs and Class Members; e. Whether and when Defendant actually learned of the Data Breach; f. Whether Defendant adequately, promptly, and accurately informed Plaintiffs and 18 Class Members that their PII and PHI had been compromised; g. Whether Defendant violated the law by failing to promptly notify Plaintiffs and Class Members that their PII and PHI had been compromised; h. Whether Defendant failed to implement and maintain reasonable security procedures and practices appropriate to the nature and scope of the information compromised in the Data Breach; i. Whether Defendant adequately addressed and fixed the vulnerabilities which permitted the Data Breach to occur; j. Whether Defendant engaged in unfair, unlawful, or deceptive practices by failing to safeguard the PII of Plaintiffs and Class Members; k. Whether Plaintiffs and Class Members are entitled to actual, damages, and/or statutory damages as a result of Defendant’s wrongful conduct; l. Whether Plaintiffs and Class Members are entitled to restitution as a result of Defendant’s wrongful conduct; and m. Whether Plaintiffs and Class Members are entitled to injunctive relief to redress the imminent and currently ongoing harm faced as a result of the Data Breach. 82. Typicality, Fed. R. Civ. P. 23(a)(3): Plaintiffs’ claims are typical of those of other Class Members because all had their PII compromised as a result of the Data Breach, due to Defendant’s misfeasance. 83. Policies Generally Applicable to the Class: This class action is also appropriate for certification because Defendant has acted or refused to act on grounds generally applicable to the Class, thereby requiring the Court’s imposition of uniform relief to ensure compatible standards of conduct toward the Class Members and making final injunctive relief appropriate with respect 19 to the Class as a whole. Defendant’s policies challenged herein apply to and affect Class Members uniformly and Plaintiffs’ challenge of these policies hinges on Defendant’s conduct with respect to the Class as a whole, not on facts or law applicable only to Plaintiffs. 84. Adequacy, Fed. R. Civ. P. 23(a)(4): Plaintiffs will fairly and adequately represent and protect the interests of the Class Members in that they have no disabling conflicts of interest that would be antagonistic to those of the other Members of the Class. Plaintiffs seek no relief that is antagonistic or adverse to the Members of the Class and the infringement of the rights and the damages they have suffered are typical of other Class Members. Plaintiffs have retained counsel experienced in complex class action litigation, and Plaintiffs intend to prosecute this action vigorously. 85. Superiority and Manageability, Fed. R. Civ. P. 23(b)(3): The class litigation is an appropriate method for fair and efficient adjudication of the claims involved. Class action treatment is superior to all other available methods for the fair and efficient adjudication of the controversy alleged herein; it will permit a large number of Class Members to prosecute their common claims in a single forum simultaneously, efficiently, and without the unnecessary duplication of evidence, effort, and expense that hundreds of individual actions would require. Class action treatment will permit the adjudication of relatively modest claims by certain Class Members, who could not individually afford to litigate a complex claim against large corporations, like Defendant. Further, even for those Class Members who could afford to litigate such a claim, it would still be economically impractical and impose a burden on the courts. 86. The nature of this action and the nature of laws available to Plaintiffs and Class Members make the use of the class action device a particularly efficient and appropriate procedure to afford relief to Plaintiffs and Class Members for the wrongs alleged because Defendant would 20 necessarily gain an unconscionable advantage since it would be able to exploit and overwhelm the limited resources of each individual Class Member with superior financial and legal resources; the costs of individual suits could unreasonably consume the amounts that would be recovered; proof of a common course of conduct to which Plaintiffs were exposed is representative of that experienced by the Class and will establish the right of each Class Member to recover on the cause of action alleged; and individual actions would create a risk of inconsistent results and would be unnecessary and duplicative of this litigation. 87. The litigation of the claims brought herein is manageable. Defendant’s uniform conduct, the consistent provisions of the relevant laws, and the ascertainable identities of Class Members demonstrates that there would be no significant manageability problems with prosecuting this lawsuit as a class action. 88. Adequate notice can be given to Class Members directly using information maintained in Defendant’s records. 89. Unless a Class-wide injunction is issued, Defendant may continue in its failure to properly secure the PII and PHI of Class Members, Defendant may continue to refuse to provide proper notification to Class Members regarding the Data Breach, and Defendant may continue to act unlawfully as set forth in this Amended Complaint. 90. Further, Defendant has acted or refused to act on grounds generally applicable to the Classes and, accordingly, final injunctive or corresponding declaratory relief with regard to the Class Members as a whole is appropriate under Rule 23(b)(2) of the Federal Rules of Civil Procedure. 91. Likewise, particular issues under Rule 23(c)(4) are appropriate for certification because such claims present only particular, common issues, the resolution of which would 21 advance the disposition of this matter and the parties’ interests therein. Such particular issues include, but are not limited to: a. Whether Defendant owed a legal duty to Plaintiffs and Class Members to exercise due care in collecting, storing, using, and safeguarding their PII and PHI; b. Whether Defendant breached a legal duty to Plaintiffs and Class Members to exercise due care in collecting, storing, using, and safeguarding their PII and PHI; c. Whether Defendant failed to comply with their own policies and applicable laws, regulations, and industry standards relating to data security; d. Whether an implied contract existed between Defendant on the one hand, and Plaintiffs and Class Members on the other, and the terms of that implied contract; e. Whether Defendant breached the implied contract; f. Whether Defendant adequately, and accurately informed Plaintiffs and Class Members that their PII and PHI had been compromised; g. Whether Defendant failed to implement and maintain reasonable security procedures and practices appropriate to the nature and scope of the information compromised in the Data Breach; h. Whether Defendant engaged in unfair, unlawful, or deceptive practices by failing to safeguard the PII and PHI of Plaintiffs and Class Members; and, i. Whether Class Members are entitled to actual damages, statutory damages, injunctive relief, and/or punitive damages as a result of Defendant’s wrongful conduct. 22 COUNT I Negligence (On Behalf of Plaintiffs and the Nationwide Class) 92. Plaintiffs re-allege and incorporate by reference herein all of the allegations contained in paragraphs 1 through 91. 93. As a condition of their treatment by Defendant, Defendant’s current and former patients were obligated to provide Defendant with certain PII and PHI, including their names, addresses, dates of birth, Social Security numbers, driver’s license / state ID numbers, passport numbers, credit/debit card information, financial account information, and health insurance information. 94. As a condition of their treatment by Defendant, Defendant created PII and PHI for Defendant’s current and former patients, including their MPI numbers, medical treatment/diagnosis information, medical record information, and health claims information. 95. Plaintiffs and the Class Members entrusted their PII and PHI to Defendant on the premise and with the understanding that Defendant would safeguard their information, use their PII and PHI for business purposes only, and/or not disclose their PII and PHI to unauthorized third parties. 96. Defendant has full knowledge of the sensitivity of the PII and PHI and the types of harm that Plaintiffs and Class Members could and would suffer if the PII and PHI were wrongfully disclosed. 97. Defendant knew or reasonably should have known that the failure to exercise due 23 care in the collecting, storing, and using of its current and former patients’ PII and PHI involved an unreasonable risk of harm to Plaintiffs and Class Members, even if the harm occurred through the criminal acts of a third party. 98. Defendant had a duty to exercise reasonable care in safeguarding, securing, and protecting such information from being compromised, lost, stolen, misused, and/or disclosed to unauthorized parties. This duty includes, among other things, designing, maintaining, and testing Defendant’s security protocols to ensure that Plaintiffs’ and Class Members’ information in Defendant’s possession was adequately secured and protected. 99. Defendant also had a duty to exercise appropriate clearinghouse practices to remove former patients’ PII it was no longer required to retain pursuant to regulations. 100. Defendant also had a duty to have procedures in place to detect and prevent the improper access and misuse of Plaintiffs’ and Class Members’ PII and PHI. 101. Defendant’s duty to use reasonable security measures arose as a result of the special relationship that existed between Defendant and Plaintiffs and Class Members. That special relationship arose because Plaintiffs and Class Members entrusted Defendant with their confidential PII and PHI, a necessary part of obtaining treatment from Defendant. 102. Defendant was subject to an “independent duty,” untethered to any contract between Defendant and Plaintiffs or Class Members. 103. A breach of security, unauthorized access, and resulting injury to Plaintiffs and the Class Members was reasonably foreseeable, particularly in light of Defendant’s inadequate security practices. 104. Plaintiffs and Class Members were the foreseeable and probable victims of any inadequate security practices and procedures. Defendant knew or should have known of the 24 inherent risks in collecting and storing the PII and PHI of Plaintiffs and the Class, the critical importance of providing adequate security of that PII and PHI, and the necessity for encrypting PII and PHI stored on Defendant’s systems. 105. Defendant’s own conduct created a foreseeable risk of harm to Plaintiffs and Class Members. Defendant’s misconduct included, but was not limited to, its failure to take the steps and opportunities to prevent the Data Breach as set forth herein. Defendant’s misconduct also included its decision not to comply with industry standards for the safekeeping of Plaintiffs’ and Class Members’ PII, including basic encryption techniques freely available to Defendant. 106. Plaintiffs and Class Members had no ability to protect their PII and PHI that was in, and possibly remains in, Defendant’s possession. 107. Defendant was in a position to protect against the harm suffered by Plaintiffs and Class Members as a result of the Data Breach. 108. Defendant had and continues to have a duty to adequately disclose that the PII and PHI of Plaintiffs and Class Members within Defendant’s possession might have been compromised, how it was compromised, and precisely the types of data that were compromised and when. Such notice was necessary to allow Plaintiffs and the Class Members to take steps to prevent, mitigate, and repair any identity theft and the fraudulent use of their PII and PHI by third 109. Defendant had a duty to employ proper procedures to prevent the unauthorized dissemination of the PII and/or PHI of Plaintiffs and Class Members. 110. Defendant has admitted that the PII and PHI of Plaintiffs and Class Members was wrongfully lost and disclosed to unauthorized third persons as a result of the Data Breach. 111. Defendant, through its actions and/or omissions, unlawfully breached its duties to 25 Plaintiffs and Class Members by failing to implement industry protocols and exercise reasonable care in protecting and safeguarding the PII and PHI of Plaintiffs and Class Members during the time the PII and PHI was within Defendant’s possession or control. 112. Defendant improperly and inadequately safeguarded the PII and PHI of Plaintiffs and Class Members in deviation of standard industry rules, regulations, and practices at the time of the Data Breach. 113. Defendant failed to heed industry warnings and alerts to provide adequate safeguards to protect its current and former patients’ PII and PHI in the face of increased risk of 114. Defendant, through its actions and/or omissions, unlawfully breached its duty to Plaintiffs and Class Members by failing to have appropriate procedures in place to detect and prevent dissemination of its current and former patients’ PII and PHI. 115. Defendant breached its duty to exercise appropriate clearinghouse practices by failing to remove former patients’ PII and PHI it was no longer required to retain pursuant to regulations. 116. Defendant, through its actions and/or omissions, unlawfully breached its duty to adequately and timely disclose to Plaintiffs and Class Members the existence and scope of the Data Breach. 117. But for Defendant’s wrongful and negligent breach of duties owed to Plaintiffs and Class Members, the PII and PHI of Plaintiffs and Class Members would not have been compromised. 118. There is a close causal connection between Defendant’s failure to implement security measures to protect the PII and PHI of Plaintiffs and Class Members and the harm suffered 26 or risk of imminent harm suffered by Plaintiffs and the Class. Plaintiffs’ and Class Members’ PII and PHI was lost and accessed as the proximate result of Defendant’s failure to exercise reasonable care in safeguarding such PII and PHI by adopting, implementing, and maintaining appropriate security measures. 119. Additionally, Section 5 of the FTC Act prohibits “unfair . . . practices in or affecting commerce,” including, as interpreted and enforced by the FTC, the unfair act or practice by businesses, such as Defendant, of failing to use reasonable measures to protect PII and PHI. The FTC publications and orders described above also form part of the basis of Defendant’s duty in this regard. 120. Defendant violated Section 5 of the FTC Act by failing to use reasonable measures to protect PII and PHI and not complying with applicable industry standards, as described in detail herein. Defendant’s conduct was particularly unreasonable given the nature and amount of PII and PHI it obtained and stored and the foreseeable consequences of the immense damages that would result to Plaintiffs and Class Members. 121. Defendant’s violation of Section 5 of the FTC Act constitutes negligence per se. 122. Plaintiffs and Class Members are within the class of persons that the FTC Act was intended to protect. 123. The harm that occurred as a result of the Data Breach is the type of harm the FTC Act was intended to guard against. The FTC has pursued enforcement actions against businesses, which, as a result of their failure to employ reasonable data security measures and avoid unfair and deceptive practices, caused the same harm as that suffered by Plaintiffs and the Class. 124. As a direct and proximate result of Defendant’s negligence and negligence per se, Plaintiffs and Class Members have suffered and will suffer injury, including but not limited to: (i) 27 actual identity theft; (ii) the loss of the opportunity of how their PII and PHI is used; (iii) the compromise, publication, and/or theft of their PII and PHI; (iv) out-of-pocket expenses associated with the prevention, detection, and recovery from identity theft, tax fraud, and/or unauthorized use of their PII and PHI; (v) lost opportunity costs associated with effort expended and the loss of productivity addressing and attempting to mitigate the actual and future consequences of the Data Breach, including but not limited to efforts spent researching how to prevent, detect, contest, and recover from tax fraud and identity theft; (vi) costs associated with placing freezes on credit reports; (vii) the continued risk to their PII and PHI, which remain in Defendant’s possession and is subject to further unauthorized disclosures so long as Defendant fails to undertake appropriate and adequate measures to protect the current and former patients’ PII and PHI in its continued possession; and (viii) future costs in terms of time, effort, and money that will be expended to prevent, detect, contest, and repair the impact of the PII and PHI compromised as a result of the Data Breach for the remainder of the lives of Plaintiffs and Class Members. 125. As a direct and proximate result of Defendant’s negligence and negligence per se, Plaintiffs and Class Members have suffered and will continue to suffer other forms of injury and/or harm, including, but not limited to, anxiety, emotional distress, loss of privacy, and other economic and non-economic losses. 126. Additionally, as a direct and proximate result of Defendant’s negligence and negligence per se, Plaintiffs and Class members have suffered and will suffer the continued risks of exposure of their PII and PHI, which remain in Defendant’s possession and is subject to further unauthorized disclosures so long as Defendant fails to undertake appropriate and adequate measures to protect the PII and PHI in their continued possession. 28 COUNT II Breach of Implied Contract (On Behalf of Plaintiffs and the Nationwide Class) 127. Plaintiffs and Class Members re-allege and incorporate by reference herein all of the allegations contained in paragraphs 1 through 91. 128. Defendant required Plaintiffs and Class Members to provide their personal information, including names, addresses, dates of birth, Social Security numbers, driver’s license / state ID numbers, passport numbers, credit/debit card information, financial account information, health insurance information, and other personal information as a condition of their treatment. 129. As a condition of Plaintiffs’ and Class Members’ treatment with Defendant, they provided their personal information to Defendant and Defendant created additional information about Plaintiffs, including MPI numbers, medical treatment/diagnosis information, medical record information, and health claims information. In so doing, Plaintiffs and Class Members entered into implied contracts with Defendant by which Defendant agreed to safeguard and protect such information, to keep such information secure and confidential, and to timely and accurately notify Plaintiffs and Class Members if their data had been breached, compromised, or stolen. 130. Plaintiffs and Class Members fully performed their obligations under the implied contracts with Defendant. 131. Defendant breached the implied contracts it made with Plaintiffs and Class Members by failing to safeguard and protect their personal information and by failing to provide timely and accurate notice to them that personal was compromised as a result of the data breach. 132. As a direct and proximate result of Defendant’s above-described breach of implied contract, Plaintiffs and Class Members have suffered (and will continue to suffer) ongoing, imminent, and impending threat of identity theft crimes, fraud, and abuse, resulting in monetary 29 loss and economic harm; actual identity theft crimes, fraud, and abuse, resulting in monetary loss and economic harm; loss of the confidentiality of the stolen confidential data; the illegal sale of the compromised data on the dark web; expenses and/or time spent on credit monitoring and identity theft insurance; time spent scrutinizing bank statements, credit card statements, and credit reports; expenses and/or time spent initiating fraud alerts, decreased credit scores and ratings; lost work time; and other economic and non-economic harm. COUNT III Invasion of Privacy (On Behalf of Plaintiffs and the Nationwide Class) 133. Plaintiffs re-allege and incorporate by reference herein all of the allegations contained in paragraphs 1 through 91. 134. Plaintiffs and Class Members had a legitimate expectation of privacy to their PII and PHI and were entitled to the protection of this information against disclosure to unauthorized third parties. 135. Defendant owed a duty to its current and former patients, including Plaintiffs and Class Members, to keep their PII and PHI contained as a part thereof, confidential. 136. Defendant failed to protect and released to unknown and unauthorized third parties the PII and/or PHI of Plaintiffs and Class Members. 137. Defendant allowed unauthorized and unknown third parties access to and examination of the PII and/or PHI of Plaintiffs and Class Members, by way of Defendant’s failure to protect the PII and PHI. 138. The unauthorized release to, custody of, and examination by unauthorized third parties of the PII and/or PHI of Plaintiffs and Class Members is highly offensive to a reasonable 30 139. The intrusion was into a place or thing, which was private and is entitled to be private. Plaintiffs and Class Members disclosed their PII and PHI to Defendant, or allowed Defendant to create their PII and PHI, as part of their treatment by Defendant, but privately with an intention that the PII and PHI would be kept confidential and would be protected from unauthorized disclosure. Plaintiffs and Class Members were reasonable in their belief that such information would be kept private and would not be disclosed without their authorization. 140. The Data Breach at the hands of Defendant constitutes an intentional interference with Plaintiffs and Class Members’ interest in solitude or seclusion, either as to their persons or as to their private affairs or concerns, of a kind that would be highly offensive to a reasonable person. 141. Defendant acted with a knowing state of mind when its permitted the Data Breach to occur because it was with actual knowledge that its information security practices were inadequate and insufficient. 142. Because Defendant acted with this knowing state of mind, it had notice and knew the inadequate and insufficient information security practices would cause injury and harm to Plaintiffs and Class Members. 143. As a proximate result of the above acts and omissions of Defendant, the PII and PHI of Plaintiffs and Class Members was disclosed to third parties without authorization, causing Plaintiffs and Class Members to suffer damages. 144. Unless and until enjoined, and restrained by order of this Court, Defendant’s wrongful conduct will continue to cause great and irreparable injury to Plaintiffs and Class Members in that the PII and PHI maintained by Defendant can be viewed, distributed, and used by unauthorized persons for years to come. Plaintiffs and Class Members have no adequate remedy 31 at law for the injuries in that a judgment for monetary damages will not end the invasion of privacy for Plaintiffs and the Class. COUNT IV Breach of Confidence (On Behalf of Plaintiffs and the Nationwide Class) 145. Plaintiffs re-allege and incorporate by reference herein all of the allegations contained in paragraphs 1 through 91. 146. At all times during Plaintiffs’ and Class Members’ interactions with Defendant, Defendant was fully aware of the confidential and sensitive nature of Plaintiffs’ and Class Members’ PII and PHI that Plaintiffs and Class Members treated by Defendant provided to Defendant or allowed Defendant to create. 147. As alleged herein and above, Defendant’s relationship with Plaintiffs and Class Members was governed by terms and expectations that Plaintiffs’ and Class Members’ PII and PHI would be collected, stored, and protected in confidence, and would not be disclosed to unauthorized third parties. 148. Plaintiffs and Class Members treated by Defendant provided Plaintiffs’ and Class Members’ PII and PHI to Defendant with the explicit and implicit understandings that Defendant would protect and not permit the PII and/or PHI to be disseminated to any unauthorized third 149. Plaintiffs and Class Members treated by Defendant also provided Plaintiffs’ and Class Members’ PII and PHI to Defendant with the explicit and implicit understandings that Defendant would take precautions to protect that PII from unauthorized disclosure. 32 150. Defendant voluntarily received in confidence Plaintiffs’ and Class Members’ PII and PHI with the understanding that PII and PHI would not be disclosed or disseminated to the public or any unauthorized third parties. 151. Due to Defendant’s failure to prevent and avoid the Data Breach from occurring, Plaintiffs’ and Class Members’ PII and PHI was disclosed and misappropriated to unauthorized third parties beyond Plaintiffs’ and Class Members’ confidence, and without their express permission. 152. As a direct and proximate cause of Defendant’s actions and/or omissions, Plaintiffs and Class Members have suffered damages. 153. But for Defendant’s disclosure of Plaintiffs’ and Class Members’ PII and PHI in violation of the parties’ understanding of confidence, their PII and PHI would not have been compromised, stolen, viewed, accessed, and used by unauthorized third parties. Defendant’s Data Breach was the direct and legal cause of the theft of Plaintiffs’ and Class Members’ PII and/or PHI as well as the resulting damages. 154. The injury and harm Plaintiffs and Class Members suffered was the reasonably foreseeable result of Defendant’s unauthorized disclosure of Plaintiffs’ and Class Members’ PII and/or PHI. Defendant knew or should have known its methods of accepting and securing Plaintiffs’ and Class Members’ PII was inadequate as it relates to, at the very least, securing servers and other equipment containing Plaintiffs’ and Class Members’ PII and PHI. 155. As a direct and proximate result of Defendant’s breach of their confidence with Plaintiffs and Class Members, Plaintiffs and Class Members have suffered and will suffer injury, including but not limited to: (i) actual identity theft; (ii) the loss of the opportunity how their PII and PHI is used; (iii) the compromise, publication, and/or theft of their PII and PHI; (iv) out-of- 33 pocket expenses associated with the prevention, detection, and recovery from identity theft, tax fraud, and/or unauthorized use of their PII and PHI; (v) lost opportunity costs associated with effort expended and the loss of productivity addressing and attempting to mitigate the actual and future consequences of the Data Breach, including but not limited to efforts spent researching how to prevent, detect, contest, and recover from tax fraud and identity theft; (vi) costs associated with placing freezes on credit reports; (vii) the continued risk to their PII and PHI, which remain in Defendant’s possession and is subject to further unauthorized disclosures so long as Defendant fails to undertake appropriate and adequate measures to protect the PII and PHI of current and former patients; and (viii) future costs in terms of time, effort, and money that will be expended to prevent, detect, contest, and repair the impact of the PII and PHI compromised as a result of the Data Breach for the remainder of the lives of Plaintiffs and Class Members. 156. As a direct and proximate result of Defendant’s breaches of confidence, Plaintiffs and Class Members have suffered and will continue to suffer other forms of injury and/or harm, including, but not limited to, anxiety, emotional distress, loss of privacy, and other economic and non-economic losses. COUNT V Violation of the Florida Deceptive and Unfair Trade Practices Act, (Fla. Stat. §§ 502.201, et seq.) (On Behalf of Plaintiff Jane Doe and the Florida Class) 157. Plaintiff Jane Doe re-alleges and incorporates by reference herein all of the allegations contained in paragraphs 1 through 91. 158. Defendant engaged in the conduct alleged in this Complaint through transactions in and involving trade and commerce. Mainly, Defendant obtained Plaintiff Jane Doe’s and Florida Class members’ PII and PHI through advertising, soliciting, providing, offering, and/or 34 distributing goods and services to Jane Doe and Florida Class members and the Data Breach occurred through the use of the internet, an instrumentality of interstate commerce. 159. As alleged herein this Complaint, Defendant engaged in unfair or deceptive acts or practices in the conduct of consumer transactions, including, among other things, the following: a. failure to implement adequate data security practices to safeguard PII and PHI; b. failure to make only authorized disclosures of current and former patients’ PII and PHI; c. failure to timely and accurately disclose the Data Breach to Plaintiff Jane Doe and Florida Class members; d. failure to disclose that its computer systems and data security practices were inadequate to safeguard PII and PHI from theft; and e. failure to timely and accurately disclose the Data Breach to Plaintiff Jane Doe and Florida Class members. 160. Defendant’s actions constitute unconscionable, deceptive, or unfair acts or practices because, as alleged herein, Defendant engaged in immoral, unethical, oppressive, and unscrupulous activities that are and were substantially injurious to its current and former patients. 161. In committing the acts alleged above, Defendant engaged in unconscionable, deceptive, and unfair acts and practices acts by omitting, failing to disclose, or inadequately disclosing to its current and former patients that it did not follow industry best practices for the collection, use, and storage of PII and PHI. 162. As a direct and proximate result of Defendant’s conduct, Plaintiff Jane Doe and Florida Class members have been harmed and have suffered damages including, but not limited to: damages arising from identity theft and fraud; out-of-pocket expenses associated with 35 procuring identity protection and restoration services; increased risk of future identity theft and fraud, and the costs associated therewith; and time spent monitoring, addressing and correcting the current and future consequences of the Data Breach. 163. As a direct and proximate result of the unconscionable, unfair, and deceptive acts or practices alleged herein, Plaintiff Jane Doe and Florida Class members have been damaged and are entitled to recover actual damages, an order providing declaratory and injunctive relief, and reasonable attorneys’ fees and costs, to the extent permitted by law. 164. Also as a direct result of Defendant’s knowing violation of the Florida Unfair and Deceptive Trade Practices Act, Plaintiff Jane Doe and Florida Class members are entitled to damages as well as injunctive relief, including, but not limited to: f. Ordering that Defendant engage third-party security auditors/penetration testers as well as internal security personnel to conduct testing, including simulated attacks, penetration tests, and audits on Defendant’s systems on a periodic basis, and ordering Defendant to promptly correct any problems or issues detected by such third-party security auditors; g. Ordering that Defendant engage third-party security auditors and internal personnel to run automated security monitoring; h. Ordering that Defendant audit, test, and train its security personnel regarding any new or modified procedures; i. Ordering that Defendant segment PII and PHI by, among other things, creating firewalls and access controls so that if one area of Defendant is compromised, hackers cannot gain access to other portions of Defendant’s systems; 36 j. Ordering that Defendant purge, delete, and destroy in a reasonable secure manner PII not necessary for its provisions of services; k. Ordering that Defendant conduct regular database scanning and securing checks; l. Ordering that Defendant routinely and continually conduct internal training and education to inform internal security personnel how to identify and contain a breach when it occurs and what to do in response to a breach; and m. Ordering Defendant to meaningfully educate its current and former patients about the threats they face as a result of the loss of their PII and PHI to third parties, as well as the steps Defendant’s current and former patients must take to protect themselves. COUNT VI Violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law, (73 P.S. §§ 202-1, et seq.) (On Behalf of Plaintiff John Doe and the Pennsylvania Class) 165. Plaintiff John Doe re-alleges and incorporates by reference herein all of the allegations contained in paragraphs 1 through 91. 166. Defendant engaged in the conduct alleged in this Complaint through transactions in and involving trade and commerce. Mainly, Defendant obtained Plaintiff John Doe’s and Pennsylvania Class members’ PII and PHI through trade or commerce directly or indirectly affecting Plaintiff John Doe and Pennsylvania Class members and the Data Breach occurred through the use of the internet, an instrumentality of interstate commerce. 167. As alleged herein this Complaint, Defendant engaged in unfair or deceptive acts or practices in the conduct of consumer transactions, including, among other things, the following: n. failure to implement adequate data security practices to safeguard PII and PHI; 37 o. failure to make only authorized disclosures of current and former patients’ PII and PHI; p. failure to timely and accurately disclose the Data Breach to Plaintiff John Doe and Pennsylvania Class members; q. failure to disclose that its computer systems and data security practices were inadequate to safeguard PII and PHI from theft; and r. failure to timely and accurately disclose the Data Breach to Plaintiff John Doe and Pennsylvania Class members. 168. Defendant’s actions constitute unconscionable, deceptive, or unfair acts or practices because, as alleged herein, Defendant engaged in immoral, unethical, oppressive, and unscrupulous activities that are and were substantially injurious to its current and former patients. 169. In committing the acts alleged above, Defendant engaged in unconscionable, deceptive, and unfair acts and practices acts by omitting, failing to disclose, or inadequately disclosing to its current and former patients that it did not follow industry best practices for the collection, use, and storage of PII and PHI. 170. As a direct and proximate result of Defendant’s conduct, Plaintiff John Doe and Pennsylvania Class members have been harmed and have suffered damages including, but not limited to: damages arising from identity theft and fraud; out-of-pocket expenses associated with procuring identity protection and restoration services; increased risk of future identity theft and fraud, and the costs associated therewith; and time spent monitoring, addressing and correcting the current and future consequences of the Data Breach. 171. As a direct and proximate result of the unconscionable, unfair, and deceptive acts or practices alleged herein, Plaintiff John Doe and Pennsylvania Class members have been 38 damaged and are entitled to recover actual damages, an order providing declaratory and injunctive relief, and reasonable attorneys’ fees and costs, to the extent permitted by law. 172. Also as a direct result of Defendant’s knowing violation of the Florida Unfair and Deceptive Trade Practices Act, Plaintiff John Doe and Pennsylvania Class members are entitled to damages as well as injunctive relief, including, but not limited to: s. Ordering that Defendant engage third-party security auditors/penetration testers as well as internal security personnel to conduct testing, including simulated attacks, penetration tests, and audits on Defendant’s systems on a periodic basis, and ordering Defendant to promptly correct any problems or issues detected by such third-party security auditors; t. Ordering that Defendant engage third-party security auditors and internal personnel to run automated security monitoring; u. Ordering that Defendant audit, test, and train its security personnel regarding any new or modified procedures; v. Ordering that Defendant segment PII and PHI by, among other things, creating firewalls and access controls so that if one area of Defendant is compromised, hackers cannot gain access to other portions of Defendant’s systems; w. Ordering that Defendant purge, delete, and destroy in a reasonable secure manner PII and PHI not necessary for its provisions of services; x. Ordering that Defendant conduct regular database scanning and securing checks; y. Ordering that Defendant routinely and continually conduct internal training and education to inform internal security personnel how to identify and contain a breach when it occurs and what to do in response to a breach; and 39 z. Ordering Defendant to meaningfully educate its current and former patients about the threats they face as a result of the loss of their PII and PHI to third parties, as well as the steps Defendant’s current and former patients must take to protect themselves. PRAYER FOR RELIEF WHEREFORE, Plaintiffs, on behalf of themselves and all Class Members, request judgment against Defendant and that the Court grant the following: A. For an Order certifying the Nationwide Class, the Florida Class, and the Pennsylvania Class as defined herein, and appointing Plaintiffs and their Counsel to represent the Class; B. For equitable relief enjoining Defendant from engaging in the wrongful conduct complained of herein pertaining to the misuse and/or disclosure of Plaintiffs’ and the Class Members’ PII and PHI, and from refusing to issue prompt, complete, and accurate disclosures to Plaintiffs and the Class Members; C. For injunctive relief requested by Plaintiffs, including but not limited to, injunctive and other equitable relief as is necessary to protect the interests of Plaintiffs and Class Members, including but not limited to an order: i. prohibiting Defendant from engaging in the wrongful and unlawful acts described herein; ii. requiring Defendant to protect, including through encryption, all data collected through the course of its business in accordance with all applicable regulations, industry standards, and federal, state or local laws; 40 iii. requiring Defendant to delete, destroy, and purge the personal identifying information of Plaintiffs and Class Members unless Defendant can provide to the Court reasonable justification for the retention and use of such information when weighed against the privacy interests of Plaintiffs and Class Members; iv. requiring Defendant to implement and maintain a comprehensive Information Security Program designed to protect the confidentiality and integrity of the personal identifying information of Plaintiffs and Class Members’ personal identifying information; v. prohibiting Defendant from maintaining Plaintiffs’ and Class Members’ personal identifying information on a cloud-based database; vi. requiring Defendant to engage independent third-party security auditors/penetration testers as well as internal security personnel to conduct testing, including simulated attacks, penetration tests, and audits on Defendant’s systems on a periodic basis, and ordering Defendant to promptly correct any problems or issues detected by such third-party security auditors; vii. requiring Defendant to engage independent third-party security auditors and internal personnel to run automated security monitoring; viii. requiring Defendant to audit, test, and train its security personnel regarding any new or modified procedures; ix. requiring Defendant to segment data by, among other things, creating firewalls and access controls so that if one area of Defendant’s network is compromised, hackers cannot gain access to other portions of Defendant’s systems; x. requiring Defendant to conduct regular database scanning and securing checks; 41 xi. requiring Defendant to establish an information security training program that includes at least annual information security training for all employees, with additional training to be provided as appropriate based upon the employees’ respective responsibilities with handling personal identifying information, as well as protecting the personal identifying information of Plaintiffs and Class Members; xii. requiring Defendant to routinely and continually conduct internal training and education, and on an annual basis to inform internal security personnel how to identify and contain a breach when it occurs and what to do in response to a breach; xiii. requiring Defendant to implement a system of tests to assess its respective employees’ knowledge of the education programs discussed in the preceding subparagraphs, as well as randomly and periodically testing employees compliance with Defendant’s policies, programs, and systems for protecting personal identifying information; xiv. requiring Defendant to implement, maintain, regularly review, and revise as necessary a threat management program designed to appropriately monitor Defendant’s information networks for threats, both internal and external, and assess whether monitoring tools are appropriately configured, tested, and updated; xv. requiring Defendant to meaningfully educate all Class Members about the threats that they face as a result of the loss of their confidential personal identifying information to third parties, as well as the steps affected individuals 42 must take to protect themselves; xvi. requiring Defendant to implement logging and monitoring programs sufficient to track traffic to and from Defendant’s servers; and for a period of 10 years, appointing a qualified and independent third party assessor to conduct a SOC 2 Type 2 attestation on an annual basis to evaluate Defendant’s compliance with the terms of the Court’s final judgment, to provide such report to the Court and to counsel for the class, and to report any deficiencies with compliance of the Court’s final judgment; For an award of damages, including actual, nominal, and consequential damages, as allowed by law in an amount to be determined; D. For an award of damages, including actual, nominal, and consequential damages, as allowed by law in an amount to be determined; E. For an award of attorneys’ fees, costs, and litigation expenses, as allowed by law; F. For prejudgment interest on all amounts awarded; and G. Such other and further relief as this Court may deem just and proper. DEMAND FOR JURY TRIAL Plaintiffs hereby demand that this matter be tried before a jury. Date: January 28, 2021 Respectfully Submitted, /s/ George G. Triantis GEORGE G. TRIANTIS, ESQ. Bar No.: 21254 MORGAN & MORGAN, P.A. 201 N. Franklin Street, Suite 700 Tampa, Florida 33602 Telephone: 813-223-5505 Facsimile: 813-257-0572 Email: GTriantis@forthepeople.com JOHN A. YANCHUNIS (Pro Hac Vice application forthcoming) RYAN D. MAXEY (Pro Hac Vice application forthcoming) 43 MORGAN & MORGAN 201 N. Franklin Street, 7th Floor Tampa, Florida 33602 (813) 223-5505 jyanchunis@ForThePeople.com rmaxey@ForThePeople.com RHINE LAW FIRM, P.C. Joel R. Rhine North Carolina State Bar No. 16028 Email: jrr@rhinelawfirm.com Martin Ramey North Carolina State Bar No. 33617 Email: mjr@rhinelawfirm.com 1612 Military Cutoff Rd, Suite 300 Wilmington, North Carolina 28403 Tel: (910) 772-9960 Fax: (910) 772-9062 44 Exhibit 1 Return Mail Processing Center ������������� ����������������������� <<Mail ID>> <<Name 1>> <<Name 2>> ������������� ������������� ������������� �������������� �������� ������������� <<City>><<State>><<Zip>> <<Country>> Re: Notice of Data Incident Dear <<Name 1>>, US Fertility (“USF”) provides IT platforms and services to several infertility clinics, including <<Variable Data 2 – Practice>>. ������������������������������������������������������������������������������������������������������������������������� ���������������������������������������������������������������������������������������������������������������������������� �������������������������������������������������������������������������������������������������������� What Happened? On September 14, 2020, USF experienced an IT security event (the “Incident”) that involved the ������������������������������������������������������������������������������������������������������������������� Incident immediately and retained third-party computer forensic specialists to assist in our investigation. Through our ���������������������������������������������������������������������������������������������������������������� ������������������������������������������������������������������������������������������������������������ ����������������������������������������������������������������������������������������������������������������������� �������������������������������������������������������������������������������������������������������������� ��������������������������������������������������������������������������������������������������������������������� ������������������������������������������������������������������������������������������������������������������ �������������������������������������������������������������������������������������������������������������� ���������������������������������� What Information Was Involved?�������������������������������������������������������������������������������������� ���������������������������������������������������������������������������������������������������������������������� ���������������������������������������������������������������������������������������������������������������������� ������������������������������������������������������������������������������������������������������������������������ ���������������������������������������������������������������������������������������������������������������������� ����������������������������������������������������������������������������������������������������������������� ������������������������������������������������������������������������������������������������������������������������� information as a result of the Incident. What We Are Doing.������������������������������������������������������������������������������������������ ������������������������������������������������������������������������������������������������������������������ �������������������������������������������������������������������������������������������������������������������� �������������������������������������������������������������������������������������������������������������������� our existing employee training protocols relating to data protection and security, including training targeted at ����������������������������������������������������������������������������������������������������������������� ������������������������������������������������������������������������������������������������������������������ ����������������������������������������������������������������������������������������������������������� ��������������������������������������������������������������������������������������������������������������� ������������������������������������������������������������������������������������������������������������������� �������������������������������������������������������������������������������������������������������������������������� ������������������������������������������������������������������������ What You Can Do.�������������������������������������������������������������������������������Steps You Can Take to Protect Personal Information.��������������������������������������������������������������������������� ������������������������������������������������������������������������������ For More Information�������������������������������������������������������������������������������������������������� �������������������������������������������������������������������������������������������������������������������� ������������������������������������������������ �������������������������������������������������������������������������������������������������������������������� the information entrusted to us. Sincerely, Carrie Roll Carrie Roll General Counsel Enroll in Complimentary Credit Monitoring ����������������������������������������������������at no cost to you, in an online credit monitoring service (myTrueIdentity) provided by TransUnion Interactive, a subsidiary of TransUnion,® ���������������������������� credit reporting companies. How to Enroll: You can sign up online or via U.S. mail delivery • To enroll in this service, go to the my������������������������www.MyTrueIdentity.com and, in the space ����������� ��� ������������������ ������� ������ ���� ��������������������� ����� <<Insert Unique 12-letter Activation Code>> ������������������������������������������������������������������������������������������� • ��������������������������������������������������������������������������������������������������������������� service, via U.S. mail delivery, please call the TransUnion Fraud Response Services toll-free hotline at 1-855-288-5422��������������������������������������������������������<<Insert static 6-digit Telephone Pass Code>>�������������������������������������������������������������������������������������������� ����������������������������������������������������������������������������������������������������������� identity theft. ���� ���� ����� ��� ���� ���� ������� ��� ������ ������� ����������� �������� �������� �������� ���� ���� <<Enrollment Deadline>>�������������������������������������������������������������������������������� ����������������������������������������������������������������������������������������������������������� ������������������������������������������������������������������������������������������������������������������� ��������������������������������� ADDITIONAL DETAILS REGARDING YOUR 12-MONTH COMPLIMENTARY CREDIT MONITORING SERVICE: • ��������������������������������������������������������������������������������������������������������� report and credit score. • �������������������������������������������������������������������������������������������������������������� ������������������������������������������������������������������������������������������������������������ of address, and more. • The service also includes access to an identity restoration program that provides assistance in the event that ���������������������������������������������������������������������������������������������������������� limitations and exclusions may apply.) Monitor Accounts ������������������������������������������������������������������������������������������������������������������ bureaus. To order your free credit report, visit �������������������������������������������������������������������� ������������������������������������������������������������������������������� of your credit report. ����������������������������������������������������������������������������������������������������������������������� ���������������������������������������������������������������������������������������������������������������������� ������������������������������������������������������������������������������������������������������������������� ����������������������������������������������������������������������������������������������������������������������� ����������������������������������������������������������������������������������������������������������������������� ���������������������������������������������������������������������������������������������������������������������� ������������������������������������������������������������������������������������������������������������������������� ����������������������������������������������������������������������������������� Experian ����������� ��������������� �������������� ����������������������������������� TransUnion ������������ ����������������� 1-888-909-8872 �������������������������� ������ Equifax ������������� ���������������������� �������������� �������������������������������� report-services ��� ����������������������������������������������������������������������������� ��� ����������������������� ��� �������������� ��� ��������������������������������������������������������������������������������������������������������� ��� ��������������������������������������������������������������������������� ��� ����������������������������������������������������������������������������������������������������������� ������������������������� 7. If you are a victim of identity theft, a copy of either the police report, investigative report, or complaint to a ������������������������������������������������� ��������������������������������������������������������������������������������������������������������������������������� ������������������������������������������������������������������������������������������������������������������������������ ������������������������������������������������������������������������������������������������������������������������ ���������������������������������������������������������������������������������������������������������������������������� ���������������������������������������������������������������������������������������������������������� Experian ������������� ��������������� �������������� ���������������������������������� TransUnion ������������� ����������������� �������������� ������������������������� ��������������������������������� Equifax ��������������� ����������������� �������������� �������������������������������� report-services Additional Information �������������������������������������������������������������������������������������������������������������������������� and prevent identity theft by contacting the consumer reporting agencies, the Federal Trade Commission, or your state ����������������� ���� �������� ������ ����������� ���� ��� �������� ���� ���� ������������� ������� ���� ������������ ��� ������� ���������������������,������������������������������������������������������������������������������������ ����������������������������������������������������������������������������������������������������������������� ������������������������������������������������������������������������������������������������������������������� ���������������������������������������������������������������������������������������������������������������������������� ������������������������������������������������������������������������������������������������������������������ ������������������������������������������������������������������������������������������������������������������ �������������������������������������������������������������� California Residents:� ������ ���� ����������� ����� ��� �������� ����������� �����������������������) for additional information on protection against identity theft. Kentucky Residents: ����������������������������������������� � ����������������������������� ������������������������1, ������������������������������������������Maryland R esidents: ����������������������������������������, Consumer Protection Division, �������������������������������M D 21202, ���������������������������������������������������������New Mexico Residents: You have rights �� ���������������������������������������������������������������������������������������������������������������������������� ����������������������������������������������������������������������������������������������������������������������������� ��������������������������������������������������������������������������������������������������������������������must correct or delete ina�������������������������������������������������������������������������������������������������� ������������������������������������������������������������������������������������������������������������������������� ���������������������������������������������������������������������������������������������������������������������� ��������������������������������������������������������������������������������������������������������������������� ������������������������������������������������������������������������������������������������������������������������� ����������������������������������������������������������������������������������������������������������� ���������� ���������������������������������������������������������������� ��� ��� �������� ��������� �������������������� ���������������������������������������������������������������������������������������New York Residents: � ���������������������������������������������������������������������������������������������������������� ������ �����������������������������. North Carolina Residents: ����������������������������������������������, ����� ���� ����������� ���������� ����� ����� �������� �������� ��������� ��� ������������ �������������, Telephone: ����� �����������������������������������������������Oregon Residents: ������������������������������������������������ �������������������������������������������������������������������������Rhode Island Residents:��������� ���� ��������� ��������� ���� ������ ����� �������� ������������ ������ ������� ������� ���������������, Telephone: ������ ����������������������������������������������������������������������������������������������������������������There are (#) Rhode Island residents impacted by this incident. Washington D.C. Residents:���������������������� �������������������������������������������������������������������������������������������������������������������� ����������������������������������. All US Residents: ������������������������������������������������������������ �������������������������������������������������������������������������������������������������������� ���������������� Exhibit 2 US Fertility Provides Notice of Data Security Incident US Fertility (“USF”) is providing notice of a recent incident that may affect the security of certain individuals’ protected health information. USF provides IT platforms and services to several infertility clinics, including Georgia Reproductive Specialists, LLC d/b/a SGF Atlanta, Center for Reproductive Endocrinology, Center for Reproductive Medicine & Advanced Reproductive Technologies, Center for Reproductive Medicine Alabama, Center for Reproductive Medicine Orlando, Coastal Fertility Specialists, Fertility Centers of Illinois, LLC, Fertility Partners of Pennsylvania Surgery Center, LLC, Idaho Center for Reproductive Medicine, Nevada Center for Reproductive Medicine, Nevada Fertility Center, New York Fertility Medical Practice, PLLC d/b/a SGF New York, Northwest Center for Infertility and Reproductive Endocrinology, LLP d/b/a IVF Florida Reproductive Associates, Reproductive Endocrinology Associates of Charlotte, Reproductive Partners Fertility Center - San Diego, Reproductive Partners Medical Group, Inc., Reproductive Science Center of the San Francisco Bay Area, Seattle Reproductive Medicine, SGF Tampa Bay, LLC, Shady Grove Fertility Center of Pennsylvania, PLLC, Shady Grove Reproductive Science Center, P.C., Sher Institute of Reproductive Medicine New York, Sher Institute of Reproductive Medicine St. Louis, UNC Fertility, Utah Fertility Center, Virginia Fertility Associates, LLC d/b/a SGF Richmond, Virginia IVF and Andrology Center, LLC, Arizona Reproductive Medicine Associates, Fertility Centers of Orange County, NYU Langone Reproductive Specialists of New York, Midwest Fertility Specialists, and Boston IVF. On September 14, 2020, USF experienced an IT security event (the “Incident”) that involved the inaccessibility of certain computer systems on our network as a result of a malware infection. We responded to the Incident immediately and retained third-party computer forensic specialists to assist in our investigation. Through our immediate investigation and response, we determined that data on a number of servers and workstations connected to our domain had been encrypted by ransomware. We proactively removed a number of systems from our network upon discovering the Incident. With the assistance of our third-party computer forensic specialists, we remediated the malware identified, ensured the security of our environment, and reconnected systems on September 20, 2020. We also notified federal law enforcement authorities of the Incident and continue to cooperate with their investigation. The forensic investigation is now concluded and confirmed that the unauthorized actor acquired a limited number of files during the period of unauthorized access, which occurred between August 12, 2020 and September 14, 2020, when the ransomware was executed. We have been working diligently with a specialized team of third-party data auditors to perform a comprehensive review of all information contained in the files accessed without authorization as a result of the Incident. The purpose of this review was to accurately identify any individuals whose personal information may have been present within the impacted files and therefore accessible to the unauthorized actor. On November 13, 2020, we began receiving the results of this review and determined that the following information relating to certain individuals was included in the impacted files when they were accessed without authorization: names, addresses, dates of birth, MPI numbers, and Social Security numbers. We recently received the completed results of the data review and determined on December 4, 2020 that information relating to additional individuals, as well as additional information types, were included in the impacted files when those files were accessed without authorization. The full scope of information types now known to potentially impacted by this Incident includes names, addresses, dates of birth, MPI numbers, Social Security numbers, driver’s license / state ID numbers, passport numbers, medical treatment/diagnosis information, medical record information, health insurance/claims information, credit/debit card information, and financial account information. The types of information impacted vary by individual. Please note that we continue to have no evidence of actual misuse of any individual’s information as a result of the Incident. In response to the Incident, USF has taken the following actions to mitigate any risk of compromise to information involved and to better prevent a similar event from recurring: (1) fortified the security of our firewall; (2) utilized the forensic specialists engaged to monitor network activity and remediate any suspicious activity; (3) provided notification to potentially impacted individuals as quickly as possible. We are also adapting our existing employee training protocols relating to data protection and security, including training targeted at recognizing phishing emails. We believe these steps will be effective in mitigating any potential harm to individuals. As always, we encourage individuals to review account statements, explanations of benefits, and credit reports carefully for unexpected activity and to report any questionable activity to the associated institutions immediately. We sincerely apologize that this Incident occurred and remain committed to safeguarding the privacy and security of the information entrusted to us. We have established a dedicated call center for individuals to contact with questions or concerns. If you have any questions regarding this Incident that are not addressed in this notice, please contact our assistance line, which can be reached at 855-914-4699 (toll free), Monday through Friday from 9:00 am to 9:00 pm EST, excluding U.S. holidays. As indicated above, we have no evidence of actual misuse of any individual’s information as a result of this Incident. Included are proactive steps that can be taken to safeguard one’s personal information in response to any data security event: Monitor Accounts Under U.S. law, you are entitled to one free credit report annually from each of the three major credit reporting bureaus. To order your free credit report, visit www.annualcreditreport.com or call, toll-free, 1-877-322-8228. You may also contact the three major credit bureaus directly to request a free copy of your credit report. You also have the right to place a “security freeze” on your credit report, which will prohibit a consumer reporting agency from releasing information in your credit report without your express authorization. The security freeze is designed to prevent credit, loans, and services from being approved in your name without your consent. However, you should be aware that using a security freeze to take control over who gets access to the personal and financial information in your credit report may delay, interfere with, or prohibit the timely approval of any subsequent request or application you make regarding a new loan, credit, mortgage, or any other account involving the extension of credit. Pursuant to federal law, you cannot be charged to place or lift a security freeze on your credit report. Should you wish to place a security freeze, please contact the major consumer reporting agencies listed below: Experian Equifax PO Box 9554 Allen, TX 75013 1-888-397-3742 TransUnion P.O. Box 160 Woodlyn, PA 19094 1-888-909-8872 PO Box 105788 Atlanta, GA 30348-5788 1-800-685-1111 www.experian.com/freeze/center. www.transunion.com/cre www.equifax.com/personal/cr html dit-freeze edit-report-services In order to request a security freeze, you will need to provide the following information: 1. Your full name (including middle initial as well as Jr., Sr., II, III, etc.); 2. Social Security number; 3. Date of birth; 4. If you have moved in the past five (5) years, the addresses where you have lived over the prior five years; 5. Proof of current address, such as a current utility bill or telephone bill; 6. A legible photocopy of a government-issued identification card (state driver’s license or ID card, military identification, etc.); and 7. If you are a victim of identity theft, a copy of either the police report, investigative report, or complaint to a law enforcement agency concerning identity theft. As an alternative to a security freeze, you have the right to place an initial or extended “fraud alert” on your file at no cost. An initial fraud alert is a 1-year alert that is placed on a consumer’s credit file. Upon seeing a fraud alert display on a consumer’s credit file, a business is required to take steps to verify the consumer’s identity before extending new credit. If you are a victim of identity theft, you are entitled to an extended fraud alert, which is a fraud alert lasting seven years. Should you wish to place a fraud alert, please contact any one of the agencies listed below: Experian Equifax P.O. Box 9554 Allen, TX 75013 1-888-397-3742 TransUnion P.O. Box 2000 Chester, PA 19016 1-800-680-7289 P.O. Box 105069 Atlanta, GA 30348 1-888-766-0008 www.experian.com/fraud/center. www.transunion.com/fra www.equifax.com/personal/cre html ud-victim- dit-report-services resource/place-fraud- alert Additional Information You can further educate yourself regarding fraud alerts, security freezes, and the steps you can take to protect yourself and prevent identity theft by contacting the consumer reporting agencies, the Federal Trade Commission, or your state Attorney General. The Federal Trade Commission can be reached at: 600 Pennsylvania Avenue NW, Washington, DC 20580, www.identitytheft.gov, 1-877-ID-THEFT (1-877-438-4338); TTY: 1-866-653-4261. The Federal Trade Commission also encourages those who discover that their information has been misused to file a complaint with them. You can obtain further information on how to file such a complaint by way of the contact information listed above. You have the right to file a police report if you ever experience identity theft or fraud. Please note that in order to file a report with law enforcement for identity theft, you will likely need to provide some proof that you have been a victim. Instances of known or suspected identity theft should also be reported to law enforcement and your state Attorney General. This notice has not been delayed by law enforcement. California Residents: Visit the California Office of Privacy Protection (www.oag.ca.gov/privacy) for additional information on protection against identity theft. Kentucky Residents: Office of the Attorney General of Kentucky, 700 Capitol Avenue, Suite 118 Frankfort, Kentucky 40601, www.ag.ky.gov, Telephone: 1-502-696-5300. Maryland Residents: Office of the Attorney General of Maryland, Consumer Protection Division 200 St. Paul Place Baltimore, MD 21202, www.oag.state.md.us/Consumer, Telephone: 1-888-743-0023. New Mexico Residents: You have rights pursuant to the Fair Credit Reporting Act, such as the right to be told if information in your credit file has been used against you, the right to know what is in your credit file, the right to ask for your credit score, and the right to dispute incomplete or inaccurate information. Further, pursuant to the Fair Credit Reporting Act, the consumer reporting agencies must correct or delete inaccurate, incomplete, or unverifiable information; consumer reporting agencies may not report outdated negative information; access to your file is limited; you must give your consent for credit reports to be provided to employers; you may limit “prescreened” offers of credit and insurance you get based on information in your credit report; and you may seek damages from a violator. You may have additional rights under the Fair Credit Reporting Act not summarized here. Identity theft victims and active duty military personnel have specific additional rights pursuant to the Fair Credit Reporting Act. You can review your rights pursuant to the Fair Credit Reporting Act by visiting www.consumerfinance.gov/f/201504_cfpb_summary_your-rights-under-fcra.pdf, or by writing Consumer Response Center, Room 130-A, Federal Trade Commission, 600 Pennsylvania Ave. N.W., Washington, D.C. 20580. New York Residents: the Attorney General may be contacted at: Office of the Attorney General, The Capitol, Albany, NY 12224-0341; 1-800-771- 7755; https://ag.ny.gov/. North Carolina Residents: Office of the Attorney General of North Carolina, Consumer Protection Division, 9001 Mail Service Center Raleigh, NC 27699-9001, www.ncdoj.gov, Telephone: 1-919-716-6400, 877-566-7226 (toll free within NC). Oregon Residents: Oregon Department of Justice, 1162 Court Street NE, Salem, OR 97301-4096, www.doj.state.or.us/, Telephone: 877-877-9392. Rhode Island Residents: Office of the Attorney General, 150 South Main Street, Providence, Rhode Island 02903, www.riag.ri.gov, Telephone: 401-274-4400. Under Rhode Island law, you have the right to obtain any police report filed in regard to this incident. There are two-hundred seventy (270) Rhode Island residents impacted by this incident. Washington D.C. Residents: the Office of Attorney General for the District of Columbia can be reached at: 441 4thStreet NW, Suite 1100 South, Washington, D.C. 20001; 1- 202-442-9828; https://oag.dc.gov. All US Residents: Identity Theft Clearinghouse, Federal Trade Commission, 600 Pennsylvania Avenue, NW Washington, DC 20580, www.consumer.gov/idtheft, 1-877-IDTHEFT (438-4338), TTY: 1-866-653-4261. Exhibit 3 US Fertility Provides Notice of Data Security Incident US Fertility (“USF”) is providing notice of a recent incident that may affect the security of certain individuals’ protected health information. USF provides IT platforms and services to several infertility clinics, including Georgia Reproductive Specialists, LLC d/b/a SGF Atlanta, Center for Reproductive Endocrinology, Center for Reproductive Medicine & Advanced Reproductive Technologies, Center for Reproductive Medicine Alabama, Center for Reproductive Medicine Orlando, Coastal Fertility Specialists, Fertility Centers of Illinois, LLC, Fertility Partners of Pennsylvania Surgery Center, LLC, Idaho Center for Reproductive Medicine, Nevada Center for Reproductive Medicine, Nevada Fertility Center, New York Fertility Medical Practice, PLLC d/b/a SGF New York, Northwest Center for Infertility and Reproductive Endocrinology, LLP d/b/a IVF Florida Reproductive Associates, Reproductive Endocrinology Associates of Charlotte, Reproductive Partners Fertility Center - San Diego, Reproductive Partners Medical Group, Inc., Reproductive Science Center of the San Francisco Bay Area, Seattle Reproductive Medicine, SGF Tampa Bay, LLC, Shady Grove Fertility Center of Pennsylvania, PLLC, Shady Grove Reproductive Science Center, P.C., Sher Institute of Reproductive Medicine New York, Sher Institute of Reproductive Medicine St. Louis, UNC Fertility, Utah Fertility Center, Virginia Fertility Associates, LLC d/b/a SGF Richmond, and Virginia IVF and Andrology Center, LLC. On September 14, 2020, USF experienced an IT security event (the “Incident”) that involved the inaccessibility of certain computer systems on our network as a result of a malware infection. We responded to the Incident immediately and retained third-party computer forensic specialists to assist in our investigation. Through our immediate investigation and response, we determined that data on a number of servers and workstations connected to our domain had been encrypted by ransomware. We proactively removed a number of systems from our network upon discovering the Incident. With the assistance of our third-party computer forensic specialists, we remediated the malware identified, ensured the security of our environment, and reconnected systems on September 20, 2020. We also notified federal law enforcement authorities of the Incident and continue to cooperate with their investigation. The forensic investigation is now concluded and confirmed that the unauthorized actor acquired a limited number of files during the period of unauthorized access, which occurred between August 12, 2020 and September 14, 2020, when the ransomware was executed. We have been working diligently with a specialized team of third-party data auditors to perform a comprehensive review of all information contained in the files accessed without authorization as a result of the Incident. The purpose of this review was to accurately identify any individuals whose personal information may have been present within the impacted files and therefore accessible to the unauthorized actor. On November 13, 2020, we began receiving the results of this review and determined that the following information relating to certain individuals was included in the impacted files when they were accessed without authorization: names, addresses, dates of birth, MPI numbers, and Social Security numbers. The types of information impacted vary by individual, and we determined that for many individuals, Social Security numbers were not impacted. Please also note that we have no evidence of actual misuse of any individual’s information as a result of the Incident. In response to the Incident, USF has taken the following actions to mitigate any risk of compromise to information involved and to better prevent a similar event from recurring: (1) fortified the security of our firewall; (2) utilized the forensic specialists engaged to monitor network activity and remediate any suspicious activity; (3) provided notification to potentially impacted individuals as quickly as possible. We are also adapting our existing employee training protocols relating to data protection and security, including training targeted at recognizing phishing emails. We believe these steps will be effective in mitigating any potential harm to individuals. As always, we encourage individuals to review account statements, explanations of benefits, and credit reports carefully for unexpected activity and to report any questionable activity to the associated institutions immediately. We sincerely apologize that this Incident occurred and remain committed to safeguarding the privacy and security of the information entrusted to us. We have established a dedicated call center for individuals to contact with questions or concerns. If you have any questions regarding this Incident that are not addressed in this notice, please contact our assistance line, which can be reached at 855-914-4699 (toll free), Monday through Friday from 9:00 am to 9:00 pm EST, excluding U.S. holidays. As indicated above, we have no evidence of actual misuse of any individual’s information as a result of this Incident. Included are proactive steps that can be taken to safeguard one’s personal information in response to any data security event: Monitor Accounts Under U.S. law, you are entitled to one free credit report annually from each of the three major credit reporting bureaus. To order your free credit report, visit www.annualcreditreport.com or call, toll-free, 1-877-322-8228. You may also contact the three major credit bureaus directly to request a free copy of your credit report. You also have the right to place a “security freeze” on your credit report, which will prohibit a consumer reporting agency from releasing information in your credit report without your express authorization. The security freeze is designed to prevent credit, loans, and services from being approved in your name without your consent. However, you should be aware that using a security freeze to take control over who gets access to the personal and financial information in your credit report may delay, interfere with, or prohibit the timely approval of any subsequent request or application you make regarding a new loan, credit, mortgage, or any other account involving the extension of credit. Pursuant to federal law, you cannot be charged to place or lift a security freeze on your credit report. Should you wish to place a security freeze, please contact the major consumer reporting agencies listed below: Experian PO Box 9554 Allen, TX 75013 1-888-397-3742 www.experian.com/freeze/center. TransUnion P.O. Box 160 Woodlyn, PA 19094 1-888-909-8872 www.transunion.com/cre Equifax PO Box 105788 Atlanta, GA 30348-5788 1-800-685-1111 www.equifax.com/personal/cr html dit-freeze edit-report-services In order to request a security freeze, you will need to provide the following information: 1. Your full name (including middle initial as well as Jr., Sr., II, III, etc.); 2. Social Security number; 3. Date of birth; 4. If you have moved in the past five (5) years, provide the addresses where you have lived over the prior five years; 5. Proof of current address, such as a current utility bill or telephone bill; 6. A legible photocopy of a government-issued identification card (state driver’s license or ID card, military identification, etc.); and 7. If you are a victim of identity theft, include a copy of either the police report, investigative report, or complaint to a law enforcement agency concerning identity theft. As an alternative to a security freeze, you have the right to place an initial or extended “fraud alert” on your file at no cost. An initial fraud alert is a 1-year alert that is placed on a consumer’s credit file. Upon seeing a fraud alert display on a consumer’s credit file, a business is required to take steps to verify the consumer’s identity before extending new credit. If you are a victim of identity theft, you are entitled to an extended fraud alert, which is a fraud alert lasting seven years. Should you wish to place a fraud alert, please contact any one of the agencies listed below: Experian P.O. Box 9554 Allen, TX 75013 1-888-397-3742 www.experian.com/fraud/center. TransUnion P.O. Box 2000 Chester, PA 19016 1-800-680-7289 www.transunion.com/fra Equifax P.O. Box 105069 Atlanta, GA 30348 1-888-766-0008 www.equifax.com/personal/cre html ud-victim- dit-report-services resource/place-fraud- alert Additional Information You can further educate yourself regarding fraud alerts, security freezes, and the steps you can take to protect yourself and prevent identity theft by contacting the consumer reporting agencies, the Federal Trade Commission, or your state Attorney General. The Federal Trade Commission can be reached at: 600 Pennsylvania Avenue NW, Washington, DC 20580, www.identitytheft.gov, 1-877-ID-THEFT (1-877-438-4338); TTY: 1-866-653-4261. The Federal Trade Commission also encourages those who discover that their information has been misused to file a complaint with them. You can obtain further information on how to file such a complaint by way of the contact information listed above. You have the right to file a police report if you ever experience identity theft or fraud. Please note that in order to file a report with law enforcement for identity theft, you will likely need to provide some proof that you have been a victim. Instances of known or suspected identity theft should also be reported to law enforcement and your state Attorney General. This notice has not been delayed by law enforcement. California Residents: Visit the California Office of Privacy Protection (www.oag.ca.gov/privacy) for additional information on protection against identity theft. Kentucky Residents: Office of the Attorney General of Kentucky, 700 Capitol Avenue, Suite 118 Frankfort, Kentucky 40601, www.ag.ky.gov, Telephone: 1-502-696-5300. Maryland Residents: Office of the Attorney General of Maryland, Consumer Protection Division 200 St. Paul Place Baltimore, MD 21202, www.oag.state.md.us/Consumer, Telephone: 1-888-743-0023. New Mexico Residents: You have rights pursuant to the Fair Credit Reporting Act, such as the right to be told if information in your credit file has been used against you, the right to know what is in your credit file, the right to ask for your credit score, and the right to dispute incomplete or inaccurate information. Further, pursuant to the Fair Credit Reporting Act, the consumer reporting agencies must correct or delete inaccurate, incomplete, or unverifiable information; consumer reporting agencies may not report outdated negative information; access to your file is limited; you must give your consent for credit reports to be provided to employers; you may limit “prescreened” offers of credit and insurance you get based on information in your credit report; and you may seek damages from a violator. You may have additional rights under the Fair Credit Reporting Act not summarized here. Identity theft victims and active duty military personnel have specific additional rights pursuant to the Fair Credit Reporting Act. You can review your rights pursuant to the Fair Credit Reporting Act by visiting www.consumerfinance.gov/f/201504_cfpb_summary_your-rights-under-fcra.pdf, or by writing Consumer Response Center, Room 130-A, Federal Trade Commission, 600 Pennsylvania Ave. N.W., Washington, D.C. 20580. New York Residents: the Attorney General may be contacted at: Office of the Attorney General, The Capitol, Albany, NY 12224-0341; 1-800-771- 7755; https://ag.ny.gov/. North Carolina Residents: Office of the Attorney General of North Carolina, Consumer Protection Division, 9001 Mail Service Center Raleigh, NC 27699-9001, www.ncdoj.gov, Telephone: 1-919-716-6400, 877-566-7226 (toll free within NC). Oregon Residents: Oregon Department of Justice, 1162 Court Street NE, Salem, OR 97301-4096, www.doj.state.or.us/, Telephone: 877-877-9392. Rhode Island Residents: Office of the Attorney General, 150 South Main Street, Providence, Rhode Island 02903, www.riag.ri.gov, Telephone: 401-274-4400. Under Rhode Island law, you have the right to obtain any police report filed in regard to this incident. There is one (1) Rhode Island residents impacted by this incident. Washington D.C. Residents: the Office of Attorney General for the District of Columbia can be reached at: 441 4thStreet NW, Suite 1100 South, Washington, D.C. 20001; 1-202-442-9828; https://oag.dc.gov. All US Residents: Identity Theft Clearinghouse, Federal Trade Commission, 600 Pennsylvania Avenue, NW Washington, DC 20580, www.consumer.gov/idtheft, 1-877- IDTHEFT (438-4338), TTY: 1-866-653-4261. I. (a) PLAINTIFFS DEFENDANTS Jane Doe and John Doe US FERTILITY, LLC, (b) County of Residence of First Listed Plaintiff County of Residence of First Listed Defendant (EXCEPT IN U.S. PLAINTIFF CASES) (IN U.S. PLAINTIFF CASES ONLY) NOTE: IN LAND CONDEMNATION CASES, USE THE LOCATION OF THE TRACT OF LAND INVOLVED. (c) Attorneys (Firm Name, Address, and Telephone Number) Attorneys (If Known) MORGAN & MORGAN, P.A., 201 N. Franklin Street, Suite 700 Tampa, Florida 33602, Telephone: 813-223-5505 II. BASIS OF JURISDICTION (Place an “X” in One Box Only) III. CITIZENSHIP OF PRINCIPAL PARTIES (Place an “X” in One Box for Plaintiff (For Diversity Cases Only) and One Box for Defendant) ’ 1 U.S. Government ’ 3 Federal Question PTF DEF PTF DEF Plaintiff (U.S. Government Not a Party) Citizen of This State ’ 1 ’ 1 Incorporated or Principal Place ’ 4 ’ 4 of Business In This State ’ 2 U.S. Government ’ 4 Diversity Citizen of Another State ’ 2 ’ 2 Incorporated and Principal Place ’ 5 ’ 5 Defendant (Indicate Citizenship of Parties in Item III) of Business In Another State Citizen or Subject of a ’ 3 ’ 3 Foreign Nation ’ 6 ’ 6 Foreign Country IV. NATURE OF SUIT (Place an “X” in One Box Only) Click here for: Nature of Suit Code Descriptions. CONTRACT TORTS FORFEITURE/PENALTY BANKRUPTCY OTHER STATUTES ’ 8 Multidistrict Litigation - ’ 110 Insurance PERSONAL INJURY PERSONAL INJURY ’ 625 Drug Related Seizure ’ 422 Appeal 28 USC 158 ’ 375 False Claims Act ’ 120 Marine ’ 310 Airplane ’ 365 Personal Injury - of Property 21 USC 881 ’ 423 Withdrawal ’ 376 Qui Tam (31 USC ’ 130 Miller Act ’ 315 Airplane Product Product Liability ’ 690 Other 28 USC 157 3729(a)) ’ 140 Negotiable Instrument Liability ’ 367 Health Care/ ’ 400 State Reapportionment ’ 150 Recovery of Overpayment ’ 320 Assault, Libel & Pharmaceutical PROPERTY RIGHTS ’ 410 Antitrust & Enforcement of Judgment Slander Personal Injury ’ 820 Copyrights ’ 430 Banks and Banking ’ 151 Medicare Act ’ 330 Federal Employers’ Product Liability ’ 830 Patent ’ 450 Commerce ’ 152 Recovery of Defaulted Liability ’ 368 Asbestos Personal ’ 840 Trademark ’ 460 Deportation Student Loans ’ 340 Marine Injury Product ’ 470 Racketeer Influenced and (Excludes Veterans) ’ 345 Marine Product Liability LABOR SOCIAL SECURITY Corrupt Organizations ’ 153 Recovery of Overpayment Liability PERSONAL PROPERTY ’ 710 Fair Labor Standards ’ 861 HIA (1395ff) ’ 480 Consumer Credit of Veteran’s Benefits ’ 350 Motor Vehicle ’ 370 Other Fraud Act ’ 862 Black Lung (923) ’ 490 Cable/Sat TV ’ 160 Stockholders’ Suits ’ 355 Motor Vehicle ’ 371 Truth in Lending ’ 720 Labor/Management ’ 863 DIWC/DIWW (405(g)) ’ 850 Securities/Commodities/ ’ 190 Other Contract Product Liability ’ 380 Other Personal Relations ’ 864 SSID Title XVI Exchange ’ 195 Contract Product Liability ’ 360 Other Personal Property Damage ’ 740 Railway Labor Act ’ 865 RSI (405(g)) ’ 890 Other Statutory Actions ’ 196 Franchise Injury ’ 385 Property Damage ’ 751 Family and Medical ’ 891 Agricultural Acts ’ 362 Personal Injury - Product Liability Leave Act ’ 893 Environmental Matters Medical Malpractice ’ 790 Other Labor Litigation ’ 895 Freedom of Information REAL PROPERTY CIVIL RIGHTS PRISONER PETITIONS ’ 791 Employee Retirement FEDERAL TAX SUITS Act ’ 210 Land Condemnation ’ 440 Other Civil Rights Habeas Corpus: Income Security Act ’ 870 Taxes (U.S. Plaintiff ’ 896 Arbitration ’ 220 Foreclosure ’ 441 Voting ’ 463 Alien Detainee or Defendant) ’ 899 Administrative Procedure ’ 230 Rent Lease & Ejectment ’ 442 Employment ’ 510 Motions to Vacate ’ 871 IRS—Third Party Act/Review or Appeal of ’ 240 Torts to Land ’ 443 Housing/ Sentence 26 USC 7609 Agency Decision ’ 245 Tort Product Liability Accommodations ’ 530 General ’ 950 Constitutionality of ’ 290 All Other Real Property ’ 445 Amer. w/Disabilities - ’ 535 Death Penalty IMMIGRATION State Statutes Employment Other: ’ 462 Naturalization Application ’ 446 Amer. w/Disabilities - ’ 540 Mandamus & Other ’ 465 Other Immigration Other ’ 550 Civil Rights Actions ’ 448 Education ’ 555 Prison Condition ’ 560 Civil Detainee - Conditions of Confinement V. ORIGIN (Place an “X” in One Box Only) ’ 1 Original Proceeding ’ 2 Removed from State Court ’ 3 Remanded from Appellate Court ’ 4 Reinstated or Reopened ’ 5 Transferred from Another District (specify) ’ 6 Multidistrict Litigation - Transfer Direct File Cite the U.S. Civil Statute under which you are filing (Do not cite jurisdictional statutes unless diversity): 28 U.S.C. § 1332(d) VI. CAUSE OF ACTION Brief description of cause: Negligence, Breach of Implied Contract, Invasion of Privacy, Breach of Confidence, FDUTPA, et al. 5,000,000.00 Judge McHugh / Judge Chuang 21-cv-367 / 21-cv-225 VII. REQUESTED IN COMPLAINT: ’ CHECK IF THIS IS A CLASS ACTION UNDER RULE 23, F.R.Cv.P. DEMAND $ CHECK YES only if demanded in complaint: JURY DEMAND: ’ Yes ’ No VIII. RELATED CASE(S) IF ANY (See instructions): JUDGE DOCKET NUMBER DATE SIGNATURE OF ATTORNEY OF RECORD 01/28/2021 /s/ George G. Triantis The JS 44 civil cover sheet and the information contained herein neither replaces nor supplements the filings and service of pleading or other papers as required by law, except as provided by local rules of court. This form, approved by the Judicial Conference of the United States in September 1974, is required for the use of the Clerk of Court for the purpose of initiating the civil docket sheet. Consequently, a civil cover sheet is submitted to the Clerk of Court for each civil complaint filed. The attorney filing a case should complete the form as follows: I.(a) Plaintiffs-Defendants. Enter names (last, first, middle initial) of plaintiff and defendant. If the plaintiff or defendant is a government agency, use only the full name or standard abbreviations. If the plaintiff or defendant is an official within a government agency, identify first the agency and then the official, giving both name and title. (b) County of Residence. For each civil case filed, except U.S. plaintiff cases, enter the name of the county where the first listed plaintiff resides at the time of filing. In U.S. plaintiff cases, enter the name of the county in which the first listed defendant resides at the time of filing. (NOTE: In land condemnation cases, the county of residence of the "defendant" is the location of the tract of land involved.) (c) Attorneys. Enter the firm name, address, telephone number, and attorney of record. If there are several attorneys, list them on an attachment, noting in this section "(see attachment)". II. Jurisdiction. The basis of jurisdiction is set forth under Rule 8(a), F.R.Cv.P., which requires that jurisdictions be shown in pleadings. Place an "X" in one of the boxes. If there is more than one basis of jurisdiction, precedence is given in the order shown below. United States plaintiff. (1) Jurisdiction based on 28 U.S.C. 1345 and 1348. Suits by agencies and officers of the United States are included here. United States defendant. (2) When the plaintiff is suing the United States, its officers or agencies, place an "X" in this box. Federal question. (3) This refers to suits under 28 U.S.C. 1331, where jurisdiction arises under the Constitution of the United States, an amendment to the Constitution, an act of Congress or a treaty of the United States. In cases where the U.S. is a party, the U.S. plaintiff or defendant code takes precedence, and box 1 or 2 should be marked. Diversity of citizenship. (4) This refers to suits under 28 U.S.C. 1332, where parties are citizens of different states. When Box 4 is checked, the citizenship of the different parties must be checked. (See Section III below; NOTE: federal question actions take precedence over diversity cases.) III. Residence (citizenship) of Principal Parties. This section of the JS 44 is to be completed if diversity of citizenship was indicated above. Mark this section for each principal party. IV. Nature of Suit. Place an "X" in the appropriate box. If there are multiple nature of suit codes associated with the case, pick the nature of suit code that is most applicable. Click here for: Nature of Suit Code Descriptions. V. Origin. Place an "X" in one of the seven boxes. Original Proceedings. (1) Cases which originate in the United States district courts. Removed from State Court. (2) Proceedings initiated in state courts may be removed to the district courts under Title 28 U.S.C., Section 1441. When the petition for removal is granted, check this box. Remanded from Appellate Court. (3) Check this box for cases remanded to the district court for further action. Use the date of remand as the filing date. Reinstated or Reopened. (4) Check this box for cases reinstated or reopened in the district court. Use the reopening date as the filing date. Transferred from Another District. (5) For cases transferred under Title 28 U.S.C. Section 1404(a). Do not use this for within district transfers or multidistrict litigation transfers. Multidistrict Litigation – Transfer. (6) Check this box when a multidistrict case is transferred into the district under authority of Title 28 U.S.C. Section 1407. Multidistrict Litigation – Direct File. (8) Check this box when a multidistrict case is filed in the same district as the Master MDL docket. PLEASE NOTE THAT THERE IS NOT AN ORIGIN CODE 7. Origin Code 7 was used for historical records and is no longer relevant due to changes in statue. VI. Cause of Action. Report the civil statute directly related to the cause of action and give a brief description of the cause. Do not cite jurisdictional statutes unless diversity. Example: U.S. Civil Statute: 47 USC 553 Brief Description: Unauthorized reception of cable service VII. Requested in Complaint. Class Action. Place an "X" in this box if you are filing a class action under Rule 23, F.R.Cv.P. Demand. In this space enter the actual dollar amount being demanded or indicate other demand, such as a preliminary injunction. Jury Demand. Check the appropriate box to indicate whether or not a jury is being demanded. VIII. Related Cases. This section of the JS 44 is used to reference related pending cases, if any. If there are related pending cases, insert the docket numbers and the corresponding judge names for such cases. Date and Attorney Signature. Date and sign the civil cover sheet. AO 440 (Rev. 06/12) Summons in a Civil Action UNITED STATES DISTRICT COURT for the District of Maryland __________ District of __________ JANE DOE and John Doe Plaintiff(s) v. Civil Action No. US FERTILITY, LLC, Defendant(s) ) ) ) ) ) ) ) ) ) ) ) ) SUMMONS IN A CIVIL ACTION To: (Defendant’s name and address) US FERTILITY, LLC c/o Registered Agent THE CORPORATION TRUST INCORPORATED 2405 YORK ROAD SUITE 201 LUTHERVILLE-TIMONIUM MD 21093 A lawsuit has been filed against you. Within 21 days after service of this summons on you (not counting the day you received it) — or 60 days if you are the United States or a United States agency, or an officer or employee of the United States described in Fed. R. Civ. P. 12 (a)(2) or (3) — you must serve on the plaintiff an answer to the attached complaint or a motion under Rule 12 of the Federal Rules of Civil Procedure. The answer or motion must be served on the plaintiff or plaintiff’s attorney, whose name and address are: GEORGE G. TRIANTIS, ESQ. Bar No.: 21254 MORGAN & MORGAN, P.A. 201 N. Franklin Street, Suite 700 Tampa, Florida 33602 Telephone: 813-223-5505 Facsimile: 813-257-0572 If you fail to respond, judgment by default will be entered against you for the relief demanded in the complaint. You also must file your answer or motion with the court. CLERK OF COURT Date: Signature of Clerk or Deputy Clerk PROOF OF SERVICE (This section should not be filed with the court unless required by Fed. R. Civ. P. 4 (l)) This summons for (name of individual and title, if any) was received by me on (date) . ’ I personally served the summons on the individual at (place) on (date) ; or ’ I left the summons at the individual’s residence or usual place of abode with (name) , a person of suitable age and discretion who resides there, on (date) , and mailed a copy to the individual’s last known address; or ’ I served the summons on (name of individual) , who is designated by law to accept service of process on behalf of (name of organization) on (date) ; or ’ I returned the summons unexecuted because ; or ’ Other (specify): My fees are $ for travel and $ for services, for a total of $ . 0.00 I declare under penalty of perjury that this information is true. Date: Server’s signature Printed name and title Server’s address Additional information regarding attempted service, etc:

products liability and mass tort

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UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF FLORIDA Case no. NATHAN ROWAN, individually and on behalf of all others similarly situated, Plaintiffs, CLASS ACTION v. JURY DEMAND THE FRANCHISE CONSULTING COMPANY, INC., a Florida corporation Defendant. CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL Plaintiff Nathan Rowan (“Plaintiff” or “Plaintiff Rowan”) brings this Class Action Complaint and Demand for Jury Trial against Defendant The Franchise Consulting Company, Inc. (“TFCC”), to stop the Defendant from violating the Telephone Consumer Protection Act (“TCPA”) by generating cold lead lists and making unsolicited calls to consumers who registered their phone numbers on the Do Not call registry (“DNC”), and to otherwise obtain injunctive and monetary relief for all persons injured by Defendant’s actions. Plaintiff alleges as follows upon personal knowledge as to himself and his own acts and experiences, and, as to all other matters, upon information and belief, including investigation conducted by his attorneys. PARTIES 1. Plaintiff Rowan is an East Rochester, New York resident. 2. Defendant TFCC is a Florida corporation headquartered in Coral Gables, Florida. TFCC conducts business throughout this District and the United States. JURISDICTION AND VENUE 3. This Court has federal question subject matter jurisdiction over this action under 28 U.S.C. § 1331, as the action arises under the Telephone Consumer Protection Act, 47 U.S.C. §227 (“TCPA”). 4. This Court has personal jurisdiction over Defendant and venue is proper in this District under 28 U.S.C. § 1391(b) because Defendant resides in this District and because the wrongful conduct leading to this case was directed by Defendant from this District. TELEMARKETING INTRODUCTION 5. As the Supreme Court recently explained, “Americans passionately disagree about many things. But they are largely united in their disdain for robocalls. The Federal Government receives a staggering number of complaints about robocalls—3.7 million complaints in 2019 alone. The States likewise field a constant barrage of complaints. For nearly 30 years, the people’s representatives in Congress have been fighting back.” Barr v. Am. Ass'n of Political Consultants, No. 19-631, 2020 U.S. LEXIS 3544, at *5 (U.S. July 6, 2020). 6. The National Do Not Call Registry provides for consumers to register their telephone numbers and thereby indicate their desire not to receive telephone solicitations at those numbers. See 47 C.F.R. § 64.1200(c)(2). 7. A listing on the DNC “must be honored indefinitely, or until the registration is cancelled by the consumer or the telephone number is removed by the database administrator.” 8. When Congress enacted the TCPA in 1991, it found that telemarketers called more than 18 million Americans every day. 105 Stat. 2394 at § 2(3). 9. By 2003, due to more powerful autodialing technology, telemarketers were calling 104 million Americans every day. In re Rules and Regulations Implementing the TCPA of 1991, 18 FCC Rcd. 14014, ¶¶ 2, 8 (2003). 10. The problems Congress identified when it enacted the TCPA have only grown exponentially in recent years. 11. Industry data shows that the number of robocalls made each month increased from 831 million in September 2015 to 4.7 billion in December 2018—a 466% increase in three 12. According to online robocall tracking service “YouMail,” 4.9 billion robocalls were placed in March, 2021, at a rate of 159.4 million per day. www.robocallindex.com (last visited April 13, 2021). 13. The FCC also has received an increasing number of complaints about unwanted calls, with 150,000 complaints in 2016, 185,000 complaints in 2017, and 232,000 complaints in 2018. FCC, Consumer Complaint Data Center, www.fcc.gov/consumer-help-center-data. 14. “Robocalls and telemarketing calls are currently the number one source of consumer complaints at the FCC.” Tom Wheeler, Cutting off Robocalls (July 22, 2016), statement of FCC chairman.1 15. “The FTC receives more complains about unwanted calls than all other complaints combined.” Staff of the Federal Trade Commission’s Bureau of Consumer Protection, In re Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, Notice of Proposed Rulemaking, CG Docket No. 02-278, at 2 (2016).2 INTRODUCTION TO TFCC 16. TFCC provides consultation services connecting consumers with franchise ownership opportunities. 17. TFCC engages in telemarketing to consumers in order to solicit its consulting services. 1 https://www.fcc.gov/news-events/blog/2016/07/22/cutting-robocalls 2 https://www.ftc.gov/system/files/documents/advocacy_documents/comment-staff-ftc-bureau- consumer-protection-federal-communications-commission-rules- regulations/160616robocallscomment.pdf 18. At no time, do the consumers ever provide their phone numbers to Defendant TFCC before they start calling them. 19. These cold calls include calling individuals who have registered on the Do Not Call registry, who have never provided their phone number to Defendant, and who never consented to receive phone calls from the Defendant. 20. For example, Plaintiff Rowan received 2 calls from TFCC, despite never having given his phone number to the Defendant and despite having his phone number registered on the DNC to prevent such cold calls. 21. Numerous consumers have posted complaints online regarding unsolicited telemarketing calls that they received from Defendant TFCC including: • “I'm Verizon wireless subscriber and this solicit came from (214) 972-3662 as a voice mail message, NOT as a call. ‘Hi, this is Samantha Clark with the Franchise Consulting Group. I'm calling because based on your background we feel you may be a fit for franchise ownership and our company helps people explore franchise opportunities in their area. I'd really like to connect and provide some more information about how our program works. If you can please give me a call back at this number, that'd be great. Thank you so much. Have a great day, goodbye!’”3 • “Same message, same caller different number . 972 645 2582”4 (posted by a different consumer) • “Same message but different number this time. Samantha Clark from Franchise marketing.”5 (also posted by a different consumer) • “same exact message from coming from 214-915-2289”6 • “Hi, this is Samantha Clark with the Franchise Consulting Group. I'm calling because based on your background we feel you may be a fit for franchise ownership and our company helps people explore franchise opportunities in their area. I'd really like to connect and provide some more information about how our program works. If you can please give me a call back at this number, that'd be great. Thank you so much. Have a great day, bye-bye!”7 3 https://800notes.com/Phone.aspx/1-214-972-3367 4 Id. 5 Id. 6 Id. 7 Id. • “Franchise sales, the message said it was from Samantha Clark (probably fake name) from the franchise consulting group.”8 • “this is definitely a scam, got a call today.”9 22. In response to these unsolicited calls, Plaintiff Rowan files this lawsuit seeking monetary and injunctive relief requiring the Defendant to cease from violating the Telephone Consumer Protection Act, as well as an award of statutory damages to the members of the Class and costs. PLAINTIFF ROWAN’S ALLEGATIONS 23. Plaintiff Rowan registered his phone number on the DNC on June 4, 2005. 24. Plaintiff Rowan uses his phone number for personal use only. 25. On January 18, 2021 at 11:24 AM, Plaintiff received an unsolicited email from an employee named Seth Lederman on behalf of TFCC regarding franchise opportunities. 26. Plaintiff replied by asking how he could get more information but specifically did not provide his phone number. 27. On January 22, 2021, Plaintiff received a 2nd unsolicited email from an employee named Todd Weiss, on behalf of TFCC regarding franchise opportunities. 28. On January 27, 2021, Plaintiff replied to Weiss by email, “Go ahead and send what you have. Thanks.” 29. At no time did Plaintiff ever provide his phone number to Weiss, Lederman, or anybody else who works for TFCC. 30. On January 27, 2021 at 9:41 AM, Plaintiff received an unsolicited text message from Defendant, from 412-508-8166 to the Plaintiffs’ phone number: 8 https://www.shouldianswer.com/phone-number/9724304684 9 https://800notes.com/Phone.aspx/1-972-430-4831 31. Plaintiff did not reply to the unsolicited text message. 32. On February 2, 2021 at 11:03 AM, Plaintiff received an unsolicited call from 516- 767-0605, from Todd Weiss on behalf of The Franchise Consulting Company.10 33. On February 4, 2021 at 1:25 PM, Plaintiff received a 2nd call from Weiss, from the phone number 516-767-0605. 34. Plaintiff did not answer this call but Weiss left a voicemail on Plaintiff’s phone: 10 https://www.toddweissfranchisepro.com/about-todd-weiss-cfa/ 35. Plaintiff asked both Weiss and Lederman how they got his phone number later in the day on February 4, 2021, since he never provided it. 36. Weiss claimed that the phone number was pulled from an email Plaintiff responded to, which is factually incorrect since Plaintiff never provided Defendant his phone number. 37. Lederman replied to Plaintiff’s email claiming that TFFC works with a company that pulls data from various public sources and directories: 38. On February 11, 2021, Plaintiff received another call from Defendant at 12:12 PM from phone number 516-767-0605. 39. A voicemail was left on Plaintiff’s phone: 40. Plaintiff received another unsolicited call on February 18, 2021, this time at 1:22 PM from 516-767-0605. Plaintiff did not answer the call and no voicemail was left. 41. On March 4, 2021, Plaintiff received a call from Defendant at 11:03 AM from phone number 516-767-0605. A voicemail was left on Plaintiff’s phone: 42. Plaintiff Rowan never consented to receiving solicitation calls from Defendant 43. Plaintiff never provided his phone number to Defendant TFCC. 44. The unauthorized telephone calls and text message made by Defendant, as alleged herein, have harmed Plaintiff Rowan in the form of annoyance, nuisance, and invasion of privacy, and disturbed the use and enjoyment of his phone, in addition to the wear and tear on the phones’ hardware (including the phones’ battery) and the consumption of memory on the phone. 45. Seeking redress for these injuries, Plaintiff Rowan, on behalf of himself and a Class of similarly situated individuals, bring suit under the Telephone Consumer Protection Act, 47 U.S.C. § 227, et seq., which prohibits unsolicited telemarketing calls/texts to phone numbers that are registered on the DNC. CLASS ALLEGATIONS Class Treatment Is Appropriate for Plaintiff’s TCPA Claim 46. Plaintiff Rowan brings this action pursuant to Federal Rules of Civil Procedure 23(b)(2) and 23(b)(3) and seek certification of the following Class: Do Not Call Registry Class: All persons in the United States who from four years prior to the filing of this action through class certification (1) Defendant (or an agent acting on behalf of Defendant) called more than one time, (2) within any 12-month period, (3) where the person’s telephone number had been listed on the National Do Not Call Registry for at least thirty days, (4) for the same purpose Defendant called Plaintiff. 47. The following individuals are excluded from the Class: (1) any Judge or Magistrate presiding over this action and members of their families; (2) Defendant, its subsidiaries, parents, successors, predecessors, and any entity in which Defendant or its parents have a controlling interest and their current or former employees, officers and directors; (3) Plaintiff’s attorneys; (4) persons who properly execute and file a timely request for exclusion from the Class; (5) the legal representatives, successors or assigns of any such excluded persons; and (6) persons whose claims against Defendant have been fully and finally adjudicated and/or released. Plaintiff Rowan anticipates the need to amend the Class definitions following appropriate discovery. 48. Numerosity: On information and belief, there are thousands of members of the Class such that joinder of all members is impracticable. 49. Commonality and Predominance: There are many questions of law and fact common to the claims of Plaintiff Rowan and the Class, and those questions predominate over any questions that may affect individual members of the Class. Common questions for the Class include, but are not necessarily limited to the following: a. whether Defendant TFCC placed multiple solicitation calls/texts to Plaintiff and members of the Do Not Call Registry class; b. whether TFCC made those calls without prior express written consent; c. whether Defendant’s conduct violated the TCPA; and d. whether Defendant’s conduct was willful or knowing, entitling the class to treble damages. 50. Adequate Representation: Plaintiff Rowan will fairly and adequately represent and protect the interests of the Class, and has retained counsel competent and experienced in class actions. Plaintiff Rowan has no interests antagonistic to those of the Class, and the Defendant has no defenses unique to Plaintiff. Plaintiff Rowan and his counsel are committed to vigorously prosecuting this action on behalf of the members of the Class, and have the financial resources to do so. Neither Plaintiff Rowan nor his counsel have any interests adverse to the 51. Appropriateness: This class action is also appropriate for certification because the Defendant has acted or refused to act on grounds generally applicable to the Class as a whole, thereby requiring the Court’s imposition of uniform relief to ensure compatible standards of conduct toward the members of the Class and making final class-wide injunctive relief appropriate. Defendant’s business practices apply to and affect the members of the Class uniformly, and Plaintiff’s challenge of those practices hinges on Defendant’s conduct with respect to the Class as a whole, not on facts or law applicable only to Plaintiff. Additionally, the damages suffered by individual members of the Class will likely be small relative to the burden and expense of individual prosecution of the complex litigation necessitated by Defendant’s actions. Thus, it would be virtually impossible for the members of the Class to obtain effective relief from Defendant’s misconduct on an individual basis. A class action provides the benefits of single adjudication, economies of scale, and comprehensive supervision by a single court. FIRST CAUSE OF ACTION Telephone Consumer Protection Act (Violations of 47 U.S.C. § 227) (On Behalf of the Plaintiff and the Do Not Registry Class) 52. Plaintiff Rowan repeats and realleges paragraphs 1 through 51 of this Complaint and incorporates them by reference. 53. The TCPA’s implementing regulation, 47 C.F.R. § 64.1200(c), provides that “[n]o person or entity shall initiate any telephone solicitation” to “[a] residential telephone subscriber who has registered her or her telephone number on the national do-not-call registry of persons who do not wish to receive telephone solicitations that is maintained by the federal government.” 54. Any “person who has received more than one telephone call within any 12-month period by or on behalf of the same entity in violation of the regulations prescribed under this subsection may” may bring a private action based on a violation of said regulations, which were promulgated to protect telephone subscribers’ privacy rights to avoid receiving telephone solicitations to which they object. 47 U.S.C. § 227(c). 55. Defendant violated 47 C.F.R. § 64.1200(c) by initiating, or causing to be initiated, telephone solicitations to telephone subscribers such as the Plaintiff and the Do Not Call Registry Class members who registered their respective telephone numbers on the National Do Not Call Registry, a listing of persons who do not wish to receive telephone solicitations that is maintained by the federal government. 56. Defendant violated 47 U.S.C. § 227(c)(5) because Plaintiff and the Do Not Call Registry Class received more than one telephone call/text in a 12-month period made by or on behalf of the Defendant in violation of 47 C.F.R. § 64.1200, as described above. As a result of Defendant’s conduct as alleged herein, Plaintiff and the Do Not Call Registry Class suffered actual damages and, under section 47 U.S.C. § 227(c), are entitled, inter alia, to receive up to $500 in damages for such violations of 47 C.F.R. § 64.1200. 57. To the extent Defendant’s misconduct is determined to be willful and knowing, the Court should, pursuant to 47 U.S.C. § 227(c)(5), treble the amount of statutory damages recoverable by the members of the Do Not Call Registry Class. PRAYER FOR RELIEF WHEREFORE, Plaintiff Rowan, individually and on behalf of the Class, pray for the following relief: a) An order certifying this case as a class action on behalf of the Class as defined above; appointing Plaintiff Rowan as the representative of the Class; and appointing his attorneys as Class Counsel; b) An award of actual and/or statutory damages and costs; c) An order declaring that Defendant’s actions, as set out above, violate the TCPA; d) An injunction requiring Defendant to cease all unsolicited calling activity, and to otherwise protect the interests of the Class; and e) Such further and other relief as the Court deems just and proper. JURY DEMAND Plaintiff Rowan requests a jury trial. Respectfully Submitted, NATHAN ROWAN, individually and on behalf of those similarly situated individuals Dated: April 14, 2021 /s/ Stefan Coleman Stefan Coleman (FL Bar No. 30188) law@stefancoleman.com LAW OFFICES OF STEFAN COLEMAN, P.A. 201 S. Biscayne Blvd, 28th FL Miami, FL 33131 Telephone: (877) 333-9427 Facsimile: (888) 498-8946 Avi R. Kaufman (FL Bar No. 84382) kaufman@kaufmanpa.com KAUFMAN P.A. 400 NW 26th Street Miami, FL 33127 Telephone: (305) 469-5881 Attorneys for Plaintiff and the putative Class

privacy

ceRYEYcBD5gMZwczbFNr

No. _______________ JURY TRIAL DEMANDED IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION MARCUS RAY MORRISSEY, Individually and On Behalf of All Others Similarly Situated, Plaintiff, v. THE MOMENTA GROUP, LLC d/b/a MOMENTUM FITNESS SOLUTIONS and GRANT MOYER, Defendants. § § § § § § § § § § § § §  PLAINTIFF’S ORIGINAL COMPLAINT TO THE HONORABLE JUDGE OF SAID COURT: COMES NOW Plaintiff Marcus Ray Morrissey (referred to as “Plaintiff” or “Morrissey”) bringing this collective action and lawsuit on behalf of himself and all other similarly situated employees to recover unpaid overtime wages from Defendants The Momenta Group, LLC d/b/a Momentum Fitness Solutions and Grant Moyer (collectively referred to as “Defendants” or “Momentum Fitness”). In support thereof, he would respectfully show the Court as follows: I. Nature of Suit 1. Morrissey’s claims arise under the Fair Labor Standards Act of 1938, 29 U.S.C. §§ 201-219 (“FLSA”). 2. The FLSA was enacted to eliminate “labor conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency and general well-being of workers … .” 29 U.S.C. § 202(a). To achieve its humanitarian goals, the FLSA defines appropriate pay deductions and sets overtime pay, minimum wage, and record keeping requirements for covered employers. 29 U.S.C. §§ 206(a), 207(a), 211(c). 3. Momentum Fitness violated the FLSA by employing Morrissey and other similarly situated nonexempt employees “for a workweek longer than forty hours [but refusing to compensate them] for [their] employment in excess of [forty] hours … at a rate not less than one and one-half times the regular rate at which [they are or were] employed.” 29 U.S.C. § 207(a)(1). 4. Momentum Fitness violated the FLSA by failing to maintain accurate time and pay records for Morrissey and other similarly situated nonexempt employees as required by 29 U.S.C. § 211(c) and 29 C.F.R. pt. 516. 5. Morrissey brings this collective action under 29 U.S.C. § 216(b) on behalf of himself and all other similarly situated employees to recover unpaid overtime wages. II. Jurisdiction & Venue 6. The Court has jurisdiction of this action pursuant to 28 U.S.C. § 1331 and 29 U.S.C. § 216(b) because it arises under the FLSA, a federal statute. 7. Venue is proper in this district and division pursuant to 28 U.S.C. § 1391(b)(1), (2) because Defendant resides in the Houston Division of the Southern District of Texas and/or a substantial part of the events or omissions giving rise to Plaintiff’s claim occurred in the Houston Division of the Southern District of Texas. III. Parties 8. Morrissey is an individual who resides in Harris County, Texas and who was employed by Momentum Fitness during the last three years. 9. The Momenta Group, LLC d/b/a Momentum Fitness Solutions is a Texas limited liability company that may be served with process by serving its registered agent, Grant Moyer, at 2723 San Marcos Lane, League City, Texas 77573. Alternatively, if the registered agent of The Momenta Group, LLC d/b/a Momentum Fitness Solutions cannot with reasonable diligence be found at the company’s registered office, The Momenta Group, LLC d/b/a Momentum Fitness Solutions may be served with process by serving the Texas Secretary of State pursuant to TEX. BUS. ORG. CODE § 5.251 and TEX. CIV. PRAC. & REM. CODE § 17.026. 10. Grant Moyer is an individual who may be served with process at at 2723 San Marcos Lane, League City, Texas 77573, or wherever he may be found. 11. Whenever it is alleged that Momentum Fitness committed any act or omission, it is meant that the Momentum Fitness’ officers, directors, vice-principals, agents, servants or employees committed such act or omission and that at the time such act or omission was committed, it was done with the full authorization, ratification or approval of Momentum Fitness or was done in the routine and normal course and scope of employment of Momentum Fitness’ officers, directors, vice-principals, agents, servants or employees. IV. Facts 12. Momentum Fitness sells and installs fitness equipment; it does business in the territorial jurisdiction of this Court and in other states. 13. Momentum Fitness employed Morrissey as an installer from approximately August 2012 through the present. 14. During Morrissey’s employment with Momentum Fitness, he was engaged in commerce or in the production of goods for commerce. 15. During Morrissey’s employment with Momentum Fitness, the company was an enterprise engaged in commerce because it (1) had employees engaged in commerce or in the production of goods for commerce or had employees handling, selling or otherwise working on goods or materials that had been moved in or produced for commerce by others and (2) had an annual gross volume of sales made or business done of at least $500,000. 16. Momentum Fitness paid Morrissey on an hourly basis. 17. During Morrissey’s employment with Momentum Fitness, he regularly worked in excess of forty hours per week. 18. Momentum Fitness knew or reasonably should have known that Morrissey worked in excess of forty hours per week. 19. Momentum Fitness paid Morrissey for all hours worked at the same hourly rate regardless of the number of hours worked. 20. In other words, Momentum Fitness did not pay Morrissey overtime as required by 29 U.S.C. § 207(a)(1) for the hours he worked in excess of forty per week. 21. Momentum Fitness knew or reasonably should have known that Morrissey was not exempt from the overtime provisions of the FLSA. 22. Momentum Fitness failed to maintain accurate time and pay records for Morrissey and other similarly situated nonexempt employees as required by 29 U.S.C. § 211(c) and 29 C.F.R. pt. 516. 23. Momentum Fitness knew or showed a reckless disregard for whether its pay practices violated the FLSA. 24. Momentum Fitness is liable to Morrissey for his unpaid overtime wages, liquidated damages and attorneys’ fees and costs pursuant to 29 U.S.C. § 216(b). 25. All installers employed by Momentum Fitness are similarly situated to Morrissey because they (1) have similar job duties; (2) regularly work in excess of forty hours per week; (3) are not paid overtime for the hours they worked in excess of forty per week as required by 29 U.S.C. § 207(a)(1) and (4) are entitled to recover their unpaid overtime wages, liquidated damages and attorneys’ fees and costs from Momentum Fitness pursuant to 29 U.S.C. § 216(b). V. Count One—Failure To Pay Overtime in Violation of 29 U.S.C. § 207(a) 26. Plaintiff adopts by reference all of the facts set forth above. See, FED. R. CIV. P. 10(c). 27. During Morrissey’s employment with Momentum Fitness, he was a nonexempt employee. 28. As a nonexempt employee, Momentum Fitness was legally obligated to pay Morrissey “at a rate not less than one and one-half times the regular rate at which he [was] employed[]” for the hours that he worked over forty in a workweek. 29 U.S.C. § 207(a)(1). 29. Momentum Fitness paid Morrissey for all hours worked at the same hourly rate regardless of the number of hours worked. 30. In other words, Momentum Fitness did not pay Morrissey overtime as required by 29 U.S.C. § 207(a)(1) for the hours he worked in excess of forty per week at one and one-half times his regular rate. 31. If Momentum Fitness classified Morrissey as exempt from the overtime requirements of the FLSA, he was misclassified because no exemption excuses the company’s noncompliance with the overtime requirements of the FLSA. 32. Momentum Fitness knew or showed a reckless disregard for whether its pay practices violated the overtime requirements of the FLSA. In other words, Momentum Fitness willfully violated the overtime requirements of the FLSA. VI. Count Two—Failure To Maintain Accurate Records in Violation of 29 U.S.C. § 211(c) 33. Plaintiff adopts by reference all of the facts set forth above. See, FED. R. CIV. P. 10(c). 34. The FLSA requires employers to keep accurate records of hours worked by nonexempt employees. 29 U.S.C. § 211(c); 29 C.F.R. pt. 516. 35. In addition to the pay violations of the FLSA described above, Momentum Fitness also failed to keep proper time records as required by the FLSA. VI. Count Three—Collective Action Allegations 36. Plaintiff adopts by reference all of the facts set forth above. See, FED. R. CIV. P. 10(c). 37. On information and belief, other employees have been victimized by Momentum Fitness’ violations of the FLSA identified above. 38. These employees are similarly situated to Morrissey because, during the relevant time period, they held similar positions, were compensated in a similar manner and were denied overtime wages at one and one-half times their regular rates for hours worked over forty in a workweek. 39. Momentum Fitness’ policy or practice of failing to pay overtime compensation is a generally applicable policy or practice and does not depend on the personal circumstances of the putative class members. 40. Since, on information and belief, Morrissey’s experiences are typical of the experiences of the putative class members, collective action treatment is appropriate. 41. All employees of Momentum Fitness, regardless of their rates of pay, who were not paid at a rate not less than one and one-half times the regular rates at which they were employed for the hours that they worked over forty in a workweek are similarly situated. Although the issue of damages may be individual in character, there is no detraction from the common nucleus of liability facts. The Class is therefore properly defined as: All installers employed by Momentum Fitness during the last three years. 42. Momentum Fitness is liable to Morrissey and other installers for the difference between what it actually paid them and what it was legally obligated to pay 43. Because Momentum Fitness knew and/or showed a reckless disregard for whether its pay practices violated the FLSA, the company owes Morrissey and the other installers their unpaid overtime wages for at least the last three years. 44. Momentum Fitness is liable to Morrissey and the other installers in an amount equal to their unpaid overtime wages as liquidated damages. 45. Momentum Fitness is liable to Morrissey and the other installers for their reasonable attorneys’ fees and costs. 46. Momentum Fitness has retained counsel who is well versed in FLSA collective action litigation and who is prepared to litigate this matter vigorously on behalf of him and all other putative class members. VI. Jury Demand 47. Morrissey demands a trial by jury. VI. Prayer 48. Morrissey prays for the following relief: a. An order allowing this action to proceed as a collective action under 29 U.S.C § 216(b); b. Judgment awarding Morrissey and other installers all unpaid overtime compensation, liquidated damages, attorneys’ fees and costs; c. Prejudgment interest at the applicable rate; d. Postjudgment interest at the applicable rate; e. All such other and further relief to which Morrissey and the other installers may show themselves to be justly entitled. Respectfully Submitted, MOORE & ASSOCIATES By: s/ Melissa Moore Melissa Moore State Bar No. 24013189 Curt Hesse State Bar No. 24065414 Lyric Center 440 Louisiana Street, Suite 675 Houston, Texas 77002 Telephone: (713) 222-6775 Facsimile: (713) 222-6739 ATTORNEYS FOR PLAINTIFF

employment & labor

N7RrC4cBD5gMZwczDo9A

David Ricksecker (pro hac vice application forthcoming) T. Reid Coploff (pro hac vice application forthcoming) WOODLEY & McGILLIVARY 1101 Vermont Ave., N.W., Suite 1000 Washington, DC 20005 (202) 833-8855 (Telephone) (202) 452-1090 (Facsimile) dr@wmlaborlaw.com Charles P. Yezbak, III (pro hac vice application forthcoming) Yezbak Law Offices 2002 Richard Jones Road, Suite B-200 Nashville, TN 37215 (615) 250-2000 (Telephone) yezbak@yezbaklaw.com Nicholas J. Enoch State Bar No. 016473 Kaitlyn A. Redfield-Ortiz State Bar No. 030318 LUBIN & ENOCH, P.C. 349 North Fourth Avenue Phoenix, AZ 85003-1505 (602) 234-0008 (Telephone) (602) 626-3586 (Facsimile) nicholas.enoch@azbar.org Attorneys for Plaintiffs IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA Jonathan Longnecker, Erandi Acevedo, ) CASE NO. Jennifer Flynn, Bonita Kathol, and Janet ) Seitz, ) COMPLAINT IN COLLECTIVE ) ACTION Plaintiffs, ) ) v. ) ) American Express Company, and AMEX ) Card Services Company, ) (DEMAND FOR JURY TRIAL) ) Defendants. ) COMPLAINT 1. The plaintiffs are current or former employees of the defendants, and they bring this action as a collective action in accordance with 29 U.S.C. § 216(b) of the Fair Labor Standards Act (FLSA) against the defendants on behalf of themselves and all others similarly situated because of defendants' unlawful deprivation of plaintiffs' rights to overtime compensation. Plaintiffs seek a declaratory judgment under 28 U.S.C. § 2201 and compensation, damages, equitable and other relief available under the FLSA, as amended, 29 U.S.C. § 201 et seq. JURISDICTION AND VENUE 2. Jurisdiction is conferred on this Court by 29 U.S.C. § 216(b), 28 U.S.C. § 1331, and 28 U.S.C. § 1337. Venue lies within this district pursuant to 28 U.S.C. § 1391. 3. At all times material herein, each of the plaintiffs has been employed by the defendants American Express Company and AmEx Card Services Company (hereinafter “American Express” or “defendants”) at defendants' call center in Phoenix, Arizona. Plaintiffs have each given their written consent to be party plaintiffs in this action pursuant to 29 U.S.C. § 216(b). Such consents are appended to this Complaint as Exhibit A. Plaintiffs bring this action as a collective action on behalf of themselves and all others similarly situated in accordance with 29 U.S.C. § 216(b). 4 Defendant American Express Company is an American corporation with its principal place of business located at 200 Vesey Street, New York, New York, 10285-3106. It is currently licensed to do business in the State of Arizona. Defendant's registered agent for service of process is C T Corporation System, 2390 Camelback Road, Phoenix, Arizona 85016. 5. Defendant AmEx Card Services Company is an American corporation with its principal place of business at 4315 South 2700 West, Salt Lake City, Utah 84184. It is currently licensed to do business in the State of Arizona. Defendant's registered agent for service of process is C T Corporation System, 2390 Camelback Road, Phoenix, Arizona 85016. 6. Defendant AmEx Card Services Company is a subsidiary of defendant American Express Company. 7. Each defendant is an “employer” within the meaning of 29 U.S.C. § 203(d) and a “person” within the meaning of 29 U.S.C. § 203(a). 8. At all times material to this action, defendants have been enterprises engaged in commerce as defined by 29 U.S.C. § 203(r)(1), and each defendant's annual dollar business volume has exceeded $500,000. 9. At all times material herein, defendants have been actively conducting business in the State of Arizona. FACTS 10. At all times material herein, plaintiffs have been entitled to the rights, protections, and benefits provided under the FLSA, 29 U.S.C. § 201 et seq. 11. At all times material herein, plaintiffs have been entitled to overtime compensation at a rate of not less than one and one-half times their regular rate of pay for the hours of overtime they have worked. 12. Although actual scheduled shift times varied for plaintiffs, at all times material herein, plaintiffs were scheduled to work 40 hours each workweek. For instance, while employed by defendants, a plaintiff could be scheduled to work four 7.5-hour shifts and one 10-hour shift each week for 40 total hours during the workweek. Another plaintiff may be scheduled to work five 8 hour shifts for 40 total hours during the workweek. At all times material herein, while employed by defendants, each of the plaintiffs has worked a paid, scheduled, weekly shift of 40 hours per work week. 13. At all times material herein, defendants set plaintiffs' work schedules. 14. In addition to their paid, scheduled shifts, during each scheduled shift that is 8 hours or longer, plaintiffs receive and received an unpaid 30-minute time period designated as their "meal period." For instance, a plaintiff scheduled to work a paid 10-hour shift would work from 9:30 a.m. to 8:00 p.m. with 30-minutes designated as an uncompensated "meal period." A plaintiff scheduled to work an 8-hour shift would work from 8:00 a.m. to 4:30 p.m. with 30- minutes designated as an uncompensated "meal period." 15. Because plaintiffs have been scheduled to work 40 hours each workweek, any work performed outside their regularly-scheduled work is in excess of the hourly levels specified in the FLSA, 29 U.S.C. § 207. 16. At all times material herein, plaintiffs have been instructed by defendants to list on their timesheets only the hours in which they are scheduled to work and no other hours during which plaintiffs performed work prior to their shifts or during their unpaid meal periods. 17. At all times material herein, plaintiffs performed additional unscheduled work in addition to the 40 hours of scheduled work, for which plaintiff and all others similar situated were not compensated. 18. At all times material herein, each day plaintiffs spend time engaged in pre-shift activities, which must be performed at the defendants' facility before plaintiffs’ official shift starting times, including, but not limited to, starting computer systems necessary to begin taking phone calls from customers and reviewing emails. Plaintiffs perform this work to ensure that they are ready and available to take calls immediately at the beginning of their shifts, as is required by defendants. 19. At all times material herein, plaintiffs spend time engaged in work activities, including, but not limited to, starting computer systems necessary to begin taking phone calls from customers and reviewing emails, during their unpaid meal periods on shifts where plaintiffs receive an unpaid meal period. Plaintiffs perform this work to ensure that they are ready and available to take calls immediately at the end of their unpaid meal break, as is required by defendants. 20. At all times material herein, plaintiffs have been entitled to receive and have received payments from defendants in addition to their base, hourly wage. These payments include, but are not limited to, incentive payments, for meeting certain work-based metrics set by defendants, and shift differentials for working certain shifts. 21. Defendants do not include the payments referenced in paragraph 20 in determining plaintiffs and other similar employees' regular rate for purposes of determining their overtime premium. 22. Defendants have other call center locations where employees perform the same or similar job duties as plaintiffs do at the Phoenix call center and where similar FLSA violations, such as defendants' failure to include the payments referenced in paragraph 20 above in calculating the employees' overtime pay. VIOLATION OF 7(a) OF THE FAIR LABOR STANDARDS ACT 23. Plaintiffs incorporate by reference paragraphs 1 through 22 in their entirety and restate them herein. 24. Section 7(a) of the Fair Labor Standards Act (FLSA), 29 U.S.C. § 207(a)(1), provides that employees shall be paid overtime compensation at a rate of not less than one and one-half times their regular rate of pay for all hours worked in excess of 40 hours per work week. 25. At defendants' call centers, including the call center located in Phoenix, Arizona defendants have violated, and continue to violate, 29 U.S.C. § 207(a)(1) by failing and refusing to compensate plaintiffs and other employees for pre-shift work performed prior to the plaintiffs' paid start time at a rate of not less than one and one-half times the regular rate at which the plaintiffs are employed in workweeks in which plaintiffs work 40 or more hours per week. 26. Defendants have deprived the plaintiffs and other similarly situated employees of overtime compensation by failing to compensate them for the time that they spend engaged in pre- shift activities, which must be performed at the defendants' facility before plaintiffs’ official shift starting time, including starting computer systems necessary to begin taking phone calls from customers and reviewing emails. They perform this work to ensure that they are ready and available to take calls immediately at the beginning of their shifts. In other words, plaintiffs perform work before the start of their shifts without compensation in workweeks in which plaintiffs work 40 or more hours per week. 27. At defendants' call centers, including the call center located in Phoenix, Arizona, defendants have violated, and continue to violate, 29 U.S.C. § 207(a)(1) by failing and refusing to compensate plaintiffs and other employees for work performed during meal periods at a rate of not less than one and one-half times the regular rate at which the plaintiffs are employed in workweeks in which plaintiffs work 40 or more hours per week. 28. Plaintiffs receive unpaid meal periods of thirty minutes each shift scheduled for 8 hours or longer. 29. Defendants have deprived plaintiffs and other similarly situated employees of overtime compensation by failing to compensate them for the time that they spend engaged in work activities during their unpaid meal periods on shifts where plaintiffs and other similarly situated employees receive an unpaid meal period. They perform this work to ensure that they are ready and available to take calls immediately at the end of their unpaid meal break. Thus, plaintiffs do not receive their full meal breaks although defendants require them to list full, unpaid meal breaks on their timesheets on days that plaintiffs are scheduled to receive a meal break during workweeks in which plaintiffs work 40 or more hours. 30. Defendants have violated, and continue to violate, 29 U.S.C. § 207(a)(1) by failing and refusing to compensate plaintiffs and other employees at defendants' call centers, including the call center located in Phoenix, Arizona, for their hours of work in excess of 40 hours per work week at a rate of not less than one and one-half times the regular rate at which the plaintiffs are employed by failing to include payments made to plaintiffs in addition to their hourly pay in defendants' calculation of plaintiffs' regular rate of pay used for the payment of overtime to plaintiffs. 31. Defendants have deprived the plaintiffs and other similarly situated employees of overtime compensation mandated under the FLSA by miscalculating the regular rate of pay at which overtime is paid. Defendants have failed to include various types of compensation paid to plaintiffs in addition to their hourly pay in plaintiffs’ regular rates of pay for purposes of calculating plaintiffs’ FLSA overtime compensation. These types of payments include, but are not limited to, incentive awards and shift differentials. These forms of compensation and similar types of payments made to plaintiffs are forms of compensation that must be included in the regular rate of pay at which overtime is paid under section 207(a) of the Fair Labor Standards Act, 29 U.S.C. § 207(a). Defendants' failure to include these payments in plaintiffs’ regular rates of pay violates section 207(a) of the Fair Labor Standards Act, 29 U.S.C. § 207(a). 32. Defendants' violations of the FLSA as alleged in paragraphs 1 through 31 herein have been done in a willful and bad faith manner. 33. As a result of the aforesaid willful violations of the FLSA, overtime compensation has been unlawfully withheld by defendants from plaintiffs and similarly situated persons for which the defendants are liable pursuant to 29 U.S.C. § 216(b), together with an additional equal amount as liquidated damages, as well as interest, reasonable attorneys’ fees, and the costs of this action. 34. The employment and work records for the plaintiffs are in the exclusive possession, custody, and control of defendants, and plaintiffs are unable to state at this time the exact amount owing to each of them. Defendants are under a duty imposed by 29 U.S.C. § 211(c) and the regulations of the U.S. Department of Labor to maintain and preserve plaintiffs' payroll and other employment records from which the amounts of the defendants' liability can be ascertained. PRAYER FOR RELIEF Wherefore, the plaintiffs pray that this Court grant relief against the defendants as follows: (a) Enter a declaratory judgment declaring that the defendants have willfully and wrongfully violated their statutory and legal obligations and deprived plaintiffs and all others who are similarly situated of their rights, privileges, protections, compensation, benefits, and entitlements under the law, as alleged herein; (b) Order a complete and accurate accounting of all the compensation to which the plaintiffs and all others who are similarly situated are entitled; (c) Award plaintiffs and all others who are similarly situated monetary damages in the form of back pay compensation and benefits; unpaid entitlements; liquidated damages under federal law equal to their unpaid compensation; plus pre-judgment and post-judgment interest; (d) Award plaintiffs and all others who are similarly situated their reasonable attorneys’ fees to be paid by the defendants, and the costs and disbursements of this action; and (e) Grant such other legal and equitable relief as may be just and proper. JURY TRIAL DEMAND Plaintiffs hereby demand a jury trial in this action. Dated: January 14, 2014 Respectfully submitted, /s/ David Ricksecker David Ricksecker T. Reid Coploff WOODLEY & McGILLIVARY 1101 Vermont Ave., NW Suite 1000 Washington, DC 20005 (202) 833-8855 (202) 452-1090 (Facsimile) dr@wmlaborlaw.com trc@wmlaborlaw.com Charles P. Yezbak, III Yezbak Law Offices 2002 Richard Jones Road Suite B-200 Nashville, TN 37215 (615) 250-2000 yezbak@yezbaklaw.com /// /// /// /s/ Nicholas J. Enoch Nicholas J. Enoch State Bar No. 016473 Kaitlyn A. Redfield-Ortiz State Bar No. 030318 LUBIN & ENOCH, P.C. 349 North Fourth Avenue Phoenix, AZ 85003-1505 (602) 234-0008 (Telephone) (602) 626-3586 (Facsimile) nicholas.enoch@azbar.org kaitlyn@lubinandenoch.com Attorneys for Plaintiffs

employment & labor

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Court File No. ____________________ CLASS ACTION COMPLAINT JURY TRIAL DEMANDED UNITED STATES DISTRICT COURT DISTRICT OF MINNESOTA PATRICIA MENGESHA individually and on behalf of all others similarly situated, Plaintiff, v. Bitconnect International PLC, Bitconnect LTD, and Bitconnect Trading LTD, Defendants. Plaintiff, Patricia Mengesha (“Plaintiff”), tenders the following as her Complaint and Jury Demand against Defendants Bitconnect International, PLC, Bitconnect LTD and Bitconnect Trading, LTD (collectively, “Bitconnect”), on behalf of herself and others similarly situated (“Class”), for financial losses suffered from an online investment scam. INTRODUCTION 1. Bitconnect scammed thousands of Minnesotans and hundreds of thousands of Americans out of millions and millions of dollars through a website called bitconnect.co. 2. Bitconnect took advantage of the increased attention, interest and success of cryptocurrencies and legitimate companies and technology to convince Plaintiff and the class that they would make money on their investment in Bitconnect’s product. 3. Bitconnect was both a pyramid scheme and a Ponzi scheme. That is, it relied on new money from new users, who were in turn expected to get more new users to produce more new money, while not actually engaging in any real activity that would produce income, profits or benefit to investors. 4. In its scheme, Bitconnect required Plaintiff and the Class to provide Bitconnect with Bitcoin, which it would exchange for Bitconnect Coins (“BCC”). With this transaction, Bitconnect promised to Plaintiff and the Class fixed returns as well as a guarantee that the principal investment/loan amount would be paid in full on date certain. 5. Instead, Bitconnect shut down its platform, took all of Plaintiff and the Class’s money, and left them with BCC, which is either entirely worthless or has significantly less value than Bitconnect promised. 6. Plaintiff and the Class were damaged and Bitconnect has profited handsomely at the expense of Plaintiff and the Class. 7. Plaintiff seeks monetary damages for these losses, in an amount to be determined at trial. 8. Plaintiff also seeks injunctive relief, in the form of: (1) specific enforcement of the contract between Bitconnect and Plaintiff and the Class; (2) a return of all money and/or cryptocurrencies given to Bitconnect by Plaintiff and the Class; (3) disgorgement of all monies earned by Defendants due to their conduct; and/or (4) an immediate order enjoining Bitconnect and its owners, members and Board of Directors from transferring, selling, spending or otherwise dissipating any assets so that Plaintiff and the Class can recover the money owed to them. JURISDICTION 9. This Court has jurisdiction pursuant to the Class Action Fairness Act of 2005, 28 U.S.C. § 1332(d), because the proposed Class consists of 100 or more members; the amount in controversy exceeds $5,000,000, exclusive of costs and interest; and minimal diversity exists. This Court also has supplemental jurisdiction over the Minnesota state law claims pursuant to 28 U.S.C. § 1367. 10. This Court has jurisdiction over Defendants because the injuries occurred in this District because of the specific actions of the Defendants purposefully, knowingly and intentionally reached this District. Bitconnect operated a website and allowed Plaintiff and the Class to sign up for the website with their Minnesota addresses. VENUE 11. Venue is proper in the District of Minnesota under 28 U.S.C. § 1391 because a substantial part of the events or omissions giving rise to Plaintiff’s claims occurred in this District. Plaintiff resides in this District, viewed Defendants’ representations and misrepresentations in this District, engaged in commerce with Defendants from her computer in this District, and otherwise specifically performed her end of the bargain in this District. PARTIES 12. Plaintiff, Patricia Mengesha is an individual living in Dakota County, Minnesota, within this District. 13. Defendants Bitconnect International, PLC, Bitconnect LTD and Bitconnect Trading, LTD (collectively, “Bitconnect”) are foreign, for-profit companies organized under the laws of the United Kingdom, doing business worldwide through the website bitconnect.co. 14. Bitconnect International’s principal place of business is Grant Thornton House, 22 Melton Street, Kings Cross, London, United Kingdom NW 1 2EP. 15. Bitconnect LTD’s principal place of business is The Panorama, Park Street, Ashford, United Kingdom TN24 8EZ. 16. Bitconnect Trading LTD’s principal place of business is 23 St. Elizabeth Avenue, Bootle, United Kingdom, L20 6FA. FACTUAL ALLEGATIONS 17. A blockchain is a distributed record of transactions, usually managed by a peer-to-peer network of computers that validates the transactions. 18. Bitcoin, a digital currency, is the most well-known type of blockchain and became synonymous with blockchain technology in the public consciousness in 2017 thanks to the huge spike in Bitcoin’s price. Bitcoin began 2017 at around $1,000 per coin, and reached highs of above $19,000 in early December, before falling back to around $12,000 in mid-January 2018. 19. Alongside Bitcoin, other blockchain “coins” had huge increases in 2017. For instance, Ethereum, another blockchain, had its coin, ETH, priced at around $8 on January 1, 2017, and ended 2017 at around $721. 20. Bitcoin, ETH and all cryptocurrency coins are volatile, unstable, subject to the whims of investors worldwide, and undergo huge price swings on a daily basis and across various different exchanges. Cryptocurrency is inherently volatile. 21. Against this backdrop, Bitconnect created a trading and lending platform that promised substantial, fixed returns and a complete return of principal at a fixed time in the future that benefited from volatility. 22. That is, users like Plaintiff and the Class would invest money in Bitconnect through a “lending” platform, Bitconnect would pay them a daily interest rate, and a bonus interest percentage, and then return the principal amount “lent” or invested. 23. Bitconnect promised these returns through a secret, proprietary trading algorithm called “volatility software interest,” which it claimed would produce returns sufficient to pay these fixed interest rates plus bonuses for bigger investors. 24. Bitconnect repeatedly referred to this as an investment, and offered and sold its investments through its “Bitconnect Lending Program.” 25. To effectuate the transactions described in this Complaint, Bitconnect created its own coin called BitConnect Coin (“BCC”). BCC had no inherent value and no use other than trading for Bitcoin. 26. Under the “Bitconnect Lending Program,” investors would “invest” into the BitConnect BCC Exchange with Bitcoin – either by using Bitcoin already owned or purchasing Bitcoin with a fiat currency. 27. Once the investor deposited his or her Bitcoin into the BitConnect BCC Exchange platform, Bitconnect instructed the investors to sell his or her Bitcoin to Bitconnect in exchange for Bitconnect’s digital coin, BCC. 28. Then, Bitconnect instructed the investors to “lend” their BCC back to BitConnect, explaining that the BCC “lent” will be used to fund the trading activities of its secret, proprietary trading system called “volatility software.” 29. On January 9, 2018, the Secretary of State of North Carolina issued a Temporary Cease and Desist Order against Bitconnect to stop them from violating state securities laws. Many of the details and allegations herein were alleged by North Carolina in seeking and issuing its Order. 30. Bitconnect describes itself as “an open source all in one bitcoin and crypto community platform designed to provide multiple investment opportunities with cryptocurrency education where it is entirely possible to find the independence we all desire, in a community of like-minded, freedom loving individuals who, like you, are seeking the possibility of income stability in a very unstable world.” 31. Bitconnect claimed investors could “begin staking or holding BitConnect Coin and watch [their] interest grow” and that “the more [investors] hold, the more [they] 32. Bitconnect represented that: a. BitConnect Coin is “the investment tool [investors] need to jump start [their] financial security;” b. Investors can “[s]ecure [their] future by gaining quick profit growth for tomorrow that is practical and attainable;” c. The investment ensures “financial freedom is available and [investors] can start today. Store and invest wealth and earn substantial interest and investment;” and d. Investors who purchase BitConnect Coin are purchasing “an interest bearing asset with 120% return per year. It is that simple.” 33. These representations, while seemingly too good to be true for most investments, were in line with the rise of cryptocurrency trading and investing in 2017, and therefore were believable and concrete, and made it reasonable for Plaintiff and the Class to rely upon and believe these representations. 34. Bitconnect offered up to 40% interest per month through its secret trading system it called “volatility software.” 35. Bitconnect published the following graphic on its website, which Plaintiff and the Class saw and relied upon, that stated: 36. Bitconnect touted the lending program investment as a “safe way to earn a high rate of return on…investment[s] without having to undergo a significant amount of risk.” 37. Bitconnect provided a chart that bolstered the misrepresentation that the returns from the BitConnect Lending Program are guaranteed, and that Plaintiff and the Class would receive the principal capital invested within a set period of time, and that the more money invested, the sooner Plaintiff and the Class would receive the money back: 38. Bitconnect published daily interest and interest histories to show how much it had paid out over a previous term: 39. Bitconnect repeatedly referred to the lending program as an investment on its website: a. “You can invest BitConnect coin in BitConnect lending platform exclusively from the BitConnect Dashboard. This investment option involves profiting from BitConnect trading bot and volatility software. You will receive daily profit based on your investment option;” b. “Upon investment term completion, you will receive your CAPITAL BACK to take out from the BitConnect lending platform or optionally reinvest back in lending platform to continue receiving daily profit;” and c. “It takes 15 days to mature your coin from last received interest block. Once you received interest block in your staking wallet, you are required to wait for another 15 days to find next interest block.” 40. Bitconnect provided daily interest charts that showed no days with negative returns on the entire chart: 41. An average daily interest rate of 1% would produce average yearly returns of 3,000%, which, while rare in financial markets, is in line with the returns seen in crypto markets in 2017. Accordingly, Plaintiff and the Class reasonably believed that these returns were available to them here. 42. Plaintiff and Class would have expected to profit from the efforts of Bitconnect and its agents. 43. Plaintiff and Class would have believed, based on Bitconnect’s statements in its promotional materials, that investors could profit by merely holding and staking BCC tokens, or enjoying the guaranteed returns provided by Bitconnect’s proprietary, secret trading system that it calls “volatility software.” Further, investors would have expected that Bitconnect and its agents would expend significant efforts to continue to develop the proprietary, secret trading system that it calls “volatility software,” and that such development would increase the value of their BCC. 44. Bitconnect represented to Plaintiff and the Class that “Investing on BitConnect platform…is a safe way to earn a high rate of return on your investment without having to undergo a significant amount of risk.” 45. Bitconnect also represented to Plaintiff and the Class that “The interest rate that we can guarantee on your investment while using our investment platform is calculated by our BitConnect Price Volatility Software and accrued daily.” 46. Based on the statements listed above, Plaintiff and the class reasonably expected that they would profit solely from the essential managerial efforts of Bitconnect. 47. Bitconnect investments are “securities” as defined in Minn, Stat. 80A.41. 48. Bitconnect unlawfully offered and sold unregistered securities in Minnesota in violation of Minn. Stat. 80A.49. 49. Further, in violation of Minn. Stat. 80A.56, Bitconnect unlawfully transacted business with individuals in Minnesota as a broker-dealer without registering as a “broker- dealer.” 50. Under Minn. Stat. 80A.68, it is unlawful for any person or entity, in connection with the offer or sale of any security, whether offered or sold indirectly or directly: “(a) to employ any device, scheme, or artifice to defraud; (b) to make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading; or (c) to engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person.” 51. Defendants violated Minn. Stat. 80A.68 when, in connection with the offer or sale of a security to Plaintiff and the Class, employed a scheme to defraud Plaintiff and the Class, made untrue and misleading statements of material facts, and engaged in a practice and course of business which operated as a fraud on Plaintiff and the Class. 52. Bitconnect intentionally misled Plaintiff and the Class, and intentionally withheld material facts about Bitconnect from Plaintiff and the Class, including, but not limited to, the following: a. The identity of the principals of Bitconnect and the true location of Bitconnect’s operations and management; b. Information about the assets and liabilities of Bitconnect and any other information that indicates the means by which Bitconnect will provide investors with a guaranteed daily return, regardless of the value of Bitcoin; c. Information about the proprietary, secret trading system that it calls its “volatility software,” details of its trading records and historical performance, proof of its existence, and the risk factors associated with its use; d. That the Bitconnect investments are securities and are not registered with the Administrator or any other governing regulator; e. That only registered dealers or agents can be paid commissions for referrals or sales of securities; and f. That affiliates who receive such commissions for their sale of Bitconnect investments without being properly registered are in violation of the Securities Act of 1933. 53. In addition, Bitconnect had token language about investment risks on its website. In the Risk Disclosure section of its website, which it did not require any user to actually view before using Bitconnect and depositing money, Bitconnect noted that “There is no guarantee of investor’s capital if the lending system fails due to any of the reasons mentioned above.” 54. Those reasons were: 55. Not listed is that disclosure was a risk Bitconnect could unilaterally shut down its lending platform, convert all of people’s investments into BCC, tank the market for BCC by eliminating any future value of BCC, and close up shop. 56. Not listed in the disclosure was the reason or reasons that Bitconnect actually shut down its lending platform, causing Plaintiff and the Class to lose their investments. 57. Nor did Bitconnect properly disclaim any promises of profits, returns, or the ability to unilaterally alter the contract and not pay back the investment principal, in full, on the date promised. 58. On January 4, 2018, the Texas State Securities Board issued an emergency cease and desist order against Bitconnect. On January 12, the North Carolina Order was issued. The next day, on January 13, Bitconnect’s website went down. According to Bitconnect’s Twitter account, this was due to “server issues,” which it then said were caused by an attack by unnamed people through a DDoS process (also known as “denial of service” attack). A few days later, the website was back up, but the lending program had been shut down. /// /// 59. Plaintiff and the Class logged on to find their entire account had been converted to BCC at a price of $363 each and that Bitconnect would no longer honor the promises for paying interest and return of principal in the lending program. The price of BCC plummeted on the exchanges when Bitconnect announced it had closed the trading platform. As of January 25, 2018, the price was down to $11.03. 60. Relying on the representations of Defendants, Plaintiff first invested $1,010 with Defendants on December 27, 2017. 61. She made her second investment, for $1,420, on January 6, 2018. 62. After receiving returns on her initial, smaller investments (another hallmark of Ponzi schemes), Plaintiff deposited another $10,100 on January 12, 2018, just one day before Defendants shut down their website. 63. She attempted to reverse or stop her last transaction, but was unable to do so. Overall, she deposited and received initial interest payments for a sum total of $12,770 on Bitconnect. 64. As of today, Plaintiff’s investment is worth a few hundred dollars. CLASS ALLEGATIONS 65. Plaintiff brings this action on behalf of himself and as a class action, pursuant to the provisions of Rules 23(a), (b)(2), and (b)(3) of the Federal Rules of Civil Procedure on behalf of the following class (“The Minnesota Class”): The Minnesota Class All Minnesota residents who invested money in the Bitconnect lending program between January 25, 2017 and January 17, 2018, through the transfer of Bitcoin or any other currency to Bitconnect. 66. Excluded from the Class are Defendants and their subsidiaries; all persons who make a timely election to be excluded from the Class; governmental entities; and the judge to whom this case is assigned and his/her immediate family. Plaintiff reserves the right to revise the Class definition based upon information learned through discovery. 67. Certification of Plaintiff’s claims for class-wide treatment is appropriate because Plaintiff can prove the elements of her claims on a class-wide basis using the same evidence as would be used to prove those elements in individual actions alleging the same 68. This action has been brought and may be properly maintained on behalf of the Class proposed herein under Federal Rule of Civil Procedure 23. 69. Numerosity. Federal Rule of Civil Procedure 23(a)(1): The members of the Classes are so numerous and geographically dispersed that individual joinder of all Class members is impracticable. While Plaintiff is informed and believes that there are not less than hundreds of thousands of members of the Class, the precise number of Class members in Minnesota is unknown to Plaintiff, but may be ascertained from Defendants’ books and records. Class members may be notified of the pendency of this action by recognized, Court-approved notice dissemination methods, which may include U.S. mail, electronic mail, Internet postings, and/or published notice. 70. Commonality and Predominance: Federal Rule of Civil Procedure 23(a)(2) and 23(b)(3): This action involves common questions of law and fact, which predominate over any questions affecting individual Class members, including, without limitation: a. Whether Defendants engaged in the conduct alleged herein; b. Whether Defendants violated federal and state securities law; c. Whether Defendants’ representations about Bitconnect were false, misleading, fraudulent other otherwise untrue; d. Whether BCC and/or the Bitconnect lending program was an investment; e. Whether Bitconnect and Plaintiff and the Class entered into an investment contract with promises by Bitconnect; f. Whether the Defendants misrepresented the risks of Bitconnect; g. Whether Bitconnect knowingly and intentionally operated a Ponzi scheme and/or pyramid scheme; h. Whether Plaintiff and the other Class members are entitled to damages and other monetary relief and, if so, in what amount. 71. Typicality: Federal Rule of Civil Procedure 23(a)(3): Plaintiff’s claims are typical of the other Class members’ claims because, among other things, all Class members were comparably injured through Defendants’ wrongful conduct as described above. 72. Adequacy: Federal Rule of Civil Procedure 23(a)(4): Plaintiff is an adequate Class representative because her interests do not conflict with the interests of the other members of the Classes she seeks to represent; Plaintiff has retained counsel competent and experienced in complex class action litigation; and Plaintiff intends to prosecute this action vigorously. The Classes’ interests will be fairly and adequately protected by Plaintiff and her counsel. 73. Declaratory and Injunctive Relief: Federal Rule of Civil Procedure 23(b)(2): Defendants have acted or refused to act on grounds generally applicable to Plaintiff and the other members of the Classes, thereby making appropriate final injunctive relief and declaratory relief, as described below, with respect to the Class as a whole. 74. Superiority: Federal Rule of Civil Procedure 23(b)(3): A class action is superior to any other available means for the fair and efficient adjudication of this controversy, and no unusual difficulties are likely to be encountered in the management of this class action. The damages or other financial detriment suffered by Plaintiff and the other Class members are relatively small compared to the burden and expense that would be required to individually litigate their claims against Defendants, so it would be impracticable for members of the proposed Minnesota Class to individually seek redress for Defendants’ wrongful conduct. Even if Class members could afford individual litigation, the court system could not. Individualized litigation creates a potential for inconsistent or contradictory judgments, and increases the delay and expense to all parties and the court system. By contrast, the class action device presents far fewer management difficulties, and provides the benefits of single adjudication, economy of scale, and comprehensive supervision by a single court. COUNT I VIOLATION OF MINNESOTA SECURITIES LAWS 75. Plaintiff realleges and incorporates by reference all paragraphs as though fully set forth herein. 76. Defendants violated Minnesota securities laws, specifically Minn. Stat. § 80A.40, et seq., through their actions detailed above. 77. As a result of the violation of this statute, Plaintiff and the Class lost money in investments that they otherwise would not have made had they known the truth. 78. Minnesota law provides a private right of action for violation of this statute, as Plaintiff and the Class were those specifically intended to be protected by this statute, and Defendants’ conduct falls within the exact public policy this statute intends to protect. COUNT II VIOLATION OF SECTION 5(A) AND 5(C) OF THE FEDERAL SECURITIES ACT 79. Plaintiff realleges and incorporates by reference all preceding allegations as though fully set forth herein. 80. Defendants violated federal securities laws through their use of websites and transactions in interstate commerce as described in detail above. 81. Defendants are each a “seller” under 15 U.S.C. 77e because it and/or its agents solicited investments from Plaintiff and the Class. 82. The Bitcoin, money or other things of value paid by Plaintiff and the Class were pooled by Bitconnect so that it could profit for itself at the expense of investors such as Plaintiff and the Class. As a result, Plaintiff and the Class, shared in the risks and benefits of the investments. 83. Plaintiff and the Class were reliant on and depended on the expertise of Defendants for their investment returns. 84. Plaintiff and the Class reasonably expected to receive profits from their investments with and through Defendants. 85. Bitconnect’s investment platform and BCC are investment contracts, subject to federal securities laws, and therefore, Defendants were required to register BCC as such. 86. However, Defendants failed to register BCC or the Bitconnect lending platform with the Securities and Exchange Commission (“SEC”) or any federal agency. 87. Defendants’ conduct violates 5(a) and 5(c) of the Securities Act, 15 USC 77e(a) and 77e(c). 88. Because of Defendants’ unregistered sales of securities, Plaintiff and the Class suffered damages as described above. COUNT III BREACH OF CONTRACT 89. Plaintiff realleges and incorporates by reference all preceding allegations as though fully set forth herein. 90. The terms of the transaction between Plaintiff and Bitconnect and the Class and Bitconnect are a contract under which Bitconnect would pay a daily interest rate, plus bonus percentage, plus return principal on a specific date. 91. The terms of the contract were clear, unambiguous, not subject to any other interpretation other than where Plaintiff would receive the benefit of the bargain. 92. Bitconnect has breached the contract by failing to pay daily interest, failing to pay bonus interest, and failing to return Plaintiff’s principal. 93. Instead, Bitconnect unilaterally converted Plaintiff’s investment into a worthless BCC token that has little to no value, and shut down the lending platform. 94. Plaintiff and the Class are entitled to damages from the breach of contract as alleged above, including, but not limited to, return of principal, interest, attorneys’ fees and other foreseeable damages from the total loss of this investment. COUNT IV FRAUD BY CONCEALMENT 95. Plaintiff realleges and incorporates by reference all paragraphs as though fully set forth herein. 96. Defendants intentionally concealed and suppressed material facts concerning the true nature of the investment as described in detail above. 97. Plaintiff and the Class reasonably relied upon Defendants’ false representations. 98. Defendants’ false representations were material to Plaintiff because it went to the heart of the bargain, an easy return on investment in the volatile and complicated cryptocurrency market. 99. Defendants had a duty to disclose the scheme it was engaged in because they had exclusive knowledge as to implementation and maintenance of their scheme, and because they knew facts not known to or reasonably discoverable by Plaintiff or the Class. 100. Defendants actively concealed and/or suppressed these material facts as described above, in whole or in part, to pad and protect its profits and to avoid scrutiny over its claimed investment returns. 101. On information and belief, Defendants have still not made full and adequate disclosures, and continue to attempt to defraud Plaintiff and the Class by concealing material information regarding the true value of BCC, and otherwise continuing to engage in the behavior complained of above in new schemes and frauds. 102. Because of the concealment and/or suppression of the facts, Plaintiff and the Class have sustained damages as outlined above. Accordingly, Defendants are liable to Plaintiff and the Class for damages in an amount to be proven at trial. 103. Defendants’ actions were done wantonly, maliciously, oppressively, deliberately, with intent to defraud, and in reckless disregard of the rights of Plaintiff and the Class, and the conduct as alleged warrants an assessment of punitive damages in an amount sufficient to deter such conduct in the future, which is to be determined according to proof. COUNT V VIOLATIONS OF THE MINNESOTA PREVENTION OF CONSUMER FRAUD ACT 104. Plaintiff incorporates by reference and re-alleges each and every paragraph alleged above as though fully alleged herein. 105. Plaintiff is a resident of the State of Minnesota. 106. Minnesota’s Private Attorney General Statute (Minn. Stat. § 8.31, subd. 3a) allows Plaintiff and the Class to bring a claim under Minn. Stat. § 325F.69. 107. The Minnesota Prevention of Consumer Fraud Act prohibits “[t]he act, use, or employment by any person of any fraud, false pretense, false promise, misrepresentation, misleading statement or deceptive practice, with the intent that others rely thereon in connection with the sale of any merchandise, whether or not any person has in fact been misled, deceived, or damaged thereby. . .” Minn. Stat. § 325F.69(1). Defendants advertised and represented to Plaintiff and members of the Class that Bitconnect possessed certain qualities, value and guaranteed profits, including, but not limited to, fixed returns as well as a guarantee that the principal investment/loan amount would be paid in full on date certain. Other states across the Country have enacted substantially similar consumer protection statutes which require the same or similar showings of proof, and which prevent the unlawful conduct described herein. 108. Defendants’ advertisements and representations with respect to Bitconnect and the Ponzi scheme were made in connection with the inducing Plaintiff and the Class to invest in Bitconnect. 109. Defendants intentionally and/or knowingly misrepresented the true nature and likely success of their investment to Plaintiff and the Class. 110. Defendants boasted: a. BitConnect Coin is “the investment tool [investors] need to jump start [their] financial security;” b. Investors can “[s]ecure [their] future by gaining quick profit growth for tomorrow that is practical and attainable;” c. The investment ensures “financial freedom is available and [investors] can start today. Store and invest wealth and earn substantial interest and investment;” and d. Investors who purchase BitConnect Coin are purchasing “an interest bearing asset with 120% return per year. It is that simple.” 111. Defendants intended for Plaintiff and the Class to rely on, and accept as true, these statements and representations in deciding whether to invest in Bitconnect. 112. Plaintiff and the Class relied on, and were in fact deceived by, Defendants’ statements and representations about the true nature and likely profitability of any investment on Bitconnect. 113. Defendants’ unfair or deceptive acts or practices were likely to deceive reasonable consumers. 114. Plaintiff and the Class were injured in fact and suffered actual damages as a result of their reliance on Defendants’ advertisements and representations. Defendants’ wrongful conduct was the direct and proximate cause of the injuries to Plaintiff and the Class. Because of Defendants’ fraudulent conduct, Plaintiff and the Class have suffered direct and indirect harm and monetary loss. 115. Had Plaintiff and the Class been aware of the true nature of any investment, along with and intention to shut down Bitconnect and take all monies by Defendants, Plaintiff and the Class did not receive the benefit of their bargain as a result of Defendants’ misconduct. 116. Pursuant to Minn. Stat. § 8.31, subd. 3a, Plaintiff and the Class seek actual damages, attorneys’ fees, and any other just and proper relief available under the Minnesota Prevention of Consumer Fraud Act. COUNT VI FALSE ADVERTISING 117. Plaintiff incorporates by reference each of the allegations contained in the preceding paragraphs of this Complaint. 118. Plaintiff is a resident of the State of Minnesota. 119. Minnesota’s False Statement in Advertising Act (“FSAA”), Minn. Stat. § 325F.67, provides a cause of action to “any person, firm, corporation, or association” who purchases goods or services through advertising which “contains any material assertion, representation, or statement of fact which is untrue, deceptive, or misleading.” Consumer protection laws of other states make similar conduct unlawful. 120. Where, as here, Plaintiff’s claims inure to the public benefit, Minnesota’s Private-Attorney General Statute, Minn. Stat. § 8.31, subd. 3a, allows individuals who have been injured through a violation of the FSAA to bring a civil action and recover damages, together with costs and disbursements, including reasonable attorney’s fees. 121. By engaging in the conduct herein, Defendants violated and continue to violate Minn. Stat. § 325F.67 and the similar laws of other states. 122. Defendants’ misrepresentations, knowing omissions, and use of other sharp business practices include, by way of example: a. Defendants’ fraudulent, misleading, and deceptive statements relating to Bitconnect and the promised fixed returns as well as a guarantee that the principal investment/loan amount would be paid in full on date certain. b. Defendants’ fraud and misrepresentations by omission with respect to failing to disclose that in fact they were not actually engaging in any real activity that would produce income, profits or benefit to investors, like Plaintiff and the Class. c. Defendants’ concealment of the true nature of the Bitconnect. 123. As a result of Defendants’ conduct, Plaintiff has suffered actual damages in that he has purchased the Loader that was defective and worth less than the price he paid. There is an association between Defendants’ acts and omissions as alleged herein and the damages suffered by Plaintiff. 124. As a result of Defendants’ untrue, deceptive, and misleading assertions and representations about Bitconnect, Plaintiff has and will continue to suffer damages that include not only the full cost to replace the Loader, but also include, without limitation, consequential and incidental damages. 125. Defendants have similarly violated the consumer-protection statutes of the various states including, but not limited to, the State of California. 126. Plaintiff and the class have been damaged in an amount in excess of $5,000,000.00. COUNT VII FRAUDULENT INDUCEMENT 127. Plaintiff incorporates by reference each of the allegations contained in the preceding paragraphs of this Complaint. 128. To induce Plaintiff and the Class members into entering the pyramid scheme and Ponzi scheme by misrepresented that Plaintiff and the Class would receive fixed returns as well as a guarantee that the principal investment/loan amount would be paid in full on date certain while not actually engaging in any real activity that would produce income, profits or benefit to investors. 129. Defendants knew that their representations were false. Defendants made sure their promotional materials to intentionally mislead consumers, such as Plaintiff and the 130. Defendants made these misrepresentations specifically so as to induce Plaintiff’s and the Class’s to invest. 131. Plaintiff and the Class did in fact rely on these misrepresentations and invested in the Ponzi scheme to their detriment. Given the deceptive manner in which Defendants advertised, represented and otherwise promoted the investment, Plaintiff and the Class’s reliance on Defendants’ misrepresentations was justifiable. 132. As a result of relying on Defendants’ misrepresentations, Plaintiff and Class members have suffered, and will continue to suffer, actual damages. REQUEST FOR RELIEF WHEREFORE, Plaintiff, individually and on the Class, respectfully requests that the Court enter judgment in their favor and against Defendants, as follows: A. Certification of the proposed Class(es), including appointment of Plaintiff’s counsel as Class Counsel; B. An order temporarily and permanently enjoining Defendants from continuing the unlawful, deceptive, fraudulent, and unfair business practices alleged in this Complaint; C. An order temporarily and permanently enjoining Defendants from selling, liquidating, transferring, spending or otherwise dissipating assets earned from Plaintiff and the Class; D. Injunctive relief in the form of a rescission, refund or replacement program to make Plaintiff and the Class whole; E. Costs, restitution, damages, including punitive damages, and disgorgement in an amount to be determined at a jury trial; F. An order requiring Defendants to pay both pre- and post-judgment interest on any amounts awarded; G. An award of costs and attorneys’ fees; and H. Such other or further relief as may be appropriate. DEMAND FOR JURY TRIAL Plaintiffs hereby demand a trial by jury as to all issues. Dated: January 31, 2018 LOCKRIDGE GRINDAL NAUEN P.L.L.P. By: /s/ Robert K. Shelquist Robert K. Shelquist, #21310X Rebecca A. Peterson, #392663 100 South Washington Avenue, Suite 2200 Minneapolis, MN 55401 Telephone: (612) 339-6900 rkshelquist@locklaw.com rapeterson@locklaw.com Genevieve Zimmerman (MN #330292) MESHBESHER & SPENCE LTD. 1616 Park Avenue South Minneapolis, MN 55404 Telephone: (612) 339-9121 gzimmerman@meshbesher.com Attorneys For Plaintiff

securities

zqawCYcBD5gMZwczfqRs

IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF GEORGIA SAVANNAH DIVISION CARRIE DONNELLY, on behalf of herself and all others similarly situated. COMPLAINT-CLASS ACTION Plaintiff, V. CIVIL ACTION NO.: SOUTHERN METALS RECYCLING, INC., Defendant. (j V 418 2 0*0 CLASS ACTION COMPLAINT PLAINTIFF CARRIE DONNELLY, individually and as representative of the class defined below, hereby files this Class Action Complaint against DEFENDANT SOUTHERN METALS RECYCLING and for this cause of action states the following: Nature ofthe Claim I. Plaintiff, individually and as representative of the class defined below, brings this action against Defendant for violating the Employee Retirement Income Security Act of 1974 {"ERISA"). as amended by the Consolidated Omnibus Budget Reconciliation Act of 1985 (•"COBRA"). As set forth below, Defendant failed to provide Plaintiff and the proposed class members with adequate notice, as prescribed by COBRA, of their rights to continue their health coverage upon the occurrence of a "qualifying event" as defined by the statute. As a result of this violations, Plaintiff and the Class members seek statutory penalties, injunctive relief, attorneys' fees, costs and expenses, and other appropriate relief as set forth herein and provided by law.

employment & labor

DARnFYcBD5gMZwczXvdP

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x YASEEN TRAYNOR, on behalf of himself and all others similarly situated, Plaintiffs, CLASS ACTION COMPLAINT v. AND DEMAND FOR JURY TRIAL INVALUABLE, LLC, Defendant. : : : : : : : : : : : : - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x INTRODUCTION 1. Plaintiff YASEEN TRAYNOR, on behalf of himself and others similarly situated, asserts the following claims against Defendant INVALUABLE, LLC as follows. 2. Plaintiff is a visually-impaired and legally blind person who requires screen-reading software to read website content using his computer. Plaintiff uses the terms “blind” or “visually-impaired” to refer to all people with visual impairments who meet the legal definition of blindness in that they have a visual acuity with correction of less than or equal to 20 x 200. Some blind people who meet this definition have limited vision. Others have no vision. 3. Based on a 2010 U.S. Census Bureau report, approximately 8.1 million people in the United States are visually impaired, including 2.0 million who are blind, and according to the American Foundation for the Blind’s 2015 report, approximately 400,000 visually impaired persons live in the State of New York. 4. Plaintiff brings this civil rights action against Defendant for its failure to design, construct, maintain, and operate its website to be fully accessible to and independently usable by Plaintiff and other blind or visually-impaired people. Defendant’s denial of full and equal access to its website, and therefore denial of its goods and services offered thereby, is a violation of Plaintiff’s rights under the Americans with Disabilities Act (“ADA”). 5. Because Defendant’s website, www.invaluable.com (the “Website” or “Defendant’s website”), is not equally accessible to blind and visually-impaired consumers, it violates the ADA. Plaintiff seeks a permanent injunction to cause a change in Defendant’s corporate policies, practices, and procedures so that Defendant’s website will become and remain accessible to blind and visually-impaired consumers. JURISDICTION AND VENUE 6. This Court has subject-matter jurisdiction over this action under 28 U.S.C. § 1331 and 42 U.S.C. § 12181, as Plaintiff’s claims arise under Title III of the ADA, 42 U.S.C. § 12181, et seq., and 28 U.S.C. § 1332. 7. This Court has supplemental jurisdiction under 28 U.S.C. § 1367 over Plaintiff’s New York State Human Rights Law, N.Y. Exec. Law Article 15, (“NYSHRL”) and New York City Human Rights Law, N.Y.C. Admin. Code § 8-101 et seq., (“NYCHRL”) claims. 8. Venue is proper in this district under 28 U.S.C. §1391(b)(1) and (2) because Defendant conducts and continues to conduct a substantial and significant amount of business in this District. A substantial portion of the conduct complained of herein occurred in this District because Plaintiff attempted, on a number of occasions, to utilize the subject Website within this Judicial District. 9. Defendant is subject to personal jurisdiction in this District. Defendant has been and is committing the acts or omissions alleged herein in the Southern District of New York that caused injury, and violated rights the ADA prescribes to Plaintiff and to other blind and other visually-impaired consumers. A substantial part of the acts and omissions giving rise to Plaintiff’s claims occurred in this District: on several separate occasions, Plaintiff has been denied the full use and enjoyment of the facilities, goods and services offered to the general public, on Defendant’s Website in New York County. These access barriers that Plaintiff encountered have caused a denial of Plaintiff’s full and equal access multiple times in the past, and now deter Plaintiff on a regular basis from accessing the Defendant’s Website in the future. 10. This Court is empowered to issue a declaratory judgment under 28 U.S.C. §§ 2201 and 2202. THE PARTIES 11. Plaintiff YASEEN TRAYNOR, at all relevant times, is a resident of Bronx, New York. Plaintiff is a blind, visually-impaired handicapped person and a member of a protected class of individuals under the ADA, under 42 U.S.C. § 12102(1)-(2), and the regulations implementing the ADA set forth at 28 CFR §§ 36.101 et seq., the NYSHRL and NYCHRL. 12. Defendant is and was at all relevant times a Massachusetts Limited Liability Company doing business in New York. 13. Defendant’s Website, and its facilities, goods, and services offered thereupon, is a public accommodation within the definition of Title III of the ADA, 42 U.S.C. §12181. NATURE OF ACTION 14. The Internet has become a significant source of information, a portal, and a tool for conducting business, doing everyday activities such as shopping, learning, banking, researching, as well as many other activities for sighted, blind and visually-impaired persons alike. 15. In today’s tech-savvy world, blind and visually-impaired people have the ability to access websites using keyboards in conjunction with screen access software that vocalizes the visual information found on a computer screen or displays the content on a refreshable Braille display. This technology is known as screen-reading software. Screen-reading software is currently the only method a blind or visually-impaired person may independently access the internet. Unless websites are designed to be read by screen- reading software, blind and visually-impaired persons are unable to fully access websites, and the information, products, goods and contained thereon. 16. Blind and visually-impaired users of Windows operating system-enabled computers and devices have several screen reading software programs available to them. Some of these programs are available for purchase and other programs are available without the user having to purchase the program separately. Job Access With Speech, otherwise known as “JAWS” is currently the most popular, separately purchased and downloaded screen- reading software program available for a Windows computer. 17. For screen-reading software to function, the information on a website must be capable of being rendered into text. If the website content is not capable of being rendered into text, the blind or visually-impaired user is unable to access the same content available to sighted users. 18. The international website standards organization, the World Wide Web Consortium, known throughout the world as W3C, has published version 2.1 of the Web Content Accessibility Guidelines (“WCAG 2.1”). WCAG 2.1 are well-established guidelines for making websites accessible to blind and visually-impaired people. These guidelines are universally followed by most large business entities and government agencies to ensure their websites are accessible. 19. Non-compliant websites pose common access barriers to blind and visually-impaired persons. Common barriers encountered by blind and visually impaired persons include, but are not limited to, the following: a. A text equivalent for every non-text element is not provided; b. Title frames with text are not provided for identification and navigation; c. Equivalent text is not provided when using scripts; d. Forms with the same information and functionality as for sighted persons are not provided; e. Information about the meaning and structure of content is not conveyed by more than the visual presentation of content; f. Text cannot be resized without assistive technology up to 200% without losing content or functionality; g. If the content enforces a time limit, the user is not able to extend, adjust or disable it; h. Web pages do not have titles that describe the topic or purpose; i. The purpose of each link cannot be determined from the link text alone or from the link text and its programmatically determined link context; j. One or more keyboard operable user interface lacks a mode of operation where the keyboard focus indicator is discernible; k. The default human language of each web page cannot be programmatically determined; l. When a component receives focus, it may initiate a change in context; m. Changing the setting of a user interface component may automatically cause a change of context where the user has not been advised before using the component; n. Labels or instructions are not provided when content requires user input, which include CAPTCHA prompts that require the user to verify that he or she is not a robot; o. In content which is implemented by using markup languages, elements do not have complete start and end tags, elements are not nested according to their specifications, elements may contain duplicate attributes, and/or any IDs are not unique; p. Inaccessible Portable Document Format (PDFs); and, q. The name and role of all User Interface elements cannot be programmatically determined; items that can be set by the user cannot be programmatically set; and/or notification of changes to these items is not available to user agents, including assistive technology. STATEMENT OF FACTS 20. Defendant is an online auctioneer and gallery, and owns and operates www.invaluable.com (its “Website”), offering features which should allow all consumers to access the goods and services and which Defendant ensures the delivery of such goods throughout the United States, including New York State. 21. Defendant’s Website offers products and services for online sale and general delivery to the public. The Website offers features which ought to allow users to browse for items, access navigation bar descriptions and prices, and avail consumers of the ability to peruse the numerous items offered for sale. 22. Plaintiff is a visually-impaired and legally blind person, who cannot use a computer without the assistance of screen-reading software. Plaintiff is, however, a proficient JAWS and NVDA screen-reader user and uses it to access the Internet. Plaintiff has visited the Website on separate occasions using a screen-reader. 23. On multiple occasions in March of 2019, Plaintiff visited Defendant’s website, www.invaluable.com, in an effort to make a purchase. Despite his efforts, however, Plaintiff was denied the same shopping experience afforded to a sighted individual due to the website’s lack of a variety of features and accommodations, which effectively barred Plaintiff from being able to determine what specific products are offered for sale, browse the site in general, or make any purchases. 24. Among other things, the Website lacks prompting information necessary to allow Plaintiff, who uses the JAWS and NVDA screen reading programs, to locate and narrow down a specific field of desired products and price range. This omission was exacerbated by the lack of alt. text, which is the invisible code embedded beneath a graphical image on a website The missing alt text was especially present in those portions of the Website containing certain items of interest to Plaintiff, including Collectible Coins, Rugs and Coffee Tables. As a result, Plaintiff was unable to equally discover those products offered. 25. The Website also requires the use of a mouse to initiate and complete a search. Yet Plaintiff cannot use a mouse because manipulating the mouse is a visual activity of moving the pointer from one visual spot to another. As a result, Plaintiff was denied the ability to independently make a purchase. 26. In addition, Plaintiff was not able to determine whether a Live Chat was available or whether a phone number was posted, and if so, whether it was a 24/7 help line, as Plaintiff conducts much of his online shopping during the late evening hours. 27. These access barriers effectively denied Plaintiff the ability to use and enjoy Defendant’s website the same way sighted individuals do. 28. It is, upon information and belief, Defendant’s policy and practice to deny Plaintiff, along with other blind or visually-impaired users, access to Defendant’s website, and to therefore specifically deny the goods and services that are offered to the general public. Due to Defendant’s failure and refusal to remove access barriers to its website, Plaintiff and visually-impaired persons have been and are still being denied equal access to Defendant’s Website, and the numerous goods and services and benefits offered to the public through the Website. 29. More generally, while attempting to navigate the Website, Plaintiff encountered multiple accessibility barriers for blind or visually-impaired people that include, but are not limited to, the following: a. Lack of Alternative Text (“alt-text”), or a text equivalent. Alt-text is an invisible code embedded beneath a graphical image on a website. Web accessibility requires that alt-text be coded with each picture so that screen-reading software can speak the alt-text where a sighted user sees pictures, which includes CAPTCHA prompts. Alt-text does not change the visual presentation, but instead a text box shows when the mouse moves over the picture. The lack of alt-text on these graphics prevents screen readers from accurately vocalizing a description of the graphics. As a result, visually-impaired individuals are unable to determine what is on the website, browse available products, and find information on promotions and related goods and services available online. b. Empty Links That Contain No Text causing the function or purpose of the link to not be presented to the user. This can introduce confusion for keyboard and screen-reader users; c. Redundant Links where adjacent links go to the same URL address which results in additional navigation and repetition for keyboard and screen-reader users; and d. Linked Images Missing Alt-text, which causes problems if an image within a link contains no text and that image does not provide alt-text. A screen reader then has no content to present the user as to the function of the link, including information contained in PDFs. 30. Due to the inaccessibility of Defendant’s Website, blind and visually-impaired customers such as Plaintiff, who need screen-readers, cannot fully and equally use or enjoy the facilities, products, and services Defendant offers to the public on its Website. The access barriers Plaintiff encountered have caused a denial of Plaintiff’s full and equal access in the past, and now deter Plaintiff on a regular basis from visiting the Website, presently and in the future. 31. If the Website was equally accessible to all, Plaintiff could independently navigate the Website and complete a desired transaction as sighted individuals do. 32. Through his attempts to use the Website, Plaintiff has actual knowledge of the access barriers that make these services inaccessible and independently unusable by blind and visually-impaired people. 33. Because simple compliance with the WCAG 2.1 Guidelines would provide Plaintiff and other visually-impaired consumers with equal access to the Website, Plaintiff alleges that Defendant has engaged in acts of intentional discrimination, including but not limited to the following policies or practices: a. Constructing and maintaining a website that is inaccessible to visually-impaired individuals, including Plaintiff; b. Failure to construct and maintain a website that is sufficiently intuitive so as to be equally accessible to visually-impaired individuals, including Plaintiff; and, c. Failing to take actions to correct these access barriers in the face of substantial harm and discrimination to blind and visually-impaired consumers, such as Plaintiff, as a member of a protected class. 34. Defendant therefore uses standards, criteria or methods of administration that have the effect of discriminating or perpetuating the discrimination of others, as alleged herein. 35. The ADA expressly contemplates the injunctive relief that Plaintiff seeks in this action. In relevant part, the ADA requires: In the case of violations of . . . this title, injunctive relief shall include an order to alter facilities to make such facilities readily accessible to and usable by individuals with disabilities . . . Where appropriate, injunctive relief shall also include requiring the . . . modification of a policy . . . 42 U.S.C. § 12188(a)(2). 36. Because Defendant’s Website has never been equally accessible, and because Defendant lacks a corporate policy that is reasonably calculated to cause its Website to become and remain accessible, Plaintiff invokes 42 U.S.C. § 12188(a)(2) and seeks a permanent injunction requiring Defendant to retain a qualified consultant acceptable to Plaintiff (“Agreed Upon Consultant”) to assist Defendant to comply with WCAG 2.1 guidelines for Defendant’s Website. Plaintiff seeks that this permanent injunction requires Defendant to cooperate with the Agreed Upon Consultant to: a. Train Defendant’s employees and agents who develop the Website on accessibility compliance under the WCAG 2.1 guidelines; b. Regularly check the accessibility of the Website under the WCAG 2.1 guidelines; c. Regularly test user accessibility by blind or vision-impaired persons to ensure that Defendant’s Website complies under the WCAG 2.1 guidelines; and, d. Develop an accessibility policy that is clearly disclosed on Defendant’s Websites, with contact information for users to report accessibility-related problems. 37. Although Defendant may currently have centralized policies regarding maintaining and operating its Website, Defendant lacks a plan and policy reasonably calculated to make them fully and equally accessible to, and independently usable by, blind and other visually- impaired consumers. 38. Defendant has, upon information and belief, invested substantial sums in developing and maintaining their Website and has generated significant revenue from the Website. These amounts are far greater than the associated cost of making their Website equally accessible to visually impaired customers. 39. Without injunctive relief, Plaintiff and other visually-impaired consumers will continue to be unable to independently use the Website, violating their rights. CLASS ACTION ALLEGATIONS 40. Plaintiff, on behalf of himself and all others similarly situated, seeks to certify a nationwide class under Fed. R. Civ. P. 23(a) and 23(b)(2): all legally blind individuals in the United States who have attempted to access Defendant’s Website and as a result have been denied access to the equal enjoyment of goods and services, during the relevant statutory period. 41. Plaintiff, on behalf of himself and all others similarly situated, seeks to certify a New York State subclass under Fed. R. Civ. P. 23(a) and 23(b)(2): all legally blind individuals in the State of New York who have attempted to access Defendant’s Website and as a result have been denied access to the equal enjoyment of those services, during the relevant statutory period. 42. Plaintiff, on behalf of himself and all others similarly situated, seeks to certify a New York City subclass under Fed. R. Civ. P. 23(a) and 23(b)(2): all legally blind individuals in the City of New York who have attempted to access Defendant’s Website and as a result have been denied access to the equal enjoyment of goods and services offered, during the relevant statutory period. 43. Common questions of law and fact exist amongst Class, including: a. Whether Defendant’s Website is a “public accommodation” under the ADA; b. Whether Defendant’s Website is a “place or provider of public accommodation” under the NYSHRL or NYCHRL; c. Whether Defendant’s Website denies the full and equal enjoyment of its products, services, facilities, privileges, advantages, or accommodations to people with visual disabilities, violating the ADA; and d. Whether Defendant’s Website denies the full and equal enjoyment of its products, services, facilities, privileges, advantages, or accommodations to people with visual disabilities, violating the NYSHRL or NYCHRL. 44. Plaintiff’s claims are typical of the Class. The Class, similarly to the Plaintiff, are severely visually impaired or otherwise blind, and claim that Defendant has violated the ADA, NYSYRHL or NYCHRL by failing to update or remove access barriers on its Website so either can be independently accessible to the Class. 45. Plaintiff will fairly and adequately represent and protect the interests of the Class Members because Plaintiff has retained and is represented by counsel competent and experienced in complex class action litigation, and because Plaintiff has no interests antagonistic to the Class Members. Class certification of the claims is appropriate under Fed. R. Civ. P. 23(b)(2) because Defendant has acted or refused to act on grounds generally applicable to the Class, making appropriate both declaratory and injunctive relief with respect to Plaintiff and the Class as a whole. 46. Alternatively, class certification is appropriate under Fed. R. Civ. P. 23(b)(3) because fact and legal questions common to Class Members predominate over questions affecting only individual Class Members, and because a class action is superior to other available methods for the fair and efficient adjudication of this litigation. 47. Judicial economy will be served by maintaining this lawsuit as a class action in that it is likely to avoid the burden that would be otherwise placed upon the judicial system by the filing of numerous similar suits by people with visual disabilities throughout the United States. FIRST CAUSE OF ACTION VIOLATIONS OF THE ADA, 42 U.S.C. § 12181 et seq. 48. Plaintiff, on behalf of himself and the Class Members, repeats and realleges every allegation of the preceding paragraphs as if fully set forth herein. 49. Section 302(a) of Title III of the ADA, 42 U.S.C. § 12101 et seq., provides: No individual shall be discriminated against on the basis of disability in the full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations of any place of public accommodation by any person who owns, leases (or leases to), or operates a place of public accommodation. 42 U.S.C. § 12182(a). 50. Defendant’s Website is a public accommodation within the definition of Title III of the ADA, 42 U.S.C. § 12181(7). The Website is a service that is offered to the general public, and as such, must be equally accessible to all potential consumers. 51. Under Section 302(b)(1) of Title III of the ADA, it is unlawful discrimination to deny individuals with disabilities the opportunity to participate in or benefit from the products, services, facilities, privileges, advantages, or accommodations of an entity. 42 U.S.C. § 12182(b)(1)(A)(i). 52. Under Section 302(b)(1) of Title III of the ADA, it is unlawful discrimination to deny individuals with disabilities an opportunity to participate in or benefit from the products, services, facilities, privileges, advantages, or accommodation, which is equal to the opportunities afforded to other individuals. 42 U.S.C. § 12182(b)(1)(A)(ii). 53. Under Section 302(b)(2) of Title III of the ADA, unlawful discrimination also includes, among other things: [A] failure to make reasonable modifications in policies, practices, or procedures, when such modifications are necessary to afford such goods, services, facilities, privileges, advantages, or accommodations to individuals with disabilities, unless the entity can demonstrate that making such modifications would fundamentally alter the nature of such goods, services, facilities, privileges, advantages or accommodations; and a failure to take such steps as may be necessary to ensure that no individual with a disability is excluded, denied services, segregated or otherwise treated differently than other individuals because of the absence of auxiliary aids and services, unless the entity can demonstrate that taking such steps would fundamentally alter the nature of the good, service, facility, privilege, advantage, or accommodation being offered or would result in an undue burden. 42 U.S.C. § 12182(b)(2)(A)(ii)-(iii). 54. The acts alleged herein constitute violations of Title III of the ADA, and the regulations promulgated thereunder. Plaintiff, who is a member of a protected class of persons under the ADA, has a physical disability that substantially limits the major life activity of sight within the meaning of 42 U.S.C. §§ 12102(1)(A)-(2)(A). Furthermore, Plaintiff has been denied full and equal access to the Website, has not been provided services that are provided to other patrons who are not disabled, and has been provided services that are inferior to the services provided to non-disabled persons. Defendant has failed to take any prompt and equitable steps to remedy its discriminatory conduct. These violations are ongoing. 55. Under 42 U.S.C. § 12188 and the remedies, procedures, and rights set forth and incorporated therein, Plaintiff, requests relief as set forth below. SECOND CAUSE OF ACTION VIOLATIONS OF THE NYSHRL 56. Plaintiff, on behalf of himself and the New York State Sub-Class Members, repeats and realleges every allegation of the preceding paragraphs as if fully set forth herein. 57. N.Y. Exec. Law § 296(2)(a) provides that it is “an unlawful discriminatory practice for any person, being the owner, lessee, proprietor, manager, superintendent, agent or employee of any place of public accommodation . . . because of the . . . disability of any person, directly or indirectly, to refuse, withhold from or deny to such person any of the accommodations, advantages, facilities or privileges thereof.” 58. Defendant and Defendant’s Website, because of their sale of goods to the general public, constitute sales establishments and public accommodations within the definition of N.Y. Exec. Law § 292(9). Defendant’s Website is a service, privilege or advantage of Defendant. 59. Defendant is subject to New York Human Rights Law because it owns and operates its Website. Defendant is a person within the meaning of N.Y. Exec. Law § 292(1). 60. Defendant is violating N.Y. Exec. Law § 296(2)(a) in refusing to update or remove access barriers to its Website, causing its Website to be completely inaccessible to the blind. This inaccessibility denies blind patrons full and equal access to the facilities, services that Defendant makes available to the non-disabled public. 61. Under N.Y. Exec. Law § 296(2)(c)(i), unlawful discriminatory practice includes, among other things, “a refusal to make reasonable modifications in policies, practices, or procedures, when such modifications are necessary to afford facilities, privileges, advantages or accommodations to individuals with disabilities, unless such person can demonstrate that making such modifications would fundamentally alter the nature of such facilities, privileges, advantages or accommodations being offered or would result in an undue burden". 62. Under N.Y. Exec. Law § 296(2)(c)(ii), unlawful discriminatory practice also includes, “a refusal to take such steps as may be necessary to ensure that no individual with a disability is excluded or denied services because of the absence of auxiliary aids and services, unless such person can demonstrate that taking such steps would fundamentally alter the nature of the facility, privilege, advantage or accommodation being offered or would result in an undue burden.” 63. Readily available, well-established guidelines exist on the Internet for making websites accessible to the blind and visually impaired. These guidelines have been followed by other large business entities and government agencies in making their website accessible, including but not limited to: adding alt-text to graphics and ensuring that all functions can be performed using a keyboard. Incorporating the basic components to make its Website accessible would neither fundamentally alter the nature of Defendant’s business nor result in an undue burden to Defendant. 64. Defendant’s actions constitute willful intentional discrimination against the class on the basis of a disability in violation of the NYSHRL, N.Y. Exec. Law § 296(2) in that Defendant has: a. constructed and maintained a website that is inaccessible to blind lass members with knowledge of the discrimination; and/or b. constructed and maintained a website that is sufficiently intuitive and/or obvious that is inaccessible to blind class members; and/or c. failed to take actions to correct these access barriers in the face of substantial harm and discrimination to blind class members. 65. Defendant has failed to take any prompt and equitable steps to remedy their discriminatory conduct. These violations are ongoing. 66. Defendant discriminates, and will continue in the future to discriminate against Plaintiff and New York State Sub-Class Members on the basis of disability in the full and equal enjoyment of the products, services, facilities, privileges, advantages, accommodations and/or opportunities of Defendant’s Website under § 296(2) et seq. and/or its implementing regulations. Unless the Court enjoins Defendant from continuing to engage in these unlawful practices, Plaintiff and the Sub-Class Members will continue to suffer irreparable harm. 67. Defendant’s actions were and are in violation of New York State Human Rights Law and therefore Plaintiff invokes his right to injunctive relief to remedy the discrimination. 68. Plaintiff is also entitled to compensatory damages, as well as civil penalties and fines under N.Y. Exec. Law § 297(4)(c) et seq. for each and every offense. 69. Plaintiff is also entitled to reasonable attorneys’ fees and costs. 70. Under N.Y. Exec. Law § 297 and the remedies, procedures, and rights set forth and incorporated therein Plaintiff prays for judgment as set forth below. THIRD CAUSE OF ACTION VIOLATION OF THE NEW YORK STATE CIVIL RIGHTS LAW 71. Plaintiff, on behalf of himself and the New York State Sub-Class Members, repeats and realleges every allegation of the preceding paragraphs as if fully set forth herein. 72. Plaintiff served notice thereof upon the attorney general as required by N.Y. Civil Rights Law § 41. 73. N.Y. Civil Rights Law § 40 provides that “all persons within the jurisdiction of this state shall be entitled to the full and equal accommodations, advantages, facilities and privileges of any places of public accommodations, resort or amusement, subject only to the conditions and limitations established by law and applicable alike to all persons. No persons, being the owner, lessee, proprietor, manager, superintendent, agent, or employee of any such place shall directly or indirectly refuse, withhold from, or deny to any person any of the accommodations, advantages, facilities and privileges thereof . . .” 74. N.Y. Civil Rights Law § 40-c(2) provides that “no person because of . . . disability, as such term is defined in section two hundred ninety-two of executive law, be subjected to any discrimination in his or her civil rights, or to any harassment, as defined in section 240.25 of the penal law, in the exercise thereof, by any other person or by any firm, corporation or institution, or by the state or any agency or subdivision.” 75. Defendant’s Website is a service, privilege or advantage of Defendant and its Website which offers such goods and services to the general public is required to be equally accessible to all. 76. Defendant is subject to New York Civil Rights Law because it owns and operates their Website, and Defendant is a person within the meaning of N.Y. Civil Law § 40-c(2). 77. Defendant is violating N.Y. Civil Rights Law § 40-c(2) in refusing to update or remove access barriers to its Website, causing its Website and the goods and services integrated with such Website to be completely inaccessible to the blind. This inaccessibility denies blind patrons full and equal access to the facilities, goods and services that Defendant makes available to the non-disabled public. 78. N.Y. Civil Rights Law § 41 states that “any corporation which shall violate any of the provisions of sections forty, forty-a, forty-b or forty-two . . . shall for each and every violation thereof be liable to a penalty of not less than one hundred dollars nor more than five hundred dollars, to be recovered by the person aggrieved thereby . . .” 79. Under NY Civil Rights Law § 40-d, “any person who shall violate any of the provisions of the foregoing section, or subdivision three of section 240.30 or section 240.31 of the penal law, or who shall aid or incite the violation of any of said provisions shall for each and every violation thereof be liable to a penalty of not less than one hundred dollars nor more than five hundred dollars, to be recovered by the person aggrieved thereby in any court of competent jurisdiction in the county in which the defendant shall reside ...” 80. Defendant has failed to take any prompt and equitable steps to remedy its discriminatory conduct. These violations are ongoing. 81. Defendant discriminates, and will continue in the future to discriminate against Plaintiff and New York State Sub-Class Members on the basis of disability are being directly or indirectly refused, withheld from, or denied the accommodations, advantages, facilities and privileges thereof in § 40 et seq. and/or its implementing regulations. 82. Plaintiff is entitled to compensatory damages of five hundred dollars per instance, as well as civil penalties and fines under N.Y. Civil Law § 40 et seq. for each and every offense. FOURTH CAUSE OF ACTION VIOLATIONS OF THE NYCHRL 83. Plaintiff, on behalf of himself and the New York City Sub-Class Members, repeats and realleges every allegation of the preceding paragraphs as if fully set forth herein. 84. N.Y.C. Administrative Code § 8-107(4)(a) provides that “It shall be an unlawful discriminatory practice for any person, being the owner, lessee, proprietor, manager, superintendent, agent or employee of any place or provider of public accommodation, because of . . . disability . . . directly or indirectly, to refuse, withhold from or deny to such person, any of the accommodations, advantages, facilities or privileges thereof.” 85. Defendant’s Website is a sales establishment and public accommodation within the definition of N.Y.C. Admin. Code § 8-102(9). 86. Defendant is subject to NYCHRL because it owns and operates its Website, making it a person within the meaning of N.Y.C. Admin. Code § 8-102(1). 87. Defendant is violating N.Y.C. Administrative Code § 8-107(4)(a) in refusing to update or remove access barriers to Website, causing its Website and the services integrated with such Website to be completely inaccessible to the blind. This inaccessibility denies blind patrons full and equal access to the facilities, products, and services that Defendant makes available to the non-disabled public. 88. Defendant is required to “make reasonable accommodation to the needs of persons with disabilities . . . any person prohibited by the provisions of [§ 8-107 et seq.] from discriminating on the basis of disability shall make reasonable accommodation to enable a person with a disability to . . . enjoy the right or rights in question provided that the disability is known or should have been known by the covered entity.” N.Y.C. Admin. Code § 8-107(15)(a). 89. Defendant’s actions constitute willful intentional discrimination against the Sub-Class on the basis of a disability in violation of the N.Y.C. Administrative Code § 8-107(4)(a) and § 8-107(15)(a) in that Defendant has: a. constructed and maintained a website that is inaccessible to blind class members with knowledge of the discrimination; and/or b. constructed and maintained a website that is sufficiently intuitive and/or obvious that is inaccessible to blind class members; and/or c. failed to take actions to correct these access barriers in the face of substantial harm and discrimination to blind class members. 90. Defendant has failed to take any prompt and equitable steps to remedy their discriminatory conduct. These violations are ongoing. 91. As such, Defendant discriminates, and will continue in the future to discriminate against Plaintiff and members of the proposed class and subclass on the basis of disability in the full and equal enjoyment of the products, services, facilities, privileges, advantages, accommodations and/or opportunities of its Website under § 8-107(4)(a) and/or its implementing regulations. Unless the Court enjoins Defendant from continuing to engage in these unlawful practices, Plaintiff and members of the class will continue to suffer irreparable harm. 92. Defendant’s actions were and are in violation of the NYCHRL and therefore Plaintiff invokes his right to injunctive relief to remedy the discrimination. 93. Plaintiff is also entitled to compensatory damages, as well as civil penalties and fines under N.Y.C. Administrative Code § 8-120(8) and § 8-126(a) for each offense as well as punitive damages pursuant to § 8-502. 94. Plaintiff is also entitled to reasonable attorneys’ fees and costs. 95. Under N.Y.C. Administrative Code § 8-120 and § 8-126 and the remedies, procedures, and rights set forth and incorporated therein Plaintiff prays for judgment as set forth below. FIFTH CAUSE OF ACTION DECLARATORY RELIEF 96. Plaintiff, on behalf of himself and the Class and New York State and City Sub-Classes Members, repeats and realleges every allegation of the preceding paragraphs as if fully set forth herein. 97. An actual controversy has arisen and now exists between the parties in that Plaintiff contends, and is informed and believes that Defendant denies, that its Website contains access barriers denying blind customers the full and equal access to the products, services and facilities of its Website, which Defendant owns, operations and controls, fails to comply with applicable laws including, but not limited to, Title III of the Americans with Disabilities Act, 42 U.S.C. §§ 12182, et seq., N.Y. Exec. Law § 296, et seq., and N.Y.C. Admin. Code § 8-107, et seq. prohibiting discrimination against the blind. 98. A judicial declaration is necessary and appropriate at this time in order that each of the parties may know their respective rights and duties and act accordingly. PRAYER FOR RELIEF WHEREFORE, Plaintiff respectfully requests this Court grant the following relief: a. A preliminary and permanent injunction to prohibit Defendant from violating the Americans with Disabilities Act, 42 U.S.C. §§ 12182, et seq., N.Y. Exec. Law § 296, et seq., N.Y.C. Administrative Code § 8-107, et seq., and the laws of New York; b. A preliminary and permanent injunction requiring Defendant to take all the steps necessary to make its Website into full compliance with the requirements set forth in the ADA, and its implementing regulations, so that the Website is readily accessible to and usable by blind individuals; c. A declaration that Defendant owns, maintains and/or operates its Website in a manner that discriminates against the blind and which fails to provide access for persons with disabilities as required by Americans with Disabilities Act, 42 U.S.C. §§ 12182, et seq., N.Y. Exec. Law § 296, et seq., N.Y.C. Administrative Code § 8-107, et seq., and the laws of New York; d. An order certifying the Class and Sub-Classes under Fed. R. Civ. P. 23(a) & (b)(2) and/or (b)(3), appointing Plaintiff as Class Representative, and his attorneys as Class Counsel; e. Compensatory damages in an amount to be determined by proof, including all applicable statutory and punitive damages and fines, to Plaintiff and the proposed class and subclasses for violations of their civil rights under New York State Human Rights Law and City Law; f. Pre- and post-judgment interest; g. An award of costs and expenses of this action together with reasonable attorneys’ and expert fees; and h. Such other and further relief as this Court deems just and proper. DEMAND FOR TRIAL BY JURY Pursuant to Fed. R. Civ. P. 38(b), Plaintiff demands a trial by jury on all questions of fact the Complaint raises. Dated: Hackensack, New Jersey /s/ Dov Mittelman April 11, 2019 STEIN SAKS, PLLC By: Dov Mittelman Dov Mittelman, Esq. Mittelmandov@yahoo.com 285 Passaic Street Hackensack, NJ 07601 Tel: (201) 282-6500 Fax: (201) 282-6501 ATTORNEYS FOR PLAINTIFF

civil rights, immigration, family

rvV6E4cBD5gMZwczc33p

CASE NO. 1:19-cv-501 UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF OHIO DIANE D. JONES, on behalf of herself and all others similarly situated, Plaintiff, vs. REALPAGE, INC. d/b/a LEASINGDESK SCREENING, Defendant. CLASS ACTION COMPLAINT (Trial by Jury Demanded) Plaintiff Diane D. Jones, on behalf of herself and all others similarly situated, files this Class Action Complaint against RealPage, Inc. d/b/a LeasingDesk Screening (“Defendant” or “RealPage”). Plaintiff alleges, based on personal knowledge as to Defendant’s actions and upon information and belief as to all other matters, as follows: NATURE OF THE ACTION 1. This is a consumer class action under the Fair Credit Reporting Act, 15 U.S.C. §§ 1681, et seq. (“FCRA”), brought on behalf of rental applicants nationwide who were the subjects of background reports prepared by Defendant. Plaintiff contends that Defendant systematically violates section 1681e(b) of the FCRA by failing to use reasonable procedures to assure the maximum possible accuracy of information included on the reports it sells to prospective landlords. 2. Specifically, Defendant violates this fundamental accuracy requirement of the FCRA by reporting criminal record information about consumers, including Ms. Jones, that does not pertain to them and which in fact relates to a different person with an entirely different name. 3. Defendant’s inaccurate reporting is the result of its systematic failure to adopt adequate matching procedures for placing criminal record information on the tenant screening reports it sells. 4. Defendant’s practices harm consumers seeking residential leases by prejudicing their prospective landlords with inaccurate adverse, and harm interstate commerce as a whole. 5. Pursuant to 15 U.S.C. §§ 1681n and 1681o, Plaintiff seeks monetary relief for herself and a class of similarly situated individuals for about whom Defendant reported criminal record information that was inaccurate on the face of the report. PARTIES 6. Plaintiff Diane D. Jones is a “consumer” as defined by the FCRA, and resides in University Heights, Ohio. 7. Defendant RealPage, Inc. is a consumer reporting agency that regularly conducts business in the State of Ohio in its own name and as “LeasingDesk Screening”. RealPage maintains a principal place of business at 2201 Lakeside Boulevard, Richardson, TX. JURISDICTION AND VENUE 8. The Court has federal question jurisdiction under the FCRA, 15 U.S.C. § 1681p, and 28 U.S.C. § 1331. 9. Venue is proper in this District pursuant to 28 U.S.C. § 1391(b). STATEMENT OF FACTS RealPage Fails To Accurately Report Consumer Information 10. Defendant is regulated by the FCRA and sells consumer reports (commonly called “credit reports”) about thousands of consumers. Defendant regularly sells credit reports for residential screening purposes. 11. CRAs such as Defendant deal in volume and use standardized procedures to gather information and attribute it to individuals. They do not “reinvent the wheel” by using unique practices with respect to each different report. 12. Defendant fails to follow reasonable procedures to assure the maximum possible accuracy regarding the information it sells about consumers. See 15 U.S.C. § 1681e(b). 13. One of the most well-known and prevalent inaccuracies that occur in the consumer reporting industry is a “mixed file.” 14. A mixed file is a consumer report in which some or all of the information in the report pertains to an individual who is not the subject of the report. 15. The main cause of mixed files is a CRA’s failure to use full identifying information to match records to the personal identifying information of consumers who are the subjects of its reports. 16. RealPage’s standard practice is to use only partial matching and not full identifying information in preparing consumer reports. 17. Specifically, RealPage does not require a match to full identifying information (such as full last name and first name; middle initial; full street address; zip code; year of birth; any generational designation; and social security number) before preparing a report that it attributes to a particular consumer and sells about that consumer. 18. Defendant employs policies and procedures that do not include the use of a reasonable number of identifiers, or even a precise first and last name, and that frequently allow the information belonging to one consumer to appear in the consumer file of another. 19. Furthermore, Defendant does not require that the identifiers that it does use to match character-for-character. For example, Defendant does not require names to match character- for-character. 20. Defendant employs these loose matching procedures in order to maximize the number of reports which contain information, accurate or not. RealPage intentionally employs procedures that maximize the likelihood of a match between any inquiry and some data in its database about one or more consumers, purposefully prioritizing quantity of matches over accuracy of matches. 21. Defendant has used the same matching procedure to create many consumer reports which include criminal records for which the name of the criminal does not match the name of the individual who is the subject of the report. Such mismatches are obvious from the face of the 22. Defendant’s reporting of inaccurate public record information is not accidental, nor a result of simple negligence, but instead a result of deliberately designed policies and procedures. The Experience of Plaintiff Diane Jones 23. Plaintiff is a consumer about whom Defendant sold inaccurate public record information pursuant to its standardized procedures for creating and selling consumer reports. 24. In June 2016, Plaintiff applied for a subsidized apartment at the Marietta Road Senior High Rise apartment operated by Interstate Realty Management (“Interstate Realty”), and was placed on a waiting list. 25. Over a year later, when her name reached the top of the waiting list, Interstate ordered a consumer tenant screening report from RealPage about Plaintiff, after obtaining Plaintiff’s name, address, social security number, and date of birth, and providing all of this information to RealPage. 26. On August 28, 2017, Defendant sold Interstate Realty a consumer report about Plaintiff for a fee. 27. The report inaccurately stated that Ms. Jones was charged with a drug crime in Fulton County, Georgia, despite the fact that the record RealPage placed on the report states that the offender’s name is “Toni Taylor.” This criminal record belongs to an unrelated person with an entirely different first and last name, and Plaintiff has no criminal record in Georgia. 28. The inclusion of inaccurate record was the result of Defendant’s use of imprecise name matching procedure to attribute public records to rental applicants, such as Plaintiff. 29. The name matching procedure is so imprecise that it does not account for the fact that neither the first nor the last name of the offender matches Plaintiff’s name. 30. Plaintiff had her good reputation tarnished and lost the opportunity to rent a subsidized senior apartment from Interstate as a result of Defendant’s inaccurate reporting. 31. At all times pertinent hereto, Defendant’s conduct was result of its deliberately- adopted policies and procedures, was willful, and was carried out in reckless disregard for consumers’ rights as set forth in sections 1681e(b) of the FCRA, and further involved an unjustifiably high risk of harm. 32. As of result of Defendant’s conduct, Plaintiff has suffered damages in the form of (a) lost rental opportunity, (b) harm to reputation, and (c) emotional distress. 33. At all times pertinent hereto, Defendant was acting by and through its agents, servants and or employees who were acting within the course and scope of their agency or employment, and under the direct supervision and control of the Defendant herein. CLASS ACTION ALLEGATIONS 34. Plaintiff brings this action pursuant to the Federal Rules of Civil Procedure 23(a) and 23(b)(3) on behalf of the following Class: All persons residing in the United States and its Territories, beginning five years prior to the filing of this Complaint and continuing through the resolution of the action, about whom RealPage furnished a consumer report which included one or more items of criminal record information for which the first and last name of the offender did not match the first and last name of the person who was the subject of the report. 35. Plaintiff reserves the right to amend the definition of the Class based on discovery or legal developments. 36. Numerosity. FED. R. CIV. P. 23(a)(1). The Class members are so numerous that joinder of all is impractical. Upon information and belief, Defendant prepares thousands of consumer reports on rental applicants each year, and those persons’ names and addresses are identifiable through documents maintained by Defendant. 37. Existence and Predominance of Common Questions of Law and Fact. FED. R. CIV. P. 23(a)(2). Common questions of law and fact exist as to all members of the Class, and predominate over the questions affecting only individual members. The common legal and factual questions include, among others, whether Defendant fails to use reasonable procedures to assure the maximum possible accuracy of information included on the reports it sells, and whether Defendant acted willfully or negligently in disregard of the rights of consumers. 38. Typicality. FED. R. CIV. P. 23(a)(3). Plaintiff’s claims are typical of the claims of each Class member. Plaintiff has the same or similar claims for statutory and punitive damages that she seeks for absent class members. 39. Adequacy. FED. R. CIV. P. 23(a)(4). Plaintiff is an adequate representative of the Class. Her interests are aligned with, and are not antagonistic to, the interests of the members of the Class she seeks to represent, she has retained counsel competent and experienced in such litigation, and she intends to prosecute this action vigorously. Plaintiff and her counsel will fairly and adequately protect the interests of members of the Class. 40. Predominance and Superiority. FED. R. CIV. P. 23(b)(3). Questions of law and fact common to the Class members predominate over questions affecting only individual members, and a class action is superior to other available methods for fair and efficient adjudication of the controversy. The statutory and punitive damages sought by each member are such that individual prosecution would prove burdensome and expensive given the complex and extensive litigation necessitated by Defendant’s conduct. Even if the members of the Class themselves could afford such individual litigation, it would be an unnecessary burden on the courts. Furthermore, individualized litigation presents a potential for inconsistent or contradictory judgments and increases the delay and expense to all parties and to the court system presented by the complex legal and factual issues raised by Defendants’ conduct. By contrast, the class action device will result in substantial benefits to the litigants and the Court by allowing the Court to resolve numerous individual claims based upon a single set of proof in a unified proceeding. CAUSES OF ACTION COUNT I Violation of Fair Credit Reporting Act, 15 U.S.C. § 1681e(b) (On behalf of Plaintiff and Class) 41. Plaintiff incorporates by reference those paragraphs set out above as though fully set forth herein. 42. Pursuant to sections 1681n and 1681o of the FCRA, Defendant is liable to the Plaintiff and the Class for negligently and willfully failing to follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom a consumer report relates, in violation of section 1681e(b). Specifically, Defendant fails to follow reasonable procedures to assure maximum possible accuracy by using matching criteria which permits a criminal record to appear on a consumer report even where the name of the offender does not match the name of the individual who is the subject of the report. PRAYER FOR RELIEF WHEREFORE, Plaintiff and the Class pray for relief as follows: A. An order certifying the case as a class action on behalf of the proposed Class under Federal Rule of Civil Procedure 23 and appointing Plaintiff and the undersigned counsel of record to represent same; B. An award of statutory, actual and punitive damages for Plaintiff and the Class; C. An award of statutory, actual and punitive damages for Plaintiff individually; D. An award of pre-judgment and post-judgment interest as provided by law; E. An award of attorneys’ fees and costs; and, F. Such other relief as the Court deems just and proper. JURY DEMAND Plaintiff hereby requests and demands a trial by jury. Respectfully submitted, /s/ Matthew A. Dooley Matthew A. Dooley (#0081482) O’TOOLE, MCLAUGHLIN, DOOLEY & PECORA CO., LPA. 5455 Detroit Rd. Sheffield Village, Ohio 44054 Telephone: (440) 930-4001 Facsimile: (440) 934-7208 Email: mdooley@omdplaw.com FRANCIS & MAILMAN, P.C. James A. Francis (pro hac vice forthcoming) John Soumilas (pro hac vice forthcoming) Lauren KW Brennan (pro hac vice forthcoming) 1600 Market Street, 25th Floor Philadelphia, PA 19103 Telephone: (215) 735.8600 Facsimile: (215) 940.8000 Email: jfrancis@consumerlawfirm.com jsoumilas@consumerlawfirm.com lbrennan@consumerlawfirm.com Counsel for Plaintiff

consumer fraud

afNDE4cBD5gMZwczRMFM

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS Daniel Kubacki, ) ) Plaintiff, ) ) v. ) No. ) Peapod LLC, ) ) JURY DEMAND Defendant. ) COMPLAINT - CLASS ACTION INTRODUCTION 1. Plaintiff Daniel Kubacki (“Plaintiff”) brings this action for damages, and other legal and equitable remedies, against Peapod LLC (“Defendant”) for negligently, knowingly, and/or willfully contacting Plaintiff on Plaintiff’s cellular telephone without his prior express consent within the meaning of the Telephone Consumer Protection Act, 47 U.S.C. § 227 et seq. (“TCPA”). The TCPA prohibits automated telephone calls to cellular telephones without prior express consent. 2. “Voluminous consumer complaints about abuses of telephone technology-- for example, computerized calls dispatched to private homes-- prompted Congress to pass the TCPA. Congress determined that federal legislation was needed because telemarketers, by operating interstate, were escaping state-law prohibitions on intrusive nuisance calls.” Mims v. Arrow Financial Services, LLC, 132 S.Ct. 740, 744, 181 L.Ed.2d 881 (2012). In an effort to enforce this fundamental federal right to privacy, Plaintiff files the instant class action complaint alleging violations of the TCPA. 3. Defendant has caused consumers actual harm, not only because consumers were subjected to the aggravation that necessarily accompanies these calls, but also because consumers frequently have to pay their cell phone service providers for the receipt of such calls and such calls are an intrusion upon seclusion, diminish cellular battery life, and waste data storage capacity. JURISDICTION AND VENUE 4. This court has jurisdiction under 28 U.S.C. § 1331 (general federal question) and 47 U.S.C. § 227 (TCPA). Venue in this district is proper because a substantial part of the events took place in this district as Plaintiff received the telephone call on his cellular telephone in this district. 28 U.S.C. § 1391(b)(2). Defendant’s principal place of business is 9933 Woods Dr., Skokie, IL 60077 and Defendant transacts business within this district. Therefore, Defendant is subject to this Court’s personal jurisdiction and is a resident of this judicial district. 28 U.S.C. § 1391(c)(2). Therefore venue is proper in this district. 28 U.S.C. § 1391(b)(1). PARTIES 5. Plaintiff Daniel Kubacki is, and at all times mentioned herein was, an individual citizen of the State of Illinois who resides in the district. 6. Peapod LLC is a foreign limited liability company registered in Delaware whose principal place of business is 9933 Woods Dr., Skokie, IL 60077 and whose agent, Illinois Corporation Service Company, is located at 801 Adlai Stevenson Drive, Springfield, IL 62703. THE TELEPHONE CONSUMER PROTECTION ACT OF 1991 (TCPA), 47 U.S.C. § 227 7. In 1991 Congress enacted the TCPA in response to a growing number of consumer complaints regarding certain telemarketing practices. 8. The TCPA regulates, among other things, the use of automated telephone equipment, or “auto-dialers.” Specifically, the plain language of section 227(b)(1)(A)(iii) prohibits the use of 2 auto-dialers to make any call to a wireless number in the absence of an emergency or the prior express consent of the called party. 9. According to findings by the Federal Communication Commission (“FCC”), the agency Congress vested with authority to issue regulations implementing the TCPA, such calls are prohibited because, as Congress found, automated or prerecorded telephone calls are a greater nuisance and invasion of privacy than live solicitation calls, and such calls can be costly and inconvenient. The FCC also recognized that wireless customers are charged for incoming calls whether they pay in advance or after the minutes are used. 10. On January 4, 2008, the FCC released a Declaratory Ruling wherein it confirmed that autodialed and prerecorded message calls to a wireless number by a creditor (or on behalf of a creditor) are permitted only if the calls are made with the “prior express consent” of the called party. The FCC “emphasize[d] that prior express consent is deemed to be granted only if the wireless number was provided by the consumer to the creditor, and that such number was provided during the transaction that resulted in the debt owed.” FACTS 11. Plaintiff is, and at all times mentioned herein was, a “person” as defined by 47 U.S.C. § 153(39). 12. Defendant is, and at all times mentioned herein was, a limited liability corporation and a “person”, as defined by 47 U.S.C. § 153(39). 13. Plaintiff received a call from Defendant on his cellular telephone on December 4, 2012 at 10:54am. 14. This call to Plaintiff was a prerecorded message as the call was completely automated 3 and no live person spoke during the telephone call. Further, the call was to solicit new accounts for Peapod. 15. The TCPA prohibits either prerecorded calls or calls made via an “automatic telephone dialing system” as defined by 27 U.S.C. § 227(a)(1). 16. The telephone number that Defendant dialed contact Plaintiff was assigned to a cellular telephone service as specified in 47 U.S.C. § 227(b)(1)(A)(iii). This contact was for non- emergency purposes and in the absence of Plaintiff’s prior express consent violated 47 U.S.C. § 227(b)(1)(A). 17. Under the TCPA and pursuant to the FCC’s January 2008 Declaratory Ruling, the burden is on Defendant to demonstrate that Plaintiff provided express consent within the meaning of the statute, because it is the best entity to determine how numbers were attained. 18. In addition, any consent given to Peapod is not transferrable to new accounts or the solicitation of new accounts. COUNT I - TCPA CLASS CLAIM (CELLULAR CALLS) 19. Plaintiff incorporates the above factual allegations herein. 20. Defendant made automated telephone calls to the wireless telephone numbers of Plaintiff and the other Class members using equipment that had the capacity to store or produce telephone numbers to be called, using a random or sequential number generator. 21. Defendant made prerecorded calls to the wireless telephone numbers of Plaintiff and the other Class members. 22. Defendant has therefore violated the TCPA, 47 U.S.C. § 227(b)(1)(A)(iii), which makes it unlawful for any person within the United States . . . to make any call (other than a call 4 made for emergency purposes or made with the prior express consent of the called party) using any automatic telephone dialing system or an artificial or prerecorded voice . . .” As a result of Defendant’s illegal conduct, the members of the class suffered actual damages and, under section 227(b)(3)(B), are each entitled to, inter alia, a minimum of $500.00 in damages for each such violation of the TCPA. 23. If Defendant’s misconduct was willful and knowing, the Court should, pursuant to section 227(b)(3)(C), treble the amount of statutory damages recoverable by the Plaintiff and the 24. Plaintiff and Class members are also entitled to and do seek injunctive relief prohibiting Defendant’s violation of the TCPA in the future. CLASS ALLEGATIONS 25. Plaintiff proposes the following Class definition, subject to amendment as appropriate: (1) All persons within the United States or its Territories (2) to 1 whose cellular telephone number (3) Defendant placed a non- emergency telephone call (4) using an automatic telephone dialing system or an artificial or prerecorded voice (5) on or after January 30, 2009. 26. Plaintiff does not know the exact number of members in the Class, but based upon the fact that defendant delivers more than 300,000 orders a year across 24 U.S. markets, Plaintiff reasonably believes that Class members number in at least the hundreds. 27. Plaintiff and all members of the class have been harmed by the acts of Defendant. Plaintiff may seek leave to amend the geographic scope of the Class definition based on 1 discovery. 5 28. This Class Action Complaint seeks money damages and injunctive relief. 29. The joinder of all Class members is impracticable due to the size and relatively modest value of each individual claim. The disposition of the claims in a class action will provide substantial benefit the parties and the Court in avoiding a multiplicity of identical suits. The class can be identified easily through records maintained by Defendant. 30. There are questions of law and fact common to the members of the classes, which common questions predominate over any questions that affect only individual class members. Those common questions of law and fact include, but are not limited to, the following: a. Whether Defendant made nonemergency calls to Plaintiff and class members’ cellular telephones using an automatic telephone dialing system or an artificial or prerecorded voice; b. Whether Defendant can meet its burden of showing it obtained prior express consent (i.e., consent that is clearly and unmistakably stated), during the transaction that resulted in the debt owed if there even was such a transaction, to make such calls; c. Whether Defendant’s conduct was knowing and/or willful; d. Whether Defendant is liable for damages, and the amount of such damages; and e. Whether Defendant should be enjoined from engaging in such conduct in the future. 31. As a person who received telephone calls using an automatic telephone dialing system or an artificial or prerecorded voice, without his prior express consent within the meaning of the TCPA, Plaintiff asserts claims that are typical of each Class member. Plaintiff will fairly 6 and adequately represent and protect the interests of the class, and he has no interests which are antagonistic to any member of the class. 32. Plaintiff has retained counsel experienced in handling class action claims involving violations of federal and state consumer protection statutes such as the TCPA. 33. A class action is the superior method for the fair and efficient adjudication of this controversy. Class wide relief is essential to compel Defendant to comply with the TCPA. Members of the Class do not have an interest in pursuing separate individual actions as the amount of each Class member’s individual claim is small compared to the expense and burden of individual prosecution. Management of these claims is unlikely to present any difficulties because the calls at issue are all automated and the Class members, by definition, did not provide the prior express consent required under the statute to authorize calls to their cellular telephones. 34. Defendant has acted on grounds generally applicable to the Class, thereby making final injunctive relief and corresponding declaratory relief with respect to the class as a whole appropriate. Moreover, on information and belief, Plaintiff alleges that the TCPA violations complained of herein are substantially likely to continue in the future if an injunction is not entered. WHEREFORE, Plaintiff requests that the Court enter judgment in favor of Plaintiff and the Class members and against Defendant as follows: a. Plaintiff seeks for himself and each Class member $500.00 in statutory damages for each and every call that violated the TCPA; b. Plaintiff seeks for himself and each Class member treble damages, as provided by statute, of up to $1,500.00 for each and every call that violated the TCPA; 7 c. An award of injunctive relief prohibiting such violations of the TCPA by Defendant in the future; d. An award of attorneys’ fees and costs to counsel for Plaintiff and the Class; e. An order certifying this action to be a proper class action pursuant to Federal Rule of Civil Procedure 23, establishing an appropriate Class and any Subclasses the Court deems appropriate, finding that Plaintiff is a proper representative of the Class, and appointing the lawyers and law firms representing Plaintiff as counsel for the Class; f. Such other relief as the Court deems just and proper. Respectfully submitted, /s/ Keith J. Keogh One of Plaintiff’s attorneys Matthew W. Kiverts Law Offices of Matthew W. Kiverts 27 North Wacker Drive, Suite 401 Chicago, Illinois 60606 312.632.1017 (office) 866.596.2210 (fax) mkiverts@kivertslaw.com Keith J. Keogh Craig Shapiro Timothy J. Sostrin Katherine Bowen Keogh Law, Ltd. 101 North Wacker Drive, Suite 605 Chicago, Illinois 60606 312.726.1092 (office) 312.726.1093 (fax) Keith@KeoghLaw.com JURY DEMAND Plaintiff demands trial by jury. /s/ Keith J. Keogh 8

privacy

AEpqA4kBRpLueGJZNr3_

CLARKSON LAW FIRM, P.C. Ryan J. Clarkson (SBN 257074) rclarkson@clarksonlawfirm.com Yana Hart (SBN 306499) yhart@clarksonlawfirm.com 22525 Pacific Coast Highway Malibu, CA 90265 Tel: (213) 788-4050 Fax: (213) 788-4070 Attorneys for Plaintiff UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA THOMAS IGLESIAS, individually and on behalf of all others similarly situated, Plaintiff, vs. HORNELL BREWING CO., INC. Defendant. Case No. CLASS ACTION COMPLAINT 1. VIOLATION OF CALIFORNIA CONSUMERS LEGAL REMEDIES ACT, CIVIL CODE § 1750, et. seq. 2. VIOLATION OF CALIFORNIA FALSE ADVERTISING LAW, BUSINESS AND PROFESSIONS CODE § 17500, et. seq. 3. VIOLATION OF CALIFORNIA UNFAIR COMPETITION LAW, BUSINESS AND PROFESSIONS CODE § 17200, et. seq. 4. UNJUST ENRICHMENT 5. BREACH OF EXPRESS WARRANTY DEMAND FOR JURY TRIAL Plaintiff Thomas Iglesias, (“Plaintiff”), individually and on behalf of all other similarly situated purchasers (the “Class”), brings this class action lawsuit against Hornell Brewing Co., Inc. (referred to herein as “Defendant”), and alleges as follows: INTRODUCTION 1. Defendant falsely labels and advertises its AriZona beverage products, including but not limited to, AriZona Kiwi Strawberry Fruit Juice Cocktail, Lemonade Fruit Juice Cocktail, Mucho Mango Fruit Juice Cocktail, Fruit Punch Fruit Juice Cocktail, Orangeade, Grapeade, Lemonade Drink Mix, Golden Bear Strawberry Lemonade, and Rx Energy as being “All Natural,” when in reality, they contain added coloring, including but not limited to “beta carotene,” “fruit and vegetable juices,” “annatto,” and “vegetable juice.” The “All Natural” AriZona beverages are collectively referred to as (the “Products”). See Figures 1-10, infra. The prominent label “ALL NATURAL” is depicted on the front of the Product container, to mislead consumers to believe that the Products are entirely natural. 2. Plaintiff brings this class action lawsuit on behalf of all purchasers of the Products within the State of California, during the last four years. 3. Plaintiff brings this class action against Defendant, who is among the United States’ leading producers of beverage products. Defendant has realized that, based on the public’s concern about natural and healthy foods, there is a financial benefit to be derived in selling products claiming to be natural. Accordingly, Defendant labels its Products as “All Natural,” even though the Products contain added coloring in violation of California and federal advertising laws. 4. Plaintiff seeks to secure injunctive relief and restitution for the Class against Defendant for false and misleading advertising in violation of California’s Business & Professions Code section 17200, et seq., Business & Professions Code section 17500, et seq., and the Consumers Legal Remedies Act Civil Code section 1750, et seq. Defendant made and continues to make false and misleading statements in its advertising of the Products. Specifically, Defendant labels the Products as “All Natural” (depicted in capital letters on the front label) and markets them as such, even though the Products contain coloring additives. 5. By letter dated December 14, 2021, Plaintiff advised Defendant of its false and misleading claims pursuant to California Civil Code Section 1782(a). Plaintiff has provided Defendant with notice of its violations of the CLRA pursuant to Civil Code section 1782(a). PARTIES 6. Plaintiff is, and at all times relevant hereto was, a citizen of California. Plaintiff purchased the Mucho Mango Fruit Juice Cocktail from a Foods Co. in San Francisco, California in on several occasions since 2017. Plaintiff paid approximately $4 for the Product. In making his purchase, Plaintiff relied upon Defendant’s labeling and advertising claims, namely, the “All Natural” label clearly printed on the front of the Product. These claims were prepared and approved by Defendant and its agents and disseminated statewide and nationwide, to encourage consumers to purchase the Products. If Plaintiff had known that the Product was not completely natural, he would not have purchased the Product. 7. Hornell Brewing Co., Inc. is a corporation headquartered in Woodbury, New York. Hornell Brewing Co., Inc. maintains its principal business office at 60 Crossways Park Drive W., Ste. 400, Woodbury, New York 11797. Hornell Brewing Co., Inc., directly and through its agents, has substantial contacts with and receives substantial benefits and income from and through the State of California. Hornell Brewing Co., Inc. is the owner, manufacturer, and distributor of the Products, and is the company that created and/or authorized the false, misleading, and deceptive packaging of the Products. JURISDICTION AND VENUE 8. This Court has subject matter jurisdiction of this action pursuant to 28 U.S.C. Section 1332 and the Class Action Fairness Act of 2005 because: (i) there are 100 or more class members, (ii) there is an aggregate amount in controversy exceeding $5,000,000, exclusive of interest and costs, and (iii) there is minimal diversity because at least one plaintiff and defendant are citizens of different states. This Court has supplemental jurisdiction over any state law claims pursuant to 28 U.S.C. Section 1367. 9. Pursuant to 28 U.S.C. Section 1391, this Court is the proper venue for this action because a substantial part of the events, omissions, and acts giving rise to the claims herein occurred in this District. Plaintiff is a citizen of California who resides in San Francisco County; Defendant made the challenged false representations to Plaintiff in San Francisco County; Plaintiff purchased the Product in this County; and Plaintiff consumed the Product in this County. Moreover, Defendant receives substantial compensation from sales in San Francisco County, actively advertises and sells Products in San Francisco County, and Defendant made numerous misrepresentations through its advertising and labeling of Products which had a substantial effect in San Francisco County. 10. Defendant is subject to personal jurisdiction in California based upon sufficient minimum contacts which exist between Defendant and California. Defendant is authorized to do and is doing business in California. FACTUAL ALLEGATIONS 11. Defendant labels and advertises its Products being “All Natural.” In reality, the Products cannot be labeled as “All Natural” because they contain added coloring. The specific food coloring agents in the Products are “vegetable juice,” “fruit and vegetable juices,” “annatto,” and “beta carotene.” 12. Consumers are willing to pay more for all natural products because of the association with a healthy and organic diet. According to Nielsen’s 2015 Global Health & Wellness Survey that polled over 30,000 people, 88% of Americans are willing to pay more for healthier foods.1 This sentiment is further evidenced by the fact that global sales of health foods reached $1 trillion in 2017, according to Euromoniter.2 13. By representing the Products to be “All Natural,” Defendant seeks to capitalize on consumers’ preference for food items with no artificial additives. 14. Defendant’s practice of capitalizing on consumers’ preferences for healthier products is deceptive. This deception continues today, as consumers continue to purchase the Products under the mistaken belief that they are all natural based on Defendant’s false, deceptive, and misleading label claims “All Natural.” 15. Plaintiff and other consumers of the Products made their purchase decisions in reliance upon Defendant’s advertised claims that that Products are “All Natural.” 16. By falsely labeling the Products as being “All Natural,” Defendant has profited from consumers’ preference for food products that are perceived to be healthier and made free from any added coloring. A. Defendant’s “All Natural” Label Claim 17. The Food and Drug Administration (“FDA”) does not regard foods with added coloring as natural, no matter the source of the coloring agent. According to their guidelines, they “have considered ‘natural’ to mean that nothing artificial or synthetic (including colors regardless of source) is included in, or has been added to, the product that would not normally be expected to be there (56 FR 60421 at 60466).”3 18. On November 10, 2015, in response to citizen petitions and consumer requests, the FDA announced the establishment of a docket to receive information and comments on the use of the term “natural” in the labeling of human food products to determine whether a definition of “natural” should be established. 19. Among the 7,687 public comments received by the FDA, not one comment from the public stated that “natural” should be allowed in food labeling if color is added to a food; rather, hundreds of comments stated “natural” should only be used for foods which are free from added coloring. Some representative examples include: a. “When I see the word ‘Natural’ on packaging, I expect the contents to have only ingredients as they are found in nature. No chemicals, no coloring, no flavoring, no GMO’s.” (Comment from Kristine Milochik. Posted 02/23/2016) b. “I think the term ‘Natural’ should be banned from food labeling. It is too ambiguous! It should be removed from all descriptors, including: Natural Flavor, Natural colors, All Natural and so on. I think for the interest of transparency all food ingredients should be simply labeled. The consumer has the right to know what they are eating or drinking.” (Comment from Daniel Kinkelaar. Posted 08/26/2016) c. “I firmly believe that consumers should be made aware of what they are purchasing when shopping for food and too many times companies are fooling the public by using the word ‘Natural’ when in fact it is not. When I see the word Natural on a food product, I consider this to mean that it is free from all additives, GMOs, Preservatives, Drugs, or colors. It is in it’s natural state. I would like to see the FDA put more stringent requirements on companies who wish to use this term in their products.” (Comment from Artemis Hader. Posted on 02/18/2016) d. “The term ‘Natural’ should only appear on foods that are organic without any preservatives or man-made chemicals. The food should be GMO-free and contain no added colors, flavors, or synthetic substances. If a food product fails to meet any of these requirements, then it should not be allowed to have the label ‘Natural’ on it.” (Comment from Sara Burr. Posted on 03/16/2016) e. “Natural should indeed mean no preservatives, additives, GMO's and or flavor or color enhancers…” (Comment from Roy Collicutt. Posted on 03/15/2016) 20. To date, the FDA has not announced its decision to further define or regulate the term “natural” in food labeling. 21. The “All Natural” label is prominently and conspicuously printed on the front of the Products. But the added coloring agents in the Products render the “All Natural” label claims false. The added coloring agents, regardless of their source, are not ingredients consumers would normally expect to be included products that are labeled as “All Natural.” 22. There are market incentives for companies to label their products as “natural.” According to a national representative survey, more than half of consumers look for products with a “natural” food label, often under “the false belief that they’re produced without...artificial ingredients.”4 As stated supra, the FDA considers “natural” to be defined as a product that includes nothing artificial “including colors regardless of source” [emphasis added].5 The process by which naturally-sourced food coloring is added to products alters their status and renders them as no longer “natural.” Therefore, the reasonable consumer will pay a price premium for products with an “All Natural” label because they believe these products are safer, more nutritious, or otherwise have different attributes than products that do not have the label, all things being equal. Thus, these market forces push producers, like Defendant, to deceptively label their products as “All Natural” to give themselves a market advantage. 23. Reasonable consumers do not expect a product prominently labeled as “All Natural” to have added coloring. The Products’ labels have the “capacity, likelihood, or tendency to deceive or confuse the public” into believing that they are fully natural and are truthfully labeled. Williams v. Gerber Prods. Co., 552 F.3d 934, 938 (9th Cir. 2008) (citing Kasky v. Nike, Inc., 27 Cal.4th 939, 951 (2002) and Leoni v. State Bar, 39 Cal. 3d 609, 626 (1985)) (The California Supreme Court has recognized “that [consumer protection] laws prohibit ‘not only advertising which is false, but also advertising which, although true, is either actually misleading or which has a capacity, likelihood or tendency to deceive or confuse the public.’”). 24. Reasonable consumers such as Plaintiff do not have specialized knowledge necessary to identify ingredients in the Products as being inconsistent with Defendant’s advertised claim of “being “All Natural.” 25. Defendant knows that consumers are willing to pay more for foods that are labeled “All Natural” because they perceive it to be a healthier alternative to similar products without any added coloring, and advertises the Products with the intention that consumers rely on the representation made on the front of the Products’ packaging made in all capital letters with prominent bold font “All Natural.” 26. Plaintiff and other consumers purchased the Products due to their belief that the Products are safer, more nutritious, or otherwise have different attributes than do products that do not have the “All Natural” labels. 27. Plaintiff and the Class made their purchasing decisions in reliance upon Defendant’s advertised claims that that Products are “All Natural.” 28. Plaintiff and the Class reasonably and detrimentally relied upon the Products’ front labels indicating that the Products are “All Natural.” 29. Plaintiff and the Class would not have purchased the Products had they known that the Products contained ingredients that were added for coloring, thus rendering the Products no longer as being “All Natural.” 30. Defendant’s conduct threatens California consumers by using false, deceptive, and misleading labels. Defendant’s conduct also threatens other companies, large and small, who “play by the rules.” Defendant’s conduct stifles competition, has a negative impact on the marketplace, and reduces consumer choice. 31. There is no practical reason for the false or misleading labeling and advertising of the Products, other than to mislead consumers as to the actual ingredients of the Products being purchased by consumers while simultaneously providing Defendant with a financial windfall as a result of money saved from lower supply costs. 32. Plaintiff makes the allegations herein upon personal knowledge as to himself and his own acts and experiences, and as to all other matters, upon information and belief, including investigation conducted by his attorneys. CLASS ALLEGATIONS 33. Plaintiff brings this action on his behalf and on behalf of all other persons similarly situated. The Class which Plaintiff seeks to represent comprises: All persons who purchased the Products in the State of California, for personal consumption and not for resale during the time period of four years prior to the filing of the complaint through the present. Said definition may be further defined or amended by additional pleadings, evidentiary hearings, a class certification hearing, and orders of this Court. 34. The class is so numerous and likely consists of hundreds of thousands of individuals, the joinder of whom is impracticable. 35. There is a well-defined community of interest in the questions of law and fact involved affecting the parties to be represented. The questions of law and fact common to the Class predominate over questions which may affect individual Class members. Common questions of law and fact include, but are not limited to, the following: a. Whether Defendant’s conduct constitutes an unfair method of competition, or unfair or deceptive act or practice, in violation of Civil Code section 1750, et seq.; b. Whether Defendant used deceptive representations in connection with the sale of the Products in violation of Civil Code section 1750, et seq.; c. Whether Defendant represented the Products as having characteristics or qualities that they do not have in violation of Civil Code section 1750, et seq.; d. Whether Defendant advertised the Products with intent not to sell them as advertised in violation of Civil Code section 1750, et seq.; e. Whether Defendant’s labeling and advertising of the Products are untrue or misleading in violation of Business and Professions Code section 17500, et seq.; f. Whether Defendant knew or by the exercise of reasonable care should have known its labeling and advertising was and is untrue or misleading in violation of Business and Professions Code section 17500, et seq.; g. Whether Defendant’s conduct is an unfair business practice within the meaning of Business and Professions Code section 17200, et seq.; h. Whether Defendant’s conduct is a fraudulent business practice within the meaning of Business and Professions Code section 17200, et seq.; i. Whether Defendant’s conduct is an unlawful business practice within the meaning of Business and Professions Code section 17200, et seq.; j. Whether Plaintiff and the Class paid more money for the Products than they actually received; and k. How much more money Plaintiff and the Class paid for the Products than they actually received. 36. Plaintiff’s claims are typical of the claims of the Class, and Plaintiff will fairly and adequately represent and protect the interests of the Class. Plaintiff has retained competent and experienced counsel in class action and other complex litigation. 37. Plaintiff and the Class have suffered injury in fact and have lost money as a result of Defendant’s false representations and material omissions. Plaintiff purchased the Product under the false belief that they were “All Natural.” Plaintiff relied upon Defendant’s packaging and would not have purchased the Products if he had known that the Product contained ingredients that were added for coloring. 38. A class action is superior to other available methods for fair and efficient adjudication of this controversy. The expense and burden of individual litigation would make it impracticable or impossible for the Class to prosecute their claims individually. 39. The trial and litigation of Plaintiff’s claims are manageable. Individual litigation of the legal and factual issues raised by Defendant’s conduct would increase delay and expense to all parties and the court system. The class action device presents far fewer management difficulties and provides the benefits of a single, uniform adjudication, economies of scale, and comprehensive supervision by a single court. 40. Defendant has acted on grounds generally applicable to the entire Class, thereby making final injunctive relief and/or corresponding declaratory relief appropriate with respect to the Class as a whole. The prosecution of separate actions by individual Class members would create the risk of inconsistent or varying adjudications with respect to individual Class members that would establish incompatible standards of conduct for Defendant. 41. Absent a class action, Defendant will likely retain the benefits of its wrongdoing. Because of the small size of the individual Class members’ claims, few, if any, Class members could afford to seek legal redress for the wrongs complained of herein. Absent a representative action, the Class will continue to suffer losses and Defendant will be allowed to continue these violations of law and to retain the proceeds of its ill-gotten gains. COUNT ONE Violation of California Consumers Legal Remedies Act, California Civil Code Section 1750, et seq. 42. Plaintiff repeats and realleges all allegations of the previous paragraphs, and incorporate the same as if set forth herein at length. 43. Plaintiff brings this cause of action pursuant to Civil Code section 1750, et seq., the Consumers Legal Remedies Act (“CLRA”), on his own behalf and on behalf of all other persons similarly situated. 44. Plaintiff and the Class members are “consumers” within the meaning of California Civil Code Section 1761(d). 45. The sale of Defendant’s products to Plaintiff’s and Class members constitutes a “transaction” within the meaning of California Civil Code Section 1761(e). 46. Defendants products are “goods” within the meaning of California Civil Code Section 1761(a).   47. The CLRA prohibits certain “unfair methods of competition and unfair or deceptive acts or practices” in connection with a sale of goods and prohibits “representing that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities that they do not have.” California Civil Code Section 1770 (d)(5).  48. The CLRA also prohibits representing that the products are of “a particular standard, quality, or grade” when it is of another. California Civil Code Section 1770(a)(7).   49. The CLRA prohibits advertising goods with the intent not to sell them as advertised and representing the goods have been supplied in accordance with a previous representation when the they have not. California Civil Code Section 1770(a)(9) and (a)(16).  50. The practices described herein, specifically Defendant’s packaging, advertising, and sale of the Products, were intended to result and did result in the sale of the Products to the consuming public and violated and continue to violate the CLRA by (1) using deceptive representations in connection with the Products, including representing them as having characteristics, benefits and qualities they do not have; (2) representing them to be of a particular quality and standard as “All Natural” while they were not “all natural” and contained added coloring; and (3) advertising and packaging the Products with intent not to sell them as advertised – specifically as being “All Natural.” 51. Defendant fraudulently deceived Plaintiff and the Class by misrepresenting the Products as having characteristics which they do not have, e.g., advertising the Products in such a way to represent them being “All Natural” when the Products contain coloring additives. In doing so, Defendant misrepresented and concealed material facts from Plaintiff and the Class. Said misrepresentations and concealment were done with the intention of deceiving Plaintiff and the Class and depriving them of their legal rights and money. 52. Defendant fraudulently deceived Plaintiff and the Class by labeling and advertising the Products with the intent not to sell them as advertised. Specifically, Defendant intentionally labeled and misrepresented the Products as being “All Natural,” and failed to disclose the coloring agents in the Products. In doing so, Defendant intentionally misrepresented and concealed material facts from Plaintiff and the Class. Said misrepresentations and concealment were done with the intention of deceiving Plaintiff and the Class and depriving them of their legal rights and money. 53. Defendant knew or should have known, through the exercise of reasonable care, that the Products’ labeling and advertising were misleading. 54. Defendant’s actions as described herein were done with conscious disregard of Plaintiff’s rights, and Defendant was wanton and malicious in its concealment of the same. 55. Defendant’s labeling and advertising of the Products were a material factor in Plaintiff’s and the Class’s decisions to purchase the Products. Based on Defendant’s labeling and advertising of the Products, Plaintiff and the Class reasonably believed that they were purchasing products that were safer, more nutritious, or otherwise had different attributes than products that do not have the “All Natural” labels. Had they known the truth of the matter, Plaintiff and the Class would not have purchased the Products. 56. Plaintiff and the Class have suffered injury in fact and have lost money as a result of Defendant’s unfair, unlawful, and fraudulent conduct. Specifically, Plaintiff paid for a beverage that was different from what he reasonably expected to receive when he decided to make his purchase. Plaintiff would not have purchased the Product had he known that the Products contained coloring agents that rendered the natural claims false. 57. Defendant’s false and misleading labeling and advertising should be enjoined due to its false, misleading, and/or deceptive nature. 58. By letter dated January 8, 2021, Plaintiff advised Hornell Brewing Co., Inc. of its false and misleading claims pursuant to California Civil Code Section 1782(a). 59. Pursuant to Section 1780(a) of the Act, Plaintiff seeks injunctive relief in the form of an order enjoining the above-described wrongful acts and practices of Defendant, including, but not limited to, an order enjoining Defendant from continuing to make the label and advertising claims challenged herein. Plaintiff also requests an order awarding Plaintiff and the Class restitution of the money wrongfully acquired by Defendant. Plaintiff shall be irreparably harmed if such an order is not granted. 60. Plaintiff respectfully requests that the Court enjoin Defendant from continuing to employ the unlawful methods, acts, and practices alleged herein pursuant to § 1780(a)(2). In addition, Defendant should be compelled to provide restitution and damages to consumers who paid for Products that are not what they expected to receive due to Defendant’s misrepresentations. a. Plaintiff and members of the Class are entitled to equitable relief as no adequate remedy at law exists. (1) Injunctive relief is appropriate on behalf of Plaintiff and members of the Class because Defendant continues to deceptively label the Products as being “All Natural.” Injunctive relief is necessary to prevent Defendant from continuing to engage in the unlawful conduct described herein and to prevent future harm—none of which can be achieved through available legal remedies. Further, injunctive relief, in the form of packaging or label modifications, is necessary to dispel public misperception about the Products that has resulted from years of Defendant’s unfair, fraudulent, and unlawful marketing efforts. Such modifications would include, reformulating the Products so they do not contain added coloring or removing the “ “All Natural” label claims. Such relief is also not available through a legal remedy as monetary damages may be awarded to remedy past harm (i.e., purchasers who have been misled), while injunctive relief is necessary to remedy future harm (i.e., prevent future purchasers from being misled), under the current circumstances where the dollar amount of future damages is not reasonably ascertainable at this time. Plaintiff is, currently, unable to accurately quantify the damages caused by Defendant’s future harm (e.g., the dollar amount that Plaintiff and Class members overpay pay for the falsely labeled Products), rendering injunctive relief a necessary remedy. COUNT TWO Violation of California False Advertising Law, Business & Professions Code Section 17500, et seq. 61. Plaintiff repeats and reallege the allegations set forth in the preceding paragraphs, and incorporate the same as if set forth herein at length. 62. Plaintiff brings this cause of action pursuant to Business and Professions Code section 17500, et seq., on his own behalf and on behalf of all other persons similarly situated. 63. California’s False Advertising Law, California Business and Professions Code section 17500, et seq., makes it “unlawful for any person to make or disseminate or cause to be made or disseminated before the public in this state, in any advertising device or in any other manner or means whatever, including over the Internet, any statement, concerning personal property or services, professional or otherwise, or performance or disposition thereof, which is untrue or misleading and which is known, or which by the exercise of reasonable care should be known, to be untrue or misleading.” 64. Defendant knowingly disseminated misleading claims regarding the Products in order to mislead the public about the ingredient makeup of the Products. 65. Defendant controlled the labeling, packaging, production and advertising of the Products. Defendant knew or should have known, through the exercise of reasonable care, that its representations and omissions about the ingredients of the Products were untrue, deceptive, and misleading. 66. Defendant’s action of displaying misleading claims and omissions about the ingredients of the Products in prominent type face on each of the Products’ front labels is likely to deceive the general public. 67. Defendant’s actions in violation of Section 17500 were false and misleading such that the general public is and was likely to be deceived. 68. As a direct and proximate result of Defendant’s conduct alleged herein in violation of the FAL, Plaintiff and members of the Class, pursuant to § 17535, are entitled to an order of this Court enjoining such future wrongful conduct on the part of Defendant, and requiring Defendant to disclose the true nature of its misrepresentations. b. Plaintiff and members of the Class are entitled to equitable relief as no adequate remedy at law exists. (1) The scope of permissible plaintiffs under the FAL is broader than the CLRA to include, for example, individuals or entities who purchased the Products for non-personal, non-family, and non-household purposes. Thus, Plaintiff and class members may be entitled to restitution under the FAL, while not entitled to damages under the CLRA. (2) Injunctive relief is appropriate on behalf of Plaintiff and members of the Class because Defendant continues to deceptively label the Products and deliberately omit that the Products contain coloring additives that render the Products no longer as being “All Natural.” Injunctive relief is necessary to prevent Defendant from continuing to engage in the unlawful conduct described herein and to prevent future harm—none of which can be achieved through available legal remedies. Further, injunctive relief, in the form of label modifications, is necessary to dispel public misperception about the Products that has resulted from years of Defendant’s unfair, fraudulent, and unlawful marketing efforts. Such modifications would include, but are not limited to, reformulating the Products or removing the false “All Natural” labeling. Such relief is also not available through a legal remedy as monetary damages may be awarded to remedy past harm (i.e., purchasers who have been misled), while injunctive relief is necessary to remedy future harm (i.e., prevent future purchasers from being misled), under the current circumstances where the dollar amount of future damages is not reasonably ascertainable at this time. Plaintiff is, currently, unable to accurately quantify the damages caused by Defendant’s future harm (e.g., the dollar amount that Plaintiff and Class members overpay for the falsely labeled Products), rendering injunctive relief a necessary remedy. 69. Plaintiff and the Class have suffered injury in fact and have lost money as a result of Defendant’s false representations. Plaintiff purchased the Products in reliance upon the claims and omissions by Defendant that the Products are “All Natural,” as represented by Defendant’s labeling and advertising. Plaintiff would not have purchased the Products if he had known that the claims and advertising as described herein were false and misleading. 70. Plaintiff and members of the Class also request an order requiring Defendant to disgorge its ill-gotten gains and/or award full restitution of all monies wrongfully acquired by Defendant by means of such acts of false advertising, plus interests and attorneys’ fees. COUNT THREE Violation of California Unfair Competition Law Business and Professions Code § 17200 et seq. 71. Plaintiff repeats and realleges the allegations set forth above, and incorporate the same as if set forth herein at length. 72. Plaintiff brings this cause of action pursuant to Business and Professions Code § 17200, et seq., on his own behalf and on behalf of all other persons similarly situated. 73. The UCL prohibits “any unlawful, unfair... or fraudulent business act or practice.” Cal. Bus & Prof. Code § 17200. A. “Unfair” Prong 74. Under California’s Unfair Competition Law, Cal. Bus. & Prof. Code § 17200, et. seq., a challenged activity is “unfair” when “any injury it causes outweighs any benefits provided to consumers and the injury is one that the consumers themselves could not reasonably avoid.” Camacho v. Auto Club of Southern California, 142 Cal. App. 4th 1394, 1403 (2006). 75. Defendant’s advertising and labeling of the Products as being “All Natural,” when the Products contain coloring additives, is false, misleading, and deceptive. 76. Defendant’s false advertising of the Products causes injuries to consumers, who do not receive the promised benefits from the Products in proportion to their reasonable expectations. 77. Through false, misleading, and deceptive labeling of the Products, Defendant seeks to take advantage of consumers’ desire for “All Natural” products, while reaping the financial benefits of manufacturing lower quality Products. 78. When Defendant labels the Products as being “All Natural,” it provides false promises to consumers and stifles competition in the marketplace. 79. Consumers cannot avoid any of the injuries caused by Defendant’s false and misleading advertising of the Products. 80. Some courts conduct a balancing test to decide if a challenged activity amounts to unfair conduct under California Business and Professions Code Section 17200. The courts “weigh the utility of the Defendant’s conduct against the gravity of the harm alleged to the victim.” Davis v. HSBC Bank Nevada, N.A., 691 F. 3d 1152, 1169 (9th Cir. 2012). 81. Defendant’s material omissions result in financial harm to consumers. Thus, the utility of Defendant’s conduct is vastly outweighed by the gravity of its harm. 82. Some courts require the “unfairness must be tethered to some legislative declared policy or proof of some actual or threatened impact on competition.” Lozano v. AT&T Wireless Servs. Inc., 504 F. 3d 718, 735 (9th Cir. 2007). 83. Defendant’s advertising of the Products, as alleged in the preceding paragraphs, is false, deceptive, misleading, and unreasonable, and constitutes unfair conduct. 84. Defendant knew or should have known of its unfair conduct. 85. As alleged in the preceding paragraphs, the material misrepresentations by Defendant detailed above constitute an unfair business practice within the meaning of California Business & Professions Code § 17200. 86. There were reasonably available alternatives to further Defendant’s legitimate business interests other than the conduct described herein. Defendant could have marketed the Products without making any false statements about the Products’ ingredients. 87. All of the conduct alleged herein occurs and continues to occur in Defendant’s business. Defendant’s wrongful conduct is part of a pattern or generalized course of conduct repeated on thousands of occasions daily. 88. Pursuant to Business & Professions Code Section 17203, Plaintiff and the Class seek an order of this Court enjoining Defendant from continuing to engage, use, or employ its practice of false and deceptive advertising of the Products. Likewise, Plaintiff and the Class seek an order requiring Defendant to disclose such misrepresentations, and additionally request an order awarding Plaintiff restitution of the money wrongfully acquired by Defendant by means of responsibility attached to Defendant’s failure to disclose the existence and significance of said misrepresentations in an amount to be determined at trial. 89. Plaintiff and the Class have suffered injury in fact and have lost money as a result of Defendant’s unfair conduct. Plaintiff paid an unwarranted premium for the Product. Plaintiff would not have purchased the Product if he had known that the Product’s “All Natural” label claims were false. B. “Fraudulent” Prong 90. California Business and Professions Code § 17200, et seq. considers conduct fraudulent and prohibits said conduct if it is likely to deceive members of the public. Bank of the West v. Superior Court, 2 Cal. 4th 1254, 1267 (1992). 91. Defendant’s advertising of the Products as being “All Natural,” without referring to their actual characterization, is likely to deceive members of the public into believing that the Products are natural. 92. Defendant’s advertising of the Products, as alleged in the preceding paragraphs, is false, deceptive, misleading, and unreasonable and constitutes fraudulent conduct. 93. Defendant knew or should have known of its fraudulent conduct. 94. As alleged in the preceding paragraphs, the material misrepresentations and omissions by Defendant detailed above constitute a fraudulent business practice in violation of California Business & Professions Code Section 17200. 95. There were reasonably available alternatives to further Defendant’s legitimate business interests, other than the conduct described herein. Defendant could have refrained from labeling the Products as being “All Natural.” 96. All of the conduct alleged herein occurs and continues to occur in Defendant’s business. Defendant’s wrongful conduct is part of a pattern or generalized course of conduct repeated on thousands of occasions daily. 97. Pursuant to Business & Professions Code Section 17203, Plaintiff and the Class seek an order of this Court enjoining Defendant from continuing to engage, use, or employ its practice of false and deceptive advertising of the Products. Likewise, Plaintiff and the Class seek an order requiring Defendant to disclose such misrepresentations, and additionally request an order awarding Plaintiff restitution of the money wrongfully acquired by Defendant by means of responsibility attached to Defendant’s failure to disclose the existence and significance of said misrepresentations in an amount to be determined at trial. 98. Plaintiff and the Class have suffered injury in fact and have lost money as a result of Defendant’s fraudulent conduct. Plaintiff and the Class paid an unwarranted premium for the Products. Plaintiff and the Class would not have purchased the Products if they had known that the Products were not “All Natural.” C. “Unlawful” Prong 99. California Business and Professions Code Section 17200, et seq., identifies violations of other laws as “unlawful practices that the unfair competition law makes independently actionable.” Velazquez v. GMAC Mortg. Corp., 605 F. Supp. 2d 1049, 1068 (C.D. Cal. 2008). 100. Defendant’s advertising of the Products, as alleged in the preceding paragraphs, violates California Civil Code Section 1750, et seq., California Business and Professions Code Section 17500, et seq. 101. Defendant’s packaging, labeling, and advertising of the Products, as alleged in the preceding paragraphs, are false, deceptive, misleading, and unreasonable, and constitute unlawful conduct. 102. Defendant knew or should have known of its unlawful conduct. 103. As alleged in the preceding paragraphs, the misrepresentations by Defendant detailed above constitute an unlawful business practice within the meaning of California Business and Professions Code Section 17200. 104. There were reasonably available alternatives to further Defendant’s legitimate business interests other than the conduct described herein. Defendant could have refrained from omitting the true characteristics of the Products. 105. All of the conduct alleged herein occurred and continues to occur in Defendant’s business. Defendant’s wrongful conduct is part of a pattern or generalized course of conduct repeated on thousands of occasions daily. 106. Pursuant to Business and Professions Code Section 17203, Plaintiff and the Class seek an order of this Court enjoining Defendant from continuing to engage, use, or employ its practice of false and deceptive advertising of the Products. Likewise, Plaintiff and the Class seek an order requiring Defendant to disclose such misrepresentations, and additionally request an order awarding Plaintiff restitution of the money wrongfully acquired by Defendant by means of responsibility attached to Defendant’s failure to disclose the existence and significance of said misrepresentations in an amount to be determined at trial. 107. Plaintiff and the Class have suffered injury in fact and have lost money as a result of Defendant’s unlawful conduct. Plaintiff paid an unwarranted premium for the Product. Plaintiff would not have purchased the Product if he had known that Defendant purposely deceived consumers into believing that the Products were “All Natural.” 108. As a result of the business acts and practices described above, Plaintiff and members of the Class, pursuant to § 17203, are entitled to an order enjoining such future wrongful conduct on the part of Defendant and such other orders and judgments that may be necessary to disgorge Defendant’s ill-gotten gains and to restore to any person in interest any money paid for the Products as a result of the wrongful conduct of Defendant. c. Plaintiff and members of the Class are entitled to equitable relief as no adequate remedy at law exists. (1) The applicable limitations period is four years for claims brought under the UCL, which is one year longer than the applicable statute of limitations under the FAL and CLRA. Thus, class members who purchased the Products between 3 and 4 years prior to the filing of the complaint will be barred from the Class if equitable relief were not granted under the UCL. (2) The scope of actionable misconduct under the unfair prong of the UCL is broader than the other causes of action asserted herein to include, for example, the overall false and misleading marketing scheme of labeling the Products as being “All Natural.” Thus, Plaintiff and class members may be entitled to restitution under the UCL, while not entitled to damages under other causes of action asserted herein (e.g., the FAL requires actual or constructive knowledge of the falsity; the CLRA is limited to certain types of plaintiffs (an individual who seeks or acquires, by purchase or lease, any goods or services for personal, family, or household purposes) and other statutorily enumerated conduct). (3) Injunctive relief is appropriate on behalf of Plaintiff and members of the Class because Defendant continues to deceptively label the Products. Injunctive relief is necessary to prevent Defendant from continuing to engage in this unfair, fraudulent, and/or unlawful conduct described herein and to prevent future harm—none of which can be achieved through available legal remedies. Further, injunctive relief, in the form of packaging or label modifications, is necessary to dispel public misperception about the Products that has resulted from years of Defendant’s unlawful marketing efforts. Such modifications could include, but are not limited to, reformulating the Products so they do not contain added coloring, or remove the “All Natural” label claims. Such relief is not available through a legal remedy, as monetary damages may be awarded to remedy past harm (i.e., purchasers who have been misled), while injunctive relief is necessary to remedy future harm (i.e., prevent future purchasers from being misled), under the current circumstances where the dollar amount of future damages is not reasonably ascertainable at this time. Plaintiff is, currently, unable to accurately quantify the damages caused by Defendant’s future harm (e.g., the dollar amount that Plaintiff and Class members will pay for the falsely labeled Products), rendering injunctive relief a necessary remedy. 109. Pursuant to Civil Code § 3287(a), Plaintiff and the Class are further entitled to pre- judgment interest as a direct and proximate result of Defendant’s unfair and fraudulent business conduct. The amount on which interest is to be calculated is a sum certain and capable of calculation, and Plaintiff and the Class are entitled to interest in an amount according to proof. / / / / / / COUNT FOUR Unjust Enrichment 110. Plaintiff repeats and realleges the allegations set forth above, and incorporates the same as if set forth herein at length. 111. By means of Defendant’s wrongful conduct alleged herein, Defendant knowingly sold the Products to Plaintiff and members of the Class in a manner that was unfair, unconscionable, and oppressive. 112. Defendant knowingly received and retained wrongful benefits and funds from Plaintiff and members of the Class. In so doing, Defendant acted with conscious disregard for the rights of Plaintiff and members of the Class. 113. As a result of Defendant’s wrongful conduct as alleged herein, Defendant has been unjustly enriched at the expense of, and to the detriment of, Plaintiff and members of the Class. 114. Defendant’s unjust enrichment is traceable to, and resulted directly and proximately from, the conduct alleged herein. 115. Under the common law doctrine of unjust enrichment, it is inequitable for Defendant to be permitted to retain the benefits it received, without justification, from selling the Products to Plaintiff and members of the Class in an unfair, unconscionable, and oppressive manner. Defendant’s retention of such funds under such circumstances making it inequitable to do so constitutes unjust enrichment. 116. The financial benefits derived by Defendant rightfully belong to Plaintiff and members of the Class. Defendant should be compelled to return in a common fund for the benefit of Plaintiff and members of the Class all wrongful or inequitable proceeds received by Defendant. 117. Plaintiff and members of the Class have no adequate remedy at law. COUNT FIVE Breach of Express Warranty 118. Plaintiff repeats and realleges all the allegations of the previous paragraphs and incorporate the same as if set forth herein at length. 119. Defendant expressly warrants that the Products are “All Natural,” as set forth above. Defendant’s claims constitute an affirmation of fact, promise, and/or description of the goods that became part of the basis of the bargain and created an express warranty that the goods would conform to the stated promise. Plaintiff placed importance on Defendant’s claims. 120. All conditions precedent to Defendant’s liability under this contract have been performed by Plaintiff and the Class. 121. Defendant breached the terms of the contract, including the express warranties, with Plaintiff and the Class by not providing Products that conform to the advertising and label claims. 122. As a result of Defendant’s breach of contract, Plaintiff and the Class have been damaged in an amount to be determined at trial. PRAYER FOR RELIEF WHEREFORE, Plaintiff, individually and on behalf of all others similarly situated, pray for judgment and relief on all Causes of Action as follows: A. This action be certified as a class action;  B. Plaintiff be appointed as the representative of the Class;  C. Defendant’s conduct be declared unlawful;  D. An order enjoining Defendant from continuing to label and advertise the Products as challenged herein; E. An order for Defendant to issue a corrective advertising campaign; F. For an award of restitutionary damages in an amount according to proof at trial; G. An order of disgorgement of profits for Defendant’s unjust enrichment obtained as a result of its unlawful, unfair, and fraudulent practices; H. For pre-judgment interest from the date of filing this suit; I. Punitive damages; J. Reasonable attorneys’ fees; K. Costs of this suit; and L. Such other and further relief as the Court may deem necessary or appropriate. JURY TRIAL DEMANDED Plaintiff demands a jury trial on all triable issues. DATED: March 21, 2022 CLARKSON LAW FIRM, P.C. /s/ Yana Hart Ryan J. Clarkson, Esq. Yana Hart, Esq. Attorneys for Plaintiff

products liability and mass tort

wq2PCocBD5gMZwczB6MP

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x EUGENE DUNCAN AND ON BEHALF OF ALL OTHER PERSONS SIMILARLY SITUATED, 1:19-cv-3579 Plaintiffs, v. ECF CASE No.: _________________ CLASS ACTION COMPLAINT JURY TRIAL DEMANDED JUDITH HELLMAN, M.D. PLLC, Defendant. : : : : : : : : : : : : - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x INTRODUCTION 1. Plaintiff, EUGENE DUNCAN, on behalf of himself and others similarly situated, asserts the following claims against Defendant, JUDITH HELLMAN, M.D. PLLC, as follows. 2. Plaintiff is a visually-impaired and legally blind person who requires screen-reading software to read website content using his computer. Plaintiff uses the terms “blind” or “visually-impaired” to refer to all people with visual impairments who meet the legal definition of blindness in that they have a visual acuity with correction of less than or equal to 20 x 200. Some blind people who meet their definition have limited vision. Others have no vision. 3. Based on a 2010 U.S. Census Bureau report, approximately 8.1 million people in the United States are visually impaired, including 2.0 million who are blind, and according to the American Foundation for the Blind’s 2015 report, approximately 400,000 visually impaired persons live in the State of New York. 4. Plaintiff brings his civil rights action against JUDITH HELLMAN, M.D. PLLC, (“Defendant” or “Company”) for its failure to design, construct, maintain, and operate its website to be fully accessible to and independently usable by Plaintiff and other blind or visually-impaired people. Defendant’s denial of full and equal access to its website, and therefore denial of its products and services offered thereby and in conjunction with its physical location, is a violation of Plaintiff’s rights under the Americans with Disabilities Act (“ADA”). 5. Plaintiff is being deterred from patronizing the Defendant’s physical location due to Defendant’s discrimination by failing to maintain access to the Website for visually-impaired consumers. Plaintiff intends to return to Defendant’s Website and medical office location once Defendant ceases its on-going discriminatory practices. 6. Because Defendant’s website, WWW.BIGAPPLESKIN.COM (the “Website” or “Defendant’s website”), is not equally accessible to blind and visually- impaired consumers, it violates the ADA. Plaintiff seeks a permanent injunction to cause a change in Defendant’s corporate policies, practices, and procedures so that Defendant’s website will become and remain accessible to blind and visually-impaired consumers. JURISDICTION AND VENUE 7. The Court has subject-matter jurisdiction over this action under 28 U.S.C. § 1331 and 42 U.S.C. § 12181, as Plaintiff’s claims arise under Title III of the ADA, 42 U.S.C. § 12181, et seq., and 28 U.S.C. § 1332. 8. The Court has supplemental jurisdiction under 28 U.S.C. § 1367 over Plaintiff’s New York State Human Rights Law, N.Y. Exec. Law Article 15, -2- (“NYSHRL”) and New York City Human Rights Law, N.Y.C. Admin. Code § 8-101 et seq., (“NYCHRL”) claims. 9. Venue is proper in this district under 28 U.S.C. §1391(b)(1) and (2) because Defendant is subject to personal jurisdiction in this District and a substantial portion of the conduct complained of herein occurred in this District. 10. Defendant is subject to personal jurisdiction in this District. Defendant has been and is committing the acts or omissions alleged herein in the Southern District of New York that caused injury, and violated rights the ADA prescribes to Plaintiff and to other blind and other visually impaired-consumers. A substantial part of the acts and omissions giving rise to Plaintiff’s claims occurred in the in this District: on several separate occasions, Plaintiff has been denied the full use and enjoyment of the facilities, goods, and services of Defendant’s Website while attempting to access the Defendant’s website from his home. These access barriers that Plaintiff encountered have caused a denial of Plaintiff’s full and equal access multiple times in the past, and now deter Plaintiff on a regular basis from visiting or returning to Defendant’s brick-and mortar location and Website. This includes, the ability to purchase products online, details about procedures and treatments available at Defendant’s locations, to obtain information about medical conditions, ask questions and read reviews, schedule appointments, access to media and published articles, participate in other social interactive experiences and to learn about other important information. 11. The Court is empowered to issue a declaratory judgment under 28 U.S.C. §§ 2201 and 2202. -3- THE PARTIES 12. Plaintiff, EUGENE DUNCAN, at all relevant times, is a resident of Queens, New York. Plaintiff is a blind, visually-impaired handicapped person and a member of member of a protected class of individuals under the ADA, under 42 U.S.C. § 12102(1)-(2), and the regulations implementing the ADA set forth at 28 CFR §§ 36.101 et seq., the NYSHRL and NYCHRL. 13. On information and belief, Defendant, JUDITH HELLMAN, M.D. PLLC, is and was, at all relevant times herein a Domestic Professional Service Limited Liability Company organized under the laws of New York with its principal executive offices in New York, NY. Defendant operates its medical office location as well as its website, and those affiliated or directly linked, and advertises, markets, offers and sells its services and medical office within the State of New York and throughout the United States. 14. Defendant operates their website across the United States, and also owns and operates its medical office in New York, New York. This location constitutes a place of public accommodation. Defendant’s location provides to the public important goods and services. Defendant’s Website provides consumers with access to an array of goods and services including its medical office location, the ability to purchase products online, details about procedures and treatments available at Defendant’s locations, to obtain information about medical conditions, ask questions and read reviews, schedule appointments, access to media and published articles, participate in other social interactive experiences and to learn about other important information. 15. Defendant’s medical office location is a place of public accommodation within the definition of Title III of the ADA, 42 U.S.C. § 12181(7). Defendant’s Website -4- is a service, privilege, or advantage that is heavily integrated with Defendant’s physical location and operates as a gateway thereto. NATURE OF ACTION 16. The Internet has become a significant source of information, a portal, and a tool for conducting business, doing everyday activities such as shopping, learning, banking, researching, as well as many other activities for sighted, blind and visually- impaired persons alike. 17. In today’s tech-savvy world, blind and visually-impaired people have the ability to access websites using keyboards in conjunction with screen access software that vocalizes the visual information found on a computer screen or displays the content on a refreshable Braille display. Their technology is known as screen-reading software. Screen-reading software is currently the only method a blind or visually-impaired person may independently access the internet. Unless websites are designed to be read by screen- reading software, blind and visually-impaired persons are unable to fully access websites, and the information, products, and services contained thereon. 18. Blind and visually-impaired users of Windows operating system-enabled computers and devices have several screen reading software programs available to them. Some of these programs are available for purchase and other programs are available without the user having to purchase the program separately. Job Access With Speech, otherwise known as “JAWS” is currently the most popular, separately purchased and downloaded screen-reading software program available for a Windows computer. -5- 19. For screen-reading software to function, the information on a website must be capable of being rendered into text. If the website content is not capable of being rendered into text, the blind or visually-impaired user is unable to access the same content available to sighted users. 20. The international website standards organization, the World Wide Web Consortium, known throughout the world as W3C, has published version 2.0 of the Web Content Accessibility Guidelines (“WCAG 2.0”). WCAG 2.0 are well-established guidelines for making websites accessible to blind and visually-impaired people. These guidelines are universally followed by most large business entities and government agencies to ensure their websites are accessible. 21. Non-compliant websites pose common access barriers to blind and visually-impaired persons. Common barriers encountered by blind and visually impaired persons include, but are not limited to, the following: a. A text equivalent for every non-text element is not provided; b. Title frames with text are not provided for identification and navigation; c. Equivalent text is not provided when using scripts; d. Forms with the same information and functionality as for sighted persons are not provided; e. Information about the meaning and structure of content is not conveyed by more than the visual presentation of content; f. Text cannot be resized without assistive technology up to 200% without losing content or functionality; -6- g. If the content enforces a time limit, the user is not able to extend, adjust or disable it; h. Web pages do not have titles that describe the topic or purpose; i. The purpose of each link cannot be determined from the link text alone or from the link text and its programmatically determined link context; j. One or more keyboard operable user interface lacks a mode of operation where the keyboard focus indicator is discernible; k. The default human language of each web page cannot be programmatically determined; l. When a component receives focus, it may initiate a change in context; m. Changing the setting of a user interface component may automatically cause a change of context where the user has not been advised before using the component; n. Labels or instructions are not provided when content requires user input, which include captcha prompts that require the user to verify that he or she is not a robot; o. In content which is implemented by using markup languages, elements do not have complete start and end tags, elements are not nested according to their specifications, elements may contain duplicate attributes and/or any IDs are not unique; p. Inaccessible Portable Document Format (PDFs); and, -7- q. The name and role of all User Interface elements cannot be programmatically determined; items that can be set by the user cannot be programmatically set; and/or notification of changes to these items is not available to user agents, including assistive technology. STATEMENT OF FACTS Defendant’s Barriers on Its Website 22. Defendant offers the commercial website, WWW.BIGAPPLESKIN.COM, to the public. The website offers features which should allow all consumers to access the goods and services which Defendant offers in connection with their physical location. The goods and services offered by Defendant include, but are not limited to the following, which allow consumers to: find information about the physical location, the ability to purchase products online, details about procedures and treatments available at Defendant’s locations, to obtain information about medical conditions, ask questions and read reviews, schedule appointments, access to media and published articles, participate in other social interactive experiences and to learn about other important information. 23. It is, upon information and belief, Defendant’s policy and practice to deny Plaintiff, along with other blind or visually-impaired users, access to Defendant’s website, and to therefore specifically deny the goods and services that are offered and integrated with Defendant’s location. Due to Defendant’s failure and refusal to remove access barriers to its website, Plaintiff and visually-impaired persons have been and are still being denied equal access to Defendant’s physical location and the numerous goods, services, and benefits offered to the public through the Website. -8- 24. Plaintiff is a visually-impaired and legally blind person, who cannot use a computer without the assistance of screen-reading software. Plaintiff is, however, a proficient JAWS screen-reader user and uses it to access the Internet. Plaintiff has visited the Website on separate occasions using the JAWS screen-reader. 25. During Plaintiff’s visits to the Website, the last occurring in March, 2019, Plaintiff encountered multiple access barriers that denied Plaintiff full and equal access to the facilities, goods and services offered to the public and made available to the public; and that denied Plaintiff the full enjoyment of the facilities, goods, and services of the Website, as well as to the facilities, goods, and services of Defendant’s physical location in New York by being unable to learn more information about the Defendant’s medical office location, the ability to purchase products online, details about procedures and treatments available at Defendant’s locations, to obtain information about medical conditions, ask questions and read reviews, schedule appointments, access to media and published articles, participate in other social interactive experiences and to learn about other important information. 26. While attempting to navigate the Website, Plaintiff encountered multiple accessibility barriers for blind or visually-impaired people that include, but are not limited to, the following: a. Lack of Alternative Text (“alt-text”), or a text equivalent. Alt-text is an invisible code embedded beneath a graphical image on a website. Web accessibility requires that alt-text be coded with each picture so that screen-reading software can speak the alt-text where a sighted user sees pictures, which includes captcha prompts. Alt-text does not change the visual presentation, but instead a text box shows when the mouse -9- moves over the picture. The lack of alt-text on these graphics prevents screen readers from accurately vocalizing a description of the graphics. As a result, visually-impaired BIG APPLE SKIN customers are unable to determine what is on the website, browse, look for the medical office location, check out Defendant’s services and prodcuts, or make any purchases; b. Empty Links That Contain No Text causing the function or purpose of the link to not be presented to the user. They can introduce confusion for keyboard and screen-reader users; c. Redundant Links where adjacent links go to the same URL address which results in additional navigation and repetition for keyboard and screen-reader users; and d. Linked Images Missing Alt-text, which causes problems if an image within a link contains no text and that image does not provide alt-text. A screen reader then has no content to present the user as to the function of the link, including information contained in PDFs. e. Defendant’s website requires the use of a mouse to complete a transaction. Yet, it is a fundamental tenet of web accessibility that for a web page to be accessible to Plaintiff and blind people, it must be possible for the user to interact with the page using only the keyboard. Indeed, Plaintiff and blind users cannot use a mouse because manipulating the mouse is a visual activity of moving the mouse pointer from one visual spot on the page to another. Thus, Defendant’s website’s inaccessible design, which requires the use of a mouse to complete a transaction, denies Plaintiff and blind customers the ability to independently navigate and/or make purchases. -10- Defendant Must Remove Barriers To Its Website 27. Due to the inaccessibility of Defendant’s Website, blind and visually- impaired customers such as Plaintiff, who need screen-readers, cannot fully and equally use or enjoy the facilities, goods, and services Defendant offers to the public on its Website. The access barriers Plaintiff encountered have caused a denial of Plaintiff’s full and equal access in the past, and now deter Plaintiff on a regular basis from accessing the Website. 28. These access barriers on Defendant’s Website have deterred Plaintiff from visiting or returning to Defendant’s physical location and Website, and enjoying them equal to sighted individuals because: Plaintiff was unable to find the location and hours of operation of Defendant’s physical location on its Website and other important information, preventing Plaintiff from visiting or returning to the location and Website to purchase items and to view the items. 29. If the Website was equally accessible to all, Plaintiff could independently navigate the Website and complete a desired transaction as sighted individuals do. 30. Through his attempts to use the Website, Plaintiff has actual knowledge of the access barriers that make these services inaccessible and independently unusable by blind and visually-impaired people. 31. Because simple compliance with the WCAG 2.0 Guidelines would provide Plaintiff and other visually-impaired consumers with equal access to the Website, Plaintiff alleges that Defendant has engaged in acts of intentional discrimination, including but not limited to the following policies or practices: -11- a. Constructing and maintaining a website that is inaccessible to visually-impaired individuals, including Plaintiff; b. Failure to construct and maintain a website that is sufficiently intuitive so as to be equally accessible to visually-impaired individuals, including Plaintiff; and, c. Failing to take actions to correct these access barriers in the face of substantial harm and discrimination to blind and visually-impaired consumers, such as Plaintiff, as a member of a protected class. 32. Defendant therefore uses standards, criteria or methods of administration that have the effect of discriminating or perpetuating the discrimination of others, as alleged herein. 33. The ADA expressly contemplates the injunctive relief that Plaintiff seeks in this action. In relevant part, the ADA requires: In the case of violations of . . . their title, injunctive relief shall include an order to alter facilities to make such facilities readily accessible to and usable by individuals with disabilities . . . Where appropriate, injunctive relief shall also include requiring the . . . modification of a policy . . . 42 U.S.C. § 12188(a)(2). 34. Because Defendant’s Website has never been equally accessible, and because Defendant lacks a corporate policy that is reasonably calculated to cause its Website to become and remain accessible, Plaintiff invokes 42 U.S.C. § 12188(a)(2) and seeks a permanent injunction requiring Defendant to retain a qualified consultant acceptable to Plaintiff (“Agreed Upon Consultant”) to assist Defendant to comply with WCAG 2.0 guidelines for Defendant’s Website. Plaintiff seeks that their permanent injunction requires Defendant to cooperate with the Agreed Upon Consultant to: -12- a. Train Defendant’s employees and agents who develop the Website on accessibility compliance under the WCAG 2.0 guidelines; b. Regularly check the accessibility of the Website under the WCAG 2.0 guidelines; c. Regularly test user accessibility by blind or vision-impaired persons to ensure that Defendant’s Website complies under the WCAG 2.0 guidelines; and, d. Develop an accessibility policy that is clearly disclosed on Defendant’s Websites, with contact information for users to report accessibility-related problems. 35. If the Website was accessible, Plaintiff and similarly situated blind and visually-impaired people could independently view service items, locate Defendant’s medical office location, book appointments and otherwise research related products and services via the Website. 36. Although Defendant may currently have centralized policies regarding maintaining and operating its Website, Defendant lacks a plan and policy reasonably calculated to make them fully and equally accessible to, and independently usable by, blind and other visually-impaired consumers. 37. Defendant has, upon information and belief, invested substantial sums in developing and maintaining their Website and has generated significant revenue from the Website. These amounts are far greater than the associated cost of making their Website equally accessible to visually impaired customers. -13- 38. Without injunctive relief, Plaintiff and other visually-impaired consumers will continue to be unable to independently use the Website, violating their rights. CLASS ACTION ALLEGATIONS 39. Plaintiff, on behalf of himself and all others similarly situated, seeks to certify a nationwide class under Fed. R. Civ. P. 23(a) and 23(b)(2): all legally blind individuals in the United States who have attempted to access Defendant’s Website and as a result have been denied access to the equal enjoyment of goods and services offered in Defendant’s physical location, during the relevant statutory period. 40. Plaintiff, on behalf of himself and all others similarly situated, seeks certify a New York State subclass under Fed. R. Civ. P. 23(a) and 23(b)(2): all legally blind individuals in the State of New York who have attempted to access Defendant’s Website and as a result have been denied access to the equal enjoyment of goods and services offered in Defendant’s physical location, during the relevant statutory period. 41. Plaintiff, on behalf of himself and all others similarly situated, seeks certify a New York City subclass under Fed. R. Civ. P. 23(a) and 23(b)(2): all legally blind individuals in the City of New York who have attempted to access Defendant’s Website and as a result have been denied access to the equal enjoyment of goods and services offered in Defendant’s physical location, during the relevant statutory period. 42. Common questions of law and fact exist amongst Class, including: a. Whether Defendant’s Website is a “public accommodation” under the ADA; -14- b. Whether Defendant’s Website is a “place or provider of public accommodation” under the NYSHRL or NYCHRL; c. Whether Defendant’s Website denies the full and equal enjoyment of its goods, services, facilities, privileges, advantages, or accommodations to people with visual disabilities, violating the ADA; and d. Whether Defendant’s Website denies the full and equal enjoyment of its goods, services, facilities, privileges, advantages, or accommodations to people with visual disabilities, violating the NYSHRL or NYCHRL. 43. Plaintiff’s claims are typical of the Class. The Class, similarly to the Plaintiff, are severely visually impaired or otherwise blind, and claim that Defendant has violated the ADA, NYSYRHL or NYCHRL by failing to update or remove access barriers on its Website so either can be independently accessible to the Class. 44. Plaintiff will fairly and adequately represent and protect the interests of the Class Members because Plaintiff has retained and is represented by counsel competent and experienced in complex class action litigation, and because Plaintiff has no interests antagonistic to the Class Members. Class certification of the claims is appropriate under Fed. R. Civ. P. 23(b)(2) because Defendant has acted or refused to act on grounds generally applicable to the Class, making appropriate both declaratory and injunctive relief with respect to Plaintiff and the Class as a whole. 45. Alternatively, class certification is appropriate under Fed. R. Civ. P. 23(b)(3) because fact and legal questions common to Class Members predominate over questions affecting only individual Class Members, and because a class action is superior to other available methods for the fair and efficient adjudication of their litigation. -15- 46. Judicial economy will be served by maintaining their lawsuit as a class action in that it is likely to avoid the burden that would be otherwise placed upon the judicial system by the filing of numerous similar suits by people with visual disabilities throughout the United States. FIRST CAUSE OF ACTION VIOLATIONS OF THE ADA, 42 U.S.C. § 12181 et seq. 47. Plaintiff, on behalf of himself and the Class Members, repeats and realleges every allegation of the preceding paragraphs as if fully set forth herein. 48. Section 302(a) of Title III of the ADA, 42 U.S.C. § 12101 et seq., provides: No individual shall be discriminated against on the basis of disability in the full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations of any place of public accommodation by any person who owns, leases (or leases to), or operates a place of public accommodation. 42 U.S.C. § 12182(a). 49. Defendant’s medical office location is a place of public accommodations within the definition of Title III of the ADA, 42 U.S.C. § 12181(7). Defendant’s Website is a service, privilege, or advantage of Defendant’s physical location. The Website is a service that is integrated with this location. 50. Under Section 302(b)(1) of Title III of the ADA, it is unlawful discrimination to deny individuals with disabilities the opportunity to participate in or benefit from the goods, services, facilities, privileges, advantages, or accommodations of an entity. 42 U.S.C. § 12182(b)(1)(A)(i). -16- 51. Under Section 302(b)(1) of Title III of the ADA, it is unlawful discrimination to deny individuals with disabilities an opportunity to participate in or benefit from the goods, services, facilities, privileges, advantages, or accommodation, which is equal to the opportunities afforded to other individuals. 42 U.S.C. § 12182(b)(1)(A)(ii). 52. Under Section 302(b)(2) of Title III of the ADA, unlawful discrimination also includes, among other things: [A] failure to make reasonable modifications in policies, practices, or procedures, when such modifications are necessary to afford such goods, services, facilities, privileges, advantages, or accommodations to individuals with disabilities, unless the entity can demonstrate that making such modifications would fundamentally alter the nature of such goods, services, facilities, privileges, advantages or accommodations; and a failure to take such steps as may be necessary to ensure that no individual with a disability is excluded, denied services, segregated or otherwise treated differently than other individuals because of the absence of auxiliary aids and services, unless the entity can demonstrate that taking such steps would fundamentally alter the nature of the good, service, facility, privilege, advantage, or accommodation being offered or would result in an undue burden. 42 U.S.C. § 12182(b)(2)(A)(ii)-(iii). 53. The acts alleged herein constitute violations of Title III of the ADA, and the regulations promulgated thereunder. Plaintiff, who is a member of a protected class of persons under the ADA, has a physical disability that substantially limits the major life activity of sight within the meaning of 42 U.S.C. §§ 12102(1)(A)-(2)(A). Furthermore, Plaintiff has been denied full and equal access to the Website, has not been provided services that are provided to other patrons who are not disabled, and has been provided services that are inferior to the services provided to non-disabled persons. Defendant has failed to take any prompt and equitable steps to remedy its discriminatory conduct. These violations are ongoing. -17- 54. Under 42 U.S.C. § 12188 and the remedies, procedures, and rights set forth and incorporated therein, Plaintiff, requests relief as set forth below. SECOND CAUSE OF ACTION VIOLATIONS OF THE NYSHRL 55. Plaintiff, on behalf of himself and the New York State Sub-Class Members, repeats and realleges every allegation of the preceding paragraphs as if fully set forth herein. 56. N.Y. Exec. Law § 296(2)(a) provides that it is “an unlawful discriminatory practice for any person, being the owner, lessee, proprietor, manager, superintendent, agent or employee of any place of public accommodation . . . because of the . . . disability of any person, directly or indirectly, to refuse, withhold from or deny to such person any of the accommodations, advantages, facilities or privileges thereof.” 57. Defendant’s physical location is located in State of New York and throughout the United States and constitute a sales establishment and place of public accommodation within the definition of N.Y. Exec. Law § 292(9). Defendant’s Website is a service, privilege or advantage of Defendant. Defendant’s Website is a service that is by and integrated with this physical location. 58. Defendant is subject to New York Human Rights Law because it owns and operates its physical location and Website. Defendant is a person within the meaning of N.Y. Exec. Law § 292(1). 59. Defendant is violating N.Y. Exec. Law § 296(2)(a) in refusing to update or remove access barriers to its Website, causing its Website and the services integrated with Defendant’s physical location to be completely inaccessible to the blind. Their -18- inaccessibility denies blind patrons full and equal access to the facilities, goods and services that Defendant makes available to the non-disabled public. 60. Under N.Y. Exec. Law § 296(2)(c)(i), unlawful discriminatory practice includes, among other things, “a refusal to make reasonable modifications in policies, practices, or procedures, when such modifications are necessary to afford facilities, privileges, advantages or accommodations to individuals with disabilities, unless such person can demonstrate that making such modifications would fundamentally alter the nature of such facilities, privileges, advantages or accommodations being offered or would result in an undue burden". 61. Under N.Y. Exec. Law § 296(2)(c)(ii), unlawful discriminatory practice also includes, “a refusal to take such steps as may be necessary to ensure that no individual with a disability is excluded or denied services because of the absence of auxiliary aids and services, unless such person can demonstrate that taking such steps would fundamentally alter the nature of the facility, privilege, advantage or accommodation being offered or would result in an undue burden.” 62. Readily available, well-established guidelines exist on the Internet for making websites accessible to the blind and visually impaired. These guidelines have been followed by other large business entities and government agencies in making their website accessible, including but not limited to: adding alt-text to graphics and ensuring that all functions can be performed using a keyboard. Incorporating the basic components to make its Website accessible would neither fundamentally alter the nature of Defendant’s business nor result in an undue burden to Defendant. -19- 63. Defendant’s actions constitute willful intentional discrimination against the class on the basis of a disability in violation of the NYSHRL, N.Y. Exec. Law § 296(2) in that Defendant has: a. constructed and maintained a website that is inaccessible to blind class members with knowledge of the discrimination; and/or b. constructed and maintained a website that is sufficiently intuitive and/or obvious that is inaccessible to blind class members; and/or c. failed to take actions to correct these access barriers in the face of substantial harm and discrimination to blind class members. 64. Defendant has failed to take any prompt and equitable steps to remedy their discriminatory conduct. These violations are ongoing. 65. Defendant discriminates, and will continue in the future to discriminate against Plaintiff and New York State Sub-Class Members on the basis of disability in the full and equal enjoyment of the goods, services, facilities, privileges, advantages, accommodations and/or opportunities of Defendant’s Website and its physical location under § 296(2) et seq. and/or its implementing regulations. Unless the Court enjoins Defendant from continuing to engage in these unlawful practices, Plaintiff and the Sub- Class Members will continue to suffer irreparable harm. 66. Defendant’s actions were and are in violation of New York State Human Rights Law and therefore Plaintiff invokes his right to injunctive relief to remedy the discrimination. 67. Plaintiff is also entitled to compensatory damages, as well as civil penalties and fines under N.Y. Exec. Law § 297(4)(c) et seq. for each and every offense. -20- 68. Plaintiff is also entitled to reasonable attorneys’ fees and costs. 69. Under N.Y. Exec. Law § 297 and the remedies, procedures, and rights set forth and incorporated therein Plaintiff prays for judgment as set forth below. THIRD CAUSE OF ACTION VIOLATION OF THE NEW YORK STATE CIVIL RIGHTS LAW 70. Plaintiff, on behalf of himself and the New York State Sub-Class Members, repeats and realleges every allegation of the preceding paragraphs as if fully set forth herein. 71. Plaintiff served notice thereof upon the attorney general as required by N.Y. Civil Rights Law § 41. 72. N.Y. Civil Rights Law § 40 provides that “all persons within the jurisdiction of this state shall be entitled to the full and equal accommodations, advantages, facilities and privileges of any places of public accommodations, resort or amusement, subject only to the conditions and limitations established by law and applicable alike to all persons. No persons, being the owner, lessee, proprietor, manager, superintendent, agent, or employee of any such place shall directly or indirectly refuse, withhold from, or deny to any person any of the accommodations, advantages, facilities and privileges thereof . . .” 73. N.Y. Civil Rights Law § 40-c(2) provides that “no person because of . . . disability, as such term is defined in section two hundred ninety-two of executive law, be subjected to any discrimination in his or her civil rights, or to any harassment, as defined in section 240.25 of the penal law, in the exercise thereof, by any other person or by any firm, corporation or institution, or by the state or any agency or subdivision.” -21- 74. Defendant’s New York State physical location is a sales establishment and place of public accommodation within the definition of N.Y. Civil Rights Law § 40-c(2). Defendant’s Website is a service, privilege or advantage of Defendant and its Website is a service that is by and integrated with these establishments. 75. Defendant is subject to New York Civil Rights Law because it advertises, owns and operates its physical location and Website. Defendant is a person within the meaning of N.Y. Civil Law § 40-c(2). 76. Defendant is violating N.Y. Civil Rights Law § 40-c(2) in refusing to update or remove access barriers to its Website, causing its Website and the services integrated with Defendant’s physical location to be completely inaccessible to the blind. Their inaccessibility denies blind patrons full and equal access to the facilities, goods and services that Defendant makes available to the non-disabled public. 77. N.Y. Civil Rights Law § 41 states that “any corporation which shall violate any of the provisions of sections forty, forty-a, forty-b or forty two . . . shall for each and every violation thereof be liable to a penalty of not less than one hundred dollars nor more than five hundred dollars, to be recovered by the person aggrieved thereby . . .” 78. Under NY Civil Rights Law § 40-d, “any person who shall violate any of the provisions of the foregoing section, or subdivision three of section 240.30 or section 240.31 of the penal law, or who shall aid or incite the violation of any of said provisions shall for each and every violation thereof be liable to a penalty of not less than one hundred dollars nor more than five hundred dollars, to be recovered by the person aggrieved thereby in any court of competent jurisdiction in the county in which the defendant shall reside ...” -22- 79. Defendant has failed to take any prompt and equitable steps to remedy its discriminatory conduct. These violations are ongoing. 80. Defendant discriminates, and will continue in the future to discriminate against Plaintiff and New York State Sub-Class Members on the basis of disability are being directly or indirectly refused, withheld from, or denied the accommodations, advantages, facilities and privileges thereof in § 40 et seq. and/or its implementing regulations. 81. Plaintiff is entitled to compensatory damages of five hundred dollars per instance, as well as civil penalties and fines under N.Y. Civil Law § 40 et seq. for each and every offense. FOURTH CAUSE OF ACTION VIOLATIONS OF THE NYCHRL 82. Plaintiff, on behalf of himself and the New York City Sub-Class Members, repeats and realleges every allegation of the preceding paragraphs as if fully set forth herein. 83. N.Y.C. Administrative Code § 8-107(4)(a) provides that “It shall be an unlawful discriminatory practice for any person, being the owner, lessee, proprietor, manager, superintendent, agent or employee of any place or provider of public accommodation, because of . . . disability . . . directly or indirectly, to refuse, withhold from or deny to such person, any of the accommodations, advantages, facilities or privileges thereof.” 84. Defendant’s location is a sales establishment and a place of public accommodation within the definition of N.Y.C. Admin. Code § 8-102(9), and its Website is a service that is integrated with its establishment. -23- 85. Defendant is subject to NYCHRL because it advertises, owns and operates its physical location and its Website in the City of New York, making it a person within the meaning of N.Y.C. Admin. Code § 8-102(1). 86. Defendant is violating N.Y.C. Administrative Code § 8-107(4)(a) in refusing to update or remove access barriers to Website, causing its Website and the services integrated with its physical location to be completely inaccessible to the blind. The inaccessibility denies blind patrons full and equal access to the facilities, goods, and services that Defendant makes available to the non-disabled public. 87. Defendant is required to “make reasonable accommodation to the needs of persons with disabilities . . . any person prohibited by the provisions of [§ 8-107 et seq.] from discriminating on the basis of disability shall make reasonable accommodation to enable a person with a disability to . . . enjoy the right or rights in question provided that the disability is known or should have been known by the covered entity.” N.Y.C. Admin. Code § 8-107(15)(a). 88. Defendant’s actions constitute willful intentional discrimination against the Sub-Class on the basis of a disability in violation of the N.Y.C. Administrative Code § 8-107(4)(a) and § 8-107(15)(a) in that Defendant has: a. constructed and maintained a website that is inaccessible to blind class members with knowledge of the discrimination; and/or b. constructed and maintained a website that is sufficiently intuitive and/or obvious that is inaccessible to blind class members; and/or -24- c. failed to take actions to correct these access barriers in the face of substantial harm and discrimination to blind class members. 89. Defendant has failed to take any prompt and equitable steps to remedy their discriminatory conduct. These violations are ongoing. 90. As such, Defendant discriminates, and will continue in the future to discriminate against Plaintiff and members of the proposed class and subclass on the basis of disability in the full and equal enjoyment of the goods, services, facilities, privileges, advantages, accommodations and/or opportunities of its Website and its establishments under § 8-107(4)(a) and/or its implementing regulations. Unless the Court enjoins Defendant from continuing to engage in these unlawful practices, Plaintiff and members of the class will continue to suffer irreparable harm. 91. Defendant’s actions were and are in violation of the NYCHRL and therefore Plaintiff invokes his right to injunctive relief to remedy the discrimination. 92. Plaintiff is also entitled to compensatory damages, as well as civil penalties and fines under N.Y.C. Administrative Code § 8-120(8) and § 8-126(a) for each offense as well as punitive damages pursuant to § 8-502. 93. Plaintiff is also entitled to reasonable attorneys’ fees and costs. 94. Under N.Y.C. Administrative Code § 8-120 and § 8-126 and the remedies, procedures, and rights set forth and incorporated therein Plaintiff prays for judgment as set forth below. -25- FIFTH CAUSE OF ACTION DECLARATORY RELIEF 95. Plaintiff, on behalf of himself and the Class and New York State and City Sub-Classes Members, repeats and realleges every allegation of the preceding paragraphs as if fully set forth herein. 96. An actual controversy has arisen and now exists between the parties in that Plaintiff contends, and is informed and believes that Defendant denies, that its Website contains access barriers denying blind customers the full and equal access to the goods, services and facilities of its Website and by extension its physical location, which Defendant owns, operates and controls, fails to comply with applicable laws including, but not limited to, Title III of the Americans with Disabilities Act, 42 U.S.C. §§ 12182, et seq., N.Y. Exec. Law § 296, et seq., and N.Y.C. Admin. Code § 8-107, et seq. prohibiting discrimination against the blind. 97. A judicial declaration is necessary and appropriate at this time in order that each of the parties may know their respective rights and duties and act accordingly. PRAYER FOR RELIEF WHEREFORE, Plaintiff respectfully requests the Court grant the following relief: a. A preliminary and permanent injunction to prohibit Defendant from violating the Americans with Disabilities Act, 42 U.S.C. §§ 12182, et seq., N.Y. -26- Exec. Law § 296, et seq., N.Y.C. Administrative Code § 8-107, et seq., and the laws of New York; b. A preliminary and permanent injunction requiring Defendant to take all the steps necessary to make its Website into full compliance with the requirements set forth in the ADA, and its implementing regulations, so that the Website is readily accessible to and usable by blind individuals; c. A declaration that Defendant owns, maintains and/or operates its Website in a manner that discriminates against the blind and which fails to provide access for persons with disabilities as required by Americans with Disabilities Act, 42 U.S.C. §§ 12182, et seq., N.Y. Exec. Law § 296, et seq., N.Y.C. Administrative Code § 8-107, et seq., and the laws of New York d. An order certifying the Class and Sub-Classes under Fed. R. Civ. P. 23(a) & (b)(2) and/or (b)(3), appointing Plaintiff as Class Representative, and his attorneys as Class Counsel; e. Compensatory damages in an amount to be determined by proof, including all applicable statutory and punitive damages and fines, to Plaintiff and the proposed class and subclasses for violations of their civil rights under New York State Human Rights Law and City Law; f. Pre- and post-judgment interest; g. An award of costs and expenses of the action together with reasonable attorneys’ and expert fees; and h. Such other and further relief as this Court deems just and proper. -27- DEMAND FOR TRIAL BY JURY Pursuant to Fed. R. Civ. P. 38(b), Plaintiff demands a trial by jury on all questions of fact the Complaint raises. Dated: New York, New York April 23, 2019 THE MARKS LAW FIRM, PC _________________________ Bradly G. Marks 175 Varick St., 3rd Floor New York, New York 10014 Tel: (646) 770-3775 Fax: (646) 867-2639 brad@markslawpc.com Jeffrey M. Gottlieb (JG-7905) Dana L. Gottlieb (DG-6151) GOTTLIEB & ASSOCIATES 150 East 18th Street, Suite PHR New York, New York 10003 Tel: 212.228.9795 Fax: 212.982.6284 nyjg@aol.com danalgottlieb@aol.com -28-

civil rights, immigration, family

_ejZEYcBD5gMZwczQ2DS

Civil Case No.: IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK NORTHTOWN AUTOMOTIVE COMPANIES INC., on behalf of itself and all others similarly situated, Plaintiff, v. JURY TRIAL DEMANDED HEARST TELEVISION INC.; GRAY TELEVISION, INC.; NEXSTAR MEDIA GROUP, INC.; TEGNA INC.; TRIBUNE MEDIA COMPANY; and SINCLAIR BROADCAST GROUP, INC., Defendants. ANTITRUST CLASS ACTION COMPLAINT TABLE OF CONTENTS TABLE OF CONTENTS .......................................................................................................... i I. NATURE OF ACTION ............................................................................................................. 1  II.  JURISDICTION AND VENUE ........................................................................................ 3  III. PARTIES ........................................................................................................................... 4  A.  PLANTIFF ............................................................................................................ 4  B.   DEFENDANTS ..................................................................................................... 4  C.  AGENTS AND CO-CONSPIRATORS ............................................................... 5  IV.  FACTUAL ALLEGATIONS ............................................................................................ 6  A.  The U.S. Department of Justice Investigation ...................................................... 6  B.  The Local Television Advertising Market ............................................................ 6  1.  The Structure and Characteristics of the Market for Local Television Advertising Supports the Existence of a Conspiracy ................................ 9  a.  The Local Television Industry Is Rapidly Consolidating ............. 9  b.  Several Challenges Restrict Access to the Local Television Market ........................................................................................ 10   c.  Defendants Had Motives and Opportunities to Conspire with Each Other.................................................................................. 12  V.  FRAUDULENT CONCEALMENT AND TOLLING OF THE STATUTE OF LIMITATIONS ................................................................................................................ 16  VI.  CLASS ACTION ALLEGATIONS ................................................................................ 17  VII.  INTERSTATE TRADE AND COMMERCE ................................................................. 20  VIII. PLAINTIFF AND THE CLASS SUFFERED ANTITRUST INJURY .............................. 20  FIRST COUNT Violation of Section 1 of the Sherman Act (15 U.S.C. § 1) (Conspiracy in Restraint of Trade) ........................................................................................................................ 21  IX.  PRAYER FOR RELIEF .................................................................................................. 22  X.  JURY DEMAND ............................................................................................................. 24  i Plaintiff Northtown Automotive Companies, Inc. (“Plaintiff”), individually and on behalf of all others similarly situated (the “Class,” as defined below), upon personal knowledge as to the facts pertaining to itself and upon information and belief as to all other matters, and based on the investigation of counsel, brings this class action for damages, injunctive relief, and other relief pursuant to federal antitrust laws, demands a trial by jury, and alleges as follows: I. NATURE OF ACTION 1. This antitrust action concerns the illegal and anticompetitive practices of Defendants Hearst Television, Inc. (“Hearst”), Gray Television, Inc. (“Gray”), Nexstar Media Group, Inc. (“Nexstar”), Tegna Inc. (“Tegna”), Tribune Media Company (“Tribune”), and Sinclair Broadcast Group, Inc. (“Sinclair”), (collectively, “Defendants”), who engaged in unlawful collusion and conspired to artificially inflate the price of local television advertisements in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1. 2. This case is filed in this district because: (1) the New York Designated Marketing Area (“DMA”), which includes New York City, Long Island, portions of New York State, Connecticut, New Jersey, and Pike County, Pennsylvania is the largest in the United States, comprising more than 7.3 million television households; (2) Defendants had ample opportunities to conspire through industry associations, including the Television Bureau of Advertising, Inc., the Media Rating Council, both of which are located in New York City, and at the industry’s up-front television advertising sales event which is held annually in New York City and attended by Defendants’ senior executives and representatives; and (3) Defendant Hearst has its headquarters in this district. 3. Defendants sell television advertising to local advertisers in multiple Designated Market Areas (“DMAs”) throughout the U.S. New York City is the largest 1 DMA, reaching more than 7.3 million households. A DMA is a geographic area for which A.C. Nielsen Company furnishes broadcast television stations, and others with data to aid in evaluating audience size and composition. 4. Plaintiff seeks to represent a Class consisting of all persons and entities in the U.S. who paid for all or a portion of advertisement time on local TV provided by Defendants from at least January 1, 2012 until the effects of their unlawful conduct cease (the “Class Period”). 5. During the Class Period, Defendants unlawfully shared information and coordinated efforts to artificially inflate prices for television commercials. Specifically, instead of competing with each other on prices for advertising sales, as competitors normally do, Defendants and their co-conspirators shared proprietary information and conspired to fix prices and reduce competition in the market. 6. On July 26, 2018, The Wall Street Journal and other media outlets reported that Sinclair, Tribune, and certain independent local television stations are the subjects of an ongoing U.S. Department of Justice (“DOJ”) investigation regarding whether communication between the stations’ ad sales teams led to higher rates for TV commercials. Later that day, Newsmax.com, an online news journal, reported that Defendants Hearst, Nexstar, and Tegna are also subjects in the DOJ probe. 7. The impact of Defendants’ unlawful and anticompetitive conduct is ongoing and continues to this day and requires injunctive relief to prevent future harm to Plaintiff and members of the Class. 8. Until the publication of reports regarding the DOJ investigation on July 26, 2018, Defendants fraudulently concealed their unlawful conduct from Plaintiff and members 2 of the Class, and Plaintiff and members of the Class had no way of knowing the advertising rates they were paying were the result of unlawful collusion. 9. Plaintiff and members of the Class seek injunctive relief and damages for their injuries caused by Defendants’ collusive, manipulative, and anticompetitive restraint of competition in the market for television advertising in the U.S. Specifically, Plaintiff seeks injunctive relief, treble damages, costs of suit, and reasonable attorneys’ fees on behalf of itself and the Class of direct purchasers, as defined herein, pursuant to Section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1. II. JURISDICTION AND VENUE 10. Plaintiff brings this class action lawsuit pursuant to Sections 4 and 16 of the Clayton Act, 15 U.S.C. §§ 15 and 26, to recover damages suffered by the Class and the costs of suit, including reasonable attorneys’ fees; to enjoin Defendants’ anticompetitive conduct; and for such other relief as is afforded under the antitrust laws of the U.S. for Defendants’ violations of Section 1 of the Sherman Act, 15 U.S.C. § 1. 11. This Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331, 1337, and Sections 4 and 16 of the Clayton Act, 15 U.S.C. §§ 15(a), 26. 12. Venue is proper in this District pursuant to Sections 4, 12, and 16 of the Clayton Act, 28 U.S.C. §§ 15, 22, and 26, and pursuant to 28 U.S.C. § 1391(b), (c), and (d), because, at all times relevant to the Complaint, one or more of the Defendants resided, transacted business, was found, or had agents in this District and for the reasons alleged above in Paragraph 2. 3 III. PARTIES A. PLANTIFF 13. Plaintiff is located at 1135 Millersport Highway, Amherst, New York. During the Class Period, Plaintiff purchased advertisement time directly from one or more of the Defendants and has suffered monetary loss as a result of the antitrust violations alleged herein. B. DEFENDANTS 14. Defendant Hearst is headquartered at 300 West 57th Street, New York, New York 10019 and is a diversified media and information company. Hearst operates television stations and cable networks throughout the U.S. According to its website, Hearst has ownership interests in 31 televisions stations which reach a combined 19% of U.S. viewers. 15. Defendant Gray is a television broadcast company headquartered at 4370 Peachtree Road, NE, Suite 400, Atlanta, Georgia 30319. Gray owns and operates television stations and digital assets in the U.S. As of February 23, 2018, Gray owned and operated television stations in 57 television markets, broadcasting approximately 200 program streams, including approximately 100 channels affiliated with the CBS Network, the NBC Network, the ABC Network, and the FOX Network. On June 23, 2018, Gray entered into a merger agreement with, among others, Raycom Media, Inc. Giving effect to the merger and prior to divestitures of stations due to market overlaps, Gray expects to own and/or operate 142 full-power television stations serving 92 markets. Upon completion, Gray expects to reach approximately 24 percent of U.S. television households through nearly 400 separate program streams including approximately 165 affiliates of the ABC/NBC/CBS/FOX networks, and over 100 affiliates of the CW, My Network, and MeTV networks. 4 16. Defendant Nexstar is headquartered at 545 East John Carpenter Freeway, Suite 700, Irving, Texas 75062, and operates as a television broadcasting and digital media company in the U.S. As of December 31, 2017, the company owned, operated, programmed, or provided sales and other services to 170 television stations in 100 markets. 17. Defendant Tegna is a broadcasting, digital media, and marketing services company and is headquartered at 7950 Jones Branch Drive, McLean, Virginia 22107. Tegna owns and operates 47 television stations in 39 markets across the U.S. 18. Defendant Tribune is headquartered at 515 North State Street, Chicago, Illinois 60654 and operates, through its subsidiaries, as a media and entertainment company in the U.S. Tribune offers news, entertainment, and sports programming through Tribune Broadcasting local television stations, including FOX television affiliates, CW Network television affiliates, CBS television affiliates, ABC television affiliates, MY television affiliates, NBC television affiliates, and independent television stations; and television series and movies on WGN America, a national general entertainment cable network. Tribune owns 43 broadcast television stations in approximately 35 cities. 19. Defendant Sinclair is headquartered at 10706 Beaver Dam Road, Hunt Valley, Maryland 21030 and operates as a television broadcast company in the U.S. As of December 31, 2017, it owned, operated, and/or provided services to 191 stations in 89 markets, which broadcast 601 channels. C. AGENTS AND CO-CONSPIRATORS 20. The acts alleged against the Defendants in this Complaint were authorized, ordered, or done by their officers, agents, employees, or representatives, while actively engaged in the management and operation of Defendants’ businesses or affairs. 5 21. Various persons and/or firms not named as Defendants herein may have participated as co-conspirators in the violations alleged herein and may have performed acts and made statements in furtherance thereof. 22. Each Defendant acted as the principal, agent, or joint venture of, or for, other Defendants with respect to the acts, violations, and common course of conduct alleged by Plaintiff. IV. FACTUAL ALLEGATIONS A. The U.S. Department of Justice Investigation 23. On July 26, 2018, The Wall Street Journal reported that the DOJ is investigating whether Defendants Sinclair, Tribune, and other local television station owners unlawfully shared information and coordinated efforts to artificially raise prices for television commercials. Later that day, Newsmax.com, an online news journal, reported that, Defendants Hearst, Nexstar, and Tegna are also subjects in the DOJ probe. 24. Upon information and belief, during the review of a proposed $3.9 billion merger acquisition of Sinclair and Tribune, the DOJ uncovered anti-competitive market information that led it to investigate Defendants’ conspiracy to artificially inflate television advertising prices. Specifically, the DOJ is investigating whether Defendants “coordinated efforts when their ad sales teams communicated with each other about their performance” in order to artificially inflate television advertising prices in violation of federal antitrust laws.. 25. On August 9, 2018, Tribune announced its withdrawal from the $3.9 billion merger. B. The Local Television Advertising Market 26. The local television landscape in the U.S. consists of parent companies who own dozens of local TV stations that carry programming distributed through their broadcast 6 platform, consisting of programming provided by third-party network and syndicators, local news, their own networks, and other original programming. 27. Defendants sell television advertising to local advertisers in multiple DMAs throughout the U.S. A DMA is a geographic area for which A.C. Nielsen Company furnishes broadcast television stations, and others with data to aid in evaluating audience size and composition. 28. New York City is the largest DMA, reaching more than 7.3 million households. There are 210 DMAs in the U.S. According to Nielsen, the key benefits to DMAs including: 1) targeting local advertising and direct marketing campaigns across multiple media; 2) selling advertising by local television market; 3) selecting local research samples; and 4) segmenting and analyzing internal and third-party data by local television market. 29. In 2016 the six largest companies with the most television household reach in local TV were Sinclair, Tribune, Nexstar, Tegna, Gray, and Hearst. As reported by the Pew Research Center, these companies owned, operated or serviced more than 443 full- powered stations, a more than 147.5% increase from the number or local TV stations owned, operated and serviced in 2004. 30. In recent years, television broadcasting companies have experienced significant slowing of growth in their advertising revenues due to increased competition from internet and other advertising. The following chart depicts the slowing growth of television advertising spending in the U.S. since 2012: 7 31. In response to reduced spending, Defendants conspired to artificially inflate advertising prices in order to stabilize and grow revenues. 32. For example, television up-front advertising prices have increased steadily since 2012. In the television industry, an upfront is a gathering at the start of important advertising sales periods, held by television network executives and attended by major advertisers and the media. It is so named because of its main purpose, to allow marketers to buy television commercial airtime “up front”, or several months before the television season begins. Up-front advertising account for a substantial portion of Defendants’ revenues. In the U.S., the major broadcast networks’ upfronts traditionally occurred in New York City, starting in March or May each year. 33. Since 2012, despite stagnant and decreasing demand, up-front prices have materially increased: 8 TV primetime upfront advertising  prices  $0.00 $2.00 $4.00 $6.00 $8.00 $10.00 $12.00 $14.00 $16.00 $18.00 $20.00 $22.00 $24.00 $26.00 $28.00 $30.00 $32.00 34. Given the above factors, Defendants and their co-conspirators have responded to falling advertisement sales by colluding on pricing, forcing Plaintiff and members of the Class to pay supracompetitive prices for local television advertising. 1. The Structure and Characteristics of the Market for Local Television Advertising Supports the Existence of a Conspiracy 35. The structure and other characteristics of the market for local television advertising make it conducive to anticompetitive conduct among Defendants, and make collusion particularly attractive. Specifically, the local television advertising market (1) is in an industry that has been rapidly consolidating and is becoming increasingly concentrated; (2) has high barriers to entry; and (3) is comprised of participants who had motives and ample opportunities to conspire. a. The Local Television Industry Is Rapidly Consolidating 36. A highly-concentrated market is more susceptible to collusion and other anticompetitive practices than less concentrated markets. 37. In response to decreased advertisement spending, the local television industry market has been consolidating in recent years. This consolidation of the market continues as 9 station owners look to increase their leverage with broadcast networks, which supply much of their programming, and pay-TV distributors, which carry their channels. In 2013, “big owners of local TV stations got substantially bigger, thanks to a wave of station purchases.” 38. Moreover, on June 25, 2018 Defendant Gray TV agreed to buy fellow television-station owner Raycom Media Inc. in a $3.65 billion deal that would create a company that reaches nearly a quarter of U.S. TV households. If the Gray-Raycom deal is completed, the combined company would own 142 television stations in 92 U.S. markets, reaching 24% of TV households and owning the third-largest number of stations. b. Several Challenges Restrict Access to the Local Television Market 39. A collusive arrangement that raises product prices above competitive levels would, under basic economic principles, attract new entrants seeking to benefit from the supracompetitive pricing. When, however, there are significant barriers to entry, new entrants are much less likely to enter the market. Thus, barriers to entry help facilitate the formation and maintenance of a cartel and market-allocation agreements. In a conspiracy that increases the prices for consumers, market forces would typically attract new entrants seeking to exploit the pricing gap created by the conspiracy’s supracompetitive pricing. But 10 where, as here, there are high barriers to entry for an industry, new broadcast television companies are less likely to enter the market. 40. New entrants planning to enter into broadcasting markets typically face six critical barriers (1) governmental policy; (2) the presence of dominant broadcasters; (3) access to content; (4) audience behavior; (5) consumer costs; and (6) capital requirements. 41. Governmental policy, including regulatory or administrative practices may restrict market access. Responsible authorities take into account economic as well as cultural and social factors when issuing broadcasting licenses which may lead to distortions of competition. 42. The existing dominant broadcasters usually have a long-established relationships with its viewers and most likely also with advertisers. New entrants in the market would have to offer a better deal than the existing broadcasters in order to usurp any market share. Additionally, bigger companies have more clout to negotiate programming deals with networks or syndicators. “If you wanted a decent seat at the table talking to those guys, you had to have scale,” said Barry Lucas, senior vice president of research at the investment firm Gabelli & Co. “Otherwise you were irrelevant and got pushed around.” A new entrant to the market would have to invest significant capital and time in establishing itself before it could work with networks. 43. Additionally, successful entry into television broadcasting markets requires access at reasonable prices to desirable programming, including production or acquisition from third parties. Acquisition of this content, which is critical to attract viewers, is likely to constitute a significant cost to new market players. 44. Commercial broadcasters, whose operations are primarily financed through advertising fees, must establish within a short period of time an audience base that will also 11 attract a sufficient number of advertisers. Therefore, in the presence of established dominant broadcasters, new entrants must provide offers attractive enough to convince viewers to alter their already existing patterns of viewing and channel choice—a task that proves to be difficult. 45. Most likely, new entrants to the market will offer television broadcasting services using cable, satellite, or digital terrestrial technologies—all of which require viewers to incur hardware related costs. The inconvenience and costs that viewers may encounter when switching between different television broadcasters have the potential of discouraging them from altering their established patterns of viewing. For example, consumers who switch from one cable television provider to another generally have to incur costs related to the rental or purchase of adequate equipment, such as set-top boxes and will have to trade in the old equipment for the new equipment. 46. Finally, it would require considerable funding, time, and technical sophistication for a potential market entrant to gain the economies of scale and audience base achieved by Defendants necessary to compete in the market for local television advertising. For example, Defendant Sinclair “believe[s] the greatest opportunity for a sustainable and growing customer base lies within [its] local communities” which it has developed by training “a strong local sales force at each of [its] television stations, which is comprised of approximately 800 marketing consultants and 100 local sales managers company-wide.” Where the level of capital required is prohibitively high, it constitutes a significant barrier to entry. c. Defendants Had Motives and Opportunities to Conspire with Each Other 47. In 2017, U.S. television advertising sales fell 7.8 percent to $61.8 billion, the steepest decline experienced by the industry in at least 20 years. According to data from 12 MagnaGlobal, a resource that develops investment strategies for industry heads, there is no sign of an increase in 2018: 48. “In a healthy economy, we’re looking at no growth in advertising from traditional media companies,” said Michael Nathanson, an analyst with research firm, MoffettNathanson. “That’s a worrying trend.” The decline in television viewership is accelerating due to increased investments in the online video advertising market, capturing almost every new advertising dollar entering the marketplace. Almost half of the growth in local video ad spending during the next five years will go to digital platforms, including local mobile video, local online video and out-of-home video, according to a new study on advanced television advertising published last week by BIA/Kelsey industry analysts. “Television ad sales have fallen even as global advertising grows, leading research firms and analysts to predict that the business may never recover.” 49. According to Defendant Sinclair’s annual report for the year ended December 31, 2017 filed with the U.S. Securities and Exchange Commission on Form 10-K, a primary source of revenue for local television stations is “the sale of commercial inventory on . . . 13 television stations to . . . advertising customers.” However, Defendant Sinclair also concedes that “advertising revenue can vary substantially from period to period based on many factors beyond [its] control.” Further, “[t]his volatility affects [its] operating results and may reduce [its] ability to repay indebtedness or reduce the market value of [its] securities.” Defendant Sinclair specifically admits that its “operating results depend on the amount of advertising revenue [it] generate[s].” 50. As Defendants largely rely on revenue from local television advertising in order to sustain their daily operations, in the face of declining sales, Defendants had reason and motivation to conspire to artificially raise the prices of local TV advertisements. 51. Moreover, Defendants had numerous opportunities to meet and conspire with each other under the guise of legitimate business contacts and to perform acts necessary for the operation and furtherance of the conspiracy. In particular, almost 300 full-power local TV stations changed hands in 2013 and many of these deals resulted in stations in the same market being separately owned on paper but operated jointly, a practice that has grown exponentially in recent years. As of 2014, joint service agreements of one kind or another existed between Defendants and other local TV station owners in at least 94 markets, almost half of the 210 local television markets nationwide, and up from 55 in 2011. Specifically, Defendant Sinclair admits that “[c]ertain of [its] stations have entered into agreements with other stations in the same market, through which [it] provide[s] programming and operating services[,] . . . sales services[,] and other non-programming operating services.” 52. Additionally, Defendants and their co-conspirators had numerous opportunities to conspire through industry associations such as the Television Bureau of Advertising, Inc. (“TVB”), the National Association of Broadcasters (“NAB”), and the 14 Media Rating Council (“MRC”), conferences and meetings held by those associations, and through merger negotiations. 53. Defendants Hearst, Nexstar, Sinclair, Tegna, Gray, and Tribune are members of TVB, which is headquartered at 3 East 54th Street, New York, NY. Nexstar’s President and CEO serves as the Chairman of TVB. TVB is a “not-for-profit trade association representing America’s $21 billion local broadcast television industry.” TVB is designed to bring together and encourage information sharing among employees of broadcast television companies, including Defendants, especially advertising sales representatives. 54. On November 20, 2017, a group of broadcast television companies, including Defendants Hearst, Nexstar, Sinclair, Tegna, and Tribune, announced the launch of the TV Interface Practices or “TIP” Initiative, described as “an industry work group dedicated to developing standard-based interfaces to accelerate electronic advertising transactions for local TV broadcasters and their media agency partners.” Defendant Nexstar’s President and CEO made a public statement regarding TIP indicating that the industry “must work together as an industry.” President and CEO of Defendant Sinclair echoed this sentiment stating that “[t]he TIP Initiative demonstrates the industry’s shared commitment to working together” to grow their advertising sales. Defendant Tribune’s President and CEO also indicated that through the TIP Initiative, Defendants could “actively work[] together.” 55. Defendants Sinclair, Tribune, and other broadcast television companies are also members of the NAB, which describes itself as the “premier trade association for broadcasters.” Defendant Tegna’s President and CEO and Defendant Hearst’s President both serve on NAB’s Executive Committee. Defendant Gray’s Chairman, President, and CEO, Defendant Nexstar’s Chairman, President and CEO, Defendant Sinclair’s President and CEO, and Defendant Tribune’s COO each serve on the NAB Television Board of Directors. 15 NAB hosts numerous meetings and other events for industry members throughout the year, which are attended by Defendants’ executives. 56. Defendants and several other local television station owners are also members of MRC. MRC boasts that one of the “[b]enefits of MRC [m]embership” is that “[m]embers are exposed to other members’ ideas and thoughts” and that “[m]embers can attend formal education seminars” together. V. FRAUDULENT CONCEALMENT AND TOLLING OF THE STATUTE OF LIMITATIONS 57. Any applicable statute of limitations has been tolled by Defendants’ knowing and active concealment of the conspiracy and conduct alleged herein. Through no fault or lack of diligence, Plaintiff and members of the Class were deceived and had no knowledge regarding Defendants’ collusion to fix, maintain, stabilize, and/or artificially inflate prices in the market for the sale of television advertising and could not reasonably discover the collusion. 58. The very nature of Defendants’ conspiracy was secret and self-concealing. Defendants engaged in market manipulation that could not be detected by Plaintiff and members of the Class. 59. Plaintiff and members of the Class had no facts sufficient to place them on inquiry notice of the conspiracy alleged herein until July 26, 2018, when The Wall Street Journal published an article reporting that the DOJ was investigating collusion between Defendants and their coconspirators to inflate prices in the market for the sale of television advertising. 60. As alleged herein, Defendants’ collusion to fix prices in the market for the sale of television advertising was material to Plaintiff and members of the Class at all relevant times. Within the time period of any applicable statute of limitations, Plaintiff and 16 members of the Class could not have discovered through the exercise of reasonable diligence that Defendants and their co-conspirators were colluding to fix, maintain, stabilize, and/or artificially inflate prices for television advertising, which Defendants fraudulently concealed. 61. Plaintiff and members of the Class did not discover and did not know of any facts that would have caused a reasonable person to suspect that Defendants and their co- conspirators were colluding to fix, maintain, stabilize, and/or artificially inflate prices for television advertising. 62. Defendants knowingly, actively, and affirmatively concealed the facts alleged herein, including their collusion to fix, maintain, stabilize, and/or artificially inflate prices in the market for the sale of television advertising. 63. Plaintiff and Class members reasonably relied on Defendants’ knowing, active, and affirmative concealment. 64. For these reasons, all applicable statutes of limitations have been tolled based on the discovery rule and Defendants’ fraudulent concealment and Defendants are estopped from relying on any statutes of limitations in defense of this action. VI. CLASS ACTION ALLEGATIONS 65. Plaintiff brings this action on behalf of itself and as a class action under Rule 23(a), (b)(2) and (b)(3) of the Federal Rules of Civil Procedure on behalf of the following class (the “Class”): All persons and entities in the U.S. who paid for all or a portion of the cost of advertisement time directly to Defendants, or any current or former subsidiary or affiliate of Defendants, or any co-conspirator, during the period from at least and including January 1, 2012 until the effects of Defendants’ unlawful conduct ceases. Excluded from the Class are Defendants, their parent companies, subsidiaries, affiliates, agents, co- conspirators, federal governmental entities and instrumentalities of the 17 federal government, and states and their subdivisions, agencies and instrumentalities. 66. While Plaintiff does not know the exact number of members of the Class, Plaintiff believes the class size is numerous given Defendants’ substantial nationwide presence. 67. Common questions of law and fact exist as to all members of the Class. This is particularly true given the nature of Defendants’ unlawful anticompetitive conduct, which was generally applicable to all the members of the Class, thereby making appropriate relief with respect to the Class as a whole. Such questions of law and fact common to the Class include, but are not limited to: (a) Whether Defendants and their co-conspirators engaged in a combination and conspiracy among themselves to restrict output and fix, raise, maintain or stabilize the prices of local television advertising time; (b) The identity of the participants of the alleged conspiracy; (c) The duration of the alleged conspiracy and the acts carried out by Defendants and their co-conspirators in furtherance of the conspiracy; (d) Whether the alleged conspiracy violated Section 1 of the Sherman Act; (e) Whether the conduct of Defendants and their co-conspirators, as alleged in this Complaint, caused injury to the business or property of Plaintiff and the members of the Class; (f) The effect of the alleged conspiracy on the cost of local television advertising time during the Class Period; (g) Whether the Defendants and their co-conspirators fraudulently concealed the existence of their anticompetitive conduct from Plaintiff and the members of the Class; (h) The appropriate injunctive and related equitable relief for Plaintiff and the Class; and (i) The appropriate class-wide measure of damages. 68. Plaintiff’s claims are typical of the claims of the members of the Class, and Plaintiff will fairly and adequately protect the interests of the Class. Plaintiff and all members of the Class are similarly affected by Defendants’ unlawful conduct in that they paid 18 artificially inflated prices for local television advertising time provided by Defendants and/or their co-conspirators. 69. Plaintiff’s claims arise out of the same common course of conduct giving rise to the claims of the other members of the Class. Plaintiff’s interests are coincident with, and not antagonistic to, those of the other members of the Class. Plaintiff is represented by competent counsel who are experienced in the prosecution of antitrust and class action litigation. 70. The questions of law and fact common to the members of the Class predominate over any questions affecting only individual members, including legal and factual issues relating to liability and damages. 71. Class action treatment is a superior method for the fair and efficient adjudication of the controversy, in that, among other things, such treatment will permit a large number of similarly situated persons to prosecute their common claims in a single forum simultaneously, efficiently and without the unnecessary duplication of evidence, effort and expense that numerous individual actions would engender. The benefits of proceeding through the class mechanism, including providing injured persons or entities with a method for obtaining redress for claims that it might not be practicable to pursue individually, substantially outweigh any difficulties that may arise in management of this class action. 72. The prosecution of separate actions by individual members of the Class would create a risk of inconsistent or varying adjudications, establishing incompatible standards of conduct for Defendants. 19 VII. INTERSTATE TRADE AND COMMERCE 73. Billions of dollars of transactions in local television advertisements are entered into each year in interstate commerce in the U.S. and the payments for those transactions flowed in interstate commerce. 74. Defendants’ manipulation of the market for the sale of local television advertising had a direct, substantial, and foreseeable impact on interstate commerce in the U.S. 75. Defendants intentionally targeted their unlawful conduct to affect commerce, including interstate commerce within the U.S., by combining, conspiring, and/or agreeing to fix, maintain, stabilize, and/or artificially inflate prices for local television advertising. 76. Defendants’ unlawful conduct has a direct and adverse impact on competition in the U.S. Absent Defendants’ combination, conspiracy, and/or agreement to manipulate the market for the sale of local television advertising, the prices of local television advertising would have been determined by a competitive, efficient market. VIII. PLAINTIFF AND THE CLASS SUFFERED ANTITRUST INJURY 77. Defendants’ antitrust conspiracy, conspiracy to monopolize, attempted monopolization, and monopolization had the following effects, among others: (a) Price competition has been restrained or eliminated with respect to local television advertising; (b) The prices of local television advertising have been fixed, raised, maintained, or stabilized at artificially inflated levels; (c) Purchasers of local television advertising time have been deprived of the benefits of free and open competition; and (d) Purchasers of local television advertising time paid artificially inflated prices. 78. The purpose of the conspiratorial and unlawful conduct of Defendants and their co-conspirators was to fix, raise, stabilize and/or maintain the price of local television advertising time. 20 79. The precise amount of the overcharge impacting the prices of local television advertising time paid by Plaintiff and the Class can be measured and quantified using well- accepted models. 80. By reason of the alleged violations of the antitrust laws, Plaintiff and the members of the Class have sustained injury to their businesses or property, having paid higher prices for local television advertising time than they would have paid in the absence of Defendants’ illegal contract, combination, or conspiracy and, as a result, have suffered damages in an amount presently undetermined. This is an antitrust injury of the type that the antitrust laws were meant to punish and prevent. FIRST COUNT Violation of Section 1 of the Sherman Act (15 U.S.C. § 1) (Conspiracy in Restraint of Trade) 81. Plaintiff repeats the allegations set forth above as if fully set forth herein. 82. From at least January 1, 2012 until the effects of their unlawful conduct ceases, Defendants and their co-conspirators entered into and engaged in a contract, combination, or conspiracy with regards to local television advertising in unreasonable restraint of trade in violation of Section 1 of the Sherman Act (15 U.S.C. § 1). 83. The contract, combination or conspiracy consisted of an agreement among the Defendants and their co-conspirators to fix, raise, stabilize or maintain at artificially high levels the prices they charged for local television advertising time in the U.S. 84. In formulating and effectuating this conspiracy, Defendants and their co- conspirators did those things that they combined and conspired to do, including: (a) participating in meetings and conversations among themselves during which they agreed to charge prices at certain levels, and otherwise to fix, increase, maintain, or stabilize prices of local television advertisements in the U.S.; and (b) participating in meetings and conversations among themselves to implement, adhere, and police the agreements they reached. 21 85. Defendants and their co-conspirators engaged in the actions described above for the purpose of carrying out their unlawful agreements to fix, maintain, raise, or stabilize prices of local television advertising time. 86. Defendants’ conspiracy had the following effects, among others: (a) Price competition in the market for local television advertisements has been restrained, suppressed, and/or eliminated; (b) Prices for local television advertisement time provided by Defendants and their co-conspirators have been fixed, raised, maintained, and stabilized at artificially high, non-competitive levels throughout the U.S.; and (c) Plaintiff and members of the Class who purchased local television advertisement time from Defendants and their co-conspirators have been deprived of the benefits of free and open competition. 87. Plaintiff and members of the Class have been injured and will continue to be injured in their business and property by paying more for local television advertising time purchased from Defendants and their co-conspirators than they would have paid and will pay in the absence of the conspiracy. 88. The alleged contract, combination, or conspiracy is a per se violation of the federal antitrust laws. 89. Plaintiff and members of the Class are entitled to treble damages and an injunction against Defendants, preventing and restraining the violations alleged herein. IX. PRAYER FOR RELIEF WHEREFORE, Plaintiff and the Class respectfully request the following relief: A. That the Court determine that this action may be maintained as a class action under Rule 23(a), (b)(2), and (b)(3) of the Federal Rules of Civil Procedure, and direct that reasonable notice of this action, as provided by Rule 23(c)(2) of the Federal Rules of Civil Procedure, be given to each and every member of the Class; 22 B. The Court adjudge and decree that the acts of the Defendants are illegal and unlawful, including the agreement, contract, combination, or conspiracy, and acts done in furtherance thereof by Defendants and their co-conspirators be adjudged to have been a per se violation of Section 1 of the Sherman Act, 15 U.S.C. § 1; C. The Court permanently enjoin and restrain Defendants, their affiliates, successors, transferees, assignees, and other offices, directors, agents, and employees thereof, and all other persons acting or claiming to act on their behalf, from in any manner continuing, maintaining, or renewing the conduct, contract, conspiracy, or combination allege herein, or from entering into any other contract, conspiracy, or combination having a similar purpose or effect, and from adopting or following any practice, plan, program, or device having a similar purpose or effect; D. That Judgment be entered against Defendants, jointly and severally, and in favor of Plaintiff and members of the Class for treble the amount of damages sustained by Plaintiff and the Class as allowed by law, together with costs of the action, including reasonable attorneys’ fees, pre- and post-judgment interest at the highest legal rate from and after the date of service of this Complaint to the extent provided by law; E. That each of the Defendants, and their respective successors, assigns, parent, subsidiaries, affiliates, and transferees, and their officers, directors, agents, and representatives, and all other persons acting or claiming to act on behalf of Defendants or in concert with them, be permanently enjoined and restrained from, in any manner, directly or indirectly, continuing, maintaining or renewing the combinations, conspiracy, agreement, understanding, or concert of action as alleged herein; and 23 F. That the Court award Plaintiff and members of the Class such other and further relief as the case may require and the Court may deem just and proper under the circumstances. X. JURY DEMAND Plaintiff demands a trial by jury, pursuant to Rule 38(b) of the Federal Rules of Civil Procedure, of all issues so triable. Dated: September 18, 2018 Jeffrey A. Klafter KLAFTER OLSEN & LESSER LLP Seth R. Lesser Two International Drive; Suite 350 Rye Brook, NY 10573 Phone: (914) 934-9200 Fax: (914) 934-9220 jak@klafterolsen.com slesser@klafterolsen.com Counsel for Plaintiff and the Proposed Class 24

antitrust

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UNITED STATES DISTRICT COURT WESTERN DISTRICT OF TENNESSEE WESTERN DIVISION DANNY WALKER, individually and on behalf of all others similarly situated, Plaintiff, v. Case No.: SYSCO CORPORATION, Defendant. ____________________________________/ CLASS ACTION COMPLAINT Plaintiff, Danny Walker, (“Plaintiff”), hereby files this Class Action Complaint alleging Defendant, Sysco Corporation (“Sysco” or “Defendant”), violated the Employee Retirement Income Security Act of 1974 (“ERISA”), as amended by the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), by failing to provide him with a timely COBRA notice that complies with the law. BRIEF OVERVIEW 1. Following an employee’s termination, federal law requires plan administrators to notify the former employee of their right to receive continuation coverage. The notice must be sufficient to permit the discharged employee to make an informed decision whether to elect coverage. 2. Despite having access to the Department of Labor’s Model COBRA form, Defendant chose not to use the model form— presumably to save Defendant money by pushing terminated employees away from electing COBRA.1 3. The deficient COBRA notice2 at issue in this lawsuit, attached as Exhibit “A,” both confused and misled Plaintiff. It also caused Plaintiff economic injuries in the form of lost health insurance and unpaid medical bills, as well as informational injuries. 4. Sysco Corporation, the plan sponsor and plan administrator of the Sysco Corporation Group Benefit Plan (“Plan”), has repeatedly violated ERISA by failing to timely provide participants and beneficiaries in the Plan with adequate notice, as prescribed by COBRA, of their right to continue their health coverage upon the occurrence of a “qualifying event” as defined by the statute. 5. As a result of receiving the deficient COBRA enrollment notice, Plaintiff could not make an informed decision about his health insurance and lost health coverage. 6. Plaintiff suffered a tangible injury refrained from seeking medical treatment as he was uninsured due to Defendant’s deficient COBRA notices. 7. And, not only did Plaintiff lose his insurance coverage, after Plaintiff lost his insurance, he lost the ability to direct his health-care related decisions. 8. Defendant’s deficient COBRA notice also caused Plaintiff an informational injury when Defendant failed to provide him with information to which he was entitled to by statute, 1 In fact, according to one Congressional research service study, “…[The] average claim costs for COBRA beneficiaries exceeded the average claim for an active employee by 53%. The average annual health insurance cost per active employee was $7,190.00, and the COBRA cost was $10,988.14. The Spencer & Associates analysts contend that this indicates that the COBRA population is sicker than active-covered employees and that the 2% administrative fee allowed in the law is insufficient to offset the difference in actual claims costs.” Health Insurance Continuation Coverage under COBRA, Congressional Research Service, Janet Kinzer, July 11, 2013. 2 Plaintiff only received the Notice attached hereto (Exhibit “A”). Upon information and belief, at some time during the relevant time period, Defendant may have utilized a “dual” COBRA notification process, using a series of communications to notify participants of their COBRA rights. This notice process is also unlawful - participants should not be required to extrapolate critical information from multiple communications to understand their COBRA rights and requirements. namely a compliant COBRA election notice containing all information required by 29 C.F.R. § 2590.6064(b)(4) and 29 U.S.C. § 1166(a). 9. As a result of these violations, which threaten Class Members’ ability to maintain their health coverage, Plaintiff seeks statutory penalties, injunctive relief, attorneys’ fees, costs and expenses, and other appropriate relief as set forth herein and provided by law. JURISDICTION, VENUE, AND PARTIES 10. This Court has jurisdiction over this action pursuant to 29 U.S.C. § 1132(e) and (f), and also pursuant to 28 U.S.C. §§ 1331 and 1355. 11. Venue is proper in this District pursuant to 29 U.S.C. § 1132(e)(2). Additionally, ERISA § 502(e)(2) provides that venue is proper “where the plan is administered, where the breach took place, or where a defendant resides or may be found.” 29 U.S.C. § 1132(e)(2). Because the breach at issue took place in this District, venue is also proper. 12. Plaintiff is a former employee of Defendant. He was covered under Defendant’s Health Plan, making him a participant/beneficiary under the Plan. 13. Plaintiff experienced a qualifying event within the meaning of 29 U.S.C. § 1163(2), rendering him a qualified beneficiary of the Plan pursuant to 29 U.S.C. § 1167(3). 14. Defendant is a foreign corporation but is registered to do business in the State of Tennessee. Defendant employed more than 20 employees who were members of the Plan in each year for the preceding 5 years. 15. Defendant is the Plan sponsor within the meaning of 29 U.S.C. §1002(16)(B), and the administrator of the Plan within the meaning of 29 U.S.C. § 1002(16)(A). The Plan provides medical benefits to employees and their beneficiaries, and is an employee welfare benefit plan within the meaning of 29 U.S.C. § 1002(1) and a group health plan within the meaning of 29 U.S.C. § 1167(1). FACTUAL ALLEGATIONS COBRA Notice Requirements 16. The COBRA amendments to ERISA included certain provisions relating to continuation of health coverage upon termination of employment or another “qualifying event” as defined by the statute. 17. Among other things, COBRA requires the plan sponsor of each group health plan normally employing more than 20 employees on a typical business day during the preceding year to provide “each qualified beneficiary who would lose coverage under the plan as a result of a qualifying event … to elect, within the election period, continuation coverage under the plan.” 29 U.S.C. § 1161. 18. Notice is of enormous importance. The COBRA notification requirement exists because employees are not expected to know instinctively of their right to continue their healthcare coverage. 19. Moreover, existing case law makes it ostensibly clear that notice is not only required to be delivered to covered employees but to qualifying beneficiaries, as well. 20. COBRA further requires the administrator of such a group health plan to provide notice to any qualified beneficiary notice of their continuation of coverage rights under COBRA upon the occurrence of a qualifying event within 44 days. 29 U.S.C. § 1166(a)(4). This notice must be “[i]n accordance with the regulations prescribed by the Secretary” of Labor. 29 U.S.C. § 1166(a). 21. To facilitate compliance with notice obligations, the United States Department of Labor (“DOL”) has issued a Model COBRA Continuation Coverage Election Notice (“Model Notice”), which is included in the Appendix to 29 C.F.R. § 2590.606-4. The DOL website states that the DOL “will consider use of the model election notice, appropriately completed, good faith compliance with the election notice content requirements of COBRA.” 22. In the event that a plan administrator declines to use the Model Notice and fails to meet the notice requirements of 29 U.S.C. § 1166 and 29 C.F.R. § 2590.606-4, the administrator is subject to statutory penalties of up to $110.00 per participant or beneficiary per day from the date of such failure. 29 U.S.C. § 1132(c)(1). In addition, the Court may order such other relief as it deems proper, including but not limited to injunctive relief pursuant to 29 U.S.C. § 1132(a)(3) and payment of attorneys’ fees and expenses pursuant to 29 U.S.C. § 1132(g)(1). Such is the case here. Defendant failed to use the Model Notice and failed to meet the notice requirements of 29 U.S.C. § 1166 and 29 C.F.R. § 2590.606-4, as set forth below. PLAINTIFF DANNY WALKER 23. Plaintiff, Danny Walker is a former employee of Defendant and participant in Defendant’s health plan. 24. Plaintiff began working for Defendant on July 30, 2018. Plaintiff was abruptly terminated on November 22, 2018. Plaintiff was not fired for gross misconduct. 25. As a result of his termination, Plaintiff experienced a qualifying event as defined by 29 U.S.C. § 1163(2). 26. The notice Defendant sent Plaintiff violates the law. Among other things: a. Defendant’s COBRA form violates 29 C.F.R. § 2590.606- 4(b)(4)(i) because it fails to include name of the plan under which continuation coverage is available; b. Defendant’s COBRA form violates 29 C.F.R. § 2590.606- 4(b)(4)(ii) because it fails to include the name of the qualifying event; c. Defendant’s COBRA form violates 29 C.F.R. § 2590.606- 4(b)(4)(iii) because it fails to include identification, by status or name, of the qualified beneficiaries who are recognized by the plan as being entitled to elect continuation coverage with respect to the qualifying event, and the date on which coverage under the plan will terminate (or has terminated) unless continuation coverage is elected; d. Defendant’s COBRA form violates 29 C.F.R. § 2590.606- 4(b)(4)(iv) because it fails to include a statement that each individual who is a qualified beneficiary with respect to the qualifying event has an independent right to elect continuation coverage; e. Defendant’s COBRA form violates 29 C.F.R. § 2590.606- 4(b)(4)(v) because it fails to include an explanation of the plan's procedures for electing continuation coverage, including an explanation of the time period during which the election must be made, and the date by which the election must be made; f. Defendant’s COBRA form violates 29 C.F.R. § 2590.606- 4(b)(4)(vi) because it fails to include an explanation of the consequences of failing to elect or waiving continuation coverage; g. Defendant’s COBRA form violates 29 C.F.R. § 2590.606- 4(b)(4)(vii) because it fails to include a description of the continuation coverage that will be made available under the plan, if elected, including the date on which such coverage will commence, either by providing a description of the coverage or by reference to the plan's summary plan description h. Defendant’s COBRA form violates 29 C.F.R. § 2590.606- 4(b)(4)(viii) because it fails to include an explanation of the maximum period for which continuation coverage will be available under the plan, if elected; i. Defendant’s COBRA form violates 29 C.F.R. § 2590.606- 4(b)(4)(xi) because it fails to include a description of the amount, if any, that each qualified beneficiary will be required to pay for continuation coverage; j. Defendant’s COBRA form violates 29 C.F.R. § 2590.606- 4(b)(4)(xii) because it fails to provide the address to which payments should be sent; k. Defendant’s COBRA form violates 29 C.F.R. § 2590.606- 4(b)(4)(xii) because it fails to include a description of the amount, if any, that each qualified beneficiary will be required to pay for continuation coverage; l. Defendant’s COBRA form violates 29 C.F.R. § 2590.606- 4(b)(4)(i) because it fails to provide the name, address and telephone number of the party responsible under the plan for administration of continuation coverage benefits, including as to both the Plan Administrator and COBRA Administrator; m. Defendant’s COBRA form violates 29 C.F.R. § 2590.606-4(b)(4) because Defendant has failed to provide a notice written in a manner calculated to be understood by the average plan participant. 27. Defendant’s COBRA notice confused Plaintiff and resulted in his inability to make an informed decision as to electing COBRA continuation coverage. 28. In fact, Plaintiff did not understand the notice and, further, Plaintiff was unable to elect COBRA because of the confusing and incomplete COBRA notice provided by Defendant. 29. For example, the COBRA’s notice omission of a payment address left Plaintiff without information on where to mail payment if elected. Similarly, Exhibit “A” failed to sufficiently explain how to enroll in COBRA. 30. Defendant has in place no administrative remedies Plaintiff was required to exhaust prior to bringing suit. 31. Additionally, because no such administrative remedies exist, any attempt to exhaust the same would have been futile. 32. Plaintiff suffered a tangible injury in the form of economic loss, specifically the loss of insurance coverage, due to Defendant’s deficient COBRA election notice. 33. Additionally, after Plaintiff lost his health insurance he suffered further injury, the loss of the comfort and security inherent in having health insurance coverage. 34. Finally, Plaintiff suffered an informational injury as a result of Defendant’s COBRA notice because he was never provided all information to which he was entitled by 29 C.F.R. § 2590.606-4(b). CLASS ACTION ALLEGATIONS 35. Plaintiff brings this action as a class action pursuant to the Federal Rules of Civil Procedure on behalf of the following putative class of persons: The Deficient COBRA Notice Class: All participants and beneficiaries in the Defendant’s Health Plan in the United States who were sent a COBRA notice by Defendant in the form attached as Exhibit “A,” during the applicable statute of limitations period, as a result of a qualifying event as determined by Defendant, who did not elect continuation coverage. 36. No administrative remedies exist as a prerequisite to Plaintiff’s claims on behalf of the Putative Class. 37. As such, any efforts related to exhausting such non-existent remedies would be futile. 38. Numerosity: The Class is so numerous that joinder of all Class members is impracticable. The class is comprised of thousands of putative members. 39. Typicality: Plaintiff’s claims are typical of the Class. The untimely COBRA notice that Defendant sent to Plaintiff was a form notice that was uniformly provided to all Class members. As such, the COBRA notice that Plaintiff received is typical of the COBRA notices that other Class Members received and suffered from the same issues. 40. Adequacy: Plaintiff will fairly and adequately protect the interests of the Class members, he has no interests antagonistic to the classes, and has retained counsel experienced in complex class action litigation. 41. Commonality: Common questions of law and fact exist as to all members of the Class and predominate over any questions solely affecting individual members of the Class, including but not limited to: a. Whether the Plan is a group health plan within the meaning of 29 U.S.C. § 1167(1); b. Whether Defendant’s COBRA notice complied with the requirements of 29 U.S.C. § 1166(a) and 29 C.F.R. § 2590.606-4; c. Whether statutory penalties should be imposed against Defendant under 29 U.S.C. § 1132(c)(1) for failing to comply with COBRA notice requirements, and if so, in what amount; d. The appropriateness and proper form of any injunctive relief or other equitable relief pursuant to 29 U.S.C. § 1132(a)(3); and e. Whether (and the extent to which) other relief should be granted based on Defendant’s failure to comply with COBRA notice requirements. 42. Class Members do not have an interest in pursuing separate individual actions against Defendant, as the amount of each Class Member’s individual claims is relatively small compared to the expense and burden of individual prosecution. 43. Class certification also will obviate the need for unduly duplicative litigation that might result in inconsistent judgments concerning Defendant’s practices and the adequacy of its COBRA notice. 44. Moreover, management of this action as a class action will not present any likely difficulties. In the interests of justice and judicial efficiency, it would be desirable to concentrate the litigation of all Class Members’ claims in a single action. 45. Plaintiff intends to send notice to all Class Members to the extent required the Federal Rules of Civil Procedure. The names and addresses of the Class Members are available from Defendant’s records, as well as from Defendant’s third-party administrator, Alight Solutions. CLASS CLAIM I FOR RELIEF Violation of 29 U.S.C. § 1166(a) and 29 C.F.R. § 2590.606-4 46. Plaintiff reincorporates by reference paragraphs 1-9 and 23-45 from above. 47. The Plan is a group health plan within the meaning of 29 U.S.C. § 1167(1). 48. Defendant is the plan sponsor and plan administrator of the Plan and was subject to the continuation of coverage and notice requirements of COBRA. 49. Plaintiff and the other members of the Class experienced a “qualifying event” as defined by 29 U.S.C. § 1163, and Defendant was aware that they had experienced such a qualifying event. 50. On account of such qualifying event, Defendant sent Plaintiff and the Class Members a COBRA notice in the form attached hereto. 51. The COBRA notice that Defendant sent to Plaintiff and other Class Members violated 29 U.S.C. § 1166(a) and 29 C.F.R. § 2590.606-4 for the reasons set forth above (among other reasons). 52. These violations were material and willful. 53. Defendant knew that its notice was inconsistent with the Secretary of Labor’s Model Notice and failed to comply with 29 U.S.C. § 1166(a) and 29 C.F.R. § 2590.606-4, but chose to use a non-compliant notice in deliberate or reckless disregard of the rights of Plaintiff and other Class Members. PRAYER FOR RELIEF WHEREFORE, Plaintiff, individually and on behalf of the Class, prays for relief as follows: a. Designating Plaintiff’s counsel as counsel for the Class; b. Issuing proper notice to the Class at Defendant’s expense; c. Declaring that the COBRA notice sent by Defendant to Plaintiff and other Class Members violated 29 U.S.C. § 1166(a) and 29 C.F.R. § 2590.606-4; d. Awarding appropriate equitable relief pursuant to 29 U.S.C. § 1132(a)(3), including but not limited to an order enjoining Defendant from continuing to use its defective COBRA notice and requiring Defendant to send corrective notices; e. Awarding statutory penalties to the Class pursuant to 29 U.S.C. § 1132(c)(1) and 29 C.F.R. § 2575.502c-1 in the amount of $110 per day for each Class Member who was sent a defective COBRA notice by Defendant; f. Awarding attorneys’ fees, costs and expenses to Plaintiff’s counsel as provided by 29 U.S.C. § 1132(g)(1) and other applicable law; and g. Granting such other and further relief, in law or equity, as this Court deems appropriate. Dated this 26th day of May, 2020. /s/ Marc R. Edelman MARC R. EDELMAN, ESQ. Florida Bar No.: 0096342 GEORGE G. TRIANTIS, ESQ. Florida Bar No.: 1015574 MORGAN & MORGAN, P.A. 201 N. Franklin Street, Suite 700 Tampa, Florida 33602 Telephone: 813-223-5505 Facsimile: 813-257-0572 E-mail: MEdelman@forthepeople.com E-mail: GTriantis@forthepeople.com Attorneys for Plaintiff

employment & labor

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IN THE UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION DESIREE LUCAS and DOMINIQUE HINTON, individually, and on behalf of all all similarly situated persons, CIVIL ACTION NO. : __________________ JURY TRIAL DEMANDED Plaintiffs, v. URBAN ONE, INC., Defendant. COLLECTIVE ACTION COMPLAINT Plaintiffs Desiree Lucas and Dominique Hinton file this Complaint against Defendant Urban One, Inc. (“Urban One”), showing the Court the following: INTRODUCTION 1. This action is brought pursuant to the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 207 and 216(b), to recover unpaid overtime wages and damages owed to Plaintiffs and those similarly situated who elect to opt-in to this action pursuant to the FLSA §§ 201 et seq., and specifically the collective action provision of § 216(b), to remedy violations of the overtime provisions of the FLSA by Urban One that have deprived Plaintiffs and others similarly situated of their lawfully earned overtime wages. 2. Plaintiffs also bring individual claims under the Equal Pay Act (“EPA”), 29 U.S.C. § 206(d). 3. Plaintiffs also bring individual claims for retaliation under Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e et seq., (“Title VII”). 4. This action challenges Urban One’s willful failure to pay Plaintiffs and others similarly situated the overtime rate of one and one-half times their regular rate for all hours worked above forty (40) hours in a given workweek. 5. This action also challenges Urban One’s failure to pay Ms. Lucas and Ms. Hinton commensurate with similarly situated male employees. 6. In addition, this action challenges Urban One’s retaliation against Plaintiffs, after Plaintiffs complained of a sexual harassment in the workplace. 7. Plaintiffs are entitled to recover overtime wages, back pay, liquidated damages, compensatory damages, punitive damages, plus interest, reasonable attorneys’ fees, and costs. JURISDICTION AND VENUE 8. Jurisdiction of this Court is invoked pursuant to the FLSA, 29 U.S.C. § 216(b) and 28 U.S.C. §§ 1331 and 1337. 9. This Court also has federal question jurisdiction pursuant to Title VII, 42 U.S.C. § 2000e-5(f)(3) and 28 U.S.C. §§ 1331. 10. The violations of Plaintiffs’ rights occurred in the Northern District of Georgia. Venue for this action in the Northern District of Georgia under 28 U.S.C. § 1391(b) is appropriate because a substantial part of the events or omissions, and the unlawful actions and practices which give rise to Plaintiffs’ claims occurred in this District. ADMINISTRATIVE PROCEEDINGS 11. Ms. Lucas filed a charge of sex discrimination and retaliation with the Equal Employment Opportunity Commission (“EEOC”) on August 22, 2018. She filed an amendment to her charge on September 3, 2019. 12. Ms. Lucas received a notice of a right to sue from the EEOC within the last 90 days and has complied with all other conditions precedent to the institution of this lawsuit. 13. Ms. Hinton filed a charge of sex discrimination and retaliation with the Equal Employment Opportunity Commission on September 19, 2018. 14. Ms. Hinton received a notice of a right to sue from the EEOC within the last 90 days and has complied with all other conditions precedent to the institution of this lawsuit. PARTIES 15. Plaintiff Desiree Lucas is a citizen of the United States and a resident of the state of Georgia. 16. Ms. Lucas is a current employee of Urban One. 17. Ms. Lucas was hired as a production assistant in or around August 2012 and continues to work in this capacity. 18. Since her hire, Ms. Lucas has been an employee of Urban One within the meaning of the FLSA and has regularly worked for Urban One for more than forty (40) hours per workweek, but has not been paid the overtime rate of one and one-half times her regular rate for all hours worked above forty (40) hours in a given workweek. 19. Ms. Lucas consents to be a party to this action pursuant to 29 U.S.C. § 216(b). Her executed consent form is attached as Exhibit A. 20. Plaintiff Dominique Hinton is a citizen of the United States and a resident of the state of Georgia. 21. Ms. Hinton is a former employee of Urban One who worked first as an unpaid intern from in or around 2005 until in or around 2012, then as a board operator from in or around July 2012 until May 2018. 22. While she worked at Urban One, Ms. Hinton was an employee of Defendant within the meaning of the FLSA and regularly worked for Urban One for more than forty (40) hours per workweek, but was not paid the overtime rate of one and one-half times her regular rate for all hours worked above forty (40) hours in a given workweek. 23. Ms. Hinton consents to be a party to this action pursuant to 29 U.S.C. § 216(b). Her executed consent form is attached as Exhibit B. 24. Defendant Urban One, Inc. (“Urban One”) is a Delaware corporation doing business in Georgia, with its principal place of business at 1010 Wayne Avenue in Silver Springs, Maryland 20910. 25. Defendant may be served with process by delivering a copy of a summons and this Complaint to its registered agent, Corporation Service Company at 40 Technology Parkway South, Suite 300, in Norcross, Georgia 30092. 26. Defendant Urban One, Inc. is formerly known as Radio One, Inc. 27. Urban One is a media conglomerate and broadcasting company that operates over 50 radio stations throughout the United States, a cable television network, and an online portfolio of digital brands. 28. Urban One’s Atlanta division, consisting of multiple radio stations, is Radio One Atlanta. 29. Radio One Atlanta’s offices are located at 101 Marietta Street NW, 12th Floor, Atlanta, GA 30303, and within the jurisdiction of this Court. 30. Radio One Atlanta’s commercial-based radio stations operate nationally and can be streamed on the internet from any location via Urban One’s website. 31. Radio One Atlanta engages in interstate commerce. 32. At all times relevant to this Complaint, Urban One, as a national radio and television operator, has engaged in interstate commerce under the FLSA, 29 U.S.C. § 203(s). 33. Upon information and belief, Urban One’s annual gross volume of sales made or business done is not less than $500,000. 34. Upon information and belief, under 29 U.S.C. §§ 201 et seq., and the cases interpreting the same, Urban One constitutes an enterprise engaged in commerce. 35. At all relevant times, Urban One was Plaintiffs’ employer as defined by the FLSA, 29 U.S.C. § 203(d), the EPA, 29 U.S.C. § 203(d), and Title VII, 42 U.S.C. § 2000e(b). 36. As the current employer of Ms. Lucas, Urban One has the power to hire and fire Ms. Lucas, supervise and control her work schedules, determine her pay rate, and maintain her employment records. 37. As the former employer of Ms. Hinton, Urban One had the power to hire and fire Ms. Hinton, supervise and control her work schedules, determine her pay rate, and maintain her employment records. 38. At all relevant times, Ms. Lucas and Ms. Hinton were Urban One’s employees as defined by the FLSA, 29 U.S.C. § 203(e), the EPA, 29 U.S.C. § 203(e), and Title VII, 42 U.S.C. §2000e(f). 39. David Smith, also known as “Hurricane Dave,” (hereafter, “Smith”) was the former Vice President of Programming and Operations at Radio One Atlanta. 40. Smith was employed by Urban One Atlanta from 2007 until August 2019. FACTS Unpaid Overtime Collective Action Allegations 41. Plaintiffs bring this action on behalf of themselves and similarly situated current and former employees of Urban One who elect to opt-in to this action pursuant to the FLSA, 29 U.S.C. §§ 201 et seq., and specifically, the collective action provision of 29 U.S.C. § 216(b), to remedy violations of the wage and hour provisions of the FLSA by Urban One that have deprived Plaintiffs and others similarly situated of their lawfully earned overtime wages. 42. In particular, Plaintiffs bring this suit on behalf of the following similarly situated persons: All current and former board operators, production assistants, or individuals in similar positions that work or have worked for Urban One radio stations within the statutory period covered by this Complaint, have worked in excess of forty (40) hours per week and not been paid legally mandated overtime rates, and who elect to opt-in to this action pursuant to the FLSA, 29 U.S.C. § 216(b). 43. In or around August 2012, Ms. Lucas was hired to work as a production assistant for Radio One Atlanta, a division of Urban One. 44. In or around July 2012, Ms. Hinton was hired to work as a board operator and production assistant for Radio One Atlanta, a division of Urban One. 45. As production assistants and board operators, the primary duties of Plaintiffs and those similarly situated involved assisting with the production of radio shows on Urban One radio stations. 46. This production involved assigning commercials to on-air personalities, assisting guests on the radio shows, ensuring that commercials play and that shows come back on time, verifying that commercials and other media files were properly uploaded and organized on Radio One’s internal systems, compiling audio files, and other tasks related to the timing of sound production associated with various Urban One radio shows. 47. Thus, Plaintiffs and putative collective action class members are similar because they were or are, employed by Urban One as board operators, production assistants, or in similar positions that primarily involve preparing the timing of the audio for radio broadcasts at Urban One radio stations, they were hourly employees, and they worked overtime but did not receive overtime compensation at a rate of one and one-half times their regular rate of pay within the statutory period. 48. The primary job duties of Plaintiffs and those similarly situated do not involve the exercise of discretion and independent judgment. 49. The primary job duties of Plaintiffs and those similarly situated do not involve administrative support for Urban One’s general business operations. 50. The primary job duties of Plaintiffs and those similarly situated do not include managerial responsibilities or the exercise of independent judgment. 51. Plaintiffs and those similarly situated have no power to hire, fire, or discipline other employees. 52. The daily work of Plaintiffs and those similarly situated is and has always been heavily controlled by their managers, including individuals like Myron Gigger, as well as by Dave Smith, the former Vice President of Operations at Radio One Atlanta. 53. Plaintiffs and those similarly situated had and have no involvement in scheduling, as schedules for Urban One were set by managers. 54. The primary job duties of Plaintiffs and those similarly situated do not require any special license, certification, or education. 55. The primary job duties of Plaintiffs and those similarly situated do not require creative invention or imagination or allow for wide creative license. 56. While Plaintiffs have both appeared “on-air” on Radio One Atlanta stations, managers and Smith had ultimate authority and control regarding the radio stations’ programming and content. Any “on-air” activity was not a primary duty of Plaintiffs’ employment. 57. At all times relevant to this Complaint, Plaintiffs and those similarly situated have been classified as non-exempt hourly, rather than a salaried, employees. 58. Ms. Lucas was hired in August 2012 at a rate of approximately $12.82 per hour and, after more than seven years of employment, continues to make approximately $12.82 per hour. 59. Ms. Hinton worked as an unpaid intern with Radio One Atlanta from in or around 2005 to in or around 2012. 60. Ms. Hinton was hired to be a paid employee of Urban One in July 2012 and was terminated by Urban One in May 2018. 61. During her time as an employee at Radio One Atlanta, Ms. Hinton was paid between approximately $10.00 and $12.32 per hour. 62. In the three years prior to the filing of this action, Plaintiffs and those similarly situated regularly worked more than forty (40) hours per workweek. 63. In their history of employment with Urban One, Plaintiffs and those similarly situated have never been paid at the overtime rate of one and one-half times their regular rates for hours worked above forty (40) in a given workweek. 64. Ms. Lucas’ pay stubs reflect that the hours she worked in excess of forty (40) hours per week were classified as “Regular” hours, such that Plaintiff Lucas was listed as having worked 100 “Regular” hours in a two-week pay period and received her normal $12.82 for each of the 100 hours worked. 65. Plaintiff Hinton’s pay stubs reflect that the hours she worked in excess of forty (40) hours per week were classified as “Regular” hours, such that Plaintiff Hinton was listed as having worked 110 “Regular” hours in a two-week pay period and received her normal rate, at the time, of $11.50 for each of the 110 hours worked. 66. The pay stubs for Ms. Lucas also list some hours as “Overtime” hours; however, Ms. Lucas was paid “half-time” for these hours, such that Ms. Lucas was paid approximately $6.40 per hour for these “Overtime” hours. 67. The pay stubs for Ms. Hinton also list some hours as “Overtime” hours; however, Ms. Hinton was paid “half-time” for these hours, such that Ms. Hinton was paid approximately $6.16 per hour for these “Overtime” hours. 68. Upon information and belief, Plaintiffs and those similarly situated worked in excess of forty (40) hours per week but Urban One had a policy of classifying their overtime hours as “Regular” hours and of paying them “straight time” rather than the legally mandated overtime rate of one and one-half times their regular rates or classifying hours as “Overtime” but paying them “half-time” for those hours. 69. For all hours worked above forty (40) hours in a workweek, Plaintiffs and those similarly situated are entitled to overtime wages of one-and-one-half times their “regular rate of pay,” defined as their total pay for the workweek divided by the number of hours worked. 29 C.F.R. § 778.118. 70. Upon information and belief, as part of its regular business practice, Urban One intentionally, willfully, and repeatedly engaged in a policy, pattern, and/or practice of violating the FLSA’s overtime provision. 71. At all relevant times, Urban One knew or should have known that its wage and hour practices were illegal, and that the FLSA required it to pay its employees an overtime premium for hours worked in excess of forty (40) hours per workweek, yet it continued and continues to violate the FLSA. 72. The net effect of Urban One’s unlawful policy and practice is that Defendant enjoyed ill-gained profits at the expense of Plaintiffs and those similarly situated. Individual Disparate Pay Allegations Desiree Lucas 73. In or around August 2012, Ms. Lucas was hired at a rate of approximately $12.82 per hour. 74. Upon her hire in 2012, Ms. Lucas was told by her supervisor, Smith, that she would receive a raise within ninety (90) days. 75. In her seven years at Urban One, Ms. Lucas has never received a 76. In or around February of 2018, Ms. Lucas complained to Tim Davies, the Regional Vice President of Urban One, that she was not receiving adequate 77. Mr. Davies then told Ms. Lucas that if she was unhappy with her $12 an hour pay rate, she should “go somewhere else.” 78. Upon information and belief, other similarly situated male employees, including but not limited to Dante Stewart, make more than $12.82 an hour for the same work as Ms. Lucas. 79. Upon information and belief, similarly situated male employees have asked Tim Davies for a raise, or for better pay, and have received more favorable responses than Ms. Lucas. 80. Upon information and belief, Urban One discriminated against Ms. Lucas based on her sex by paying similarly situated male employees greater wages and compensation. 81. Unlike similarly situated male employees, Ms. Lucas received the same hourly pay of $12.82 for the past seven years and was never given a pay increase. 82. Conversely, upon information and belief, similarly situated male employees have been provided pay increases in their tenure at Urban One. Dominique Hinton 83. In or around September 2005, Ms. Hinton began working as an unpaid intern at Radio One Atlanta. 84. In or around July 2012, Ms. Hinton was hired as a paid employee at a rate of approximately $10.00 per hour. 85. In her six years at Radio One Atlanta, Ms. Hinton’s hourly pay, including when she was working as a board operator for the Ricky Smiley Morning Show, ranged from approximately $10.00 an hour to only $12.32 an hour. 86. Upon information and belief, other similarly situated male employees, including but not limited to John Marshall, made more than $12.32 an hour for the same work that Ms. Hinton engaged in. 87. Upon information and belief, Urban One discriminated against Ms. Hinton based on her sex by paying similarly situated male employees greater wages and compensation. 88. Upon information and belief, unlike similarly situated male employees, Ms. Hinton was given a pay increase of less than $2.50 in approximately six years of employment with Defendant. 89. Conversely, upon information and belief, similarly situated male employees have been provided larger pay increases in their tenure at Urban One. Individual Title VII Allegations Dominique Hinton 90. Ms. Hinton worked as an unpaid intern for Radio One Atlanta from approximately 2005 to 2012. 91. In or around July 2012, Ms. Hinton was hired to be a board operator for Radio One Atlanta. 92. Soon after she began working as a board operator, Ms. Hinton was subject to sexual harassment by Smith, who was the Vice President of Programming and Operations at Radio One Atlanta, and one of Ms. Hinton’s supervisors. 93. Smith had the power to hire, fire, and discipline Ms. Hinton. 94. Smith regularly told Ms. Hinton that her body and her lips “looked really good,” and that she looked like she would be a good kisser. 95. On one occasion, Smith called Ms. Hinton into his office, and told her to turn around. When Ms. Hinton asked if she had something on her clothes, he told her, “No, I just wanted to get a good look at that,” referencing her backside. 96. During weekly air checks with Ms. Hinton, Smith told her, “I think about you. Do you think about me?” Smith also asked her, “What’s your favorite sex position?” 97. At these air checks, Smith also asked Ms. Hinton, “Do you like giving or getting head?” and also told Ms. Hinton, “I think about you when I’m having sex with my wife.” 98. Unsure of how to deal with these comments, and unaware of any sexual harassment policy at Urban One, Ms. Hinton told her direct supervisor, Mitch Henry, about Smith’s comments and harassment. 99. Upon information and belief, Mitch Henry did not further report Ms. Hinton’s complaints. 100. Upon information and belief, Mitch Henry and other managers at Radio One Atlanta had never received sexual harassment training from Urban One. 101. On another occasion in November 2014, Smith, while in an elevator at Radio One Atlanta, pushed Ms. Hinton against the wall of the elevator and forcibly kissed her. Ms. Hinton blocked Smith with her arms. 102. When the elevator arrived in the garage at Radio One Atlanta, Smith told Ms. Hinton, “If you scratch my back, I’ll scratch yours.” Ms. Hinton understood Smith to be propositioning her for sex in exchange for career advancement and opportunities. In response, Ms. Hinton played dumb, as if she did not understand his implications, thus rejecting his advances. 103. In response to this rejection, Smith began gradually reducing Ms. Hinton’s hours, giving her less work and therefore less income. 104. Smith continued to make sexually harassing comments in the workplace, and eventually asked Ms. Hinton if she was a lesbian. 105. Ms. Hinton continued to reject Smith’s advances. 106. In or around 2016, Smith also learned that Ms. Hinton had a boyfriend and was not a lesbian. After learning this information, Smith grew more upset about Ms. Hinton’s rejections. 107. In response to Ms. Hinton’s continued rejections and the knowledge that she was heterosexual, Smith began cutting her hours even more. 108. In addition, Smith passed Ms. Hinton over for “on-air” opportunities. 109. Another male employee at Urban One told Ms. Hinton that she wasn’t getting opportunities at Radio One Atlanta because “she wasn’t fucking.” 110. In April 2018, Ms. Hinton disclosed Smith’s sexual harassment to a member of Urban One’s HR department named Gloria. 111. This HR representative (Gloria) told Ms. Hinton that her reporting would be confidential. 112. Upon information and belief, Urban One conducted a sham investigation into allegations of sexual harassment by Smith in the Spring of 2018. 113. After this “investigation” was apparently completed, Ms. Hinton was told that Smith was being “suspended.” 114. Upon information and belief, Smith’s “suspension” involved being sent on a Tom Joyner “Fantastic Voyage” luxury cruise, paid for by Urban One. 115. Smith returned to work in or around May 2018. Upon his return, Smith indicated to Ms. Hinton that he was aware she had complained about him. 116. Then, at the end of May 2018, a month after she complained to HR, Ms. Hinton was fired by Smith and Urban One. 117. Ms. Hinton was told that she had uploaded the incorrect file for a commercial for the Ricky Smiley Morning Show, causing the broadcast of commercials with incorrect information. 118. However, Ms. Hinton did not upload the incorrect file. Records show that files were altered while Ms. Hinton was out of the office on vacation. 119. Upon information and belief, person(s) working for Urban One tampered with recordings in order to place blame on Ms. Hinton for the broadcast of incorrect information. 120. In addition, other similarly situated individuals had uploaded incorrect files in the past and were not fired for such errors. 121. Smith and Urban One used these recording inaccuracies as a justification for placing Ms. Hinton on final warning and ultimately for firing her. 122. Smith placed Ms. Hinton on final warning in retaliation for her denying his sexual advances and for reporting him for sexual harassment. 123. Smith and Urban One terminated Ms. Hinton in retaliation for her denying Smith’s sexual advances and for her reporting Smith’s sexual harassment. 124. Upon information and belief, Tim Davies, Regional Vice President of Urban One, was aware of allegations that Smith was having sexual relationships with his subordinates in or around January 2016 and did not investigate this allegations nor report them to HR. 125. Instead, Davies pressured Ms. Hinton to remain silent about any allegations that Smith might be engaging in inappropriate sexual behavior with individuals he supervised. Desiree Lucas 126. Ms. Lucas began working for Radio One Atlanta in 2012 as a board operator. 127. Immediately after she began working, Smith, who was her supervisor, took Ms. Lucas to lunch to “discuss career goals.” 128. At this lunch, Smith told Ms. Lucas that he could help her career but that she would have to do something for him. Smith told her, “If you scratch my back, I’ll scratch yours.” 129. Smith made it clear that he was propositioning Ms. Lucas for sex. Ms. Lucas told Smith she would not sleep with him and asked him, “Aren’t you married?” Smith responded, “Everyone cheats.” 130. Upon leaving the lunch, Smith told Ms. Lucas, “This is your last chance.” 131. Unaware of any sexual harassment policy, and never having received any sexual harassment training, Ms. Lucas reported this lunch incident to her direct manager at the time, Otis Tillman. 132. Mr. Tillman did not further report Smith’s harassment. 133. Upon information and belief, Tillman and other managers at Radio One Atlanta had never received training regarding how to handle complaints of sexual harassment in the workplace. 134. Smith’s harassment of Ms. Lucas continued after this first lunch. 135. At their weekly air-checks, Smith frequently told Ms. Lucas that she looked sexy, while looking her up and down. Smith would also frequently comment on Ms. Lucas’ clothes and how good she looked in them. 136. In June 2016, when Ms. Lucas was sick, Smith told Ms. Lucas, “Maybe if you didn’t wear all those skimpy clothes, you wouldn’t get sick.” 137. Ms. Lucas reported this comment to her manager at the time, Myron Gigger. Gigger did not further report Ms. Lucas’ complaint. 138. At the same time, Ms. Lucas also reported this comment to another manager, Monique Hudson. 139. In response, Ms. Hudson contacted an Urban One HR representative and told the representative that there was “something going on” in the Atlanta office that they should investigate and that women in Atlanta didn’t feel comfortable speaking up about what was happening to them. 140. Upon information and belief, in response to Ms. Hudson’s call, Urban One sent an HR representative to the Atlanta office in 2016. 141. However, the HR representative sat alone in a glass-walled conference room, visible to all passerby in the office, and did not interview any individuals in connection with Ms. Hudson’s reporting, and Urban One did not offer employees an opportunity to speak to HR privately. 142. As the conference room had glass walls, anyone who would have spoken to HR about sexual harassment would have been scrutinized by managers, including Smith, and could have faced retaliation. 143. Upon information and belief, Urban One did no further investigation into sexual harassment at Radio One Atlanta in response to Ms. Hudson’s 2016 tip. 144. Two years later, in April 2018, a member of HR (Gloria) contacted Ms. Lucas regarding allegations of sexual harassment at Urban One. Ms. Lucas disclosed the sexual harassment by Smith. 145. Ms. Lucas also told Gloria that Smith had harassed interns and relayed a story of a specific intern who had been harassed. 146. Ms. Lucas told Gloria that, upon looking at an intern’s social media account, Smith asked the intern about a tattoo on her chest and asked if she liked pain during sex. 147. Gloria told Ms. Lucas that her reporting would be confidential. 148. Smith was one of the most powerful individuals in the Radio One Atlanta office. He had the power to hire and fire most employees, and had the power to set work schedules, as well as to offer “on-air” opportunities. 149. After Urban One’s “investigation,” Ms. Lucas was also told that Smith was being “suspended.” However, upon information and belief, Smith served his “suspension” by being sent on a Tom Joyner “Fantastic Voyage” luxury cruise, paid for by Urban One. 150. When he returned, Smith began retaliating against Ms. Lucas. 151. Smith fabricated a story about Ms. Lucas cursing in the break room and pressed Ms. Lucas’ direct manager to put her on a final warning. 152. Smith and Urban One also denied Ms. Lucas a promotion to an “on- air” position with the “Classic” station, to which she applied and was qualified for. 153. Despite Ms. Lucas’ Facebook Live show attracting a wide audience, Smith and Urban One cancelled the show. COUNT I UNPAID OVERTIME WAGES IN VIOLATION OF THE FLSA, 29 U.S.C. § 207 154. Plaintiffs incorporate by reference all preceding and subsequent paragraphs of this Complaint. 155. Urban One is an employer within the meaning of the FLSA, 29 U.S.C. § 203(d). 156. Plaintiffs and those similarly situated are employees within the meaning of the FLSA, 29 U.S.C. § 203(e). 157. Plaintiffs and those similarly situated, during all relevant times, engaged in commerce or in the production of goods for commerce, or were employed in an enterprise engaged in commerce or the production of goods for commerce. 158. The overtime wage provisions set forth in the FLSA apply to Urban One, Plaintiffs, and those similarly situated. 159. 29 U.S.C. § 213 exempts certain categories of employees from minimum wage and overtime obligations. None of these exemptions apply to Plaintiffs and those similarly situated. 160. During the statutory period, Plaintiffs and those similarly situated individuals were employed by Defendant as production assistants, board operators, and similar positions that primarily involved preparing radio broadcasts and commercials for Urban One’s radio stations. 161. The FLSA requires employers to pay for all hours worked. The FLSA, 29 U.S.C. § 207 requires employers to pay employees one and one-half times the regular rate of pay for all hours worked over forty (40) hours per workweek. 162. Urban One’s actions, policies, and/or practices described above violated the FLSA’s overtime requirements by regularly and repeatedly failing to compensate Plaintiffs and the similarly situated individuals for overtime work described in the Complaint. 163. At all times material to this Complaint, Urban One had knowledge that Plaintiffs and those similarly situated were performing work in excess of forty (40) hours per workweek for the benefit of Urban One without overtime compensation, as evidenced by the calculation of pay reflected in Plaintiffs’ pay stubs. 164. Urban One knowingly and willfully failed to pay Plaintiffs and those similarly situated overtime wages as required by the law for each and every hour above forty (40) hours per workweek Plaintiffs and those similarly situated worked for Defendant. 165. Defendant did not have a good faith basis for its failure to pay overtime wages as required by law for all hours worked in excess of forty (40) hours per workweek by Plaintiffs and those similarly situated. 166. As a result of Defendant’s intentional, willful, and unlawful violations of the FLSA, Plaintiffs and those similarly situated are entitled to their unpaid overtime wages in an amount to be determined at trial, an equal amount as liquidated damages, pre-judgment and post-judgment interest, reasonable attorneys’ fees, and costs of litigation, pursuant to 29 U.S.C. § 216(b). COUNT II VIOLATION OF THE EQUAL PAY ACT AS TO MS. LUCAS 167. Plaintiffs incorporate by reference all preceding and subsequent paragraphs of this Complaint. 168. Ms. Lucas is an employee of Urban One, as defined by the EPA, 29 U.S.C. § 203(e)(1). 169. Urban One is an “employer” of Ms. Lucas, as defined by 29 U.S.C. § 203(d). 170. Ms. Lucas is female, and Urban One, in paying Ms. Lucas less than similarly situated males, has discriminated against Ms. Lucas in violation of the 171. Upon information and belief, in refusing to give Ms. Lucas a raise throughout her seven years with the company, while giving raises to comparable male employees, Urban One discriminated against Ms. Lucas in violation of the 172. Ms. Lucas performed the same job as similarly situated male employees that required the same skill, effort, and responsibility. 173. However, Urban One refused to pay Ms. Lucas the same wages and compensation as similarly situated male employees due to Ms. Lucas’ sex in violation of the EPA. 174. Ms. Lucas has been consistently compensated at a lesser hourly rate than her male comparators, even though Ms. Lucas has performed substantially equal or greater work under similar working conditions. 175. Ms. Lucas has also received fewer pay raises, and promises of pay raises, as compared to similarly situated male employees. 176. Urban One’s refusal to compensate Ms. Lucas in an amount equal to that earned by her male comparators was intentional, willful, and done in reckless disregard of Ms. Lucas’ rights as protected by the EPA. 177. As a direct and proximate result of Urban One’s unlawful conduct, Ms. Lucas has suffered damages. 178. As a result of Urban One’s intentional, willful, and unlawful violations of the EPA, Ms. Lucas is entitled to all appropriate damages, remedies, and relief available under the Equal Pay Act for wage violations, including compensation in the amount of the difference between the wages, benefits, and other remuneration that she earned and that which were earned by her male comparators; and additional equal amount as liquidated damages; and reasonable attorney’s fees, court costs, and expenses. COUNT III VIOLATION OF THE EQUAL PAY ACT AS TO MS. HINTON 179. Plaintiffs incorporate by reference all preceding paragraphs of this Complaint. 180. Ms. Hinton was an employee of Urban One, as defined the EPA, 29 U.S.C. § 203(e)(1). 181. Urban One was an “employer” of Ms. Hinton, as defined by 29 U.S.C. § 203(d). 182. Ms. Hinton is female, and Urban One, in paying Ms. Hinton less than similarly situated males, has discriminated against Ms. Hinton in violation of the 183. Upon information and belief, in refusing to give Ms. Hinton a meaningful raise throughout her six years as a paid employee with the company (and over twelve years in total with the company), while giving raises to comparable male employees, Urban One discriminated against Ms. Hinton in violation of the EPA. 184. Ms. Hinton performed the same job as similarly situated male employees that required the same skill, effort, and responsibility. 185. However, Urban One refused to pay Ms. Hinton the same wages and compensation as similarly situated male employees due to Ms. Hinton’s sex in violation of the EPA. 186. Ms. Hinton was consistently compensated at a lesser hourly rate than her male comparators, even though Ms. Hinton performed substantially equal work under similar working conditions. 187. Ms. Hinton also received fewer pay raises, and promises of pay raises, as compared to similarly situated male employees. 188. Urban One’s refusal to compensate Ms. Hinton in an amount equal to that earned by her male comparators was intentional, willful, and done in reckless disregard of Ms. Hinton’s rights as protected by the EPA. 189. As a direct and proximate result of Urban One’s unlawful conduct, Ms. Hinton has suffered damages. 190. As a result of Urban One’s intentional, willful, and unlawful violations of the EPA, Ms. Hinton is entitled to all appropriate damages, remedies, and relief available under the Equal Pay Act for wage violations, including compensation in the amount of the difference between the wages, benefits, and other remuneration that she earned and that which were earned by her male comparators; and additional equal amount as liquidated damages; and reasonable attorney’s fees, court costs, and expenses. COUNT IV RETALIATION IN VIOLATION OF TITLE VII, AS TO MS. HINTON 191. Plaintiffs incorporate every preceding and subsequent paragraph of this Complaint. 192. During all relevant times, Urban One was Ms. Hinton’s employer within the meaning of 42 U.S.C. § 2000e(b). 193. Ms. Hinton was an employee who in engaged in protected speech under Title VII by objecting to and complaining against sexual harassment prohibited by Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e et seq. 194. Ms. Hinton reasonably believed that she and others were being subject to unlawful sexual harassment by Smith. 195. Ms. Hinton objected to Smith’s sexual harassment directly to Smith. 196. After objecting to Smith, and denying his advances, Smith cut Ms. Hinton’s hours so that she received less compensation. 197. Smith, acting for Urban One, cut Ms. Hinton’s hours because she denied his sexual advances. 198. Ms. Hinton complained of Smith’s sexual harassment to her direct manager, Mitch Henry. 199. Ms. Hinton complained of Smith’s sexual harassment to Gloria in HR. 200. One month after Ms. Hinton complained of Smith’s sexual harassment to Gloria in HR, Ms. Hinton was terminated by Smith and Urban One. 201. The above-pled retaliatory conduct towards Ms. Hinton constitutes unlawful retaliation against her in violation of Title VII. 202. As a direct and proximate result of Urban One’s unlawful actions, Ms. Hinton has suffered lost compensation, healthcare, and other benefits of employment. Ms. Hinton has also suffered severe emotional distress, inconvenience, loss of income, humiliation, and other indignities. 203. Urban One and Smith undertook their conduct intentionally and maliciously with respect to Ms. Hinton and her federally protected rights, entitling her to recover punitive damages against them. COUNT V RETALIATION IN VIOLATION OF TITLE VII, AS TO MS. LUCAS 204. Plaintiffs incorporate every preceding and subsequent paragraph of this Complaint. 205. During all relevant times, Urban One was Ms. Lucas’ employer within the meaning of 42 U.S.C. § 2000e et seq. 206. Ms. Lucas is an employee who in engaged in protected speech under Title VII by objecting to and complaining against sexual harassment prohibited by Title VII of the Civil Rights Act of 1964 as amended, 42 U.S.C. § 2000e et seq. 207. Ms. Lucas reasonably believed that she and other women at Radio One Atlanta were being subject to unlawful sexual harassment by Smith. 208. Ms. Lucas objected to Smith’s sexual harassment directly to Smith. 209. Ms. Lucas complained of Smith’s sexual harassment to three different managers at various times: to Otis Tillman in 2012 and to Myron Gigger and Monique Hudson in 2016. 210. In 2018, Ms. Lucas applied for an “on-air” position with the Classic station. 211. Smith denied Ms. Lucas the Classic position in retaliation for her rejection and opposition of his sexual advances and because Ms. Lucas had reported him to other managers. 212. Ms. Lucas complained of Smith’s sexual harassment to Gloria in HR in April 2018. 213. A month after Ms. Lucas complained to Gloria in HR, Smith fabricated a story about Ms. Lucas cursing in the break room in efforts to persuade Ms. Lucas’ manager to put her on a “final warning.” 214. Ms. Lucas maintains that she did not curse in the break room and also that others, such as Smith, cursed regularly in the workplace. 215. In August 2018, Smith cancelled Ms. Lucas’ Facebook Live show in retaliation for her complaints about his sexual harassment. 216. The above-pled retaliatory conduct towards Ms. Lucas constitutes unlawful retaliation against her in violation of Title VII. 217. As a direct and proximate result of Urban One’s unlawful actions, Ms. Lucas has suffered lesser compensation. Ms. Lucas has also suffered emotional distress, inconvenience, loss of income, humiliation, and other indignities. 218. Urban One and Smith undertook their conduct intentionally and maliciously with respect to Ms. Lucas and her federally protected rights, entitling her to recover punitive damages against them. PRAYER FOR RELIEF WHEREFORE, Plaintiffs, individually, and on behalf of all other similarly situated persons, seek an order or orders providing the following relief: (a) Conditional certification of this collective action, and prompt issuance of notice pursuant to 29 U.S.C. § 216(b) to all similarly situated board operators, production assistants, and other similarly situated individuals who worked at Urban One radio stations, nationwide. Such notice should inform them that this civil action has been filed, of the nature of the action, and of their right to join this lawsuit if they worked in excess of forty hours per week and were not paid overtime compensation, and tolling of the statute of limitations; (b) A declaratory judgment that the practices complained of herein are unlawful under the FLSA, the EPA, and Title VII; (c) An injunction prohibiting Defendant from engaging in unlawful employment practices in violation of the FLSA, the EPA, and Title VII; (d) An award of unpaid wages for all overtime hours Plaintiffs and those similarly situated worked under the FLSA at the overtime rate one- and-one-half times Plaintiffs’ and those similarly situated “regular rate of pay,” defined as their total pay for each workweek divided by the number of hours worked pursuant to 29 C.F.R. § 778.118; (e) An award of back pay for both Plaintiffs, including all lost wages and benefits of employment, pay increases Plaintiffs would have received absent unlawful retaliation, including interest, in an amount to be determined at the trial of this case; (f) An award of liquidated damages as a result of Defendant’s willful failure to pay for all overtime hours worked pursuant to 29 U.S.C. § 216(b); (g) An award of liquidated damages for Defendant’s willful violation of the Equal Pay Act; (h) Leave to add additional plaintiffs or opt-ins by motion, the filing of written consent forms, or any other method approved by the Court; (i) An award of prejudgment and post-judgment interest; (j) Compensatory damages, in an amount to be determined by the enlightened conscience of the jury, for Plaintiffs’ emotional distress, suffering, inconvenience, mental anguish, loss of enjoyment of life and special damages; (k) Punitive damages in an amount to be determined by the enlightened conscience of the jury to be sufficient to punish Defendant for its conduct towards Plaintiffs and deter it from similar conduct in the future; (l) An award of costs and expenses of this action along with reasonable attorneys’ and expert fees, and other costs of litigation; and (m) Such other and further relief the Court may deem appropriate. JURY TRIAL DEMAND Pursuant to Rule 38(b) of the Federal Rules of Civil Procedure, Plaintiff demands trial by jury on all issues so triable. Respectfully submitted this 20th day of November, 2019. BUCKLEY BEAL, LLP By: s/ Edward D. Buckley Edward D. Buckley Georgia Bar No. 092750 edbuckley@buckleybeal.com 600 Peachtree Street NE Suite 3900 Atlanta, GA 30308 Telephone: (404) 781-1100 Facsimile: (404) 781-1101 Attorney for Plaintiff

employment & labor

fNtKEIcBD5gMZwczYNQ9

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS SHERMAN DIVISION LEE BURRELL, Plaintiff § § § Civil Action No.: v. § § § CLASS ACTION Complaint for Accommodation Discrimination Under the A.D.A. JURY TRIAL SECOND MAPLE AND MCKINNEY, L.P. and HERMITAGE INVESTMENTS, INC., § § § § Defendants ORIGINAL COMPLAINT, DEMAND FOR JURY TRIAL AND FOR CLASS ACTION 1. Plaintiff, Lee Burrell, brings this action pursuant to Title III of the Americans with Disabilities Act ("ADA"), 42 U.S.C. § 12101 et seq., the Texas Architectural Barrier Act1 (the “TABA”) and the TEX. HUM. RES. CODE § 121.001 et seq. (the “THRC”). This Complaint seeks redress for past and continuing discrimination against persons with disabilities and to bring the premises into compliance with Texas and Federal law including the ADAAG2. This discrimination is occurring at a public accommodation in Dallas, Texas that is a commercial property on McKinney Avenue that has a One Stop Food Store with a small Dickey’s BBQ inside. Plaintiff brings this civil rights claim against the Defendants because Plaintiff and the members of the Proposed Class, by reason of their disability, are being excluded from participation in or being denied the benefits of the services, programs, or activities of and being subjected to discrimination by the Defendants at this property and its public accommodations. 1 Texas Revised Civil Statutes, Article 9102 et seq., (the “TABA”). The TABA is now codified in the Texas Government Code at chapter 469. PLAINTIFF’S ORIGINAL COMPLAINT FOR CLASS ACTION AND DEMAND FOR JURY TRIAL Page 1 of 37 2. Plaintiff seeks to enjoin the Defendants from maintaining and to require that the Defendants remove the architectural barriers that interfere with Plaintiff’s and the Proposed Class’ right to the full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations at the property. 3. Plaintiff also seeks a permanent injunction to prevent the Defendants from engaging in these unlawful practices, as well as declaratory relief, and damages for the violation of Plaintiff’s civil rights and the civil rights of each of the members of the Proposed Class under Texas State law, along with attorney's fees and costs of litigation. JURISDICTION 4. This Court has jurisdiction over the federal claims brought in this action under 28 U.S.C. §1331 and 42 U.S.C. §12188 and supplemental jurisdiction over any state claims pertaining to this discrimination under 28 U.S.C. §1367. PARTIES 5. Plaintiff Lee Burrell is an individual with a disability within the meaning of the ADA Sec. 3(2)(A), 42 U.S.C. 12102(2)(A), and a "Person with a disability" as defined by TEX. HUM. RES. CODE § 121.002(4). He is mobility impaired and uses a wheelchair for mobility. 6. Defendant Second Maple and McKinney, L.P. is a Texas limited liability partnership doing business in Texas. Defendant Second Maple and McKinney, L.P. owns the real property in this case. Second Maple and McKinney, L.P. lists its agent for service of process as Scott G. Damuth located at 2716 West Main Street, Gun Barrel City, Texas 75156. 7. Defendant Hermitage Investments, Inc. is a Texas for profit corporation doing business in 2 Federal ADA Guidelines for Buildings and Facilities, 28 C.F.R. Part 36, Appendix A, (the “ADAAG”). PLAINTIFF’S ORIGINAL COMPLAINT FOR CLASS ACTION AND DEMAND FOR JURY TRIAL Page 2 of 37 Texas and is the general partner of Second Maple and McKinney, L.P. Hermitage Investments, Inc. lists its agent for service of process as a very similar person to the other agent. Hermitage Investments, Inc. lists its agent for service of process as G. Scott Damuth located at 2716 West Main Street, Gun Barrel City, Texas 75156. Second Maple and McKinney, L.P. and Hermitage Investments, Inc. are collectively referred to herein going forward as “Defendant” or “Landlord”. 8. The Property is a commercial property located generally on McKinney Ave. in Dallas, Texas. The Property is more particularly described in Dallas County records as HIGHLAND PARK LAND CO 1 BLK 4/541 LT 5A ACS 0.5445, and has a value of approximately $3.000,000.00. The Defendant purchased the Property approximately 20 years ago. BACKGROUND OF LEGAL CLAIMS 9. More than 25 years ago Congress determined that disabled people, such as the Plaintiff and the Proposed Class, were suffering discrimination. Specifically, Congress found inter alia the following: (a) some 43,000,000 Americans have one or more physical or mental disabilities, and this number is increasing as the population as a whole is growing older; (b) individuals with disabilities continually encounter various forms of discrimination, including outright intentional exclusion, the discriminatory effects of architectural, transportation, and communication barriers, overprotective rules and policies, failure to make modifications to existing facilities and practices, exclusionary qualification standards and criteria, segregation, and relegation to lesser services, programs, activities, benefits, jobs, or other opportunities; (c) the Nation's proper goals regarding individuals with disabilities are to assure equality of opportunity, full participation, independent living, and economic self-sufficiency for such individuals; and PLAINTIFF’S ORIGINAL COMPLAINT FOR CLASS ACTION AND DEMAND FOR JURY TRIAL Page 3 of 37 (d) the continuing existence of unfair and unnecessary discrimination and prejudice denies people with disabilities the opportunity to compete on an equal basis and to pursue those opportunities for which our free society is justifiably famous, and costs the United States billions of dollars in unnecessary expenses resulting from dependency and non-productivity.”3 10. As a result of these findings, the Congress passed the Americans with Disabilities Act (the “ADA”), 42 U.S.C. Sec. 12101 et seq. That act forms the basis for this action. The ADA was designed to do several things, specifically among other things: (a) to provide a clear and comprehensive national mandate for the elimination of discrimination against individuals with disabilities; (b) to provide clear, strong, consistent, enforceable standards addressing discrimination against individuals with disabilities; (c) to ensure that the Federal Government plays a central role in enforcing the standards established in this chapter on behalf of individuals with disabilities; and (d) to invoke the sweep of congressional authority, including the power to enforce the fourteenth amendment and to regulate commerce, in order to address the major areas of discrimination faced day-to-day by people with disabilities.”4 11. In an effort to prevent discrimination against persons with disabilities, Texas passed the Texas Architectural Barrier Act5 (the “TABA”). The intent of the TABA was to make all buildings and facilities covered by that article accessible to and functional for, persons with disabilities to, through, and within their doors. The TABA states, “The provisions of this article are to further the policy of the State of Texas to encourage and promote the rehabilitation of persons with disabilities and to eliminate, insofar as possible, unnecessary barriers encountered 342 U.S.C. 12101(a) Only portions are set out in full so lettering does not match statute. 442 U.S.C. 12101(b). 5 Tex. Civ. Stat. Art. 9102 Sec. 3(b). The TABA was later incorporated into the Tex Gov Code chapter 469. PLAINTIFF’S ORIGINAL COMPLAINT FOR CLASS ACTION AND DEMAND FOR JURY TRIAL Page 4 of 37 by persons with disabilities, whose ability to engage in gainful occupations or to achieve maximum personal independence is needlessly restricted.”6 12. The Texas Accessibility Standards (the “TAS”) adopted as a result of the TABA apply to “a privately funded building or facility defined as a ‘public accommodation’ by Section 301(7) of the Americans with Disabilities Act of 1990, and its subsequent amendments, that is constructed or renovated, modified, or altered on or after January 1, 1992.”7 (emphasis added) 13. The Texas Human Resource Code (the “THRC”) prohibits discrimination against disabled individuals to wit, “Persons with disabilities have the same right as persons without disabilities to the full use and enjoyment of any public facility in the state.” Tex Hum Res. Code 121.003 makes a failure to comply with Chapter 469 of the Government Code or to make reasonable accommodations in policies, practices and procedures an act of discrimination. 14. So both Federal and State laws impose obligations on commercial property owners regarding the disabled. 15. As a result of Plaintiff’s disability, using many public accommodations is already difficult even when architectural barriers have been removed. By failing to comply with the law and by owning or operating non-complying public accommodation, the Defendant continues the discriminatory effects that the laws sought to reform. 16. Under the ADA, both the landlord who owns the building and the tenants who own or operate the places of public accommodation are liable for the violations of the ADA alleged 6 Tex. Civ. Stat. Art. 9102 Sec. 1. 7 Tex. Civ. Stat. Art. 9102 Sec. 2(a)(4). PLAINTIFF’S ORIGINAL COMPLAINT FOR CLASS ACTION AND DEMAND FOR JURY TRIAL Page 5 of 37 herein. As between those parties, allocation of responsibility for complying with the obligations of the ADA may be determined by lease or other contract. 36 C.F.R. 201 (b). 17. Under Texas law the owner of the property is responsible for THRC damages that are conclusively presumed to have occurred when a violation of Chapter 469 has occurred or when an owner fails to make reasonable accommodations to its policies practices and procedures resulting in discrimination at a covered property. 18. Congress provided that the primary enforcement mechanism for the ADA would be private citizens. The State of Texas provided that private citizens have the right to file suit in a court of competent jurisdiction to seek recovery for damages. Thus, private citizens have been given the right to file suit to enforce these civil rights laws to assure access to the public accommodations in Texas. There are simply too many pieces of property for these government agencies to single handedly bring into compliance. 19. The Property is completely under the control of the Defendant. The Plaintiff and the members of the Proposed Class have no control of the Property or the fact that they are disabled. The existence and requirements of 25 year old laws can come as no surprise to any entity owning or operating commercial property. PRE-SUIT NOTICE WAS ATTEMPTED 20. Pre-suit notice is not required under the statutes. Counsel for the Plaintiff did, however, provide such notice and an opportunity for Defendant to resolve this matter. A letter was sent via overnite to the landlord’s agent for service and to the address on the tax role. The letter included a draft copy of this complaint. The letter requested that the Defendant have its counsel contact Plaintiff’s counsel if it wanted to try and resolve this matter outside formal litigation. No PLAINTIFF’S ORIGINAL COMPLAINT FOR CLASS ACTION AND DEMAND FOR JURY TRIAL Page 6 of 37 response was ever received. As a result, this suit has been filed and the Defendant is free to assert whatever defenses it claims to have. 21. At any time prior to receiving the letter and Complaint from the Plaintiff the Defendant could have modified the Property to come into compliance with the more than 25 year old laws and avoided this suit. But the Defendant did not. What the Defendant chose to do instead was to buy, own and operate Property in direct violation of Federal and Texas law and to thereby discriminate against the Plaintiff and the Proposed Class. 22. Plaintiff and the Proposed Class, are now exercising their rights granted by Congress and the State of Texas, to enforce the laws to stop the discrimination and to enforce the statutory penalties for the discrimination the Defendant has caused. FACTS 23. The Property is commercial property with a public accommodation, a convenience store/restaurant, located right on McKinney Ave. The Property has its own parking. There are public transportation stops located right on McKinney Ave and a trolley that runs in front of the Property as well. 24. Plaintiff uses a wheelchair for mobility. Mr. Burrell lives about 10 to 15 minutes from the Property. Mr. Burrell pulled in to the Property to get some BBQ. When he got out he attempted to use the bathroom to wash his hands. The restroom is not accessible. The sink is not accessible. The sink has no clearance for a person in a wheelchair to be able to get under the sink. The sink in the men’s room at the Property is pictured below. PLAINTIFF’S ORIGINAL COMPLAINT FOR CLASS ACTION AND DEMAND FOR JURY TRIAL Page 7 of 37 25. When he went to leave, he found that there was not a sufficient amount of room on the pull side of the door to get out. The door from the restroom is not compliant. A picture of the doorway appears below. PLAINTIFF’S ORIGINAL COMPLAINT FOR CLASS ACTION AND DEMAND FOR JURY TRIAL Page 8 of 37 26. Mr. Burrell was discriminated against by the Defendant at the Property. 27. The problems shown above are not the only barriers at the Property. Despite being right on McKinney with a Trolley running right in front of the Property, there is not an accessible route from the sidewalk into the business on the Property. A picture of the barriers that would be encountered by people entering the Property from the east are pictured below. 28. The entrance from the sidewalk on the west side of the Property is not compliant as well. A picture of the barriers encountered if entering the Property from the west are pictured below. PLAINTIFF’S ORIGINAL COMPLAINT FOR CLASS ACTION AND DEMAND FOR JURY TRIAL Page 9 of 37 29. The law requires and accessible route from the sidewalk to the front door of the business on the Property. The Property does not have an accessible route to the sidewalk. ADAAG 4.3.2 Location. (1) At least one accessible route within the boundary of the site shall be provided from public transportation stops, accessible parking, and accessible passenger loading zones, and public streets or sidewalks to the accessible building entrance they serve. The accessible route shall, to the maximum extent feasible, coincide with the route for the general public. (2) At least one accessible route shall connect accessible buildings, facilities, elements, and spaces that are on the same site. 30. So what we have in this case is a 3 million dollar piece of Property with a convenience store and restaurant that doesn’t have an accessible men’s room or an accessible route from the front door to the sidewalk. The Property was purchased 20 years ago. The building was constructed at the same basic time the Property was purchased by the Defendant. The Property is new construction. The plans for the construction of the Property were never inspected by TDLR. The Property was never inspected by TDLR for compliance after construction. 31. Mr. Burrell, like any disabled person, has encountered these types of barriers countless times over the years. The Property, like so many other properties in the DFW area, does not comply with the accessibility laws. So long as Property like this fails to provide access, the law is thwarted. 32. The law does not require that any plaintiff engage in a futile act to continue to try and patronize businesses so blatantly in violation of the laws designed to allow Mr. Burrell to access PLAINTIFF’S ORIGINAL COMPLAINT FOR CLASS ACTION AND DEMAND FOR JURY TRIAL Page 10 of 37 and use the facility just like the able bodied, however, Mr. Burrell would like to be able to use the Property and would like to return to the Property when it is made compliant. 33. The Defendant has owned and operated this Property without bothering to bring it into compliance that entire time. The undeniable reality is that more than 25 years after the ADA was passed this Property is operating with open and obvious barriers to the disabled public and nothing at all will be done about it until the Plaintiff has hired a lawyer and filed a lawsuit. 34. After discovery when a full review has been conducted, a complete list of the barriers at the Property will be provided to the Defendant. The listing in this Complaint is merely intended to provide the Defendant with information sufficient to conform to the notice pleading requirements and to show facts sufficient to prove liability. 35. The types of architectural barriers that exist at the Property are precisely what the ADA and Texas laws were designed to eliminate. The Plaintiff was discriminated against when he attempted to visit the Property when he encountered the architectural barriers at the Property. The Plaintiff would like to be able to visit the Property and would return to the Property if it were made compliant so that he could park and get in and use the business like an able bodied person can. 36. The Plaintiff and members of the Proposed Class will encounter architectural barriers any time they attempt to visit the Property. The Defendant by failing to remove the architectural barriers discourages the Plaintiff and all members of the proposed class from attempting to use the Property and from enjoying the Property in the same way that the able bodied can. By failing to remove the barriers the Defendant discriminates against the Plaintiff and the mobility impaired individuals who would like to visit the Property. PLAINTIFF’S ORIGINAL COMPLAINT FOR CLASS ACTION AND DEMAND FOR JURY TRIAL Page 11 of 37 37. As a result of the Defendant’s conduct and in order to pursue this matter Plaintiff has retained counsel with more than 29 years of experience, including having been appointed class counsel on several occasions to represent mobility impaired individuals of Texas. The Plaintiff has agreed to pay his attorney a reasonable fee. Pursuant to his statutory rights, Plaintiff will seek to recover his fees and any costs in this litigation from the Defendant if he is the prevailing party in this case and if the Proposed Class is certified counsel will seek fees for their representation as well. NEED FOR CLASS CERTIFICTION 38. ADA Title III cases and cases brought under the THRC are civil rights cases. The discrimination, in general, is the existence of architectural barriers at the properties. The ADA and Texas laws were designed to eliminate those discriminatory barriers over time. The laws require that new locations be designed and constructed in full compliance, and they require that all modifications to existing locations also be made in full compliance.8 The laws are structured so that over time, gradually, all properties will be or become compliant to the maximum extent feasible. 39. It has now been more than 25 years since passage of those laws and compliance has simply not occurred as expected because new construction and modifications are regularly not made in compliance, owners have not voluntarily made readily achievable modifications as the law requires, and, so long as this situation exists and so long as property is purchased and or operated without regard to compliance, compliance will never be achieved. When non- compliant modifications are built into a property and when property is purchased without regard PLAINTIFF’S ORIGINAL COMPLAINT FOR CLASS ACTION AND DEMAND FOR JURY TRIAL Page 12 of 37 to compliance a significant purpose of the law is thwarted because this prevents gradual compliance. 40. For more than 17 years now counsel for the Plaintiff and the Proposed Class, has represented disabled individuals on ADA Title III barrier cases. During that time it has become abundantly clear that individual ADA Title III cases are considered nothing but a nuisance by the vast majority of commercial property owners. The money damages available under state law to an individual seeking enforcement are only $300.00 for each violation. 41. Thus the only “damages” an owner faces in an individual ADA case, above and beyond the costs to “fix”, are the potential attorney’s fees. So property owners are just not concerned about getting caught out of compliance because there is no real consequence. Even in the rare occasion where an owner is caught and sued, the downside amounts to nothing more than doing what they should have already done years ago and possibly paying a “nuisance” attorney fee in addition to resolve the case. 9 In other words, it’s just the cost of doing business if you’re caught. 42. As a result of this situation, commercial property owners have not been motivated over the past 25 years to come into compliance or to be sure whatever modifications they do make are made in compliance, or to make sure that when they buy property that it is compliant and/or that modifications are or were made in compliance. A quick drive around the Metroplex to view the 8 The ADA also imposes an affirmative obligation to make readily achievable modifications to the property. 9 Further, the court is well aware that ADA Title III cases are regularly referred to as “drive by litigation” and the people bringing the cases along with their counsel are subtly smeared as somehow unscrupulous. This situation tends to further decrease compliance. Additionally, this kind of “press” seriously dissuades disabled individuals from raising issues of discrimination lest they be cast as “litigious trouble makers”. This situation in turn prevents any real awareness of how widespread the noncompliance and discrimination still actually is. Filing this as a class makes it clear that this case is serious and that the plaintiff and counsel stand ready to prove all of the allegations contained herein. As a class this case will vindicate the rights of the Proposed Class and will help to raise awareness regarding the problem the members of the Proposed Class face each day. PLAINTIFF’S ORIGINAL COMPLAINT FOR CLASS ACTION AND DEMAND FOR JURY TRIAL Page 13 of 37 general state of compliance in older properties, newer properties, and in the modifications that have been made to both types of properties is enough to show any objective person that the laws are almost universally ignored, misunderstood, or given nothing but lip service. The objective state of compliance that exists, now 25 years later, is strong evidence that the purpose of both the federal and State laws has been substantially thwarted. 43. The Property involved in this case is a perfect example. It is a typical piece of commercial property for the area. It has been owned by the same entity for approximately 20 years. The building on the Property was constructed brand new under the ADA and Texas Access laws, yet despite this, the Defendant fails to meet even the most basic requirements for a path through the facility and for providing an accessible restroom at the Property. 44. Any attempt to come into compliance with the ADA begins with having the Property assessed. And any basic ADA inspection would turn up the existence of the types of barriers that have been shown in this Complaint. Any reasonable due diligence regarding ADA compliance would have found the problems. There open and obvious architectural barriers are violations of the requirements of ADAAG and the TAS10. 45. Either the Defendant has never bothered to have the Property inspected for compliance or the Defendant has ignored any findings of such an inspection. Either way, it is clear that the policies, practices and procedures of the Defendant have not been modified to try to avoid discrimination. Such a set of facts shows without a doubt that the Defendant has not modified its policy, practice and procedure to prevent discrimination at property it owns. 10 The Texas Accessibility Standards. PLAINTIFF’S ORIGINAL COMPLAINT FOR CLASS ACTION AND DEMAND FOR JURY TRIAL Page 14 of 37 46. Further, when notified by letter from counsel of the issues at the location before this suit was filed, the Defendant did not even bother to have their lawyer call the Plaintiff’s counsel. Nothing will change until suit is filed. It cannot be any clearer, there is no concern about being caught out of compliance. 47. Filing this ADA Title III case as a class action instead of as an individual claim will provide anyone who has had their rights violated the opportunity to collect the state mandated $300.00 they are entitled to for each violation, it will provide certainty as to the remediation requirements so that there are not differing legal standards applied against the Defendant regarding what is “readily achievable”, and, by having notice prominently placed at the property during the time for claims, this case will begin to raise awareness about the situation that exists and thereby, over time, help to eliminate it. 48. This is hardly the only property in DFW, or even within a quarter mile of it, that is out of compliance. It has been 25 years. Enough is enough. Property owners need to begin to see that a continued failure to voluntarily comply before being caught can result in consequences beyond the cost of an individual suit. Once this happens, property owners will begin to come into compliance voluntarily before being sued, they will make sure modifications are made in compliance, and they will be careful when purchasing property to be sure it is in compliance, just as the laws intended. 49. For the foregoing reasons filing this ADA Title III case as a class action instead of as an individual claim will ultimately result in less overall litigation in the courts and greater overall access for the Proposed Class in the future. PLAINTIFF’S ORIGINAL COMPLAINT FOR CLASS ACTION AND DEMAND FOR JURY TRIAL Page 15 of 37 50. Therefore the Named Plaintiff now seeks to exercise the full panoply of rights and protections that the law provides by not only seeking broad injunctive relief that will benefit the Proposed Class, but by taking the additional and crucial step of providing for a method to notice and pay the Proposed Class members the conclusively presumed $300.00 nominal state law damages for each civil rights violation if they choose to make application. 51. The Named Plaintiff does not seek a “class fund” and thus the counsel for the Proposed Class is not seeking to benefit from taking any portion of such a fund. The Proposed Class members will each receive 100% of the nominal state law damages. It makes no monetary difference to the Named Plaintiff or the counsel for the Proposed Class whether 20, 50, 100 or 1000 people make claims. The purpose for the monetary damages portion of this case is to raise awareness through posting notice at the Property and on Social Media, and to provide a way for the Proposed Class members, if they so choose, to collect what is a negative value damage award that state law says they are owed as a matter of law. The nominal state law damages are a classic negative value claim and they are simply not sufficient to make it cost effective to file an individual claim for them, thus they cannot not be collected by unnamed members outside of a THE CLAIMS MADE IN THIS CASE SUPPORT CLASS CERTIFICATION 52. In Amchem Products v. Windsor,11 the United States Supreme Court confirmed the propriety of certifying a class, and held that the analysis should focus on “whether the proposed class has sufficient unity so that absent members can fairly be bound by decisions of class 11 Amchem Products v. Windsor, 521 U.S. 591 (1997). PLAINTIFF’S ORIGINAL COMPLAINT FOR CLASS ACTION AND DEMAND FOR JURY TRIAL Page 16 of 37 representatives.”12 The Proposed Class in this case is a civil rights case seeking injunctive relief. The Supreme Court in Wal-Mart Stores, Inc.13 more recently reiterated what it said in Amchem when it stated that, “"[c]ivil rights cases against parties charged with unlawful, class-based discrimination are prime examples” of what (b)(2) is meant to capture.””14 Courts have repeatedly held that a putative class of individuals with disabilities is sufficiently identifiable for purposes of satisfying preliminary requirements of class certification.15 53. The Proposed Class seeks broad injunctive relief that is identical for each member. Further, the negative value monetary damages sought in this case are both identical and conclusively presumed to have occurred as to each member of the Proposed Class. Thus, the prosecution of the liability issues in this case is almost identical whether it is done as a class or as an individual claim. Once the violation is shown for any one claimant, such as the class representative, then the damages flow directly to each claimant who cares to make a claim. As a result, there are no real “class complications” for trial and very limited issues for discovery. 54. Because no class fund is being sought the exact size of the class of persons who would be eligible to make a claim for money damages does not need to be determined, nor could it ever be as in most civil rights cases. All that has to be determined is that a class is proper under Fed. Rules Civ. P. 23. Whether an eligible member chooses to make application for the nominal state law damages is up to them. 12 Id. At 613. 13 Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011). 14 Id. 15 See, e.g., Colorado Cross Disability Coalition v. Taco Bell Corporation, 184 F.R.D. 354 (D. Col. 1999); Davoll v Webb, 160 F.R.D. 142, 143 (D. Col. 1995). PLAINTIFF’S ORIGINAL COMPLAINT FOR CLASS ACTION AND DEMAND FOR JURY TRIAL Page 17 of 37 55. The size of the “proposed class members who would be eligible” is almost always one of the most contentious points in any class seeking payment to members because Class Counsel normally seeks to receive a portion of that amount and so the amount must be set in advance to be placed into a “fund” even though only a small portion of the eligible members in any class ever make claims. But in this case, because Counsel is not seeking to benefit from a fund from which claims will be paid, there is no need for a fund at all. All state law damage claims can simply be paid by the Defendant if, when, and as, proper application is made by someone to a claims fund manager. 56. By declining to benefit from the creation of a “fund”, the Proposed Class Counsel has streamlined the necessary analysis in this case and has eliminated the vast majority of issues for class litigation in this case. 57. The injunctive relief benefits all members, and the “negative value” monetary damages are available equally to any Proposed Class member who cares to make a valid application. If a member of the Proposed Class does not care to make a monetary claim, then the Defendant is out nothing and the member still receives the benefit of the injunctive relief. It simply cannot be any fairer, or any clearer that this Proposed Class should be certified. REQUIREMENTS OF RULE 23(A) ARE MET 58. Plaintiff seeks to maintain this action as a class action under Rule 23(b)(2), or alternatively, Rule 23 (b)(3) of the Federal Rules of Civil Procedure. The Proposed Class would consist of the following: all persons 18 years or older who have a mobility impairment such that they are considered disabled under the ADA and Texas law, and, who were discriminated by the architectural barriers at the Property and or by the Defendant’ failure to modify its PLAINTIFF’S ORIGINAL COMPLAINT FOR CLASS ACTION AND DEMAND FOR JURY TRIAL Page 18 of 37 polices, practices and procedures affecting the Property, and, who could bring a suit against the Defendant for accommodation discrimination at the Property under the ADA and or the THRC, and who do not claim any additional harm that might entitle them to greater than the minimum $300.00 nominal damages set by law for each violation. (hereinafter, the “Proposed Class”). The Requirements of Rule 23(a). 59. The prerequisites to class certification under Fed. R. Civ. P. 23(a) are (1) numerosity; (2) commonality; (3) typicality; and (4) adequacy of representation.16 A district court has substantial discretion in determining whether to certify a class and will be reversed on appeal only for an abuse of that discretion.17 However, “it is important to remember that Rule 23(a) must be read liberally in the context of civil rights suits.”18 The purpose behind this rule is to aid ‘‘small individual claimants who would otherwise be reluctant to bring their claims due to the expense of the litigation.”19 “Niggardliness in determining maintainability must be shunned, for unless class actions are hospitably received into our judicial system, many valid constitutional claims may be stymied.”20 60. Class actions brought pursuant to Title III of Americans with Disabilities Act are regularly found to satisfy the prerequisites for certification under Rule 23(a) and 23(b).21 Further, the instant class action would serve the express purpose of the ADA, to wit, “a clear and 16 Amchem at 613; Mullen v. Treasure Chest Casino, L.L.C., 186 F.3d 620 (5th Cir. 1999). 17 Texaco v. Louisiana Land & Exploration Co., 995 F.2d 43, 44 (5th Cir. 1993). 18 Jones v. Diamond, 519 F.2d 1090, 1099 (5th Cir. 1975). 19 Hawaii v. Standard Oil, 405 U.S. 251, 266 (1972). 20 Diamond, 519 F.2d at 1100. 21 See Neff v. Via Metro Transit Authority, 179 F.R.D. 185, 196 (W.D. Tx. 1998); Arnold v. United Artists Theatre Circuit, Inc., 158 F.R.D. 439, 460 (N.D. Cal. 1994) (modified, 158 F.R.D. 439, 460) (N.D. Cal. 1994); Berlowitz v. Nob Hill Masonic Management No. C-97-01241 M.H.P., 1996 U.S. Dist. LEXIS 25999 (N.D. Cal. December 6, 1996). PLAINTIFF’S ORIGINAL COMPLAINT FOR CLASS ACTION AND DEMAND FOR JURY TRIAL Page 19 of 37 comprehensive national mandate for the elimination of discrimination against individuals with disabilities.”22 This Court should hold that the Proposed Class in this case is sufficiently identifiable and that all prerequisites for class certification have been satisfied. There is Numerosity in the Proposed Class and Joinder of All Members is Impracticable. 61. Rule 23(a)(1) requires that the proponent of a class action demonstrate that “the class is so numerous that joinder of all members is impracticable.”23 Although commonly referred to as a "numerosity" requirement, "Rule 23(a)(1) is an impracticability of joinder requirement, of which class size is an inherent consideration within the rationale of joinder concepts."24 The court need not make specific findings as to the number of persons in the Proposed Class, but rather “may examine statistical data and then draw reasonable inferences from the facts in determining whether the numerosity requirement has been met.’’25 62. The 5th Circuit Court of Appeals has found that the numerosity requirement was met by a class with just 25 members26, and it has held that a class range of 100 to 150 members generally satisfies the requirement.27 It is clear that there is no precise number. 63. The Plaintiff must show “some evidence or reasonable estimate” of the number who are in the purported class.28 The statistical data available in this case regarding the number of 22 42 U.S.C. §12101(b)(l). 23 FED. R. CIV. P. 23(a)(1); see Phillips v. Joint Legislative Comm. on Performance & Expenditure Review, 637 F. 2d 1014,1022 (5th Cir. 1981). 24 HERBERT B. NEWBERG AND ALBA CONTE, NEWBERG ON CLASS ACTIONS, § 3.03, at 3-11 (3d ed.1992). 25 Pottinger V. Miami, 720 F. Supp. 955 (S.D. Fla. 1989)(citing Padron v. FeaVer, 180 F.R.D. 448, 453 (S.D. Fla. 1998)(certifying class of persons denied supplemental security income benefits, and extrapolating from national statistics regarding the number of persons similarly situated). 26See Zeidman v. J.Ray McDermott & Company, Inc., 651 F.2nd 1030, (5th Cir. 1981). 27 Mullen v. Treasure Chest Casinos L.L.C. 186 F.3d 620, 624, (5th Cir. 1999) 28 Zeidman v. J.Ray McDermott & Company, Inc., 651 F.d 1030, 1058 (5th Cir. 1981). PLAINTIFF’S ORIGINAL COMPLAINT FOR CLASS ACTION AND DEMAND FOR JURY TRIAL Page 20 of 37 mobility impaired individuals in the area of the Property is certainly sufficient to meet this standard. The State of Texas Workforce Investment Counsel29 completed a comprehensive evaluation of the number of disabled individuals residing in Texas in 2016 and the information is broken down by county.30 This Report shows that there are approximately 130,000 mobility impaired individuals living in Dallas County.31 64. The 5th Circuit Court of Appeals has found that although the numerosity requirement would not be met by a class with 20 members, it was met by a class with 317 members,32 and that a potential class of 580 individuals who had their property demolished without adequate notice satisfied the numerosity requirement.33 65. If only 1% of the disabled individuals in Dallas County are affected, that is still more than sufficient to show numerosity. Further records show that Dallas County is approximately 900 square miles. Therefore if the location draws only from 1.5 miles in each direction, that is 1% of Dallas County. 1.5 + 1.5 = 3. 3 miles north south and 3 miles east west is 3x3 or 9 square miles. That is 1%. It is not credible to argue that the Property does not draw people from at least that far away. Clearly, numerosity is met in this case. 66. The discrimination in this case has been occurring for many years. The vast majority of the people who have been discriminated against will never be found and the statute of limitations 29The Texas Workforce Investment Council (“The Council”) was created in 1993 by the 73rd Texas Legislature. As an advisory body to the Governor and the Legislature, the Council assists with strategic planning for and evaluation of Texas’ workforce system. 30 See People with Disabilities: A Texas Profile. The Texas Workforce Investment Council 2016. Link to pdf provided here: https://gov.texas.gov/uploads/files/organization/twic/Disabilities_Profile.pdf 31 Id. 32 Boykin v. Georgia-Pacific Corp., 706 F.2d 1384, 1386 (5th Cir. 1983). 33 James v. City of Dallas Texas, 254 F.3d 551 (5th Cir. 2001). PLAINTIFF’S ORIGINAL COMPLAINT FOR CLASS ACTION AND DEMAND FOR JURY TRIAL Page 21 of 37 on their state law claim for money damages has passed. However, even beginning just 2 years back from the date of filing of this case means that there are more than 104 weeks already in the class time frame. Even if just one or two mobility impaired persons a week visited the location, the numerosity requirement would also be more than met. The Texas Workforce Data shows that fully 5% of the population is mobility impaired. It cannot be reasonably be argued that fewer than fifty total people visit the Property each week. 5% of 50 is 2.5 people a week. So again, it is clear numerosity is met. 67. Further, the analysis of numerosity in this circuit is not strictly defined by numbers – the analysis includes other factors, among which are whether the proposed class members are identifiable or knowable.34 In this case the members and future members are, for the most part, simply not known or knowable as is the case in virtually every civil rights case. This results from the very nature of the Proposed Class, namely individuals who have been to the Property or who will go before remediation is complete.35 68. The Property contains a convenience store/restaurant and no identification is required to enter. Few if any records exist to identify the people who have gone and none of those will include information to know whether the person was or is disabled. Further, whatever number who did go to the Property does not include the people who were discouraged from going because of the architectural barriers, such as people who were discouraged from even trying to 34 See Penderson v. Louisiana State University, 213 F.3rd 858 (5th Cir. 2000)(Plaintiffs showing of 5000 “potential” class members was significant factor in determining if joinder was practicable.) 35 Id. at 213 F.3d at 868, n. 11. PLAINTIFF’S ORIGINAL COMPLAINT FOR CLASS ACTION AND DEMAND FOR JURY TRIAL Page 22 of 37 go when they saw the paths of travel.36 Any potential class member who visited the Property would have immediately encountered some of the non compliant conditions shown in this Complaint. Many may have simply left and told their friends not to bother going. For all of these reasons this Court should conclude that Fed. R. Civ. P. 23(a)(1)’s numerosity requirement has been satisfied. Commonality is met by the Proposed Class 69. The questions of law and fact in this case between members of the Proposed Class are not just similar, they are identical. The claims made in this case are identical regardless of which disabled claimant brings them. The law sets the requirements for what is compliance and what is an architectural barrier, regardless of the level of disability. As a practical matter there is, therefore, no difference at all between trying the liability issues in an individual ADA Title III case or one brought as a class. 70. Specifically, here are just some of the questions of law and fact common to the Proposed (a) Whether Defendant is in violation of the THRC. (b) Whether Defendant has violated Tex Gov Code Chapter 469. (c) Whether Defendant is in violation of the ADA. (d) What barriers are readily achievable to remove. (e) What modifications have been made to the Property. Typicality is met by the Proposed Class 36 A Plaintiff is not required to engage in a futile act. (The Fifth Circuit appears to have endorsed this theory in Frame v. City of Arlington, 657 F.3d 215, 236 (5th Cir., 2011) (a Title II ADA case), cert. denied, 132 S.Ct. 1561, 182 L.Ed.2d 168 (2012), when it stated that “a disabled individual need not engage in futile gestures before seeking an injunction; the individual must show only that [the inaccessible object or place] affects his activities in some concrete way.”.) PLAINTIFF’S ORIGINAL COMPLAINT FOR CLASS ACTION AND DEMAND FOR JURY TRIAL Page 23 of 37 71. Plaintiff’s claims are typical of the claims of the members of the Proposed Class. The Plaintiff, like other members of the Proposed Class, has a mobility impairment and uses a wheelchair. Plaintiff’s impairment is, for the most part, equal to or worse than the impairments of the unnamed members of the Proposed Class. And once again, the right to relief under the claims is identical for any disabled person. No Plaintiff has, nor could they ever have, a right to relief any different than any other plaintiff or member of the Proposed Class regardless of the level of their disability. Therefore this case presents an ideal situation for a class. Adequacy of Representation is met by the Named Plaintiff and Counsel 72. The named Plaintiff claims that the Defendant has violated the named Plaintiff’s civil rights by, among other things, owning or operating a public accommodation that has architectural barriers in violation of the laws, new construction modifications that fail to comply with the ADAAG and TAS requirements, and/or by failing to have policies, practices, and procedures to prevent discrimination at the Property, and/or has failed to make readily achievable modifications. These failures are a violation of his civil rights and those of all members of the Proposed Class. 73. Plaintiff will fairly and adequately protect the interests of the Proposed Class. Plaintiff has no conflict with the Proposed Class and in fact his interests are identical. The Plaintiff is mobility impaired just as the other members of the Proposed Class. The injunctive and monetary relief the Plaintiff is entitled to is identical to the relief that any other member of the Proposed Class would be entitled to obtain regardless of the level of “impairment”. Plaintiff’s interest is in getting compliance at the Property, assuring compliance in the community at large, raising awareness in the community for the discrimination that has occurred, and if this case goes PLAINTIFF’S ORIGINAL COMPLAINT FOR CLASS ACTION AND DEMAND FOR JURY TRIAL Page 24 of 37 forward, in assuring that each member of the Proposed Class be allowed an opportunity to collect the monetary damages they are owed if they choose to do so. 74. The Plaintiff has retained counsel with previous experience in class action litigation in precisely the same area within which this suit seeks recovery. Palmer Bailey is a lawyer with more than 29 years of litigation experience. He has represented numerous disabled individuals in individual lawsuits similar to this one for more than 17 years. Further, Mr. Bailey has been approved in the Northern District as class counsel for disabled individuals on class action cases virtually identical to this one. Mr. Bailey is therefore particularly well suited to represent the Proposed Class. THIS CLASS IS PROPERLY CERTIFIED UNDER FEDERAL RULE OF CIVIL PROCEDURE 23(b)(2) 75. This action may be maintained as a class action pursuant to Federal Rule of Civil Procedure 23(b)(2) because the Proposed Class seeks injunctive relief that is identical for all members. Defendant’ violations of the ADA are applicable to all members of the Proposed Class equally regardless of the level of disability, or the type of barrier encountered. Therefore the injunctive relief sought in this case is identical as to each member of the Proposed Class. Further, because the damages are nominal damages awarded for the vindication of a civil rights violation that flow directly from the violation they are “incidental” to the injunctive relief sought, and thus proper under the Supreme Court’s most recent analysis in Wal-Mart Stores, Inc. v. Dukes.37 37 Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011). PLAINTIFF’S ORIGINAL COMPLAINT FOR CLASS ACTION AND DEMAND FOR JURY TRIAL Page 25 of 37 76. Because this is a civil rights case with no Class Fund being sought, and because the Proposed Class only seeks to represent individuals who do not have any additional harm beyond nominal damages, this case is as pure of an example of a “Wal-Mart” 23(b)2) with incidental damages flowing directly from the injunctive injury as could be posited. Quite simply, IF a person is a member of the Proposed Class, THEN that person is entitled to receive an identical nominal monetary damage award set by law along with the injunctive relief that is identical for all Proposed Class members with no additional defenses or calculations to be made. 77. The obligation of the Defendant to each member of the Proposed Class is identical and is set by statute. Once discrimination is proved as to one member, discrimination is proved equally as to all members. So clearly this class is appropriate. 78. There are virtually no difficulties associated with operating this case as a class per se beyond the motion to certify it as such. Unlike the vast majority of class actions where damages are being sought for the Proposed Class members, because no Class Fund is being sought here, there is no need for any discovery to determine the exact size of the Proposed Class. The Proposed Class is described and proved under rule 23 and any member who chooses can make a claim. The claims are limited to those individuals who would have their own right to file suit to collect the damages. The notice proposed will focus on providing notice at the Property itself and on social media associated with the Class and the Property. Thereby assuring the best possible notice, and, that the notice is directed at those who actually go to the Property. 79. Because there is no need for significant litigation about the exact size of the Proposed Class or “the fund” because no fund is sought, the case will not require any discovery to determine exactly how many people are eligible to be a class member. The determination of PLAINTIFF’S ORIGINAL COMPLAINT FOR CLASS ACTION AND DEMAND FOR JURY TRIAL Page 26 of 37 whether or not someone meets the qualifications to be in the class in order to receive monetary damages will be made if, when and as someone makes a claim. At that time all that it will be necessary to determine is whether the person is mobility impaired, and whether they went to the Property. Neither determination requires any extraneous legal defenses or complex calculations. Basic medical proof, and a signature under oath by the claimant attesting to his having been to the Property will give rise to a valid claim. If the Defendant cares to challenge that, it can do so at that time through the claims process. 80. Regardless, every member of the class of mobility impaired individuals will received the benefit of the injunctive relief sought. And quite frankly, the case will be conducted on the liability issues in an identical fashion to an individual Title III, THRC claim. This case is therefore an ideal candidate for class certification. ALTERNATIVELY THIS CLASS IS PROPERLY CERTIFIED UNDER FEDERAL RULE OF CIVIL PROCEDURE 23(b)(3) 81. This action may also be maintained as a class action pursuant to Federal Rule of Civil Procedure 23(b)(3) because the questions of law and fact common to the members of the class predominate over any questions affecting only individual members, and a class action is a superior method for the fair and efficient adjudication of the controversy. 82. The injunctive relief that is available in this case is identical for each member regardless of the level of their disability. No person could ever require any greater or lesser “compliance” than any other member. Differences between individual plaintiffs or claimants level of disability or experience at the Property does not change what the Defendant must do in order to comply if PLAINTIFF’S ORIGINAL COMPLAINT FOR CLASS ACTION AND DEMAND FOR JURY TRIAL Page 27 of 37 the barrier is discriminating. Further, the action necessary to bring suit is identical for every Proposed Class member. The facts and the law do not just predominate between the Proposed Class members, the facts and law necessary to prosecute this case are identical between the Proposed Class members. 83. There is no conflict between any class representative or any individual member of the Proposed Class. To the extent that any individual sought to “control the class” there would still be no difference in how the case even could be conducted, because the individual cannot make the Defendant do or not do anything that any other claimant can. 84. There is no other litigation pending against the Defendant on this issue and none is expected. And again, if there was any filed it would not be capable of obtaining any better or different relief than the present case and in all likelihood would be abated by the court pending the outcome of this matter. 85. A class action is a superior method to resolve this claim. This class is needed in order to concentrate the negative value state law damage claims to obtain relief for the Proposed Class that they otherwise would not be able to obtain. Without a class the individual members of the Proposed Class have no way to ever collect the damages they have incurred that are set by statute. The state law claims are only $300.00 per person for each violation. It is not economically feasible to bring a single claim for that amount outside a claim to obtain the injunctive relief or as a class. Even if it were, it would flood the court with basically identical 86. Further, counsel for the Proposed Class is prevented by barratry laws from informing any other potentially harmed plaintiffs outside of class litigation. Thus the only way the members of PLAINTIFF’S ORIGINAL COMPLAINT FOR CLASS ACTION AND DEMAND FOR JURY TRIAL Page 28 of 37 the Proposed Class can find out about, or get an opportunity to collect their damages is through the notice that will be provided in this class action. Without a class, each of the individuals in the Proposed Class will never even learn about, let alone be given the opportunity to collect, the nominal damages the State of Texas has determined they are owed, should they choose to collect 87. Further, it has become clear that even 25 years after this law was passed that it is not taken seriously for the reasons previously set out. A class action will send the clear message that the law is serious and thus raise awareness of the discrimination that is occurring all over DFW. 88. Finally, one of the purposes of a class is to obtain finality on an issue so that a Defendant is not subject to varying standards and requirements. The determination of whether a barrier or condition is compliant is precisely the kind of issue that class actions are designed to resolve so that the Defendant will not face multiple differing standards with which to come into compliance. CAUSES OF ACTION Count 1 ADA - Improper New Construction and or Alterations The ADA in section 12183 defines a form of discrimination under section 12182 as: (1) a failure to design and construct facilities for first occupancy later than 30 months after July 26, 1990, that are readily accessible to and usable by individuals with disabilities, except where an entity can demonstrate that it is structurally impracticable to meet the requirements of such subsection in accordance with standards set forth or incorporated by reference in regulations issued under this subchapter; and (2) with respect to a facility or part thereof that is altered by, on behalf of, or for the use of an establishment in a manner that affects or could affect the usability of the facility or part thereof, a failure to make alterations in such a manner that, to PLAINTIFF’S ORIGINAL COMPLAINT FOR CLASS ACTION AND DEMAND FOR JURY TRIAL Page 29 of 37 the maximum extent feasible, the altered portions of the facility are readily accessible to and usable by individuals with disabilities, including individuals who use wheelchairs. Where the entity is undertaking an alteration that affects or could affect usability of or access to an area of the facility containing a primary function, the entity shall also make the alterations in such a manner that, to the maximum extent feasible, the path of travel to the altered area and the bathrooms, telephones, and drinking fountains serving the altered area, are readily accessible to and usable by individuals with disabilities where such alterations to the path of travel or the bathrooms, telephones, and drinking fountains serving the altered area are not disproportionate to the overall alterations in terms of cost and scope (as determined under criteria established by the Attorney General). 89. Additionally, 36 C.F.R. 406 provides that, “(a) New construction and alterations subject to this part shall comply with the standards for accessible design published as appendix A to this part (ADAAG).” (emphasis added) As such the law requires that both new construction and alterations be built in compliance with the ADAAG new construction standards. 90. The building and facility is new construction under the law. Clearly access into the Property “affects or could affect the usability of the building or facility or any part thereof.” The “accessible” route into the business and the restrooms must be accessible. As shown in the facts section they are not. There is not an accessible route from the front door to the sidewalk at the Property. There is not an accessible men’s room at the Property. It matters not whether the Property had the modification when the Defendant purchased the Property, or whether the Defendant had the Property constructed with the barriers, the Defendant is responsible for owning and operating a public accommodation with non compliant new construction conditions. 91. Further, neither a Plaintiff nor its counsel is free to do a full inspection of a property before filing suit. The items set out in this Complaint show barriers that are clear violations and are clearly new construction. The pleading contained herein is made simply to put the Defendant on notice as required under the rules as to open and obvious modifications which do not comply. PLAINTIFF’S ORIGINAL COMPLAINT FOR CLASS ACTION AND DEMAND FOR JURY TRIAL Page 30 of 37 92. When a piece of commercial property still does not even have proper access to the front door, or an accessible restroom, it is clear that the law is simply ignored. If the law does not require an accessible route and restroom at a 3 million dollar piece of new construction after 25 years, then it is difficult to see what access the law does require be provided. 93. The Defendant discriminates against Plaintiff and the Proposed Class on the basis of a disability in the full and equal enjoyment of the goods, services, facilities, privileges, advantages, and/or accommodations at the Property in that, the Defendant does not afford to Plaintiff or any member of the Proposed Class the full and equal use and or enjoyment of or access to the goods, services, facilities, privileges, advantages, and accommodations available at the Property as required by law because it owns and operates a facility and public accommodation where there are alterations or modifications made after January 26, 1992 that are not accessible to the maximum extent feasible and or where the public accommodation was designed and constructed entirely after January 26, 1992 but does not meet the new construction requirements. 94. As a direct and proximate result of the Defendant owning a public accommodation that has modifications that have not been made in compliance with the law the Defendant has discriminated against the Plaintiff and the Proposed Class. Count 2 Failure to Implement Policies, Practices and Procedures to Prevent Discrimination under the ADA 95. The Property is new construction and has several open and obvious architectural barriers including those listed in the facts section of this Complaint. Any attempt to do the most basic due diligence regarding ADA compliance would discover the barriers. Further, buying, owning and operating a piece of Property with a noncompliant accessible route through the Property is PLAINTIFF’S ORIGINAL COMPLAINT FOR CLASS ACTION AND DEMAND FOR JURY TRIAL Page 31 of 37 clear evidence that there is no policy, practice and procedure in place to avoid discrimination at the Property. 96. One form of discrimination defined by the ADA in 42 U.S.C. §12182(a)(ii) is, (ii) a failure to make reasonable modifications in policies, practices, or procedures, when such modifications are necessary to afford such goods, services, facilities, privileges, advantages, or accommodations to individuals with disabilities, unless the entity can demonstrate that making such modifications would fundamentally alter the nature of such goods, services, facilities, privileges, advantages, or accommodations; 97. Either the Defendant did not do any due diligence to find out if the Property was compliant before having it built or after it was constructed, or it purchased it without doing such due diligence, or it has ignored the findings of any such due diligence. Either the Defendant has policies and procedures in place to be sure the property it owns and operates is compliant or it does not. If it has policies, practices and procedures, then those policies discriminate against the disabled because the barriers demonstrated in this case are open and obvious. 98. The Defendant discriminates against Plaintiff and the Proposed Class on the basis of a disability in the full and equal enjoyment of the goods, services, facilities, privileges, advantages, and/or accommodations at the Property in that, the Defendant does not afford to Plaintiff or any member of the Proposed Class the full and equal use and or enjoyment of or access to the goods, services, facilities, privileges, advantages, and accommodations available at the Property as required by law because the Defendant failed to make reasonable modifications to its policies, practices and procedures to afford such goods, services, facilities, privileges, advantages, or accommodations it offers to individuals with disabilities. PLAINTIFF’S ORIGINAL COMPLAINT FOR CLASS ACTION AND DEMAND FOR JURY TRIAL Page 32 of 37 99. As a direct and proximate result of the Defendant’s failure to modify its policies practices and procedures the Defendant has discriminated against the Plaintiff and the Proposed Class. Count 3 TEX. HUM. RES. CODE – Discrimination under 121.003 (d)(1) for Violation of Texas Government Code Subchapters A and B 100. TEX. HUM. RES. CODE § 121.003(a) provides that persons who are physically disabled have the same right as the able-bodied to the full use and enjoyment of any public facility in the 101. TEX. GOVT. CODE § 469.003 (Vernon 2003) defines one set of public facilities covered by the law, specifically, “a privately funded building or facility defined as a "public accommodation" by Section 301(7) of the Americans with Disabilities Act of 1990 (42 U.S.C. Section 12181), and its subsequent amendments, that is constructed or renovated, modified, or altered on or after January 1, 1992” (emphasis added). As has been shown, the Property was either built brand new or modified after 1993 and is therefore covered under Texas law. 102. The State of Texas, Texas Accessibility Standards (the “TAS”) of the Architectural Barriers Act, Article 9102, Texas Civil Statutes, are similar to and closely track the ADAAG. Article 9102 was simply codified into Chapter 469 of the Government Code in 2003. 103. The TAS clearly sets out certain requirements for public accommodations such as the Property with regards to design requirements. The TAS are the state equivalent to the ADAAG. 104. TEX. HUM. RES. CODE § 121.003(d)(1) defines one form of discrimination as a failure to comply with Chapter 469 of the Government Code. Owning covered property where modifications have been made or it was built new and fails to comply with TAS is a violation of Chapter 469 and therefore a violation of 121.003. The Property was built new or modified as set PLAINTIFF’S ORIGINAL COMPLAINT FOR CLASS ACTION AND DEMAND FOR JURY TRIAL Page 33 of 37 out in the facts section of this Complaint. The accessible route through the facility and to the sidewalk is not compliant with the ADA or Texas law. The restroom is not compliant. The known barriers demonstrate violations of the TABA or Chapter 469 of the Government Code. Under the law, the owner of the Property is responsible for those violations. The Property is covered. A violation of 121.003(d)(1) has been shown. 105. TEX. HUM. RES. CODE § 121.004(b) states that any violation of 121.003 is deemed to have deprived a person with a disability of his or her civil liberties. The person with a disability so deprived of his or her civil liberties is then given the right to maintain a cause of action for damages in any court of competent jurisdiction, and there is a conclusive presumption of damages in the amount of no less than $300 deemed in favor of the plaintiff for that violation. 106. The Defendant’s failure to comply with Chapter 469 of the Gov Code by owning covered property that was constructed as new but does not comply with the new construction requirements or where modifications have been made but the modifications were not made in compliance with the Texas Accessibility Standards when such compliance was required is deemed to be a violation of Texas law 121.003(d)(1) and Defendant is conclusively presumed to have damaged the Plaintiff and every member of the Proposed Class in the amount of no less than $300.00 for this violation. PLAINTIFF’S ORIGINAL COMPLAINT FOR CLASS ACTION AND DEMAND FOR JURY TRIAL Page 34 of 37 Count 5 TEX. HUM. RES. CODE – Discrimination under 121.003 (d)(2) 107. TEX. HUM. RES. CODE § 121.003(a) provides that persons who are physically disabled have the same right as the able-bodied to the full use and enjoyment of any public facility in the 108. TEX. GOVT. CODE § 469.003 (Vernon 2003) defines one set of public facilities covered by the law, specifically, “a privately funded building or facility defined as a "public accommodation" by Section 301(7) of the Americans with Disabilities Act of 1990 (42 U.S.C. Section 12181), and its subsequent amendments, that is constructed or renovated, modified, or altered on or after January 1, 1992” (emphasis added). The Property has been modified after 1993 and is therefore covered under Texas law. 109. TEX. HUM. RES. CODE § 121.003(d)(2) defines one form of discrimination to be a failure to make reasonable modifications to policies, practices and procedures. This provision basically tracts the violation set out in the previous section regarding the ADA failure to maintain policies practices and procedure. The pertinent portions of that pleading section are fully incorporated 110. The Defendant’s conduct in buying, owning and operating a property which has open and obvious violations such as a non compliant parking and no accessible route through the facility demonstrates a failure to make reasonable accommodation in its policies, practices and procedures to prevent discrimination at the Property and that failure is a violation of section 121.003(d)(2). PLAINTIFF’S ORIGINAL COMPLAINT FOR CLASS ACTION AND DEMAND FOR JURY TRIAL Page 35 of 37 111. The Defendant’s failure make reasonable accommodations to its policies, practices and procedures that results in discrimination is a violation of 121.003(d)(2) against the Plaintiff and each member of the Proposed Class. 112. TEX. HUM. RES. CODE § 121.004(b) states that any violation of 121.003 is deemed to have deprived a person with a disability of his or her civil liberties. The person with a disability so deprived of his or her civil liberties is then given the right to maintain a cause of action for damages in any court of competent jurisdiction, and there is a conclusive presumption of damages in the amount of no less than $300 deemed in favor of the plaintiff for that violation. 113. Thus the Defendant’s failure to make reasonable accommodation to its policies, practices and procedures is deemed to be a violation of Texas law 121.003(d)(2) and Defendant is conclusively presumed to have damaged the Plaintiff and every member of the Proposed Class in the amount of no less than $300.00 for this violation. REQUEST FOR RELIEF Wherefore Plaintiff respectfully requests that the Court grant the following relief: 114. An order directing Defendant to bring any modifications that are new construction at the Property into full compliance with both Federal and State law. 115. An order to remove the architectural barriers that are readily achievable to remove. 116. An entry of money judgment against the Defendant, awarding Plaintiff the statutory minimum damages of three hundred ($300) dollars for the violation of his civil rights under TEX. HUM. RES. CODE § 121.003(d)(1), and for three hundred dollars ($300) for the violation of his civil rights under TEX. HUM. RES. CODE § 121.003(d)(2), and for such further amount for his PLAINTIFF’S ORIGINAL COMPLAINT FOR CLASS ACTION AND DEMAND FOR JURY TRIAL Page 36 of 37 time and expense in the prosecution of this cause as a named plaintiff as shown by the evidence at trial should he be named as Class Plaintiff. 117. An award to each member of the Proposed Class who makes proper application for the statutory minimum damages provided for the violation of their civil rights under TEX. HUM. RES. CODE § 121.003(d)(1) and for three hundred ($300) dollars for the violation of their civil rights under TEX. HUM. RES. CODE § 121.003(d)(2), by the Defendant. 118. An award to Plaintiff and the Proposed Class for attorney’s fees, including litigation expenses, and costs. 119. An award to Plaintiff and to members of the Proposed Class for all other relief at law and in equity for which the Court deems appropriate. Respectfully submitted ____________, 2018, by, /s/Palmer D.Bailey Mr. Palmer D. Bailey Bar Card No. 01533400 Law Office of Palmer Bailey 1400 Preston Road, Suite 400 Plano, TX 75093 Tel. 972.560.4095 Fax. 972.560.4096 pdbaileyesq@gmail.com Attorney for Plaintiff and the Proposed Class Plaintiff and the Proposed Class demand a trial by jury. PLAINTIFF’S ORIGINAL COMPLAINT FOR CLASS ACTION AND DEMAND FOR JURY TRIAL Page 37 of 37

discrimination

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Plaintiff, CLASS ACTION COMPLAINT AND JURY DEMAND V. Defendants. PRELIMINARY STATEMENT 1. Plaintiff Jennifer Rossman, an individual with a mobility disability who uses a JURISDICTION 2. The Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1331 for civil 3. This Court has supplemental jurisdiction over claims based in New York State Law 4. Declaratory and injunctive relief are sought under 28 U.S.C. § § 2201 and 2202. 1 VENUE 5. Venue in the Northern District of New York is proper under 28 U.S.C. $1391, as it PARTIES 6. Plaintiff, Jennifer Rossman, is a resident of Oneonta, New York. 7. Plaintiff has a mobility disability that substantially limits one or more of her major 8. Plaintiff uses a wheelchair for mobility. 9. The Defendant, DOLLAR GENERAL CORPORATION, is a foreign corporation 10. The Defendant, DOLLAR GENERAL CORPORATION, has a principal place of 11. The Defendant, DOLGENCORP of NEW YORK, INC., is a foreign corporation 12. The Defendant, DOLGENCORP of NEW YORK, INC., has a principal place of 13. Collectively, the Defendants operate a retail business establishment known as STATUTORY AND REGULATORY FRAMEWORK 14. On July 26, 1990, President George H.W. Bush signed into law the ADA, a 2 15. The ADA broadly protects the rights of individuals with disabilities in 16. Title III of the ADA prohibits discrimination in the activities of places of public 17. Title III of the ADA requires places of public accommodation to comply with 18. Defendants are required to remove existing architectural barriers when such 19. If there has been an alteration to Defendants' places of public accommodation 20. If the Defendants' facilities were designed and constructed for first occupancy 21. New York State's Human Rights Law and Civil Rights Law provide similar 22. New York State Law requires that places of public accommodations remove 3 23. Additionally, all New Yorkers with disabilities are entitled under New York State 24. Defendants own, operate, control and/or lease places of public accommodation. 25. The ADA and New York State Law impose on the Defendants a mandatory 26. Defendants' facilities are not fully accessible to individuals who use wheelchairs. 27. Defendants' facilities are not independently usable by individuals who use STATEMENT OF FACTS THE NAMED PLAINTIFF 28. Plaintiff relies on a wheelchair for mobility. 29. Plaintiff uses her wheelchair at home and in the community. 30. On or about June 3, 2017, Plaintiff visited Dollar General Store #10652, ("Store 31. Plaintiff could not navigate in her wheelchair around Store #10652 because there a. merchandise stacked on the floor and in aisles, b. large stocking carts placed at the ends of aisles blocking or narrowing the aisle pathway, C. cardboard merchandise displays blocking or narrowing the aisle pathway, and 4d. items arranged outside the store which blocked the curb ramp from the parking lot to the entrance. 32. The impediments and obstacles listed in Paragraph 33 prevented Plaintiff from 33. On July 18, 2017, on behalf of the Plaintiff, Disability Rights New York 34. On August 8, 2017, Defendants sent a letter to DRNY which said that "each aisle 35. Further, the August 8th letter stated that "[s]tore employees were reminded to 36. Defendants also advised DRNY that they would remove stocking carts kept in 37. Plaintiff went to Store #10652 again on or about October 13, 2017. 38. During the October 2017 visit, Plaintiff could not navigate her wheelchair around 39. During her October 2017 visit to Store #10652, Plaintiff encountered physical 40. Defendants' Store #10652 continues to be inaccessible to Plaintiff. 5 FACTS PERTAINING TO THE CLASS 41. Defendants own and operate over 14,500 Dollar General stores in 44 states across 42. Defendants operate over 325 Dollar General stores in New York State. 43. Between November 2017 and January 2018, DRNY visited and documented 44. At least 75 of Defendants' stores have aisles with overflow merchandise or 45. At least 61 of Defendants' stores have aisles narrower than the minimum 46. At least 31 of Defendants' stores have level changes, including, a. level changes greater than half an inch, b. no curb ramps or bevels, and c. inaccessible sloped entrance ramps. 47. At least nine of Defendants' stores have designated accessible parking that either, a. does not connect to an exterior accessible route, or, b. impermissibly utilizes the vehicular way in lieu of an exterior accessible route, or c. does not connect to an exterior accessible route and utilizes the vehicular way in lieu of an exterior accessible route. 48. In at least 29 of Defendants' stores, the drinking fountain is blocked for one or more a. merchandise is stacked in front of or on top of the drinking fountain, 6 b. the route to the drinking fountain is blocked by merchandise, or C. the drinking fountain itself is installed in an inaccessible location. 49. At least 28 of Defendants' stores have merchandise or other materials blocking the 50. At least seven of Defendants' stores have emergency egresses which have at least a. steps, b. sliding bolts greater than five feet from the floor securing the egress door, or c. egress doors obstructed or blocked by merchandise. 51. At least six of Defendants' stores have doors with one or more inaccessible feature, a. too heavy, b. require an inaccessible amount of force to open, C. close too hard, or d. close too fast. 52. Plaintiff and other similarly situated individuals are unable to patronize Store 53. Plaintiff and other similarly situated individuals are unable to fully and safely 54. Plaintiff intends to return to Defendants' Dollar General stores. 55. So long as Defendants' inadequate ADA compliance policies and practices remain 7 56. Without injunctive relief, Defendants continue to discriminate against Plaintiff and CLASS ALLEGATIONS 57. Plaintiff brings this class action on behalf of herself and all others similarly situated 58. The named Plaintiff and each member of the class have a mobility disability that 59. The named Plaintiff and each member of the class are individuals with a physical 60. The class is SO numerous that joinder of all members in one action would be 61. There are questions of law and fact common to Plaintiff and members of the class. a. Whether Defendants operate places of public accommodation and are subject to Title III of the ADA and its implementing regulations; b. Whether Defendants are subject to New York Executive Law $296, and New York Civil Rights Law §§ 40 and 40-c; 8C. Whether storing merchandise in aisles and outside of the store makes the stores inaccessible to Plaintiff and class members; d. Whether storing merchandise in the bathroom and around egress doors makes the stores inaccessible to Plaintiff and class members; and e. Whether Defendants' storage, stocking and setup policies and practices discriminate against Plaintiff and class members. 62. The claims of the Plaintiff are typical of the claims of the class members because 63. Individuals with mobility disabilities who use wheelchairs or other devices, 64. Plaintiff seeks injunctive relief to ensure Defendants are enjoined to change their 65. By pursuing her interest in relief, Plaintiff will advance the interests of all class 66. Plaintiff will fairly and adequately protect the interests of the class because she has 9 67. There are no conflicts of interest between the Plaintiff and class members, and 68. Defendants have acted and will act on grounds generally applicable to each member 69. A class action is superior to other available methods for the fair and efficient 70. Without a class action, Defendants will likely continue their policy and practice of FIRST CAUSE OF ACTION THE AMERICANS WITH DISABILITIES ACT 42 U.S.C. §§ 12111-12213 71. Plaintiff re-alleges and incorporates herein all previously alleged paragraphs of the 72. Plaintiff is an individual with a mobility disability which results in a physical 73. As a result of her disability, Plaintiff relies on a wheelchair for mobility. 74. Plaintiff is a qualified individual with a disability within the meaning of 42 U.S.C. 75. Title III of the Americans with Disabilities Act prohibits discrimination against 76. The ADA requires that places of public accommodation comply with accessibility 10 77. Defendants' Dollar General stores are places of public accommodation as defined 78. Defendants discriminate against Plaintiff and other individuals with disabilities 79. Defendants do not alter, design, construct, or maintain Dollar General stores to 80. Defendants' conduct is ongoing, making declaratory and injunctive relief against SECOND CAUSE OF ACTION THE NEW YORK STATE HUMAN RIGHTS LAW N.Y. EXECUTIVE LAW § 296(2) 81. Plaintiff re-alleges and incorporates herein all previously alleged paragraphs of the 82. The New York State Human Rights Law violations alleged herein are related to the 83. The New York State Human Rights Law makes it unlawful for an owner of a place 1184. Plaintiff is an individual with a disability within the meaning of Executive Law 85. Discrimination under N.Y. Executive Law § 296 includes an owner's refusal to 86. Defendants are subject to N.Y. Executive Law § 296 because Dollar General stores 87. Defendants fail to remove architectural barriers in their places of public 88. Defendants discriminate against Plaintiff and other individuals with disabilities by 89. Because Defendants' discriminatory and unlawful conduct is ongoing, declaratory 12 THIRD CAUSE OF ACTION N.Y. CIVIL RIGHTS LAW §§ 40, 40-c 90. Plaintiff re-alleges and incorporates herein all previously alleged paragraphs of the 91. The New York State Civil Rights Law violations alleged herein are related to the 92. All persons in New York State are entitled to the full and equal accommodations, 93. Plaintiff is a person entitled to the protections of N.Y. Civil Rights Law § § 40, 40- 94. It is unlawful to discriminate against a person on the basis of their disability if that 95. Under N.Y. Civil Rights Law § 40-c, a violation of N.Y. Civil Rights Law § 40 96. Defendants have directly or indirectly engaged in conduct that discriminates against 13 97. Because Defendants' discriminatory and unlawful conduct is ongoing, declaratory DEMAND FOR JURY TRIAL 98. Pursuant to Rule 36 of the Federal Rules of Civil Procedure, Plaintiff, individually PRAYER FOR RELIEF a. A Declaratory Judgement against Defendants DOLLAR GENERAL CORPORATION, and DOLGENCORP OF NEW YORK, INC. on the basis of their having violated the Americans with Disabilities Act 42 U.S.C. §§ 12111- 12213; New York Executive Law $296, and New York Civil Rights Law § 40-c because the Defendants' stores, as described above, are inaccessible to, and not independently useable by, individuals with disabilities who use devices for mobility; and, b. A Permanent Injunction pursuant to 42 U.S.C. § 12188(a)(2) and 28 C.F.R. § 36.504(a) enjoining the Defendants from discriminating against individuals with disabilities and requiring the Defendants to: 1. Take all necessary steps to remove the access barriers and to bring their facilities into full compliance with the requirements set forth in the ADA and its implementing regulations, SO that their facilities are fully 14 accessible to, and independently useable by, individuals with mobility related disabilities; 2. Change their corporate policies and practices to prevent the reoccurrence of access barriers post-remediation; 3. Provide Plaintiff and her counsel bi-annual reports for five years from the date of judgement outlining the measures taken by Defendants to remediate the access barriers present in their stores, as well as measures taken to correct their business practices, such reports to include data collected and reviewed by professional third parties engaged in architecture, engineering, or similar relevant field; and, 4. Permit Plaintiff and her counsel to monitor Defendants' facilities for a period of five years to ensure that the injunctive relief SO ordered above is achieved and remains in place. C. An Order certifying the class proposed by the Plaintiff, and naming the Plaintiff as class representative, and appointing DRNY as class counsel; d. Damages, in an amount to be determined by this Court; e. Payment of the costs of suit; f. Reasonable attorney's fees; and, g. Any other relief as this Court may deem just and proper under the circumstances. 15May 15, 2018 Rochester, New York Ryan J. McDonald, Esq. Bar Roll No. 520954 Jennifer Monthie, Esq. Bar Roll No. 512427 DISABILITY RIGHTS NEW YORK 44 Exchange Boulevard Suite 110 Rochester, New York 14614 (518) 432-7861 (telephone) (518) 427-6561 (facsimile) (not for service) 16

civil rights, immigration, family

oLDuCocBD5gMZwczTqO7

Civil Action No.: IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND NORTHERN DIVISION DAVID K. AND DEBRA L. BAILEY 754 Spar Mill Road Burnsville, NC 28714 WILLIAM C. AND HELLER BATTON 2600 Laurel Brook Road Fallston, MD 21047 GREGORY P. DOPKOWSKI, SR. 311 Lorraine Avenue Essex, MD 21221 SAMUEL AND BEVERLY PATTERSON, JR. 4000 Balmoral Circle Pikesville, MD 21208 RAHEIM AND SYREETA PATTERSON 3636 Clifmar Road Windsor Mill, MD 21244 ARNOLD N. AND LOIS A. WELSH, JR. 2259 Ridgemont Drive Finksburg, MD 21048 Plaintiffs, v. SIERRA PACIFIC MORTGAGE COMPANY, INC. 1180 Iron Point Road, Suite 200 Folsom, CA 95630 Serve on: National Registered Agents, Inc. of MD, Resident Agent 2405 York Road, Suite 201 Lutherville-Timonium, MD 21093 Defendant. CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL Plaintiffs, David K. and Debra L. Bailey, William C. and Heller Batton, Gregory P. Dopkowski, Sr., Samuel and Beverly Patterson, Jr., Raheim and Syreeta Patterson, and Arnold N. and Lois Welsh, Jr., on behalf of themselves and on behalf of the entire class of persons similarly situated, by and through their attorneys, Michael Paul Smith, Melissa L. English and Sarah A. Zadrozny of Smith, Gildea & Schmidt, LLC and Timothy F. Maloney, Veronica B. Nannis and Megan Benevento of Joseph, Greenwald and Laake, P.A., file this Class Action Complaint, sue the Defendant for cause, claim damages, and state as follows: INTRODUCTION 1. Plaintiffs David K. and Debra L. Bailey (“Bailey Plaintiffs”), William C. and Heller Batton (“Batton Plaintiffs”), Gregory P. Dopkowski, Sr., Samuel and Beverly Patterson, Jr. (“Patterson Parent Plaintiffs”), Raheim and Syreeta Patterson (“Patterson Plaintiffs”), and Arnold N. and Lois Welsh, Jr. (“Welsh Plaintiffs”) (collectively, “Plaintiffs”) and alleged Class Members are borrowers who currently have or had a residential mortgage loan originated and/or brokered by Defendant Sierra Pacific Mortgage Company, Inc. (“Sierra Pacific”), which was or is secured by Plaintiffs’ and Class Members’ residential real property. 2. Plaintiffs and alleged Class Members are victims of an illegal kickback and price fixing scheme between Sierra Pacific and All Star Title, Inc. (“All Star”), a Maryland-based title and settlement services company. 3. Under the scheme, Sierra Pacific’s branch managers, loan officers, agents, and/or other employees received and accepted illegal kickbacks in exchange for the assignment and referral of residential mortgage loans, refinances and reverse mortgages to All Star for title and settlement services in violation of the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. §§ 2601, et seq. Sierra Pacific and All Star laundered the kickbacks through third party marketing companies to conceal the illegal kickbacks and the kickback agreement. 4. As an essential component of the scheme, All Star conspired to and formed a cartel with various residential mortgage lenders (“All Star Lender Cartel”). Sierra Pacific participated in the All Star Lender Cartel and, in violation of Section 1 of the Sherman Act, 15 U.S.C. §§ 1, et seq., entered into naked price fixing, minimum pricing and refusal to deal agreements (collectively, the “Cartel Agreements”) with All Star related to the residential mortgage loans generated by All Star’s illegal kickback payments to Sierra Pacific. 5. Sierra Pacific benefitted, and upon information and belief, continues to benefit from the Cartel Agreements, because the supracompetitive prices for title and settlement services charged to Sierra Pacific borrowers under the Cartel Agreements were financed into the borrower’s loans, and which Sierra Pacific charges and earns interest from these supracompetitive prices. 6. Sierra Pacific and All Star continuously and regularly used the U.S. Mail and interstate wires in furtherance of the kickback and price fixing scheme, and to identify and defraud borrowers into the All Star Scheme, willfully and intentionally engaging in a pattern of racketeering activity over a period of at least five years, in violation of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. §§ 1961, et seq. 7. The kickback and Cartel Agreements, and the resulting supracompetitive prices, were fraudulently concealed by Sierra Pacific and All Star from Plaintiffs and alleged Class Members by: laundering kickbacks through third party marketing companies, creating sham invoice and payment records, fraudulent representations in marketing materials, false allocation of title and settlement fees and manipulation of the APR associated with Sierra Pacific loans, and false and fraudulent representations and omissions in Sierra Pacific borrowers’ loan documents, and prevented borrowers, regulators and auditors from discovering the scheme or kickback and Cartel Agreements and the injuries to Sierra Pacific borrowers therefrom, thereby allowing the kickbacks and supracompetitive fees to continue. PARTIES 8. Plaintiffs bring this action pursuant to Federal Rule of Civil Procedure 23 as a class action on their own behalf and on behalf of the entire class of people similarly situated. 9. Plaintiffs David K. and Debra L. Bailey are residents of Yancey County, North Carolina. 10. Plaintiffs William C. and Heller Batton are residents of Harford County, Maryland. 11. Plaintiff Gregory P. Dopkowski, Sr. is a resident of Baltimore County, Maryland. 12. Plaintiffs Samuel and Beverly Patterson, Jr. are residents of Baltimore County, Maryland. 13. Plaintiffs Raheim and Syreeta Patterson are residents of Baltimore County, Maryland. 14. Plaintiffs Arnold N. and Lois Welsh, Jr. are residents of Carroll County, Maryland. 15. Defendant Sierra Pacific Mortgage Company, Inc. is a corporation organized under the laws of California and at all relevant times was registered and qualified to do business in Maryland. It is engaged in the business of consumer mortgage brokering and/or origination and/or lending and/or otherwise transacted business in the state of Maryland and in other states. JURISDICTION AND VENUE 16. This Court has subject matter jurisdiction over this action pursuant to 28 U.S.C. §§ 1331 and 1337(a), Section 4 of the Sherman Act, 15 U.S.C. § 4, and 18 U.S.C. § 1964(c). 17. This Court has personal jurisdiction over the parties. Personal jurisdiction over Sierra Pacific is appropriate because during the time period alleged herein Sierra Pacific continuously transacted business within this District and engaged in an illegal price fixing agreement to fix the prices charged by All Star for settlement services that was directed at, and had the intended effect of causing injury to, persons residing in or located in this District. In addition, Sierra Pacific currently transacts business within this District. 18. Venue is proper in this Court pursuant to 28 U.S.C. § 1391(b) and 18 U.S.C. § 1965(a) because Sierra Pacific is subject to personal jurisdiction in this District and a substantial part of the conduct, events, and omissions giving rise to Plaintiffs’ and Class Members’ claims occurred within this District, and a substantial portion of the affected interstate trade and commerce has been carried out in this District. FACTUAL ALLEGATIONS FOR INDIVIDUAL AND CLASS RELIEF 19. At all relevant times, All Star is a Maryland corporation and a title and settlement service provider licensed in Maryland and regulated by the Maryland Insurance Administration. All Star is a licensed title and settlement service provider in more than 30 states, and provides title and settlement services on residential mortgage loans, refinances and reverse mortgages secured by real property in 47 states. I. The All Star Scheme A. All Star and Participating Lenders Pay and Receive Kickbacks in Exchange for the Assignment and Referral of Residential Mortgage Loans to All Star and Employ Several Methods to Conceal the Kickbacks. 20. Beginning by at least 2008, All Star designs and executes a scheme (“All Star Scheme”) to pay kickbacks to various mortgage lenders and their brokers, loan officers and other employees (collectively, “Participating Lender”) in exchange for the Participating Lender’s assignment and referral of residential mortgage loans, refinances and reverse mortgages to All Star for title and settlement services (“Kickback Agreement”). 21. All Star bases the amount of the kickback All Star paid on the number of loans the Participating Lender assigns and refers to All Star under the Kickback Agreement and the amount of profit All Star realizes on those loans. 22. All Star pays, and Participating Lenders receive and accept, kickbacks in different forms and laundered by and through different channels. 23. In some instances, All Star pays kickbacks by purchasing and delivering to a Participating Lender marketing materials for the Participating Lender to use in soliciting borrowers, most commonly postage to be used by a Participating Lender to send direct mail solicitations. 24. In other instances, All Star pays cash kickbacks by checks written directly to a Participating Lender and/or their branch managers, mortgage brokers, loan officers, or other employees. Often, a Participating Lender or its employee receives and accepts a kickback check laundered by and through a sham entity set up for the express purpose of receiving and accepting kickbacks and concealing the same. 25. In most instances, to further conceal the kickbacks, the Participating Lenders and All Star agree to have All Star not issue a check directly to the Participating Lender and/or their branch managers, mortgage brokers, loan officers, or other employees, but instead launders the kickback payment through a third party marketing company. 26. Participating Lenders and/or their branch managers, mortgage brokers, loan officers, or other employees frequently use third party marketing companies (such as a direct mail, data and/or leads lists, telemarketing or live transfer leads provider) to provide marketing services aimed at soliciting borrowers to obtain residential mortgage loans, refinances and reverse mortgages, which increase the volume of loans the Participating Lender brokers or originates thereby increasing its net profit and commissions earned. 27. All Star and Participating Lenders use a variety of third party marketing companies to launder the kickbacks. Some of these marketing companies specialize in direct mail, while others specialize in producing data and leads lists of potential borrowers for direct mail or telemarketing solicitations. Still other third party marketing companies provide Participating Lenders “live transfer” leads in which a borrower who contacts a centralized telemarketing company is transferred “live” to the Participating Lender. 28. Under the Kickback Agreement, the Participating Lender receiving and accepting the kickback from All Star identifies a third party marketing company that the Participating Lender uses for marketing services. The third party marketing company then produces an invoice for marketing services it produces for the Participating Lender that was subject to a kickback, All Star then makes the kickback payment to the third party marketing company, and the Participating Lender receives and accepts the kickback payment when the third party marketing company applies the payment to the invoice for marketing services for the benefit of the Participating Lender. 29. To even further conceal the kickbacks and the Kickback Agreement, All Star and the Participating Lenders request and cause the third party marketing companies to issue sham invoices that falsely identify All Star as the company purchasing and receiving the marketing services. These sham invoices create the false impression that All Star purchases and receives marketing services when in fact the payment is a kickback received and accepted by the Participating Lender in exchange for the assignment and referral of loans to All Star under the Kickback Agreement. 30. The sham invoices conceal the fact that any thing of value is exchanged between All Star and the Participating Lender related to the loans that are assigned and referred to All Star under the Kickback Agreement. 31. In some instances, All Star and the Participating Lender direct the third party marketing company to create and/or receive sham split invoices, of which one invoice for a portion of the amount due to the third party marketing company is sent to the Participating Lender and one invoice for the other portion of the amount due to the third party marketing company is sent to All Star. 32. All Star and the Participating Lenders’ choice to use the split invoices create the false impression that All Star purchased and received marketing services when in fact the payment is a kickback received and accepted by the Participating Lender in exchange for the assignment and referral of loans to All Star under the Kickback Agreement. The sham split invoices also hide All Star and the Participating Lender’s coordinated business relationship because there is no Participating Lender listed on the sham split invoice received and paid by All Star. 33. In other instances, All Star and the Participating Lenders choose to conceal the kickback payment entirely by creating sham payment records. To do this, a Participating Lender directs All Star to launder a kickback through the third party marketing company without the use or issuance of any invoice. Other times, the Participating Lender forwards to All Star an invoice addressed to the Participating Lender and All Star launder a kickback through a third party marketing company by simply referencing the Participating Lender’s invoice number. 34. All Star and Sierra Pacific’s choice to use sham invoice and payment records is integral to the Kickback Scheme and Agreement and is designed to hide the fact that payment is made by All Star. These choices by All Star and Sierra Pacific, among with the choice to launder the payoffs through marketing companies, also conceal the fact that All Star and the Participating Lender exchanged a thing of value related to the loans that are assigned and referred to All Star under the Kickback Agreement. B. All Star and Participating Lenders Form a Cartel and Conspire and Agree to Fix and Charge Borrowers Higher Prices for Title and Settlement Services and Refuse to Deal with Competitors. 35. One of the purposes of the All Star Scheme is to allow All Star to charge borrowers higher prices for title and settlement service than is possible in a competitive market and to exclude other title and settlement services from the market for title and settlement services on residential mortgage loans, refinances and reverse mortgages. 36. To achieve these purposes, All Star and Participating Lenders conspire to and form a cartel (“All Star Lender Cartel”), enter agreements and act in restraint of trade. 37. To enforce the All Star Lender Cartel, All Star and Participating Lenders conspire and agree to fix the prices All Star charges the Participating Lender’s borrowers for title and settlement services on loans that are assigned and referred to All Star under the Kickback Agreement (“Price Fixing Agreement”). 38. In addition, All Star and the Participating Lenders conspire and agree to minimum prices to charge borrowers for title and settlement services on loans that are assigned and referred to All Star under the Kickback Agreement (“Minimum Fee Agreements”). 39. The Price Fixing and Minimum Fee Agreements are enforced by an agreement that the Participating Lender refuse to deal with any other title and settlement services company on those loans generated by the kickbacks (“Refusal to Deal Agreement”) (collectively, with the Price Fixing and Minimum Fee Agreements, the “Cartel Agreements”), such that all loans generated by the Kickback Agreement are referred to All Star and are subject to the Price Fixing and Minimum Fee Agreements. 40. The prices All Star and the Participating Lenders fix under the Price Fixing and Minimum Fee Agreements are supracompetitive and higher than the prices that borrowers would otherwise be charged for title and settlement services in a competitive market and without the Cartel Agreements. 41. An additional purpose of the All Star Lender Cartel formed by All Star and Participating Lenders under the Kickback and Cartel Agreements is to exclude All Star’s competitors from the market for title and settlement services on residential mortgage loans, refinances and reverse mortgages, and to deprive borrowers of their choice of title and settlement service provider on loans generated by the All Star funded kickbacks. 42. Participating Lenders benefit from the Cartel Agreements because: (i) the supracompetitive pricing funds the illegal kickbacks used by Participating Lenders to solicit borrowers, generate residential mortgage loans, and earn substantial interest and commissions, and (ii) the costs for title and settlement service fees are financed into the loan and paid for by borrowers from loan proceeds such that the Participating Lender earned interest and other fees from the supracompetitive pricing. C. All Star and the Participating Lenders Use the U. S. Mail and Interstate Wires to Identify and Lure Borrowers into the All Star Scheme. 43. All Star and Participating Lenders intend the All Star Scheme to defraud borrowers into paying supracompetitive prices for title and settlement services and to thereby fund and continue the kickbacks All Star is paying Participating Lenders. 44. In service of this intention, Participating Lenders and All Star use the kickback payments to lure borrowers into the All Star Scheme, and in turn use the interstate mails and wires to identify, solicit and lure borrowers into the All Star Scheme. 45. Potential borrowers are identified by the third party marketing companies through which All Star and Participating Lenders are laundering the kickbacks. Many of these third party marketing companies specialize in identifying and soliciting potential borrowers, and compiling and selling borrower sales and marketing “leads lists.” 46. Participating Lenders use these lists to solicit borrowers often through printed direct mail pieces such as postcards, letters, “SNAP packs” (mailers with perforated edges the recipient rips or “snaps” open), and other printed material that encourage borrowers to contact the Participating Lender and apply for a residential mortgage loan, refinance or reverse mortgage. 47. All Star requires, and Participating Lenders agree, to include false representations in the Participating Lender’s direct mail borrower solicitations, stating that a potential borrower would save “30-40% on title fees” by using All Star. The purpose of these false representations is to: (i) prevent a borrower from trying to use a different title and settlement services company for the loan, (ii) conceal the fixed, supracompetitive pricing resulting from the All Star Scheme, and (iii) create the false representation that the prices charged the borrower for title and settlement services would be lower than the prices charged by All Star competitors. 48. Participating Lenders and All Star, by and through third party marketing companies, cause borrower data and leads list to be merged onto these direct mail solicitations, and Participating Lenders, by and through the third party marketing companies, cause these fraudulent solicitations to be sent through the interstate U.S. mails. 49. All Star and Participating Lenders also obtain from third party marketing companies borrower data and leads list to solicit borrowers over the telephone, and Participating Lenders use interstate wires to make these telemarketing calls to potential borrowers. Plaintiffs believe, and therefore aver, that All Star requires, and Participating Lenders agree, to make false representations to borrowers in these telephone solicitations similar to the false representations that All Star and Participating Lenders agree to include in direct mail solicitations. 50. Participating Lenders also receive “live transfer” leads wherein a borrower calls a centralized call center, and then is transferred by the call center “live” to the Participating Lender. The third marketing company delivering the live transfer leads transmits the “live transfer” over interstate wires, and the Participating Lender receives the live transfer calls over interstate wires. 51. All Star’s records document that these borrower solicitation techniques lured thousands of borrowers into the All Star Scheme. II. Sierra Pacific’s Participation in the All Star Scheme Beginning by January 2012 52. By approximately January 2012, Sierra Pacific begins conspiring with All Star to enter the All Star Lender Cartel and Kickback Agreement and to conceal the kickbacks and overcharges on borrowers’ HUD-1s. 53. By at least March 2012, Sierra Pacific, by and through its branch managers, loan officers and other employees, agree to accept and receive kickbacks paid by All Star in exchange for the assignment and referral of Sierra Pacific loans to All Star for title and settlement services, and assign and refer more than 300 loans to All Star involving residential mortgage loans, refinances or reverse mortgages secured by property in over four states. 54. All Star pays, and Sierra Pacific receives and accepts, kickbacks that were laundered through third party marketing companies used by Sierra Pacific for marketing services. 55. At all relevant times, Sierra Pacific branch managers and loan officers who received and accepted kickbacks are licensed mortgage brokers and/or authorized loan officers, and at all relevant times are acting within scope of the business relationship and duties of their employment on behalf of Sierra Pacific, specifically seeking borrowers and originating and securing loans for residential mortgages through Sierra Pacific and/or brokering such loans through Sierra Pacific to other lenders with whom Sierra Pacific authorizes, referring Sierra Pacific borrowers to title companies, and working with title companies to close these loans. All activities, including interaction with All Star, are for the benefit of Sierra Pacific. A. Sierra Pacific’s Participation in the All Star Scheme by and through the Sierra Pacific White Marsh Branch 56. Beginning in January 2012 through the present, Todd Asplen (“Asplen”) is a branch manager and licensed mortgage originator employed by Sierra Pacific at a branch first located at 7718 Belair Road, Baltimore, MD 21236, then at 8032 Belair Road, Nottingham, MD 21236, and later at 11100 Pulaski Highway, Bldg. C, White Marsh, MD 21162 (“Sierra Pacific White Marsh Branch”). 57. Beginning in January 2012 through the present, David Brown (“Brown”) is a licensed mortgage originator employed by Sierra Pacific at the Sierra Pacific White Marsh Branch. 58. In furtherance and performance of the and All Star Scheme and All Star Lender Cartel, Sierra Pacific enters into naked price fixing agreements in which All Star and Sierra Pacific conspire to and fix the prices charged borrowers for title and settlement services at supracompetitive levels and at levels higher than would have been charged without the price fixing agreements. 59. In furtherance and performance of the and All Star Scheme and All Star Lender Cartel, Sierra Pacific also enters into Minimum Fee Agreements in which All Star and Sierra Pacific conspire to and fix minimum prices to be charged to Sierra Pacific borrowers for title and settlement services on loans assigned and referred by Sierra Pacific to All Star under the Kickback Agreement. 60. By approximately January 2012, All Star and Sierra Pacific conspire and agree to fix prices in relation to loans assigned and referred to All Star by the Sierra Pacific White Marsh Branch to “$800 plus title insurance” and for loans located in Pennsylvania to “$695 plus title insurance.” See 1/12/12 Fee Sheet, attached as Exhibit 1; see 2/1/12 e- mail between All Star and Brown, attached as Exhibit 2. 61. A few months later, , on March 20-21, 2012, All Star and Sierra Pacific raise the fixed price charged for loans referred to All Star by the Sierra Pacific White Marsh Branch to $1,750. All Star and Sierra Pacific agree to raise the fixed prices under teh Cartel Agreements because of the kickbacks All Star is paying Sierra Pacific by and through third party marketing companies. Sierra Pacific agrees to All Star’s requirement that “I’ll have to have them to be at that rate for all files like we did in the past. Jason wants to make sure that we capitalize in the case that the marketing flops.” See 3/21/13 e-mails between All Star and Asplen, attached as Exhibit 3. 62. In accordance with and in furtherance of the Kickback Agreement and All Star Scheme, on or about March 21, 2012, All Star pays a $2,512.50 kickback to Sierra Pacific by and through Titan List and Mailing Services (“Titan”), a Florida based marketing services company. The sham split invoices associated with this kickback appear as Exhibit 4. 63. The sham invoices state that Titan designs, produces and mails 6,000 Sierra Pacific solicitations to potential borrowers located in Maryland and Virginia. Based on the postage charged on the sham invoice, Plaintiffs believe, and therefore aver, that these Sierra Pacific solicitations are sent by U.S. Mail and most, if not all, are delivered interstate; that is, the Sierra Pacific solicitation is placed in the mail in one state and delivered to the potential borrower in another state. 64. All Star makes the kickback payment by transmission over interstate wires, with All Star transmitting the kickback payment from its bank in Maryland and Sierra Pacific receiving the payment, by and through Titan, in Florida. The e-mail confirming the wire payment is attached as Exhibit 5. 65. A few months later, in May 2012, All Star and Sierra Pacific conspire and agree to fix prices for title and settlement services for loans assigned and referred to All Star by the Sierra Pacific White Marsh Branch at $1,750 including title insurance for loans in licensed states, and $1,000 plus title insurance for loans in unlicensed states (that is, those states in which All Star is not a licensed title and settlement services company and must work with a cooperating title company). See Exhibit 6, 5/4/12 Client Fees Spreadsheet. These prices are approximately $300 higher than the prices All Star is charging other Participating Lenders, which amount represents the minimum amount of actual damages incurred by Sierra Pacific borrowers assigned and referred to All Star by the Sierra Pacific White Marsh Branch. 66. On May 16, 2012, All Star pays a $3,072.50 kickback to Sierra Pacific by and through Titan. The sham split invoices associated with this kickback appear as Exhibit 7. 67. The sham split invoices state that Titan designs, produces and mails 7,500 Sierra Pacific solicitations to potential borrowers located in Maryland and Virginia. Based on the postage charged on the sham invoice, Plaintiffs believe, and therefore aver, that these Sierra Pacific solicitations are sent by U.S. Mail and most, if not all, are delivered interstate; that is, the Sierra Pacific solicitation is placed in the mail in one state and delivered to the potential borrower in another state. 68. All Star makes the kickback payment by transmission over interstate wires, with All Star transmitting the kickback payment from All Star’s bank in Maryland and Sierra Pacific receiving the payment, by and through Titan, in Florida. The 5/16/12 e-mail confirming the wire payment is attached as Exhibit 8. 69. Two months later, on July 11, 2012, All Star pays a $4,010.97 kickback to Sierra Pacific by and through Titan. The sham split invoices and payment record appear as Exhibit 9. 70. The sham split invoices state that Titan designs, produces and mails 10,000 Sierra Pacific solicitations to potential borrowers located in Maryland, Virginia and Pennsylvania. Based on the postage charged on the sham invoice, Plaintiffs believe, and therefore aver, that these Sierra Pacific solicitations are sent by U.S. Mail and most, if not all, are delivered interstate; that is, the Sierra Pacific solicitation is placed in the mail in one state and delivered to the potential borrower in another state. 71. All Star makes the kickback payment by transmission over interstate wires in the form of a credit card authorization form, with All Star transmitting the kickback payment from Maryland and Sierra Pacific receiving the payment, by and through Titan, in Florida. See Exhibit 9. 72. Two months later, September 12, 2012, All Star pays a $2,138.50 kickback to Sierra Pacific by and through Titan. The sham split invoices and payment record appear as Exhibit 10. 73. The sham split invoices state that Titan designs, produces and mails 5,000 Sierra Pacific borrower solicitations. Based on the postage charged on the sham invoice, Plaintiffs believe, and therefore aver, that these Sierra Pacific solicitations are sent by U.S. Mail and most, if not all, are delivered interstate; that is, the Sierra Pacific solicitation is placed in the mail in one state – Florida – and delivered to the potential borrower in another state. 74. All Star makes the kickback payment by transmission over interstate wires in the form of a credit card authorization form, with All Star transmitting the kickback payment from All Star’s bank in Maryland and Sierra Pacific receiving the payment, by and through Titan, in Florida. See Exhibit 10. 75. The next month, on October 17, 2012, All Star pays a $3,045.76 kickback to Sierra Pacific by and through Titan. The sham split invoices and payment record associated with this kickback appear as Exhibit 11. 76. The sham split invoices state that Titan designs, produces and mails 6,000 Sierra Pacific borrower solicitations. Based on the postage charged on the sham invoice, Plaintiffs believe, and therefore aver, that these Sierra Pacific solicitations are sent by U.S. Mail and most, if not all, are delivered interstate; that is, the Sierra Pacific solicitation is placed in the mail in one state – Florida – and delivered to the potential borrower in another state. 77. All Star makes the kickback payment by transmission over interstate wires in the form of a credit card authorization form, with All Star transmitting the kickback payment from its offices in Maryland and Sierra Pacific receiving the payment, by and through Titan, in Florida. See Exhibit 11. 78. The next month, on November 28, 2012, All Star pays a $2,753.41 kickback to Sierra Pacific by and through Titan. The sham split invoices and payment record associated with this kickback appear as Exhibit 12. 79. The sham split invoices state that Titan designs, produces and mails 6,598 Sierra Pacific borrower solicitations. Based on the postage charged on the sham invoice, Plaintiffs believe, and therefore aver, that these Sierra Pacific solicitations are sent by U.S. Mail and most, if not all, are delivered interstate; that is, the Sierra Pacific solicitation is placed in the mail in one state – Florida – and delivered to the potential borrower in another state. 80. All Star makes the kickback payment by transmission over interstate wires in the form of a credit card authorization form, with All Star transmitting the kickback payment from its offices in Maryland and Sierra Pacific receiving the payment, by and through Titan, in Florida. See Exhibit 12. 81. About six weeks later, on January 17, 2013, All Star pays a $3,278.60 kickback to Sierra Pacific by and through Titan. The sham split invoices and payment record associated with this kickback appear as Exhibit 13. 82. The sham split invoices state that Titan designs, produces and mails 8,000 Sierra Pacific borrower solicitations over three weeks. Based on the postage charged on the sham invoice, Plaintiffs believe, and therefore aver, that these Sierra Pacific solicitations are sent by U.S. Mail and most, if not all, are delivered interstate; that is, the Sierra Pacific solicitation is placed in the mail in one state – Florida – and delivered to the potential borrower in another state. 83. All Star makes the kickback payment by transmission over interstate wires in the form of a credit card authorization form, with All Star transmitting the kickback payment from its offices in Maryland and Sierra Pacific receiving the payment, by and through Titan, in Florida. See Exhibit 13. 84. The next month, on February 13, 2013, All Star pays a $3,679.03 kickback to Sierra Pacific by and through Titan. The sham split invoices and payment record associated with this kickback appear as Exhibit 14. 85. The sham invoices state that Titan designs, produces and mails 9,015 Sierra Pacific borrower solicitations over four weeks. Based on the postage charged on the sham invoice, Plaintiffs believe, and therefore aver, that these Sierra Pacific solicitations are sent by U.S. Mail and most, if not all, are delivered interstate; that is, the Sierra Pacific solicitation is placed in the mail in one state – Florida – and delivered to the potential borrower in another state. 86. All Star makes the kickback payment by transmission over interstate wires in the form of a credit card authorization form, with All Star transmitting the kickback payment from its offices in Maryland and Sierra Pacific receiving the payment, by and through Titan, in Florida. See Exhibit 14. 87. Two months later, April 23, 2013, All Star pays a $3,828.59 kickback to Sierra Pacific by and through Titan. The sham split invoices and payment record associated with this kickback appear as Exhibit 15. 88. The sham invoices state that Titan designs, produces and mails 9,064 Sierra Pacific borrower solicitations over four weeks. Based on the postage charged on the sham invoice, Plaintiffs believe, and therefore aver, that these Sierra Pacific solicitations are sent by U.S. Mail and most, if not all, are delivered interstate; that is, the Sierra Pacific solicitation is placed in the mail in one state – Florida – and delivered to the potential borrower in another state. 89. All Star makes the kickback payment by transmission over interstate wires in the form of a credit card authorization form, with All Star transmitting the kickback payment from its offices in Maryland and Sierra Pacific receiving the payment, by and through Titan, in Florida. See Exhibit 15. 90. Four months later, August 14, 2013, All Star pays a $3,146.00 kickback to Sierra Pacific by and through Titan. The sham split invoices and payment record associated with this kickback appear as Exhibit 16. 91. The sham split invoices state that Titan designs, produces and mails 9,000 Sierra Pacific borrower solicitations over four weeks. Based on the postage charged on the sham invoice, Plaintiffs believe, and therefore aver, that these Sierra Pacific solicitations are sent by U.S. Mail and most, if not all, are delivered interstate; that is, the Sierra Pacific solicitation is placed in the mail in one state – Florida – and delivered to the potential borrower in another state. 92. All Star makes the kickback payment by transmission over interstate wires in the form of a credit card authorization form, with All Star transmitting the kickback payment from its offices in Maryland and Sierra Pacific receiving the payment, by and through Titan, in Florida. See Exhibit 16. 93. The next month, on September 22, 2014, All Star pays a $2,917.20 kickback to Sierra Pacific by and through Titan. The sham split invoices and payment record associated with this kickback appear as Exhibit 17. 94. The sham split invoices state that Titan obtains the data, produces and mails 8,000 Sierra Pacific borrower solicitations. Based on the postage charged on the sham invoice, Plaintiffs believe, and therefore aver, that these Sierra Pacific solicitations are sent by U.S. Mail and most, if not all, are delivered interstate; that is, the Sierra Pacific solicitation is placed in the mail in one state – Florida – and delivered to the potential borrower in another state. 95. All Star makes the kickback payment by transmission over interstate wires in the form of a credit card authorization form, with All Star transmitting the kickback payment from its offices in Maryland and Sierra Pacific receiving the payment, by and through Titan, in Florida. See Exhibit 17. 96. All Star’s records indicate that Sierra Pacific and All Star agree to and perform the Kickback and Cartel Agreements through at least August 2015. By this time, Sierra Pacific and All Star fix prices for title and settlement services charged borrowers assigned and referred to All Star from the Sierra Pacific White Marsh Branch at: (i) $1,000 plus title insurance for purchases, (ii) $695 plus title insurance for purchases on properties located in Pennsylvania; (iii) $800 plus title insurance for refinances, and (iv) $695 plus title insurance for refinances on properties located in Pennsylvania. See 8/5/15 Settlement Fees Sheet, attached as Exhibit 18. 97. These prices are between $75-205 higher than the prices All Star is charging other Participating Lenders, which amount represents the minimum amount of actual damages incurred by Sierra Pacific borrowers assigned and referred to All Star by the Sierra Pacific White Marsh Branch. 98. The Sierra Pacific White Marsh Branch assigned and referred more than 300 loans to All Star involving residential mortgage loans, refinances or reverse mortgages secured by real property across at least four states. B. Sierra Pacific’s Participation in the All Star Scheme by and through the Sierra Pacific Bel Air Branch 99. Beginning in August 2011 through present, Todd Dennis (“Dennis”) is a branch manager and licensed mortgage originator employed by Sierra Pacific at a branch located at 539 Rock Spring Road, Bel Air, MD 21014 (“Sierra Pacific Bel Air Branch”). 100. By August 2013, All Star and Sierra Pacific conspire and agree to fix prices for title and settlement service associated with Sierra Pacific loans assigned and referred from the Sierra Pacific Bel Air Branch at $1,000 plus title insurance. See 8/12/13 E-mail attached as Exhibit 19. 101. In accordance with the Price Fixing and Kickback Agreements and in furtherance of the All Star Scheme, on August 12, 2013, All Star pays a $1,534.17 kickback to Sierra Pacific by and through Titan. The sham split invoices and payment record associated with this kickback appear as Exhibit 20. 102. The sham split invoices state that Titan produces and mails 8,000 Sierra Pacific borrower solicitations. Based on the postage charged on the sham invoice, Plaintiffs believe, and therefore aver, that these Sierra Pacific solicitations are sent by U.S. Mail and most, if not all, are delivered interstate; that is, the Sierra Pacific solicitation is placed in the mail in one state – Florida – and delivered to the potential borrower in another state. 103. All Star makes the kickback payment by transmission over interstate wires in the form of a credit card authorization form, with All Star transmitting the kickback payment from its offices in Maryland and Sierra Pacific receiving the payment, by and through Titan, in Florida. See Exhibit 20. 104. On August 14, 2013, All Star communicates with an account representative at Titlehound, the software company All Star uses to generate “pre-HUDS” and other loan documents provided by All Star and Sierra Pacific to borrowers and on which All Star and Sierra Pacific intend borrowers to rely. All Star causes its Price Fixing and Minimum Fee Agreement with the Sierra Pacific Bel Air Branch of $1,000 plus title insurance to be programmed into the software so that the Cartel Agreements are automatically performed when the software used by All Star and Sierra Pacific. See 8/14/13 e-mail, attached as Exhibit 21. 105. In doing so, All Star and Sierra Pacific also agreed that the $1,000 in title and settlement service fees are to be allocated only to the title exam and abstract fee. See id. 106. These fixed prices are between $100-300 more than All Star is charging other Participating Lenders, which amount represents the actual damages sustained by Sierra Pacific borrowers assigned and referred to All Star by the Sierra Pacific Bel Air Branch. 107. Sierra Pacific and All Star agree to and perform the Kickback by and through the Sierra Pacific Bel Air Branch through at least August 2015, and, on information and belief, longer. 108. Sierra Pacific and All Star agree to and perform the Cartel Agreements by and through the Sierra Pacific Bel Air Branch through at least August 2015, and, on information and belief, longer. See Exhibit 18, 8/5/15 Settlement Fees Sheet. C. Sierra Pacific’s Participation in the All Star Scheme by and through the Sierra Pacific Westminster Branch 109. Beginning in May 2012 through August 2015, Byron Zonin (“Zonin”) is a branch manager and licensed mortgage originator employed by Sierra Pacific at a branch located at 15 East Main Street, #28, Westminster, MD 21157 (“Sierra Pacific Westminster Branch”). 110. On or about January 11, 2013, All Star pays a $2,183.25 kickback to Sierra Pacific by and through MailerLeads, LLC (“MailerLeads”), a Ohio-based direct mail and leads company. The sham invoice and e-mail regarding payment associated with this kickback appears as Exhibit 22. 111. The sham invoices state that MailerLeads produces and mails four drops of 1,250 each Sierra Pacific solicitations to potential borrowers. Based on the postage charged on the sham invoice, Plaintiffs believe, and therefore aver, that these Sierra Pacific solicitations are sent by U.S. Mail and most, if not all, are delivered interstate; that is, the Sierra Pacific solicitation is placed in the mail in one state – Ohio – and delivered to the potential borrower in another state. 112. All Star makes the kickback payment by transmission over interstate wires in the form of a credit card authorization form, with All Star transmitting the kickback payment from its offices in Maryland and Sierra Pacific receiving the payment, by and through MailerLeads, in Ohio. See Exhibit 22. 113. Pursuant to the Kickback, Cartel, and Minimum Fee Agreements, All Star and Sierra Pacific also conspire and agree to fix prices in relation to loans assigned and referred to All Star by the Sierra Pacific Westminster Branch to “$850.00 plus title insurance”. See 1/11/13 e-mails between All Star attached as Exhibit 23. 114. These fixed prices are between $50-150 higher than the prices All Star is charging other Participating Lenders, which amount represents the minimum amount of actual damages incurred by Sierra Pacific borrowers assigned and referred to All Star by the Sierra Pacific Westminster Branch. 115. After performing the Kickback and Cartel Agreements for more than a year, in September 2014, All Star and Sierra Pacific conspire and agree to increase the fixed prices in relation to loans assigned and referred to All Star by Zonin and the Sierra Pacific Westminster Branch to “$895.00 plus title insurance”. See 9/3/14 Dan’s Clients Fees Chart, attached as Exhibit 24. 116. These increased prices are between $95-195 higher than the prices All Star is charging other Participating Lenders, which amount represents the minimum amount of actual damages incurred by Sierra Pacific borrowers assigned and referred to All Star by the Sierra Pacific Westminster Branch. 117. Sierra Pacific and All Star perform the Kickback by and through the Sierra Pacific Westminster Branch through at least August 2015, and, on information and belief, longer. 118. Sierra Pacific and All Star perform the Cartel Agreements by and through the Sierra Pacific Westminster Branch through at least August 2015, and, on information and belief, longer. See Exhibit 18, 8/5/15 Settlement Fees Sheet. 119. Based on the continuing pattern of practice between All Star and Sierra Pacific, Plaintiffs believe, and therefore aver, that All Star and Sierra Pacific conspire to and fix prices for title and settlement services associated with loans assigned and referred to All Star by additional known and unknown Sierra Pacific loan officers in furtherance and performance of the All Star Lender Cartel and the Cartel Agreements. 120. Based on the continuing pattern of practice between All Star and Sierra Pacific, Plaintiffs believe, and therefore aver, that All Star pays, and Sierra Pacific receives, kickbacks in exchange for Sierra Pacific’s assignment and referral of loans from additional known and unknown Sierra Pacific loan officers in furtherance and performance of the Kickback Agreement. 121. Based on the continuing pattern of practice between All Star and Sierra Pacific, Plaintiffs believe, and therefore aver, that All Star pays kickbacks to Sierra Pacific by and through other third party marketing companies in addition to those identified herein. 122. Based on the continuing pattern of practice between All Star and Sierra Pacific, Plaintiffs believe, and therefore aver, that All Star and Sierra Pacific use and cause to be used U.S. mail and/or interstate wires to identify and solicit borrowers that are the currency of the Kickback and Cartel Agreements between All Star and Sierra Pacific. 123. As a result of the Kickback and Cartel Agreements, and Sierra Pacific’s participation in the All Star Lender Cartel and wider All Star Scheme, Sierra Pacific borrowers, including Plaintiffs and alleged Class Members, are harmed because they are defrauded into being charged and paying higher and supracompetitive prices for title and settlement services than they would have been charged and paid without the Kickback and Cartel Agreements, are denied kickback free title and settlement services, and were denied their choice of title and settlement service provider and other consumer benefits of a competitive marketplace. 124. No title services are provided by Sierra Pacific, or any Sierra Pacific employee and/or agent, associated with the receipt and acceptance of the kickbacks. The payment by All Star and the receipt and acceptance by Sierra Pacific of the kickbacks are made solely for the assignment and referral of Sierra Pacific borrowers to All Star. FACTUAL ALLEGATIONS RELATED TO THE INDIVIDUAL CLASS REPRESENTATIVES 125. Plaintiffs’ transactions and the course of events thereafter exemplify the working of the Kickback and Cartel Agreements and are typical of all alleged Class Members’ transactions. A. The Bailey Plaintiffs’ Loan 126. In or about November 2011, Plaintiffs David K. and Debra L. Bailey (“Bailey Plaintiffs”) obtained a residential mortgage loan from Sierra Pacific through Todd Asplen, a loan officer employed by Sierra Pacific in the Sierra Pacific White Marsh Branch, in relation to the refinancing of their residential real property and principal residence located at 956 Edmund Street, Aberdeen, MD 21001. The Bailey Plaintiffs’ loan settled on November 2, 2012 with Plaza Home Mortgage, Inc. as the lender. 127. The Bailey Plaintiffs believe, and therefore aver, that Asplen assigned and referred the Bailey Plaintiffs’ loan to All Star in performance of the Refusal to Deal Agreement and as quid pro quo for the $2,138.50 kickback All Star paid and Sierra Pacific received and accepted on September 12, 2012 by and through Titan, thereby performing the Kickback and Cartel Agreements, depriving the Bailey Plaintiffs of their choice of title and settlement service provider, and denying the Bailey Plaintiffs kickback-free title and settlement services. See Exhibit 10. 128. The Bailey Plaintiffs believe, and therefore aver, that All Star charges the Bailey Plaintiffs approximately $1,750 for title and settlement service fees, thereby performing the Price Fixing and Minimum Fee Agreements. The Bailey Plaintiffs are not in possession of their HUD-1 Settlement Statement, and believe that document is in the sole possession of Sierra Pacific. 129. The Bailey Plaintiffs believe, and therefore aver, the price for title and settlement service fees All Star charges the Bailey Plaintiffs are supracompetitive and higher than the same charges would have been without the Kickback and Cartel Agreements. 130. The Bailey Plaintiffs believe, and therefore aver, that these title and settlement service fees included the approximately $300 Kickback Overcharge described in ¶ 65, which is the minimum amount of the Bailey Plaintiffs’ actual damages resulting from the All Star Scheme and Cartel Agreements. 131. The Bailey Plaintiffs believe, and therefore aver, that they paid for these charges when All Star disbursed proceeds from the Bailey Plaintiffs’ loan in payment of these title and settlement service charges. 132. The Bailey Plaintiffs believe, and therefore after, that Sierra Pacific benefitted, and continues to benefit, from the supracompetitive title and settlement service charges related to the Bailey Plaintiffs’ loan because Sierra Pacific financed the fees into their loan and thereby earns interest on the fees. 133. As a direct and proximate result of the Kickback and Cartel Agreements, and Sierra Pacific’s performance of these agreements, the Bailey Plaintiffs were harmed because they were: (i) charged and paid more for settlement services than they would have paid without the illegal Kickback and Cartel Agreements; (ii) was defrauded into being charged and paying supracompetitive prices for title and settlements service fees; (iii) stripped of their choice of title and settlement service provider and their mortgage broker’s impartial evaluation of All Star’s service and quality; and (iv) deprived of kickback-free title and settlement services and the consumer benefits of fair competition among independent title and settlement service providers. 134. As a direct and proximate result of the Kickback and Cartel Agreements, the Bailey Plaintiffs were charged and paid more for the title and settlement services than they would have paid without the Kickback and Cartel Agreements, and suffered actual damages in the amount of at least $300 and, on information and belief, additional amounts. B. The Batton Plaintiffs’ Loan 135. In or about September 2015, Plaintiffs William C. and Heller Batton (“Batton Plaintiffs”) obtained a residential mortgage loan from Sierra Pacific through David Brown, a loan officer employed by Sierra Pacific in the Sierra Pacific White Marsh Branch, in relation to the refinancing of their residential real property and principal residence located at 2600 Laurel Brook Road, Fallston, MD 21047. The Batton Plaintiffs’ loan settled on September 25, 2015 with Sierra Pacific as the lender. 136. The Batton Plaintiffs believe, and therefore aver, that Brown assigned and referred the Batton Plaintiffs’ loan to All Star in performance of the Refusal to Deal Agreement and as quid pro quo for the $2,917.20 kickback All Star paid to Sierra Pacific on September 22, 2014 by and through Titan, thereby performing the Kickback and Cartel Agreements, depriving the Batton Plaintiffs of their choice of title and settlement service provider, and denying the Batton Plaintiffs kickback-free title and settlement services. 137. All Star charges the Batton Plaintiffs $1,730.04 in total title and settlement service fees, broken out by $585.04 for title insurance, $895.00 for title exam and settlement fees, and $250.00 for a “Sub Fee”, thereby performing the Price Fixing and Minimum Fee Agreements. See Batton Plaintiffs’ HUD-1, attached hereto as Exhibit 25. The price for title and settlement service fees All Star charges the Batton Plaintiffs are supracompetitive and higher than the same charges would have been without the Kickback and Cartel Agreements. 138. These title and settlement service fees included the between $75-205 Kickback Overcharge described in ¶¶ 96-97, which is the minimum amount of the Batton Plaintiffs’ actual damages resulting from the All Star Scheme and Cartel Agreements. 139. The Batton Plaintiffs paid for these charges when All Star disbursed proceeds from the Batton Plaintiffs’ loan in payment of these title and settlement service charges, as reflected on the Batton Plaintiffs’ HUD-1. See Exhibit 25. 140. The Batton Plaintiffs believe, and therefore aver, that Sierra Pacific benefitted, and continues to benefit, from the supracompetitive title and settlement service charges related to the Batton Plaintiffs’ loan because Sierra Pacific financed the fees into their loan and thereby earns interest on the fees. 141. As a direct and proximate result of the Kickback and Cartel Agreements, and Sierra Pacific’s performance of these agreements, the Batton Plaintiffs were harmed because they were: (i) charged and paid more for settlement services than they would have paid without the illegal Kickback and Cartel Agreements; (ii) was defrauded into being charged and paying supracompetitive prices for title and settlements service fees; (iii) stripped of their choice of title and settlement service provider and their mortgage broker’s impartial evaluation of All Star’s service and quality; and (iv) deprived of kickback-free title and settlement services and the consumer benefits of fair competition among independent title and settlement service providers. 142. As a direct and proximate result of the Kickback and Cartel Agreements, the Batton Plaintiffs were charged and paid more for the title and settlement services than they would have paid without the Kickback and Cartel Agreements, and suffered actual damages in the amount of at least $75-205 and, on information and belief, additional amounts. C. Gregory Dopkowski’s Loan 143. In or about October 2015, Plaintiff Gregory P. Dopkowski, Sr. (“Plaintiff Dopkowski”) obtained a residential mortgage loan from Sierra Pacific through David Brown, a loan officer employed by Sierra Pacific in the Sierra Pacific White Marsh Branch, in relation to the refinance of his residential real property and principal residence located at 311 Lorraine Avenue, Essex, MD 21221. Plaintiff Dopkowski’s loan settled on October 26, 2015 with Sierra Pacific as the lender. 144. Plaintiff Dopkowski believes, and therefore avers, that Brown assigned and referred Plaintiff Dopkowski’s loan to All Star in performance of the Refusal to Deal Agreement and as quid pro quo for the $2,917.20 kickback All Star paid to Sierra Pacific on September 22, 2014 by and through Titan, thereby performing the Kickback and Cartel Agreements, depriving Plaintiff Dopkowski of his choice of title and settlement service provider, and denying Plaintiff Dopkowski kickback-free title and settlement services. 145. Plaintiff Dopkowski believes, and therefore avers, that that All Star charges Plaintiff Dopkowski approximately $800 for his settlement services, title exam and abstract fees, plus an amount for title insurance, thereby performing the Price Fixing and Minimum Fee Agreements. Plaintiff Dopkowski is not in possession of his HUD-1 Settlement Statement, and believes that document is in the sole possession of Sierra Pacific. 146. Plaintiff Dopkowski believes, and therefore avers, that the price for title and settlement service fees All Star charges Plaintiff Dopkowski are supracompetitive and higher than the same charges would have been without the Kickback and Cartel Agreements. 147. Plaintiff Dopkowski believes, and therefore avers, that these title and settlement service fees are approximately $75-205 higher than the prices All Star is charging other Participating Lenders as alleged in ¶¶ 96-97, which is the minimum amount of Plaintiff Dopkowski’s actual damages resulting from the All Star Scheme and Cartel Agreements. 148. Plaintiff Dopkowski believes, and therefore avers, that he paid for these charges when All Star disbursed proceeds from Plaintiff Dopkowski’s loan in payment of these title and settlement service charges. 149. Sierra Pacific benefitted, and continues to benefit, from the supracompetitive title and settlement service charges related to Plaintiff Dopkowski’s loan because Sierra Pacific financed the fees into his Sierra Pacific loan and thereby earns interest on the fees. 150. As a direct and proximate result of the Kickback and Cartel Agreements, and Sierra Pacific’s performance of these agreements, Plaintiff Dopkowski was harmed because he was: (i) charged and paid more for settlement services than he would have paid without the illegal Kickback and Cartel Agreements; (ii) was defrauded into being charged and paying supracompetitive prices for title and settlements service fees; (iii) stripped of his choice of title and settlement service provider and his mortgage broker’s impartial evaluation of All Star’s service and quality; and (iv) deprived of kickback-free title and settlement services and the consumer benefits of fair competition among independent title and settlement service providers. 151. As a direct and proximate result of the Kickback and Cartel Agreements, Plaintiff Dopkowski was charged and paid more for the title and settlement services than he would have paid without the Kickback and Cartel Agreements, and suffered actual damages in the amount of at least $75-205 and, on information and belief, additional amounts. D. The Patterson Parents Plaintiffs’ Loan 152. In or about September 2015, Plaintiffs Samuel and Beverly Patterson, Jr. (“Patterson Parents Plaintiffs”) obtain a residential mortgage loan from Sierra Pacific through David Brown, a loan officer employed by Sierra Pacific in the Sierra Pacific White Marsh Branch, in relation to the refinancing of their residential real property and principal residence located at 4000 Balmoral Circle, Pikesville, MD 21208. The Patterson Parents Plaintiffs’ loan settled on September 16, 2015 with Sierra Pacific as the lender. 153. The Patterson Parents Plaintiffs believe, and therefore aver, that Brown assigned and referred the Patterson Parents Plaintiffs’ loan to All Star in performance of the Refusal to Deal Agreement and as quid pro quo for the $2,917.20 kickback All Star paid to Sierra Pacific on September 22, 2014 by and through Titan, thereby performing the Kickback and Cartel Agreements, depriving the Patterson Parents Plaintiffs of their choice of title and settlement service provider, and denying the Patterson Parents Plaintiffs kickback- free title and settlement services. 154. All Star charges the Patterson Parents Plaintiffs $1,048.76 in total title and settlement service fees, thereby performing the Price Fixing and Minimum Fee Agreements. See Patterson Parents Plaintiffs’ HUD-1, attached as Exhibit 26. The price for title and settlement service fees All Star charges the Patterson Parents Plaintiffs are supracompetitive and higher than the same charges would have been without the Kickback and Cartel Agreements. 155. These title and settlement service fees included the between $75-205 Kickback Overcharge described in ¶¶ 96-97, which is the minimum amount of the Patterson Parents Plaintiffs’ actual damages resulting from the All Star Scheme and Cartel Agreements. 156. The Patterson Parents Plaintiffs believe, and therefore aver, that they paid for these charges when All Star disbursed proceeds from their loan in payment of these title and settlement service charges, as reflected on the Patterson Parents Plaintiffs’ HUD-1. See Exhibit 26. 157. The Patterson Parents Plaintiffs believe, and therefore after, that Sierra Pacific benefitted, and continues to benefit, from the supracompetitive title and settlement service charges related to the Patterson Parents Plaintiffs’ loan because Sierra Pacific financed the fees into their Sierra Pacific loan and thereby earns interest on the fees. 158. As a direct and proximate result of the Kickback and Cartel Agreements, and Sierra Pacific’s performance of these agreements, the Patterson Parents Plaintiffs were harmed because they were: (i) charged and paid more for settlement services than they would have paid without the illegal Kickback and Cartel Agreements; (ii) was defrauded into being charged and paying supracompetitive prices for title and settlements service fees; (iii) stripped of their choice of title and settlement service provider and their mortgage broker’s impartial evaluation of All Star’s service and quality; and (iv) deprived of kickback-free title and settlement services and the consumer benefits of fair competition among independent title and settlement service providers. 159. As a direct and proximate result of the Kickback and Cartel Agreements, the Patterson Parents Plaintiffs were charged and paid more for the title and settlement services than they would have paid without the Kickback and Cartel Agreements, and suffered actual damages in the amount of at least $75-205 and, on information and belief, additional amounts. E. The Patterson Plaintiffs’ Loan 160. In or about June 2015, Plaintiffs Raheim and Syretta Patterson (“Patterson Plaintiffs”) obtained a residential mortgage loan from Sierra Pacific through David Brown, a loan officer employed by Sierra Pacific in the Sierra Pacific White Marsh Branch, in relation to the refinancing of their residential real property and principal residence located at 3636 Clifmar Road, Windsor Mill, MD 21244. The Patterson Plaintiffs’ loan settled on June 10, 2015 with Sierra Pacific as the lender. 161. The Patterson Plaintiffs believe, and therefore aver, that Brown assigns and refers the Patterson Plaintiffs’ loan to All Star in performance of the Refusal to Deal Agreement and as quid pro quo for the $2,917.20 kickback All Star paid to Sierra Pacific on September 22, 2014 by and through Titan, thereby performing the Kickback and Cartel Agreements, depriving the Patterson Plaintiffs of their choice of title and settlement service provider, and denying the Patterson Plaintiffs kickback-free title and settlement services. 162. The Patterson Plaintiffs believe, and therefore aver, that All Star charged the Patterson Plaintiffs approximately $800 for their settlement services, title exam and abstract fees, plus title insurance, thereby performing the Price Fixing and Minimum Fee Agreements. The Patterson Plaintiffs are not in possession of their HUD-1 Settlement Statement, and believe that document is in the sole possession of Sierra Pacific. 163. The Patterson Plaintiffs believe, and therefore aver, the price for title and settlement service fees All Star charges the Patterson Plaintiffs are supracompetitive and higher than the same charges would have been without the Kickback and Cartel Agreements. 164. The Patterson Plaintiffs believe, and therefore aver, that these title and settlement service fees are approximately $75-205 higher than the prices All Star is charging other Participating Lenders as alleged in ¶¶ 96-97, which is the minimum amount of the Patterson Plaintiffs’ actual damages resulting from the All Star Scheme and Cartel Agreements. 165. The Patterson Plaintiffs pay for these charges when All Star disburses proceeds from the Patterson Plaintiffs’ loan in payment of these title and settlement service charges. 166. The Patterson Plaintiffs believe, and therefore after, that Sierra Pacific benefitted, and continues to benefit, from the supracompetitive title and settlement service charges related to the Patterson Plaintiffs’ loan because Sierra Pacific financed the fees into their Sierra Pacific loan and thereby earns interest on the fees. 167. As a direct and proximate result of the Kickback and Cartel Agreements, and Sierra Pacific’s performance of these agreements, the Patterson Plaintiffs were harmed because they were: (i) charged and paid more for settlement services than they would have paid without the illegal Kickback and Cartel Agreements; (ii) was defrauded into being charged and paying supracompetitive prices for title and settlements service fees; (iii) stripped of their choice of title and settlement service provider and their mortgage broker’s impartial evaluation of All Star’s service and quality; and (iv) deprived of kickback-free title and settlement services and the consumer benefits of fair competition among independent title and settlement service providers. 168. As a direct and proximate result of the Kickback and Cartel Agreements, the Patterson Plaintiffs were charged and paid more for the title and settlement services than they would have paid without the Kickback and Cartel Agreements, and suffered actual damages in the amount of at least $75-205 and, on information and belief, additional amounts. F. The Welsh Plaintiffs’ Loan 169. In or about February 2015, Plaintiffs Arnold N. and Lois Welsh, Jr. (“Welsh Plaintiffs”) obtain a residential mortgage loan from Sierra Pacific through Todd Asplen, a loan officer employed by Sierra Pacific in the Sierra Pacific White Marsh Branch, in relation to the refinancing of their residential real property and principal residence located at 2259 Ridgemont Drive, Finksburg, MD 21048. The Welsh Plaintiffs’ loan settled on February 23, 2015 with Sierra Pacific as the lender. 170. The Welsh Plaintiffs believe, and therefore aver, that Asplen assigned and referred the Welsh Plaintiffs’ loan to All Star in performance of the Refusal to Deal Agreement and as quid pro quo for the $2,917.20 kickback All Star paid to Sierra Pacific on September 22, 2014 by and through Titan, thereby performing the Kickback and Cartel Agreements, depriving the Welsh Plaintiffs of their choice of title and settlement service provider, and denying the Welsh Plaintiffs kickback-free title and settlement services. 171. All Star charges the Welsh Plaintiffs $1,647.84 in total title and settlement service fees, thereby performing the Price Fixing and Minimum Fee Agreements. See Welsh Plaintiffs’ HUD-1, attached as Exhibit 27. The price for title and settlement service fees All Star charges the Welsh Plaintiffs are supracompetitive and higher than the same charges would have been without the Kickback and Cartel Agreements. 172. These title and settlement service fees included the between $75-205 Kickback Overcharge described in ¶¶ 96-97, which is the minimum amount of the Welsh Plaintiffs’ actual damages resulting from the All Star Scheme and Cartel Agreements. 173. The Welsh Plaintiffs believe, and therefore aver, that they paid for these charges when All Star disbursed proceeds from their loan in payment of these title and settlement service charges, as reflected on the Welsh Plaintiffs’ HUD-1. See Exhibit 26. 174. The Welsh Plaintiffs believe, and therefore after, that Sierra Pacific benefitted, and continues to benefit, from the supracompetitive title and settlement service charges related to the Welsh Plaintiffs’ loan because Sierra Pacific financed the fees into their Sierra Pacific loan and thereby earns interest on the fees. 175. As a direct and proximate result of the Kickback and Cartel Agreements, and Sierra Pacific’s performance of these agreements, the Welsh Plaintiffs were harmed because they were: (i) charged and paid more for settlement services than they would have paid without the illegal Kickback and Cartel Agreements; (ii) was defrauded into being charged and paying supracompetitive prices for title and settlements service fees; (iii) stripped of their choice of title and settlement service provider and their mortgage broker’s impartial evaluation of All Star’s service and quality; and (iv) deprived of kickback-free title and settlement services and the consumer benefits of fair competition among independent title and settlement service providers. 176. As a direct and proximate result of the Kickback and Cartel Agreements, the Welsh Plaintiffs were charged and paid more for the title and settlement services than they would have paid without the Kickback and Cartel Agreements, and suffered actual damages in the amount of at least $75-205 and, on information and belief, additional amounts. FACTUAL ALLEGATIONS RELATED TO LIMITATIONS 177. Essential to the All Star Scheme, Sierra Pacific, as well as other members of the All Star Lender Cartel, and All Star undertake affirmative acts that fraudulently conceal the Kickback and Cartel Agreements, the resulting kickbacks and fixed prices, and the actual injury and damages to borrowers, including Plaintiffs and alleged Class Members. I. All Star and Sierra Pacific Launder Kickbacks through Third Party Marketing Companies and Use Sham Invoice and Payment Records. 178. As described in ¶ 27 above, Sierra Pacific and All Star chose to conceal the fact and payment of kickbacks by laundering kickbacks through third party marketing companies. 179. As described in ¶¶ 29-34, Sierra Pacific and All Star further chose to conceal the illegal kickbacks and Kickback Agreement through the creation of sham invoices and sham payment records. 180. These sham invoices and payment records create an ongoing false record that conceals and prevents discovery of the fact that any thing of value is exchanged between Sierra Pacific and All Star related to the assignment and referral of Sierra Pacific loans, including Plaintiffs’ loans, the actual payment and receipt and acceptance of illegal kickbacks, and Sierra Pacific’s coordinated business relationship with All Star. II. Sierra Pacific and All Star’s Fraudulent Marketing Representations 181. To further conceal the Price Fixing, Minimum Fee Agreements, the Kickback Agreement, and the resulting supracompetitive prices charged to Sierra Pacific borrowers for title and settlement services, Sierra Pacific and All Star make false representations to borrowers in marketing materials. 182. In direct mail solicitations of borrowers, Sierra Pacific represents that a borrower can “Save an additional 30-40% of your title fees with All Star Title!” and that All Star is Sierra Pacific’s “Preferred Title Company” See, e.g., 9/12/12 and 9/22/14 invoice mailers, attached as Exhibits 28 and 29. 183. These representations are false because: (i) Sierra Pacific does not recognize the designation of a “preferred” title company; (ii) a borrower can not save any percentage of title fees with All Star, but instead is charged higher and supracompetitive fees under the Price Fixing and Minimum Fee Agreements; (iii) the reason the Sierra Pacific broker wants a borrower to use All Star is for the Sierra Pacific broker to obtain kickbacks and to perform its obligations under the Cartel Agreements, not because the borrower will receive lower fees; and (iv) any borrower responding to the direct mail solicitation does not “choose” All Star, but will be assigned and referred by Sierra Pacific to All Star. 184. Plaintiffs believe, and therefore aver, that Sierra Pacific makes similar false representations by other means, e.g. as in telemarketing phone calls with borrowers. III. Sierra Pacific and All Star’s False Allocation of Fees and APR Manipulation 185. The Truth in Lending Act (“TILA”) mandates that lenders report to borrowers the Annual Percentage Rate, or “APR”, associated with a loan, refinance, or reverse mortgage. While the interest rate of a loan is the cost to borrow the principal loan amount, the APR includes both the interest rate of the loan plus certain other lender fees, such as origination fees, discount points and some closing costs, including some title and settlement service fees. The APR is intended as a tool for borrowers to compare, among other things, closing and settlement costs across loans with similar interest rates and to easily identify when one loan has substantially higher fees than another loan at the same interest rate. Lenders are required to report to borrowers a calculation of the APR on various loan documents, including the TILA disclosure. 186. The title and settlement service fees that are excluded in the APR calculation are defined by TILA. 12 C.F.R. § 1026.4(c). Because some fees are excluded from the APR (and others are not), title and settlement service companies and lenders can manipulate – and falsely minimize – the APR by falsely allocating amounts charged for title and settlement services to those categories of fees that are excluded from the APR calculation. 187. As a regular and continuing business practice, Sierra Pacific and All Star allocate the charges for title and settlement services associated with a borrower’s loan only to those categories of title services not included in the APR, thereby falsely minimizing the APR reported on Sierra Pacific borrowers’ loan documents and required federal disclosures. 188. For example, “fees for title examination” and “abstract of title” are excluded from the APR calculation – see, 12 C.F.R. § 1026.4(c)(7)(i) – while a settlement or closing fee, or an application signing fee, is a settlement service cost required to be included in the APR calculation. See 12 C.F.R. § 1026.4(a)(1)(i). By allocating the charges associated to conducting a settlement or closing with a borrower to the category of “title exam” or “abstract” the result would be a false, and falsely minimized, APR. 189. All Star claims the false allocation of fees and manipulation of the APR as a regular business practice as early as 2011 and at least through October, 2015, allocating all charges for title and settlement service to “Title Exam” or “Abstract” because those fees are excluded from, and do not raise, the APR. See, e.g., June 6, 2011 E-mail, attached as Exhibit 30; September 24, 2015 E-mail l, attached as Exhibit 31; October 6, 2015 E- mail, attached as Exhibit 32. 190. Sierra Pacific participates in and ratifies this false allocation of fees. See Exhibit 21, 8/14/13 All Star e-mail with Titlehound. Based on this continuing pattern of practice, Plaintiffs believe, and therefore aver, that All Star and Sierra Pacific engage in the false allocation and manipulation of the APR throughout the time period Sierra Pacific is participating in the All Star Scheme. 191. For example, despite conducting a settlement or closing with each Sierra Pacific borrower, All Star and Sierra Pacific choose to not allocate any amount of All Star’s charges associated with a borrower’s loan to “settlement or closing fee” because that charge is included in the APR. Instead, All Star and Sierra Pacific allocate all charges, including that portion attributable to conducting a settlement or closing, to “Title Exam” or “Abstract”, which are excluded from the APR. See Exhibits 30-32. 192. Sierra Pacific and All Star’s choice to falsely allocate fees resulted in the fraudulent reporting of false APR’s and the false, and falsely minimized, representation of the cost of the loan to the Sierra Pacific borrower. 193. Sierra Pacific and All Star’s choice to falsely allocate fees and fraudulently report these false allocations in borrowers’ loan documents concealed from Sierra Pacific borrowers the supracompetitive pricing of title and settlement services resulting from the Kickback and Cartel Agreements and prevented borrowers from discovering the supracompetitive nature of the pricing through comparison to Sierra Pacific’s and All Star’s competitors. 194. As a regular business practice, All Star used various software programs, including “Titlehound”, to produce borrower loan documents, including documents reporting the APRs associated with a loan. All Star caused this software, including Titlehound, to be programmed to make these false allocations of title and settlement service fees and the resulting false APR calculations, and to produce Sierra Pacific loan documents to present to borrowers and on which Sierra Pacific and All Star intended borrowers rely. See Exhibits 1 and 21. 195. Sierra Pacific and All Star’s choice to falsely allocate fees and manipulate and falsely report APRs fraudulently concealed from Sierra Pacific borrowers the coordinated business relationship between Sierra Pacific and All Star under the Kickback and Cartel Agreements, the supracompetitive and higher prices for title and settlement services resulting from the Kickback and Cartel Agreements, and affirmatively prevented Sierra Pacific borrowers from discovering their injuries resulting therefrom. IV. False Representations in Sierra Pacific Borrowers’ Loan Documents 196. In addition to false representations in marketing communications to borrowers and the choice to misrepresent the actual APR’s through the intentionally classifying some of All Star’s charges as non-APR related charges, Sierra Pacific and All Star choose to make false representations on borrowers’ loan documents. 197. At all relevant times, federal law required Sierra Pacific, as a lender, to provide a “Good Faith” Estimate to the borrower within three days of taking a loan application. 12 C.F.R. § 1024.7(a)-(b). 198. Block 4 of the “Good Faith” Estimate is to state only the charges for “title services and lender’s title insurance”. 199. As a regular pattern of practice, Sierra Pacific falsely includes in Block 4 charges that are not title services and lender’s title insurance including flat fee overcharges associated with the Price Fixing and Minimum Fee Agreements. 200. Sierra Pacific’s choice to falsely include these charges in Block 4 of the “Good Faith” Estimate conceals from borrowers: (i) the charges and amounts associated with the surcharges and flat fixed fees, (ii) the fixed and supracompetitive nature of the charges, (iii) the illegal kickbacks, and (iv) the coordinated business relationship between Sierra Pacific and All Star under the Kickback and Cartel Agreements. 201. In addition to the GFE, federal law, at all relevant times, required each borrower to receive a HUD- Settlement Statement at the closing or settlement of a loan. The settlement agent produces the HUD-1, but federal regulations require the lender to provide to the settlement agent all information appearing in the HUD-1 statement. 202. Section 1100 of the HUD-1 reports to the borrower the title and settlement services provided on the loan, along with the associated charges to the borrowers for those services. 203. As a continuing pattern and regular business practice, Sierra Pacific and All Star choose and cause the false allocation of fees described in ¶¶ 185-195 to repeat and appear on Sierra Pacific borrowers’ HUD-1 statements in Section 1100. 204. As a continuing pattern and regular business practice, Sierra Pacific omits and fails to describe anywhere on a borrower’s HUD-1 statement the amount of the kickback received by Sierra Pacific related to the borrower’s loan or the fact that All Star has paid a kickback to Sierra Pacific for the assignment and referral of the borrower’s loan. Sierra Pacific is required to report the kickback on Line 801 or Line 808 of the HUD-1. 205. As a continuing pattern of practice, Sierra Pacific omits and fails to describe anywhere on a borrower’s HUD-1 statement that the borrower is being charged or the amount of any Kickback Overcharge, Attorney Fee Surcharge, or other flat fee associated with the fixed prices under the Cartel Agreements. Sierra Pacific is required to report these amounts in Section 1100 or Section 1300 of the HUD-1. 206. These false representations and omissions, presented to Sierra Pacific borrowers by All Star as Sierra Pacific’s agent at closing, fraudulently conceals: (i) the charges and amounts associated with the surcharges, overcharges, and flat fixed fees, (ii) the fixed and supracompetitive nature of the charges, (iii) the illegal kickbacks, and (iv) the coordinated business relationship between Sierra Pacific and All Star under the Kickback and Cartel Agreements. 207. Individually and collectively, Sierra Pacific and All Star’s affirmative acts of concealment – the laundering of kickbacks through third party marketing companies, the related creation of shame invoice and payment records, false marketing statements, false allocation of fees and manipulation of the reported APR, and misrepresentations and omissions on borrowers “Good Faith” Estimates, HUD-1s, and other loan documents – are outside the control of Sierra Pacific borrowers, including Plaintiffs and Class Members, and are in the sole control of, and the result of choices by, Sierra Pacific and All Star. V. Plaintiffs’ Reasonable Diligence 208. As a result of the fraudulent concealments by Sierra Pacific and All Star, the Bailey Plaintiffs, the Batton Plaintiffs, Gregory Dopkowski, the Patterson Parents Plaintiffs, the Patterson Plaintiffs, and the Welsh Plaintiffs (and, upon information and belief, all alleged Class Members) had no actual notice before, at or after the closing of their Sierra Pacific loans of the illegal kickbacks, the exchange of any thing of value between Sierra Pacific and All Star, the Price Fixing and Minimum Fee Agreements or the resulting supracompetitive nature of the prices charged for title and settlement services, or the coordinated business relationship of Sierra Pacific or All Star under the Kickback and Cartel Agreements. 209. Plaintiffs exercised reasonable diligence before, during and after the closing of their loans. A. The Bailey Plaintiffs’ Reasonable Diligence 210. As a result of the fraudulent concealments by Sierra Pacific and All Star, the Bailey Plaintiffs have no actual notice before, at or after the closing of their Sierra Pacific loan of the illegal kickbacks, the exchange of any thing of value between Sierra Pacific and All Star, the Price Fixing and Minimum Fee Agreements, the resulting supracompetitive nature of the prices charged for title and settlement services, or the coordinated business relationship of Sierra Pacific or All Star under the Kickback and Cartel Agreements. 211. The Bailey Plaintiffs exercise reasonable diligence before, during and after the closing of their loan. 212. The Bailey Plaintiffs receive loan documents prepared by Sierra Pacific in advance of their closing and review those loan documents. 213. The Bailey Plaintiffs believe, and therefore aver, that their pre-closing loan documents include the Bailey Plaintiffs’ “Good Faith” Estimate which they believe, and therefore aver, Sierra Pacific prepared. The Bailey Plaintiffs are not in possession of the “Good Faith” Estimate issued regarding their Sierra Pacific refinance and believe that document is in the sole possession of Sierra Pacific. 214. The Bailey Plaintiffs believe, and therefore aver, that their “Good Faith” Estimate does not include any description or statement of the coordinated business relationship between Sierra Pacific and All Star, or the fact that All Star has paid anything of value for Sierra Pacific’s assignment and referral of the Bailey Plaintiffs’ loan to All Star. 215. The Bailey Plaintiffs believe, and therefore aver, that their “Good Faith” Estimate does not include any description or statement of the coordinated business relationship between Sierra Pacific and All Star contains the fraudulent representations and omission described in ¶¶ 197-200 above. 216. The Bailey Plaintiffs believe and therefore aver that their “Good Faith” Estimate does not identify All Star as the provider of any title settlement service related to the Bailey Plaintiffs’ refinance. 217. The Bailey Plaintiffs believe, and therefore aver, that their pre-closing documents reflect Sierra Pacific and All Star’s false allocation of fees, and, upon information and belief, contain a false APR as described in ¶¶ 185-195. 218. The false statements and omissions made in the Bailey Plaintiffs’ pre-closing loan documents are made for the purposes of concealing, did so conceal from them, the coordinated business relationship between Sierra Pacific and All Star, the Kickback and Cartel Agreements, the fact, nature and amount of the illegal kickbacks related to the Bailey Plaintiffs’ loan, and the supracompetitive nature of prices the Bailey Plaintiffs were charged for title and settlement services. 219. As is reasonable under the circumstances, the Bailey Plaintiffs believe these pre-closing documents and the representations made therein. A reasonable borrower would have no reason to believe, and the Bailey Plaintiffs do not believe, that: (i) a coordinated business relationship exists between Sierra Pacific and All Star; (ii) there has been any payment or exchange of a thing of value between Sierra Pacific and All Star related to the assignment and referral of their Sierra Pacific loan for title and settlement services, or (iii) the prices they will be charged for title and settlement services are fixed and supracompetitive, and the result of Kickback and Cartel Agreements between Sierra Pacific and All Star. 220. The Bailey Plaintiffs act diligently during the closing or settlement of their loan. As a condition of funding their loan, Sierra Pacific requires the Bailey Plaintiffs to participate in a closing, and they attend and fully participate in the required closing. 221. The Bailey Plaintiffs believe, and therefore aver, that at the closing of their loan, they receive from All Star, or its agent, several documents, including a HUD-1 Settlement Statement. The Bailey Plaintiffs are not in possession of the documents received at their closing, including their HUD-1 issued regarding their Sierra Pacific loan, and believe that document is in the sole possession of Sierra Pacific. 222. The Bailey Plaintiffs believe, and therefore aver, that the documents they receive at their closing, including their HUD-1, do not contain a description or statement of the coordinated business relationship between Sierra Pacific and All Star under any of the Kickback or Cartel Agreements. 223. The Bailey Plaintiffs believe, and therefore aver, that the documents they receive at their closing, including their HUD-1, do not contain a description or statement of any payment, amount or thing of value that was paid by All Star to Sierra Pacific related to the Bailey Plaintiffs’ loan. 224. The Bailey Plaintiffs believe, and therefore aver, that the documents they receive at their closing, including their HUD-1, contain and reflect the false allocation of fees as described in ¶¶ 185-195. 225. The Bailey Plaintiffs believe, and therefore aver, that the documents they received at their closing, including their HUD-1, contain the false representations and omissions described in ¶¶ 201-205. 226. The false representations and omissions in the Bailey Plaintiffs’ loan closing documents are made for the purposes of concealing, and did so conceal from them, the coordinated business relationship between Sierra Pacific and All Star, the Kickback and Cartel Agreements, the fact, nature, and amount of the illegal kickback related to the Bailey Plaintiffs’ loan, the fixed and supracompetitive nature of the prices charged for title and settlement services, and their injuries and actual damages therefrom. 227. As is reasonable under the circumstances, the Bailey Plaintiffs believe these closing documents and the representations made therein. A reasonable borrower would have no reason to believe, and the Bailey Plaintiffs do not believe, that: (i) a coordinated business relationship exists between Sierra Pacific and All Star, (ii) there has been any payment or exchange of a thing of value between Sierra Pacific and All Star related to the assignment and referral of their Sierra Pacific loan for title and settlement services, or (iii) the prices charged for title and settlement services are fixed and supracompetitive and the result of Kickback and Cartel Agreements between Sierra Pacific and All Star. 228. The Bailey Plaintiffs act diligently after their closing. On or about November 13, 2018 the Bailey Plaintiffs receive a letter from undersigned counsel describing the describing an investigation of All Star and Sierra Pacific. This is the Bailey Plaintiffs’ first indication of any potential wrongful, illegal, potential harm and/or actionable conduct by anyone related to their Sierra Pacific loan. 229. Within days the Bailey Plaintiffs contact and retain counsel. The Bailey Plaintiffs file this Complaint within months of becoming aware of facts giving rise to their causes of action, injuries, and actual damages. 230. As a result of Sierra Pacific and All Star’s fraudulent concealment, and the Bailey Plaintiffs’ reasonable diligence before, during and after the closing of their loan, the statute of limitations on their claims were tolled beginning on the date of their loan closing and continuing until the Bailey Plaintiffs learning of facts giving rise to their causes of action, on or about November 13, 2018. B. The Batton Plaintiffs’ Reasonable Diligence 231. As a result of the fraudulent concealments by Sierra Pacific and All Star, the Batton Plaintiffs have no actual notice before, at or after the closing of their Sierra Pacific loan of the illegal kickbacks, the exchange of any thing of value between Sierra Pacific and All Star, the Price Fixing and Minimum Fee Agreements, the resulting supracompetitive nature of the prices charged for title and settlement services, or the coordinated business relationship of Sierra Pacific or All Star under the Kickback and Cartel Agreements. 232. The Batton Plaintiffs exercise reasonable diligence before, during and after the closing of their loan. 233. The Batton Plaintiffs receive loan documents prepared by Sierra Pacific in advance of their closing and review those loan documents. The Batton Plaintiffs’ pre-closing loan documents include their “Good Faith” Estimate which the Batton Plaintiffs believe, and therefore aver, Sierra Pacific prepared. The Batton Plaintiffs’ “Good Faith” Estimate does not include any description or statement of the coordinated business relationship between Sierra Pacific and All Star, or the fact that All Star has paid anything of value for Sierra Pacific’s assignment and referral of the Batton Plaintiffs’ loan to All Star. See Exhibit 33, Batton Plaintiffs’ “Good Faith” Estimate. 234. The Batton Plaintiffs’ “Good Faith” Estimate contains the fraudulent representations and omission described in ¶¶ 197-201 above. 235. The Batton Plaintiffs’ pre-closing documents reflect Sierra Pacific and All Star’s false allocation of fees, and, upon information and belief, contain a false APR as described in ¶¶ 185-195. 236. The false statements and omissions made in the Batton Plaintiffs’ pre-closing loan documents are made for the purposes of concealing, did so conceal from the Batton Plaintiffs, the coordinated business relationship between Sierra Pacific and All Star, the Kickback and Cartel Agreements, the fact, nature and amount of the illegal kickbacks related to the Batton Plaintiffs’ loan, and the supracompetitive nature of prices charged them for title and settlement services. 237. As is reasonable under the circumstances, the Batton Plaintiffs believe these pre-closing documents and the representations made therein. A reasonable borrower would have no reason to believe, and the Batton Plaintiffs do not believe, that: (i) a coordinated business relationship exists between Sierra Pacific and All Star; (ii) there has been any payment or exchange of a thing of value between Sierra Pacific and All Star related to the assignment and referral of the Batton Plaintiffs’ Sierra Pacific loan for title and settlement services, or (iii) the prices they will be charged for title and settlement services are fixed and supracompetitive, and the result of Kickback and Cartel Agreements between Sierra Pacific and All Star. 238. The Batton Plaintiffs act diligently during the closing or settlement of their loan. As a condition of funding their loan, Sierra Pacific requires Batton Plaintiffs to participate in a closing, and Batton Plaintiffs attend and fully participate in the required closing, and review all documents with All Star’s representative. 239. At the closing of their loan, the Batton Plaintiffs receive from All Star, or its agent, several documents, including a HUD-1 Settlement Statement. The Batton Plaintiffs review and sign all of the documents All Star presents at the closing, including the HUD- 1 Settlement Statement. 240. The documents the Batton Plaintiffs receive at their closing, including their HUD-1, do not contain a description or statement of the coordinated business relationship between Sierra Pacific and All Star under any of the Kickback or Cartel Agreements. See Exhibit 25, Batton Plaintiffs’ HUD-1. 241. The documents the Batton Plaintiffs receive at their closing, including their HUD-1, do not contain a description or statement of any payment, amount or thing of value that was paid by All Star to Sierra Pacific related to Batton Plaintiffs’ loan. 242. The documents the Batton Plaintiffs receive at their closing, including their HUD-1, contain and reflect the false allocation of fees as described in ¶¶ 185-195. 243. The documents the Batton Plaintiffs receive at their closing, including their HUD-1, contain the false representations and omissions described in ¶¶ 201-205. 244. The false representations and omissions in the Batton Plaintiffs’ loan closing documents are made for the purposes of concealing, and did so conceal from the Batton Plaintiffs, the coordinated business relationship between Sierra Pacific and All Star, the Kickback and Cartel Agreements, the fact, nature, and amount of the illegal kickback related to the Batton Plaintiffs’ loan, the fixed and supracompetitive nature of the prices charged for title and settlement services, and their injuries and actual damages therefrom. 245. As is reasonable under the circumstances, the Batton Plaintiffs believe these closing documents and the representations made therein. A reasonable borrower would have no reason to believe, and the Batton Plaintiffs do not believe, that: (i) a coordinated business relationship exists between Sierra Pacific and All Star, (ii) there has been any payment or exchange of a thing of value between Sierra Pacific and All Star related to the assignment and referral of their loan for title and settlement services, or (iii) the prices charged for title and settlement services are fixed and supracompetitive and the result of Kickback and Cartel Agreements between Sierra Pacific and All Star. 246. The Batton Plaintiffs act diligently after their closing. On or about January 3, 2019, the Batton Plaintiffs receive a letter from undersigned counsel describing an investigation of All Star and Sierra Pacific. This is the Batton Plaintiffs’ first indication of any potential wrongful, illegal, potential harm and/or actionable conduct by anyone related to their Sierra Pacific loan. 247. Within days the Batton Plaintiffs contact and retain counsel. The Batton Plaintiffs file this Complaint within months of becoming aware of facts giving rise to their causes of action, injuries, and actual damages. 248. As a result of the Sierra Pacific’s and All Star’s fraudulent concealment, and Batton Plaintiffs’ reasonable diligence before, during and after the closing of their loan, the statute of limitations related to the Batton Plaintiffs’ claims was tolled beginning on the date of their loan closing and continuing until the Batton Plaintiffs’ learning of facts giving rise to their causes of action, on or about January 3, 2019. C. Gregory Dopkowski’s Reasonable Diligence 249. As a result of the fraudulent concealments by Sierra Pacific and All Star, Plaintiff Dopkowski has no actual notice before, at or after the closing of his Sierra Pacific loan of the illegal kickbacks, the exchange of any thing of value between Sierra Pacific and All Star, the Price Fixing and Minimum Fee Agreements, the resulting supracompetitive nature of the prices charged for title and settlement services, or the coordinated business relationship of Sierra Pacific or All Star under the Kickback and Cartel Agreements. 250. Plaintiff Dopkowski exercises reasonable diligence before, during and after the closing of his loan. 251. Plaintiff Dopkowski receives loan documents prepared by Sierra Pacific in advance of his closing and reviews those loan documents. 252. Plaintiff Dopkowski believes, and therefore avers, that his pre-closing loan documents include Plaintiff Dopkowski’s “Good Faith” Estimate which he believes, and therefore avers, Sierra Pacific prepared. Plaintiff Dopkowski is not in possession of the “Good Faith” Estimate issued regarding his Sierra Pacific refinance and believe that document is in the sole possession of Sierra Pacific. 253. Plaintiff Dopkowski believes, and therefore avers, that his “Good Faith” Estimate does not include any description or statement of the coordinated business relationship between Sierra Pacific and All Star, or the fact that All Star has paid anything of value for Sierra Pacific’s assignment and referral of Plaintiff Dopkowski’s loan to All Star. 254. Plaintiff Dopkowski believes, and therefore avers, that his “Good Faith” Estimate does not include any description or statement of the coordinated business relationship between Sierra Pacific and All Star contains the fraudulent representations and omission described in ¶¶ 197-200 above. Plaintiff Dopkowski believes and therefore avers that his “Good Faith” Estimate does not identify All Star as the provider of any title settlement service related to Plaintiff Dopkowski’s refinance. 255. Plaintiff Dopkowski believes, and therefore avers, that his pre-closing documents reflect Sierra Pacific and All Star’s false allocation of fees, and, upon information and belief, contain a false APR as described in ¶¶ 185-195. 256. The false statements and omissions made in Plaintiff Dopkowski’s pre-closing loan documents are made for the purposes of concealing, did so conceal from him, the coordinated business relationship between Sierra Pacific and All Star, the Kickback and Cartel Agreements, the fact, nature and amount of the illegal kickbacks related to Plaintiff Dopkowski’s loan, and the supracompetitive nature of prices Plaintiff Dopkowski was charged for title and settlement services. 257. As is reasonable under the circumstances, Plaintiff Dopkowski believes these pre-closing documents and the representations made therein. A reasonable borrower would have no reason to believe, and Plaintiff Dopkowski does not believe, that: (i) a coordinated business relationship exists between Sierra Pacific and All Star; (ii) there has been any payment or exchange of a thing of value between Sierra Pacific and All Star related to the assignment and referral of his Sierra Pacific loan for title and settlement services, or (iii) the prices he will be charged for title and settlement services are fixed and supracompetitive, and the result of Kickback and Cartel Agreements between Sierra Pacific and All Star. 258. Plaintiff Dopkowski acts diligently during the closing or settlement of his loan. As a condition of funding their loan, Sierra Pacific requires Plaintiff Dopkowski to participate in a closing, and Plaintiff Dopkowski attends and fully participates in the required closing. 259. Plaintiff Dopkowski believes, and therefore avers, that at the closing of his loan, the Plaintiff Dopkowski receives from All Star, or its agent, several documents, including a HUD-1 Settlement Statement. Plaintiff Dopkowski is not in possession of the documents received at his closing, including his HUD-1 issued regarding his Sierra Pacific loan, and believes that document is in the sole possession of Sierra Pacific. 260. Plaintiff Dopkowski believes, and therefore avers, that the documents he receives at his closing, including his HUD-1, do not contain a description or statement of the coordinated business relationship between Sierra Pacific and All Star under any of the Kickback or Cartel Agreements. 261. Plaintiff Dopkowski believes, and therefore avers, that the documents he receives at his closing, including his HUD-1, do not contain a description or statement of any payment, amount or thing of value that was paid by All Star to Sierra Pacific related to Plaintiff Dopkowski’s loan. 262. Plaintiff Dopkowski believes, and therefore avers, that the documents he receives at his closing, including his HUD-1, contain and reflect the false allocation of fees as described in ¶¶ 185-195. 263. Plaintiff Dopkowski believes, and therefore avers, that the documents he receives at his closing, including his HUD-1, contain the false representations and omissions described in ¶¶ 201-205. 264. The false representations and omissions in Plaintiff Dopkowski’s loan closing documents are made for the purposes of concealing, and did so conceal from Plaintiff Dopkowski, the coordinated business relationship between Sierra Pacific and All Star, the Kickback and Cartel Agreements, the fact, nature, and amount of the illegal kickback related to Plaintiff Dopkowski’s loan, the fixed and supracompetitive nature of the prices charged for title and settlement services, and their injuries and actual damages therefrom. 265. As is reasonable under the circumstances, Plaintiff Dopkowski believes these closing documents and the representations made therein. A reasonable borrower would have no reason to believe, and Plaintiff Dopkowski does not believe, that: (i) a coordinated business relationship exists between Sierra Pacific and All Star, (ii) there has been any payment or exchange of a thing of value between Sierra Pacific and All Star related to the assignment and referral of his loan for title and settlement services, or (iii) the prices charged for title and settlement services are fixed and supracompetitive and the result of Kickback and Cartel Agreements between Sierra Pacific and All Star. 266. Plaintiff Dopkowski acts diligently after his closing. On or about January 3, 2019, Plaintiff Dopkowski receives a letter from undersigned counsel describing an investigation of All Star and Sierra Pacific. This is Plaintiff Dopkowski’s first indication of any potential wrongful, illegal, potential harm and/or actionable conduct by anyone related to their Sierra Pacific loan. 267. Within days Plaintiff Dopkowski contacts and retains counsel. Plaintiff Dopkowski files this Complaint within months of becoming aware of facts giving rise to his causes of action, injuries, and actual damages. 268. As a result of the Sierra Pacific’s and All Star’s fraudulent concealment, and Plaintiff Dopkowski’s reasonable diligence before, during and after the closing of his loan, the statute of limitations related to Plaintiff Dopkowski’s claims was tolled beginning on the date of his loan closing and continuing until Plaintiff Dopkowski’s learning of facts giving rise to his causes of action, on or about January 3, 2019. D. The Patterson Parents Plaintiffs’ Reasonable Diligence 269. As a result of the fraudulent concealments by Sierra Pacific and All Star, the Patterson Plaintiffs have no actual notice before, at or after the closing of their Sierra Pacific loan of the illegal kickbacks, the exchange of any thing of value between Sierra Pacific and All Star, the Price Fixing and Minimum Fee Agreements, the resulting supracompetitive nature of the prices charged for title and settlement services, or the coordinated business relationship of Sierra Pacific or All Star under the Kickback and Cartel Agreements. 270. The Patterson Parents Plaintiffs exercise reasonable diligence before, during and after the closing of their loan. 271. The Patterson Parents Plaintiffs receive loan documents prepared by Sierra Pacific in advance of their closing and review those loan documents. 272. The Patterson Parents Plaintiffs believe, and therefore aver, that their pre-closing loan documents include the Patterson Parents Plaintiffs’ “Good Faith” Estimate which they believe, and therefore aver, Sierra Pacific prepared. The Patterson Parents Plaintiffs are not in possession of the “Good Faith” Estimate issued regarding their Sierra Pacific refinance and believe that document is in the sole possession of Sierra Pacific. 273. The Patterson Parents Plaintiffs believe, and therefore aver, that their “Good Faith” Estimate does not include any description or statement of the coordinated business relationship between Sierra Pacific and All Star, or the fact that All Star has paid anything of value for Sierra Pacific’s assignment and referral of the Patterson Parents Plaintiffs’ loan to All Star. 274. The Patterson Parents Plaintiffs believe, and therefore aver, that their “Good Faith” Estimate does not include any description or statement of the coordinated business relationship between Sierra Pacific and All Star contains the fraudulent representations and omission described in ¶¶ 197-200 above. The Patterson Parents Plaintiffs believe and therefore aver that their “Good Faith” Estimate does not identify All Star as the provider of any title settlement service related to the Patterson Parents Plaintiffs’ refinance. 275. The Patterson Parents Plaintiffs believe, and therefore aver, that their pre-closing documents reflect Sierra Pacific and All Star’s false allocation of fees, and, upon information and belief, contain a false APR as described in ¶¶ 185-195. 276. The false statements and omissions made in the Patterson Parents Plaintiffs’ pre-closing loan documents are made for the purposes of concealing, did so conceal from them, the coordinated business relationship between Sierra Pacific and All Star, the Kickback and Cartel Agreements, the fact, nature and amount of the illegal kickbacks related to the Patterson Parents Plaintiffs’ loan, and the supracompetitive nature of prices the Patterson Parents Plaintiffs were charged for title and settlement services. 277. As is reasonable under the circumstances, the Patterson Parents Plaintiffs believe these pre-closing documents and the representations made therein. A reasonable borrower would have no reason to believe, and the Patterson Parents Plaintiffs do not believe, that: (i) a coordinated business relationship exists between Sierra Pacific and All Star; (ii) there has been any payment or exchange of a thing of value between Sierra Pacific and All Star related to the assignment and referral of their Sierra Pacific loan for title and settlement services, or (iii) the prices they will be charged for title and settlement services are fixed and supracompetitive, and the result of Kickback and Cartel Agreements between Sierra Pacific and All Star. 278. The Patterson Parents Plaintiffs act diligently during the closing or settlement of their loan. As a condition of funding their loan, Sierra Pacific requires Patterson Parents Plaintiffs to participate in a closing, and Patterson Parents Plaintiffs attend and fully participate in the required closing, and review all documents with All Star’s representative. 279. At the closing of their loan, the Patterson Parents Plaintiffs receive from All Star, or its agent, several documents, including a HUD-1 Settlement Statement. The Patterson Parents Plaintiffs review and sign all of the documents All Star presents at the closing, including the HUD-1 Settlement Statement. 280. The documents the Patterson Parents Plaintiffs receive at their closing, including their HUD-1, do not contain a description or statement of the coordinated business relationship between Sierra Pacific and All Star under any of the Kickback or Cartel Agreements. See Exhibit 26, Patterson Parents Plaintiffs’ HUD-1. 281. The documents the Patterson Parents Plaintiffs receive at their closing, including their HUD-1, do not contain a description or statement of any payment, amount or thing of value that was paid by All Star to Sierra Pacific related to Patterson Parents Plaintiffs’ loan. 282. The documents the Patterson Parents Plaintiffs receive at their closing, including their HUD-1, contain and reflect the false allocation of fees as described in ¶¶ 185-195. 283. The documents the Patterson Parents Plaintiffs receive at their closing, including their HUD-1, contain the false representations and omissions described in ¶¶ 201-205. 284. The false representations and omissions in the Patterson Parents Plaintiffs’ loan closing documents are made for the purposes of concealing, and did so conceal from the Patterson Parents Plaintiffs, the coordinated business relationship between Sierra Pacific and All Star, the Kickback and Cartel Agreements, the fact, nature, and amount of the illegal kickback related to the Patterson Parents Plaintiffs’ loan, the fixed and supracompetitive nature of the prices charged for title and settlement services, and their injuries and actual damages therefrom. 285. As is reasonable under the circumstances, the Patterson Parents Plaintiffs believe these closing documents and the representations made therein. A reasonable borrower would have no reason to believe, and the Patterson Parents Plaintiffs do not believe, that: (i) a coordinated business relationship exists between Sierra Pacific and All Star, (ii) there has been any payment or exchange of a thing of value between Sierra Pacific and All Star related to the assignment and referral of their loan for title and settlement services, or (iii) the prices charged for title and settlement services are fixed and supracompetitive and the result of Kickback and Cartel Agreements between Sierra Pacific and All Star. 286. The Patterson Parents Plaintiffs act diligently after their closing. On or about January 3, 2019, the Patterson Parents Plaintiffs receive a letter from undersigned counsel describing an investigation of All Star and Sierra Pacific. This is the Patterson Parents Plaintiffs’ first indication of any potential wrongful, illegal, potential harm and/or actionable conduct by anyone related to their Sierra Pacific loan. 287. Within days the Patterson Parents Plaintiffs contact and retain counsel. The Patterson Parents Plaintiffs file this Complaint within months of becoming aware of facts giving rise to their causes of action, injuries, and actual damages. 288. As a result of the Sierra Pacific’s and All Star’s fraudulent concealment, and the Patterson Parents Plaintiffs’ reasonable diligence before, during and after the closing of their loan, the statute of limitations related to the Patterson Parents Plaintiffs’ claims was tolled beginning on the date of their loan closing and continuing until the Patterson Parents Plaintiffs’ learning of facts giving rise to their causes of action, on or about January 3, 2019. E. The Patterson Plaintiffs’ Reasonable Diligence 289. As a result of the fraudulent concealments by Sierra Pacific and All Star, the Patterson Plaintiffs have no actual notice before, at or after the closing of their Sierra Pacific loan of the illegal kickbacks, the exchange of any thing of value between Sierra Pacific and All Star, the Price Fixing and Minimum Fee Agreements, the resulting supracompetitive nature of the prices charged for title and settlement services, or the coordinated business relationship of Sierra Pacific or All Star under the Kickback and Cartel Agreements. 290. The Patterson Plaintiffs exercise reasonable diligence before, during and after the closing of their loan. 291. The Patterson Plaintiffs receive loan documents prepared by Sierra Pacific in advance of their closing and review those loan documents. 292. The Patterson Plaintiffs believe, and therefore aver, that their pre-closing loan documents include the Patterson Plaintiffs’ “Good Faith” Estimate which they believe, and therefore aver, Sierra Pacific prepared. The Patterson Plaintiffs are not in possession of the “Good Faith” Estimate issued regarding their Sierra Pacific refinance and believe that document is in the sole possession of Sierra Pacific. 293. The Patterson Plaintiffs believe, and therefore aver, that their “Good Faith” Estimate does not include any description or statement of the coordinated business relationship between Sierra Pacific and All Star, or the fact that All Star has paid anything of value for Sierra Pacific’s assignment and referral of the Patterson Plaintiffs’ loan to All Star. 294. The Patterson Plaintiffs believe, and therefore aver, that their “Good Faith” Estimate does not include any description or statement of the coordinated business relationship between Sierra Pacific and All Star contains the fraudulent representations and omission described in ¶¶ 197-200 above. The Patterson Plaintiffs believe and therefore aver that their “Good Faith” Estimate does not identify All Star as the provider of any title settlement service related to the Patterson Plaintiffs’ refinance. 295. The Patterson Plaintiffs believe, and therefore aver, that their pre-closing documents reflect Sierra Pacific and All Star’s false allocation of fees, and, upon information and belief, contain a false APR as described in ¶¶ 185-195. 296. The false statements and omissions made in the Patterson Plaintiffs’ pre-closing loan documents are made for the purposes of concealing, did so conceal from them, the coordinated business relationship between Sierra Pacific and All Star, the Kickback and Cartel Agreements, the fact, nature and amount of the illegal kickbacks related to the Patterson Plaintiffs’ loan, and the supracompetitive nature of prices the Patterson Plaintiffs were charged for title and settlement services. 297. As is reasonable under the circumstances, the Patterson Plaintiffs believe these pre- closing documents and the representations made therein. A reasonable borrower would have no reason to believe, and the Patterson Plaintiffs do not believe, that: (i) a coordinated business relationship exists between Sierra Pacific and All Star; (ii) there has been any payment or exchange of a thing of value between Sierra Pacific and All Star related to the assignment and referral of their Sierra Pacific loan for title and settlement services, or (iii) the prices they will be charged for title and settlement services are fixed and supracompetitive, and the result of Kickback and Cartel Agreements between Sierra Pacific and All Star. 298. The Patterson Plaintiffs act diligently during the closing or settlement of their loan. As a condition of funding their loan, Sierra Pacific requires the Patterson Plaintiffs to participate in a closing, and they attend and fully participate in the required closing. 299. The Patterson Plaintiffs believe, and therefore aver, that at the closing of their loan, they receive from All Star, or its agent, several documents, including a HUD-1 Settlement Statement. The Patterson Plaintiffs are not in possession of the documents received at their closing, including their HUD-1 issued regarding their Sierra Pacific loan, and believe that document is in the sole possession of Sierra Pacific. 300. The Patterson Plaintiffs believe, and therefore aver, that the documents they receive at their closing, including their HUD-1, do not contain a description or statement of the coordinated business relationship between Sierra Pacific and All Star under any of the Kickback or Cartel Agreements. 301. The Patterson Plaintiffs believe, and therefore aver, that the documents they receive at their closing, including their HUD-1, do not contain a description or statement of any payment, amount or thing of value that was paid by All Star to Sierra Pacific related to the Patterson Plaintiffs’ loan. 302. The Patterson Plaintiffs believe, and therefore aver, that the documents they receive at their closing, including their HUD-1, contain and reflect the false allocation of fees as described in ¶¶ 185-195. 303. The Patterson Plaintiffs believe, and therefore aver, that the documents they receive at their closing, including their HUD-1, contain the false representations and omissions described in ¶¶ 201-205. 304. The false representations and omissions in the Patterson Plaintiffs’ loan closing documents are made for the purposes of concealing, and did so conceal from them, the coordinated business relationship between Sierra Pacific and All Star, the Kickback and Cartel Agreements, the fact, nature, and amount of the illegal kickback related to the Patterson Plaintiffs’ loan, the fixed and supracompetitive nature of the prices charged for title and settlement services, and their injuries and actual damages therefrom. 305. As is reasonable under the circumstances, the Patterson Plaintiffs believe these closing documents and the representations made therein. A reasonable borrower would have no reason to believe, and the Patterson Plaintiffs do not believe, that: (i) a coordinated business relationship exists between Sierra Pacific and All Star, (ii) there has been any payment or exchange of a thing of value between Sierra Pacific and All Star related to the assignment and referral of their Sierra Pacific loan for title and settlement services, or (iii) the prices charged for title and settlement services are fixed and supracompetitive and the result of Kickback and Cartel Agreements between Sierra Pacific and All Star. 306. The Patterson Plaintiffs act diligently after their closing. On or January 3, 2019 the Patterson Plaintiffs receive a letter from undersigned counsel describing the describing an investigation of All Star and Sierra Pacific. This is the Patterson Plaintiffs’ first indication of any potential wrongful, illegal, potential harm and/or actionable conduct by anyone related to their Sierra Pacific loan. 307. Within days the Patterson Plaintiffs contact and retain counsel. The Patterson Plaintiffs file this Complaint within months of becoming aware of facts giving rise to their causes of action, injuries, and actual damages. 308. As a result of Sierra Pacific and All Star’s fraudulent concealment, and the Patterson Plaintiffs’ reasonable diligence before, during and after the closing of their loan, the statute of limitations on their claims were tolled beginning on the date of their loan closing and continuing until the Patterson Plaintiffs learning of facts giving rise to their causes of action, on or about January 3, 2019. F. The Welsh Plaintiffs’ Reasonable Diligence 309. As a result of the fraudulent concealments by Sierra Pacific and All Star, the Welsh Plaintiffs have no actual notice before, at or after the closing of their Sierra Pacific loan of the illegal kickbacks, the exchange of any thing of value between Sierra Pacific and All Star, the Price Fixing and Minimum Fee Agreements, the resulting supracompetitive nature of the prices charged for title and settlement services, or the coordinated business relationship of Sierra Pacific or All Star under the Kickback and Cartel Agreements. 310. The Welsh Plaintiffs exercise reasonable diligence before, during and after the closing of their loan. 311. The Welsh Plaintiffs receive loan documents prepared by Sierra Pacific in advance of their closing and review those loan documents. The Welsh Plaintiffs’ pre-closing loan documents include their “Good Faith” Estimate which the Welsh Plaintiffs believe, and therefore aver, Sierra Pacific prepared. The Welsh Plaintiffs’ “Good Faith” Estimate does not include any description or statement of the coordinated business relationship between Sierra Pacific and All Star, or the fact that All Star has paid anything of value for Sierra Pacific’s assignment and referral of the Welsh Plaintiffs’ loan to All Star. See Exhibit 34, Welsh Plaintiffs’ “Good Faith” Estimate. 312. The Welsh Plaintiffs’ “Good Faith” Estimate contains the fraudulent representations and omission described in ¶¶ 197-201 above. 313. The Welsh Plaintiffs’ pre-closing documents reflect Sierra Pacific and All Star’s false allocation of fees, and, upon information and belief, contain a false APR as described in ¶¶ 185-195. 314. The false statements and omissions made in the Welsh Plaintiffs’ pre-closing loan documents are made for the purposes of concealing, did so conceal from the Welsh Plaintiffs, the coordinated business relationship between Sierra Pacific and All Star, the Kickback and Cartel Agreements, the fact, nature and amount of the illegal kickbacks related to the Welsh Plaintiffs’ loan, and the supracompetitive nature of prices charged them for title and settlement services. 315. As is reasonable under the circumstances, the Welsh Plaintiffs believe these pre-closing documents and the representations made therein. A reasonable borrower would have no reason to believe, and the Welsh Plaintiffs do not believe, that: (i) a coordinated business relationship exists between Sierra Pacific and All Star; (ii) there has been any payment or exchange of a thing of value between Sierra Pacific and All Star related to the assignment and referral of the Welsh Plaintiffs’ Sierra Pacific loan for title and settlement services, or (iii) the prices they will be charged for title and settlement services are fixed and supracompetitive, and the result of Kickback and Cartel Agreements between Sierra Pacific and All Star. 316. The Welsh Plaintiffs act diligently during the closing or settlement of their loan. As a condition of funding their loan, Sierra Pacific requires Welsh Plaintiffs to participate in a closing, and Welsh Plaintiffs attend and fully participate in the required closing, and review all documents with All Star’s representative. 317. At the closing of their loan, the Welsh Plaintiffs receive from All Star, or its agent, several documents, including a HUD-1 Settlement Statement. The Welsh Plaintiffs review and sign all of the documents All Star presents at the closing, including the HUD- 1 Settlement Statement. 318. The documents the Welsh Plaintiffs receive at their closing, including their HUD-1, do not contain a description or statement of the coordinated business relationship between Sierra Pacific and All Star under any of the Kickback or Cartel Agreements. See Exhibit 27, Welsh Plaintiffs’ HUD-1. 319. The documents the Welsh Plaintiffs receive at their closing, including their HUD-1, do not contain a description or statement of any payment, amount or thing of value that was paid by All Star to Sierra Pacific related to Welsh Plaintiffs’ loan. 320. The documents the Welsh Plaintiffs receive at their closing, including their HUD-1, contain and reflect the false allocation of fees as described in ¶¶ 185-195. 321. The documents the Welsh Plaintiffs receive at their closing, including their HUD-1, contain the false representations and omissions described in ¶¶ 201-205. 322. The false representations and omissions in the Welsh Plaintiffs’ loan closing documents are made for the purposes of concealing, and did so conceal from the Welsh Plaintiffs, the coordinated business relationship between Sierra Pacific and All Star, the Kickback and Cartel Agreements, the fact, nature, and amount of the illegal kickback related to the Welsh Plaintiffs’ loan, the fixed and supracompetitive nature of the prices charged for title and settlement services, and their injuries and actual damages therefrom. 323. As is reasonable under the circumstances, the Welsh Plaintiffs believe these closing documents and the representations made therein. A reasonable borrower would have no reason to believe, and the Welsh Plaintiffs do not believe, that: (i) a coordinated business relationship exists between Sierra Pacific and All Star, (ii) there has been any payment or exchange of a thing of value between Sierra Pacific and All Star related to the assignment and referral of their loan for title and settlement services, or (iii) the prices charged for title and settlement services are fixed and supracompetitive and the result of Kickback and Cartel Agreements between Sierra Pacific and All Star. 324. The Welsh Plaintiffs act diligently after their closing. On or about January 3, 2019, the Welsh Plaintiffs receive a letter from undersigned counsel describing an investigation of All Star and Sierra Pacific. This is the Welsh Plaintiffs’ first indication of any potential wrongful, illegal, potential harm and/or actionable conduct by anyone related to their Sierra Pacific loan. 325. Within days the Welsh Plaintiffs contact and retain counsel. The Welsh Plaintiffs file this Complaint within months of becoming aware of facts giving rise to their causes of action, injuries, and actual damages. 326. As a result of the Sierra Pacific’s and All Star’s fraudulent concealment, and Welsh Plaintiffs’ reasonable diligence before, during and after the closing of their loan, the statute of limitations related to the Welsh Plaintiffs’ claims was tolled beginning on the date of their loan closing and continuing until the Welsh Plaintiffs’ learning of facts giving rise to their causes of action, on or about January 3, 2019. VI. Accrual and Tolling of Limitations 327. The Batton Plaintiffs’ claims pursuant to pursuant to 15 U.S.C. § 1 and 18 U.S.C. § 1964 accrued at the earliest, for the purpose of the limitations period provided in 15 U.SC. § 15(b), on the date of their injury, that is on or about September 30, 2015, the date their loan proceeds were disbursed and the Batton Plaintiffs incurred and paid the fixed and supracompetitive prices resulting from the Kickback and Cartel Agreements. The Batton Plaintiffs’ claims are brought within four years of that date, and are not subject to any limitations defense. 328. In addition, Plaintiff Dopkowski’s claims pursuant to pursuant to 15 U.S.C. § 1 and 18 U.S.C. § 1964 accrued at the earliest, for the purpose of the limitations period provided in 15 U.SC. §15(b), on the date of his injury, that is on or about October 26, 2015, the date his loan proceeds were disbursed and Plaintiff Dopkowski incurred and paid the fixed and supracompetitive prices resulting from the Kickback and Cartel Agreements. Plaintiff Dopkowski’s claims are brought within four years of that date, and are not subject to any limitations defense. 329. The Patterson Parents Plaintiffs’ claims pursuant to pursuant to 15 U.S.C. § 1 and 18 U.S.C. § 1964 accrued at the earliest, for the purpose of the limitations period provided in 15 U.SC. § 15(b), on the date of their injury, that is on or about September 21, 2015, the date their loan proceeds were disbursed and the Patterson Parents Plaintiffs incurred and paid the fixed and supracompetitive prices resulting from the Kickback and Cartel Agreements. The Patterson Parents Plaintiffs’ claims are brought within four years of that date, and are not subject to any limitations defense. 330. The Patterson Plaintiffs’ claims pursuant to pursuant to 15 U.S.C. § 1 and 18 U.S.C. § 1964 accrued at the earliest, for the purpose of the limitations period provided in 15 U.SC. § 15(b), on the date of their injury, that is on or about June 10, 2015, the date their loan proceeds were disbursed and the Patterson Plaintiffs incurred and paid the fixed and supracompetitive prices resulting from the Kickback and Cartel Agreements. The Patterson Plaintiffs’ claims are brought within four years of that date, and are not subject to any limitations defense. 331. The Welsh Plaintiffs’ claims pursuant to pursuant to 15 U.S.C. § 1 and 18 U.S.C. § 1964 accrued at the earliest, for the purpose of the limitations period provided in 15 U.SC. § 15(b), on the date of their injury, that is on or about February 27, 2015, the date their loan proceeds were disbursed and the Welsh Plaintiffs incurred and paid the fixed and supracompetitive prices resulting from the Kickback and Cartel Agreements. The Welsh Plaintiffs’ claims are brought within four years of that date, and are not subject to any limitations defense. 332. In addition, and in the alternative, the limitations period provided in 15 U.S.C. § 15(b), applicable to claims pursuant to 15 U.S.C. § 1 and 18 U.S.C. § 1964, is subject to the discovery of injury rule. Detrick v. Panalpina, 108 F.3d 529 (4th Cir. 1997) cert. denied 1997 U.S. Dist. LEXIS 4626. Sierra Pacific’s affirmative acts precluded Sierra Pacific borrowers, including all Plaintiffs and Class Members, from discovering the fixed and supracompetitive nature of the prices charged for title and settlement services, and affirmatively prevented Sierra Pacific borrowers, including Plaintiffs and Class Members, from discovering the fact of their injuries resulting therefrom. 333. As a result, Plaintiffs’, and Class Members’, claims pursuant to 15 U.S.C. § 1 and 18 U.S.C. § 1964 did not accrue, for the purpose of the limitations period provided in 15 U.SC. § 15(b), until such time as Plaintiffs, and Class Members, knew, or should have known, of their injury – for the Bailey Plaintiffs, on or about November 13, 2018, and for the Batton Plaintiffs, Gregory Dopkowski, the Patterson Parents Plaintiffs, the Patterson Plaintiffs and the Welsh Plaintiffs, on or about January 3, 2019. 334. In addition and in the alternative, as a result of Sierra Pacific’s and All Star’s fraudulent concealments and Plaintiffs’ reasonable diligence before, during and after the closing of Plaintiffs’ loans, the statute of limitations as to all causes of action pled herein are and should be tolled beginning on the date of each Plaintiffs’ loan closing and continuing until the learning of facts giving rise to the causes of action pled herein: for the Bailey Plaintiffs, on or about November 13, 2018, and for the Batton Plaintiffs, Gregory Dopkowski, the Patterson Parents Plaintiffs, the Patterson Plaintiffs, and the Welsh Plaintiffs, on or about January 3, 2019. 335. Plaintiffs believe, and therefore aver, that the fraudulent concealments described herein were an integral component of the Kickback and Cartel Agreements and the All Star Scheme, and typical of all alleged Class Members’ transactions such that all Class Members are entitled to the equitable tolling of applicable limitations period. COUNT I Violation of the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. § 2607(a) 336. Plaintiffs incorporate the above stated paragraphs as if restated herein. 337. All transactions at issue in the instant complaint are incident to or part of real estate settlement services involving federally related mortgage loans and thereby are subject to the provisions of RESPA, 12 U.S.C. § 2601, et seq. 338. Sierra Pacific laundered by and through its president, mortgage brokers, loan officers, employees and/or agents received and accepted things of value paid by All Star in exchange for the assignment and referral of business to All Star in violation of RESPA, 12 U.S.C. § 2607(a). 339. All loans referred to All Star under the Kickback Scheme were secured by first or subordinate liens on residential real property and were made in whole or in part by Sierra Pacific and/or its affiliates whose deposits or accounts are insured by the Federal Government and/or who are regulated by an agency of the Federal Government. 340. The payment and/or arranging of payment of kickbacks to Sierra Pacific by All Star and Sierra Pacific’s receipt thereof constitute a violation of § 8(a) of RESPA, which prohibits the payment of referral fees or kickbacks pursuant to an agreement in connection with the origination or brokering of federally related mortgage loans. 341. Plaintiffs allege claims for violations of 12 U.S.C. §2607(a) on their own behalf and pursuant to Fed. R. Civ. P. 23 with the class defined as follows: All individuals in the United States who were borrowers on a federally related mortgage loan (as defined under the Real Estate Settlement Procedures Act, 12 U.S.C. § 2602) originated or brokered by Sierra Pacific Mortgage Company, Inc. for which All Star Title, Inc. provided a settlement service, as identified in Section 1100 on the borrower’s HUD-1, between January 1, 2012 and December 31, 2016. Exempted from this class is any person who, during the period of January 1, 2012 through December 31, 2016, was an employee, officer, member and/or agent of Sierra Pacific Mortgage Company, Inc. or All Star Title, Inc. (the “RESPA Class”). 342. There are questions of law and fact common to the claims of each and all members of the RESPA Class. These common questions include, but are not limited to: a. Whether there existed a referral agreement between Sierra Pacific and All Star whereby Sierra Pacific agreed to assign and refer Sierra Pacific loans, refinances and reverse mortgages to All Star in return for kickbacks; b. Whether Sierra Pacific and its employees and/or agents received illegal kickbacks from All Star for the assignment and referral of business to All Star; c. Whether the illegal kickbacks to Sierra Pacific and its employees and/or agents violated RESPA; d. Whether Sierra Pacific and All Star used third party marketing companies to launder kickbacks related to Sierra Pacific loans; e. Whether Plaintiffs and RESPA Class Members were forced to pay more for said settlement services; f. Whether Sierra Pacific used sham and/or split invoices and sham payment records to actively and fraudulently conceal the payment, receipt and acceptance of illegal kickbacks; g. Whether Sierra Pacific disclosed or described to any borrower its coordinated business relationship with All Star or the fact that a thing of value had been exchanged between Sierra Pacific and All Star related to any borrower’s loan; h. Whether Sierra Pacific disclosed or described on any borrowers “Good Faith” Estimate, HUD-1 or other loan document Sierra Pacific’s coordinated business relationship with All Star or the fact that a thing of value had been exchanged between Sierra Pacific and All Star related to any borrower’s loan; i. Whether despite exercising reasonable due diligence, Plaintiffs and RESPA Class Members did not and could not have learned of the illegal kickbacks until contacted by counsel; j. Whether Plaintiffs and RESPA Class Members are entitled to treble damages under RESPA; and k. Whether Plaintiffs and RESPA Class Members are entitled to attorneys’ fees and expenses under RESPA. 343. These common issues of law and fact predominate over any question affecting only individual RESPA Class Members. 344. Plaintiffs’ transactions and claims are typical of the claims or defenses of the respective RESPA Class Members, and are subject to the same statutory measure of damages set forth in 12 U.S.C. § 2607(d)(2). 345. Plaintiffs will fairly and adequately protect the interests of the RESPA Class. The interests Plaintiffs and all other members of the RESPA Class are identical. 346. Plaintiffs’ counsel has substantial experience in complex litigation and class action proceedings, have been approved as class and settlement class counsel in multiple U.S. District Courts in similar litigation, and will adequately represent the RESPA Class’s interests. 347. The RESPA Class consists of borrowers on more than 300 loans, and thus are so numerous that joinder of all members is impracticable. 348. Separate actions by individual members of the class would create a risk of inconsistent or varying adjudications with respect to individual members of the class that would establish incompatible standards of conduct for Sierra Pacific. 349. This action entails questions of law and fact common to RESPA Class Members that predominate over any questions affecting only individual plaintiffs; therefore, a class action is superior to other available methods of fair and efficient adjudication of this litigation. 350. Most members of the RESPA Class are unaware of their rights to prosecute a claim against Sierra Pacific. 351. No member of the RESPA Class has a substantial interest in individually controlling the prosecution of a separate action, but if he or she does, he or she may exclude himself or herself from the class upon the receipt of notice under Fed. R. Civ. P. 23(c). COUNT II Violation of the Sherman Act, 15 U.S.C. § 1 352. Plaintiffs incorporate the above stated paragraphs as if restated herein. 353. All Star and Sierra Pacific conspired to and executed an agreement to fix the price of title and settlement services charged to borrowers on refinances, reverse mortgages, and other mortgage loans, in violation of the Sherman Act, 15 U.S.C. § 1. 354. As a direct and proximate result of the Cartel Agreements between Sierra Pacific and All Star, Plaintiffs and Class Members were charged and paid supracompetitive prices for title and settlement services and were charged and paid more for title and settlement services than they otherwise would have without the Cartel Agreements. 355. As a direct and proximate result of the Cartel Agreements between Sierra Pacific and All Star, Plaintiffs and Class Members were injured and suffered actual damages in the amount of at least $300.00, which is the minimum difference between the lowest amount charged by All Star for settlement services with another lender and the amount charged to Plaintiffs under the Price Fixing and Minimum Fee Agreements with Sierra Pacific and is the Kickback Overcharge. 356. Plaintiffs allege claims pursuant to Fed. R. Civ. P. 23 for violations of 15 U.S.C. § 1 (“Antitrust Class”), with the alleged Antitrust Class defined as: All individuals in the United States who were borrowers on a federally related mortgage loan (as defined under the Real Estate Settlement Procedures Act, 12 U.S.C. § 2602) originated or brokered by Sierra Pacific Mortgage Company, Inc. for which All Star Title, Inc. provided a settlement service, as identified in Section 1100 on the borrower’s HUD-1, between January 1, 2012 and December 31, 2017. Exempted from this class is any person who, during the period of January 1, 2012 through December 31, 2017, was an employee, officer, member and/or agent of Sierra Pacific Mortgage Company, Inc. or All Star Title, Inc. 357. The Antitrust Class consists of borrowers on more than 300 loans, and thus are so numerous that joinder of all members is impracticable. 358. There are questions of law and fact common to the claims of each and all members of the Antitrust Class. These common questions include, but are not limited to: a. Whether Sierra Pacific and its employees and/or agents violated the Sherman Act by conspiring to and fixing the title and settlement services fees charged to and paid by Plaintiffs and Antitrust Class Members; b. Whether Sierra Pacific and its employees and/or agents violated the Sherman Act by conspiring to and agreeing to supporting the Price Fixing and Minimum Fee Agreements through a concerted refusal to deal with non-cartel title and settlement service companies on all Sierra Pacific loans generated by the Kickback Agreement; c. Whether the prices charged Sierra Pacific borrowers pursuant to the Cartel Agreements were supracompetitive, and higher than prices that would have been charged without the Cartel Agreements; d. Whether Sierra Pacific made false representations to borrowers to actively conceal the Cartel Agreements and supracompetitive prices resulting therefrom; e. Whether All Star falsely allocated fees to actively conceal the Cartel Agreements and the supracompetitive prices charged Sierra Pacific borrowers in performance of those agreements; f. Whether Sierra Pacific made false representations on Sierra Pacific borrowers’ Good Faith Estimates, HUD-1s and other loan documents to actively conceal the Cartel Agreements and the supracompetitive prices charged Sierra Pacific borrowers in performance of those agreements; g. Whether despite exercising reasonable due diligence, Plaintiffs and Class Members did not and could not have learned of the Cartel Agreements, the supracompetitive prices charged for title and settlement services, and their injuries and actual damages therefrom, until contacted by counsel; h. Whether Plaintiffs and the Antitrust Class are entitled to treble damages under the Sherman Act; and i. Whether Plaintiffs and the Antitrust Class are entitled to attorneys’ fees and expenses under the Sherman Act. 359. These common issues of law and fact predominate over any question affecting only individual Antitrust Class Members. 360. Plaintiffs’ transactions and claims are typical of the claims or defenses of the respective Antitrust Class Members, and are subject to the same statutory measure of damages set forth in 15 U.S.C. § 15(a). 361. Plaintiffs will fairly and adequately protect the interests of the Antitrust Class. The interests of the named Plaintiffs and all other members of the Antitrust Class are identical. 362. Plaintiffs’ counsel has substantial experience in complex litigation and class action proceedings, have been approved as class counsel in related litigation, and will adequately represent the Antitrust Class’s interests. 363. Separate actions by individual members of the class would create a risk of inconsistent or varying adjudications with respect to individual members of the class that would establish incompatible standards of conduct for Sierra Pacific. 364. This action entails questions of law and fact common to Antitrust Class Members that predominate over any questions affecting only individual plaintiffs; therefore, a class action is superior to other available methods of fair and efficient adjudication of this litigation. 365. Most members of the Antitrust Class are unaware of their rights to prosecute a claim against Sierra Pacific. 366. No member of the Antitrust Class has a substantial interest in individually controlling the prosecution of a separate action, but if he or she does, he or she may exclude himself or herself from the class upon the receipt of notice under Fed. R. Civ. P. 23(c). COUNT III Violation of the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. § 1962 367. Plaintiffs incorporate the above stated paragraphs as if restated herein. 368. Sierra Pacific is a “person” as defined under 18 U.S.C. § 1961(3). 369. The All Star Scheme constitutes an enterprise for the purposes of 18 U.S.C. § 1962(a). The activities of the All Star Scheme Enterprise affect interstate commerce across more than 30 states. 370. Sierra Pacific and All Star perpetrated the All Star Scheme for the purpose of defrauding borrowers into paying fixed and supracompetitive prices for title and settlement services related to Sierra Pacific residential mortgage, refinance and reverse mortgages, and to thereby deprive borrowers of their money and/or property. 371. The use of the U.S. Mail and interstate wires by Sierra Pacific and All Star in furtherance of the All Star Scheme, as pled herein, constitutes a pattern of racketeering activity. 372. Sierra Pacific received, and continues to receive, income derived from this pattern of racketeering activity in the form of the kickbacks paid by All Star to Sierra Pacific, and through the interest, fees and other income earned on the Sierra Pacific mortgages, refinances and reverse mortgages resulting from the pattern of racketeering activity. 373. Sierra Pacific improperly used and invested the income it received from the pattern of racketeering activity in furtherance of the All Star Scheme Enterprise and for the purpose of luring borrowers into the All Star Scheme Enterprise in violation of 18 U.S.C. § 1962. 374. As a direct and proximate result of Sierra Pacific’s pattern of racketeering activity, Plaintiffs and Class Members were injured and suffered actual damages in the amount of at least $300.00, which is the minimum difference between the lowest amount charged by All Star for settlement services with another lender and the amount charged to Plaintiffs under the Price Fixing and Minimum Fee Agreements with Sierra Pacific and is the Kickback Overcharge. 375. Plaintiffs allege claims pursuant to Fed. R. Civ. P. 23 for violations of 18 U.S.C. § 1962(a) (“RICO Class”), with the alleged RICO Class defined as: All individuals in the United States who were borrowers on a federally related mortgage loan (as defined under the Real Estate Settlement Procedures Act, 12 U.S.C. § 2602) originated or brokered by Sierra Pacific Mortgage Company, Inc. for which All Star Title, Inc. provided a settlement service, as identified in Section 1100 on the borrower’s HUD-1, between January 1, 2012 and December 31, 2017. Exempted from this class is any person who, during the period of January 1, 2012 through December 31, 2017, was an employee, officer, member and/or agent of Sierra Pacific Mortgage Company, Inc. or All Star Title, Inc. 376. The RICO Class consists of borrowers on more than 300 loans, and thus are so numerous that joinder of all members is impracticable. 377. There are questions of law and fact common to the claims of each and all members of the RICO Class. These common questions include, but are not limited to: a. Whether Sierra Pacific and its employees and/or agents violated RICO by defrauding borrowers, including Plaintiffs and RICO Class Members, into paying supracompetitive prices for title and settlement services and fund the kickbacks All Star is paying Sierra Pacific; b. Whether Sierra Pacific and All Star formed an enterprise; c. Whether the activities of the All Star Scheme Enterprise affected interstate commerce; d. Whether one purpose of the All Star Scheme was to deprive borrowers of money or property; e. Whether Sierra Pacific and All Star used the interstate U.S. Mail in furtherance of the All Star Scheme and All Star Scheme Enterprise; f. Whether Sierra Pacific and All Star used the interstate wires in furtherance of the All Star Scheme and the All Star Scheme Enterprise; g. Whether Sierra Pacific received income from a pattern of racketeering activity; h. Whether Sierra Pacific used income derived from a patter of racketeering activity in support of, or in furtherance of, the All Star Scheme Enterprise; i. Whether Sierra Pacific actively conceal the All Star Scheme, the supracompetitive prices, and the All Star Scheme Enterprise; j. Whether Plaintiffs’ and RICO Class members knew or should have known of their injuries resulting from Sierra Pacific’s violation of 18 U.S.C. § 1962(a); k. Whether Sierra Pacific and All Star’s fraudulent concealments prevented Plaintiffs’ and RICO class members from discovering their injuries proximately caused by the Sierra Pacific’s pattern of racketeering activity; l. Whether Plaintiffs and the RICO Class are entitled to treble damages pursuant to 18 U.S.C. § 1964(c); and m. Whether Plaintiffs and the RICO Class are entitled to attorneys’ fees and expenses pursuant to 18 U.S.C. § 1964(c). 378. These common issues of law and fact predominate over any question affecting only individual RICO Class Members. 379. Plaintiffs’ transaction and claims are typical of the claims or defenses of the respective RICO Class Members, and are subject to the same statutory measure of damages set forth in 18 U.S.C. § 1964(c). 380. Plaintiffs will fairly and adequately protect the interests of the RICO Class. The interests of the named Plaintiffs and all other members of the RICO Class are identical. 381. Plaintiffs’ counsel has substantial experience in complex litigation and class action proceedings, have been approved as class counsel in related litigation, and will adequately represent the RICO Class’s interests. 382. Separate actions by individual members of the class would create a risk of inconsistent or varying adjudications with respect to individual members of the class that would establish incompatible standards of conduct for Sierra Pacific. 383. This action entails questions of law and fact common to RICO Class Members that predominate over any questions affecting only individual plaintiffs; therefore, a class action is superior to other available methods of fair and efficient adjudication of this litigation. 384. Most members of the RICO Class are unaware of their rights to prosecute a claim against Sierra Pacific. 385. No member of the RICO Class has a substantial interest in individually controlling the prosecution of a separate action, but if he or she does, he or she may exclude himself or herself from the class upon the receipt of notice under Fed. R. Civ. P. 23(c). WHEREFORE, Plaintiffs respectfully demand: a. This Court to certify the RESPA, Antitrust, and RICO Classes pursuant to Federal Rule of Civil Procedure 23 and set this matter for trial; b. Judgment for Plaintiffs and RESPA Members against Sierra Pacific Mortgage Company, Inc., and award Plaintiffs and RESPA Class Members treble damages for title and settlement services charged by All Star, including, but not limited to, title insurance premiums, in an amount equal to three times the amount of any charge paid for such settlement services, pursuant to 12 U.S.C. § 2607(d)(2); c. Judgment for Plaintiffs and Antitrust Class Members against Sierra Pacific Mortgage Company, Inc., and award Plaintiffs and Antitrust Class Members damages in the amount equal to three times the actual damages caused by the Cartel Agreements pursuant to 15 U.S.C. § 15(a); d. Judgment for Plaintiffs and RICO Class Members against Sierra Pacific Mortgage Company, Inc., and award Plaintiffs and RICO Class Members damages in the amount equal to three times the actual damages caused by the All Star Scheme pursuant to 18 U.S.C. § 1964(c); e. Reasonable attorneys’ fees, interest and costs pursuant to 12 U.S.C. § 2607(d)(5), 15 U.S.C. § 15(a), and 18 U.S.C. § 1964(c); and f. For such other and further relief as this Court deems proper. Respectfully submitted, ______/s/____________________ _______/s/__________________ Michael Paul Smith, Esq. #23685 Melissa L. English, Esq. #19864 Sarah A. Zadrozny, Esq. #13911 Smith, Gildea & Schmidt, LLC 600 Washington Avenue, Suite 200 Towson, Maryland 21204 (410) 821-0070 / (410) 821-0071 (fax) Email: mpsmith@sgs-law.com menglish@sgs-law.com szadrozny@sgs-law.com Counsel for Plaintiffs and Class Members Timothy F. Maloney, Esq. #03381 Veronica B. Nannis, Esq. #15679 Megan A. Benevento, Esq. #19883 Joseph, Greenwald & Laake, P.A. 6404 Ivy Lane, Suite 400 Greenbelt, Maryland 20770 (301) 220-2200 / (301) 220-1214 (fax) Email: tmaloney@jgllaw.com vnannis@jgllaw.com mbenevento@jgllaw.com Co-Counsel for Plaintiffs and Class Members PRAYER FOR JURY TRIAL Plaintiffs and Class Members hereby request a trial by jury on the foregoing Class Action Complaint. ______/s/____________________ _______/s/__________________ Michael Paul Smith, Esq. #23685 Melissa L. English, Esq. #19864 Sarah A. Zadrozny, Esq. #13911 Smith, Gildea & Schmidt, LLC 600 Washington Avenue, Suite 200 Towson, Maryland 21204 (410) 821-0070 / (410) 821-0071 (fax) Email: mpsmith@sgs-law.com menglish@sgs-law.com szadrozny@sgs-law.com Counsel for Plaintiffs and Class Members Timothy F. Maloney, Esq. #03381 Veronica B. Nannis, Esq. #15679 Megan A. Benevento, Esq. #19883 Joseph, Greenwald & Laake, P.A. 6404 Ivy Lane, Suite 400 Greenbelt, Maryland 20770 (301) 220-2200 / (301) 220-1214 (fax) Email: tmaloney@jgllaw.com vnannis@jgllaw.com mbenevento@jgllaw.com Co-Counsel for Plaintiffs and Class Members

antitrust

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Todd M. Friedman (SBN 216752) Adrian R. Bacon (SBN 280332) LAW OFFICES OF TODD M. FRIEDMAN, P.C. 21550 Oxnard St., Suite 780 Woodland Hills, CA 91367 Phone: 323-306-4234 Fax: 866-633-0228 tfriedman@toddflaw.com abacon@toddflaw.com Attorneys for Plaintiff UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA ABANTE ROOTER AND PLUMBING, individually and on behalf of all others similarly situated, Case No. CLASS ACTION COMPLAINT FOR VIOLATIONS OF: Plaintiff, vs. 1. NEGLIGENT VIOLATIONS OF THE TELEPHONE CONSUMER PROTECTION ACT [47 U.S.C. §227(b)] 2. WILLFUL VIOLATIONS OF THE TELEPHONE CONSUMER PROTECTION ACT [47 U.S.C. §227(b)] GREEN STAR CAPITAL SOLUTIONS, INC., and DOES 1 through 10, inclusive, and each of them, Defendant. 3. NEGLIGENT VIOLATIONS OF THE TELEPHONE CONSUMER PROTECTION ACT [47 U.S.C. §227(c)] 4. WILLFUL VIOLATIONS OF THE TELEPHONE CONSUMER PROTECTION ACT [47 U.S.C. §227(c)] DEMAND FOR JURY TRIAL ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Plaintiff ABANTE ROOTER AND PLUMBING (“Plaintiff”), individually and on behalf of all others similarly situated, alleges the following upon information and belief based upon personal knowledge: NATURE OF THE CASE 1. Plaintiff brings this action individually and on behalf of all others similarly situated seeking damages and any other available legal or equitable remedies resulting from the illegal actions of GREEN STAR CAPITAL SOLUTIONS, INC. (“Defendant”), in negligently, knowingly, and/or willfully contacting Plaintiff on Plaintiff’s cellular telephone in violation of the Telephone Consumer Protection Act, 47. U.S.C. § 227 et seq. (“TCPA”) and related regulations, specifically the National Do-Not-Call provisions, thereby invading Plaintiff’s privacy. JURISDICTION & VENUE 2. Jurisdiction is proper under 28 U.S.C. § 1332(d)(2) because Plaintiff, a resident of California, seeks relief on behalf of a Class, which will result in at least one class member belonging to a different state than that of Defendant, a Florida corporation. Plaintiff also seeks up to $1,500.00 in damages for each call in violation of the TCPA, which, when aggregated among a proposed class in the thousands, exceeds the $5,000,000.00 threshold for federal court jurisdiction. Therefore, both diversity jurisdiction and the damages threshold under the Class Action Fairness Act of 2005 (“CAFA”) are present, and this Court has jurisdiction. 3. Venue is proper in the United States District Court for the Central District of California pursuant to 28 U.S.C. § 1391(b) and because Defendant does business within the State of California and Plaintiff resides within the County of Los Angeles. PARTIES 4. Plaintiff, ABANTE ROOTER AND PLUMBING (“Plaintiff”), resides in Los Angeles County, California and is a “person” as defined by 47 U.S.C. § 153 (39). 5. Defendant, GREEN STAR CAPITAL SOLUTIONS, INC. (“Defendant”) is an business financing company, and is a “person” as defined by 47 U.S.C. § 153 (39). 6. The above named Defendant, and its subsidiaries and agents, are collectively referred to as “Defendants.” The true names and capacities of the Defendants sued herein as DOE DEFENDANTS 1 through 10, inclusive, are currently unknown to Plaintiff, who therefore sues such Defendants by fictitious names. Each of the Defendants designated herein as a DOE is legally responsible for the unlawful acts alleged herein. Plaintiff will seek leave of Court to amend the Complaint to reflect the true names and capacities of the DOE Defendants when such identities become known. 7. Plaintiff is informed and believes that at all relevant times, each and every Defendant was acting as an agent and/or employee of each of the other Defendants and was acting within the course and scope of said agency and/or employment with the full knowledge and consent of each of the other Defendants. Plaintiff is informed and believes that each of the acts and/or omissions complained of herein was made known to, and ratified by, each of the other Defendants. FACTUAL ALLEGATIONS 8. Beginning in or around May 2017, Defendant contacted Plaintiff on Plaintiff’s cellular telephone number ending in -3803, -5903, -7255, -7511, and - 1080 in an attempt to solicit Plaintiff to purchase Defendant’s services. 9. Defendant used an “automatic telephone dialing system” as defined by 47 U.S.C. § 227(a)(1) to place its call to Plaintiff seeking to solicit its services. 10. Defendant contacted or attempted to contact Plaintiff from telephone numbers 209-498-4848, 209-732-5482, 888-868-0577, 480-750-0223, and 209- 253-2625. 11. Defendant’s calls constituted calls that were not for emergency purposes as defined by 47 U.S.C. § 227(b)(1)(A). 12. During all relevant times, Defendant did not possess Plaintiff’s “prior express consent” to receive calls using an automatic telephone dialing system or an artificial or prerecorded voice on his cellular telephone pursuant to 47 U.S.C. § 227(b)(1)(A). 13. Further, Plaintiff’s cellular telephone number ending in – 5903, -7255, -7511, and -1080 had been on the National Do-Not-Call Registry well over thirty (30) days prior to Defendant’s initial call. 14. Defendant placed multiple calls soliciting its business to Plaintiff on his cellular telephone ending in -9210 in or around May 2017. 15. Such calls constitute solicitation calls pursuant to 47 C.F.R. § 64.1200(c)(2) as they were attempts to promote or sell Defendant’s services. 16. Plaintiff received at least one solicitation call from Defendant within a 12-month period. 17. Defendant called Plaintiff in an attempt to solicit its services and in violation of the National Do-Not-Call provisions of the TCPA. 18. Upon information and belief, and based on Plaintiff’s experiences of being called by Defendant after being on the National Do-Not-Call list for several years prior to Defendant’s initial call, and at all relevant times, Defendant failed to establish and implement reasonable practices and procedures to effectively prevent telephone solicitations in violation of the regulations prescribed under 47 U.S.C. § 227(c)(5). CLASS ALLEGATIONS 19. Plaintiff brings this action individually and on behalf of all others similarly situated, as a member the two proposed classes (hereafter, jointly, “The Classes”). 20. The class concerning the ATDS claim for no prior express consent (hereafter “The ATDS Class”) is defined as follows: All persons within the United States who received any solicitation/telemarketing telephone calls from Defendant to said person’s cellular telephone made through the use of any automatic telephone dialing system or an artificial or prerecorded voice and such person had not previously consented to receiving such calls within the four years prior to the filing of this Complaint 21. The class concerning the National Do-Not-Call violation (hereafter “The DNC Class”) is defined as follows: All persons within the United States registered on the National Do-Not-Call Registry for at least 30 days, who had not granted Defendant prior express consent nor had a prior established business relationship, who received more than one call made by or on behalf of Defendant that promoted Defendant’s products or services, within any twelve-month period, within four years prior to the filing of the complaint. 22. Plaintiff represents, and is a member of, The ATDS Class, consisting of all persons within the United States who received any collection telephone calls from Defendant to said person’s cellular telephone made through the use of any automatic telephone dialing system or an artificial or prerecorded voice and such person had not previously not provided their cellular telephone number to Defendant within the four years prior to the filing of this Complaint. 23. Plaintiff represents, and is a member of, The DNC Class, consisting of all persons within the United States registered on the National Do-Not-Call Registry for at least 30 days, who had not granted Defendant prior express consent nor had a prior established business relationship, who received more than one call made by or on behalf of Defendant that promoted Defendant’s products or services, within any twelve-month period, within four years prior to the filing of the complaint. 24. Defendant, its employees and agents are excluded from The Classes. Plaintiff does not know the number of members in The Classes, but believes the Classes members number in the thousands, if not more. Thus, this matter should be certified as a Class Action to assist in the expeditious litigation of the matter. 25. The Classes are so numerous that the individual joinder of all of its members is impractical. While the exact number and identities of The Classes members are unknown to Plaintiff at this time and can only be ascertained through appropriate discovery, Plaintiff is informed and believes and thereon alleges that The Classes includes thousands of members. Plaintiff alleges that The Classes members may be ascertained by the records maintained by Defendant. 26. Plaintiff and members of The ATDS Class were harmed by the acts of Defendant in at least the following ways: Defendant illegally contacted Plaintiff and ATDS Class members via their cellular telephones thereby causing Plaintiff and ATDS Class members to incur certain charges or reduced telephone time for which Plaintiff and ATDS Class members had previously paid by having to retrieve or administer messages left by Defendant during those illegal calls, and invading the privacy of said Plaintiff and ATDS Class members. 27. Common questions of fact and law exist as to all members of The ATDS Class which predominate over any questions affecting only individual members of The ATDS Class. These common legal and factual questions, which do not vary between ATDS Class members, and which may be determined without reference to the individual circumstances of any ATDS Class members, include, but are not limited to, the following: a. Whether, within the four years prior to the filing of this Complaint, Defendant made any telemarketing/solicitation call (other than a call made for emergency purposes or made with the prior express consent of the called party) to a ATDS Class member using any automatic telephone dialing system or any artificial or prerecorded voice to any telephone number assigned to a cellular telephone service; b. Whether Plaintiff and the ATDS Class members were damaged thereby, and the extent of damages for such violation; and c. Whether Defendant should be enjoined from engaging in such conduct in the future. 28. As a person that received numerous telemarketing/solicitation calls from Defendant using an automatic telephone dialing system or an artificial or prerecorded voice, without Plaintiff’s prior express consent, Plaintiff is asserting claims that are typical of The ATDS Class. 29. Plaintiff and members of The DNC Class were harmed by the acts of Defendant in at least the following ways: Defendant illegally contacted Plaintiff and DNC Class members via their telephones for solicitation purposes, thereby invading the privacy of said Plaintiff and the DNC Class members whose telephone numbers were on the National Do-Not-Call Registry. Plaintiff and the DNC Class members were damaged thereby. 30. Common questions of fact and law exist as to all members of The DNC Class which predominate over any questions affecting only individual members of The DNC Class. These common legal and factual questions, which do not vary between DNC Class members, and which may be determined without reference to the individual circumstances of any DNC Class members, include, but are not limited to, the following: a. Whether, within the four years prior to the filing of this Complaint, Defendant or its agents placed more than one solicitation call to the members of the DNC Class whose telephone numbers were on the National Do-Not-Call Registry and who had not granted prior express consent to Defendant and did not have an established business relationship with Defendant; b. Whether Defendant obtained prior express written consent to place solicitation calls to Plaintiff or the DNC Class members’ telephones; c. Whether Plaintiff and the DNC Class member were damaged thereby, and the extent of damages for such violation; and d. Whether Defendant and its agents should be enjoined from engaging in such conduct in the future. 31. As a person that received numerous solicitation calls from Defendant within a 12-month period, who had not granted Defendant prior express consent and did not have an established business relationship with Defendant, Plaintiff is asserting claims that are typical of the DNC Class. 32. Plaintiff will fairly and adequately protect the interests of the members of The Classes. Plaintiff has retained attorneys experienced in the prosecution of class actions. 33. A class action is superior to other available methods of fair and efficient adjudication of this controversy, since individual litigation of the claims of all Classes members is impracticable. Even if every Classes member could afford individual litigation, the court system could not. It would be unduly burdensome to the courts in which individual litigation of numerous issues would proceed. Individualized litigation would also present the potential for varying, inconsistent, or contradictory judgments and would magnify the delay and expense to all parties and to the court system resulting from multiple trials of the same complex factual issues. By contrast, the conduct of this action as a class action presents fewer management difficulties, conserves the resources of the parties and of the court system, and protects the rights of each Classes member. 34. The prosecution of separate actions by individual Classes members would create a risk of adjudications with respect to them that would, as a practical matter, be dispositive of the interests of the other Classes members not parties to such adjudications or that would substantially impair or impede the ability of such non-party Class members to protect their interests. 35. Defendant has acted or refused to act in respects generally applicable to The Classes, thereby making appropriate final and injunctive relief with regard to the members of the Classes as a whole. FIRST CAUSE OF ACTION Negligent Violations of the Telephone Consumer Protection Act 47 U.S.C. §227(b). On Behalf of the ATDS Class 36. Plaintiff repeats and incorporates by reference into this cause of action the allegations set forth above at Paragraphs 1-35. 37. The foregoing acts and omissions of Defendant constitute numerous and multiple negligent violations of the TCPA, including but not limited to each and every one of the above cited provisions of 47 U.S.C. § 227(b), and in particular 47 U.S.C. § 227 (b)(1)(A). 38. As a result of Defendant’s negligent violations of 47 U.S.C. § 227(b), Plaintiff and the Class Members are entitled an award of $500.00 in statutory damages, for each and every violation, pursuant to 47 U.S.C. § 227(b)(3)(B). 39. Plaintiff and the ATDS Class members are also entitled to and seek injunctive relief prohibiting such conduct in the future. SECOND CAUSE OF ACTION Knowing and/or Willful Violations of the Telephone Consumer Protection Act 47 U.S.C. §227(b) On Behalf of the ATDS Class 40. Plaintiff repeats and incorporates by reference into this cause of action the allegations set forth above at Paragraphs 1-39. 41. The foregoing acts and omissions of Defendant constitute numerous and multiple knowing and/or willful violations of the TCPA, including but not limited to each and every one of the above cited provisions of 47 U.S.C. § 227(b), and in particular 47 U.S.C. § 227 (b)(1)(A). 42. As a result of Defendant’s knowing and/or willful violations of 47 U.S.C. § 227(b), Plaintiff and the ATDS Class members are entitled an award of $1,500.00 in statutory damages, for each and every violation, pursuant to 47 U.S.C. § 227(b)(3)(B) and 47 U.S.C. § 227(b)(3)(C). 43. Plaintiff and the Class members are also entitled to and seek injunctive relief prohibiting such conduct in the future. THIRD CAUSE OF ACTION Negligent Violations of the Telephone Consumer Protection Act 47 U.S.C. §227(c) On Behalf of the DNC Class 44. Plaintiff repeats and incorporates by reference into this cause of action the allegations set forth above at Paragraphs 1-43. 45. The foregoing acts and omissions of Defendant constitute numerous and multiple negligent violations of the TCPA, including but not limited to each and every one of the above cited provisions of 47 U.S.C. § 227(c), and in particular 47 U.S.C. § 227 (c)(5). 46. As a result of Defendant’s negligent violations of 47 U.S.C. § 227(c), Plaintiff and the DNC Class Members are entitled an award of $500.00 in statutory damages, for each and every violation, pursuant to 47 U.S.C. § 227(c)(5)(B). 47. Plaintiff and the DNC Class members are also entitled to and seek injunctive relief prohibiting such conduct in the future. FOURTH CAUSE OF ACTION Knowing and/or Willful Violations of the Telephone Consumer Protection Act 47 U.S.C. §227 et seq. On Behalf of the DNC Class 48. Plaintiff repeats and incorporates by reference into this cause of action the allegations set forth above at Paragraphs 1-47. 49. The foregoing acts and omissions of Defendant constitute numerous and multiple knowing and/or willful violations of the TCPA, including but not limited to each and every one of the above cited provisions of 47 U.S.C. § 227(c), in particular 47 U.S.C. § 227 (c)(5). 50. As a result of Defendant’s knowing and/or willful violations of 47 U.S.C. § 227(c), Plaintiff and the DNC Class members are entitled an award of $1,500.00 in statutory damages, for each and every violation, pursuant to 47 U.S.C. § 227(c)(5). 51. Plaintiff and the DNC Class members are also entitled to and seek injunctive relief prohibiting such conduct in the future. PRAYER FOR RELIEF WHEREFORE, Plaintiff requests judgment against Defendant for the following: FIRST CAUSE OF ACTION Negligent Violations of the Telephone Consumer Protection Act 47 U.S.C. §227(b) • As a result of Defendant’s negligent violations of 47 U.S.C. §227(b)(1), Plaintiff and the ATDS Class members are entitled to and request $500 in statutory damages, for each and every violation, pursuant to 47 U.S.C. 227(b)(3)(B). • Any and all other relief that the Court deems just and proper. SECOND CAUSE OF ACTION Knowing and/or Willful Violations of the Telephone Consumer Protection Act 47 U.S.C. §227(b) • As a result of Defendant’s willful and/or knowing violations of 47 U.S.C. §227(b)(1), Plaintiff and the ATDS Class members are entitled to and request treble damages, as provided by statute, up to $1,500, for each and every violation, pursuant to 47 U.S.C. §227(b)(3)(B) and 47 U.S.C. §227(b)(3)(C). • Any and all other relief that the Court deems just and proper. THIRD CAUSE OF ACTION Negligent Violations of the Telephone Consumer Protection Act 47 U.S.C. §227(c) • As a result of Defendant’s negligent violations of 47 U.S.C. §227(c)(5), Plaintiff and the DNC Class members are entitled to and request $500 in statutory damages, for each and every violation, pursuant to 47 U.S.C. 227(c)(5). • Any and all other relief that the Court deems just and proper. FOURTH CAUSE OF ACTION Knowing and/or Willful Violations of the Telephone Consumer Protection Act 47 U.S.C. §227(c) • As a result of Defendant’s willful and/or knowing violations of 47 U.S.C. §227(c)(5), Plaintiff and the DNC Class members are entitled to and request treble damages, as provided by statute, up to $1,500, for each and every violation, pursuant to 47 U.S.C. §227(c)(5). • Any and all other relief that the Court deems just and proper. 52. Pursuant to the Seventh Amendment to the Constitution of the United States of America, Plaintiff is entitled to, and demands, a trial by jury. Respectfully Submitted this 24th Day of January, 2020. LAW OFFICES OF TODD M. FRIEDMAN, P.C. By: /s/ Todd M. Friedman Todd M. Friedman Law Offices of Todd M. Friedman Attorney for Plaintiff

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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x VALENTIN REID, on behalf of himself and all others similarly situated, Case No.: 1:19-cv-5571 CLASS ACTION COMPLAINT AND Plaintiffs, v. DEMAND FOR JURY TRIAL VACASA LLC, Defendant. : : : : : : : : : : : : - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x INTRODUCTION 1. Plaintiff VALENTIN REID, on behalf of himself and others similarly situated, asserts the following claims against Defendant VACASA LLC as follows. 2. Plaintiff is a visually-impaired and legally blind person who requires screen- reading software to read website content using his computer. Plaintiff uses the terms “blind” or “visually-impaired” to refer to all people with visual impairments who meet the legal definition of blindness in that they have a visual acuity with correction of less than or equal to 20 x 200. Some blind people who meet this definition have limited vision. Others have no vision. 3. Based on a 2010 U.S. Census Bureau report, approximately 8.1 million people in the United States are visually impaired, including 2.0 million who are blind, and according to the American Foundation for the Blind’s 2015 report, approximately 400,000 visually impaired persons live in the State of New York. 4. Plaintiff brings this civil rights action against Defendant for its failure to design, construct, maintain, and operate its website to be fully accessible to and independently usable by Plaintiff and other blind or visually-impaired people. Defendant’s denial of full and equal access to its website, and therefore denial of its goods and services offered thereby, is a violation of Plaintiff’s rights under the Americans with Disabilities Act (“ADA”). 5. Because Defendant’s website, www.vacasa.com (the “Website”), is not equally accessible to blind and visually impaired consumers, it violates the ADA. Plaintiff seeks a permanent injunction to cause a change in Defendant’s corporate policies, practices, and procedures so that Defendant’s website will become and remain accessible to blind and visually-impaired consumers. JURISDICTION AND VENUE 6. This Court has subject-matter jurisdiction over this action under 28 U.S.C. § 1331 and 42 U.S.C. § 12181, as Plaintiff’s claims arise under Title III of the ADA, 42 U.S.C. § 12181, et seq., and 28 U.S.C. § 1332. 7. This Court has supplemental jurisdiction under 28 U.S.C. § 1367 over Plaintiff’s New York State Human Rights Law, N.Y. Exec. Law Article 15, (“NYSHRL”) and New York City Human Rights Law, N.Y.C. Admin. Code § 8-101 et seq., (“NYCHRL”) claims. 8. Venue is proper in this district under 28 U.S.C. §1391(b)(1) and (2) because Defendant conducts and continues to conduct a substantial and significant amount of business in this District, and a substantial portion of the conduct complained of herein occurred in this District because Plaintiff attempted to utilize, on a number of occasions, the subject Website within this Judicial District. 9. Defendant is subject to personal jurisdiction in this District. Defendant has been and is committing the acts or omissions alleged herein in the Southern District of New York that caused injury, and violated rights the ADA prescribes to Plaintiff and to other blind and other visually impaired-consumers. A substantial part of the acts and omissions giving rise to Plaintiff’s claims occurred in this District: on several separate occasions, Plaintiff has been denied the full use and enjoyment of the facilities, goods and services offered to the general public, on Defendant’s Website in New York County. These access barriers that Plaintiff encountered have caused a denial of Plaintiff’s full and equal access multiple times in the past, and now deter Plaintiff on a regular basis from accessing the Defendant’s Website in the future. 10. This Court is empowered to issue a declaratory judgment under 28 U.S.C. §§ 2201 and 2202. THE PARTIES 11. Plaintiff VALENTIN REID, at all relevant times, is a resident of Brooklyn, New York. Plaintiff is a blind, visually-impaired handicapped person and a member of member of a protected class of individuals under the ADA, under 42 U.S.C. § 12102(1)-(2), and the regulations implementing the ADA set forth at 28 CFR §§ 36.101 et seq., the NYSHRL and NYCHRL. 12. Defendant is and was at all relevant times a Delaware Limited Liability Company doing business in New York. 13. Defendant’s Website, and its facilities, goods, and services offered thereupon, is a public accommodation within the definition of Title III of the ADA, 42 U.S.C. § 12181(7). NATURE OF ACTION 14. The Internet has become a significant source of information, a portal, and a tool for conducting business, doing everyday activities such as shopping, learning, banking, researching, as well as many other activities for sighted, blind and visually- impaired persons alike. 15. In today’s tech-savvy world, blind and visually impaired people have the ability to access websites using keyboards in conjunction with screen access software that vocalizes the visual information found on a computer screen or displays the content on a refreshable Braille display. This technology is known as screen-reading software. Screen-reading software is currently the only method a blind or visually- impaired person may independently access the internet. Unless websites are designed to be read by screen-reading software, blind and visually-impaired persons are unable to fully access websites, and the information, products, goods and contained thereon. 16. Blind and visually-impaired users of Windows operating system-enabled computers and devices have several screen reading software programs available to them. Some of these programs are available for purchase and other programs are available without the user having to purchase the program separately. Job Access With Speech, otherwise known as “JAWS” is currently the most popular, separately purchased and downloaded screen-reading software program available for a Windows computer. 17. For screen-reading software to function, the information on a website must be capable of being rendered into text. If the website content is not capable of being rendered into text, the blind or visually-impaired user is unable to access the same content available to sighted users. 18. The international website standards organization, the World Wide Web Consortium, known throughout the world as W3C, has published version 2.1 of the Web Content Accessibility Guidelines (“WCAG 2.1”). WCAG 2.1 are well- established guidelines for making websites accessible to blind and visually- impaired people. These guidelines are universally followed by most large business entities and government agencies to ensure their websites are accessible. 19. Non-compliant websites pose common access barriers to blind and visually- impaired persons. Common barriers encountered by blind and visually impaired persons include, but are not limited to, the following: a. A text equivalent for every non-text element is not provided; b. Title frames with text are not provided for identification and navigation; c. Equivalent text is not provided when using scripts; d. Forms with the same information and functionality as for sighted persons are not provided; e. Information about the meaning and structure of content is not conveyed by more than the visual presentation of content; f. Text cannot be resized without assistive technology up to 200% without losing content or functionality; g. If the content enforces a time limit, the user is not able to extend, adjust or disable it; h. Web pages do not have titles that describe the topic or purpose; i. The purpose of each link cannot be determined from the link text alone or from the link text and its programmatically determined link context; j. One or more keyboard operable user interface lacks a mode of operation where the keyboard focus indicator is discernible; k. The default human language of each web page cannot be programmatically determined; l. When a component receives focus, it may initiate a change in context; m. Changing the setting of a user interface component may automatically cause a change of context where the user has not been advised before using the component; n. Labels or instructions are not provided when content requires user input, which include captcha prompts that require the user to verify that he or she is not a robot; o. In content which is implemented by using markup languages, elements do not have complete start and end tags, elements are not nested according to their specifications, elements may contain duplicate attributes, and/or any IDs are not unique; p. Inaccessible Portable Document Format (PDFs); and, q. The name and role of all User Interface elements cannot be programmatically determined; items that can be set by the user cannot be programmatically set; and/or notification of changes to these items is not available to user agents, including assistive technology. STATEMENT OF FACTS 20. Defendant is a property rental company that owns and operates www.vacasa.com (its “Website”), offering features which should allow all consumers to access the goods and services throughout the United States, including New York State. 21. Defendant’s Website offers rental properties to the public, and offers features which ought to allow users to browse available rental properties, access navigation bar descriptions and prices, and avail consumers of the ability to peruse available properties offered for rent. 22. Plaintiff is a visually-impaired and legally blind person, who cannot use a computer without the assistance of screen-reading software. Plaintiff is, however, a proficient JAWS and NVDA screen-reader user and uses it to access the Internet. Plaintiff has visited the Website on separate occasions using a screen-reader. 23. On multiple occasions, the last occurring in May of 2019, Plaintiff visited Defendant’s Website, www.vacasa.com, to browse an available vacation property for rent. Despite his efforts, however, Plaintiff was denied an experience similar to that of a sighted individual. 24. The Website lacks alt. text, which is the invisible code embedded beneath a graphical image on a website. Due to the lack of alt text, Plaintiff was unable to differentiate what properties were on the screen due to the failure of the Website to adequately describe its content. 25. The Website also contained a host of broken links, which is a hyperlink to a non- existent or empty webpage. For the visually impaired this is especially paralyzing due to the inability to navigate or otherwise determine where one is on the website once a broken link is encountered. Here, Plaintiff attempted to click on an image of “Hilton Head Beach Fronts,” however, Plaintiff encountered the error message “HTTP “404” instead. 26. Finally, the Website requires the use of a mouse to browse the Website. However, Plaintiff cannot use a mouse because manipulating the mouse is a visual activity of moving the mouse pointer from one visual spot on the page to another. Defendant’s Website requires a mouse as it contains multiple pages with “drop-down” menus, which cannot be accessed absent the use of a mouse. For example, when attempting to select an intended destination, check-in and check-out dates, and number of guests the user is required to use a mouse. 27. These access barriers effectively denied Plaintiff the ability to use and enjoy Defendant’s website the same way sighted individuals do. 28. It is, upon information and belief, Defendant’s policy and practice to deny Plaintiff, along with other blind or visually-impaired users, access to Defendant’s website, and to therefore specifically deny the goods and services that are offered to the general public. Due to Defendant’s failure and refusal to remove access barriers to its website, Plaintiff and visually-impaired persons have been and are still being denied equal access to Defendant’s Website, and the numerous goods and services and benefits offered to the public through the Website. 29. More generally, while attempting to navigate the Website, Plaintiff encountered multiple accessibility barriers for blind or visually-impaired people that include, but are not limited to, the following: a. Lack of Alternative Text (“alt-text”), or a text equivalent. Alt-text is an invisible code embedded beneath a graphical image on a website. Web accessibility requires that alt-text be coded with each picture so that screen- reading software can speak the alt-text where a sighted user sees pictures, which includes captcha prompts. Alt-text does not change the visual presentation, but instead a text box shows when the mouse moves over the picture. The lack of alt-text on these graphics prevents screen readers from accurately vocalizing a description of the graphics. As a result, visually impaired individuals are unable to determine what is on the website, browse available rental properties, find information on promotions and related services available online. b. Empty Links That Contain No Text causing the function or purpose of the link to not be presented to the user. This can introduce confusion for keyboard and screen-reader users; c. Redundant Links where adjacent links go to the same URL address which results in additional navigation and repetition for keyboard and screen-reader users; and d. Linked Images Missing Alt-text, which causes problems if an image within a link contains no text and that image does not provide alt-text. A screen reader then has no content to present the user as to the function of the link, including information contained in PDFs. 30. Due to the inaccessibility of Defendant’s Website, blind and visually-impaired customers such as Plaintiff, who need screen-readers, cannot fully and equally use or enjoy the facilities and services Defendant offers to the public on its Website. The access barriers Plaintiff encountered have caused a denial of Plaintiff’s full and equal access in the past, and now deter Plaintiff on a regular basis from visiting the Website, presently and in the future. 31. If the Website was equally accessible to all, Plaintiff could independently navigate the Website and complete a desired transaction as sighted individuals do. 32. Through his attempts to use the Website, Plaintiff has actual knowledge of the access barriers that make these services inaccessible and independently unusable by blind and visually-impaired people. 33. Because simple compliance with the WCAG 2.1 Guidelines would provide Plaintiff and other visually-impaired consumers with equal access to the Website, Plaintiff alleges that Defendant has engaged in acts of intentional discrimination, including but not limited to the following policies or practices: a. Constructing and maintaining a website that is inaccessible to visually-impaired individuals, including Plaintiff; b. Failure to construct and maintain a website that is sufficiently intuitive so as to be equally accessible to visually impaired individuals, including Plaintiff; and, c. Failing to take actions to correct these access barriers in the face of substantial harm and discrimination to blind and visually-impaired consumers, such as Plaintiff, as a member of a protected class. 34. Defendant therefore uses standards, criteria or methods of administration that have the effect of discriminating or perpetuating the discrimination of others, as alleged herein. 35. The ADA expressly contemplates the injunctive relief that Plaintiff seeks in this action. In relevant part, the ADA requires: In the case of violations of . . . this title, injunctive relief shall include an order to alter facilities to make such facilities readily accessible to and usable by individuals with disabilities . . . Where appropriate, injunctive relief shall also include requiring the . . . modification of a policy . . . 42 U.S.C. § 12188(a)(2). 36. Because Defendant’s Website has never been equally accessible, and because Defendant lacks a corporate policy that is reasonably calculated to cause its Website to become and remain accessible, Plaintiff invokes 42 U.S.C. § 12188(a)(2) and seeks a permanent injunction requiring Defendant to retain a qualified consultant acceptable to Plaintiff (“Agreed Upon Consultant”) to assist Defendant to comply with WCAG 2.1 guidelines for Defendant’s Website. Plaintiff seeks that this permanent injunction requires Defendant to cooperate with the Agreed Upon Consultant to: a. Train Defendant’s employees and agents who develop the Website on accessibility compliance under the WCAG 2.1 guidelines; b. Regularly check the accessibility of the Website under the WCAG 2.1 guidelines; c. Regularly test user accessibility by blind or vision-impaired persons to ensure that Defendant’s Website complies under the WCAG 2.1 guidelines; and, d. Develop an accessibility policy that is clearly disclosed on Defendant’s Websites, with contact information for users to report accessibility-related problems. 37. Although Defendant may currently have centralized policies regarding maintaining and operating its Website, Defendant lacks a plan and policy reasonably calculated to make them fully and equally accessible to, and independently usable by, blind and other visually-impaired consumers. 38. Defendant has, upon information and belief, invested substantial sums in developing and maintaining their Website and has generated significant revenue from the Website. These amounts are far greater than the associated cost of making their Website equally accessible to visually impaired customers. 39. Without injunctive relief, Plaintiff and other visually-impaired consumers will continue to be unable to independently use the Website, violating their rights. CLASS ACTION ALLEGATIONS 40. Plaintiff, on behalf of himself and all others similarly situated, seeks to certify a nationwide class under Fed. R. Civ. P. 23(a) and 23(b)(2): all legally blind individuals in the United States who have attempted to access Defendant’s Website and as a result have been denied access to the equal enjoyment of goods and services, during the relevant statutory period. 41. Plaintiff, on behalf of himself and all others similarly situated, seeks certify a New York State subclass under Fed. R. Civ. P. 23(a) and 23(b)(2): all legally blind individuals in the State of New York who have attempted to access Defendant’s Website and as a result have been denied access to the equal enjoyment of those services, during the relevant statutory period. 42. Plaintiff, on behalf of himself and all others similarly situated, seeks certify a New York City subclass under Fed. R. Civ. P. 23(a) and 23(b)(2): all legally blind individuals in the City of New York who have attempted to access Defendant’s Website and as a result have been denied access to the equal enjoyment of goods and services offered, during the relevant statutory period. 43. Common questions of law and fact exist amongst Class, including: a. Whether Defendant’s Website is a “public accommodation” under the ADA; b. Whether Defendant’s Website is a “place or provider of public accommodation” under the NYSHRL or NYCHRL; c. Whether Defendant’s Website denies the full and equal enjoyment of its services, facilities, privileges, advantages, or accommodations to people with visual disabilities, violating the ADA; and d. Whether Defendant’s Website denies the full and equal enjoyment of its services, facilities, privileges, advantages, or accommodations to people with visual disabilities, violating the NYSHRL or NYCHRL. 44. Plaintiff’s claims are typical of the Class. The Class, similarly to the Plaintiff, are severely visually impaired or otherwise blind, and claim that Defendant has violated the ADA, NYSYRHL or NYCHRL by failing to update or remove access barriers on its Website so either can be independently accessible to the Class. 45. Plaintiff will fairly and adequately represent and protect the interests of the Class Members because Plaintiff has retained and is represented by counsel competent and experienced in complex class action litigation, and because Plaintiff has no interests antagonistic to the Class Members. Class certification of the claims is appropriate under Fed. R. Civ. P. 23(b)(2) because Defendant has acted or refused to act on grounds generally applicable to the Class, making appropriate both declaratory and injunctive relief with respect to Plaintiff and the Class as a whole. 46. Alternatively, class certification is appropriate under Fed. R. Civ. P. 23(b)(3) because fact and legal questions common to Class Members predominate over questions affecting only individual Class Members, and because a class action is superior to other available methods for the fair and efficient adjudication of this litigation. 47. Judicial economy will be served by maintaining this lawsuit as a class action in that it is likely to avoid the burden that would be otherwise placed upon the judicial system by the filing of numerous similar suits by people with visual disabilities throughout the United States. FIRST CAUSE OF ACTION VIOLATIONS OF THE ADA, 42 U.S.C. § 12181 et seq. 48. Plaintiff, on behalf of himself and the Class Members, repeats and realleges every allegation of the preceding paragraphs as if fully set forth herein. 49. Section 302(a) of Title III of the ADA, 42 U.S.C. § 12101 et seq., provides: No individual shall be discriminated against on the basis of disability in the full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations of any place of public accommodation by any person who owns, leases (or leases to), or operates a place of public accommodation. 42 U.S.C. § 12182(a). 50. Defendant’s Website is a public accommodations within the definition of Title III of the ADA, 42 U.S.C. § 12181(7). The Website is a service that is offered to the general public, and as such, must be equally accessible to all potential consumers. 51. Under Section 302(b)(1) of Title III of the ADA, it is unlawful discrimination to deny individuals with disabilities the opportunity to participate in or benefit from the products, services, facilities, privileges, advantages, or accommodations of an entity. 42 U.S.C. § 12182(b)(1)(A)(i). 52. Under Section 302(b)(1) of Title III of the ADA, it is unlawful discrimination to deny individuals with disabilities an opportunity to participate in or benefit from the products, services, facilities, privileges, advantages, or accommodation, which is equal to the opportunities afforded to other individuals. 42 U.S.C. § 12182(b)(1)(A)(ii). 53. Under Section 302(b)(2) of Title III of the ADA, unlawful discrimination also includes, among other things: [A] failure to make reasonable modifications in policies, practices, or procedures, when such modifications are necessary to afford such goods, services, facilities, privileges, advantages, or accommodations to individuals with disabilities, unless the entity can demonstrate that making such modifications would fundamentally alter the nature of such goods, services, facilities, privileges, advantages or accommodations; and a failure to take such steps as may be necessary to ensure that no individual with a disability is excluded, denied services, segregated or otherwise treated differently than other individuals because of the absence of auxiliary aids and services, unless the entity can demonstrate that taking such steps would fundamentally alter the nature of the good, service, facility, privilege, advantage, or accommodation being offered or would result in an undue burden. 42 U.S.C. § 12182(b)(2)(A)(ii)-(iii). 54. The acts alleged herein constitute violations of Title III of the ADA, and the regulations promulgated thereunder. Plaintiff, who is a member of a protected class of persons under the ADA, has a physical disability that substantially limits the major life activity of sight within the meaning of 42 U.S.C. §§ 12102(1)(A)-(2)(A). Furthermore, Plaintiff has been denied full and equal access to the Website, has not been provided services that are provided to other patrons who are not disabled, and has been provided services that are inferior to the services provided to non-disabled persons. Defendant has failed to take any prompt and equitable steps to remedy its discriminatory conduct. These violations are ongoing. 55. Under 42 U.S.C. § 12188 and the remedies, procedures, and rights set forth and incorporated therein, Plaintiff, requests relief as set forth below. SECOND CAUSE OF ACTION VIOLATIONS OF THE NYSHRL 56. Plaintiff, on behalf of himself and the New York State Sub-Class Members, repeats and realleges every allegation of the preceding paragraphs as if fully set forth herein. 57. N.Y. Exec. Law § 296(2)(a) provides that it is “an unlawful discriminatory practice for any person, being the owner, lessee, proprietor, manager, superintendent, agent or employee of any place of public accommodation . . . because of the . . . disability of any person, directly or indirectly, to refuse, withhold from or deny to such person any of the accommodations, advantages, facilities or privileges thereof.” 58. Defendant’s Website and its’ sale of goods to the general public, constitute sales establishments and public accommodations within the definition of N.Y. Exec. Law § 292(9). Defendant’s Website is a service, privilege or advantage of Defendant. 59. Defendant is subject to New York Human Rights Law because it owns and operates its Website. Defendant is a person within the meaning of N.Y. Exec. Law § 292(1). 60. Defendant is violating N.Y. Exec. Law § 296(2)(a) in refusing to update or remove access barriers to its Website, causing its Website to be completely inaccessible to the blind. This inaccessibility denies blind patrons full and equal access to the facilities, services that Defendant makes available to the non-disabled public. 61. Under N.Y. Exec. Law § 296(2)(c)(i), unlawful discriminatory practice includes, among other things, “a refusal to make reasonable modifications in policies, practices, or procedures, when such modifications are necessary to afford facilities, privileges, advantages or accommodations to individuals with disabilities, unless such person can demonstrate that making such modifications would fundamentally alter the nature of such facilities, privileges, advantages or accommodations being offered or would result in an undue burden". 62. Under N.Y. Exec. Law § 296(2)(c)(ii), unlawful discriminatory practice also includes, “a refusal to take such steps as may be necessary to ensure that no individual with a disability is excluded or denied services because of the absence of auxiliary aids and services, unless such person can demonstrate that taking such steps would fundamentally alter the nature of the facility, privilege, advantage or accommodation being offered or would result in an undue burden.” 63. Readily available, well-established guidelines exist on the Internet for making websites accessible to the blind and visually impaired. These guidelines have been followed by other large business entities and government agencies in making their website accessible, including but not limited to: adding alt-text to graphics and ensuring that all functions can be performed using a keyboard. Incorporating the basic components to make its Website accessible would neither fundamentally alter the nature of Defendant’s business nor result in an undue burden to Defendant. 64. Defendant’s actions constitute willful intentional discrimination against the class on the basis of a disability in violation of the NYSHRL, N.Y. Exec. Law § 296(2) in that Defendant has: a. constructed and maintained a website that is inaccessible to blind class members with knowledge of the discrimination; and/or b. constructed and maintained a website that is sufficiently intuitive and/or obvious that is inaccessible to blind class members; and/or c. failed to take actions to correct these access barriers in the face of substantial harm and discrimination to blind class members. 65. Defendant has failed to take any prompt and equitable steps to remedy their discriminatory conduct. These violations are ongoing. 66. Defendant discriminates, and will continue in the future to discriminate against Plaintiff and New York State Sub-Class Members on the basis of disability in the full and equal enjoyment of the services, facilities, privileges, advantages, accommodations and/or opportunities of Defendant’s Website under § 296(2) et seq. and/or its implementing regulations. Unless the Court enjoins Defendant from continuing to engage in these unlawful practices, Plaintiff and the Sub-Class Members will continue to suffer irreparable harm. 67. Defendant’s actions were and are in violation of New York State Human Rights Law and therefore Plaintiff invokes his right to injunctive relief to remedy the discrimination. 68. Plaintiff is also entitled to compensatory damages, as well as civil penalties and fines under N.Y. Exec. Law § 297(4)(c) et seq. for each and every offense. 69. Plaintiff is also entitled to reasonable attorneys’ fees and costs. 70. Under N.Y. Exec. Law § 297 and the remedies, procedures, and rights set forth and incorporated therein Plaintiff prays for judgment as set forth below. THIRD CAUSE OF ACTION VIOLATION OF THE NEW YORK STATE CIVIL RIGHTS LAW 71. Plaintiff, on behalf of himself and the New York State Sub-Class Members, repeats and realleges every allegation of the preceding paragraphs as if fully set forth herein. 72. Plaintiff served notice thereof upon the attorney general as required by N.Y. Civil Rights Law § 41. 73. N.Y. Civil Rights Law § 40 provides that “all persons within the jurisdiction of this state shall be entitled to the full and equal accommodations, advantages, facilities and privileges of any places of public accommodations, resort or amusement, subject only to the conditions and limitations established by law and applicable alike to all persons. No persons, being the owner, lessee, proprietor, manager, superintendent, agent, or employee of any such place shall directly or indirectly refuse, withhold from, or deny to any person any of the accommodations, advantages, facilities and privileges thereof . . .” 74. N.Y. Civil Rights Law § 40-c(2) provides that “no person because of . . . disability, as such term is defined in section two hundred ninety-two of executive law, be subjected to any discrimination in his or her civil rights, or to any harassment, as defined in section 240.25 of the penal law, in the exercise thereof, by any other person or by any firm, corporation or institution, or by the state or any agency or subdivision.” 75. Defendant’s Website is a service, privilege or advantage of Defendant and its Website which offers such goods and services to the general public is required to be equally accessible to all. 76. Defendant is subject to New York Civil Rights Law because it owns and operates their Website, and Defendant is a person within the meaning of N.Y. Civil Law § 40-c(2). 77. Defendant is violating N.Y. Civil Rights Law § 40-c(2) in refusing to update or remove access barriers to its Website, causing its Website and the goods and services integrated with such Website to be completely inaccessible to the blind. This inaccessibility denies blind patrons full and equal access to the facilities, goods and services that Defendant makes available to the non-disabled public. 78. N.Y. Civil Rights Law § 41 states that “any corporation which shall violate any of the provisions of sections forty, forty-a, forty-b or forty-two . . . shall for each and every violation thereof be liable to a penalty of not less than one hundred dollars nor more than five hundred dollars, to be recovered by the person aggrieved thereby . . .” 79. Under NY Civil Rights Law § 40-d, “any person who shall violate any of the provisions of the foregoing section, or subdivision three of section 240.30 or section 240.31 of the penal law, or who shall aid or incite the violation of any of said provisions shall for each and every violation thereof be liable to a penalty of not less than one hundred dollars nor more than five hundred dollars, to be recovered by the person aggrieved thereby in any court of competent jurisdiction in the county in which the defendant shall reside ...” 80. Defendant has failed to take any prompt and equitable steps to remedy its discriminatory conduct. These violations are ongoing. 81. Defendant discriminates, and will continue in the future to discriminate against Plaintiff and New York State Sub-Class Members on the basis of disability are being directly or indirectly refused, withheld from, or denied the accommodations, advantages, facilities and privileges thereof in § 40 et seq. and/or its implementing regulations. 82. Plaintiff is entitled to compensatory damages of five hundred dollars per instance, as well as civil penalties and fines under N.Y. Civil Law § 40 et seq. for each and every offense. FOURTH CAUSE OF ACTION VIOLATIONS OF THE NYCHRL 83. Plaintiff, on behalf of himself and the New York City Sub-Class Members, repeats and realleges every allegation of the preceding paragraphs as if fully set forth herein. 84. N.Y.C. Administrative Code § 8-107(4)(a) provides that “It shall be an unlawful discriminatory practice for any person, being the owner, lessee, proprietor, manager, superintendent, agent or employee of any place or provider of public accommodation, because of . . . disability . . . directly or indirectly, to refuse, withhold from or deny to such person, any of the accommodations, advantages, facilities or privileges thereof.” 85. Defendant’s Website is a sales establishment and public accommodations within the definition of N.Y.C. Admin. Code § 8-102(9). 86. Defendant is subject to NYCHRL because it owns and operates its Website, making it a person within the meaning of N.Y.C. Admin. Code § 8-102(1). 87. Defendant is violating N.Y.C. Administrative Code § 8-107(4)(a) in refusing to update or remove access barriers to Website, causing its Website and the services integrated with such Website to be completely inaccessible to the blind. This inaccessibility denies blind patrons full and equal access to the facilities, products, and services that Defendant makes available to the non-disabled public. 88. Defendant is required to “make reasonable accommodation to the needs of persons with disabilities . . . any person prohibited by the provisions of [§ 8-107 et seq.] from discriminating on the basis of disability shall make reasonable accommodation to enable a person with a disability to . . . enjoy the right or rights in question provided that the disability is known or should have been known by the covered entity.” N.Y.C. Admin. Code § 8-107(15)(a). 89. Defendant’s actions constitute willful intentional discrimination against the Sub- Class on the basis of a disability in violation of the N.Y.C. Administrative Code § 8-107(4)(a) and § 8-107(15)(a) in that Defendant has: a. constructed and maintained a website that is inaccessible to blind class members with knowledge of the discrimination; and/or b. constructed and maintained a website that is sufficiently intuitive and/or obvious that is inaccessible to blind class members; and/or c. failed to take actions to correct these access barriers in the face of substantial harm and discrimination to blind class members. 90. Defendant has failed to take any prompt and equitable steps to remedy their discriminatory conduct. These violations are ongoing. 91. As such, Defendant discriminates, and will continue in the future to discriminate against Plaintiff and members of the proposed class and subclass on the basis of disability in the full and equal enjoyment of the services, facilities, privileges, advantages, accommodations and/or opportunities of its Website under § 8- 107(4)(a) and/or its implementing regulations. Unless the Court enjoins Defendant from continuing to engage in these unlawful practices, Plaintiff and members of the class will continue to suffer irreparable harm. 92. Defendant’s actions were and are in violation of the NYCHRL and therefore Plaintiff invokes his right to injunctive relief to remedy the discrimination. 93. Plaintiff is also entitled to compensatory damages, as well as civil penalties and fines under N.Y.C. Administrative Code § 8-120(8) and § 8-126(a) for each offense as well as punitive damages pursuant to § 8-502. 94. Plaintiff is also entitled to reasonable attorneys’ fees and costs. 95. Under N.Y.C. Administrative Code § 8-120 and § 8-126 and the remedies, procedures, and rights set forth and incorporated therein Plaintiff prays for judgment as set forth below. FIFTH CAUSE OF ACTION DECLARATORY RELIEF 96. Plaintiff, on behalf of himself and the Class and New York State and City Sub- Classes Members, repeats and realleges every allegation of the preceding paragraphs as if fully set forth herein. 97. An actual controversy has arisen and now exists between the parties in that Plaintiff contends, and is informed and believes that Defendant denies, that its Website contains access barriers denying blind customers the full and equal access to the services and facilities of its Website, which Defendant owns, operations and controls, fails to comply with applicable laws including, but not limited to, Title III of the Americans with Disabilities Act, 42 U.S.C. §§ 12182, et seq., N.Y. Exec. Law § 296, et seq., and N.Y.C. Admin. Code § 8-107, et seq. prohibiting discrimination against the blind. 98. A judicial declaration is necessary and appropriate at this time in order that each of the parties may know their respective rights and duties and act accordingly. PRAYER FOR RELIEF WHEREFORE, Plaintiff respectfully requests this Court grant the following relief: a. A preliminary and permanent injunction to prohibit Defendant from violating the Americans with Disabilities Act, 42 U.S.C. §§ 12182, et seq., N.Y. Exec. Law § 296, et seq., N.Y.C. Administrative Code § 8-107, et seq., and the laws of New York; b. A preliminary and permanent injunction requiring Defendant to take all the steps necessary to make its Website into full compliance with the requirements set forth in the ADA, and its implementing regulations, so that the Website is readily accessible to and usable by blind individuals; c. A declaration that Defendant owns, maintains and/or operates its Website in a manner that discriminates against the blind and which fails to provide access for persons with disabilities as required by Americans with Disabilities Act, 42 U.S.C. §§ 12182, et seq., N.Y. Exec. Law § 296, et seq., N.Y.C. Administrative Code § 8-107, et seq., and the laws of New York d. An order certifying the Class and Sub-Classes under Fed. R. Civ. P. 23(a) & (b)(2) and/or (b)(3), appointing Plaintiff as Class Representative, and his attorneys as Class Counsel; e. Compensatory damages in an amount to be determined by proof, including all applicable statutory and punitive damages and fines, to Plaintiff and the proposed class and subclasses for violations of their civil rights under New York State Human Rights Law and City Law; f. Pre- and post-judgment interest; g. An award of costs and expenses of this action together with reasonable attorneys’ and expert fees; and h. Such other and further relief as this Court deems just and proper. DEMAND FOR TRIAL BY JURY Pursuant to Fed. R. Civ. P. 38(b), Plaintiff demands a trial by jury on all questions of fact the Complaint raises. Dated: Hackensack, New Jersey June 14, 2019 STEIN SAKS, PLLC By: /s/ David Force David Force, Esq. dforce@steinsakslegal.com 285 Passaic Street Hackensack, NJ 07601 Tel: (201) 282-6500 Fax: (201) 282-6501 ATTORNEYS FOR PLAINTIFF

civil rights, immigration, family

C-xWEocBD5gMZwczDUzy

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x YASEEN TRAYNOR A/K/A YASEEN TRAYLOR, on behalf of himself and all others similarly situated, CASE NO.: 1:19-cv-6942 CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL Plaintiffs, v. TEESPRING, INC., Defendant. : : : : : : : : : : : : - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x INTRODUCTION 1. Plaintiff YASEEN TRAYNOR A/K/A YASEEN TRAYLOR, on behalf of himself and others similarly situated, asserts the following claims against Defendant TEESPRING, INC. as follows. 2. Plaintiff is a visually-impaired and legally blind person who requires screen- reading software to read website content using his computer. Plaintiff uses the terms “blind” or “visually-impaired” to refer to all people with visual impairments who meet the legal definition of blindness in that they have a visual acuity with correction of less than or equal to 20 x 200. Some blind people who meet this definition have limited vision. Others have no vision. 3. Based on a 2010 U.S. Census Bureau report, approximately 8.1 million people in the United States are visually impaired, including 2.0 million who are blind, and according to the American Foundation for the Blind’s 2015 report, approximately 400,000 visually impaired persons live in the State of New York. 4. Plaintiff brings this civil rights action against Defendant for its failure to design, construct, maintain, and operate its website to be fully accessible to and independently usable by Plaintiff and other blind or visually-impaired people. Defendant’s denial of full and equal access to its website, and therefore denial of its goods and services offered thereby, is a violation of Plaintiff’s rights under the Americans with Disabilities Act (“ADA”). 5. Because Defendant’s website, www.teespring.com (the “Website”), is not equally accessible to blind and visually impaired consumers, it violates the ADA. Plaintiff seeks a permanent injunction to cause a change in Defendant’s corporate policies, practices, and procedures so that Defendant’s website will become and remain accessible to blind and visually-impaired consumers. JURISDICTION AND VENUE 6. This Court has subject-matter jurisdiction over this action under 28 U.S.C. § 1331 and 42 U.S.C. § 12181, as Plaintiff’s claims arise under Title III of the ADA, 42 U.S.C. § 12181, et seq., and 28 U.S.C. § 1332. 7. This Court has supplemental jurisdiction under 28 U.S.C. § 1367 over Plaintiff’s New York State Human Rights Law, N.Y. Exec. Law Article 15, (“NYSHRL”) and New York City Human Rights Law, N.Y.C. Admin. Code § 8-101 et seq., (“NYCHRL”) claims. 8. Venue is proper in this district under 28 U.S.C. §1391(b)(1) and (2) because Defendant conducts and continues to conduct a substantial and significant amount of business in this District, and a substantial portion of the conduct complained of herein occurred in this District because Plaintiff attempted to utilize, on a number of occasions, the subject Website within this Judicial District. 9. Defendant is subject to personal jurisdiction in this District. Defendant has been and is committing the acts or omissions alleged herein in the Southern District of New York that caused injury, and violated rights the ADA prescribes to Plaintiff and to other blind and other visually impaired-consumers. A substantial part of the acts and omissions giving rise to Plaintiff’s claims occurred in this District: on several separate occasions, Plaintiff has been denied the full use and enjoyment of the facilities, goods and services offered to the general public, on Defendant’s Website in New York County. These access barriers that Plaintiff encountered have caused a denial of Plaintiff’s full and equal access multiple times in the past, and now deter Plaintiff on a regular basis from accessing the Defendant’s Website in the future. 10. This Court is empowered to issue a declaratory judgment under 28 U.S.C. §§ 2201 and 2202. THE PARTIES 11. Plaintiff YASEEN TRAYNOR A/K/A YASEEN TRAYLOR, at all relevant times, is and was a resident of Brooklyn, New York. 12. Plaintiff is a blind, visually-impaired handicapped person and a member of member of a protected class of individuals under the ADA, under 42 U.S.C. § 12102(1)-(2), and the regulations implementing the ADA set forth at 28 CFR §§ 36.101 et seq., the NYSHRL and NYCHRL. 13. Defendant is and was at all relevant times a Delaware Limited Liability Company doing business in New York. 14. Defendant’s Website, and its goods, and services offered thereupon, is a public accommodation within the definition of Title III of the ADA, 42 U.S.C. § 12181(7). NATURE OF ACTION 15. The Internet has become a significant source of information, a portal, and a tool for conducting business, doing everyday activities such as shopping, learning, banking, researching, as well as many other activities for sighted, blind and visually- impaired persons alike. 16. In today’s tech-savvy world, blind and visually impaired people have the ability to access websites using keyboards in conjunction with screen access software that vocalizes the visual information found on a computer screen or displays the content on a refreshable Braille display. This technology is known as screen-reading software. Screen-reading software is currently the only method a blind or visually- impaired person may independently access the internet. Unless websites are designed to be read by screen-reading software, blind and visually-impaired persons are unable to fully access websites, and the information, products, goods and contained thereon. 17. Blind and visually-impaired users of Windows operating system-enabled computers and devices have several screen reading software programs available to them. Some of these programs are available for purchase and other programs are available without the user having to purchase the program separately. Job Access With Speech, otherwise known as “JAWS” is currently the most popular, separately purchased and downloaded screen-reading software program available for a Windows computer. Another popular screen-reading software program available for a Windows computer is NonVisual Desktop Access “NVDA”. 18. For screen-reading software to function, the information on a website must be capable of being rendered into text. If the website content is not capable of being rendered into text, the blind or visually-impaired user is unable to access the same content available to sighted users. 19. The international website standards organization, the World Wide Web Consortium, known throughout the world as W3C, has published version 2.1 of the Web Content Accessibility Guidelines (“WCAG 2.1”). WCAG 2.1 are well- established guidelines for making websites accessible to blind and visually- impaired people. These guidelines are universally followed by most large business entities and government agencies to ensure their websites are accessible. 20. Non-compliant websites pose common access barriers to blind and visually- impaired persons. Common barriers encountered by blind and visually impaired persons include, but are not limited to, the following: a. A text equivalent for every non-text element is not provided; b. Title frames with text are not provided for identification and navigation; c. Equivalent text is not provided when using scripts; d. Forms with the same information and functionality as for sighted persons are not provided; e. Information about the meaning and structure of content is not conveyed by more than the visual presentation of content; f. Text cannot be resized without assistive technology up to 200% without losing content or functionality; g. If the content enforces a time limit, the user is not able to extend, adjust or disable it; h. Web pages do not have titles that describe the topic or purpose; i. The purpose of each link cannot be determined from the link text alone or from the link text and its programmatically determined link context; j. One or more keyboard operable user interface lacks a mode of operation where the keyboard focus indicator is discernible; k. The default human language of each web page cannot be programmatically determined; l. When a component receives focus, it may initiate a change in context; m. Changing the setting of a user interface component may automatically cause a change of context where the user has not been advised before using the component; n. Labels or instructions are not provided when content requires user input, which include captcha prompts that require the user to verify that he or she is not a robot; o. In content which is implemented by using markup languages, elements do not have complete start and end tags, elements are not nested according to their specifications, elements may contain duplicate attributes, and/or any IDs are not unique; p. Inaccessible Portable Document Format (PDFs); and, q. The name and role of all User Interface elements cannot be programmatically determined; items that can be set by the user cannot be programmatically set; and/or notification of changes to these items is not available to user agents, including assistive technology. STATEMENT OF FACTS 21. Defendant is a personalized clothing and accessories retailer that owns and operates www.teespring.com (its “Website”), offering features which should allow all consumers to access the goods and services and which Defendant ensures the delivery of such goods throughout the United States, including New York State. 22. Defendant’s Website offers products and services for online sale and general delivery to the public. The Website offers features which ought to allow users to browse for items, access navigation bar descriptions and prices, and avail consumers of the ability to peruse the numerous items offered for sale. 23. Plaintiff is a visually-impaired and legally blind person, who cannot use a computer without the assistance of screen-reading software. Plaintiff is, however, a proficient NVDA screen-reader user and uses it to access the Internet. Plaintiff has visited the Website on separate occasions using a screen-reader. 24. On multiple occasions, the last occurring in July of 2019, Plaintiff visited Defendant’s website, www.teespring.com, to make a purchase. Despite his efforts, however, Plaintiff was denied a shopping experience similar to that of a sighted individual due to the website’s lack of a variety of features and accommodations, which effectively barred Plaintiff from being able to determine what specific products were offered for sale. 25. Many features on the Website lacks alt. text, which is the invisible code embedded beneath a graphical image. As a result, Plaintiff was unable to differentiate what products were on the screen due to the failure of the Website to adequately describe its content. Such issues were predominant in the apparel section where Plaintiff was attempting, but was unsuccessful, in making a purchase. 26. Many features on the Website also fail to Add a label element or title attribute for each field. This is a problem for the visually impaired because the screen reader fails to communicate the purpose of the page element. It also leads to the user not being able to understand what he or she is expected to insert into the subject field. This was an issue on Defendant’s Website particularly in the apparel section. As a result, Plaintiff and similarly situated visually impaired users of Defendant’s Website are unable to enjoy the privileges and benefits of the Website equally to sighted users. 27. The Website also contained a host of broken links, which is a hyperlink to a non- existent or empty webpage. For the visually impaired this is especially paralyzing due to the inability to navigate or otherwise determine where one is on the website once a broken link is encountered. For example, upon coming across a link of interest, the user is redirected to an error page. However, the screen-reader fails to communicate that the link is broken. As a result, a visually impaired user is not able to return to or continue his original search. 28. These access barriers effectively denied Plaintiff the ability to use and enjoy Defendant’s website the same way sighted individuals do. 29. It is, upon information and belief, Defendant’s policy and practice to deny Plaintiff, along with other blind or visually-impaired users, access to Defendant’s website, and to therefore specifically deny the goods and services that are offered to the general public. Due to Defendant’s failure and refusal to remove access barriers to its website, Plaintiff and visually-impaired persons have been and are still being denied equal access to Defendant’s Website, and the numerous goods and services and benefits offered to the public through the Website. 30. Due to the inaccessibility of Defendant’s Website, blind and visually-impaired customers such as Plaintiff, who need screen-readers, cannot fully and equally use or enjoy the facilities, products, and services Defendant offers to the public on its Website. The access barriers Plaintiff encountered have caused a denial of Plaintiff’s full and equal access in the past, and now deter Plaintiff on a regular basis from equal access to the Website. 31. If the Website were equally accessible to all, Plaintiff could independently navigate the Website and complete a desired transaction as sighted individuals do. 32. Through his attempts to use the Website, Plaintiff has actual knowledge of the access barriers that make these services inaccessible and independently unusable by blind and visually-impaired people. 33. Because simple compliance with the WCAG 2.1 Guidelines would provide Plaintiff and other visually-impaired consumers with equal access to the Website, Plaintiff alleges that Defendant has engaged in acts of intentional discrimination, including but not limited to the following policies or practices: a. Constructing and maintaining a website that is inaccessible to visually-impaired individuals, including Plaintiff; b. Failure to construct and maintain a website that is sufficiently intuitive so as to be equally accessible to visually impaired individuals, including Plaintiff; and, c. Failing to take actions to correct these access barriers in the face of substantial harm and discrimination to blind and visually-impaired consumers, such as Plaintiff, as a member of a protected class. 34. Defendant therefore uses standards, criteria or methods of administration that have the effect of discriminating or perpetuating the discrimination of others, as alleged herein. 35. The ADA expressly contemplates the injunctive relief that Plaintiff seeks in this action. In relevant part, the ADA requires: In the case of violations of . . . this title, injunctive relief shall include an order to alter facilities to make such facilities readily accessible to and usable by individuals with disabilities . . . Where appropriate, injunctive relief shall also include requiring the . . . modification of a policy . . . 42 U.S.C. § 12188(a)(2). 36. Because Defendant’s Website has never been equally accessible, and because Defendant lacks a corporate policy that is reasonably calculated to cause its Website to become and remain accessible, Plaintiff invokes 42 U.S.C. § 12188(a)(2) and seeks a permanent injunction requiring Defendant to retain a qualified consultant acceptable to Plaintiff (“Agreed Upon Consultant”) to assist Defendant to comply with WCAG 2.1 guidelines for Defendant’s Website. Plaintiff seeks that this permanent injunction requires Defendant to cooperate with the Agreed Upon Consultant to: a. Train Defendant’s employees and agents who develop the Website on accessibility compliance under the WCAG 2.1 guidelines; b. Regularly check the accessibility of the Website under the WCAG 2.1 guidelines; c. Regularly test user accessibility by blind or vision-impaired persons to ensure that Defendant’s Website complies under the WCAG 2.1 guidelines; and, d. Develop an accessibility policy that is clearly disclosed on Defendant’s Websites, with contact information for users to report accessibility-related problems. 37. Although Defendant may currently have centralized policies regarding maintaining and operating its Website, Defendant lacks a plan and policy reasonably calculated to make them fully and equally accessible to, and independently usable by, blind and other visually-impaired consumers. 38. Defendant has, upon information and belief, invested substantial sums in developing and maintaining their Website and has generated significant revenue from the Website. These amounts are far greater than the associated cost of making their Website equally accessible to visually impaired customers. 39. Without injunctive relief, Plaintiff and other visually-impaired consumers will continue to be unable to independently use the Website, violating their rights. CLASS ACTION ALLEGATIONS 40. Plaintiff, on behalf of himself and all others similarly situated, seeks to certify a nationwide class under Fed. R. Civ. P. 23(a) and 23(b)(2): all legally blind individuals in the United States who have attempted to access Defendant’s Website and as a result have been denied access to the equal enjoyment of goods and services, during the relevant statutory period. 41. Plaintiff, on behalf of himself and all others similarly situated, seeks certify a New York State subclass under Fed. R. Civ. P. 23(a) and 23(b)(2): all legally blind individuals in the State of New York who have attempted to access Defendant’s Website and as a result have been denied access to the equal enjoyment of those services, during the relevant statutory period. 42. Plaintiff, on behalf of himself and all others similarly situated, seeks certify a New York City subclass under Fed. R. Civ. P. 23(a) and 23(b)(2): all legally blind individuals in the City of New York who have attempted to access Defendant’s Website and as a result have been denied access to the equal enjoyment of goods and services offered, during the relevant statutory period. 43. Common questions of law and fact exist amongst Class, including: a. Whether Defendant’s Website is a “public accommodation” under the ADA; b. Whether Defendant’s Website is a “place or provider of public accommodation” under the NYSHRL or NYCHRL; c. Whether Defendant’s Website denies the full and equal enjoyment of its products, services, facilities, privileges, advantages, or accommodations to people with visual disabilities, violating the ADA; and d. Whether Defendant’s Website denies the full and equal enjoyment of its products, services, facilities, privileges, advantages, or accommodations to people with visual disabilities, violating the NYSHRL or NYCHRL. 44. Plaintiff’s claims are typical of the Class. The Class, similarly to the Plaintiff, are severely visually impaired or otherwise blind, and claim that Defendant has violated the ADA, NYSYRHL or NYCHRL by failing to update or remove access barriers on its Website so either can be independently accessible to the Class. 45. Plaintiff will fairly and adequately represent and protect the interests of the Class Members because Plaintiff has retained and is represented by counsel competent and experienced in complex class action litigation, and because Plaintiff has no interests antagonistic to the Class Members. Class certification of the claims is appropriate under Fed. R. Civ. P. 23(b)(2) because Defendant has acted or refused to act on grounds generally applicable to the Class, making appropriate both declaratory and injunctive relief with respect to Plaintiff and the Class as a whole. 46. Alternatively, class certification is appropriate under Fed. R. Civ. P. 23(b)(3) because fact and legal questions common to Class Members predominate over questions affecting only individual Class Members, and because a class action is superior to other available methods for the fair and efficient adjudication of this litigation. 47. Judicial economy will be served by maintaining this lawsuit as a class action in that it is likely to avoid the burden that would be otherwise placed upon the judicial system by the filing of numerous similar suits by people with visual disabilities throughout the United States. FIRST CAUSE OF ACTION VIOLATIONS OF THE ADA, 42 U.S.C. § 12181 et seq. 48. Plaintiff, on behalf of himself and the Class Members, repeats and realleges every allegation of the preceding paragraphs as if fully set forth herein. 49. Section 302(a) of Title III of the ADA, 42 U.S.C. § 12101 et seq., provides: No individual shall be discriminated against on the basis of disability in the full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations of any place of public accommodation by any person who owns, leases (or leases to), or operates a place of public accommodation. 42 U.S.C. § 12182(a). 50. Defendant’s Website is a public accommodations within the definition of Title III of the ADA, 42 U.S.C. § 12181(7). The Website is a service that is offered to the general public, and as such, must be equally accessible to all potential consumers. 51. Under Section 302(b)(1) of Title III of the ADA, it is unlawful discrimination to deny individuals with disabilities the opportunity to participate in or benefit from the products, services, facilities, privileges, advantages, or accommodations of an entity. 42 U.S.C. § 12182(b)(1)(A)(i). 52. Under Section 302(b)(1) of Title III of the ADA, it is unlawful discrimination to deny individuals with disabilities an opportunity to participate in or benefit from the products, services, facilities, privileges, advantages, or accommodation, which is equal to the opportunities afforded to other individuals. 42 U.S.C. § 12182(b)(1)(A)(ii). 53. Under Section 302(b)(2) of Title III of the ADA, unlawful discrimination also includes, among other things: [A] failure to make reasonable modifications in policies, practices, or procedures, when such modifications are necessary to afford such goods, services, facilities, privileges, advantages, or accommodations to individuals with disabilities, unless the entity can demonstrate that making such modifications would fundamentally alter the nature of such goods, services, facilities, privileges, advantages or accommodations; and a failure to take such steps as may be necessary to ensure that no individual with a disability is excluded, denied services, segregated or otherwise treated differently than other individuals because of the absence of auxiliary aids and services, unless the entity can demonstrate that taking such steps would fundamentally alter the nature of the good, service, facility, privilege, advantage, or accommodation being offered or would result in an undue burden. 42 U.S.C. § 12182(b)(2)(A)(ii)-(iii). 54. The acts alleged herein constitute violations of Title III of the ADA, and the regulations promulgated thereunder. Plaintiff, who is a member of a protected class of persons under the ADA, has a physical disability that substantially limits the major life activity of sight within the meaning of 42 U.S.C. §§ 12102(1)(A)-(2)(A). Furthermore, Plaintiff has been denied full and equal access to the Website, has not been provided services that are provided to other patrons who are not disabled, and has been provided services that are inferior to the services provided to non-disabled persons. Defendant has failed to take any prompt and equitable steps to remedy its discriminatory conduct. These violations are ongoing. 55. Under 42 U.S.C. § 12188 and the remedies, procedures, and rights set forth and incorporated therein, Plaintiff, requests relief as set forth below. SECOND CAUSE OF ACTION VIOLATIONS OF THE NYSHRL 56. Plaintiff, on behalf of himself and the New York State Sub-Class Members, repeats and realleges every allegation of the preceding paragraphs as if fully set forth herein. 57. N.Y. Exec. Law § 296(2)(a) provides that it is “an unlawful discriminatory practice for any person, being the owner, lessee, proprietor, manager, superintendent, agent or employee of any place of public accommodation . . . because of the . . . disability of any person, directly or indirectly, to refuse, withhold from or deny to such person any of the accommodations, advantages, facilities or privileges thereof.” 58. Defendant’s Website and its’ sale of goods to the general public constitute sales establishments and public accommodations within the definition of N.Y. Exec. Law § 292(9). Defendant’s Website is a service, privilege or advantage of Defendant. 59. Defendant is subject to New York Human Rights Law because it owns and operates its Website. Defendant is a person within the meaning of N.Y. Exec. Law § 292(1). 60. Defendant is violating N.Y. Exec. Law § 296(2)(a) in refusing to update or remove access barriers to its Website, causing its Website to be completely inaccessible to the blind. This inaccessibility denies blind patrons full and equal access to the facilities, services that Defendant makes available to the non-disabled public. 61. Under N.Y. Exec. Law § 296(2)(c)(i), unlawful discriminatory practice includes, among other things, “a refusal to make reasonable modifications in policies, practices, or procedures, when such modifications are necessary to afford facilities, privileges, advantages or accommodations to individuals with disabilities, unless such person can demonstrate that making such modifications would fundamentally alter the nature of such facilities, privileges, advantages or accommodations being offered or would result in an undue burden". 62. Under N.Y. Exec. Law § 296(2)(c)(ii), unlawful discriminatory practice also includes, “a refusal to take such steps as may be necessary to ensure that no individual with a disability is excluded or denied services because of the absence of auxiliary aids and services, unless such person can demonstrate that taking such steps would fundamentally alter the nature of the facility, privilege, advantage or accommodation being offered or would result in an undue burden.” 63. Readily available, well-established guidelines exist on the Internet for making websites accessible to the blind and visually impaired. These guidelines have been followed by other large business entities and government agencies in making their website accessible, including but not limited to: adding alt-text to graphics and ensuring that all functions can be performed using a keyboard. Incorporating the basic components to make its Website accessible would neither fundamentally alter the nature of Defendant’s business nor result in an undue burden to Defendant. 64. Defendant’s actions constitute willful intentional discrimination against the class on the basis of a disability in violation of the NYSHRL, N.Y. Exec. Law § 296(2) in that Defendant has: a. constructed and maintained a website that is inaccessible to blind class members with knowledge of the discrimination; and/or b. constructed and maintained a website that is sufficiently intuitive and/or obvious that is inaccessible to blind class members; and/or c. failed to take actions to correct these access barriers in the face of substantial harm and discrimination to blind class members. 65. Defendant has failed to take any prompt and equitable steps to remedy their discriminatory conduct. These violations are ongoing. 66. Defendant discriminates, and will continue in the future to discriminate against Plaintiff and New York State Sub-Class Members on the basis of disability in the full and equal enjoyment of the products, services, facilities, privileges, advantages, accommodations and/or opportunities of Defendant’s Website under § 296(2) et seq. and/or its implementing regulations. Unless the Court enjoins Defendant from continuing to engage in these unlawful practices, Plaintiff and the Sub-Class Members will continue to suffer irreparable harm. 67. Defendant’s actions were and are in violation of New York State Human Rights Law and therefore Plaintiff invokes his right to injunctive relief to remedy the discrimination. 68. Plaintiff is also entitled to compensatory damages, as well as civil penalties and fines under N.Y. Exec. Law § 297(4)(c) et seq. for each and every offense. 69. Plaintiff is also entitled to reasonable attorneys’ fees and costs. 70. Under N.Y. Exec. Law § 297 and the remedies, procedures, and rights set forth and incorporated therein Plaintiff prays for judgment as set forth below. THIRD CAUSE OF ACTION VIOLATION OF THE NEW YORK STATE CIVIL RIGHTS LAW 71. Plaintiff, on behalf of himself and the New York State Sub-Class Members, repeats and realleges every allegation of the preceding paragraphs as if fully set forth herein. 72. Plaintiff served notice thereof upon the attorney general as required by N.Y. Civil Rights Law § 41. 73. N.Y. Civil Rights Law § 40 provides that “all persons within the jurisdiction of this state shall be entitled to the full and equal accommodations, advantages, facilities and privileges of any places of public accommodations, resort or amusement, subject only to the conditions and limitations established by law and applicable alike to all persons. No persons, being the owner, lessee, proprietor, manager, superintendent, agent, or employee of any such place shall directly or indirectly refuse, withhold from, or deny to any person any of the accommodations, advantages, facilities and privileges thereof . . .” 74. N.Y. Civil Rights Law § 40-c(2) provides that “no person because of . . . disability, as such term is defined in section two hundred ninety-two of executive law, be subjected to any discrimination in his or her civil rights, or to any harassment, as defined in section 240.25 of the penal law, in the exercise thereof, by any other person or by any firm, corporation or institution, or by the state or any agency or subdivision.” 75. Defendant’s Website is a service, privilege or advantage of Defendant and its Website which offers such goods and services to the general public is required to be equally accessible to all. 76. Defendant is subject to New York Civil Rights Law because it owns and operates their Website, and Defendant is a person within the meaning of N.Y. Civil Law § 40-c(2). 77. Defendant is violating N.Y. Civil Rights Law § 40-c(2) in refusing to update or remove access barriers to its Website, causing its Website and the goods and services integrated with such Website to be completely inaccessible to the blind. This inaccessibility denies blind patrons full and equal access to the facilities, goods and services that Defendant makes available to the non-disabled public. 78. N.Y. Civil Rights Law § 41 states that “any corporation which shall violate any of the provisions of sections forty, forty-a, forty-b or forty-two . . . shall for each and every violation thereof be liable to a penalty of not less than one hundred dollars nor more than five hundred dollars, to be recovered by the person aggrieved thereby . . .” 79. Under NY Civil Rights Law § 40-d, “any person who shall violate any of the provisions of the foregoing section, or subdivision three of section 240.30 or section 240.31 of the penal law, or who shall aid or incite the violation of any of said provisions shall for each and every violation thereof be liable to a penalty of not less than one hundred dollars nor more than five hundred dollars, to be recovered by the person aggrieved thereby in any court of competent jurisdiction in the county in which the defendant shall reside ...” 80. Defendant has failed to take any prompt and equitable steps to remedy its discriminatory conduct. These violations are ongoing. 81. Defendant discriminates, and will continue in the future to discriminate against Plaintiff and New York State Sub-Class Members on the basis of disability are being directly or indirectly refused, withheld from, or denied the accommodations, advantages, facilities and privileges thereof in § 40 et seq. and/or its implementing regulations. 82. Plaintiff is entitled to compensatory damages of five hundred dollars per instance, as well as civil penalties and fines under N.Y. Civil Law § 40 et seq. for each and every offense. FOURTH CAUSE OF ACTION VIOLATIONS OF THE NYCHRL 83. Plaintiff, on behalf of himself and the New York City Sub-Class Members, repeats and realleges every allegation of the preceding paragraphs as if fully set forth herein. 84. N.Y.C. Administrative Code § 8-107(4)(a) provides that “It shall be an unlawful discriminatory practice for any person, being the owner, lessee, proprietor, manager, superintendent, agent or employee of any place or provider of public accommodation, because of . . . disability . . . directly or indirectly, to refuse, withhold from or deny to such person, any of the accommodations, advantages, facilities or privileges thereof.” 85. Defendant’s Website is a sales establishment and public accommodations within the definition of N.Y.C. Admin. Code § 8-102(9). 86. Defendant is subject to NYCHRL because it owns and operates its Website, making it a person within the meaning of N.Y.C. Admin. Code § 8-102(1). 87. Defendant is violating N.Y.C. Administrative Code § 8-107(4)(a) in refusing to update or remove access barriers to Website, causing its Website and the services integrated with such Website to be completely inaccessible to the blind. This inaccessibility denies blind patrons full and equal access to the facilities, products, and services that Defendant makes available to the non-disabled public. 88. Defendant is required to “make reasonable accommodation to the needs of persons with disabilities . . . any person prohibited by the provisions of [§ 8-107 et seq.] from discriminating on the basis of disability shall make reasonable accommodation to enable a person with a disability to . . . enjoy the right or rights in question provided that the disability is known or should have been known by the covered entity.” N.Y.C. Admin. Code § 8-107(15)(a). 89. Defendant’s actions constitute willful intentional discrimination against the Sub- Class on the basis of a disability in violation of the N.Y.C. Administrative Code § 8-107(4)(a) and § 8-107(15)(a) in that Defendant has: a. constructed and maintained a website that is inaccessible to blind class members with knowledge of the discrimination; and/or b. constructed and maintained a website that is sufficiently intuitive and/or obvious that is inaccessible to blind class members; and/or c. failed to take actions to correct these access barriers in the face of substantial harm and discrimination to blind class members. 90. Defendant has failed to take any prompt and equitable steps to remedy their discriminatory conduct. These violations are ongoing. 91. As such, Defendant discriminates, and will continue in the future to discriminate against Plaintiff and members of the proposed class and subclass on the basis of disability in the full and equal enjoyment of the products, services, facilities, privileges, advantages, accommodations and/or opportunities of its Website under § 8-107(4)(a) and/or its implementing regulations. Unless the Court enjoins Defendant from continuing to engage in these unlawful practices, Plaintiff and members of the class will continue to suffer irreparable harm. 92. Defendant’s actions were and are in violation of the NYCHRL and therefore Plaintiff invokes his right to injunctive relief to remedy the discrimination. 93. Plaintiff is also entitled to compensatory damages, as well as civil penalties and fines under N.Y.C. Administrative Code § 8-120(8) and § 8-126(a) for each offense as well as punitive damages pursuant to § 8-502. 94. Plaintiff is also entitled to reasonable attorneys’ fees and costs. 95. Under N.Y.C. Administrative Code § 8-120 and § 8-126 and the remedies, procedures, and rights set forth and incorporated therein Plaintiff prays for judgment as set forth below. FIFTH CAUSE OF ACTION DECLARATORY RELIEF 96. Plaintiff, on behalf of himself and the Class and New York State and City Sub- Classes Members, repeats and realleges every allegation of the preceding paragraphs as if fully set forth herein. 97. An actual controversy has arisen and now exists between the parties in that Plaintiff contends, and is informed and believes that Defendant denies, that its Website contains access barriers denying blind customers the full and equal access to the products, services and facilities of its Website, which Defendant owns, operations and controls, fails to comply with applicable laws including, but not limited to, Title III of the Americans with Disabilities Act, 42 U.S.C. §§ 12182, et seq., N.Y. Exec. Law § 296, et seq., and N.Y.C. Admin. Code § 8-107, et seq. prohibiting discrimination against the blind. 98. A judicial declaration is necessary and appropriate at this time in order that each of the parties may know their respective rights and duties and act accordingly. PRAYER FOR RELIEF WHEREFORE, Plaintiff respectfully requests this Court grant the following relief: a. A preliminary and permanent injunction to prohibit Defendant from violating the Americans with Disabilities Act, 42 U.S.C. §§ 12182, et seq., N.Y. Exec. Law § 296, et seq., N.Y.C. Administrative Code § 8-107, et seq., and the laws of New York; b. A preliminary and permanent injunction requiring Defendant to take all the steps necessary to make its Website into full compliance with the requirements set forth in the ADA, and its implementing regulations, so that the Website is readily accessible to and usable by blind individuals; c. A declaration that Defendant owns, maintains and/or operates its Website in a manner that discriminates against the blind and which fails to provide access for persons with disabilities as required by Americans with Disabilities Act, 42 U.S.C. §§ 12182, et seq., N.Y. Exec. Law § 296, et seq., N.Y.C. Administrative Code § 8-107, et seq., and the laws of New York d. An order certifying the Class and Sub-Classes under Fed. R. Civ. P. 23(a) & (b)(2) and/or (b)(3), appointing Plaintiff as Class Representative, and his attorneys as Class Counsel; e. Compensatory damages in an amount to be determined by proof, including all applicable statutory and punitive damages and fines, to Plaintiff and the proposed class and subclasses for violations of their civil rights under New York State Human Rights Law and City Law; f. Pre- and post-judgment interest; g. An award of costs and expenses of this action together with reasonable attorneys’ and expert fees; and h. Such other and further relief as this Court deems just and proper. DEMAND FOR TRIAL BY JURY Pursuant to Fed. R. Civ. P. 38(b), Plaintiff demands a trial by jury on all questions of fact the Complaint raises. Dated: Hackensack, New Jersey July 25, 2019 STEIN SAKS, PLLC By: /s/ David Force David Force, Esq. dforce@steinsakslegal.com 285 Passaic Street Hackensack, NJ 07601 Tel: (201) 282-6500 Fax: (201) 282-6501 ATTORNEYS FOR PLAINTIFF

civil rights, immigration, family

dMDYDIcBD5gMZwczSg5t

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK Civil Action No. PAUL DEMARIA, individually and on behalf of all others similarly situated, CLASS ACTION COMPLAINT Plaintiff, v. FIVE GUYS ENTERPRISES, LLC, Defendant. NATURE OF THE ACTION 1. This is a class action on behalf of all of Defendant Five Guys Enterprises, LLC’s (“Defendant”) employees in the State of New York that engage in manual work in the course of their employment. 2. New York Law requires companies to pay their manual workers on a weekly basis unless they receive an express authorization to pay on a semi-monthly basis from the New York State Department of Labor Commissioner. See New York Labor Law (“NYLL”), Article 6, §191. 3. On information and belief, Defendant has received no such authorization from the New York State Department of Labor Commissioner. 4. The New York Court Of Appeals has explained that this law is “intended for the protection of those who are dependent upon their wages for sustenance.” People v. Ventri, 309 N.Y. 401, 405 (citing former Labor Law § 196). 5. Defendant has violated and continues to violate this law by paying its manual workers every other week rather than on a weekly basis. 6. Plaintiff therefore demands liquidated damages, interest, and attorneys’ fees on behalf of himself and a putative class comprised of all manual workers employed by Defendant in New York State over the last six years. JURISDICTION AND VENUE 7. This Court has personal jurisdiction over Defendant because Defendant conducts business in New York. Defendant owns and operates numerous restaurant locations within New 8. This Court has subject matter jurisdiction over this proposed class action pursuant to 28 U.S.C. § 1332(d), which, under the provisions of the Class Action Fairness Act (“CAFA”), explicitly provides for the original jurisdiction of the federal courts in any class action in which at least 100 members are in the proposed plaintiff class, any member of the plaintiff class is a citizen of a State different from any defendant, and the matter in controversy exceeds the sum of $5,000,000.00, exclusive of interest and costs. Plaintiff alleges that the total claims of individual members of the proposed Class (as defined herein) are well in excess of $5,000,000.00 in the aggregate, exclusive of interest and costs. 9. Venue is proper in this District under 28 U.S.C. § 1391(b)(1) because this is a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred. PARTIES 10. Defendant Five Guys Enterprises, LLC is a Delaware limited liability company with a principal place of business at 10718 Richmond Highway, Lorton, VA 22079. Defendant owns a chain of hamburger restaurants that employs thousands of manual workers in the State of New York. 11. Plaintiff Paul DeMaria is a citizen of New York who resides in Hicksville, New York. Plaintiff was employed by Defendant as a Store Manager from 2013 to June 2016 at a Five Guys location in Long Beach, New York. At least 25% of Plaintiff’s job responsibilities at Five Guys included manual labor, including tasks such as cooking, preparing, and wrapping food, taking orders, and taking food to customers. He also received store products, took and stocked inventory, and performed cleaning duties. Plaintiff was paid every other week, rather than weekly, during the entirety of his employment with Defendant. CLASS ACTION ALLEGATIONS 12. Pursuant to Fed. R. Civ. P. 23, Plaintiff seeks to represent a class defined as all persons who worked as manual workers in their employment for Defendant in the State of New York from six years preceding this Complaint to the date of class notice in this action (the “Class”). 13. Members of the Class are so numerous that their individual joinder herein is impracticable. On information and belief, members of the Class number in the thousands. The precise number of Class members and their identities are unknown to Plaintiff at this time but may be determined through discovery. Class members may be notified of the pendency of this action by mail and/or publication through the employment records of Defendant. 14. Common questions of law and fact exist as to all Class members and predominate over questions affecting only individual Class members. Common legal and factual questions include, but are not limited to: whether Defendant was required to pay class members on a weekly basis, whether class members were paid on a weekly basis, and whether Defendant violated NYLL § 191. 15. The claims of the named Plaintiff are typical of the claims of the Class in that the named Plaintiff worked as a manual worker for Defendant during the class period but was not provided with compensation for his work on a weekly basis. 16. Plaintiff is an adequate representative of the Class because his interests do not conflict with the interests of the Class members he seeks to represent, he has retained competent counsel experienced in prosecuting class actions, and he intends to prosecute this action vigorously. The interests of Class members will be fairly and adequately protected by Plaintiff and his counsel. 17. The class mechanism is superior to other available means for the fair and efficient adjudication of the claims of the Class members. Each individual Class member may lack the resources to undergo the burden and expense of individual prosecution of the complex and extensive litigation necessary to establish Defendant’s liability. Individualized litigation increases the delay and expense to all parties and multiplies the burden on the judicial system presented by the complex legal and factual issues of this case. Individualized litigation also presents a potential for inconsistent or contradictory judgments. In contrast, the class action device presents far fewer management difficulties and provides the benefits of single adjudication, economy of scale, and comprehensive supervision by a single court on the issue of Defendant’s liability. Class treatment of the liability issues will ensure that all claims and claimants are before this Court for consistent adjudication of the liability issues. CLAIMS FOR RELIEF COUNT I New York Labor Law – Failure to Pay Timely Wages 18. Plaintiff realleges and incorporates by reference all allegations in all preceding paragraphs. 19. The timely payment of wages provisions NYLL § 191 and its supporting regulations apply to Defendant and protect Plaintiff and the Class. 20. Defendant failed to pay Plaintiff and the Class on a timely basis as required by NYLL § 191(1)(a). 21. Due to Defendant’s violations of the NYLL, Plaintiff and the Class are entitled to recover from Defendant the amount of their untimely paid wages as liquidated damages, reasonable attorneys’ fees and costs, and pre-judgment and post-judgment interest as provided for by NYLL § 198. PRAYER FOR RELIEF WHEREFORE, Plaintiff, individually and on behalf of all others similarly situated, seeks judgment against Defendant, as follows: a. For an order certifying the Class under Rule 23 of the Federal Rules of Civil Procedure and naming Plaintiff as a representative of the Class and Plaintiff’s attorneys as Class Counsel to represent the Class members; b. For an order declaring Defendant’s conduct violates the law referenced herein; c. For an order finding in favor of Plaintiff and the Class on the count asserted herein; d. For liquidated damages in amounts to be determined by the Court and/or jury; e. For prejudgment interest on all amounts awarded; and f. For an order awarding Plaintiff and the Class their reasonable attorneys’ fees, expenses, and costs of suit. DEMAND FOR JURY TRIAL Pursuant to Federal Rule of Civil Procedure 38(b), Plaintiff demands a trial by jury of any and all issues in this action so triable of right. Dated: June 30, 2021 Respectfully Submitted, By: /s/ Yitzchak Kopel _ Yitzchak Kopel BURSOR & FISHER, P.A Yitzchak Kopel Alec M. Leslie 888 Seventh Avenue New York, NY 10019 Telephone: (646) 837-7150 Facsimile: (212) 989-9163 Email: ykopel@bursor.com aleslie@bursor.com Counsel for Plaintiff

employment & labor

3bReC4cBD5gMZwczwCxq

FEUERSTEIN, J. X M.J. Civil Action No.: Plaintiffs, -against- SUMMONS ISSUED DEMAND FOR JURY TRIAL Defendant(s). CV11-5319 Plaintiff AGLAIDE OSCAR ("Plaintiff"), by through her attorneys, M. Halvey INTRODUCTION/PRELIMINARY STATEMENT 1. Plaintiff brings this action on her own behalf for damages and declaratory and PARTIES 2. Plaintiff is a resident of the State of New York, residing at 243 Grand Street, 3. Defendants PROFESSIONAL CLAIMS BUREAU, INC. has their main office 4. Defendants are "debt collectors" as the phrase is defined and used in the JURISDICTION AND VENUE 5. The Court has jurisdiction over this matter pursuant to 28 USC $1331, as well 6. Venue is proper in this judicial district pursuant to 28 U.S.C. § 1391(b)(2). ALLEGATIONS FOR CLASS ACTION 7. Plaintiff brings this action as a class action, pursuant to Federal Rules of Civil 8. This Class satisfies all the requirements of FRCP Rule 23 for maintaining a 9. The Class is so numerous that joinder of all members is impracticable. Upon 10. The debt collection notices and/or letters/communications from the 11. There are questions of law and fact which are common to the Class and 12. Plaintiff's claims are typical of the claims of the Class, and Plaintiff has no 13. A class action is superior to other methods for the fair and efficient 14. The members of the Class are generally unsophisticated individuals, whose 15. Prosecution of separate actions by individual members of the Class would 16. A class action will permit a large number of similarly situated persons to 17. Plaintiff will fairly and adequately represent the Class members' interests in 18. Absent a class action the Class members will continue to suffer losses borne 19. Defendant has acted, and will act, on grounds generally applicable to the FACTUAL ALLEGATIONS 20. Plaintiffs repeats, reiterates and incorporates the allegations contained in 21. The Plaintiff received a debt collection letter form the Defendant dated 22. The Defendant's letter violated 15 USC § 1692 f- preface, using an unfair and23. The Defendant's violated 15 USC § 1692 e (7), the false representation that 24. The Defendant's further violated 15 USC $1692 e- preface and e (10) and e FIRST CAUSE OF ACTION (Violations of the FDCPA) 25. Plaintiff repeats, reiterates and incorporates the allegations contained in 26. Defendant's debt collection efforts attempted and/or directed towards the 27. As a result of Defendant's violations of the FDCPA, Plaintiff and the CLASS DEMAND FOR TRIAL BY JURY 28. Plaintiff AGLAIDE OSCAR AND THE CLASS hereby respectfully requests PRAYER FOR RELIEF WHEREFORE, Plaintiff AGLAIDE OSCAR and the CLASS demands judgment from A. For actual damages provided and pursuant to 15 USC $1692k(a)(1); B. For statutory damages provided and pursuant to 15 USC C. For statutory damages provided and pursuant to 15 USC D. For attorneys' fees and costs provided and pursuant to 15 USC E. A declaration that the Defendant's practices violated the FDCPA; F. For any such other and further relief, as well as further costs, New York, New York September 23, 2011 Respectfully submitted, By: M. Harvey Rephen, (MR3384), Esq. M. HARVEY REPHEN & ASSOCIATES, P.C. 708 Third Avenue, 6th Floor New York, New York 10017 Phone: (212) 796-0930 Facsimile: (212) 330-7582 Attorney for the Plaintiff Aglaide Oscar Professional Claims Bureau, Inc. 439 Oak Street Garden City, NY 11530 (by prescribed Service) Clerk, United States District Court, Eastern of New York (For Filing Purposes) CASE NO.: Plaintiff(s), -against- Defendant(s). COMPLAINT M. HARVEY REPHEN & ASSOCIATES, P.C. 708 Third Avenue, 6th Floor New York, New York 10017 Phone: (212) 796-0930 Facsimile: (212) 330-7582

consumer fraud

CfRdE4cBD5gMZwcz0peU

UNITED STATES DISTRICT COURT DISTRICT OF COLORADO MARC JOSEPH, Individually and On Behalf of All Others Similarly Situated, Case No. CLASS ACTION COMPLAINT FOR VIOLATION OF THE FEDERAL SECURITIES LAWS JURY TRIAL DEMANDED CLASS ACTION Plaintiff, v. LIBERTY OILFIELD SERVICES INC., CHRISTOPHER A. WRIGHT, MICHAEL STOCK, CARY D. STEINBECK, WILLIAM F. KIMBLE, PETER A. DEA, N. JOHN LANCASTER, JR., BRETT STAFFIERI, KEN BABCOCK, JESAL SHAH, MORGAN STANLEY & CO. LLC, GOLDMAN SACHS & CO. LLC, WELLS FARGO SECURITIES, LLC, CITIGROUP GLOBAL MARKETS INC., J.P. MORGAN SECURITIES LLC, EVERCORE GROUP L.L.C., PIPER SANDLER & CO., TUDOR, PICKERING, HOLT & CO. SECURITIES, LLC, HOULIHAN LOKEY CAPITAL, INC., INTREPID PARTNERS, LLC, PETRIE PARTNERS SECURITIES, LLC, SUNTRUST ROBINSON HUMPHREY, INC., RIC ENERGY IV DIRECT PARTNERSHIP, L.P., and RIC IV LIBERTY HOLDINGS, L.P., Defendants. Plaintiff Marc Joseph (“Plaintiff”), individually and on behalf of all other persons similarly situated, by Plaintiff’s undersigned attorneys, alleges the following based upon personal knowledge as to Plaintiff and Plaintiff’s own acts, and upon information and belief as to all other matters based on the investigation conducted by and through Plaintiff’s attorneys, which included, among other things, a review of U.S. Securities and Exchange Commission (“SEC”) filings by Liberty Oilfield Services, Inc. ("Liberty Oilfield" or the “Company”), as well as media and analyst reports about the Company and Company press releases. Plaintiff believes that substantial additional evidentiary support will exist for the allegations set forth herein. NATURE OF THE ACTION 1. Plaintiff brings this securities class action on behalf of persons who purchased or otherwise acquired Liberty Oilfield’s securities pursuant and/or traceable to the registration statement and related prospectus (collectively, the “Registration Statement”) issued in connection with Liberty Oilfield’s January 17, 2018 initial public offering (the “IPO” or “Offering”), seeking to recover compensable damages caused by Defendants’ violations of the Securities Act of 1933 (the “Securities Act”). 2. In January 2018, Defendants held the IPO, issuing approximately 14.6 million of Liberty Oilfield Class A stock to the investing public at $17.00 per share, pursuant to the Registration Statement. 3. By the commencement of this action, Liberty Oilfield’s shares trade significantly below its IPO price. As a result, investors were damaged. JURISDICTION AND VENUE 4. The claims alleged herein arise under and pursuant to Sections 11, 12(a)(2) and 15 of the Securities Act, 15 U.S.C. §§77k, 771(a)(2) and 77o. 5. This Court has jurisdiction over the subject matter of this action pursuant to 28 U.S.C. §1331 and Section 22 of the Securities Act (15 U.S.C. §77v). 6. Venue is proper in this District pursuant to 28 U.S.C. § 1391(b) and §22(a) of the Securities Act (15 U.S.C. §77v(a)) as the alleged misstatements entered and subsequent damages took place within this judicial district. The Company is also headquartered in this judicial district. 7. In connection with the acts, conduct and other wrongs alleged in this complaint, Defendants, directly or indirectly, used the means and instrumentalities of interstate commerce, including but not limited to, the United States mails, interstate telephone communications and the facilities of a national securities exchange. Defendants disseminated the statements alleged to be false and misleading herein into this District, and Defendants solicited purchasers of Liberty Oilfield securities in this District. PARTIES 8. Plaintiff, as set forth in the accompanying certification incorporated by reference herein, purchased Liberty Oilfield securities pursuant and/or traceable to the IPO and was damaged thereby. 9. Defendant Liberty Oilfield is a holding company with membership interests in Liberty Oilfield Services New HoldCo LLC ("Liberty LLC"). Through Liberty LLC, the Company provides hydraulic fracturing services and goods to onshore oil and natural gas exploration and production companies in North America. Defendant Liberty Oilfield is incorporated in Delaware and maintains its principal executive offices at 950 17th Street, Suite 2400, Denver, Colorado 80202. Liberty Oilfield’s shares are listed on the New York Stock Exchange (“NYSE”) under the ticker symbol “LBRT.” 10. Defendant Christopher A. Wright (“Wright”) is, and was at the time of the IPO, the Company’s Chief Executive Officer (“CEO”) and has been the Chairman of the Company’s Board of Directors since at least March 2018. Defendant Wright reviewed, contributed to, and signed the Registration Statement. 11. Defendant Michael Stock (“Stock”) is, and was at the time of the IPO, the Company’s Chief Financial Officer (“CFO”) and was a Director of the Company from February 2017 to January 2018. 12. Defendant Cary D. Steinbeck (“Steinbeck”) has been a Director of the Company since January 2018. Defendant Steinbeck reviewed and contributed to the Registration Statement and is identified therein as an incoming director nominee. 13. Defendant William F. Kimble (“Kimble”) has been a Director of the Company since January 2018. Defendant Kimble reviewed and contributed to the Registration Statement and is identified therein as an incoming director nominee. 14. Defendant Peter A. Dea (“Dea”) has been a Director of the Company since January 2018. Defendant Dea reviewed and contributed to the Registration Statement and is identified therein as an incoming director nominee. 15. Defendant N. John Lancaster, Jr. (“Lancaster”) is a Liberty Oilfield Director and has been since January 2018, and is a Partner at Riverstone Holdings LLC ("Riverstone"), a private equity firm, and has been since at least February 2017. Riverstone nominated Defendant Lancaster to Liberty Oilfield's Board pursuant to a Stockholders' Agreement in which the Company and Defendant RIC Direct (defined below) are parties. Defendant Lancaster reviewed and contributed to the Registration Statement and is identified therein as an incoming director nominee. 16. Defendant Brett Staffieri (“Staffieri”) is a Liberty Oilfield Director and has been since January 2018, and is a Partner at Riverstone and has been since at least August 2019. Defendant Staffieri was also a Managing Director at Riverstone from 2014 to at least March 2019. Riverstone nominated Defendant Staffieri to Liberty Oilfield's Board pursuant to a Stockholders' Agreement in which the Company and Defendant RIC Direct are parties. Defendant Staffieri reviewed and contributed to the Registration Statement and is identified therein as an incoming director nominee. 17. Defendant Ken Babcock (“Babcock”) is a Liberty Oilfield Director and has been since January 2018, and the Chief Executive Officer of Abaco Energy Technologies LLC, a company formed by Riverstone, and has been since at least October 2013. Riverstone nominated Defendant Babcock to Liberty Oilfield's Board pursuant to a Stockholders' Agreement in which the Company and Defendant RIC Direct are parties. Defendant Babcock reviewed and contributed to the Registration Statement and is identified therein as an incoming director nominee. 18. Defendant Jesal Shah (“Shah”) is a Liberty Oilfield Director and has been since January 2018, and a Principal at Riverstone and has been since at least March 2019. Defendant Shah was also a Vice President at Riverstone from at least May 2017 to at least February 2019 and has held other various positions at Riverstone since joining that company in 2010. Riverstone nominated Defendant Shah to Liberty Oilfield's Board pursuant to a Stockholders' Agreement in which the Company and Defendant RIC Direct are parties. Defendant Shah reviewed and contributed to the Registration Statement and is identified therein as an incoming director nominee. 19. The Defendants named in ¶¶ 10-18 are referred to herein as the “Individual Defendants.” The Individual Defendants signed the Registration Statement, solicited the investing public to purchase securities issued pursuant thereto, hired and assisted the underwriters, planned and contributed to the IPO and Registration Statement, and attended road shows and other promotions to meet with and present favorable information to potential Liberty Oilfield investors, all motivated by their own and the Company’s financial interests. 20. Defendant Morgan Stanley & Co. LLC (“Morgan Stanley”) is an investment banking firm that acted as an underwriter of Liberty Oilfield’s IPO, helping to draft and disseminate the IPO documents. Morgan Stanley’s address is 1585 Broadway, New York, NY 21. Defendant Goldman Sachs & Co. LLC (“Goldman Sachs”) is an investment banking firm that acted as an underwriter of Liberty Oilfield’s IPO, helping to draft and disseminate the IPO documents. Goldman Sachs’ address is 200 West Street, New York, NY 22. Defendant Wells Fargo Securities, LLC (“Wells Fargo”) is an investment banking firm that acted as an underwriter of Liberty Oilfield’s IPO, helping to draft and disseminate the IPO documents. Wells Fargo’s address is 550 South Tryon Street, 6th Floor, Charlotte, NC 23. Defendant Citigroup Global Markets INC (“Citigroup”) is an investment banking firm that acted as an underwriter of Liberty Oilfield’s IPO, helping to draft and disseminate the IPO documents. Citigroup’s address is 388 Greenwich Street, Tower Building, New York, NY 24. Defendant J.P. Morgan Securities LLC (“J.P. Morgan”) is an investment banking firm that acted as an underwriter of Liberty Oilfield’s IPO, helping to draft and disseminate the IPO documents. J.P. Morgan’s address is 383 Madison Avenue, New York, NY 10017. 25. Defendant Evercore Group L.L.C. (“Evercore”) is an investment banking firm that acted as an underwriter of Liberty Oilfield’s IPO, helping to draft and disseminate the IPO documents. Evercore’s address is 55 East 52nd Street, New York, NY 10055. 26. Defendant Piper Sandler & Co. (F/K/A Piper Jaffray & Co.) (“Piper Sandler”) is an investment banking firm that acted as an underwriter of Liberty Oilfield’s IPO, helping to draft and disseminate the IPO documents. Piper Sandler’s address is 800 Nicollet Mall, Minneapolis, MN 55402. 27. Defendant Tudor, Pickering, Holt & Co. Securities, LLC (F/K/A Tudor, Pickering, Holt & Co. Securities, Inc.) (“TPH”) is an investment banking firm that acted as an underwriter of Liberty Oilfield’s IPO, helping to draft and disseminate the IPO documents. TPH’s address is 1111 Bagby, Suite 4900, Houston, TX 77002. 28. Defendant Houlihan Lokey Capital, Inc. (“Houlihan Lokey”) is an investment banking firm that acted as an underwriter of Liberty Oilfield’s IPO, helping to draft and disseminate the IPO documents. Houlihan Lokey’s address is 10250 Constellation Boulevard, 5th Floor, Los Angeles, CA 90067. 29. Defendant Intrepid Partners, LLC (“Intrepid”) is an investment banking firm that acted as an underwriter of Liberty Oilfield’s IPO, helping to draft and disseminate the IPO documents. Intrepid’s address is 540 Madison Avenue, 25th Floor, New York, NY 10022. 30. Defendant Petrie Partners Securities, LLC (“Petrie Partners”) is an investment banking firm that acted as an underwriter of Liberty Oilfield’s IPO, helping to draft and disseminate the IPO documents. Petrie Partners’s address is 1144 15th Street, Denver, CO 31. Defendant SunTrust Robinson Humphrey, Inc. (“SunTrust”) is an investment banking firm that acted as an underwriter of Liberty Oilfield’s IPO, helping to draft and disseminate the IPO documents. SunTrust’s address is 3333 Peachtree Road, N.E. Atlanta Financial Center, South Tower, 9th Floor Atlanta, GA 30326. 32. Defendants Morgan Stanley, Goldman Sachs, Wells Fargo, Citigroup, J.P. Morgan, Evercore, Piper Sandler, TPH, Houlihan Lokey, Intrepid, Petrie, and SunTrust are referred to herein as the “Underwriter Defendants.” 33. Pursuant to the Securities Act, the Underwriter Defendants are liable for the false and misleading statements in the Registration Statement as follows: (a) The Underwriter Defendants are investment banking houses that specialize in, among other things, underwriting public offerings of securities. They served as the underwriters of the IPO and shared millions of dollars in fees collectively. The Underwriter Defendants arranged a multi-city roadshow prior to the IPO during which they, and representatives from Liberty Oilfield, met with potential investors and presented highly favorable information about the Company, its operations and its financial prospects. (b) The Underwriter Defendants also demanded and obtained an agreement from Liberty Oilfield and the Individual Defendants that Liberty Oilfield would indemnify and hold the Underwriter Defendants harmless from any liability under the federal securities laws. (c) Representatives of the Underwriter Defendants also assisted Liberty Oilfield and the Individual Defendants in planning the IPO, and purportedly conducted an adequate and reasonable investigation into the business and operations of Liberty Oilfield, an undertaking known as a “due diligence” investigation. The due diligence investigation was required of the Underwriter Defendants in order to engage in the IPO. During the course of their “due diligence,” the Underwriter Defendants had continual access to internal, confidential, current corporate information concerning Liberty Oilfield’s most up-to-date operational and financial results and prospects. (d) In addition to availing themselves of virtually unlimited access to internal corporate documents, agents of the Underwriter Defendants met with Liberty Oilfield’s lawyers, management and top executives and engaged in “drafting sessions.” During these sessions, understandings were reached as to: (i) the strategy to best accomplish the IPO; (ii) the terms of the IPO, including the price at which Liberty Oilfield securities would be sold; (iii) the language to be used in the Registration Statement; what disclosures about Liberty Oilfield would be made in the Registration Statement; and (iv) what responses would be made to the SEC in connection with its review of the Registration Statement. As a result of those constant contacts and communications between the Underwriter Defendants’ representatives and Liberty Oilfield’s management and top executives, the Underwriter Defendants knew of, or in the exercise of reasonable care should have known of, Liberty Oilfield’s existing problems as detailed herein. (e) The Underwriter Defendants caused the Registration Statement to be filed with the SEC and declared effective in connection with the offers and sales of securities registered thereby, including those to Plaintiff and the other members of the Class. 34. RIC Energy IV Direct Partnership, L.P. ("RIC Direct") is an investment partnership managed by its general partner, Riverstone/Carlyle Energy Partners IV, L.P., through its general partner, RIC Energy GP IV, LLC. 35. RIC IV Liberty Holdings, L.P. ("RIC Liberty") is an investment partnership managed by its general partner, Riverstone/Carlyle Energy Partners IV, L.P., through its general partner, RIC Energy GP IV, LLC. 36. Defendants RIC Direct and RIC Liberty are referred to herein as the “Riverstone Defendants.” The Riverstone Defendants are affiliates of Riverstone. Immediately prior to the IPO, the Riverstone Defendants beneficially owned a 49.7% membership interest in Liberty LLC. Defendant RIC Direct sold 300,541 Liberty Oilfield shares in the 37. In connection with the closing of the IPO, on January 17, 2018, the Company and RIC Direct, among others, entered into a Stockholders' Agreement concerning the right to designate a number of nominees to the Board based on the percentage of beneficial ownership of Common A and Class B stock held by Riverstone and its affiliates. Pursuant to the Stockholders' Agreement, Riverstone and its affiliates had the right to appoint five directors to the Board at the time of the IPO. Riverstone and its affiliates nominated Defendants Lancaster, Staffieri, Babcock, and Shah, four out of nine directors. 38. Liberty Oilfield, the Individual Defendants, the Underwriter Defendants, and the Riverstone Defendants are referred to collectively as “Defendants.” SUBSTANTIVE ALLEGATIONS Background Information 39. Liberty Oilfield purports to be a provider of hydraulic fracturing services to onshore oil and natural gas exploration and production ("E&P") companies in North America. It provides services primarily in the Permian Basin, the Eagle Ford Shale, the Denver-Julesburg Basin, the Williston Basin, the San Juan Basin, and the Powder River Basin. 40. The Company faces substantial competition within its industry, competition that intensified leading up to the Company's IPO in January 2018. According to a January 25, 2018 Houston Chronicle article titled, "Sand, Water, and Horsepower: Welcome to the Year of the Fracker," the ratio of fracking fleets to drilling rigs nearly doubled. In 2014, there was one fleet for every four rigs. By the beginning of 2018, that number increased to one fleet for every two 41. According to a March 2018 S&P Global Market Intelligence article, Moody's January 2, 2018 note to clients stated that pricing in the market would not improve until the "oversupplied oilfield services markets align more closely with demand." A Bernstein analyst wrote in a March 8, 2018 note to clients that "the biggest risk to the pressure pumping market is supply discipline (or lack thereof). Discipline is the name of the game for continued pricing gains in this fragmented, low-barriers to entry market.” 42. The Company, and its competitors, however, did not exercise supply discipline. By the time of the IPO, the market for fracking services was oversupplied, an oversupply that was being exasperated by technological advances that lessened the need for fleets. 43. The contracts the Company enters into with its customers are up to a year long. Thus, while the contracts may provide some flexibility in terms of pricing, Liberty Oilfield would mostly notice the effect of the oversupply as it enters into new contracts. That is because, as explained in the Registration Statement, "[t]he Company's contractual agreements with its customers provide fixed and determinable rates for individual fracturing stages and volumes of materials utilized per stage." Liberty Oilfield’s False and/or Misleading Registration Statement 44. On February 14, 2017, Liberty Oilfield filed with the SEC a registration statement on Form F-1 which in combination with subsequent amendments on Forms F-1/A and filed pursuant to Rule 424(b)(4), would be used for the IPO. 45. On January 16, 2018, Liberty Oilfield filed with the SEC the final prospectus for the IPO of common stock on Form 424B4 (the “Prospectus”), which forms part of the Registration Statement. In the IPO, Liberty Oilfield sold 14.6 million shares at $17.00 per share. The Company received gross proceeds of approximately of $220.4 million in offering proceeds, after deducting $23.4 million of underwriting discounts, commissions, and other costs. 46. The Registration Statement was negligently prepared and, as a result, contained untrue statements of material facts or omitted to state other facts necessary to make the statements made not misleading, and was not prepared in accordance with the rules and regulations governing its preparation. 47. Under applicable SEC rules and regulations, the Registration Statement was required to disclose known trends, events or uncertainties that were having, and were reasonably likely to have, an impact on the Company’s continuing operations. 48. In the Registration Statement Liberty Oilfield claimed that the fracking industry’s downturn from 2014 through 2016 led to a supposed decrease in competition, as competitors filed for bankruptcy or other debt restructuring. The Registration Statement also claimed that Liberty Oilfield's technological ability and expertise will position it well against competitors. It also stated that "greater rig efficiencies" would push more demand to the Company and the market overall. In particular, the Registration Statement claimed: While our industry experienced a significant downturn from late 2014 through the first half of 2016, we significantly increased our capacity while maintaining full utilization. We performed approximately 50% more hydraulic fracturing stages in 2015 than in 2014 and approximately 20% more hydraulic fracturing stages in 2016 than in 2015. This trend has continued into 2017. During the downturn, total U.S. marketable fracturing capacity declined between 40% and 60%. In contrast, over 95% of our capacity was active and deployed during this period. We believe our utilization reflects the strong partnerships we have built with our customers and we believe these partnerships will continue to support the demand for our services as we deploy two new fleets and one previously acquired fleet that we are currently upgrading to our specifications by the second quarter of 2018. * * * Overall demand and pricing for hydraulic fracturing services in North America has declined from their highs in late 2014 as a result of the downturn in hydrocarbon prices and the corresponding decline in E&P activity. While the pricing for our hydraulic fracturing services declined substantially, negatively affecting our revenue per average active HHP, and has not returned to its 2014 highs, the industry witnessed an increase in demand for these services beginning in the third quarter of 2016 and continuing into 2017 as hydrocarbon prices have recovered somewhat, and we are currently experiencing price increases and increases in our revenue per average active HHP. We expect this demand to continue to increase as E&P companies increase drilling and completion activities. According to Baker Hughes Incorporated’s (“Baker Hughes”) North American Rig Count, the number of active total rigs in the United States reached a low of 404, as reported on May 27, 2016, but has since increased by more than 130% to 931 active rigs as reported on December 8, 2017. If hydrocarbon prices stabilize at current levels or rise further, we expect to see further increased drilling and completion activity in the basins in which we operate. Should hydrocarbon prices decrease, our pricing and revenue per average active HHP may decrease due to lower demand for our services, negatively affecting our liquidity and financial condition. Please see “Risk Factors—Risks Related to Our Business— Our business depends on domestic capital spending by the oil and natural gas industry, and reductions in capital spending could have a material adverse effect on our liquidity, results of operations and financial condition” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—How We Evaluate Our Operations.” In addition to increased industry activity levels, we expect to benefit from increased horizontal drilling as well as other long-term macro industry trends that improve drilling economics such as (i) greater rig efficiencies that result in more wells drilled per rig in a given period and (ii) increased complexity and service intensity of well completions, including longer wellbore laterals, more and larger fracturing stages and higher proppant usage per well. These industry trends will directly benefit hydraulic fracturing companies like us that have the expertise and technological ability to execute increasingly complex and intense well completions. Given the improved returns that E&P companies have reported for new well completions, we expect these industry trends to continue. We believe industry contraction and the resulting reduction in total U.S. marketable fracturing capacity since late 2014 will benefit us as industry demand increases. Industry sources report this capacity has declined between 40% and 60% from its peak of approximately 17 million HHP in 2014 and approximately 75% of this capacity is currently active and deployed. A number of our competitors have filed for bankruptcy or have otherwise undergone substantial debt restructuring, significantly reducing available capital and their ability to quickly redeploy fleets. In contrast, our rigorous preventive maintenance program, in addition to scheduled and in-process fleet additions and upgrades, has positioned us well to benefit from improving market dynamics. During the recent downturn, many oilfield service companies significantly reduced their employee headcounts, which will constrain their ability to quickly reactivate fleets. Over the same period, we retained our high quality and experienced employees, did not conduct lay offs and substantially increased our workforce. * * * Further, Coras Oilfield Research (“Coras”) reports that the amount of proppant used per horizontal well has grown from six million pounds per well in 2014 to over ten million pounds per well in 2016. Our services are essential to the development of oil and natural gas wells in the major shale plays that we serve in the United States. As a result of these trends of increased activity and intensity, the prices we are able to charge for our hydraulic fracturing services have begun to recover and we expect further price strengthening. (Emphasis added.) 49. The Registration Statement also claimed the following regarding the tightening of the fracking services market since the downturn in 2014: Tightening of Supply in the Hydraulic Fracturing Services Market Due to the significant maintenance required as a result of increasing service intensity, the potential cost to redeploy older, idle fleets has significantly increased. These costs depend on the level of previous use and preventive maintenance spending, as well as the amount of time spent idle. We believe industry contraction and the resulting reduction in total U.S. marketable fracturing capacity since late 2014 benefits us as industry demand increases. Industry sources report this capacity has declined between 40% and 60% from its peak of approximately 17 million HHP in 2014 and approximately 75% of this capacity is currently active. A number of our competitors have filed for bankruptcy or have otherwise undergone substantial debt restructuring, significantly reducing available capital and their ability to quickly redeploy fleets. In contrast, our rigorous preventive maintenance program, in addition to scheduled and in-process fleet additions and upgrades, has positioned us well to benefit from improving market dynamics. During the recent downturn, many oilfield service companies significantly reduced their employee headcounts, which will constrain their ability to quickly reactive fleets. Over the same period, we retained our high quality and experienced employees, did not conduct lay offs and substantially increased our workforce. Because demand for new equipment exceeds active supply, we believe that pricing power has begun to return to the broader oilfield services sector as well as the hydraulic fracturing industry. We are currently experiencing price increases, and believe that this trend will continue. (Emphasis added.) 50. The Registration Statement contained a section discussing Liberty Oilfield's recent trends and outlook. This section reiterated the earlier described false and misleading statements about demand of the Company's services increasing and competition decreasing, stating in pertinent part: These industry trends will directly benefit hydraulic fracturing companies like us that have the expertise and technological ability to execute increasingly complex and intense well completions. Given the improved returns that E&P companies have reported for new well completions, we expect these industry trends to continue. We believe industry contraction and the resulting reduction in total U.S. marketable fracturing capacity since late 2014 will benefit us as industry demand increases. Industry sources report this capacity has declined between 40% and 60% from its peak of approximately 17 million HHP in 2014 and approximately 75% of this capacity is currently active and deployed. A number of our competitors have filed for bankruptcy or have otherwise undergone substantial debt restructuring, significantly reducing available capital and their ability to quickly redeploy fleets. In contrast, our rigorous preventive maintenance program, in addition to scheduled and in-process fleet additions and upgrades, has positioned us well to benefit from improving market dynamics. During the recent downturn, many oilfield service companies have significantly reduced their employee headcounts, which will constrain their ability to quickly reactivate fleets. Over the same period, we retained our high quality and experienced employees, did not conduct lay offs and substantially increased our workforce. (Emphasis added.) 51. Rather than disclose the known adverse historical facts, the Registration Statement provided boilerplate risk statements about potential contingent future issues that may occur. While these risk statements acknowledged the material importance to investors of industry conditions, the risk disclosures themselves were materially misleading because they failed to disclose the oversupply currently in the market. The Registration Statement stated, in pertinent part: Industry conditions are influenced by numerous factors over which we have no control, including: * * * . . . the supply of and demand for hydraulic fracturing and equipment in the United States[.] 52. The Registration Statement also discussed the competition the Company faced. However, these risk disclosures were in the form of losing market share, not that the oversupply of fracking services companies would lead to glut that would push down the price of Liberty Oilfield's services. In particular, the Registration Statement stated: We face intense competition that may cause us to lose market share and could negatively affect our ability to market our services and expand our operations. The oilfield services business is highly competitive. Some of our competitors have a broader geographic scope, greater financial and other resources, or other cost efficiencies. Additionally, there may be new companies that enter our business, or re-enter our business with significantly reduced indebtedness following emergence from bankruptcy, or our existing and potential customers may develop their own hydraulic fracturing business. Our ability to maintain current revenue and cash flows, and our ability to market our services and expand our operations, could be adversely affected by the activities of our competitors and our customers. If our competitors substantially increase the resources they devote to the development and marketing of competitive services or substantially decrease the prices at which they offer their services, we may be unable to effectively compete. All of these competitive pressures could have a material adverse effect on our business, results of operations and financial condition. Some of our larger competitors provide a broader range of services on a regional, national or worldwide basis. These companies may have a greater ability to continue oilfield service activities during periods of low commodity prices and to absorb the burden of present and future federal, state, local and other laws and regulations. Any inability to compete effectively with larger companies could have a material adverse impact on our financial condition and results of operations. 53. The Registration Statement also stated a risk that the Company's customers could stop or reduce spending. However, this was presented in terms of these customers' spending in 2014 and spending on exploration. It did not concern the reduction in spending that would be created by an oversupply of fracking services companies. In particular, the Registration Statement stated: Our business depends on domestic capital spending by the oil and natural gas industry, and reductions in capital spending could have a material adverse effect on our liquidity, results of operations and financial condition. Our business is directly affected by our customers' capital spending to explore for, develop and produce oil and natural gas in the United States. The significant decline in oil and natural gas prices that began in late 2014 has caused a reduction in the exploration, development and production activities of most of our customers and their spending on our services. These cuts in spending have curtailed drilling programs, which has resulted in a reduction in the demand for our services as compared to activity levels in late 2014, as well as the prices we can charge. These reductions have negatively affected our revenue per average active HHP. In addition, certain of our customers could become unable to pay their vendors and service providers, including us, as a result of the decline in commodity prices. Reduced discovery rates of new oil and natural gas reserves in our areas of operation as a result of decreased capital spending may also have a negative long-term impact on our business, even in an environment of stronger oil and natural gas prices. Any of these conditions or events could adversely affect our operating results. If the recent recovery does not continue or our customers fail to further increase their capital spending, it could have a material adverse effect on our liquidity, results of operations and financial condition. 54. The Registration Statement also identified "technology advancements" as a potential risk. The Company did so, however, in terms of losing market share or being at a competitive disadvantage. It also claimed that new technology could make it easier for larger companies to do their own fracking support services, i.e., "vertically integrate." However, companies, were not vertically integrating. Rather, by the time of the IPO, that new technology was creating increased efficiencies, lessening the need for Liberty Oilfield's services, and increasing the oversupply of fracking services available on the market. The risk disclosure failed to mention this actual trend. In particular, the Registration Statement Technology advancements in well service technologies, including those involving hydraulic fracturing, could have a material adverse effect on our business, financial condition and results of operations. The hydraulic fracturing industry is characterized by rapid and significant technological advancements and introductions of new products and services using new technologies. As competitors and others use or develop new technologies or technologies comparable to ours in the future, we may lose market share or be placed at a competitive disadvantage. Further, we may face competitive pressure to implement or acquire certain new technologies at a substantial cost. Some of our competitors may have greater financial, technical and personnel resources than we do, which may allow them to gain technological advantages or implement new technologies before we can. Additionally, we may be unable to implement new technologies or services at all, on a timely basis or at an acceptable cost. New technology could also make it easier for our customers to vertically integrate their operations, thereby reducing or eliminating the need for our services. Limits on our ability to effectively use or implement new technologies may have a material adverse effect on our business, financial condition and results of operations. 55. Item 303 of SEC Regulation S-K, 17 C.F.R. §229.303, requires disclosure of any known events or uncertainties that had caused, or were reasonably likely to cause, Liberty Oilfield's disclosed financial information not to be indicative of future results. The oversupply of fracking services was likely to (and in fact did) materially and adversely affect Liberty Oilfield's future results and prospects. The omitted material facts alleged herein were reasonably expected to and did have an unfavorable impact on the Company's sales, revenues, and income from continuing operations. 56. In addition, Item 105 of SEC Regulation S-K, 17 C.F.R. §229.105, requires, in the "Risk Factors" section of the Registration Statement, a discussion of the most significant factors that made the offering risky or speculative and that each risk factor adequately describe the risk. Because the omitted material facts alleged herein were not disclosed, as well as the consequent material adverse effects on the Company's future results and prospects, Defendants violated Item 105. 57. The statements contained in ¶¶ 44-56 were materially false and/or misleading because they misrepresented and failed to disclose the following adverse facts pertaining to the Company’s business, operations and prospects, which were known to Defendants or recklessly disregarded by them. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (1) there was an oversupply in the hydraulic fracturing services market; (2) the Company's pricing power was weak; (3) the Company's services were not increasing and its competition was not decreasing; and (4) as a result, Defendants’ statements about the Company’s business, operations, and prospects were materially false and misleading and/or lacked a reasonable basis at all relevant times. 58. On February 5, 2019, the Company announced its fourth quarter and full year 2018 financial and operational results. The press release revealed disappointing revenue and net income. In the press release, Liberty Oilfield claimed "fleet utilization" for the quarter was "challenging." While it briefly mentioned the oversupply of frac fleets in the market, the Company mainly blamed "last-minute decisions to defer completions in the fourth quarter," which were caused by a drop in commodity prices. It also downplayed any potential effect of the oversupply on the Company's services. The press release claimed that demand was high for the Company's fleet, stating that "[w]orking in concert with customers, Liberty continues to drive innovation and operational efficiency across [the] entire fleet. This performance translates to strong demand for Liberty's high-efficiency fleets...." Describing the lost projects as merely deferrals, the Company claimed that these projects "provided Liberty a solid backdrop for utilization at the start of 2019.” 59. Also on February 5, 2019, during Liberty Oilfield's earnings conference call held with analysts and investors, Defendant Wright highlighted the customer deferrals as the cause of the Company's financial result softness and that these deferred projects would prove "a solid backdrop for utilization at the start of 2019." In particular, Defendant Wright The fourth quarter of 2018 was challenging from a fleet utilization perspective. A number of customers made last minute decisions to defer completions in the fourth quarter due to a combination of capital budget and cash flow management decisions brought on in part by the rapid drop in the commodity price in November and December. While this was disruptive to our fourth quarter work calendar, we believe the focus of capital discipline by operators is ultimately a positive factor for the services industry as we move towards a sustainable production environment that could ultimately lead to less volatile activity levels and perhaps even a steadier commodity price. With these challenges, our fourth quarter revenue was $473 million, and net income was $34 million, or $0.27 per fully diluted share. Adjusted EBITDA for the quarter was $72 million, or $13 million per average active frac fleet on an annualized basis. Premium service quality, coupled with basin and customer diversity, provides the company the opportunity to continue generating strong returns on capital employed regardless of how the market unfolds in 2019. The fourth quarter customer project deferrals provided Liberty a solid backdrop for utilization at the start of 2019. In fact, in January, we pumped the highest monthly volume of sand in the company's history. We are currently projecting sequential revenue growth in the first quarter in the single digit percentage range and adjusted EBITDA to be approximately flat, as increased utilization is offset by pricing decreases. 60. During the same call, Defendant Stock explained that the disappointing results were due to the one time deferrals, rather than the material oversupply trend. In particular, Defendant Stock stated: As Chris mentioned, the fourth quarter was challenging from a customer scheduling perspective. Last-minute project deferrals due to companies managing to announce budgets and cash flow balancing caused a significant increase in white space on the calendar. Typically, we would have far more visibility into these schedule changes and therefore, be better able to fill these gaps. 61. On the same call, Defendant Wright furthered the impression that oversupply was not a trend, that market participants acted quickly to curtain this oversupply, and that some fleets there were idled due to the oversupply actually returned to the market. In particular, Defendant Wright stated: [W]e hear stuff from our customers, we hear stuff in the - around the - in the bars. So what I'm going to get - give you is sort of a sense of what's going on. But in the broad sweep, last - from last summer, sort of the peak of activity level, and a very high peak it was, probably 20%, say 70, 80, 90 frac fleets that were fracking last summer are not fracking today or were not - probably some of that - a few of them are back, but they weren't fracking in December. 62. On the same call, Defendant Wright further explained that demand for Liberty Oilfield's services remained strong and "what bit [the Company] in the fourth quarter" was the short-term deferrals. Further, Defendant Wright claimed that the price for services had bottomed. In particular, he stated: So look, as we've said in the late summer, whatever, market's very strong, we saw some erosion in Q3 in activity level as we talked about on our last call. We saw a more significant erosion in Q4. And when there are these fleets that are pushed on the market and they're trying to get new work, that pushes pressure on pricing. So pricing, I don't know, from last fall or something, maybe pricing's declined by more than 10%. Half of that is a decrease in commodity prices. Think of the compression, for example, in sand prices. That's a plus for us, it's a plus for our customers. But maybe 5% of that is coming out of our variable margin. So that's - of course, that makes the market tougher. But activity level, we have these - schedule changes, they're normal for this industry. They happen all the time, but we usually know them with some advance. And as you've heard us say before, there's excess demand for Liberty. We can always move fleet somewhere else if we know a schedule changed. What bit us in the fourth quarter was very short notice changes in behavior that didn't allow us to redeploy those fleets or efficiently redeploy them. That hurts. Now that goes on in Q4. In Q1 today, every fleet, all 22 fleets we have are fracking, as I'm talking to you today. And I'd say, we've got good reason to believe that will continue, that will continue as far out as we can see. I think we feel pretty good about fleet utilization this year even though the market is softer. We'll keep our fleets busy. We've been in very close communication with our customers. They're somewhat apologetic for the vagaries of this changing market, exiting the dot-com phase that sometimes makes very rapid decisions required, but pricing is compressed. And Sean, I guess, to maybe your most important question, I would say, across our fleets today, they are all pretty close or roughly in line with leading edge pricing. I think the compression in pricing has probably mostly happened. I would suspect we're at a bottom. (Emphasis added.) 63. On the same call, Defendant Wright also claimed that the Company was already near its peak output levels, levels reached before this supposed, momentary blip in demand created mainly by customer deferrals. In particular, he stated: [Analyst:] Coming back to the activity outlook. I know that there's been several questions on this front, but I wanted to ask another one. Chris, you mentioned a full calendar as we go through 1Q and it sounds like into 2Q, does that mean there's line of sight to getting back to the mid-2018 rate of stages per fleet per month in 2Q or 3Q? [Defendant Wright:] Absolutely. I'd say we're there today or close to it. I mean, we're running 22 fleets and pumped record amount of sand in January. So I think, stage throughput and activity levels right now are good. We're winter so we're going to have disturbances, but boy so far winter has been very smooth. Winter has been very smooth. 64. In light of the statements described above, while Defendants briefly mentioned oversupply, investors would believe that the oversupply would quickly correct itself, if it had not done so already; that the oversupply would not constitute a trend, and if it was, this trend would not materially affect the Company; and finally, that the trend was not in existence at the time of the IPO or Registration Statement. 65. Despite Defendants' assurance, the following quarters' financial results continued to note the oversupply of frac fleets materially weighing down Liberty Oilfield's financial results. Defendants constantly mixed in positive news with these results, muddling investor response. 66. On April 30, 2019, Liberty Oilfield issued a press release announcing its financial results for the first quarter of the 2019 fiscal year. The Company reported revenue of $535 million and net income of $34 million. The press release noted that there was an oversupply of staffed frac fleets that caused a drop in pricing. Liberty Oilfield estimated that 20% of the frac fleets that were active in the prior year were now idle or in the process of being idled. Despite this sobering news, the Company's press release presented a rosy picture of Liberty Oilfield's financials and the market, and the impression that the effects of the oversupply in pricing had already worked its way through the system and pricing would improve. The Company also announced a $100 million stock repurchase. In particular, the press release stated: Entering the fourth quarter of 2018, there was an oversupply of staffed frac fleets in the market which, combined with the additional reduction in customer activity, led to a rapid reduction of pricing for frac services. These reductions worked their way through our fleet repricing negotiations from late fourth quarter 2018 into the middle of first quarter 2019. While there continues to be an oversupply of frac fleets in the market, we believe that roughly 20% of the frac fleets that were active in the summer of 2018 are now either idle or in the process of being idled. As supply of active frac equipment balances with demand we expect pricing to potentially improve later this year. (Emphasis added.) 67. On May 1, 2019, Liberty Oilfield held its earnings conference call with analysts and investors. During call, Defendant Wright clarified that the cause of the decrease in pricing was the oversupply of frac services, not commodity prices. At the same time, he downplayed the long-term effect of this oversupply and that it had worked its way through the market. In particular, Defendant Wright stated: [T]here was a lot of price resetting in Q4 or at the very beginning of Q1. Think of when the supply and - not just commodity prices falling rapidly, even more importantly, just supply and demand in the frac market. There's just way more fleets looking for frac work than there was demand for frac work in Q4 but then at the end of Q4 and going into Q1, so you get the markets work, and so you get pricing response there. So yes, I would say a large part of the big reset already flowed through Q1, but the later ones and resets that were middle of Q1, there's a little bit of an impact from there. But a long way to say yes. You said it correctly. * * * So our guess is that the dominant driver and maybe the sole driver is lower supply. The market today is less oversupplied than it was 2 months ago and much less oversupplied than it was 4 months ago, so we're seeing supply removed from the market. With customers with lower budgets and aggressive production targets, it's critical to them to have high throughput, reliable, efficient operations. So maybe there's even a little bit of skew in there in that the pull on Liberty fleets right now is actually quite strong. We're - there are plenty of people we like, we know, we'd like to work for - we don't have the capacity for today. (Emphasis added.) 68. On July 30, 2019, Liberty Oilfield issued a press release announcing its financial results for the second quarter of the 2019 fiscal year. The Company reported revenue of$542 million, slightly up from the previous quarter, and net income of $41 million. Again, Liberty Oilfield noted that there was an oversupply of frac services in the market. At the same time, the Company claimed that it had strong demand for its services and that demand will remain high. 69. On February 5, 2020, Liberty Oilfield issued a press release announcing disappointing results for the fourth quarter and full year of 2019. In particular, the Company announced a quarterly loss of $0.15 per share compared to consensus estimates of only $0.04 per share. Revenue was only $398 million, a decrease of 23% quarter-over-quarter. In contrast to previous statements, Liberty Oilfield now admitted that there was a "substantial oversupply of frac equipment." In the press release, the Company revealed that even while total frac stages increased, the additional efficiency of each fleet exasperated the oversupply within the fracking services industry. In particular, the press release stated: The pricing dynamic entering into 2020 is challenging. Total industry frac stages in North America were up marginally year-over-year in 2019. However, efficiency gains across the industry have raised the number of frac stages completed by each fleet by 10% to 20%. which implies a decrease of at least 10% in the active frac fleets needed to meet demand. The slowing pace of frac activity led to progressively lower demand for frac fleets through the second half of 2019, resulting in pricing pressure on services. The substantial oversupply of frac equipment in the second half of 2019 was the pricing backdrop for 2020 dedicated fleet negotiations. The supply of staffed fracturing fleets across the industry fell meaningfully in late 2019. While this trend will be helpful in the long term, we believe the impact of attrition has not yet supported an improvement in pricing for services at the start of 2020. There remains an oversupply of frac fleets in the market and we do not expect pricing to improve materially until supply of actively staffed frac equipment better balances with demand. Increased profitability will have to come from technology. increased efficiency and improved processes. (Emphasis added.) 70. The price of Liberty Oilfield’s securities has plummeted since the IPO. Liberty Oilfield securities have traded significantly lower than the IPO price of $17.00 per share. 71. As a result of Defendants’ wrongful acts and omissions, and the precipitous decline in the market value of Liberty Oilfield’s shares, Plaintiff and other Class members have suffered significant losses and damages. PLAINTIFF’S CLASS ACTION ALLEGATIONS 72. Plaintiff brings this action as a class action on behalf of all those who purchased Liberty Oilfield securities pursuant and/or traceable to the Registration Statement (the “Class”). Excluded from the Class are Defendants and their families, the officers and directors and affiliates of Defendants, at all relevant times, members of their immediate families and their legal representatives, heirs, successors or assigns and any entity in which Defendants have or had a controlling interest. 73. The members of the Class are so numerous that joinder of all members is impracticable. While the exact number of Class members is unknown to Plaintiff at this time and can only be ascertained through appropriate discovery, Plaintiff believes that there are at least thousands of members in the proposed Class. Record owners and other members of the Class may be identified from records maintained by Liberty Oilfield or its transfer agent and may be notified of the pendency of this action by mail, using the form of notice similar to that customarily used in securities class actions. 74. Plaintiff’s claims are typical of the claims of the members of the Class, as all members of the Class are similarly affected by Defendants’ wrongful conduct in violation of federal law that is complained of herein. 75. Plaintiff will fairly and adequately protect the interests of the members of the Class and has retained counsel competent and experienced in class and securities litigation. 76. Common questions of law and fact exist as to all members of the Class and predominate over any questions solely affecting individual members of the Class. Among the questions of law and fact common to the Class are: a) whether Defendants violated the Securities Act; b) whether the Registration Statement contained false or misleading statements of material fact and omitted material information required to be stated therein; and c) to what extent the members of the Class have sustained damages and the proper measure of damages. 77. A class action is superior to all other available methods for the fair and efficient adjudication of this controversy since joinder of all members is impracticable. Furthermore, as the damages suffered by individual Class members may be relatively small, the expense and burden of individual litigation make it impossible for members of the Class to individually redress the wrongs done to them. There will be no difficulty in the management of this action as a class action. COUNT I Violations of Section 11 of the Securities Act Against All Defendants 78. Plaintiff incorporates all the foregoing by reference. 79. This Count is brought pursuant to §11 of the Securities Act, 15 U.S.C. §77k, on behalf of the Class, against all Defendants. 80. The Registration Statement contained untrue statements of material facts, omitted to state other facts necessary to make the statements made not misleading, and omitted to state material facts required to be stated therein. 81. Defendants are strictly liable to Plaintiff and the Class for the misstatements and omissions. 82. None of the Defendants named herein made a reasonable investigation or possessed reasonable grounds for the belief that the statements contained in the Registration Statement were true and without omissions of any material facts and were not misleading. 83. By reason of the conduct herein alleged, each Defendant violated or controlled a person who violated §11 of the Securities Act. 84. Plaintiff acquired Liberty Oilfield securities pursuant to the Registration Statement. 85. At the time of their purchases of Liberty Oilfield securities, Plaintiff and other members of the Class were without knowledge of the facts concerning the wrongful conduct alleged herein and could not have reasonably discovered those facts prior to the disclosures herein. 86. This claim is brought within one year after discovery of the untrue statements and/or omissions in the Offering that should have been made and/or corrected through the exercise of reasonable diligence, and within three years of the effective date of the Offering. It is therefore timely. COUNT II Violations of Section 12(a)(2) of the Securities Act Against All Defendants 87. Plaintiff incorporates all the foregoing by reference. 88. By means of the defective Prospectus, Defendants promoted, solicited, and sold Liberty Oilfield securities to Plaintiff and other members of the Class. 89. The Prospectus for the IPO contained untrue statements of material fact, and concealed and failed to disclose material facts, as detailed above. Defendants owed Plaintiff and the other members of the Class who purchased Liberty Oilfield securities pursuant to the Prospectus the duty to make a reasonable and diligent investigation of the statements contained in the Prospectus to ensure that such statements were true and that there was no omission to state a material fact required to be stated in order to make the statements contained therein not misleading. Defendants, in the exercise of reasonable care, should have known of the misstatements and omissions contained in the Prospectus as set forth above. 90. Plaintiff did not know, nor in the exercise of reasonable diligence could Plaintiff have known, of the untruths and omissions contained in the Prospectus at the time Plaintiff acquired Liberty Oilfield securities. 91. By reason of the conduct alleged herein, Defendants violated §12(a)(2) of the Securities Act, 15 U.S.C. §77l(a)(2). As a direct and proximate result of such violations, Plaintiff and the other members of the Class who purchased Liberty Oilfield securities pursuant to the Prospectus sustained substantial damages in connection with their purchases of the shares. Accordingly, Plaintiff and the other members of the Class who hold the securities issued pursuant to the Prospectus have the right to rescind and recover the consideration paid for their shares, and hereby tender their securities to Defendants sued herein. Class members who have sold their securities seek damages to the extent permitted by law. 92. This claim is brought within one year after discovery of the untrue statements and/or omissions in the Offering that should have been made and/or corrected through the exercise of reasonable diligence, and within three years of the effective date of the Offering. It is therefore timely. COUNT III Violations of Section 15 of the Securities Act Against the Individual Defendants 93. Plaintiff incorporates all the foregoing by reference. 94. This cause of action is brought pursuant to §15 of the Securities Act, 15 U.S.C. §77o against all Defendants except the Underwriter Defendants. 95. The Individual Defendants were controlling persons of Liberty Oilfield by virtue of their positions as directors or senior officers of Liberty Oilfield. The Individual Defendants each had a series of direct and indirect business and personal relationships with other directors and officers and major shareholders of Liberty Oilfield. The Company controlled the Individual Defendants and all of Liberty Oilfield’s employees. 96. Liberty Oilfield and the Individual Defendants were culpable participants in the violations of §§11 and 12(a)(2) of the Securities Act as alleged above, based on their having signed or authorized the signing of the Registration Statement and having otherwise participated in the process which allowed the IPO to be successfully completed. 97. This claim is brought within one year after discovery of the untrue statements and/or omissions in the Offering that should have been made and/or corrected through the exercise of reasonable diligence, and within three years of the effective date of the Offering. It is therefore timely. PRAYER FOR RELIEF WHEREFORE, Plaintiff, on behalf of herself and the Class, prays for judgment and relief as follows: A. declaring this action to be a proper class action, designating Plaintiff as Lead Plaintiff and certifying plaintiff as a class representative under Rule 23 of the Federal Rules of Civil Procedure and designating plaintiff’s counsel as Lead Counsel; B. awarding damages in favor of Plaintiff and the other Class members against all defendants, jointly and severally, together with interest thereon; C. awarding Plaintiff and the Class reasonable costs and expenses incurred in this action, including counsel fees and expert fees; and D. awarding Plaintiff and other members of the Class such other and further relief as the Court may deem just and proper. DEMAND FOR TRIAL BY JURY Plaintiff hereby demands a trial by jury. April 3, 2020 Respectfully submitted, THE ROSEN LAW FIRM, P.A. /s/Phillip Kim Phillip Kim, Esq. 275 Madison Ave., 40th Floor New York, NY 10016 Tel: (212) 686-1060 Fax: (212) 202-3827 Email: pkim@rosenlegal.com Counsel for Plaintiff 32 The individual or institution listed below (the "Plaintiff") authorizes and, upon execution of the accompanying retainer agreement by The Rosen Law Firm P.A., retains The Rosen Law Firm P.A. to file an action under the federal securities laws to recover damages and to seek other relief against Liberty Oilfield Services Inc.. The Rosen Law Firm P.A. will prosecute the action on a contingent fee basis and will advance all costs and expenses. The Liberty Oilfield Services Inc.. Retention Agreement provided to the Plaintiff is incorporated by reference, upon execution by The Rosen Law Firm P.A. First name: Marc Middle initial: Last name: Joseph Address: City: State: Zip: Country: Facsimile: Phone: Email: Plaintiff certifies that: 1. Plaintiff has reviewed the complaint and authorized its filing. 2. Plaintiff did not acquire the security that is the subject of this action at the direction of plaintiff's counsel or in order to participate in this private action or any other litigation under the federal securities laws. 3. Plaintiff is willing to serve as a representative party on behalf of a class, including providing testimony at deposition and trial, if necessary. 4. Plaintiff represents and warrants that he/she/it is fully authorized to enter into and execute this certification. 5. Plaintiff will not accept any payment for serving as a representative party on behalf of the class beyond the Plaintiff's pro rata share of any recovery, except such reasonable costs and expenses (including lost wages) directly relating to the representation of the class as ordered or approved by the court. 6. Plaintiff has made no transaction(s) during the Class Period in the debt or equity securities that are the subject of this action except those set forth below: Type of Security Buy Date # of Shares Price per Share Common Stock 05/21/2018 250 23.47 Type of Security Sale Date # of Shares Price per Share Common Stock 11/08/2019 250 9.02 Certification for Marc Joseph (cont.) 7. I have not served as a representative party on behalf of a class under the federal securities laws during the last three years, except if detailed below. [ ] I declare under penalty of perjury, under the laws of the United States, that the information entered is accurate: YES By clicking on the button below, I intend to sign and execute this agreement and retain the Rosen Law Firm, P.A. to proceed on Plaintiff's behalf, on a contingent fee basis. YES Signed pursuant to California Civil Code Section 1633.1, et seq. - and the Uniform Electronic Transactions Act as adopted by the various states and territories of the United States. Date of signing: 04/03/2020

securities

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UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT TACOMA KYLA YI, individually and on behalf of all others similarly situated, CASE NO: ___________________________ PLAINTIFF’S ANTITRUST CLASS ACTION COMPLAINT FOR: (1) VIOLATIONS OF SECTION 1 OF THE SHERMAN ACT [15 U.S.C. § 1, et. seq.]; and (2) UNFAIR COMPETITION Plaintiff, v. SK BAKERIES, LLC, a Washington Limited Liability Company, CINNABON FRANCHISOR SPV, LLC, a Delaware Limited Liability Company; and DOES 1 through 10, inclusive, [Washington Unfair Business Practices Act, RCW 19.86, et. seq.]; DEMAND FOR JURY TRIAL Defendants. Plaintiff KYLA YI (“Plaintiff Yi”), individually and on behalf of all those similarly situated, by and through her counsel, brings this Class Action Complaint (“Complaint”) against Defendants SK BAKERIES, LLC (“SK Bakeries”), CINNABON FRANCHISOR SPV, LLC (“Cinnabon”); and Does 1 through 10 (who collectively shall be referred to hereinafter as “Defendants”), on personal knowledge with respect to herself and her own acts, and on information and belief as to other matters, alleges as follows: INDIA LIN BODIEN, ATTORNEY AT LAW I. NATURE OF ACTION 1. Plaintiff Yi, on behalf of herself, on behalf of the Washington general public, and as a class action on behalf of Defendants’ employees and workers from July 12, 2014 through the present (“Class Members”), seeks millions of dollars in lost wages, plus triple damages, and interest, caused by Defendants’ long-standing and illegal mutual non-solicitation agreements (i.e., agreements that Cinnabon franchisees could not solicit for employment the employees of Cinnabon and/or of other Cinnabon franchisees) and no-hire agreements (i.e., agreements that Cinnabon franchisees could not hire the employees of Cinnabon. and/or other Cinnabon franchisees) that were all entered into by Cinnabon franchises throughout Washington State for decades and that had the intended and actual effect of significantly reducing Class Members’ wages and salaries. The genesis of the no-hire and non-solicitation agreements at issue were franchise agreements between Cinnabon and its franchisees, and between its franchisees, including, upon information and belief, SK Bakeries. 2. This illegal conspiracy among and between Defendants and other Cinnabon franchisees to not employ, seek to employ, or to recruit one another’s employees, in order to thereby suppress their wages, was not known, to Plaintiff and the Class Members until July 12, 2018, when the Washington State Attorney General (“AG”) revealed as part of its then-pending investigation into illegal behavior by some of the largest fast food franchises in Washington and the United States, including Cinnabon, that Cinnabon would no longer enforce provisions in its franchise agreements that prevented workers from being hired or solicited by other Cinnabon franchisees. In sum, Defendants engaged in per se violations of the Washington Unfair Competition Act and the Sherman Act by entering into no-hire and non-solicitation agreements, for the express purpose of depressing and/or reducing market-based wages and benefit increases INDIA LIN BODIEN, ATTORNEY AT LAW for Class Members that are typically associated with the active recruitment of employees and workers in a competitive industry. While protecting and enhancing their profits, Defendants, through their no-hire and non-solicitation agreements, robbed Class Members millions of dollars- worth of wages for which Plaintiff and the Class now seek relief. II. JURISDICTION AND VENUE 3. This Court has jurisdiction over the subject of this action pursuant to 15 U.S. C. §§ 4 and 16, as well as 28 U.S.C. §§ 1331 and 1337. This Court has supplemental jurisdiction over the claims brought under the laws of the State of Washington pursuant to 28 U.S.C. § 1367(a), since the matters at the heart of the Washington Unfair Competition Claims form part of the same case or controversy. 4. Venue as to each Defendant is proper in this judicial district, pursuant to 15 U.S.C. §§ 22 and 28 and 28 U.S. C. §1391(b)(1) and (2), because Defendants transact business and/or has transacted business during the relevant time period within the counties encompassed by the jurisdiction of the United States District Court for the Western District of Washington. Defendants do sufficient business in this District to be subject to personal jurisdiction herein, because a substantial part of the events or omissions giving rise to the claims occurred in this District. III. THE PARTIES 5. Plaintiff Kyla Yi, who at all relevant times was a resident of Washington, is a current employee of Defendant SK Bakeries. Plaintiff Yi has worked as a crewmember and/or supervisor in training at SK Bakeries’ Capital Mall Cinnabon store located at 625 Black Lake Boulevard Southwest, Suite 9019, in Olympia, Washington from approximately June, 2017 through to the present. As a result, Plaintiff Yi was subject to and victimized by the non- INDIA LIN BODIEN, ATTORNEY AT LAW solicitation and no-hire conspiracy between and among the Defendants, resulting in her having lost wages. 6. Defendant SK Bakeries is a Washington limited liability company. Defendant SK Bakeries does business in Washington State as Cinnabon, with its principal place of business located at P.O. Box 257 in Olympia, Washington. Upon information and belief, Defendant SK Bakeries entered into a franchise agreement with Defendant Cinnabon that contained no-hire and non-solicitation provisions. 7. Defendant Cinnabon is a Delaware limited liability company. Upon information and belief, Defendant Cinnabon’s principal place of business is located at 251 Little Falls Drive in Wilmington, Delaware. Defendant Cinnabon is a franchisor. Defendant Cinnabon is in the business of cinnamon roll bakery stores, which it franchises throughout Washington and the United States. Upon information and belief, Defendant Cinnabon entered into agreements with its franchisees, including SK Bakeries, that contained no-hire and non-solicitation provisions. 8. The true names and capacities, whether individual, corporate, associate, or otherwise, of Defendants sued herein as DOES 1 to 10, inclusive, are currently unknown to Plaintiff, who therefore sues Defendants by such fictitious names. Does 1 through 10 are the other largest franchisees of Cinnabon in Washington State based on number of employees employed. Plaintiff is informed and believes, and based thereon alleges, that each of the Defendants designated herein as a Doe is legally responsible in some manner for the unlawful acts referred to herein in that they are additional co-conspirators. Plaintiff will seek leave of court to amend this Complaint to reflect the true names and capacities of the Defendants designated hereinafter as Does when such identities become known. Defendants and the Does 1- 10 shall collectively be referred to as “Defendants.” INDIA LIN BODIEN, ATTORNEY AT LAW 9. Plaintiff is informed and believes, and based thereon alleges, that each Defendant acted in all respects pertinent to this action as the agent of the other Defendants, carried out a joint scheme, business plan or policy in all respects pertinent hereto, and the acts of each Defendant are legally attributable to the other Defendants. Furthermore, Defendants in all respects acted pursuant to the mutual non-solicitation and no-hire agreements that were intended to suppress and had the effect of suppressing wages and salaries for the Class Members. IV. FACTS EVIDENCING THE CONSPIRACY 10. Defendants had a longstanding agreement to control their employees’ wages and mobility by agreeing not employ or solicit each other’s employees. 11. The specific provisions of Defendants’ franchise agreements that violated federal and state antitrust laws are found at Section 15.4.A(v) and Section 15.4.B(c) and the last sentences of Section 18.4.A (“You further agree that you will not employ or seek to employ an employee of ours of another franchisee, or attempt to induce such employee to cease his/her employment without prior written consent of such employee’s employer”).1 12. The mutual no-hire and non-solicitation agreement itself constituted a per se violation of the Sherman Antitrust Act and Washington’s Unfair Business Practices Act between Defendants from 2013 until it was brought to light by the AG’s investigation commencing in 2018 in the course of the AG’s investigation into similarly illegal mutual non-solicitation and anti-poach/no-hire agreements entered into between several of the largest fast food franchisors operating in Washington and the United States. 1 See In Re: Franchise No Poaching Provisions, Cinnabon Franchisor SPV, LLC, Assurance of Discontinuance, Case No. 18-2-17232-2SEA, Exhibit B (Dkt. No. 1) (July 12, 2018) (hereinafter “Cinnabon AOD”). INDIA LIN BODIEN, ATTORNEY AT LAW 13. Upon information and belief, SK Bakeries and other franchisees, that own a total of approximately 24 Cinnabon stores in Washington state, entered into franchisee agreements with the no-hire and non-solicitation terms set forth above. 14. The AG investigated the non-solicitation and no-hire agreement issued by Cinnabon to its franchisees and found that Cinnabon and its franchisees’ conduct constituted a contract, combination, or conspiracy in restraint of trade in violation of the Washington Unfair Business Practices Act – Consumer Protection Act, RCW 19.86.030. The AG concluded that “Since 2013, the franchise agreements entered into between Cinnabon and its franchisees have provided that franchisees subject to such agreements could not solicit for employment the employees of Cinnabon and/or other Cinnabon franchisees…and in certain years provided that franchisees subject to such agreements could not hire the employees of Cinnabon and/or other Cinnabon franchisees….”2 15. As set forth herein, upon information and belief, all of the Defendants entered into the mutual non-solicitation agreements with the no-hire and non-solicitation terms above, with the common interest and intention to keep their employees’ wage costs down, so that profits continued to rise or at least not be undercut by rising salaries across the industry. As a result, Defendants engaged in anti-competitive behavior in advancement of a common and illegal goal of profiting at the expense of competitive market-based salaries. 16. Defendants agreements unreasonably restrained trade in violation of the Sherman Act 15 U.S.C. § 1, et seq., and constituted unfair competition and unfair practices in violation of Washington’s Unfair Business Practices law, 19.86, et seq. Plaintiff Kyla Yi, on behalf of herself and on behalf of the Class defined herein, seeks to recover the difference between the wages and 2 Cinnabon AOD, § 2.2. INDIA LIN BODIEN, ATTORNEY AT LAW salaries that Class Members were paid and what Class Members would have been paid in a competitive market, in the absence of Defendants’ unlawful agreements, treble damages, attorneys fees, and interest, allowed under the law. V. HARM TO COMPETITION AND ANTITRUST INJURY 17. Defendants are in the business of operating fast food cinnamon roll bakery stores where cinnamon rolls are rolled and baked in-store by crewmembers. In order to operate, Defendants owned other stores in Washington and hired crewmembers in their stores to make and sell cinnamon rolls. 18. No-hire and non-solicitation agreements create downward pressure on fast food worker wages. No-hire and non-solicitation agreements restrict worker mobility, which prevents low-wage workers from seeking and obtaining higher pay. This artificially suppresses fast food worker wages. In fact, fast food worker wages have remained stagnant. 19. Unrestricted competition and the Free Market are the foundations of the American economic system. That is because “[f]ree and open markets are the foundation of a vibrant economy. Just as competition among sellers in an open marketplace gives consumers the benefits of lower prices, higher quality products and services, more choices, and greater innovation, competition among employer helps actual and potential employees through higher wages, better benefits, or other terms of employment.” DOJ/FTC Antitrust Guidance for HR Professionals, Oct. 2016, at p. 2. 20. Upon information and belief, Defendants conspired not to actively solicit or hire each other’s employees and workers as part of one overarching conspiracy to suppress the compensation of their employees, including Plaintiff and Class Members. The desired effect was obtained. Defendants’ conspiracy suppressed Plaintiff’s and the Class’s compensation and INDIA LIN BODIEN, ATTORNEY AT LAW restricted competition in the labor markets in which Plaintiff and the other members of the Class sold their services. It did so through an overarching agreement concerning mutual non- solicitation and no-hiring. 21. Concerning the non-solicitation agreements, active solicitations have a significant beneficial impact for individual employees’ compensation. As understood by Defendants, active recruitment by rival employers, here other franchisees doing business as Cinnabon, often include enticing offers that exceed an employee’s wages, salary, and/or benefits, thereby incentivizing the employee to leave his or her current employment in order to receive greater compensation for his or her labor, or alternatively, allowing the employee to negotiate increased compensation from his or her current employer. Employees receiving active solicitation offers often inform other employees of the offer(s) they received, spreading information about higher wage and salary levels that can similarly lead to movement for the purposes of higher salary and wages and/or negotiation by those other employees with their current employer or others for greater compensation. 22. Active solicitation similarly affects compensation practices by employers. A franchisee that actively solicits other franchisees’ employees or other workers will learn whether their offered compensation is enough to attract their competitors’ employees, and may increase the offers to make their own company and its salaries more competitive in the marketplace. Similarly, companies losing or at risk of losing employees to competitors engaged in active recruitment of employees or workers associated with their competitors may preemptively increase their employees’ compensation in order to reduce their competitors’ appeal. INDIA LIN BODIEN, ATTORNEY AT LAW 23. Defendants’ efforts to maintain internal equity coupled with their non-solicitation agreements ensured that their conspiracy caused the compensation of all their employees to be suppressed. VI. INTERSTATE COMMERCE 24. During the Class Period, Defendants employed Plaintiff and other Class Members in Washington and numerous other states. 25. States compete to attract low wage workers, including fast food workers, leading employment in the industry to cross state lines. 26. Both Defendants and Plaintiff and other Class Members view labor competition in the industry to be nationwide. Defendants considered each other’s wages to be competitively relevant regardless of location, and many Class Members moved between states to pursue opportunities at Defendants’ stores. 27. Defendants’ conduct substantially affected interstate commerce throughout the United States and caused antitrust injury throughout the United States. VII. CLASS ACTION ALLEGATIONS 28. Plaintiff brings this case as a class action pursuant to Federal Rule of Civil Procedure 23(b)(3) on behalf of a Class consisting of: All persons who were employed by SK Bakeries, LLC, or Cinnabon Franchisor SPV, LLC, or any of the ten largest franchises of Cinnabon in Washington State at any time from July 12, 2014 through the conclusion of this action (the “Class Period”).3 29. Plaintiff believes there are more than 500 current and former employees in the Class. Given Defendants’ systemic failure to comply with United States and Washington laws 3 Plaintiff reserves the right to modify the class definition at a later date to conform to new facts learned, including the properly named entity Defendant(s). INDIA LIN BODIEN, ATTORNEY AT LAW outlined in this case, the members of the Class are so numerous that joinder of all members is impractical. The Class is ascertainable from either Defendants’ employment and hiring records. 30. Plaintiff’s claims are typical of the claims of the members of the Class, because all Class Members are or were employees who sustained damages arising out of (a) Defendants’ illegal mutual no-hire and anti-solicitation arrangements in violation of Section 1 of the Sherman Act that resulted in wage suppression for all of the Class Members; and (b) Defendants’ unfair business practices in violation of Washington law. 31. Plaintiff will fairly and adequately represent the interests of the Class. Plaintiff has no conflict of interest with any member of the Class. Plaintiff has retained counsel competent and experienced in complex class action litigation with the resources and expertise necessary to litigate this case through to conclusion. 32. Common questions of law and fact exist as to all members of the Class, and predominate over any questions solely affecting individual members of the Class. Among the questions of law and fact common to Plaintiff and Class Members are: a. Whether Defendants agreed not to actively recruit each other’s employees in positions held by the Class Members; b. Whether the mutual non-solicitation and no-hire agreements between Defendants were per se violations of the Sherman Act, 15 U.S.C. § 1, et seq.; c. Whether Defendants violated the Sherman Act by agreeing to not actively hire or solicit one another’s workers in positions held by Class Members; INDIA LIN BODIEN, ATTORNEY AT LAW d. Whether Defendants violated RCW 19.86, et seq., by entering into agreements to not actively recruit each other’s employees in positions held by Class Members; e. whether and the extent to which Defendants’ conduct suppressed wages and salaries below competitive levels; f. whether Plaintiff and the other Class Members suffered injury as a result of Defendants’ agreements; g. whether any such injury constitutes antitrust injury; h. whether Class Members are entitled to treble damages; and i. the measure of damages suffered by Plaintiff and the Class. 33. Class action treatment is superior to any alternative to ensure the fair and efficient adjudication of the controversy alleged herein. Such treatment will permit a large number of similarly situated persons to prosecute their common claims in a single forum simultaneously, efficiently, and without duplication of effort and expense that numerous individuals would entail. No difficulties are likely to be encountered in the management of this class action that would preclude its maintenance as a class action, and no superior alternative exists for the fair and efficient adjudication of this controversy. The Class Members are readily identifiable from Defendants’ employee rosters, payroll records or other company records. 34. Defendants’ actions are generally applicable to the entire Class. Prosecution of separate actions by individual members of the Class creates the risk of inconsistent or varying adjudications of the issues presented herein, which, in turn, would establish incompatible standards of conduct for Defendants. INDIA LIN BODIEN, ATTORNEY AT LAW 35. Because joinder of all members is impractical, a class action is superior to other available methods for the fair and efficient adjudication of this controversy. Furthermore, the amounts at stake for many members of the Class, while substantial, may not be sufficient to enable them to maintain separate suits against Defendants. VIII. STATUTE OF LIMITATIONS AND DEFENDANTS’ CONTINUING VIOLATION 36. Defendants’ conspiracy was a continuing violation in which Defendants repeatedly invaded Plaintiff’s and Class Members’ interests by adhering to, enforcing, and reaffirming the anticompetitive agreements described herein. 37. Before July 12, 2018, Plaintiff and the members of the Class had neither actual nor constructive knowledge of the pertinent facts constituting their claims for relief asserted herein. Plaintiff and members of the Class did not discover, and could not have discovered through the exercise of reasonable diligence, the existence of any conspiracy until at the earliest July 12, 2018 when the investigation by the AG into non-solicitation agreements among fast food franchisees/franchisors including Cinnabon was first revealed publicly. This case is filed within four years of the moment when it was first revealed that the AG investigation had unearthed that Cinnabon had engaged in mutual non-solicitation and no-hire agreements with SK Bakeries and other Cinnabon franchisees. 38. Defendants engaged in a conspiracy that did not give rise to facts that would put Plaintiff or the Class on inquiry notice that there was a conspiracy among Cinnabon and franchisees to restrict competition for Class Members’ services through non-solicitation and no- hire agreements. INDIA LIN BODIEN, ATTORNEY AT LAW IX. CAUSES OF ACTION FIRST CAUSE OF ACTION VIOLATION OF SECTION ONE OF SHERMAN ACT [15 U.S.C. § 1, et seq.] (On Behalf of Plaintiff and the Class) 39. Plaintiff incorporates by reference the allegations in the above paragraphs as if fully set forth herein. 40. Defendants, by and through their officers, directors, employees, agents or other representatives, have entered into an unlawful agreement, combination and conspiracy in restraint of trade, in violation of 15 U.S.C. § 1, et seq. Specifically, Defendants agreed to restrict competition for Class Members’ services through non-solicitation agreements and no-hire agreements, all with the purpose and effect of suppressing Class Members’ compensation and restraining competition in the market for Class Members’ services. 41. According to the Department of Justice (“DOJ”) and Federal Trade Commission (“FTC”), “…no-poaching agreements, among employers…are per se illegal under the antitrust laws.” DOJ/FTC Antitrust Guidance for HR Professionals, Oct. 2016, at p. 3. “It is unlawful for competitors to expressly or implicitly agree not to compete with one another, even if they are motivated by a desire to reduce costs.” Id. at p. 2. 42. Defendants’ conduct injured Class Members by lowering their compensation and depriving them of free and fair competition in the market for their services. 43. Defendants’ agreements are per se violations of the Sherman Act. 44. Plaintiff seeks the relief set forth below, including underpaid and treble damages. INDIA LIN BODIEN, ATTORNEY AT LAW SECOND CAUSE OF ACTION UNFAIR COMPETITION AND UNLAWFUL BUSINESS PRACTICE [Washington Unfair Business Practices Act, 19.86 et seq.] 45. Plaintiff incorporates by reference the allegations in the above paragraphs as if fully set forth herein. 46. Revised Code of Washington Section 19.86, et seq., prohibits unfair or deceptive methods of competition or acts or practices. Specifically, RCW 19.86.030 prohibits contracts, combinations, or conspiracies that restrain trade or commerce. 47. As stated above, the Washington State Attorney General investigated Cinnabon and determined that the no-hire and non-solicitation provisions of its franchise agreements, by and between itself and its franchisees, constituted a contract, combination, or conspiracy in restraint of trade in violation of the Washington Unfair Business Practices Act – Consumer Protection Act, RCW 19.86.030. 48. Through its conspiracy and actions as alleged herein, Defendants’ efforts to restrain competition for and suppress compensation of their employees through their franchise agreements constitutes unfair competition and unlawful and unfair business practices in violation of the Washington Unfair Business Practices Act, RCW 19.86, et seq. Specifically, Defendants agreed to restrict competition for Class Members’ services through non-solicitation and no-hire agreements, all with the purpose and effect of suppressing Class Members’ compensation and restraining competition in the market for Class Members’ services. Defendants’ illegal conspiracy was substantially injurious to Plaintiff and the Class Members. 49. Defendants’ acts were unfair, unlawful, and/or unconscionable, both in their own INDIA LIN BODIEN, ATTORNEY AT LAW 50. Defendants’ conduct injured Plaintiff and other Class Members by lowering their compensation and depriving them of free and fair competition in the market for their services, allowing Defendants to unlawfully retain money that otherwise would have been paid to Plaintiff and other Class Members. Plaintiff and other Class Members are therefore persons who have suffered injury in fact and lost money or property as a result of the unfair competition under RCW 19.86.090. 51. The harm to Plaintiff and members of the Class in being denied payment for their services in the amount of higher wages and salaries that they would have received in the absence of the conspiracy outweighs the utility, if any, of Defendants’ illegal non-solicitation and no-hire agreements and, therefore, Defendants’ actions described herein constitute an unfair business practice or act within the meaning of RCW 19.86, et seq. 52. Pursuant to RCW 19.86.090, any person who is injured by a violation of RCW 19.86.030 may bring a civil action to recover actual damages, treble damages, and attorneys’ fees and costs. 53. Plaintiff seeks the relief set forth below. X. JURY DEMAND AND DESIGNATION OF PLACE OF TRIAL Pursuant to Federal Rule of Civil Procedure 38(b), Plaintiff demands a trial by jury on all issues so triable. XI. PRAYER FOR RELIEF WHEREFORE, Plaintiff Kyla Yi, on behalf of herself and a class of all others similarly situated, requests that the Court enter an order or judgment against Defendants including the following: a. Certification of the class described herein pursuant to Rule 23 of the Federal Rules of Civil Procedure; INDIA LIN BODIEN, ATTORNEY AT LAW b. Appointment of Plaintiff Kyla Yi as Class Representative and her counsel of record as Class Counsel; c. Compensatory damages in an amount to be proven at trial and trebled thereafter; d. Pre-judgment and post-judgment interest as provided for by law or allowed in equity; e. The costs of bringing this suit, including reasonable attorneys’ fees and costs; f. An incentive award to compensate Plaintiff Kyla Yi for her efforts in pursuit of this litigation; g. Interest under Washington law; and h. All other relief to which Plaintiff Kyla Yi and the Class may be entitled at law or in equity. Dated August 3, 2018. Respectfully submitted, India Lin Bodien, Attorney at Law Ackermann & Tilajef, P.C. _________________________________________ By: India Lin Bodien, WSBA #44898 INDIA LIN BODIEN, ATTORNEY AT LA W 2522 North Proctor Street, #387 Tacoma, Washington 98406-5338 Telephone: (253) 212-7913 Fascimile: (253)276-0081 india@indialinbodienlaw.com Craig J. Ackermann, WSBA #53330 Brian Denlinger, WSBA #53177 ACKERMANN & TILAJEF, P.C. 2602 North Proctor Street, #205 Tacoma, Washington, 98406 Telephone: (310) 277-0614 Facsimile: (310) 277-0635 cja@ackermanntilajef.com bd@ackermanntilajef.com INDIA LIN BODIEN, ATTORNEY AT LAW

antitrust

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UNITED STATES DISTRICT COURT EASTERN DISTRICT OF VIRGINIA Alexandria Division CIVIL ACTION NO. _______________ LOUISIANA HEALTH SERVICE & INDEMNITY COMPANY D/B/A BLUE CROSS AND BLUE SHIELD OF LOUISIANA, and HMO LOUISIANA, INC., on behalf of themselves and all others similarly situated, Plaintiffs, v. JANSSEN BIOTECH, INC., JANSSEN ONCOLOGY, INC., JANSSEN RESEARCH & DEVELOPMENT, LLC, and BTG INTERNATIONAL LIMITED, Defendants. CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL TABLE OF CONTENTS I. INTRODUCTION ...............................................................................................................1 II. JURISDICTION AND VENUE ..........................................................................................4 III. THE PARTIES.....................................................................................................................5 IV. OBTAINING AND ENFORCING PATENTS ...................................................................7 A. Although subject to a procedural presumption of validity, patents are not sacrosanct. ................................................................................................................7 1. Patent applicants must provide full and complete information to the PTO when seeking approval of a patent application..............................7 2. The “presumption of validity” for patents is a procedural device to assign burdens of proof; it is not a conclusive determination. .....................9 B. “Obvious” inventions are not patentable. ..............................................................10 C. “Commercial success” as an argument supporting non-obviousness works only if no “blocking patents” exist, preventing others from commercially testing or selling the product. .................................................................................10 D. Patents can be challenged by multiple means. .......................................................13 1. Patents can be challenged in court proceedings. ........................................13 2. Patents can be challenged through the inter partes review system. ..........14 V. REGULATORY BACKGROUND ...................................................................................15 A. Potential brand drug manufacturers must demonstrate the safety and effectiveness of their new drug and must list in the Orange Book patents they claim cover it. .................................................................................................15 B. Potential manufacturers of a generic equivalent of a brand drug must contend with the listed patents and are incentivized to challenge or design around weak patents. ..............................................................................................16 1. ANDA applicants may challenge the validity of listed patents and the patent holders may sue for patent infringement in response. ...............18 2. Brand drug manufacturers can use the filing of P.IV certifications to delay potential generic competitors through litigation. .........................20 3. First ANDA filers are entitled to a valuable 180-day exclusivity. ............21 VI. ECONOMIC BACKGROUND .........................................................................................23 VII. FACTS ...............................................................................................................................25 A. 1994-2011: Abiraterone acetate is invented, patented, developed, approved, and launched as Zytiga. .........................................................................25 B. 2007-2010: The PTO rejects as obvious Janssen’s first two attempts to secure a second patent. ...........................................................................................27 C. 2010-2011: Janssen seeks and obtains FDA approval to sell abiraterone acetate. ...................................................................................................................30 D. 2011-2013: The PTO issues three more rejections of Janssen’s attempt to patent the obvious but extends the life of the ’213 patent by three years. .............31 1. February 2012: The PTO rejects Janssen’s second patent attempt for a third time. ..........................................................................................31 2. September 2012: The PTO issues its fourth rejection of Janssen’s patent application, over obviousness, unexpected results, and commercial success arguments. .................................................................33 3. March 2013: The PTO issues its fifth rejection. ........................................35 4. September 2013: The PTO grants a patent term extension on the ’213 blocking patent, following representations from BTG that the ’213 patent claims the only active ingredient in Zytiga. ............................36 E. September 2014: Janssen’s sixth time is the charm, patenting the obvious based on a commercial success argument. .............................................................36 F. 2015: Generic competitors line up to compete with Zytiga, Janssen and BTG pursue litigations they cannot win to prevent competition, and generic manufacturers challenge the ’438 patent at the PTAB..............................40 1. April – July 2015: Generic competitors line up to compete with Zytiga and Janssen and BTG sue them. .....................................................40 2. December 2015: Generic companies ask the PTAB to assess the validity of the ’438 patent. .........................................................................42 G. 2016: The PTAB accepts Amerigen’s petition (making its first determination that the claims of the ’438 patent were likely too obvious to be patented), more generics file petitions for inter partes review, and the ’213 patent expires. ................................................................................................44 1. Early summer 2016: Ten more generics file petitions for inter partes review to invalidate the ’438 patent as the PTAB initiates a formal review. ............................................................................................44 2. August 2016: Actavis changes its P.IV certification on the ’213 blocking patent to a P.III certification, and any semblance of legitimacy to Janssen’s litigation disappears. ............................................45 3. Late 2016: Judge McNulty issues his Markman decision, adopting Janssen’s narrow definition of “treatment” and “treating” and the ’213 patent expires. ....................................................................................46 H. 2017: The PTAB grants additional petitions for inter partes review, Janssen and BTG continue their baseless litigations, and generic companies clear regulatory hurdles. ......................................................................46 I. Early 2018: The PTAB issues three decisions, each finding the ’438 patent invalid as obvious. .................................................................................................48 1. January 17, 2018: The PTAB issues its first decision finding the claims of the ’438 patent unpatentable. .....................................................48 2. January 17, 2018: The PTAB issues its second decision finding the claims of the ’438 patent unpatentable. .....................................................53 J. Mid 2018: Following a nine-day trial, Judge McNulty finds clear and convincing evidence that the ’438 patent is invalid. ..............................................54 K. Late 2018 and early 2019: After losing at the district court, Janssen and BTG continue trying to delay generic competition, the courts rebuff them at every turn, and generic competition for Zytiga finally begins. ..........................57 L. Absent the sham litigations, one or more Zytiga generics could have been available in December 2016, and would have been available no later than November 2017. .....................................................................................................58 M. Janssen possesses monopoly power over abiraterone acetate................................59 VIII. CLASS ACTION ALLEGATIONS ..................................................................................61 IX. CLAIMS FOR RELIEF .....................................................................................................64 X. COMPLIANCE WITH NOTICE REQUIREMENTS.....................................................142 XI. DEMAND FOR JUDGMENT .........................................................................................149 XII. JURY DEMAND .............................................................................................................150 Louisiana Health Service & Indemnity Company, d/b/a Blue Cross and Blue Shield of Louisiana (“BCBSLA”) and HMO Louisiana, Inc. (“HMOLA”) (collectively “Plaintiffs” or “BCBSLA”) bring this action on behalf of themselves, and all others similarly situated (“the purchasers”), against defendants Janssen Biotech, Inc., Janssen Oncology, Inc., Janssen Research & Development LLC (collectively, “Janssen”) and BTG International Limited (“BTG”). These allegations are based on publicly available materials and knowledge, information, and belief. I. INTRODUCTION 1. Patents protect innovation and encourage new discoveries. Sometimes, a party can obtain multiple patents relating to the same product. But each patent must protect a novel invention or discovery. If an invention claimed in a patent application is obvious in light of existing technology, it is generally not patentable. 2. However, an invention that is obvious may still be patentable if the patent applicant can prove that “secondary considerations” overcome the obviousness. One such way to do so is to prove “commercial success” of the newly-claimed invention; if the newly-claimed invention was commercially successful, and the newly-claimed invention was the reason for that success, then the newly-claimed invention may be worthy of patent protection. 3. Janssen got a patent on the compound abiraterone acetate in 1997. That patent – U.S. Patent No. 5,604,213 (the ’213 patent) – lasted nearly twenty years and expired in December 2016. During the life of the ’213 patent was in place, only Janssen could sell an abiraterone acetate product; no other company could. On April 28, 2011, Janssen got approval from the FDA for Zytiga, abiraterone acetate tablets, for the treatment of prostate cancer in combination with prednisone. For the next five and a half years, because of the ’213 patent, Janssen had a legitimate monopoly on sales of Zytiga. The company made billions of dollars: U.S. sales of Zytiga went from $191 million in 2011 to $463 million in 2012, its first full year on the market. In 2015, U.S. Zytiga sales exceeded $1 billion. 4. But the ’213 patent would not last forever, and Janssen (and its partner BTG) wanted to extend that monopoly. So beginning in 2007 and continuing through 2014, Janssen sought a second patent: on a method of using abiraterone acetate in combination with prednisone to treat prostate cancer. 5. Here’s the rub: • It was well known at the time that abiraterone can be used to treat prostate cancer. • It was well known at the time that prednisone can be used for the same. • It was well known at the time that the way in which abiraterone works makes it necessary to administer it with a glucocorticoid, a kind of steroid. • It was well known at the time that prednisone was a commonly used glucocorticoid; in fact, prednisone had been successfully used in combination with another drug in the same class as abiraterone to treat prostate cancer. 6. Not surprisingly, the United States Patent & Trademark Office (the PTO) repeatedly rejected this second patent application, correctly finding that it was obvious to combine abiraterone acetate and prednisone together to treat prostate cancer, and the claimed invention was therefore not patentable. On five separate occasions, the PTO rejected Janssen’s application. (Years later the Patent Trial and Appeal Board (PTAB) and district court, under broad and narrow claim constructions respectively, would both reach the same conclusion.) 7. Realizing the futility of trying to persuade the PTO that its claimed invention was not obvious, Janssen pivoted, moving away from trying to prove non-obviousness and instead pursuing a “commercial success” argument. For lucky try number six, Janssen told the PTO that combining abiraterone acetate and prednisone could not possibly have been obvious because of the tremendous commercial success that Zytiga enjoyed. Were the combination obvious, the argument goes, practitioners would already have been using abiraterone acetate and prednisone in combination to treat prostate cancer and Zytiga would not have been as successful as it has 8. In making this argument, though, Janssen never called the PTO’s attention to the at-the-time-unexpired ’213 patent. It never pointed out that the ’213 patent, covering the only active drug compound in Zytiga, prevented anyone other than Janssen from making or selling any drug product containing that compound. (This is what is commonly referred to as a “blocking patent.”). Zytiga enjoyed commercial success not because it demonstrated the supposed non-obviousness of the combination of abiraterone and acetate but because no one else could make or sell an abiraterone acetate product. As both the PTAB and the district court would later conclude, the existence of the blocking patent defeated any “commercial success” argument. 9. But with no other party present to call the blocking patent to the PTO’s attention in 2013, Janssen’s ruse worked. The PTO examiner found that “the unexpected commercial success” of Zytiga was sufficient to overcome the finding of obviousness. And on that basis – and that basis alone – United States Patent No. 8,822,438 (the ’438 patent) issued. 10. To protect Janssen’s monopoly, Janssen and BTG then asserted the ’438 patent in infringement litigation that they both knew they could never ultimately win in the courts. Their goal was not to win a litigation victory, though; it was simply to delay generic competition. In that sense, Janssen and BTG did win. Their wrongful conduct delayed generic competition by more than one year – and during that time, Zytiga was among the most profitable drugs sold by Janssen’s parent company, Johnson & Johnson. United States sales of Zytiga for the twelve months ending December 31, 2017 were $1.228 billion. In 2018, United States sales of Zytiga climbed to $1.771 billon. 11. Absent the defendants’ unlawful conduct, generic competition for Zytiga would have entered as early as December 2016 and no later than October 2017. Instead, the defendants’ unlawful conduct prevented generic manufacturers from entering the market with competing abiraterone acetate products for more than year, delayed the entry of additional generic competitors, and has cost purchasers hundreds of millions of dollars in overcharge damages. Plaintiff and the proposed class seek to recover damages, including treble damages, under the state antitrust and consumer protection laws enumerated below or in the alternative, damages under § 2 of the Sherman Act1 and §§ 4 and 16 of the Clayton Act2. II. JURISDICTION AND VENUE 12. This Court has jurisdiction over this action pursuant to 28 U.S.C. § 1332(d) because this is a class action involving common questions of law or fact in which the aggregate amount in controversy exceeds $5,000,000, exclusive of interest and costs, there are more than one hundred members of the class, and at least one member of the putative Class is a citizen of a state different from that of one of the defendants. 13. The Court has subject matter jurisdiction under 28 U.S.C. §§ 1331, 1332(d), and 1337(a). 14. The Court also has jurisdiction over this action pursuant to § 2 of the Sherman Act and §§ 4 and 16 of the Clayton Act. 1 15 U.S.C. § 2. 2 15 U.S.C. §§ 15(a), 26. 15. The defendants transact business within this District and/or have agents in and/or can be found in this District. 16. Venue is appropriate within this District under 28 U.S.C. § 1391. A substantial part of the events or omissions giving rise to the claims asserted herein occurred before, and involved, the PTAB which is located in Alexandria, Virginia. 17. Venue is also appropriate within this District under § 12 of the Clayton Act3. 18. The Court has personal jurisdiction over each of the defendants. The defendants have transacted business, maintained substantial contacts, and/or committed overt acts in furtherance of the illegal scheme throughout the United States, including in this District. The scheme has been directed at, and has had the intended effect of causing injury to individuals and companies residing in or doing business throughout the United States, including in this District. III. THE PARTIES 19. Plaintiff Louisiana Health Service &Indemnity Company, d/b/a Blue Cross and Blue Shield of Louisiana is not for profit health insurance company organized and existing under the laws of the state of Louisiana. BCBSLA provides and manages health benefits to more than 1 million participants, members, and beneficiaries primarily in the state of Louisiana, as well as throughout the U.S. BCBSLA also provides third-party administrative services for members of self-funded employee health plans. BCBSLA has paid all or part of the cost of its participants’ purchases of Zytiga, and its AB-rated generic equivalents during the relevant time period. 20. Plaintiff HMO Louisiana, Inc. is a domestic health maintenance organization licensed to conduct business in the state of Louisiana. HMOLA is a wholly owned subsidiary of BCBSLA. HMOLA provides and manages health benefits to participants, members, and 3 15 U.S.C. § 22. beneficiaries primarily in the state of Louisiana, as well as throughout the U.S. HMOLA has paid all or part of the cost of its participants’ purchases of Zytiga, and its AB-rated generic equivalents during the relevant time period. 21. Defendant Janssen Biotech is a corporation organized and existing under the laws of Pennsylvania, with its principal place of business at 800/850 Ridgeview Drive, Horsham, PA 19044. 22. Defendant Janssen Oncology Inc. is a corporation organized and existing under the laws of Delaware, with its principal place of business at 10990 Wilshire Blvd., Los Angeles, CA 90024. 23. Defendant Janssen R&D is a limited liability company organized and existing under the laws of New Jersey, with its principal place of business at 920 Route 202 South, Raritan, NJ 08869. 24. The three entities identified in the preceding three paragraphs are referred to individually and collectively herein as “Janssen.” 25. Defendant BTG is a company organized and existing under the laws of the United Kingdom, with its principal place of business at 5 Fleet Place, London, EC4M 7RD United Kingdom. 26. The defendants’ wrongful actions described in this complaint are part of and were taken in furtherance of the illegal monopolization scheme and restraint of trade alleged herein. These actions were authorized, ordered, and/or undertaken by the defendants’ various officers, agents, employees, or other representatives while actively engaged in the management of the defendants’ affairs within the course and scope of their duties and employment and with their actual, apparent, or ostensible authority. IV. OBTAINING AND ENFORCING PATENTS A. Although subject to a procedural presumption of validity, patents are not sacrosanct. 27. Section 101 of the Patent Act provides that “[w]hoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.” To be patentable, subject matter must be, inter alia, novel, non-obvious, and particularly described. 28. The protections afforded by patents must strike a delicate balance between creating incentives that lead to creation, invention, and discovery and impeding the flow of information that might spur invention. 1. Patent applicants must provide full and complete information to the PTO when seeking approval of a patent application. 29. The process by which a patent applicant seeks a patent consists of a series of communications between the applicant and the PTO examiner to whom the application is assigned. Other potentially interested parties, such as scientists who have published closely related work, drug companies who may be pursuing similar drugs, or potential competitors who may be planning to practice a similar invention, are generally not allowed to participate in this dialogue. 30. It is the responsibility of the applicant (and/or the attorney or agent who is prosecuting the application) to accurately explain the invention to the examiner, point out any misunderstandings of or errors made by the examiner, place before the examiner all relevant material and information known to the applicant, and fully and accurately explain the relevance of that material and information to the examiner. That is why applicable regulations impose upon applicants (and their representatives) a duty of candor and good faith in their dealings with the 31. The PTO processes thousands of patent applications each year. The PTO is overworked, under-funded, and faces massive backlogs. Examiners, on average, spend less than 20 hours reviewing and assessing each application. Most examiners are not lawyers, despite having to assess and respond to legal arguments put before them by the patent applicant’s counsel. In reality, the examiner almost always knows less about the invention and technical field than the patent applicant. 32. These conditions are ripe for abuse, particularly where, as in the pharmaceutical industry, patents are a gateway to potentially billions of dollars in sales. 33. Precisely because patents are generally obtained in an ex parte setting, with an informational imbalance and no participation by anyone but the applicant and examiner, compliance with the duty of candor and good faith is essential in preventing improper conduct before the PTO, and in avoiding the issuance of patents that will not withstand full scrutiny. 34. The duty of candor and good faith is designed to provide the PTO with the information necessary for effective and efficient decision-making. Examiners and other PTO personnel place great reliance on applicants and inventors to fulfill their duty of candor and good faith. Examiners are trained to believe that applicants and their attorneys are complying with that duty. Generally speaking, the PTO accepts representations from inventors and their attorneys at face value and expects that the duty of candor and good faith is being followed: that there are no half-truths, misleading statements, misrepresentations, or material omissions from inventors and attorneys. 35. The Manual of Patent Examining Procedure reminds attorneys that submission of misleading or inaccurate statements may render the resulting patents unenforceable: “The submission by an applicant of misleading or inaccurate statements of facts during the prosecution of applications for patents has resulted in the patents issuing on such applications being held unenforceable.” 2. The “presumption of validity” for patents is a procedural device to assign burdens of proof; it is not a conclusive determination. 36. Once issued, patents are generally presumed to be valid. This presumption emanates from a deference given to the expertise of the PTO. 37. Although subject to a procedural presumption of validity, patents are not bulletproof. The presumption of validity associated with an issued patent is not a conclusive determination that the patent is, in fact, valid; it is simply a procedural device that allows reviewing bodies to assign the appropriate burdens in proceedings challenging the validity of an issued patent. 38. Patents are routinely invalidated or held unenforceable, either upon re- examination by the PTO, through a review by the PTAB, by court decision, or by jury verdict. A patent can be invalidated for a variety of reasons, including lack of novelty, obviousness, indefiniteness, enablement, or fraud or inequitable conduct. 39. When assessing this procedural presumption of validity, understanding the information actually presented to the PTO at the time it was making its decision is important. While not directly altering the ultimate burden of proof on a party challenging this presumption, evidence not considered by the PTO may carry more weight than evidence that was considered, and go further towards meeting the challenger’s burden. If the PTO did not have all material facts before it when making its initial patentability decision, its considered judgment may lose significant force, and the burden to overcome the presumption may be easier to sustain. B. “Obvious” inventions are not patentable. 40. One reason why a claimed invention may be denied a patent, or why an issued patent may later be invalidated, is a determination that the invention was, in fact, “obvious.” 41. A patent claim is invalid as obvious if the purported differences between the subject matter sought to be patented and the prior art are such that the subject matter would have been obvious to a person of ordinary skill in the art (a POSA). In other words, if the prior art and the general knowledge of a POSA would be sufficient to teach all the parts of the claim, the patent claim is obvious and generally cannot be allowed. 42. The question of obviousness is resolved on the basis of underlying factual determinations including (1) the scope and content of the prior art, (2) any differences between the claimed subject matter and the prior art, (3) the level of ordinary skill in that art, and (4) so- called secondary evidence of non-obviousness. 43. A patent applicant can attempt to overcome an obviousness rejection by pointing to “secondary considerations,” also referred to as objective indicia of obviousness, such as the commercial success of the claimed invention, a long-felt but unsolved need for the claimed invention, and the failure of others in attempting to make the claimed invention. C. “Commercial success” as an argument supporting non-obviousness works only if no “blocking patents” exist, preventing others from commercially testing or selling the product. 44. The law presumes that if an idea were obvious, normal market forces would already have caused a product embodying that idea or claimed invention to be made available (or use of the method of that idea/claimed invention to already be occurring). So if a patent applicant can prove (1) the commercial success of its product embodying the idea or claimed invention and (2) a causal relation, or “nexus,” between a product embodying that invention and that success, it may be that the idea or claimed invention was not as obvious as thought; in such instances, the commercial success of the product may be probative on the obviousness inquiry. 45. When others are legally barred from commercially testing the ideas of the newly- claimed invention, though, the commercial or financial success of the product is irrelevant to the obviousness analysis. If the commercial success of the product is due to the fact that no one else can practice the idea or claimed invention, then commercial success arguably says nothing about obviousness. 46. Existing patents can serve to legally bar others from commercially testing an idea or claimed invention. Indeed, that is the point of patents. 47. If an already-existing patent relates to the general subject matter of a newly- claimed invention and could support a claim of infringement to the newly-claimed invention, it must be considered when assessing commercial success. 48. Such patents – ones that might be infringed by practice of a later invention – are commonly referred to as “blocking patents.” The existence of a blocking patent may deter others from investing the resources needed to make, develop, or market such a later “blocked” invention because of the risk of infringement liability and associated monetary and injunctive remedies. The clearer the “block,” the greater the deterrence. 49. Of course, not all prior patents act as blocking patents. For example, a patent covering only a particular formulation of a drug would not prevent another company from selling that drug using a different formulation. Likewise, a patent covering only a particular type of delivery mechanism would not prevent another company from selling the product using a different delivery mechanism. And a patent covering only a particular method of using a drug would not prevent another company from selling that drug for a different use. 50. But where the prior patent covers the underlying product itself, such as a drug compound, it blocks all other potential uses. Without the ability to sell the drug compound itself, there is no motivation to try and develop a new formulation of the drug or a new delivery mechanism or method of use for that drug. The drug compound patent would prevent the marketing of any such product; it “blocks” all others from even trying to bring a product to the market. 51. The deterrent effect of a blocking patent has no impact on the owner or licensee of the initial patent. So, if the owner or licensee of a drug compound patent wants to seek another, related patent, it can do so without fear of being sued for infringement on the initial patent. Where a later invention is patented by the owner or licensee of an earlier blocking patent, understanding the deterrent effect is relevant to assessing why others may not have pursued the “blocked” invention, and hence, to evaluating any claimed secondary considerations. 52. Courts have made clear that, if all other variables are constant, a blocking patent diminishes possible rewards from a non-owner’s or non-licensees’ investment activity aimed at an invention whose commercial exploitation would be infringing, thus reducing incentives for innovations in the blocked space by non-owners and non-licensees of the blocking patent. 53. A blocking patent, therefore, can be evidence that discounts the significance of the claim that nobody but the blocking patent’s owners or licensees arrived at, developed, and marketed the invention covered by the later patent. 54. Where such a blocking patent exists, commercial success is of “minimal probative value” and is not, by itself, sufficient to justify a finding of non-obviousness. The evaluation of commercial success as a means of overcoming obviousness is a fact-specific inquiry, which should include assessment of the effect of any blocking patents on possible competition. D. Patents can be challenged by multiple means. 55. To address the fact that “bad” patents can sometimes slip through and gain approval, patents have long been challengeable in court. More recently, Congress supplemented the litigation route with various administrative remedies, including an inter partes review system. 1. Patents can be challenged in court proceedings. 56. In the case of pharmaceutical patents, a generic can prevail in patent infringement litigation by showing that its product does not infringe the patent (and/or that the patent holder cannot meet its burden to prove infringement). It may also, or in the alternative, show that the patent itself is invalid or unenforceable. For example, a patent is invalid or unenforceable when the disclosed invention is obvious in light of prior art. A patent is also invalid or unenforceable when an inventor, an inventor’s attorney, or another person involved with the application, with intent to mislead or deceive the PTO, fails to disclose to the PTO material information known to that person to be material, or submits materially false information to the PTO during prosecution. 57. In those circumstances, the PTO’s decision to issue a patent does not substitute for a fact-specific assessment of (i) whether the applicant made intentional misrepresentations or omissions on which the PTO relied in issuing the patent, and (ii) whether a reasonable manufacturer in the patent holder’s position would have a realistic likelihood of succeeding on the merits of a patent infringement suit. 58. As a statistical matter, if the parties litigate to a decision on the merits, it is more likely that a challenged patent will be found invalid or not infringed than upheld. The Federal Trade Commission (“FTC”) reports that generics prevailed in 73% of Hatch-Waxman patent litigation cases resolved on the merits between 1992 and 2002. An empirical study of all substantive decisions rendered in every patent case filed in 2008 and 2009 similarly reports that when a generic challenger stays the course until a decision on the merits, the generic wins 74% of the time. 2. Patents can be challenged through the inter partes review system. 59. In 2011, Congress passed the Leahy-Smith America Invents Act (“AIA”) to address a widely held concern that invalid patents were being issued and enforced, to the detriment of both innovation and the economy. 60. A centerpiece of the AIA is the system of inter partes review. Through this system at the PTO, members of the public can challenge issued patents. The grounds for an inter partes review is limited to patentability issues under § 102 (novelty) or § 103 (obviousness); even then, the challenge can only be based on prior art consisting of patents or prior publications. 61. The advent of inter partes review created a less expensive and more efficient venue for patent validity challenges than challenges in district court. Inter partes review proceedings are overseen by technically educated judges, skilled in the sciences of a particular proceeding. 62. An inter partes review commences when a party – often an alleged patent infringer – petitions the PTAB to reconsider the PTO’s issuance of an existing patent and invalidate it on the ground that it was obvious or anticipated by prior art. 63. The PTAB will grant a request for an inter partes review only if the challenger of the patent shows “a reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged in the petition.”4 The PTAB must decide the review within one year of 4 35 U.S.C. § 314(a). the institution date. 64. Once commenced, the review proceeds before the PTAB in much the same way as standard litigation. The parties conduct discovery, file briefs, and engage in oral argument. 65. The PTAB proceedings have become an effective method of challenging improperly granted patents: only 4% of all Board petitions end with a final written decision in which all claims are upheld as patentable; 69% of all PTAB petitions that have reached final written decisions have led to findings that all of the patents’ claims were unpatentable. V. REGULATORY BACKGROUND A. Potential brand drug manufacturers must demonstrate the safety and effectiveness of their new drug and must list in the Orange Book patents they claim cover it. 66. Under the Food, Drug, and Cosmetics Act (the FDCA), drug companies that wish to sell a new drug product must file a New Drug Application (an NDA) with the FDA. An NDA submission must include specific data concerning the safety and effectiveness of the drug, including information from at least two clinical trials. 67. Approval of an NDA by the FDA does not typically grant any exclusive marketing rights but a few such FDA-granted exclusivities do exist. One is the New Chemical Entity (“NCE”) exclusivity, which applies to products containing chemical entities never previously approved by FDA either alone or in combination. NCE exclusivity generally lasts 5 years, although it can be extended to 7.5 years in certain circumstances. FDA-granted exclusivities are different from (but can run concurrently with) any marketing exclusivity procured by patent protection.5 5 And regulatory exclusivities are not necessarily bars to generic entry. For example, some can be overcome by carving out information in the label or for other reasons. See, e.g., 21 C.F.R. §§ 314.94(a)(8)(iv), 314.127(a)(7); 21 U.S.C. § 355a(o). 68. An NDA applicant must also submit to the FDA information about each patent that purportedly covers the drug product, including methods-of-using the drug product, described in the NDA and for which “a claim of patent infringement could reasonably be asserted if a person not licensed by the owner engaged in the manufacture, use, or sale of the drug.”6 The FDA then publishes this information in a digest titled Approved Drug Products with Therapeutic Equivalence Ratings, known as the Orange Book. 69. The FDA performs only a ministerial act in listing patents in the Orange Book. The FDA does not have the resources or authority to verify the manufacturer’s representations for accuracy or trustworthiness. Thus, the FDA relies completely on the manufacturer’s truthfulness about the Orange Book information it supplies, including whether the listed patent is valid and may reasonably be asserted against a generic applicant. 70. Once a brand manufacturer lists a patent in the Orange Book, that listing puts potential generic competitors on notice that the brand considers the patent to cover its drug. The listing triggers important regulatory consequences. B. Potential manufacturers of a generic equivalent of a brand drug must contend with the listed patents and are incentivized to challenge or design around weak patents. 71. The Hatch-Waxman Amendments, enacted in 1984, simplified regulatory hurdles for prospective generic manufacturers by eliminating the need for them to file lengthy and costly NDAs.7 A manufacturer seeking approval to sell a generic version of a brand drug may instead file an Abbreviated New Drug Application (“ANDA”). An ANDA relies on the scientific findings of safety and effectiveness included in the brand manufacturer’s original NDA and must 6 21 U.S.C. § 355(b)(1), (c)(2). 7 See Drug Price Competition and Patent Term Restoration Act of 1984, Pub. L. No. 98-417, 98 Stat. 1585 (1984) (codified as amended at 21 U.S.C. § 355). show that the generic contains the same active ingredient(s), dosage form, route of administration, and strength as the brand drug and that it is bioequivalent, i.e., absorbed at the same rate and to the same extent as the brand. The FDA assigns generics that meet these criteria relative to their brand counterparts an “AB” rating. 72. The FDCA and Hatch-Waxman Amendments operate on the principle that bioequivalent drug products containing identical amounts of the same active ingredients, having the same route of administration and dosage form, and meeting applicable standards of strength, quality, purity, and identity are therapeutically equivalent and may be substituted for one another. Bioequivalence demonstrates that the active ingredient of the proposed generic would be present in the blood of a patient to the same extent and for the same amount of time as the brand counterpart.8 73. Through the Hatch-Waxman Amendments, Congress sought to expedite the entry of less expensive generic competitors to brand drugs, thereby reducing healthcare expenses nationwide. Congress also sought to protect pharmaceutical manufacturers’ incentives to create new and innovative products. 74. The Hatch-Waxman Amendments achieved both goals, advancing substantially the rate of generic product launches and ushering in an era of historically high profit margins for brand pharmaceutical manufacturers. In 1983, before the Hatch-Waxman Amendments, only 35% of the top-selling drugs with expired patents had generic alternatives; by 1998, nearly all did. In 1984, prescription drug revenues for brands and generics totaled $21.6 billion; by 2013, total prescription drug revenues had climbed to more than $329.2 billion, with generics 8 21 U.S.C. § 355(j)(8)(B). accounting for 86% of prescriptions. Generics are dispensed about 95% of the time when a generic form is available. 1. ANDA applicants may challenge the validity of listed patents and the patent holders may sue for patent infringement in response. 75. An ANDA must include one of the following four certifications with respect to each patent listed by the NDA holder as covering the branded drug it seeks to produce: i. Paragraph I: no such patent has been listed in the Orange Book; ii. Paragraph II: any such listed patent has expired; iii. Paragraph III: the date on which such patent will expire and the intent not to market or sell the product until that date; or iv. Paragraph IV: such patent is invalid or will not be infringed by the manufacture, use, or sale of the new drug for which the application is submitted.9 76. An ANDA applicant may agree to wait for FDA approval until after a listed patent expires, in which case it submits a Paragraph III or “P.III” certification. As the ANDA filer is not seeking to market a generic product prior to patent expiry, no litigation claiming infringement results. 77. An ANDA applicant may also decide to challenge the listed patent or patents in the hopes of getting to market before patent expiry. In this case, the ANDA filer submits a Paragraph IV or “P.IV” certification. 78. Upon receipt of a P.IV certification, the patent holder may assess whether it is entitled to commence litigation. The ANDA filer’s stated intent to market its product prior to patent expiry is considered a technical act of constructive infringement. So, the patent holder 9 Id. § 355(j)(2)(A)(vii)(I)-(IV); see also 21 C.F.R. § 314.94(a)(12)(i)(A). The FDCA provides only one circumstance in which an applicant with a pending ANDA need not certify to a listed patent, but that exception, relating to method-of-use patents, is not applicable here. 21 U.S.C. § 355(j)(2)(A)(viii). would have standing to bring such a suit if it had a legitimate basis to allege infringement. However, nothing in the Hatch-Waxman Act compels the institution of an infringement suit. Instead, the conditions of Rule 11 still apply, and the patent holder is required to analyze the contents of the ANDA applicant’s notice and certification, as well as the legitimacy of its patent(s), before electing to file suit. 79. Often, when such litigation is filed, the generic company will focus its arguments on basic claims of patent invalidity or non-infringement, rather than claiming outright fraud by the patentee in obtaining the patent. This is a practical consideration; invalidity or non- infringement may be easier and less time-consuming to prove in court. And it has the same effect; the patent will be judicially determined not to prevent the generic from marketing its product. 80. Many times, an ANDA applicant will submit a P.III certification as to some Orange Book-listed patents and a P.IV certification as to others. When that happens, only the patents as to which a P.IV certification was submitted can be asserted in litigation against that ANDA filer. 81. The ANDA applicant submits the certifications to the FDA. Once the FDA alerts the ANDA applicant that it has received the ANDA and is beginning substantive review of it, the ANDA applicant must notify the patent holder of any P.IV certification. This notice must include a description of the legal and factual basis for the ANDA applicant’s assertion that the patent is invalid or not infringed.10 The statute prohibits an applicant from providing such notice prior to FDA’s formal receipt of the application for substantive review.11 10 21 U.S.C. § 355(j)(2)(B)(iv)(II). 11 21 U.S.C. § 355(j)(2)(B)(ii). 2. Brand drug manufacturers can use the filing of P.IV certifications to delay potential generic competitors through litigation. 82. If a generic manufacturer files an ANDA containing a P.IV certification, a brand manufacturer can delay FDA approval of the ANDA simply by suing the ANDA applicant for patent infringement. 83. If the brand manufacturer initiates a patent infringement action against the generic filer within forty-five days of receiving notification of the paragraph IV certification, the FDA generally will not grant final approval on that ANDA until the earlier of (i) the passage of 30 months, or (ii) the issuance of a decision by a court that the patent is invalid or not infringed by the generic manufacturer’s ANDA.12 This period is commonly referred to as the “30-month 84. Any 30-month stay afforded by the Hatch-Waxman Amendments is specific to the ANDA(s) which contained the requisite PIV certifications. 85. Where the ANDA relates to a drug with an NCE exclusivity, the 30-month stay may last even longer. For NCEs, the FDA may not accept an ANDA for a drug containing the same active moiety for a period of five years from the date of the NDA’s approval, with one 12 21 U.S.C. § 355(j)(5)(B)(iii). The brand/patent holder can choose to sue the generic after 45 days, including waiting until the generic has launched its product, but doing so would not trigger the automatic 30-month stay of FDA approval and the brand must instead satisfy the showing required to obtain a preliminary injunction to prevent the generic launch. By enabling a brand manufacturer to bring suit in response to a paragraph IV certification, the Hatch- Waxman Amendments create a procedural mechanism through which the brand and generic manufacturer can resolve their patent dispute before the generic’s intended launch date. Thus, such a system prevents the delay to generic entry that such a suit would otherwise cause. If a patent is listed in the Orange Book after an ANDA is submitted but before it is approved, the applicant for the pending ANDA generally must amend its application and provide an appropriate certification for the newly listed patent and the attendant notice. Nonetheless, a patent listed after the date an ANDA was accepted for filing (i.e., the date the FDA determines it was substantially complete) will not trigger a 30-month stay for that application. 21 U.S.C. § 355(j)(5)(B)(iii). exception: if the ANDA contains a P.IV certification of patent invalidity or non-infringement, an ANDA may be submitted four years after the NDA approval, one year earlier.13 In that situation, when legitimate patent infringement litigation is timely filed, any appropriate 30-month stay is “extended by such amount of time (if any) which is required for seven and one-half years to have elapsed from the date of approval” of the NDA.14 In effect, this can increase the 30-month stay by up to another year. 86. Until the court issues a decision finding the patent invalid or not infringed or until 30 months (or longer if an NCE) has passed, the FDA may grant “tentative approval” to the ANDA filer, recognizing that the ANDA is approvable, but cannot grant final approval, which would allow the generic manufacturer to market its product. 87. If the challenging generic company obtains a favorable district court decision, and has tentative approval, it meets FDA requirements for manufacture and sale and from a regulatory perspective is clear to launch, even if the patent at issue has not yet expired. In that case, the generic manufacturer may choose to launch before the patent expires (though may be subject to damages if it is found to infringe a valid patent). 3. First ANDA filers are entitled to a valuable 180-day exclusivity. 88. Potential ANDA competitors may be classified as first filers or subsequent filers. 89. To encourage manufacturers to seek approval of generic versions of brand drugs, the Medicare Prescription Drug, Improvement, and Modernization Act of 200315 provides an incentive to challenge weak patents. The incentive is given to the first applicant – the first filer – to submit a substantially complete ANDA containing a P.IV certification and thus the first 13 21 U.S.C. § 355(j)(5)(F)(ii); 21 C.F.R. § 314.108(b)(2). 14 21 U.S.C. § 355(j)(5)(F)(ii). 15 Pub. L. No. 108-173, 117 Stat. 2066 (Dec. 8, 2003). applicant to undertake the risk of facing patent infringement litigation. The reward is an opportunity to be the only ANDA generic on the market with the brand for a 180-day period: the FDA cannot approve subsequent ANDAs for the same product that a contain P.IV certification until after this six-month exclusivity has run.16 90. If multiple ANDAs are filed on the same day containing P.IV certifications, and no earlier such ANDAs were filed, those ANDA applicants share the 180-day exclusivity if successful in challenging the patent(s). 91. The 180-day window is referred to as the first-filer’s six-month or 180-day “exclusivity” but that is a bit of a misnomer. An NDA holder (such as Janssen) can launch a so- called “authorized generic” version of its own brand under its own NDA at any time: these “authorized generics” are often the same pills in different bottles and sold at a lower price point. Brand manufacturers frequently license a third party to sell its authorized generic beginning at the same time as ANDA generic entry as a means to recoup some of the sales they would otherwise lose. 92. During the 180-day exclusivity period, the first filer is the only ANDA-approved generic manufacturer on the market. In the absence of competition from other generics (ANDA or authorized), during the 180-day exclusivity period, a first-filer generic manufacturer generally makes about 80% of all of the profits that it will ever make on the product. 93. The Supreme Court has recognized that “this 180-day period of exclusivity can prove valuable, possibly ‘worth several hundred million dollars’” to the first filer. 94. Where patent protection is viewed as weak, ANDAs with P.IV certifications are 16 The first filer can, in some circumstances, forfeit this exclusivity; the requirements for obtaining and retaining this 180-day exclusivity period are described at 21 U.S.C. § 355(j)(5)(B)(iv), (5)(D). often filed on the first possible day; in the case of drugs with an NCE exclusivity, that is exactly four years after the NDA was approved. VI. ECONOMIC BACKGROUND 95. The marketplace for the sale of prescription pharmaceutical products in the United States is unusual. In most industries, the person who pays for a product is also the person who chooses the product. When the same person has both the payment obligation and the choice of products, the price of the product plays a predominant role in the choice of products. Consequently, manufacturers have a strong incentive to lower the price of their products to maintain profitability. 96. The pharmaceutical marketplace, in contrast, is characterized by a “disconnect” between the payment obligation and the product selection. State laws prohibit pharmacists from dispensing certain drugs to patients unless they can present a prescription written by their physician. This prohibition introduces an anomaly into the pharmaceutical marketplace between the payment obligation and the product selection. The patient (and in many cases his or her insurer) has the obligation to pay for the pharmaceutical product, but his or her doctor chooses which product the patient will buy. 97. In 1984, Congress sought to ameliorate the “disconnect,” by authorizing the manufacture and sale of generic pharmaceuticals under the Hatch-Waxman Amendments. Since the passage of the Hatch-Waxman Amendments, every state has adopted drug product selection laws that either require or permit pharmacies to substitute AB-rated generic equivalents for brand prescriptions (unless the prescribing physician specifically directs that substitution is not permitted). In this way, price reenters the product selection decision at the pharmacy counter, lessening the pharmaceutical marketplace “disconnect.” When a therapeutically equivalent generic is introduced and not prevented from competing, brand manufacturers can no longer exploit the “disconnect,” their monopoly power dissipates, and some of the normal competitive pressures are restored. 98. Because generic versions of branded drugs contain the same active ingredients, and are determined by the FDA to be just as safe and effective as their branded counterparts, the only material differences between generic drugs and their branded counterparts are their prices and manufacturers. Because generic versions of branded products are commodities that cannot be differentiated, the primary basis for generic competition is price. 99. Typically, generics are at least 25% less expensive than their branded counterparts when there is a single generic competitor. They are 50% to 80% (or more) less expensive when there are multiple generic competitors on the market for a given brand. Consequently, the launch of a bioequivalent generic drug usually results in significant cost savings to all drug purchasers. 100. Once a generic hits the market, it quickly captures sales of the corresponding brand drug, often 80% or more of the market, within the first six months after entry. In one study, the FTC found that on average, within a year of generic entry, generics had captured 90% of corresponding brand sales and (with multiple generics on the market) prices had dropped 85%. As a result, competition from generics is viewed by brand manufacturers, such as Janssen, as a grave threat to their bottom lines. 101. Until the generic version of a brand drug enters the market, there is no bioequivalent generic to substitute for, and thus compete with, the branded drug, so the branded drug manufacturer can continue to profitably charge supra-competitive prices. As a result, brand drug manufacturers, well aware of the rapid erosion of branded drug sales by generic drugs, have a strong incentive to delay the start of generic drug competition into the market. Brand manufacturers often seek to extend their monopolies, sometimes resorting to illegal ones, including fraud on the PTO and subsequent sham litigation against generics seeking to enter the market. 102. The Hatch-Waxman Amendments have significantly advanced the rate of generic drug launches while also ushering in an era of historically high profits for brand drug manufacturers. In 1983, before the Hatch-Waxman Amendments, only 35% of the top-selling branded drugs with expired patents had generic alternatives; by 1998, nearly all did. In 1984, annual prescription drug revenue for branded and generic drugs totaled $21.6 billion; by 2013, total annual prescription drug revenue had soared to $329.2 billion. VII. FACTS A. 1994-2011: Abiraterone acetate is invented, patented, developed, approved, and launched as Zytiga. 103. Prostate cancer results from the uncontrolled growth of abnormal cells in the prostate gland. Once a prostate cancer tumor develops, androgens such as testosterone promote prostate cancer growth. At its early stages, localized prostate cancer is often curable with local therapy including, for example, surgical removal of the prostate gland and radiotherapy. However, when local therapy fails – as it does in up to a third of men – the disease progresses into metastatic cancer (i.e., it spreads from the prostate into other parts of the body). 104. The enzyme 17α-hydroxylase/C17, 20-lyase (“CYP17”) is involved in testosterone synthesis, and CYP17 inhibitors have for decades been known to be useful in the treatment of cancer, specifically androgen-dependent disorders like prostate cancer. 105. Abiraterone acetate, a prodrug of abiraterone,17 is a CYP17 inhibitor, and considered a second-line therapy for the treatment of prostate cancer. 17 A prodrug is a biologically inactive compound that the body can metabolize to produce a drug. 106. Abiraterone was first discovered in the early 1990s by a group of scientists at the Institute of Cancer Research (ICR). Those scientists were familiar with research from the 1980s involving ketoconazole, another CYP17 inhibitor, and set about making a drug molecule that could mimic some of the properties of ketobonazole. 107. On September 30, 1994, those scientists, including Susan E. Barrie, Michael Jarman, Gerard A. Potter, and Ian R. Hardcastle, filed Patent Application No. 08/315,882, covering the class of compounds to which abiraterone acetate belongs. As the patent’s specification described, the “invention relates to 7-substituted steroids and their use in the treatment of androgen-dependent and oestrogen-dependent disorders, especially prostatic cancer and breast cancer respectively.” The claimed invention related to drug compounds having the following general formula: 108. After a series of rejections, the inventors convinced the PTO that one particular feature of the claimed compounds (a mandatory double bond at the 16, 17 position and position 14 can only be substituted with halogen or C1-4alkyl) was sufficiently non-obvious so as to warrant patentability. 109. On February 18, 1997, the PTO issued this application as U.S. Patent No. 5,604,213 (the ’213 patent or the ’213 blocking patent), assigned to British Technology Group Limited. 110. In 2004, Cougar Biotechnology obtained an exclusive license to the ’213 patent from British Technology Group. Janssen acquired Cougar Biotechnology in May 2009. B. 2007-2010: The PTO rejects as obvious Janssen’s first two attempts to secure a second patent. 111. On August 24, 2007, Cougar, through two of its scientists, filed patent application number 11/844,440 (the ’440 application), listing 36 claims. 112. On December 29, 2009, following Janssen’s acquisition of Cougar, PTO examiner San-ming Hui noted that claims 1-26 were drawn to a method of treating cancer, while claims 27-36 were direct to a composition for the treatment of cancer. When an application claims two or more distinct inventions, the Patent Act, 35 U.S.C. § 121, permits the PTO to require the applicant to restrict the application to one of the inventions. Examiner Hui required Janssen to choose between its method claims and composition claims. 113. In response, Janssen cancelled claims 1-36 and submitted new claims 37-63 relating to a “method for the treatment of a prostate cancer in a human comprising administering to said human a therapeutically effective amount of abiraterone acetate or a pharmaceutically acceptable salt thereof and a therapeutically effective amount of prednisone” (claim 37), a “method for the treatment of a refractory prostate cancer in a human comprising administering to said human a therapeutically effective amount of abiraterone acetate or a pharmaceutically acceptable salt thereof and a therapeutically effective amount of prednisone” (claim 48), and various dependent claims deriving from claims 37 & 48. 114. On April 8, 2010, examiner Hui issued her first rejection of claims 37-63 as being unpatentable over two pieces of prior art. Specifically, examiner Hu found that a 2004 article by A. O’Donnell on the results of clinical trials of abiraterone (2004)18 teaches (a) abiraterone acetate is a known CYP17 inhibitor which can be used to suppress testosterone level in prostate cancer patients, (b) 800 mg of abiraterone acetate is useful in suppressing the serum testosterone level, and (c) concomitant glucocorticoid therapy may be needed for continuous use of abiraterone acetate. She also found that a 1996 article by IF Tannock et al.19 “teaches 10 mg of prednisone in combination with other anti-cancer drugs as effective in treating refractory hormonal-resistant prostate cancer.” Thus, it would have been obvious to one skilled in the art to employ both abiraterone acetate and prednisone to treat prostate cancer including refractory prostate cancer, and the motivation to do so would have been present since abiraterone acetate provided a new mechanism of action in treating prostate cancer. 115. On July 8, 2010, Janssen submitted what would be its most substantive response to examiner Hui: 10 pages of counter-argument to the April 8 rejection, claiming: a. Neither O’Donnell (2004) nor Tannock (1996) discloses using abiraterone acetate and prednisone together for the treatment of prostate cancer; b. Neither O’Donnell (2004) nor Tannock (1996) provide any reason to modify their teachings to arrive at a method of treating prostate cancer with a combination of abiraterone acetate and prednisone; c. The patients in the O’Donnell (2004) study were not allowed to take concomitant steroids (and, thus O’Donnell (2004) actually teaches away from the co- administration of steroids); d. O’Donnell (2004) concludes that abiraterone acetate is potentially useful in causing reductions in testosterone levels and is thus potentially useful as a second-line treatment of patients who have become refractory to gonadotrophin-releasing hormone agonists; 18 A. O’Donnell, et al., “Hormonal Impact of the 17α-hydroxylase/C17,20-lyase Inhibitor Abiraterone Acetate (CB7630) in Patients with Prostate Cancer” (O’Donnell 2004). 19 IF Tannock, et al., “Chemotherapy with mitoxantrone plus prednisone or prednisone alone for symptomatic hormone-resistant prostate cancer” J. Clin. Oncol., 1996; 14:1756-1764 (Tannock 1996). e. There are no disclosures of prednisone in O’Donnell (2004) and no suggestion to modify its administration of abiraterone acetate to also administer prednisone; f. O’Donnell (2004) concludes that it is unknown whether or not it might be useful to administer a glucocorticoid with abiraterone acetate, and that further study is needed, thus, at most O’Donnell (2004) provides an invitation to experiment; g. Tannock (1996) discloses the results of a study concerning whether chemotherapy using mitoxantrone, along with prednisone, provides a better palliative response than prednisone (and showed no significant difference in survival rates); h. Tannock (1996) chose mitoxantrone for specific reasons and there is no suggestion of using another drug, including abiraterone acetate, especially since abiraterone acetate and mitoxantrone are two different types of drugs; and i. Neither O’Donnell (2004) nor Tannock (1996) identified a “problem” in using abiraterone acetate without prednisone or vice-versa. 116. Janssen also made an “unexpected results” argument, pointing to a newly published article by Danila et al.20 on a clinical study of patients with progressive metastatic castration-resistant prostate cancer who were administered abiraterone acetate together with prednisone. Janssen argued that the results of Danila 2010 unexpectedly showed: (a) abiraterone acetate and prednisone resulted in antitumor effects; (b) a decline in the levels of prostate- specific-antigen, demonstrating antitumor activity; (c) a potential for reversing clinical resistance to abiraterone acetate; and (d) a lowered incidence of mineralocorticoid-related toxicities. 117. On September 24, 2010, examiner Hui again rejected claims 37-63. 118. She rejected Janssen’s lack of motivation to combine argument, noting that the initial rejection “resides in the fact that both the herein agents are known to be useful in treating prostate cancer. Since abiraterone acetate provide[s] a new mechanism of action in treating prostate cancer and prednisone is known to be useful in treating refractory prostate cancer, 20 Danila et al. “Phase II Multicenter Study of Abiraterone Acetate Plus Prednisone Therapy in Patients with Docetaxel-Treated Castration-Resistant Prostate Cancer,” J. Clin. Oncol. Vol. 28, no. 9, pp. 1496-1501 (March 20, 2010) (Danila 2010). concomitant employment of both compounds into a single method useful for the very same purpose, treating prostate cancer, would be considered prima facie obvious.” 119. She rejected Janssen’s teaching away argument, noting that O’Donnell (2004) was trying to determine the effects of abiraterone acetate, and thus it would have been improper to administer another drug that has an endocrine effect, such as steroids, to the patients. 120. And she rejected Janssen’s unexpected results arguments, noting that the claimed unexpected results were not “commensurate with the scope of the subject matter recited in the claims.” 121. Janssen made no further attempts to support the claims in the ’440 application, and the PTO issued a notice of abandonment as to the ’440 application. C. 2010-2011: Janssen seeks and obtains FDA approval to sell abiraterone acetate. 122. On December 18, 2010, Janssen filed an NDA seeking FDA approval to sell tablets containing abiraterone acetate, bearing the tradename Zytiga.21 123. On April 28, 2011, the FDA approved Janssen’s NDA for the sale of Zytiga. 124. The recommended dose of Zytiga is 1000 mg (either two 500 mg film-coated tablets, or four 250 mg uncoated tablets) to be taken orally once daily, along with 5 mg of prednisone to be taken twice daily. The active ingredient in Zytiga tablets consists of non- micronized abiraterone acetate. 125. Following approval of the NDA, Janssen submitted the ’213 patent for listing in the FDA’s Orange Book as covering Zytiga. 21 The NDA was initially filed by Ortho Biotech Oncoloft Research and Development, a unit of Cougar Biotechnology, Inc. 126. In 2011, United States sales of Zytiga were $191 million; they would soon reach over $1 billion a year.22 D. 2011-2013: The PTO issues three more rejections of Janssen’s attempt to patent the obvious but extends the life of the ’213 patent by three years. 1. February 2012: The PTO rejects Janssen’s second patent attempt for a third time. 127. While awaiting FDA approval of Zytiga, Janssen was also renewing attempts to obtain a second patent. On February 24, 2011, Janssen scientists filed Patent Application No. 13/034,340 (the ’340 application), identifying it as a continuation of the ’440 application, and re- asserting the same 36 claims originally set out in the ’440 application.23 128. As she had with the earlier ’440 application, examiner Hui determined that the ’340 application actually claimed two distinct inventions and required Janssen to choose between its method claims and composition claims. And as it had in the now-abandoned ’440 application, Janssen would elect to prosecute the method claims rather than the composition claims. 129. On December 21, 2011, Janssen cancelled all 36 claims in the’340 application and proposed 20 new method claims, numbered 37-56. The new claims were directed to “[a] method for the treatment of a prostate cancer in a human comprising administering to said human a therapeutically effective amount of abiraterone acetate or a pharmaceutically acceptable salt thereof and a therapeutically effective amount of prednisone.” 22 In 2012, its first full year on the market, Zytiga’s United States sales had reached $463 million; they climbed to $750 million in 2013. Zytiga sales continued to rise: By 2014 they were $971 million, and in 2015 they exceeded $1 billion. 23 This application was a continuation of U.S. Patent Application No. 11/844,440, filed on August 24, 2007, and claimed the priority date of provisional U.S. Patent Application No. 60/921,506, filed on August 25, 2006. Both were filed by Cougar, on assignment from its scientists Auerbach and Belldegrun; Cougar, at that point, was owned by Johnson & Johnson. From here on out, the complaint will refer to the patent application as Janssen’s. 130. On February 3, 2012, examiner Hui rejected the patent in its entirety, finding the newly-proposed claims obvious in light of O’Donnell (2004) and Tannock (1996). 131. As before, examiner Hui explained that O’Donnell (2004) “teaches abiraterone acetate is known to be an inhibitor of 17ahydroxylase/C17,20-lyase, which can be used to suppress testosterone level in prostate cancer patients” and “teaches 800 mg of abiraterone acetate as useful in suppressing the serum testosterone level.” And as before, examiner Hui further noted that O’Donnell (2004) “also teaches that concomitant glucocorticoid therapy may be needed for continuous use of abiraterone acetate.” 132. While examiner Hui recognized that O’Donnell (2004) did “not expressly teach the use of [the steroid] prednisone in the method of treating prostate cancer” and did not “expressly teach the use of the herein claimed dosage and regimen for prednisone and abiraterone acetate,” she again noted that Tannock (1996) did just that: “Tannock et al. teaches 10 mg of prednisone in combination with other an[ti]-cancer drug as effective in treating refractory hormonal-resistance prostate cancer.” 133. Combining these two prior art references, examiner Hui concluded that “[i]t would have been obvious to one of ordinary skill in the art at the time the invention was made to employ both prednisone and abiraterone acetate, in the dosage herein claimed, together in a method of treating prostate cancer, including refractory prostate cancer.” Since abiraterone acetate provide a new mechanism of action in treating prostate cancer and prednisone is known to be useful in treating refractory prostate cancer, concomitant employment of both compounds into a single method useful for the very same purpose, tre[a]ting prostate cancer, would be considered prima facie obvious (See In re Kerkhoven 205 USPQ 1069 (CCPA 1980)). Treating refractory prostate cancer with abiraterone acetate would be reasonably expected to be effective since abiraterone provides a new mechanism of action against prostate cancer. O’Donnell et al. provides an additional motivation to concomitantly employ prednisone since employing replacement glucocorticoid such as prednisone would ensure the safety and effectiveness of abiraterone acetate. 134. Examiner Hui further explained that the “the optimization of result effect parameters (e.g., dosage range, dosing regimens) is obvious as being within the skill of the artisan. The optimization of known effective amounts of known active agents to be administered is considered well in the competence level of an ordinary skilled artisan in pharmaceutical science, involving merely routine skill in the art.”24 2. September 2012: The PTO issues its fourth rejection of Janssen’s patent application, over obviousness, unexpected results, and commercial success arguments. 135. Approximately five months after receiving the PTO’s third rejection, Janssen responded on July 3, 2012, acknowledging the two prior art references, but arguing that O’Donnell (2004) and Tannock (1996) only “suggest that the combination of abiraterone acetate and prednisone would be obvious to try.” According to Janssen, “[n]othing in the art teaches or suggests that abiraterone acetate in combination with prednisone would be a particularly useful combination for cancer treatment.” In so arguing, Janssen urged an incorrect interpretation of the obviousness case law. 136. Janssen went further, also asserting that two secondary considerations of non- obviousness enabled it to traverse the examiner’s prima facie obviousness rejection: unexpected results and commercial success. 24 In addition to her obviousness rejection, the examiner provisionally rejected claims 37-56 of the ’340 Application for non-statutory double patenting based on Janssen’s co-pending Patent Application No. 12/898,149 (the ’149 application). In plain English, the ’340 was duplicative of another Janssen patent application. Because the PTO had not yet issued a patent based on the ’149 application at the time of the examiner’s rejection, the examiner clarified that her double patenting rejection was only provisional: it would only take effect if the PTO issued a patent based on the ’149 application. Janssen informed examiner Hui on July 3, 2012 that it had abandoned the ’149 application. 137. First, Janssen contended that “the claimed invention produces unexpected results.” To support this argument, Janssen referenced a 2011 study published in Nature Reviews Clinical Oncology that found that Janssen’s claimed invention successfully lowered the pain associated with abiraterone treatment and reduced a certain type of tumor cell. Janssen urged that “the claimed invention produces the unexpected results of increased survival, reduced pain, and lower levels of a biomarker connected with survival.” 138. Second, Janssen claimed that its “invention has experienced an impressive commercial success.” Contending that Zytiga is a commercial embodiment of the claimed invention approved for sale in the U.S. in April 2011, Janssen emphasized that “[w]ithin the first year of release, worldwide sales were over $400 million.” Thus, according to Janssen, “not only did the claimed invention enjoy immediate commercial success, this commercial success grew over the first year of commercial availability.” 139. On September 11, 2012, in a final office action, examiner Hui issued a final office action, rejecting both of Janssen’s arguments on secondary consideration. 140. She found Janssen’s unexpected results to be “unpersuasive”: “Because abiraterone and prednisone are known to be individually effective in treating prostate cancer,” their “additive effective is expected.” 141. Janssen’s commercial success contentions fared no better. Examiner Hui noted that “gross sales figures do not show commercial success absent evidence as to market share, or as to the time period during which the product was sold, or as to what sales would normally be expected in the market.” And “[i]n the instant case, . . . no evidence of commercial success was provided.” 3. March 2013: The PTO issues its fifth rejection. 142. Janssen tried again, requesting on January 11, 2013 that the examiner reconsider her final action and citing a new reference—an article published in the New England Journal of Medicine—in support of its unexpected results argument. Janssen made no new arguments regarding Zytiga’s commercial success. 143. But again, examiner Hui found Janssen’s argument unpersuasive. On March 4, 2013, she issued another final rejection, expressly rejecting all of Janssen’s arguments as they pertained to claimed “unexpected results.” Examiner Hui again noted that as “abiraterone and prednisone are known to be individually effective in treating prostate cancer,” an “at least additive effective is expected.” 144. By this point, the writing was indelibly etched into the wall. Scientists were well aware, long before the ’438 patent’s 2006 priority date that androgen hormones such as testosterone promote prostate cancer growth and therapies aimed at suppressing androgen production were a mainstay of prostate cancer treatment. “First line” treatments such as surgical or chemical castration could eliminate most androgen production, but residual androgen produced by adrenal glands could eventually support cancer growth. By the 1990s, researchers knew that CYP17 inhibitors, such as abiraterone and ketoconazole, effectively suppressed both testicular and adrenal androgen production. And abiraterone was recognized as being especially selective and potent. Scientists also recognized that since CYP17 inhibitors suppressed synthesis of beneficial adrenal hormones, concomitant administration of a replacement glucocorticoid was likely necessary. And synthetic glucocorticoids such as prednisone had been used for palliative effects in treating refractory prostate cancer since the 1950s, and a 1998 study showed other anti- prostate cancer activity associated with prednisone. Janssen could dispute none of this. 4. September 2013: The PTO grants a patent term extension on the ’213 blocking patent, following representations from BTG that the ’213 patent claims the only active ingredient in Zytiga. 145. In the meantime, Janssen’s partner worked to prolong the protection of the ’213 patent. The ’213 patent was set to expire on February 18, 2014. On June 22, 2011, BTG filed an application for a patent term extension on the ’213 patent. A patent term extension is intended to compensate a patent applicant for delays occurring during the prosecution of the patent before the PTO. Such an application must be filed within 60 days of the regulatory approval of the product, and at least one claim of the patent must cover the product or a method of using the product. 146. In its application for a patent term extension, BTG noted that the FDA “has approved New Drug Application (“NDA”) No. 202379 for ZYTIGA (abiraterone acetate). The active ingredient of ZYTIGA is abiraterone acetate.” BTG also represented that the ’213 patent “claims the active ingredient of the approved product which is abiraterone acetate.” 147. On September 25, 2013, examiner Bottino (the examiner who handled the original application for the ’213 patent) granted a patent term extension for the ’213 patent. The PTO determined, based on the representations made by BTG, that since the claims of the ’213 patent “cover the human drug product ZYTIGA (abiraterone acetate),” an extension of 1,029 days was warranted. The expiration of the ’213 blocking patent was set at December 13, 2016, granting BTG, and its licensee Janssen, an additional 1,029 days – nearly three years – of patent life. E. September 2014: Janssen’s sixth time is the charm, patenting the obvious based on a commercial success argument. 148. Rather than accept the examiner’s repeated rejections, Janssen revived its failed commercial success argument. On June 4, 2013, Janssen submitted a new response, re-asserting Zytiga’s commercial success as grounds for patentability. 149. This time, Janssen provided the FDA-approved label for Ztyiga, along with a December 2012 FDA News Release noting that the agency had decided to expand Zytiga’s use for late-stage prostate cancer. Additionally, Janssen submitted two news releases from the FDA (dated June 17, 2010 and August 31, 2012) and a Janssen slideshow, dated May 2013. 150. Janssen claimed that these references showed that Zytiga was a market leader with both chemo-refractory prostate cancer patients (patients who have previously received chemotherapy treatment) and chemo-naive prostate cancer patients (patients who have not previously received chemotherapy treatment). Janssen emphasized Zytiga’s success over two other cancer treatments: Jevtana, which the FDA approved a year before Zytiga, and Xtandi, which the FDA approved a year-and-a-half after Zytiga. 151. At no time during the patent prosecution did Janssen inform examiner Hui that the ’213 blocking patent prevented any other company from even trying to bring an abiraterone acetate product to the market. Janssen never called examiner Hui’s attention to the fact that such a “blocking patent” existed. Janssen intentionally and deliberately refrained from mentioning the ’213 blocking patent when pressing its commercial success argument because it knew that the existence of such a blocking patent would render its purported evidence of commercial success to be of minimal, if any, probative value. 152. Based on Janssen’s new arguments and the limited evidence Janssen put before her, examiner Hui reversed course and issued a notice of allowance to Janssen on July 3, 2013. In support of this allowance, the examiner provided a single justification: “The unexpected commercial success of the launch of the drug obviates the rejection under 35 U.S.C. § 103(a).” 153. As issued, claim 1 of the ’438 patent recites: A method for the treatment of a prostate cancer in a human comprising administering to said human a therapeutically effective amount of abiraterone acetate or a pharmaceutically acceptable salt thereof and a therapeutically effective amount of prednisone. 154. After receiving the notice of allowance, Janssen began papering the file with dozens of additional references. On October 3, 2013, Janssen disclosed 25 prior art references, all of which were “Other Prior Art – Non Patent Literature Documents.” On October 25, 2013, the examiner maintained her allowance for “the same reasons of allowance as previous[ly] communicated in the previous notice of allowance.” 155. On January 10, 2014, Janssen disclosed twelve more references in a second information disclosure statement, again putting them all in the “Other Prior Art – Non Patent Literature Documents” category. On February 11, 2014, the examiner accepted them without comment and maintained her allowance because “[t]he commercial success of the combination of prednisone and abiraterone to treat prostate cancer obviate the rejection under 35 USC 103(a).” 156. On May 9, 2014, Janssen submitted a third information disclosure statement containing 29 more references. As before, most (twenty-six) of these references were non-patent literature documents, although this submission also contained three patent-related documents. One was an abandoned United States patent application (20060030608) for anti-aromatase compounds and two were foreign patent references (EP2478907, the European counterpart to the ’340 application and WO2006027266, relating to site and time controlled release mechanisms). These three references would be the only ones cited in the’438 patent. 157. In addition to these references, Janssen disclosed “the existence of commonly owned pending U.S. Patent Application Serial Nos. 11/844,440.” Janssen notified the examiner that the ’440 application had been “published and is therefore publicly available in PAIR. Moreover, the Patent Office has issued one or more Office Actions in this application.” Janssen “invited” the examiner “to review the prosecution of this application to determine its impact, if any, on the prosecution of the present application.” However, although Janssen had already submitted over 50 new references, post-allowance, to the PTO, Janssen did not submit a copy of the ’440 application, claiming that it did not want to “overwhelm the Examiner with an overly large IDS.” Janssen also did not mention that the ’440 application had been declared abandoned more than three years earlier, on April 14, 2011. 158. On May 30, 2014, Janssen submitted a fourth information disclosure statement containing eight new references. Again, Janssen made no mention of the ’213 blocking patent. 159. On June 2, 2014, the examiner again affirmed her allowance. And again, the sole reason given was “[t]he commercial success of the combination of prednisone and abiraterone to treat prostate cancer obviate the rejection under 35 USC 103(a).” 160. On June 16, 2014, Janssen made its final submission, along with eight more non- patent references. Still absent from the references supplied to the PTO was the ’213 blocking patent. On August 13, 2014, the PTO issued notice of a projected patent number and issue date. 161. On September 2, 2014, the ’340 application issued as U.S. Patent No. 8,822,438 (the ’438 patent), claiming “methods for treating cancer” comprising “administ[ration of] a 17c- hydroxylase/Czo-lyase inhibitor, such as abiraterone acetate, in combination with at least one additional therapeutic agents such as an anti-cancer agent or a steroid.” The twenty approved claims all specify use of abiraterone acetate and prednisone. 162. The ’213 blocking patent was not cited to the PTO during the prosecution of the ’438 patent, and it does not appear in the References Cited portion of the ’438 patent. 163. Subsequent to the issuance of the ’438 patent, there was a proceeding to correct inventorship in which Dr. Johann S. de Bono was added as an inventor to the ’438 patent. BTG is the owner of Dr. de Bono’s inventions and thus asserts co-ownership of the ’438 patent along with Janssen. F. 2015: Generic competitors line up to compete with Zytiga, Janssen and BTG pursue litigations they cannot win to prevent competition, and generic manufacturers challenge the ’438 patent at the PTAB. 1. April – July 2015: Generic competitors line up to compete with Zytiga and Janssen and BTG sue them. 164. On April 28, 2015, the first day on which ANDAs could be filed, multiple generic companies submitted ANDAs seeking FDA approval to launch generic Zytiga. Based on publicly-available FDA approval letters, at least five generic companies filed on this date; other estimates indicate that at least ten generics did so. 165. These generic ANDA filers promptly provided notice to Janssen of their ANDA filings and the certifications contained therein: Generic company Notice letter date P.IV on ’213 patent? P.IV on ’438 patent? Actavis June 22, 2015 Yes25 Yes Amneal July 10, 2015 No Yes Apotex July 7, 2015 No Yes Citron June 25, 2015 No Yes Dr. Reddy’s July 9, 2015 No Yes Mylan July 9, 2015 No Yes Par June 26, 2015 No Yes Sun June 25, 2015 No Yes Teva July 7, 2015 No Yes Hikma/West Ward June 24, 2015 No Yes Wockhardt June 24, 2015 No Yes 25 Actavis, the only ANDA filer who submitted a P.IV certification on the ’213 blocking patent, subsequently changed that to a P.III certification and stipulated with Janssen that it would not seek to sell generic Zytiga prior to the patent’s expiration on December 13, 2016. 166. On July 31, 2015, Janssen and BTG filed a single lawsuit against eleven generic companies in the District of New Jersey. The case was assigned to Judge Kevin McNulty. The filing of this lawsuit triggered the Hatch-Waxman 30-month stay as to the approval of each of their Zytiga ANDAs, a stay that would be extended a year to October 27, 2018 because of Zytiga’s NCE exclusivity.26 167. Of the eleven different generic companies named by Janssen in a single lawsuit, only one of them, Actavis, had submitted a P.IV certification as to the ’213 blocking patent. That is, ten of the eleven defendants made clear that they did not intend to sell generic abiraterone acetate until at least December 13, 2016, when the ’213 blocking patent expired. As to those ten generic defendants, the only patent that could give Janssen the protection afforded by the 30- month stay was the ’438 patent. 168. Consequently, after the ’213 patent expired, the 30-month stay remained in effect only because of Janssen’s strategic and unlawful decision to continue prosecuting its case as to the ’438 patent (which Janssen knew to be invalid). 169. Janssen’s decision to lump all of the generic ANDA filers in a single lawsuit asserting both the ’213 and ’438 patent does not change the sham nature of the claims it initially asserted against the ten generic manufacturers who had not served P.IV certifications as to the ’213 patent. Nor does it insulate the sham nature of the claims it later maintained against all eleven generic manufacturers after the expiration of the ’213 patent. 26 Due to the NCE exclusivity provisions discussed above, the “30-month stay” as to the ’438 patent actually lasted until October 27, 2018. 2. December 2015: Generic companies ask the PTAB to assess the validity of the ’438 patent. 170. On December 4, 2015, Amerigen Pharmaceuticals Limited (Amerigen) filed a petition for inter partes review of the ’438 patent with the PTAB. Amerigen requested cancellation of all 20 claims of the ’438 patent, arguing that (a) claims 1-20 were obvious over O’Donnell (2004) in view of a 1990 article by G.S. Gerber and G.W. Chodak,27 and (b) claims 1- 4 and 6-11 were obvious over the ’213 patent in view of Gerber (1990). 171. Amerigen began by pointing out the strong evidence that the claimed invention of the ’438 patent was, as the PTO held, obvious. As Amerigen noted, the prior art taught the use of abiraterone acetate as an effective anti-cancer agent which suppresses testosterone synthesis in prostate cancer patients. And while it was known that suppressing testosterone synthesis was beneficial to treating prostate cancer, it was also known that using a CYP17 inhibitor to reduce testosterone synthesis also undesirably suppressed the production of cortisol, a glucocorticoid. So, the prior art also taught that concomitant glucocorticoid replacement therapy might be necessary when administering abiraterone acetate (as was common practice when administering ketoconazole, another CYP17 inhibitor). The prior art also taught that abiraterone acetate was a more effective CYP17 inhibitor than ketoconazole. Finally, the prior art taught that the combination of ketoconazole and prednisone was a safe and effective treatment for refractory metastatic prostate cancer. 27 Gerber, G.S. & Chodak, G.W., Prostate specific antigen for assessing response to ketoconazole and prednisone in patients with hormone refractory metastatic prostate cancer, 144 J. Urol. 1177-79 (1990) (Gerber 1990). 172. Amerigen noted that based on the teachings of prior publications including the ’213 blocking patent, a POSA would have combined abiraterone acetate and prednisone with a reasonable expectation of success. 173. Amerigen went on to explain why “secondary considerations” were insufficient to overcome that finding. In particular, Amerigen pointed out that evidence of secondary considerations, such as commercial success, is only relevant if the patentee can show a direct link, or “nexus,” between the secondary consideration and the claims of the patent. But any commercial success of Zytiga was due to the effectiveness of abiraterone acetate in treating prostate cancer, not the subject matter of the ’438 patent (i.e., the combination of abiraterone acetate and prednisone). 174. Amerigen noted that Janssen had presented zero evidence to the PTO suggesting that it was the claimed invention, rather than abiraterone acetate itself, that was responsible for any commercial success. “Instead, [Janssen] mislead the Examiner by arguing that because Zytiga is approved in combination with prednisone, Zytiga is a commercial embodiment of the claimed invention.” 175. Amerigen pointed to Janssen’s failure to provide any evidence of unexpected results or to any showing that the claimed invention satisfied any long-felt but unmet need. 176. Finally, Amerigen pointed out that both abiraterone acetate and its use for the treatment of cancer are claimed in the ’213 patent and the existence of this “blocking patent” acted to limit the ability of any would-be competitors to develop a competing product. G. 2016: The PTAB accepts Amerigen’s petition (making its first determination that the claims of the ’438 patent were likely too obvious to be patented), more generics file petitions for inter partes review, and the ’213 patent expires. 1. Early summer 2016: Ten more generics file petitions for inter partes review to invalidate the ’438 patent as the PTAB initiates a formal review. 177. On May 31, 2016, the PTAB granted Amerigen’s petition and instituted a formal proceeding to examine the ’438 patent. The PTAB grants petitions for inter partes review only where the challenger of the patent shows “a reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged in the petition.”28 178. In so doing, the PTAB adopted Janssen’s lexicography and interpreted certain claims terms: Claim term(s) PTAB construction “treat,” “treating,” and “treatment” include the eradication, removal, modification, management or control of a tumor or primary, regional, or metastatic cancer cells or tissue and the minimization or delay of the spread of cancer “anti-cancer agent” any therapeutic agent that directly or indirectly kills cancer cells or directly or indirectly prohibits, stops or reduces the proliferation of cancer cells “refractory cancer” cancer that is not responding to an anticancer treatment or cancer that is not responding sufficiently to an anti-cancer treatment 179. In finding a reasonable likelihood that Amerigen would prevail on obviousness, the PTAB noted that O’Donnell (2004) suggests the co-administration of a glucocorticoid (such as prednisone), Gerber (1990) discloses co-administration of prednisone with ketoconazole, and ketoconazole and abiraterone acetate were both known CYP17 inhibitors. Likewise, the PTAB noted that the ’213 patent (sometimes referred to in the PTAB proceedings as Barrie (2004)) 28 35 U.S.C. § 314(a). discloses the use of abiraterone acetate for treating prostate cancer and contrasts that with the performance of ketoconazole. 180. On June 29, 2016, Argentum sought inter partes review of the ’438 patent. Concurrently with its petition, Argentum filed a motion seeking to join its case with the one filed by Amerigen.29 The Amerigen and Argentum petitions were eventually consolidated. 181. On June 30, 2016, Mylan sought inter partes review of the ’438 patent, raising many of the same points that had been made by Amerigen, and seeking cancellation on the same grounds (obviousness over O’Donnell (2004) in view of Gerber (1990) and obviousness over the ’213 patent in view of Gerber (1990)). Shortly thereafter, a group of petitioners including Actavis, Amneal, Dr. Reddy’s, Sun, Teva, West-Ward, and Hikma filed a petition on the same grounds, and sought joinder with the Mylan IPR. A few months later, Wockhardt filed an inter partes review petition also challenging the ’438 patent. 182. All of these petitions raised the same basic arguments that had been raised in the Amerigen petition. And all would be accepted by the PTAB. 2. August 2016: Actavis changes its P.IV certification on the ’213 blocking patent to a P.III certification, and any semblance of legitimacy to Janssen’s litigation disappears. 183. On August 30, 2016, Actavis, Janssen, and BTG filed a joint stipulation indicating that Actavis had changed its P.IV certification on the ’213 blocking patent to a P.III certification. In so doing, Actavis certified to the FDA that it would not be seeking to sell its generic abiraterone acetate product prior to the December 13, 2016 expiration of the ’213 blocking 29 On September 19, 2016, the PTAB accepted Argentum’s petition and granted the motion to join the proceeding with the Amerigen action. 184. In light of the P.III certification, Actavis, Janssen and BTG all agreed “that a case or controversy no longer exists between them with respect to the ’213 patent” and “all claims, counterclaims, and affirmative defenses relating to the ’213 patent are dismissed, without prejudice, for lack of subject matter jurisdiction.” 185. From this point forward, Janssen and BTG’s prosecution of the litigation was solely based on its assertion of the ’438 patent which, they both knew, was invalid. 3. Late 2016: Judge McNulty issues his Markman decision, adopting Janssen’s narrow definition of “treatment” and “treating” and the ’213 patent expires. 186. By late 2016, the parties in patent litigation over the ’438 patent had proceeded to the claim construction phase, wherein the court construes any disputed terms. 187. In a Markman decision entered November 10, 2016, Judge McNulty construed the terms “treated” and “treating,” interpreting them as follows: Claim term(s) Judge McNulty construction “treating” and “treatment” the eradication, removal, modification, management or control of a tumor or primary, regional, or metastatic cancer cells or tissue and the minimization or delay of the spread of cancer 188. This was narrower than the PTAB construction of the same terms; the PTAB definition began with the word “include” and thus did not limit the definition to the listed items. 189. On December 13, 2016, the ’213 blocking patent expired. H. 2017: The PTAB grants additional petitions for inter partes review, Janssen and BTG continue their baseless litigations, and generic companies clear regulatory hurdles. 190. In 2017, movement continued on various fronts. The PTAB accepted for inter partes review two more petitions challenging all of the claims of the ‘438 patent. In the meantime, Janssen and BTG continued to pursue litigation against multiple generic manufacturers on the grounds that they were infringing the ’438 patent. And the FDA began to grant tentative approval to several potential generic competitors. 191. On January 10, 2017, the PTAB determined that Mylan’s petition warranted institution of inter partes review of claims 1-20 of the ’438 patent. The PTAB did not join Mylan’s petition with the Amerigen/Argentum proceeding already underway. 192. On April 12, 2017, the PTAB accepted the petition filed by Actavis and others, joining it with the pending Mylan petition. 193. On the litigation front, Janssen and BTG filed an amended complaint on January 30, 2017. The amended complaint reasserted claims relating to the ’213 blocking patent; this despite the facts that (a) the ’213 blocking patent had expired more than a month earlier and (b) Janssen and BTG had agreed almost a year earlier in a stipulation with Actavis that there was no case or controversy as to the ’213 blocking patent. 194. Later in the year, on August 25, 2017, Janssen and BTG filed suit against Teva, asserting infringement of the ’438 patent in connection with Teva’s submission of an ANDA seeking approval to launch a generic version of 500 mg tablets of abiraterone acetate. This case was subsequently consolidated into the pending action before Judge McNulty. 195. By shortly thereafter, in October 2017, at least two generics received tentative approvals from the FDA for their abiraterone acetate ANDAs. Absent the litigation filed by Janssen and BTG, these tentative approvals would have been final approvals. 196. On October 18, 2017, the FDA granted tentative approval to Wockhardt for its abiraterone acetate ANDA, No. 208380. 197. On October 27, 2017, the FDA granted tentative approval to Amneal for its abiraterone acetate ANDA, No. 208327. 198. Both tentative approval letters noted the existence of the Orange Book-listed ’438 patent, and the litigation that had been filed by Janssen and BTG, noting that final approval could not be granted until: 1. a the expiration of the 7.5-year time period provided for in sections 505(j)(5)(B)(iii) and 505(j)(5)(F)(ii) of the FD&C Act, b. the date the court decides that the ‘438 patent is invalid or not infringed (see section 505(j)(5)(B)(iii)(I), (II), and (III) of the FD&C Act), or c. the ’438 patents [sic] has expired, and 2. The Agency is assured that there is no new information that would affect whether final approval should be granted. 199. The FDA’s letters make clear that both Wockhardt and Amneal were prevented from receiving final approval in October 2017 due to the litigation that Janssen and BTG had filed and were continuing to pursue concerning the ’438 patent. I. Early 2018: The PTAB issues three decisions, each finding the ’438 patent invalid as obvious. 1. January 17, 2018: The PTAB issues its first decision finding the claims of the ’438 patent unpatentable. 200. On January 17, 2018, the PTAB issued two final written decisions, one in the Amerigen/Argentum matter and one in the Mylan matter, both concluding that all claims of the ’438 patent were invalid. The PTAB’s reasoning in these two decisions was substantially similar. 201. The PTAB noted Judge McNulty’s claim construction decision, but elected to continue with its initial interpretation of the key claims terms (including the broader definition of “treat”), to which Janssen did not object: Claim term(s) PTAB Construction “treat,” “treating,” and “treatment” Include the eradication, removal, modification, management or control of a tumor or primary, regional, or metastatic cancer cells or tissue and the minimization or delay of the spread of cancer “anti-cancer agent” Any therapeutic agent that directly or indirectly kills cancer cells or directly or indirectly prohibits, stops or reduces the proliferation of cancer cells “refractory cancer” Cancer that is not responding to an anti-cancer treatment or cancer that is not responding sufficiently to an anti-cancer treatment “therapeutically effective amount of prednisone” An amount of prednisone effective for treating prostate cancer. 202. Turning to the substance of the parties’ arguments, the PTAB rejected Janssen’s argument that POSAs considered the prior art teachings about ketoconazole to be irrelevant to abiraterone, along with Janssen’s related suggestion that POSAs were unmotivated to combine abiraterone with a glucocorticoid. Noting that the ’438 specification described administering abiraterone with “at least one additional therapeutic agent, such as an anti-cancer agent or a steroid,” the PTAB concluded that a POSA would have reasonably expected success in using prednisone. The specification’s defining prednisone as both an “anti-cancer agent” and a “steroid” demonstrated that prednisone was expected to have therapeutic effects even apart from anti-cancer effects. 203. The PTAB began by addressing the generic manufacturers’ argument that it was obvious to use a glucocorticoid, such as prednisone, to reduce the undesirable effects of administering a CYP17 inhibitor to reduce testosterone synthesis, including the suppressed production of cortisol, a glucocorticoid, which lead to increased ACTH production. 204. In support, the generic manufacturers cited O’Donnell (2004), which taught, inter alia, that abiraterone acetate was more effective than ketoconazole in suppressing testosterone levels, and Gerber (1990), which taught, inter alia, that the combination of ketoconazole and prednisone is safe and effective in treating humans with hormone-refractory advanced prostate cancer. The generic manufacturers also cited Barrie (2004) – the ’213 blocking patent – which, like O’Donnell (2004), taught, inter alia, that abiraterone acetate is more effective than ketoconazole in suppressing testosterone levels in mammals in vitro. In light of O’Donnell (2004)/Gerber (1990) and Barrie (2004)/Gerber (1990), it would have been obvious to one skilled in the art to combine abiraterone acetate and prednisone with a reasonable expectation of success. 205. As had examiner Hui at the PTO, the PTAB rejected each of Janssen’s responsive arguments on obviousness. 206. First, the PTAB rejected Janssen’s argument that because abiraterone acetate and ketoconazole have different effects on steroid biosynthesis and different side effects, one skilled in the art would not have used the example of ketoconazole’s clinical use to take investigative steps with abiraterone acetate. The PTAB, while acknowledging differences in the specific mechanism by which abiraterone acetate and ketoconazole functioned, concluded that “one of ordinary skill in the art would look to the administration of ketoconazole for guidance on how to administer abiraterone acetate.” 207. Second, the PTAB rejected Janssen’s argument that O’Donnell (2004) did not establish a need for glucocorticoid replacement with abiraterone acetate, agreeing with the generic manufacturers’ “plain reading of O’Donnell (2004) as indicating further investigation of the necessity of co-administration of a glucocorticoid with abiraterone acetate.” 208. Third, the PTAB rejected Janssen’s argument that ketoconazole plus prednisone was not known to be “safe and effective” for prostate cancer in 2006, noting that Gerber (1990) was a peer-reviewed article published in a reputable journal and O’Donnell (2004) corroborates that the clinical use of ketoconazole is “common practice.” 209. Fourth, the PTAB rejected Janssen’s argument that prednisone’s side effects would have dissuaded a person from using it without a clear clinical benefit, pointing out that while glucocorticoids have certain risks, they did not outweigh the positive effects in seriously ill patients with limited life expectancy. 210. Fifth, the PTAB rejected Janssen’s argument that in 2006, prednisone was not known to have anti-cancer effects. Construing the term “therapeutically effective amount of prednisone” as “an amount of prednisone effective for treating prostate cancer” and recognizing that “treating” can include a number of actions, the PTAB concluded that prior art provides a reasonable expectation that prednisone could be used as a therapeutic agent in the treatment of prostate cancer.30 211. Sixth, the PTAB rejected Janssen’s argument that the prior art provided no basis to expect that prednisone would provide anti-prostate cancer effects, for the same basic reasons it rejected Janssen’s fifth argument. 212. Seventh, the PTAB rejected Janssen’s contention that the generic manufacturers were relying on hindsight, noting that prior research did focus on use of a CYP17 inhibitor with glucocorticoids to treat prostate cancer. 30 This claim construction was broader than the construction adopted by Judge McNulty in his 2016 Markman opinion. However, any difference in construction is immaterial to the obviousness analysis. In his final opinion, Judge McNulty noted studies finding glucocorticoids alone may have antitumor effects, and also found the palliative effects of prednisone would have provided some of the motivation to combine it with abiraterone acetate. 213. Eighth, the PTAB rejected Janssen’s argument that there was no motivation to combine abiraterone acetate with prednisone, finding that none of the prior art taught away from, and instead encouraged, doing exactly that. 214. Next, the PTAB addressed the secondary considerations that Janssen posited to overcome the clear obviousness, specifically rejecting all four, including the alleged “commercial success” argument that Janssen had used to dupe examiner Hui. 215. The PTAB found no unexpected results, determining there was insufficient evidence of the allegedly unexpected results and noting that in any event, Janssen failed to tie those results to the administration or abiraterone acetate and prednisone. 216. The PTAB rejected the “skepticism and failure of others” argument noting, among other things, that Janssen’s arguments were all directed solely to abiraterone acetate (not the combination of abiraterone acetate and prednisone). And the PTAB noted that abiraterone acetate itself had been previously patented, demonstrating that at least some had overcome any skepticism. 217. The PTAB found that any “long felt need” was, at best, neutral. Of course, any drug that improves cancer patient survival rates will nearly always satisfy a need. But abiraterone acetate’s availability for nearly a decade before the issuance of the ’438 patent undermined Janssen’s argument. 218. Finally, the PTAB turned to the “commercial success” argument – i.e., the specific basis upon which Janssen had first obtained the ’438 patent. 219. The PTAB began by noting there was no dispute that Zytiga is commercially successful in term of dollar sales, although it stressed that abiraterone acetate was previously known and patented before the ’438 patent issued. The PTAB was persuaded by the generic manufacturers’ “argument that the blocking patent would have deterred others from exploring the commercial potential of abiraterone acetate, and thus, that blocking patent to abiraterone acetate limits the applicability of other evidence of commercial success.” 220. The PTAB also credited the generic manufacturers’ argument that there was no nexus between the commercial success of Zytiga and the claimed invention of the ’438 patent, as the record, including Janssen’s own prescribing literature, demonstrated that Zytiga’s anti-cancer effects come from abiraterone acetate. 2. January 17, 2018: The PTAB issues its second decision finding the claims of the ’438 patent unpatentable. 221. On the same day that it issued its decision in the Amerigen and Mylan proceedings, the PTAB issued a final written decision in the Wockhardt proceeding. The Wockhardt decision addressed obviousness over the combination of Gerber (1990), O’Donnell (2004) and Sartor (1998), a different combination of prior art than Amerigen and Mylan had relied upon. 222. The PTAB once again found the claims of the ’438 patent invalid as obvious. In addition to the O’Donnell (2004) and Gerber (1990) references that the PTAB relied on in the Amerigen/Mylan decision, the PTAB highlighted the Sartor (1998) reference as another, independent basis, for concluding that the claims of the ’438 patent were obvious. Sartor (1998), recognized by the PTAB as a peer-reviewed article published in a reputable journal, disclosed that the administration of prednisone alone demonstrated some degree of success in a group of patients, and indicated some measure of efficacy for certain mCRPC patients. 223. As with the Amerigen and Mylan petitions, the PTAB rejected Janssen’s non- obviousness arguments as weak and unsupported. In so doing, it reiterated that both abiraterone and prednisone were known in the prior art and that Janssen’s assertion that the combination of the two drove Zytiga’s sales failed to demonstrate a nexus between commercial success and the claimed invention. 224. On February 16, 2018, Janssen filed a request for rehearing on the petitions. J. Mid 2018: Following a nine-day trial, Judge McNulty finds clear and convincing evidence that the ’438 patent is invalid. 225. Apotex was the only generic manufacturer named in the Janssen/BTG litigation that had not filed, or joined, any of the PTAB petitions. As such, Apotex possessed something no other generic did at the time: the unquestioned ability to challenge the validity of the ’438 patent at the upcoming trial in the district court. 226. Apotex’s unique status came from 35 U.S.C. § 315(e)(2), an estoppel provision providing that a party who seeks review of a patent claim before the PTAB that leads to a written decision from the PTAB may not pursue an invalidity argument in the district court on the same grounds that it had presented to the PTAB. 227. It is an open question as to whether this provision prevents successful PTAB petitioners (such as the non-Apotex generics here) from pursuing an invalidity defense in the district court. But since Apotex had not filed or joined any of the petitions decided by the PTAB, there was no question that Apotex was free to pursue any and all invalidity defenses in the district court. 228. Desperate to avoid a judicial decision invalidating the ’438 patent, on top of the three PTAB decisions invalidating it, Janssen and BTG settled with Apotex on April 20, 2018, entering into a license agreement for the ’438 patent and dismissing Apotex from the action. 229. With Apotex dismissed, Janssen and BTG filed a motion in limine based on the language of § 315(e)(2) seeking to prevent the generic defendants from raising at trial the very invalidity defenses on which they had prevailed at the PTAB. Janssen and BTG argued that Judge McNulty must ignore the invalidity determinations of the PTAB and enforce the ’438 patent without any examination of its merits. 230. Saving the ’438 patent was not the goal. Janssen and BTG were simply trying to further delay generic competition, which they could do so long as they avoided a determination on the merits – and another repudiation of the ’438 patent. 231. On July 23, 2018, Judge McNulty commenced what would be a nine-day trial, concluding on August 2, 2018. Between August 31, 2018 and September 21, 2018, the parties submitted their post-trial briefings. 232. On October 26, 2018, Judge McNulty issued his opinion, finding, inter alia, that the generic defendants had met their burden of proving, by clear and convincing evidence, that the ’438 patent is invalid on obviousness grounds. 233. Judge McNulty began his analysis by dispensing with Janssen’s argument that the district court lacked subject matter jurisdiction to decide invalidity. While noting that the literal language of 35 U.S.C. § 315(e)(2) could be read in the manner proposed by Janssen, he concluded that doing so would fly in the face of the statute’s intent, which is “to prevent parties from using multiple, possibly inconsistent and wasteful means of attacking a patent.” Judge McNulty refused to “accept, however, that Congress intended to require a party to stand mute in court because it previously prevailed on the same issue before the PTAB. The result would be a decision reached without consideration of legally relevant facts and issues.” 234. Judge McNulty pointed out the perverse result that Janssen’s argument could lead to: “this Court could find itself in the position of being required to enter an injunction against infringement based on a patent already found invalid.” 235. As for obviousness, Judge McNulty found, just as examiner Hui and the PTAB had, that the combination therapy claimed in the ’438 patent would have been obvious to a POSA. He noted that abiraterone had been identified in the prior art as a second-line prostate cancer treatment that was regarded as superior to ketoconazole, and that there was more than sufficient motivation to combine abiraterone acetate with prednisone. In fact, the prior art went so far as to identify specific dosages of prednisone (between 10 and 20 mg) to use. 236. The secondary considerations raised by Janssen and BTG did not alter his conclusion on obviousness. Chief among the reasons for this was the fact of the ’213 blocking patent. Just like the PTAB had concluded the existence of the ’213 blocking patent cast serious doubt on Janssen and BTG’s claims of commercial success (and examiner Hui would have reached the same conclusion if she had been informed of the ’213 blocking patent), Judge McNulty noted that the sales of Zytiga may not be entirely attributable to the combination therapy claimed in the ’438 patent.31 237. In his accompanying order, Judge McNulty noted that the 30-month stay (as extended by the NCE exclusivity provision) was set to expire on Sunday, October 28, 2018. Based on his preliminary assessment that the case presented a potentially appealable issue relating to the PTAB estoppel issue, Judge McNulty entered an order for expedited briefing on the appropriateness of a stay pending appeal. He also found that a “very brief” temporary stay to maintain the status quo through October 30, 2018 was warranted and prevented any generic from launching prior to October 31, 2018. 31 Judge McNulty also assessed the parties’ infringement contentions, finding that if the patent had been valid, the generic products would have infringed it. K. Late 2018 and early 2019: After losing at the district court, Janssen and BTG continue trying to delay generic competition, the courts rebuff them at every turn, and generic competition for Zytiga finally begins. 238. Following Judge McNulty’s ruling on invalidity, Janssen used every procedural move it could think of to try and delay generic entry. All, however, proved unsuccessful as both the Federal Circuit and Supreme Court quickly disposed of Janssen’s emergency motions for a 239. On October 30, 2018, Judge McNulty heard argument on Janssen’s motion and briefly extended his temporary injunction until the earlier of November 9, 2018 or the Federal Circuit’s ruling on Janssen’s request for an injunction pending appeal. 240. On October 31, 2018, the very first day after the 30-month stay expired, the FDA granted final approval to at least four generic manufacturers’ abiraterone acetate ANDAs – Apotex, Hikma, Mylan, and Teva. At that point, they remained blocked from launching only by the temporary injunction. 241. On November 1, 2018, Janssen and BTG filed an emergency motion before the Federal Circuit, seeking an injunction pending appeal, arguing that the “most fundamental[]” error committed by Judge McNulty was his decision to actually examine the validity of the ’438 patent. (Of course, the entire PTAB estoppel issue was nothing but another delay tactic. Even if Janssen were to ultimately prevail on that procedural point, it would not be a ‘merits based’ victory. Instead, it would simply serve to prolong the inevitable – the Federal Circuit’s confirmation that the ’438 patent is invalid for obviousness.) 242. On November 20, 2018, the Federal Circuit rejected Janssen’s request for injunctive relief, concluding “based on the papers submitted that [Janssen and BTG] have not established that an injunction is warranted here” and denying the motion for an injunction and vacating the temporary injunction. The Federal Circuit also set a merits briefing schedule and invited the Director of the PTO to submit his views on the PTAB estoppel issues. 243. Later that evening, Janssen filed an emergency motion to reinstate the temporary injunction pending a further appeal to the Supreme Court. The Federal Circuit denied this motion the following morning. 244. On November 21, 2018 Janssen and BTG filed an application for injunctive relief pending appeal with the United States Supreme Court. The Supreme Court denied Janssen’s request for injunctive relief pending appeal. 245. Immediately following the Federal Circuit’s rejection of Janssen’s and BTG’s emergency motion, generic competition for Zytiga began. On or about November 21, 2018, Mylan and Teva each launched 250 mg generic abiraterone acetate products. Hikma/West-Ward and Apotex each launched on November 23, 2018. Janssen itself then launched an authorized generic version of Zytiga. 246. On or about January 7, 2019, Amneal launched its generic product and Wockhardt launched its generic product on or about February 27, 2019. 247. The Federal Circuit consolidated Janssen’s appeals of the three PTAB decisions and the district court decision. On January 18, 2019, Janssen and BTG filed their opening appellate brief. The generic defendants filed their opposition on February 19, 2019, and briefing on the appeal was completed on February 28, 2019 when Janssen and BTG filed their reply brief. 248. Oral argument on the consolidated appeal was held on March 14, 2019. L. Absent the sham litigations, one or more Zytiga generics could have been available in December 2016, and would have been available no later than November 2017. 249. Had Janssen and BTG not asserted the ’438 patent in litigation against their generic competitors, there would have been no 30-month stay on FDA approval for 10 of the 11 first-to-file ANDA applications. And once the ’213 blocking patent expired on December 13, 2016, there would have been no “exclusivity” preventing any of the 11 generics from coming on the market. 250. Absent Janssen and BTG’s assertion of the’438 patent, generic competition for Zytiga would have begun as early as December 2016, when the ’213 patent expired, and no later than October 2017. And once generic competition entered the market, Janssen would have launched an authorized generic (as it did in November of 2018), thereby bringing even more competition to the market and further driving down the cost of those purchasing Zytiga. 251. While the full effect of Janssen and BTG’s conduct will be the subject of discovery, absent the sham litigation over the ’438 patent, other generic manufacturers might have altered their ANDA activities so as to be in a position to receive final approval in the fall of 2017 around the same time as Mylan, Teva, and others. M. Janssen possesses monopoly power over abiraterone acetate. 252. At all relevant times, Janssen has maintained monopoly power over abiraterone acetate: it had the power to raise and/or maintain the price of abiraterone acetate at supra- competitive levels without losing substantial sales. 253. To the extent that the plaintiffs and the class are required to prove monopoly power circumstantially by first defining a relevant product market, the plaintiffs allege that the relevant product market is Zytiga and therapeutically equivalent (“AB-rated”) abiraterone acetate generics. 254. Through the sale of Zytiga, Janssen has had a one hundred percent (100%) market share in the relevant market at all times. 255. Prior to the late 2018 generic entrants discussed above, there were no generic competitors to Zytiga and there are no other reasonably interchangeable drug products available to prescribing physicians at the dosages at, and for the indications for which, Zytiga is prescribed. 256. Given the nature of the relevant market, Janssen needed to control only Zytiga and therapeutically equivalent generics of Zytiga—and no other products—to maintain the price of Zytiga profitably at supra-competitive levels. 257. Janssen used its market power to maintain premium pricing for Zytiga since the drug’s inception. At all times, Janssen sold branded Zytiga well in excess of both marginal cost and of the competitive price, and has enjoyed unusually high profit margins. Zytiga is extremely expensive, with an average monthly wholesale price of approximately $3,000. 258. Only the market entry of a competing, therapeutically equivalent generic version of Zytiga would make Janssen unable to profitably maintain its prices for Zytiga without losing substantial sales. However, the FDA’s approval process for NDAs serves as a significant barrier to new drug entry into this market. The only feasible way for a generic competitor to enter this market requires obtaining a sample of Zytiga, but Janssen has complete control over its distribution. 259. Janssen has used its market power to foreclose or otherwise adversely affect competition in the market for FDA-approved abiraterone acetate drug products by—among other unlawful tactics—preventing potential competitors from obtaining samples and active pharmaceutical ingredient (“API”) supplies, which are necessary for formulating a generic version of the drug. This conduct has caused output to be artificially low, raised competitors’ costs, and/or kept the market price for FDA-approved abiraterone acetate artificially high. 260. Janssen’s conduct has forced consumers who need abiraterone acetate to purchase Zytiga at artificially high and noncompetitive price levels and denied those consumers the availability of a lower cost generic abiraterone acetate product. Going forward, consumers who need abiraterone acetate will be forced to purchase Zytiga at artificially high and noncompetitive prices and will be denied the availability of a lower cost generic abiraterone acetate product. 261. Janssen has had a significant incentive to maintain its monopoly over abiraterone acetate and keep prices artificially high. Zytiga has been a blockbuster drug for Janssen. Sales of Zytiga have accounted for a large majority of the company’s revenues. In the first nine months of 2012, Janssen’s combined worldwide sales of Zytiga were approximately $1.2 billion. Analysts following Janssen’s stock have warned that loss of its monopoly over abiraterone acetate without a follow-up product to take its place could be financially ruinous for the company. 262. The relevant geographic market is the United States and its territories. 263. At all relevant times, Janssen enjoyed high barriers to entry with respect to the above-defined relevant market. 264. A small but significant, non-transitory price increase to Zytiga by Janssen would not have caused a significant loss of sales to other drugs or products used for similar purposes, with the exception of therapeutically equivalent generic versions of abiraterone acetate, had any been available. 265. Abiraterone acetate does not exhibit significant, positive cross-price elasticity of demand with any other CYP17 inhibitor used for treating prostate cancer, but it would likely exhibit significant, positive cross-price elasticity of demand with AB-rated generic versions of VIII. CLASS ACTION ALLEGATIONS 266. The plaintiffs bring this action on their own behalf and on behalf of all others similarly situated as a class action under Rules 23(a) and 23(b)(3) of the Federal Rules of Civil Procedure, seeking damages pursuant to the common law of unjust enrichment and the antitrust, unfair competition, and consumer protection laws of the states listed below (the “Indirect Purchaser States”), and as representative of a class defined as follows: All persons and entities in the Indirect Purchaser States and territories who indirectly purchased, paid and/or provided reimbursement for some or all of the purchase price of Zytiga or abiraterone acetate, other than for resale, at any time during the period from December 13, 2016 through and until the anticompetitive effects of the defendants’ challenged conduct cease (the “Class Period”). 267. Excluded from the class are: a. the defendants and their counsel, officers, directors, management, employees, subsidiaries, and affiliates; b. all federal governmental entities; c. all persons or entities who purchased Zytiga for purposes of resale; d. fully insured health plans (i.e., health plans that purchased insurance from another third-party payor covering 100 percent of the plan’s reimbursement obligations to its members); e. any “flat co-pay” consumers whose purchases of Zytiga were paid in part by a third-party payor and whose co-payment was the same regardless of the retail purchase price; f. pharmacy benefit managers; and g. all judges assigned to this case and any members of their immediate families. 268. Members of the class are so numerous and widely geographically dispersed throughout the United States and its territories that joinder is impracticable. The plaintiffs believe that the class numbers in the dozens at least and is geographically spread across the nation. Further, the identities of members of the class will be readily identifiable from information and records in the possession of Janssen. 269. The plaintiffs’ claims are typical of the claims of members of the class. The plaintiffs and all members of the class were damaged by the same wrongful conduct by Janssen, and all paid artificially inflated prices for Zytiga and were deprived of the benefits of competition from less expensive generic versions as a result of the defendants’ conduct. 270. The plaintiffs will fairly and adequately protect and represent the interests of the class. The plaintiffs’ interests are coincident with, and not antagonistic to, the class. 271. The plaintiffs are represented by counsel who are experienced and competent in the prosecution of class action litigation, and who have particular experience with class action litigation involving the pharmaceutical industry. 272. Questions of law and fact common to members of the class predominate over questions, if any, that may affect only individual class members, because the defendants have acted on grounds generally applicable to the entire class. Such generally applicable conduct is inherent in the defendants’ wrongful conduct. 273. Any plaintiff who was forced to pay a higher price in the absence of generic competition has a substantial and shared interest in proving that the higher price was the result of unlawful monopolizing conduct that is redressable by an award of damages. 274. Questions of law and fact common to the class include: a. whether Janssen unlawfully maintained monopoly power through all or part of its overarching scheme; b. whether Janssen and BTG’s anticompetitive scheme suppressed generic competition to Zytiga; c. as to those parts of Janssen and BTG’s challenged conduct for which such justifications may be offered, whether there exist cognizable, non-pretextual procompetitive justifications, which defendants’ challenged conduct was the least restrictive means of achieving, that offset the harm to competition in the markets in which abiraterone acetate is sold; d. whether direct proof of Janssen’s monopoly power is available, and if available, whether it is sufficient to prove Janssen’s monopoly power without the need to also define a relevant market; e. to the extent a relevant market or markets must be defined, what that definition is or those definitions are; f. determination of a reasonable estimate of the amount of delay the defendants’ unlawful monopolistic, unfair and unjust conduct caused; g. whether the defendants’ scheme, in whole or in part, has substantially affected interstate commerce; h. whether the defendants’ scheme, in whole or in part, caused antitrust injury to the business or property of the plaintiffs and members of the class in the nature of overcharges; and i. the quantum of overcharges paid by the class in the aggregate. 275. Class action treatment is a superior method for the fair and efficient adjudication of this controversy. Among other things, class treatment will permit a large number of similarly situated persons to prosecute their common claims in a single forum simultaneously, efficiently, and without the unnecessary duplication of evidence, effort, and expense that numerous individual actions would engender. The benefits of proceeding through the class mechanism, including providing injured persons or entities with a method for obtaining redress on claims that might not be practicable to pursue individually, substantially outweigh any difficulties that may arise in management of this class action. 276. The plaintiffs know of no difficulty to be encountered in the maintenance of this action that would preclude their maintenance as a class action. IX. CLAIMS FOR RELIEF VIOLATIONS OF STATE ANTITRUST LAWS 277. The plaintiffs incorporate by reference the allegations in the preceding paragraphs. 278. Beginning at a time currently unknown to the plaintiffs, but at least as early as July 2015, and continuing through the present, the exact dates being unknown to the plaintiffs, the defendants entered into continuing agreement(s), understanding(s), and conspiracy(ies) in restraint of trade artificially to fix, raise, stabilize, and peg prices for abiraterone acetate in the United States, in violation of the laws enumerated below. 279. In formulating and carrying out the alleged agreement, understanding, and conspiracy, the defendants, acting in concert with one another, did those things that they combined and conspired to do, including but not limited to the acts, practices, and course of conduct set forth above. 280. The combination and conspiracy alleged herein has had the following effects, among others: A. Price competition in the sale of abiraterone acetate has been restrained, suppressed, and/or eliminated in the United States; B. Prices for abiraterone acetate have been fixed, raised, maintained and stabilized at artificially high, non-competitive levels throughout the United States; and C. Those who purchased abiraterone acetate indirectly from defendants have been deprived of the benefits of free and open competition. 281. The plaintiffs and members of the class have been injured and will continue to be injured in their businesses and property by paying more for abiraterone acetate purchased indirectly from the defendants than they would have paid and will pay in the absence of the combination and conspiracy. 282. The following claims for relief one through twenty-eight are pleaded under the antitrust laws of each State or jurisdiction identified below, on behalf of the class, and arise from the defendants’ exclusionary, anticompetitive scheme designed to create and maintain a monopoly for abiraterone acetate and its generic substitutes. 283. Through its anticompetitive overarching scheme and conduct described more fully above, defendants willfully maintained monopoly power in the relevant market using fraudulent, restrictive or exclusionary conduct, rather than by means of greater business acumen or a historic accident, and thereby injured the plaintiffs and the class. This anticompetitive conduct was undertaken with the specific intent to maintain a monopoly in the abiraterone acetate market in the United States. 284. The defendants accomplished their goals by, inter alia, filing and maintaining litigation against multiple would-be generic competitors despite knowing that the ‘438 patent was invalid and could not be enforced, rendering their litigation a fraudulent attempt to prevent competition. CLAIM FOR RELIEF VIOLATION OF ARIZONA’S UNIFORM STATE ANTITRUST ACT, ARIZ. REV. STAT. § 44-1401, et seq. 285. The plaintiffs incorporate each and every allegation set forth in the preceding paragraphs of this complaint. 286. By reason of the conduct alleged herein, defendants have violated Arizona Revised Statute § 44-1401, et seq. 287. Under Arizona law, “[t]he establishment, maintenance or use of a monopoly or an attempt to establish a monopoly of trade or commerce, any part of which is within this state, by any person for the purpose of excluding competition or controlling, fixing or maintaining prices is unlawful.” ARIZ. REV. STAT. § 44-1403. 288. The defendants entered into a contract, combination, or conspiracy between two or more persons in restraint of, or to monopolize, trade or commerce in the abiraterone acetate market, a substantial part of which occurred within Arizona. 289. The defendants established, maintained, or used a monopoly, or attempted to establish a monopoly, of trade or commerce in the abiraterone acetate market, a substantial part of which occurred within Arizona, for the purpose of excluding competition or controlling, fixing, or maintaining prices in the abiraterone acetate market. 290. The defendants’ violations of Arizona law were flagrant. 291. The defendants’ unlawful conduct substantially affected Arizona’s trade and commerce. 292. As a direct and proximate cause of the defendants’ unlawful conduct, the plaintiffs and members of the class have been injured in their business or property and are threatened with further injury. 293. By reason of the foregoing, the plaintiffs and members of the class are entitled to seek all forms of relief available under ARIZ. REV. STAT. § 44-1401, et seq. CLAIM FOR RELIEF VIOLATION OF CALIFORNIA’S CARTWRIGHT ACT, CAL. BUS. & PROF. CODE § 16700, et seq. 294. The plaintiffs incorporate each and every allegation set forth in the preceding paragraphs of this complaint. 295. The California Business & Professions Code generally governs conduct of corporate entities. The Cartwright Act, CAL. BUS. & PROF. CODE §§ 16700-16770, governs antitrust violations in California. 296. California policy is that “vigorous representation and protection of consumer interests are essential to the fair and efficient functioning of a free enterprise market economy,” including by fostering competition in the marketplace. CAL. BUS. & PROF. CODE § 301. 297. Under the Cartwright Act, indirect purchasers have standing to maintain an action based on the facts alleged in this complaint. CAL. BUS. & PROF. CODE § 16750(a). 298. A trust in California is any combination intended for various purposes, including but not limited to creating or carrying out restrictions in trade or commerce, limiting or reducing the production or increasing the price of merchandise, or preventing competition in the market for a commodity CAL. BUS. & PROF. CODE § 16720. Every trust in California is unlawful except as provided by the Code. Id. at § 16726. 299. The defendants agreed to, and did in fact, act in restraint of trade or commerce by illegally monopolizing and attempting to monopolize the abiraterone acetate market in California. As a result, California purchasers paid supra-competitive, artificially inflated prices for abiraterone acetate. 300. Members of the class purchased abiraterone acetate within the State of California during the class period. But for the defendants’ conduct set forth herein, the price of abiraterone acetate would have been lower, in an amount to be determined at trial. 301. The defendants enacted a combination of capital, skill or acts for the purpose of creating and carrying out restrictions in trade or commerce, in violation of CAL. BUS. & PROF. CODE § 16700, et seq. 302. The plaintiffs and members of the class were injured in their business or property, with respect to purchases of Zytiga and its AB rated generic equivalents in California and are entitled to all forms of relief, including recovery of treble damages, interest, and injunctive relief, plus reasonable attorneys’ fees and costs. CLAIM FOR RELIEF VIOLATION OF THE DISTRICT OF COLUMBIA ANTITRUST ACT, D.C. CODE § 28-4501, et seq. 303. The plaintiffs incorporate each and every allegation set forth in the preceding paragraphs of this complaint. 304. The policy of District of Columbia Code, Title 28, Chapter 45 (Restraints of Trade) is to “promote the unhampered freedom of commerce and industry throughout the District of Columbia by prohibiting restraints of trade and monopolistic practices.” 305. Members of the class purchased abiraterone acetate within the District of Columbia during the class period. But for the defendants’ conduct set forth herein, the price of abiraterone acetate would have been lower, in an amount to be determined at trial. 306. Under District of Columbia law, indirect purchasers have standing to maintain an action under the antitrust provisions of the D.C. Code based on the facts alleged in this complaint, because “any indirect purchaser in the chain of manufacture, production or distribution of goods ... shall be deemed to be injured within the meaning of this chapter.” D.C. CODE § 28-4509(a). 307. The defendants contracted, combined or conspired to act in restraint of trade within the District of Columbia, and monopolized or attempted to monopolize the market for abiraterone acetate within the District of Columbia, in violation of D.C. CODE § 28-4501, et seq. 308. The plaintiffs and members of the class were injured with respect to purchases of Zytiga and its AB rated generic equivalents in the District of Columbia and are entitled to all forms of relief, including actual damages, treble damages, and interest, reasonable attorneys’ fees and costs. CLAIM FOR RELIEF VIOLATION OF THE FLORIDA DECEPTIVE AND UNFAIR TRADE PRACTICES ACT, FLA. STAT. § 501.201, et seq. 309. The plaintiffs incorporate each and every allegation set forth in the preceding paragraphs of this complaint. 310. The Florida Deceptive & Unfair Trade Practices Act, Florida Statute §§ 501.201, et seq. (the “FDUTPA”), generally prohibits “unfair methods of competition, unconscionable acts or practices, and unfair or deceptive acts or practices in the conduct of any trade or commerce,” including practices in restraint of trade. FLA. STAT. § 501.204(1). 311. The primary policy of the FDUTPA is “[t]o protect the consuming public and legitimate business enterprises from those who engage in unfair methods of competition, or unconscionable, deceptive, or unfair acts or practices in the conduct of any trade or commerce.” FLA. STAT. § 501.202(2). 312. The FDUTPA proscribes unfair methods of competition as illegal, and also provides that in determining what constitutes an “unfair method of competition” due consideration and weight should be given to the interpretations of the Federal Trade Commission and federal courts relating to § 5(a)(1) of the FTC Act and Section 5.1(a)(1) encompasses violations of the antitrust laws. 313. A claim for damages under the FDUTPA has three elements: (1) a prohibited practice; (2) causation; and (3) actual damages. 314. Under Florida law, indirect purchasers have standing to maintain an action under the FDUTPA based on the facts alleged in this complaint. FLA. STAT. § 501.211(a) (“anyone aggrieved by a violation of this [statute] may bring an action . . .”). 315. Members of the class purchased abiraterone acetate within the State of Florida during the class period. But for the defendants’ conduct set forth herein, the price of abiraterone acetate would have been lower, in an amount to be determined at trial. 316. The defendants entered into a contract, combination or conspiracy between two or more persons in restraint of, or to monopolize, trade or commerce in the abiraterone acetate market, a substantial part of which occurred within Florida. 317. The defendants established, maintained or used a monopoly, or attempted to establish a monopoly, of trade or commerce in the market for abiraterone acetate, for the purpose of excluding competition or controlling, fixing or maintaining prices in Florida at a level higher than the competitive market level, beginning at least as early as 2015 and continuing through the date of this filing. 318. Accordingly, the defendants’ conduct was an unfair method of competition, and an unfair or deceptive act or practice within the conduct of commerce within the State of Florida. 319. The defendants’ unlawful conduct substantially affected Florida’s trade and commerce. 320. As a direct and proximate cause of defendants’ unlawful conduct, plaintiff and the members of the class have been injured in their business or property by virtue of overcharges for abiraterone acetate and are threatened with further injury. 321. By reason of the foregoing, the plaintiffs and members of the class are entitled to seek all forms of relief, including injunctive relief pursuant to FLA. STAT. § 501.208 and declaratory judgment, actual damages, reasonable attorneys’ fees and costs pursuant to FLA. STAT. § 501.211. CLAIM FOR RELIEF VIOLATION OF THE HAWAII ANTITRUST ACT, HAW. REV. STAT. §480-3, et seq. 322. The plaintiffs incorporate each and every allegation set forth in the preceding paragraphs of this complaint. 323. The defendants are “persons” within the meaning of Haw. Rev. Stat. § 480-1 et seq. (the “HUPUCA”). Haw.Rev.Stat. § 480-1. And the defendants’ acts or practices as set forth above occurred in the conduct of trade or commerce. 324. The plaintiffs and members of the class are “consumer[s]” within the meaning of the Hawaii statute. Haw.Rev.Stat. § 480-1. 325. HUPUCA prohibits the use of any “[u]nfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce.” 326. Members of the class purchased abiraterone acetate within the State of Hawaii during the class period. But for the defendants’ conduct set forth herein, the price of abiraterone acetate would have been lower, in an amount to be determined at trial. 327. The defendants entered into a contract, combination or conspiracy between two or more persons in restraint of, or to monopolize, trade or commerce in the abiraterone acetate market, a substantial part of which occurred within Hawaii. 328. The defendants’ unlawful conduct substantially affected Hawaii’s trade and commerce. 329. As a direct and proximate cause of the defendants’ unlawful conduct, the plaintiffs and members of the class have been injured in their business or property by virtue of overcharges for abiraterone acetate and are threatened with further injury. 330. By reason of the foregoing, the plaintiffs and members of the class are entitled to seek all forms of relief, including actual or statutory damages and any other relief deemed necessary or proper by the court. Haw.Rev.Stat. §§ 480-13, 480-13.5. CLAIM FOR RELIEF VIOLATION OF THE ILLINOIS ANTITRUST ACT, 740 ILL. COMP. STAT. ANN. 10/3(1), et seq. 331. The plaintiffs incorporate each and every allegation set forth in the preceding paragraphs of this complaint. 332. The Illinois Antitrust Act, 740 ILCS 10/1, et seq., aims “to promote the unhampered growth of commerce and industry throughout the State by prohibiting restraints of trade which are secured through monopolistic or oligarchic practices and which act or tend to act to decrease competition between and among persons engaged in commerce and trade . . . .” 740 ILCS 10/2. 333. Members of the class purchased abiraterone acetate within the State of Illinois during the class period. But for the defendants’ conduct set forth herein, the price of abiraterone acetate would have been lower, in an amount to be determined at trial. 334. Under the Illinois Antitrust Act, indirect purchasers have standing to maintain an action for damages based on the facts alleged in this complaint. 740 ILCS 10/7(2). 335. The defendants made contracts or engaged in a combination or conspiracy with each other, for the purpose of fixing, controlling or maintaining prices for abiraterone acetate sold, and/or for allocating customers or markets for abiraterone acetate within the intrastate commerce of Illinois. 336. The defendants further unreasonably restrained trade or commerce and established, maintained or attempted to acquire monopoly power over the market for abiraterone acetate in Illinois for the purpose of excluding competition, in violation of 740 ILCS 10/1, et seq. 337. The plaintiffs and members of the class were injured with respect to purchases of Zytiga and its AB rated generic equivalents in Illinois and are entitled to all forms of relief, including actual damages, treble damages, reasonable attorneys’ fees and costs. CLAIM FOR RELIEF VIOLATION OF THE IOWA COMPETITION LAW IOWA CODE § 553.1, et seq. 338. The plaintiffs incorporate each and every allegation set forth in the preceding paragraphs of this complaint. 339. The Iowa Competition Law aims to “prohibit[] restraint of economic activity and monopolistic practices.” Iowa Code § 553.2. 340. Members of the class purchased abiraterone acetate within the State of Iowa during the class period. But for the defendants’ conduct set forth herein, the price of abiraterone acetate would have been lower, in an amount to be determined at trial. 341. The defendants contracted, combined or conspired to restrain or monopolize trade in the market for abiraterone acetate, and attempted to establish or did in fact establish a monopoly for the purpose of excluding competition or controlling, fixing or maintaining prices for abiraterone acetate, in violation of Iowa Code § 553.1, et seq. 342. The plaintiffs and members of the Iowa Class were injured with respect to purchases of Zytiga and its AB rated generic equivalents in Iowa, and are entitled to all forms of relief, including actual damages, exemplary damages for willful conduct, reasonable attorneys’ fees and costs, and injunctive relief. CLAIM FOR RELIEF VIOLATION OF THE KANSAS RESTRAINT OF TRADE ACT KAN. STAT. ANN. § 50-101, et seq. 343. The plaintiffs incorporate each and every allegation set forth in the preceding paragraphs of this complaint. 344. The Kansas Restraint of Trade Act aims to prohibit practices which, inter alia, “tend to prevent full and free competition in the importation, transportation or sale of articles imported into this state.” Kan. Stat. Ann. § 50-112. 345. Members of the class purchased abiraterone acetate within the State of Kansas during the class period. But for the defendants’ conduct set forth herein, the price of abiraterone acetate would have been lower, in an amount to be determined at trial. 346. Under the Kansas Restraint of Trade Act, indirect purchasers have standing to maintain an action based on the facts alleged in this Complaint. Kan. Stat. Ann § 50-161(b). 347. The defendants combined capital, skill or acts for the purposes of creating restrictions in trade or commerce of abiraterone acetate, increasing the price of abiraterone acetate, preventing competition in the sale of abiraterone acetate, or binding themselves not to sell abiraterone acetate, in a manner that established the price of abiraterone acetate and precluded free and unrestricted competition among themselves in the sale of abiraterone acetate, in violation of Kan. Stat. Ann. § 50-101, et seq. 348. The plaintiffs and members of the class were injured with respect to purchases of Zytiga and its AB rated generic equivalents in Kansas and are entitled to all forms of relief, including actual damages, reasonable attorneys’ fees and costs, and injunctive relief. CLAIM FOR RELIEF VIOLATION OF MAINE’S ANTITRUST STATUTE ME. REV. STAT. ANN. TIT. 10 § 1101, et seq. 349. The plaintiffs incorporate each and every allegation set forth in the preceding paragraphs of this complaint. 350. Part 3 of Title 10 the Maine Revised Statutes generally governs regulation of trade in Maine. Chapter 201 thereof governs monopolies and profiteering, generally prohibiting contracts in restraint of trade and conspiracies to monopolize trade. Me. Rev. Stat. Ann. tit. 10, §§ 1101-02. 351. Members of the class purchased abiraterone acetate within the State of Maine during the class period. But for the defendants’ conduct set forth herein, the price of abiraterone acetate would have been lower, in an amount to be determined at trial. 352. Under Maine law, indirect purchasers have standing to maintain an action based on the facts alleged in this Complaint. Me. Rev. Stat. Ann. tit. 10, § 1104(1). 353. The defendants contracted, combined or conspired in restraint of trade or commerce of abiraterone acetate within the intrastate commerce of Maine, and monopolized or attempted to monopolize the trade or commerce of abiraterone acetate within the intrastate commerce of Maine, in violation of Me. Rev. Stat. Ann. tit. 10, § 1101, et seq. 354. The plaintiffs and members of the class were injured with respect to purchases of Zytiga and its AB rated generic equivalents in Maine and are entitled to all forms of relief, including actual damages, treble damages, reasonable attorneys’ and experts’ fees and costs. CLAIM FOR RELIEF VIOLATION OF THE MICHIGAN ANTITRUST REFORM ACT MICH. COMP. LAWS § 445.771, et seq. 355. The plaintiffs incorporate each and every allegation set forth in the preceding paragraphs of this complaint. 356. The Michigan Antitrust Reform Act aims “to prohibit contracts, combinations, and conspiracies in restraint of trade or commerce...to prohibit monopolies and attempts to monopolize trade or commerce...[and] to provide remedies, fines, and penalties for violations of this act.” Mich. Act 274 of 1984. 357. Members of the class purchased abiraterone acetate within the State of Michigan during the class period. But for the defendants’ conduct set forth herein, the price of abiraterone acetate would have been lower, in an amount to be determined at trial. 358. Under the Michigan Antitrust Reform Act, indirect purchasers have standing to maintain an action based on the facts alleged in this complaint. Mich. Comp. Laws. § 452.778(2). 359. The defendants contracted, combined or conspired to restrain or monopolize trade or commerce in the market for abiraterone acetate, in violation of Mich. Comp. Laws § 445.772, 360. The plaintiffs and members of the class were injured with respect to purchases of Zytiga and its AB rated generic equivalents in Michigan and are entitled to all forms of relief, including actual damages, treble damages for flagrant violations, interest, costs, reasonable attorneys’ fees, and injunctive or other appropriate equitable relief. CLAIM FOR RELIEF VIOLATION OF THE MINNESOTA ANTITRUST LAW, MINN. STAT. § 325D.49, et seq. & 325D.57, et seq. 361. The plaintiffs incorporate each and every allegation set forth in the preceding paragraphs of this complaint. 362. The Minnesota Antitrust Law of 1971 aims to prohibit any contract, combination or conspiracy when any part thereof was created, formed, or entered into in Minnesota; any contract, combination or conspiracy, wherever created, formed or entered into; any establishment, maintenance or use of monopoly power; and any attempt to establish, maintain or use monopoly power, whenever any of these affect Minnesota trade or commerce. 363. Members of the class purchased abiraterone acetate within the State of Minnesota during the class period. But for the defendants’ conduct set forth herein, the price of abiraterone acetate would have been lower, in an amount to be determined at trial. 364. Under the Minnesota Antitrust Act of 1971, indirect purchasers have standing to maintain an action based on the facts alleged in this Complaint. Minn. Stat. § 325D.57. 365. The defendants contracted, combined or conspired in unreasonable restraint of trade or commerce in the market for abiraterone acetate within the intrastate commerce of and outside of Minnesota; established, maintained, used or attempted to establish, maintain or use monopoly power over the trade or commerce in the market for abiraterone acetate within the intrastate commerce of and outside of Minnesota; and fixed prices and allocated markets for abiraterone acetate within the intrastate commerce of and outside of Minnesota, in violation of Minn. Stat. § 325D.49, et seq. 366. The plaintiffs and members of the class were injured with respect to purchases of Zytiga and its AB rated generic equivalents in Minnesota and are entitled to all forms of relief, including actual damages, treble damages, costs and disbursements, reasonable attorneys’ fees, and injunctive relief necessary to prevent and restrain violations hereof. CLAIM FOR RELIEF VIOLATION OF THE MISSISSIPPI ANTITRUST STATUTE, MISS. CODE ANN. § 75-21-1, et seq. 367. The plaintiffs incorporate each and every allegation set forth in the preceding paragraphs of this complaint. 368. Title 75 of the Mississippi Code regulates trade, commerce and investments. Chapter 21 thereof generally prohibits trusts and combines in restraint or hindrance of trade, with the aim that “trusts and combines may be suppressed, and the benefits arising from competition in business [are] preserved” to Mississippians. Miss. Code Ann. § 75-21-39. 369. Trusts are combinations, contracts, understandings or agreements, express or implied, when inimical to the public welfare and with the effect of, inter alia, restraining trade, increasing the price or output of a commodity, or hindering competition in the production or sale of a commodity. Miss. Code Ann. § 75-21-1. 370. Members of the class purchased abiraterone acetate within the State of Mississippi during the class period. But for the defendants’ conduct set forth herein, the price of abiraterone acetate would have been lower, in an amount to be determined at trial. 371. Under Mississippi law, indirect purchasers have standing to maintain an action under the antitrust provisions of the Mississippi Code based on the facts alleged in this Complaint. Miss. Code Ann. § 75-21-9. 372. The defendants combined, contracted, understood and agreed in the market for abiraterone acetate, in a manner inimical to public welfare, with the effect of restraining trade, increasing the price of abiraterone acetate and hindering competition in the sale of abiraterone acetate, in violation of Miss. Code Ann. § 75-21-1(a), et seq. 373. The defendants monopolized or attempted to monopolize the production, control or sale of abiraterone acetate, in violation of Miss. Code Ann. § 75-21-3, et seq. 374. The defendants’ abiraterone acetate are sold indirectly via distributors throughout the State of Mississippi. During the Class Period, Defendants’ illegal conduct substantially affected Mississippi commerce. 375. The plaintiffs and members of the class were injured with respect to purchases of Zytiga and its AB rated generic equivalents in Mississippi and are entitled to all forms of relief, including actual damages and a penalty of $500 per instance of injury. CLAIM FOR RELIEF VIOLATION OF THE MISSOURI MERCHANDISING PRACTICES ACT, MO. ANN. STAT. § 407.010, et seq. 376. The plaintiffs incorporate each and every allegation set forth in the preceding paragraphs of this complaint. 377. Chapter 407 of the Missouri Merchandising Practices Act (the “MMPA”) generally governs unlawful business practices, including antitrust violations such as restraints of trade and monopolization. 378. Members of the class purchased abiraterone acetate within the State of Missouri during the class period. But for the defendants’ conduct set forth herein, the price of abiraterone acetate would have been lower, in an amount to be determined at trial. 379. Under Missouri law, indirect purchasers have standing to maintain an action under the MMPA based on the facts alleged in this Complaint. Gibbons v. J. Nuckolls, Inc., 216 S.W.3d 667, 669 (Mo. 2007). 380. The defendants contracted, combined or conspired in restraint of trade or commerce of abiraterone acetate within the intrastate commerce of Missouri, and monopolized or attempted to monopolize the market for abiraterone acetate within the intrastate commerce of Missouri by possessing monopoly power in the market and willfully maintaining that power through agreements to fix prices, allocate markets and otherwise control trade, in violation of Mo. Ann. Stat. § 407.010, et seq. 381. The plaintiffs and members of the class were injured with respect to purchases of Zytiga and its AB rated generic equivalents in Missouri and are entitled to all forms of relief, including actual damages or liquidated damages in an amount which bears a reasonable relation to the actual damages which have been sustained, as well as reasonable attorneys’ fees, costs, and injunctive relief. CLAIM FOR RELIEF VIOLATION OF THE NEBRASKA JUNKIN ACT, NEB. REV. STAT. § 59-801, et seq. 382. The plaintiffs incorporate each and every allegation set forth in the preceding paragraphs of this complaint. 383. Chapter 59 of the Nebraska Revised Statute generally governs business and trade practices. Sections 801 through 831 thereof, known as the Junkin Act, prohibit antitrust violations such as restraints of trade and monopolization. 384. Members of the class purchased abiraterone acetate within the State of Nebraska during the class period. But for the defendants’ conduct set forth herein, the price of abiraterone acetate would have been lower, in an amount to be determined at trial. 385. Under Nebraska law, indirect purchasers have standing to maintain an action under the Junkin Act based on the facts alleged in this Complaint. Neb. Rev. Stat. § 59-821. 386. The defendants contracted, combined or conspired in restraint of trade or commerce of abiraterone acetate within the intrastate commerce of Nebraska, and monopolized or attempted to monopolize the market for abiraterone acetate within the intrastate commerce of Nebraska by possessing monopoly power in the market and willfully maintaining that power through agreements to fix prices, allocate markets and otherwise control trade, in violation of Neb. Rev. Stat. § 59-801, et seq. 387. The plaintiffs and members of the class were injured with respect to purchases of Zytiga and its AB rated generic equivalents in Nebraska and are entitled to all forms of relief, including actual damages or liquidated damages in an amount which bears a reasonable relation to the actual damages which have been sustained, as well as reasonable attorneys’ fees, costs, and injunctive relief. CLAIM FOR RELIEF VIOLATION OF THE NEVADA UNFAIR TRADE PRACTICES ACT, NEV. REV. STAT. § 598A.010, et seq. 388. The plaintiffs incorporate each and every allegation set forth in the preceding paragraphs of this complaint. 389. The Nevada Unfair Trade Practice Act (“NUTPA”) states that “free, open and competitive production and sale of commodities ... is necessary to the economic well-being of the citizens of the State of Nevada.” Nev. Rev. Stat. Ann. § 598A.030(1). 390. The policy of NUTPA is to prohibit acts in restraint of trade or commerce, to preserve and protect the free, open and competitive market, and to penalize all persons engaged in anticompetitive practices. Nev. Rev. Stat. Ann. § 598A.030(2). Such acts include, inter alia, price fixing, division of markets, allocation of customers, and monopolization of trade. Nev. Rev. Stat. Ann. § 598A.060. 391. Members of the class purchased abiraterone acetate within the State of Nevada during the class period. But for the defendants’ conduct set forth herein, the price of abiraterone acetate would have been lower, in an amount to be determined at trial. 392. Under Nevada law, indirect purchasers have standing to maintain an action under NUTPA based on the facts alleged in this Complaint. Nev. Rev. Stat. Ann. § 598A.210(2). 393. The defendants fixed prices by agreeing to establish prices for abiraterone acetate in Nevada, divided Nevada markets, allocated Nevada customers, and monopolized or attempted monopolize trade or commerce of abiraterone acetate within the intrastate commerce of Nevada, constituting a contract, combination or conspiracy in restraint of trade in violation of Nev. Rev. Stat. Ann. § 598A, et seq. 394. The plaintiffs and members of the class were injured with respect to purchases of Zytiga and its AB rated generic equivalents in Nevada in that at least thousands of sales of Defendants’ abiraterone acetate took place in Nevada, purchased by Nevada consumers at supra- competitive prices caused by the defendants’ conduct. 395. Accordingly, the plaintiffs and members of the Nevada Class are entitled to all forms of relief, including actual damages, treble damages, reasonable attorneys’ fees, costs, and injunctive relief. 396. In accordance with the requirements of § 598A.210(3), notice of this action was mailed to the Nevada Attorney General by the plaintiffs. SIXTEENTH CLAIM FOR RELIEF VIOLATION OF NEW HAMPSHIRE’S ANTITRUST STATUTE, N.H. REV. STAT. ANN. TIT. XXXI, § 356, et seq. 397. The plaintiffs incorporate each and every allegation set forth in the preceding paragraphs of this complaint. 398. Title XXXI of the New Hampshire Statutes generally governs trade and commerce. Chapter 356 thereof governs combinations and monopolies and prohibits restraints of trade. N.H. Rev. Stat. Ann. §§ 356:2, 3. 399. Members of the class purchased abiraterone acetate within the State of New Hampshire during the class period. But for the defendants’ conduct set forth herein, the price of abiraterone acetate would have been lower, in an amount to be determined at trial. 400. Under New Hampshire law, indirect purchasers have standing to maintain an action based on the facts alleged in this Complaint. N.H. Rev. Stat. Ann. § 356:11(II). 401. The defendants fixed, controlled or maintained prices for abiraterone acetate, allocated customers or markets for abiraterone acetate, and established, maintained or used monopoly power, or attempted to, constituting a contract, combination or conspiracy in restraint of trade in violation of N.H. Rev. Stat. Ann. § 356:1, et seq. 402. The plaintiffs and members of the class were injured with respect to purchases of Zytiga and its AB rated generic equivalents in New Hampshire and are entitled to all forms of relief, including actual damages sustained, treble damages for willful or flagrant violations, reasonable attorneys’ fees, costs, and injunctive relief. CLAIM FOR RELIEF VIOLATION OF THE NEW MEXICO ANTITRUST ACT, N.M. STAT. ANN. §§ 57-1-1, et seq. 403. The plaintiffs incorporate each and every allegation set forth in the preceding paragraphs of this complaint. 404. The New Mexico Antitrust Act aims to prohibit restraints of trade and monopolistic practices. N.M. Stat. Ann. § 57-1-15. 405. Members of the class purchased abiraterone acetate within the State of New Mexico during the class period. But for the defendants’ conduct set forth herein, the price of abiraterone acetate would have been lower, in an amount to be determined at trial. 406. Under New Mexico law, indirect purchasers have standing to maintain an action based on the facts alleged in this Complaint. N.M. Stat. Ann. § 57-1-3. 407. The defendants contracted, agreed, combined or conspired, and monopolized or attempted to monopolize trade for abiraterone acetate within the intrastate commerce of New Mexico, in violation of N.M. Stat. Ann. §§ 57-1-1 and 57-1-2, et seq. 408. The plaintiffs and members of the class were injured with respect to purchases of Zytiga and its AB rated generic equivalents in New Mexico and are entitled to all forms of relief, including actual damages, treble damages, reasonable attorneys’ fees, costs, and injunctive relief. CLAIM FOR RELIEF VIOLATION OF THE NEW YORK GENERAL BUSINESS LAW, GEN. BUS. LAW §340, et seq. 409. The plaintiffs incorporate each and every allegation set forth in the preceding paragraphs of this complaint. 410. Section 340 of Article 22 of the New York General Business Law general prohibits monopolies and contracts or agreements in restraint of trade, with the policy of encouraging competition or the free exercise of any activity in the conduct of any business, trade or commerce in New York. N.Y. Gen. Bus. Law § 340(1). 411. Members of the class purchased abiraterone acetate within the State of New York during the class period. But for the defendants’ conduct set forth herein, the price of abiraterone acetate would have been lower, in an amount to be determined at trial. 412. Under New York law, indirect purchasers have standing to maintain an action based on the facts alleged in this Complaint. N.Y. Gen. Bus. Law § 340(6). 413. The defendants established or maintained a monopoly within the intrastate commerce of New York for the trade or commerce of abiraterone acetate and restrained competition in the free exercise of the conduct of the business of abiraterone acetate within the intrastate commerce of New York, in violation of N.Y. Gen. Bus. Law § 340, et seq. 414. The plaintiffs and members of the class were injured with respect to purchases of Zytiga and its AB rated generic equivalents in New York and are entitled to all forms of relief, including actual damages, treble damages, costs not exceeding $10,000, and reasonable attorneys’ fees and all relief available under N.Y. Gen. Bus. Law § 349, et seq. CLAIM FOR RELIEF VIOLATION OF THE NORTH CAROLINA GENERAL STATUTES, N.C. GEN. STAT. § 75-1, et seq. 415. The plaintiffs incorporate each and every allegation set forth in the preceding paragraphs of this complaint. 416. The defendants entered into a contract or combination in the form of trust or otherwise, or conspiracy in restraint of trade or commerce in the abiraterone acetate market, a substantial part of which occurred within North Carolina. 417. The defendants established, maintained, or used a monopoly, or attempted to establish a monopoly, of trade or commerce in the abiraterone acetate market, for the purpose of affecting competition or controlling, fixing, or maintaining prices, a substantial part of which occurred within North Carolina. 418. The defendants’ unlawful conduct substantially affected North Carolina’s trade and commerce. 419. As a direct and proximate cause of the defendants’ unlawful conduct, the plaintiffs and members of the class have been injured in their business or property and are threatened with further injury. 420. By reason of the foregoing, the plaintiffs and members of the class are entitled to seek all forms of relief available, including treble damages, under N.C. Gen. Stat. § 75-1, et seq. CLAIM FOR RELIEF VIOLATION OF THE NORTH DAKOTA UNIFORM STATE ANTITRUST ACT, N.D. CENT. CODE § 51-08.1, et seq. 421. The plaintiffs incorporate each and every allegation set forth in the preceding paragraphs of this complaint. 422. The North Dakota Uniform State Antitrust Act generally prohibits restraints on or monopolization of trade. N.D. Cent. Code § 51-08.1, et seq. 423. Members of the class purchased abiraterone acetate within the State of North Dakota during the class period. But for the defendants’ conduct set forth herein, the price of abiraterone acetate would have been lower, in an amount to be determined at trial. 424. Under the North Dakota Uniform State Antitrust Act, indirect purchasers have standing to maintain an action based on the facts alleged in this Complaint. N.D. Cent. Code § 51-08.1-08. 425. The defendants contracted, combined or conspired in restraint of, or to monopolize trade or commerce in the market for abiraterone acetate, and established, maintained, or used a monopoly, or attempted to do so, for the purposes of excluding competition or controlling, fixing or maintaining prices for abiraterone acetate, in violation of N.D. Cent. Code §§ 51-08.1-02, 03. 426. The plaintiffs and members of the class were injured with respect to purchases in North Dakota and are entitled to all forms of relief, including actual damages, treble damages for flagrant violations, costs, reasonable attorneys’ fees, and injunctive or other equitable relief. CLAIM FOR RELIEF VIOLATION OF THE OREGON ANTITRUST LAW, OR. REV. STAT. § 646.705, et seq. 427. The plaintiffs incorporate each and every allegation set forth in the preceding paragraphs of this complaint. 428. Chapter 646 of the Oregon Revised Statutes generally governs business and trade practices within Oregon. Sections 705 through 899 thereof govern antitrust violations, with the policy to “encourage free and open competition in the interest of the general welfare and economy of the state.” OR. REV. STAT. § 646.715. 429. Members of the class purchased abiraterone acetate within the State of Oregon during the class period. But for the defendants’ conduct set forth herein, the price of abiraterone acetate would have been lower, in an amount to be determined at trial. 430. Under Oregon law, indirect purchasers have standing under the antitrust provisions of the Oregon Revised Statutes to maintain an action based on the facts alleged in this Complaint. OR. REV. STAT. § 646.780(1)(a). 431. The defendants contracted, combined, or conspired in restraint of trade or commerce of abiraterone acetate, and monopolized or attempted to monopolize the trade or commerce of abiraterone acetate, in violation of OR. REV. STAT. § 646.705, et seq. 432. The plaintiffs and members of the class were injured with respect to purchases of Zytiga and its AB rated generic equivalents within the intrastate commerce of Oregon, or alternatively to interstate commerce involving actual or threatened injury to persons located in Oregon, and are entitled to all forms of relief, including actual damages, treble damages, reasonable attorneys’ fees, expert witness fees and investigative costs, and injunctive relief. CLAIM FOR RELIEF VIOLATION OF THE PUERTO RICAN ANTI-MONOPOLY ACT, P.R. LAWS TIT. 10, § 260, et seq. 433. The plaintiffs incorporate each and every allegation set forth in the preceding paragraphs of this complaint. 434. The provisions of the Puerto Rican Anti-Monopoly Act of 1964 (the AMA) parallel Sections 1 and 2 of the Sherman Act, and other federal statutes. And those provisions are supplemented by The Regulation on Fair Competition Number VII, which proscribes certain conduct including the type engaged in by the defendants more fully described above. 435. Under the AMA, it is unlawful to monopolize, or attempt to monopolize any part of the trade or commerce in the Commonwealth of Puerto Rico. P.R. LAWS tit. 10, § 260. 436. Members of the class purchased abiraterone acetate within Puerto Rico during the class period. But for the defendants’ conduct set forth herein, the price of abiraterone acetate would have been lower, in an amount to be determined at trial. 437. By reason of the foregoing, the plaintiffs and members of the class are entitled to seek all forms of relief available, including treble damages, attorneys’ fees, and costs of suit Puerto Rico Laws tit. 10, § 268. CLAIM FOR RELIEF VIOLATION OF THE RHODE ISLAND ANTITRUST ACT, R.I. GEN LAWS § 6-36-1, et seq. 438. The plaintiffs incorporate each and every allegation set forth in the preceding paragraphs of this complaint. 439. The Rhode Island Antitrust Act aims to promote the unhampered growth of commerce and industry throughout Rhode Island by prohibiting unreasonable restraints of trade and monopolistic practices that hamper, prevent or decrease competition. R.I. Gen. Laws § 6-36- 2(a)(2). 440. Under the Rhode Island Antitrust Act, as of January 1, 2008, indirect purchasers have standing to maintain an action based on the facts alleged in this Complaint. R.I. Gen. Laws § 6-36-11(a). 441. Members of the class purchased abiraterone acetate within the State of Rhode Island during the class period. But for the defendants’ conduct set forth herein, the price of abiraterone acetate would have been lower, in an amount to be determined at trial. 442. The defendants contracted, combined and conspired in restraint of trade of abiraterone acetate within the intrastate commerce of Rhode Island, and established, maintained or used, or attempted to establish, maintain or use, a monopoly in the trade of abiraterone acetate for the purpose of excluding competition or controlling, fixing or maintaining prices within the intrastate commerce of Rhode Island, in violation of R.I. Gen. Laws § 6-36-1, et seq. 443. The plaintiffs and members of the class were injured with respect to purchases of Zytiga and its AB rated generic equivalents in Rhode Island and are entitled to all forms of relief, including actual damages, treble damages, reasonable costs, reasonable attorneys’ fees, and injunctive relief. CLAIM FOR RELIEF VIOLATION OF THE SOUTH DAKOTA ANTITRUST STATUTE, S.D. CODIFIED LAWS § 37-1-3.1, et seq. 444. The plaintiffs incorporate each and every allegation set forth in the preceding paragraphs of this complaint. 445. Chapter 37-1 of the South Dakota Codified Laws prohibits restraint of trade, monopolies and discriminatory trade practices. S.D. Codified Laws §§ 37-1- 3.1, 3.2. 446. Members of the class purchased abiraterone acetate within the State of South Dakota during the class period. But for the defendants’ conduct set forth herein, the price of abiraterone acetate would have been lower, in an amount to be determined at trial. 447. Under South Dakota law, indirect purchasers have standing under the antitrust provisions of the South Dakota Codified Laws to maintain an action based on the facts alleged in this Complaint. S.D. Codified Laws § 37-1-33. 448. The defendants contracted, combined or conspired in restraint of trade or commerce of abiraterone acetate within the intrastate commerce of South Dakota, and monopolized or attempted to monopolize trade or commerce of abiraterone acetate within the intrastate commerce of South Dakota, in violation of S.D. Codified Laws § 37-1, et seq. 449. The plaintiffs and members of the class were injured with respect to purchases of Zytiga and its AB rated generic equivalents in South Dakota and are entitled to all forms of relief, including actual damages, treble damages, taxable costs, reasonable attorneys’ fees, and injunctive or other equitable relief. CLAIM FOR RELIEF VIOLATION OF THE TENNESSEE TRADE PRACTICES ACT, TENN. CODE, § 47-25-101, et seq. 450. The plaintiffs incorporate each and every allegation set forth in the preceding paragraphs of this complaint. 451. The Tennessee Trade Practices Act generally governs commerce and trade in Tennessee, and it prohibits, inter alia, all arrangements, contracts, agreements, or combinations between persons or corporations made with a view to lessen, or which tend to lessen, full and free competition in goods in Tennessee. All such arrangements, contracts, agreements, or combinations between persons or corporations designed, or which tend, to increase the prices of any such goods, are against public policy, unlawful, and void. Tenn. Code, § 47-25-101. 452. The defendants competed unfairly and colluded by meeting to fix prices, divide markets, and otherwise restrain trade as set forth herein, in violation of Tenn. Code, § 47-25-101, 453. The defendants’ conduct violated the Tennessee Trade Practice Act because it was an arrangement, contract, agreement, or combination to lessen full and free competition in goods in Tennessee, and because it tended to increase the prices of goods in Tennessee. Specifically, the defendants’ combination or conspiracy had the following effects: (1) price competition for abiraterone acetate was restrained, suppressed, and eliminated throughout Tennessee; (2) prices for abiraterone acetate were raised, fixed, maintained and stabilized at artificially high levels throughout Tennessee; (3) Plaintiff and the Tennessee Class were deprived of free and open competition; and (4) the plaintiffs and the Tennessee Class paid supra- competitive, artificially inflated prices for abiraterone acetate. 454. During the class period, the defendants’ illegal conduct had a substantial effect on Tennessee commerce as abiraterone acetate was sold in Tennessee. 455. Members of the class purchased abiraterone acetate within the State of Tennessee during the class period. But for the defendants’ conduct set forth herein, the price of abiraterone acetate would have been lower, in an amount to be determined at trial. As a direct and proximate result of the defendants’ unlawful conduct, the plaintiffs and class have been injured in their business and property and are threatened with further injury. 456. Under Tennessee law, indirect purchasers (such as the plaintiffs and class) have standing under the Tennessee Trade Practice Acts to maintain an action based on the facts alleged in this complaint. 457. The plaintiffs and members of the class were injured with respect to purchases of Zytiga and its AB rated generic equivalents in Tennessee and are entitled to all forms of relief available under the law, including return of the unlawful overcharges that they paid on their purchases, damages, equitable relief, and reasonable attorneys’ fees. CLAIM FOR RELIEF VIOLATION OF THE UTAH ANTITRUST ACT, UTAH CODE ANN. §§ 76-10-3101, et seq. 458. The plaintiffs incorporate each and every allegation set forth in the preceding paragraphs of this complaint. 459. The Utah Antitrust Act aims to “encourage free and open competition in the interest of the general welfare and economy of this state by prohibiting monopolistic and unfair trade practices, combinations and conspiracies in restraint of trade or commerce . . . .” Utah Code Ann. § 76-10-3102. 460. Members of the class purchased abiraterone acetate within the State of Utah during the class period. But for the defendants’ conduct set forth herein, the price of abiraterone acetate would have been lower, in an amount to be determined at trial. 461. Under the Utah Antitrust Act, indirect purchasers who are either Utah residents or Utah citizens have standing to maintain an action based on the facts alleged in this Complaint. Utah Code Ann. § 76-10-3109(1)(a). 462. The defendants contracted, combined or conspired in restraint of trade or commerce of abiraterone acetate, and monopolized or attempted to monopolize trade or commerce of abiraterone acetate, in violation of Utah Code Ann. § 76-10-3101, et seq. 463. The plaintiffs and members of the class who are either Utah residents or Utah citizens were injured with respect to purchases of Zytiga and its AB rated generic equivalents in Utah and are entitled to all forms of relief, including actual damages, treble damages, costs of suit, reasonable attorneys’ fees, and injunctive relief. CLAIM FOR RELIEF VIOLATION OF THE WEST VIRGINIA ANTITRUST ACT, W. VA. CODE §47-18-1, et seq. 464. The plaintiffs incorporate each and every allegation set forth in the preceding paragraphs of this complaint. 465. The violations of federal antitrust law set forth above also constitute violations of section 47-18-1 of the West Virginia Code. 466. During the class period, defendants engaged in a continuing contract, combination or conspiracy in unreasonable restraint of trade and commerce and other anticompetitive conduct alleged above in violation of W. Va. Code §§ 47-18-1 and 47-18-20, et seq. 467. The defendants’ anticompetitive acts described above were knowing, willful and constitute violations or flagrant violations of the West Virginia Antitrust Act. 468. As a direct and proximate result of the defendants’ unlawful conduct, the plaintiffs and members of the class have been injured in their business and property in that they paid more for abiraterone acetate than they otherwise would have paid in the absence of the defendants’ unlawful conduct. As a result of the defendants’ violation of section 47-18-3 of the West Virginia Antitrust Act, the plaintiffs and members of the class seek treble damages and their cost of suit, including reasonable attorneys’ fees, pursuant to section 47-18-9 of the West Virginia Code. CLAIM FOR RELIEF VIOLATION OF THE WISCONSIN ANTITRUST ACT, WIS. STAT. ANN. § 133.01(1), et seq. 469. The plaintiffs incorporate each and every allegation set forth in the preceding paragraphs of this complaint. 470. Chapter 133 of the Wisconsin Statutes governs trust and monopolies, with the intent “to safeguard the public against the creation or perpetuation of monopolies and to foster and encourage competition by prohibiting unfair and discriminatory business practices which destroy or hamper competition.” Wis. Stat. § 133.01. 471. Members of the class purchased abiraterone acetate within the State of Wisconsin during the class period. But for the defendants’ conduct set forth herein, the price of abiraterone acetate would have been lower, in an amount to be determined at trial. 472. Under Wisconsin law, indirect purchasers have standing under the antitrust provisions of the Wisconsin Statutes to maintain an action based on the facts alleged in this Complaint. Wis. Stat. § 133.18(a). 473. The defendants contracted, combined or conspired in restraint of trade or commerce of abiraterone acetate, and monopolized or attempted to monopolize the trade or commerce of abiraterone acetate, with the intention of injuring or destroying competition therein, in violation of Wis. Stat. § 133.01, et seq. 474. The plaintiffs and members of the class were injured with respect to purchases of Zytiga and its AB rated generic equivalents in Wisconsin in that the actions alleged herein substantially affected the people of Wisconsin, with at least thousands of consumers in Wisconsin paying substantially higher prices for the defendants’ abiraterone acetate in Wisconsin. 475. Accordingly, the plaintiffs and members of the class are entitled to all forms of relief, including actual damages, treble damages, costs and reasonable attorneys’ fees, and injunctive relief. 476. The defendants’ anticompetitive activities have directly, foreseeably and proximately caused injury to the plaintiffs and members of the classes in the United States. Their injuries consist of: (1) being denied the opportunity to purchase lower-priced abiraterone acetate from defendants, (2) paying higher prices for abiraterone acetate than they would have in the absence of defendants’ conduct, and (3) being denied the opportunity to purchase generic abiraterone acetate at a price substantially lower than what they were forced to pay for abiraterone acetate. These injuries are of the type of the laws of the above States were designed to prevent, and flow from that which makes the defendants’ conduct unlawful. 477. The defendants are jointly and severally liable for all damages suffered by the plaintiffs and members of the classes. VIOLATIONS OF STATE CONSUMER PROTECTION LAWS 478. The plaintiffs incorporate by reference the allegations in the preceding paragraphs. 479. The defendants’ above-described scheme and conduct constitutes unfair competition, unconscionable conduct, and fraudulent and deceptive acts and practices in violation of the state consumer protection statutes set forth below. As a direct and proximate result of the defendants’ anticompetitive, fraudulent, deceptive, unfair, and/or unconscionable acts or practices, the plaintiffs and the class were denied the opportunity to purchase lower- priced generic versions of abiraterone acetate, and in fact paid higher prices for branded abiraterone acetate than they should have. 480. By reason of the conduct alleged herein, including the violation of federal antitrust laws, deception before the PTO, and the filing and maintaining of baseless litigation, the defendants have committed unfair, materially deceptive, and fraudulent acts and omissions in violation of the federal and state laws set forth herein. 481. The gravity of harm from the defendants’ wrongful conduct significantly outweighs any conceivable utility from that conduct. The plaintiffs and class members could not reasonably have avoided injury from the defendants’ wrongful conduct. 482. The plaintiffs and members of the class purchased the goods at issue, namely abiraterone acetate, primarily for personal, family, or household purposes, and not for resale. 483. There was and is a gross disparity between the price that plaintiff and the class members paid for abiraterone acetate and the value they received. 484. The following claims for relief twenty-nine through fifty-three are pleaded under the consumer protection or similar laws of each State or jurisdiction identified below, on behalf of the class. CLAIM FOR RELIEF VIOLATION OF ARIZONA CONSUMER FRAUD ACT ARIZ. REV. STAT. § 44-1521, et seq. 485. The plaintiffs incorporate each and every allegation set forth in the preceding paragraphs of this complaint. 486. The Arizona Consumer Fraud Act prohibits the “act, use or employment by any person of any deception, deceptive . . . act or practice, fraud, false pretense, false promise, misrepresentation, or concealment, suppression or omission of any material fact with intent that others rely on such concealment, suppression or omission, in connection with the sale or advertisement of any merchandise.” Ariz. Rev. Stat. § 44-1522(A). 487. By reason of the conduct alleged herein, including the violation of federal antitrust laws, deception before the PTO, and the filing and maintaining of baseless litigation, the defendants have violated the Arizona Consumer Fraud Act, Section 44-1521, et seq. 488. Members of the class purchased abiraterone acetate within the State of Arizona during the class period. But for the defendants’ conduct set forth herein, the price paid would have been lower, in an amount to be determined at trial. 489. The defendants established, maintained, or used a monopoly, or attempted to establish a monopoly, of trade or commerce in the abiraterone acetate market, a substantial part of which occurred within Arizona, for the purpose of excluding competition or controlling, fixing, or maintaining prices in the abiraterone acetate market. 490. The defendants’ conduct was an unfair method of competition, and an unfair or deceptive act or practice within the conduct of commerce within the State of Arizona. 491. The defendants’ unlawful conduct substantially affected Arizona’s trade and commerce. 492. As a direct and proximate cause of the defendants’ unlawful conduct, the plaintiffs and members of the class have been injured in their business or property and are threatened with further injury. 493. By reason of the foregoing, the plaintiffs and the class are entitled to seek all forms of relief, including up to treble damages and reasonable attorneys’ fees and costs. CLAIM FOR RELIEF VIOLATION OF CALIFORNIA’S UNFAIR COMPETITION LAW CAL. BUS. & PROF. CODE § 17200, et seq. (THE “UCL”) 494. The plaintiffs incorporate each and every allegation set forth in the preceding paragraphs of this complaint. 495. The violations of federal antitrust law set forth above also constitute violations of section 17200, et seq. of California Business and Professions Code. 496. California Business and Professions Code § 17200 prohibits any “unlawful, unfair, or fraudulent act or practices.” 497. The defendants have engaged in unfair competition or unfair, unconscionable, deceptive or fraudulent acts or practices in violation of the UCL by engaging in the acts and practices specified above. 498. This claim is instituted pursuant to sections 17203 and 17204 of California Business and Professions Code, to obtain restitution from these defendants for acts, as alleged herein, that violated the UCL. 499. The defendants’ conduct as alleged herein violated the UCL. The acts, omissions, misrepresentations, practices and non-disclosures of defendants, as alleged herein, including their pursuit of inter alia, filing and maintaining litigation against multiple would-be generic competitors despite knowing that the ‘438 patent was invalid and could not be enforced, constituted a common, continuous, and continuing course of conduct of unfair competition by means of unfair, unlawful, and/or fraudulent business acts or practices within the meaning of the UCL, including, but not limited to, the violations of section 16720, et seq., of California Business and Professions Code, set forth above. 500. The defendants’ acts, omissions, misrepresentations, practices, and non- disclosures, as described above, whether or not in violation of section 16720, et seq., of California Business and Professions Code, and whether or not concerted or independent acts, are otherwise unfair, unconscionable, unlawful or fraudulent. 501. The plaintiffs and members of the class are entitled to full restitution and/or disgorgement of all revenues, earnings, profits, compensation, and benefits that may have been obtained by defendants as a result of such business acts or practices. 502. The unlawful and unfair business practices of the defendants, and each of them, as described above, have caused and continue to cause members of the class to pay supra- competitive and artificially-inflated prices for abiraterone acetate sold in the State of California. The plaintiffs and members of the class suffered injury in fact and lost money or property as a result of such unfair competition. 503. As alleged in this complaint, the defendants have been unjustly enriched as a result of their wrongful conduct and by the defendants’ unfair competition. The plaintiffs and members of the class are accordingly entitled to equitable relief including restitution and/or disgorgement of all revenues, earnings, profits, compensation, and benefits that may have been obtained by defendants as a result of such business practices, pursuant to California Business and Professions Code sections 17203 and 17204. CLAIM FOR RELIEF VIOLATION OF THE DISTRICT OF COLUMBIA CONSUMER PROTECTION PROCEDURES ACT, D.C. CODE § 28-3901, et seq. 504. The plaintiffs incorporate each and every allegation set forth in the preceding paragraphs of this complaint. 505. Members of the class purchased abiraterone acetate for personal, family, or household purposes. 506. By reason of the conduct alleged herein, including their pursuit of inter alia, filing and maintaining litigation against multiple would-be generic competitors despite knowing that the ‘438 patent was invalid and could not be enforced, the defendants have violated D.C. Code § 28-3901, et seq. 507. The defendants are “merchants” within the meaning of D.C. Code § 28- 3901(a)(3). 508. The defendants entered into a contract, combination, or conspiracy between two or more persons in restraint of, or to monopolize, trade or commerce in the abiraterone acetate market, a substantial part of which occurred within the District of Columbia. 509. The defendants established, maintained, or used a monopoly, or attempted to establish a monopoly, of trade or commerce in the abiraterone acetate market, a substantial part of which occurred within the District of Columbia, for the purpose of excluding competition or controlling, fixing, or maintaining prices in the abiraterone acetate market. 510. The defendants’ conduct was an unfair method of competition, and an unfair or deceptive act or practice within the conduct of commerce within the District of Columbia. 511. The defendants’ unlawful conduct substantially affected the District of Columbia’s trade and commerce. 512. As a direct and proximate cause of defendants’ unlawful conduct, the plaintiffs and members of the class have been injured in their business or property and are threatened with further injury. 513. By reason of the foregoing, the plaintiffs and members of the class are entitled to seek all forms of relief, including treble damages or $1500 per violation (whichever is greater) plus punitive damages, reasonable attorney’s fees and costs under D.C. Code § 28-3901, et seq. CLAIM FOR RELIEF VIOLATION OF THE FLORIDA DECEPTIVE AND UNFAIR TRADE PRACTICES ACT, FLA. STAT. § 501.201(2), et seq. 514. The plaintiffs incorporate each and every allegation set forth in the preceding paragraphs of this complaint. 515. The Florida Deceptive & Unfair Trade Practices Act, Florida Stat. §§ 501.201, et seq. (the “FDUTPA”), generally prohibits “unfair methods of competition, unconscionable acts or practices, and unfair or deceptive acts or practices in the conduct of any trade or commerce,” including practices in restraint of trade. Florida Stat. § 501.204(1). 516. The primary policy of the FDUTPA is “[t]o protect the consuming public and legitimate business enterprises from those who engage in unfair methods of competition, or unconscionable, deceptive, or unfair acts or practices in the conduct of any trade or commerce.” Florida Stat. § 501.202(2). 517. A claim for damages under the FDUTPA has three elements: (1) a prohibited practice; (2) causation; and (3) actual damages. 518. Under Florida law, indirect purchasers have standing to maintain an action under the FDUTPA based on the facts alleged in this complaint. Fla. Stat. § 501.211(a) (“anyone aggrieved by a violation of this [statute] may bring an action . . . ”). 519. Members of the class purchased abiraterone acetate within the State of Florida during the class period. But for the defendants’ conduct set forth herein, the price of abiraterone acetate would have been lower, in an amount to be determined at trial. 520. The defendants entered into a contract, combination or conspiracy between two or more persons in restraint of, or to monopolize, trade or commerce in the abiraterone acetate market, a substantial part of which occurred within Florida. 521. The defendants established, maintained or used a monopoly, or attempted to establish a monopoly, of trade or commerce in the market for abiraterone acetate, for the purpose of excluding competition or controlling, fixing or maintaining prices in Florida at a level higher than the competitive market level, beginning at least as early as 2015 and continuing through the date of this filing. 522. Accordingly, the defendants’ conduct was an unfair method of competition, and an unfair or deceptive act or practice within the conduct of commerce within the State of Florida. 523. The defendants’ unlawful conduct substantially affected Florida’s trade and commerce. 524. As a direct and proximate cause of the defendants’ unlawful conduct, the plaintiffs and members of the class have been injured in their business or property by virtue of overcharges for abiraterone acetate and are threatened with further injury. 525. By reason of the foregoing, the plaintiffs and members of the class are entitled to seek all forms of relief, including injunctive relief pursuant to Florida Stat. § 501.208 and declaratory judgment, actual damages, reasonable attorneys’ fees and costs pursuant to Florida Stat. § 501.211. CLAIM FOR RELIEF VIOLATION OF THE HAWAII REVISED STATUTES ANNOTATED §§ 480-1, et seq. 526. The plaintiffs incorporate each and every allegation set forth in the preceding paragraphs of this complaint. 527. The defendants have engaged in unfair competition or unfair, unconscionable, or deceptive acts or practices in violation of the Hawaii Revised Statutes Annotated §§ 480-1, et 528. The defendants’ unlawful conduct had the following effects: (1) abiraterone acetate price competition was restrained, suppressed, and eliminated throughout Hawaii; (2) abiraterone acetate prices were, fixed, maintained, and stabilized at artificially high levels throughout Hawaii; (3) the plaintiffs and members of the class were deprived of free and open competition; and (4) the plaintiffs and members of the class paid supra-competitive, artificially inflated prices for abiraterone acetate. 529. During the class period, the defendants’ illegal conduct substantially affected Hawaii commerce and consumers. 530. As a direct and proximate result of the defendants’ unlawful conduct, the plaintiffs and members of the class have been injured and are threatened with further injury. CLAIM FOR RELIEF VIOLATION OF THE IDAHO CONSUMER PROTECTION ACT, IDAHO CODE §§ 48-601, et seq. 531. The plaintiffs incorporate each and every allegation set forth in the preceding paragraphs of this complaint. 532. The Idaho Consumer Protection Act, Idaho Code §§ 48-601, et seq. (the “Idaho CPA”), is a remedial statute that generally protects both consumers and businesses from “unfair methods of competition and unfair or deceptive acts and practices in the conduct of trade or commerce” and is designed to provide “efficient and economical procedures to secure such protection.” 533. The Idaho CPA further provides that “any unconscionable method, act or practice in the conduct of any trade or commerce” expressly fall within the scope of its protection. Idaho Code §§ 48-603(18); 48-603C. 534. The Idaho CPA also contains a harmonization provision with the FTC Act. Idaho Code § 48-604(1). 535. Under Idaho law, indirect purchasers have standing to maintain an action under the Idaho CPA based on the facts alleged in this complaint. See, e.g., Idaho Code § 48-608 (“Any person who purchases or leases goods or services and thereby suffers any ascertainable loss of money or property…as a result of the use or employment by another person of a method, act or practice declared unlawful by this chapter, may…bring an action to recover actual damages or one thousand dollars ($1,000), whichever is the greater…”). 536. Members of the class purchased abiraterone acetate within the State of Idaho during the class period. But for the defendants’ conduct set forth herein, the price of abiraterone acetate would have been lower, in an amount to be determined at trial. 537. The defendants entered into a contract, combination or conspiracy between two or more persons in restraint of, or to monopolize, trade or commerce in the abiraterone acetate market, a substantial part of which occurred within Idaho. 538. The defendants established, maintained or used a monopoly, or attempted to establish a monopoly, of trade or commerce in the market for abiraterone acetate, for the purpose of excluding competition or controlling, fixing or maintaining prices in Idaho at a level higher than the competitive market level, beginning at least as early as 2015 and continuing through the date of this filing. 539. Accordingly, the defendants’ conduct, including their restricting consumer access to generic versions of Zytiga, was an unfair method of competition, and an unfair or deceptive act or practice within the conduct of commerce within the State of Idaho. 540. The defendants’ unlawful conduct substantially affected Idaho’s trade and commerce. 541. As a direct and proximate cause of the defendants’ unlawful conduct, the plaintiffs and members of the class have been injured in their business or property by virtue of overcharges for abiraterone acetate and are threatened with further injury. 542. By reason of the foregoing, the plaintiffs and members of the class are entitled to seek all forms of relief, including injunctive relief, actual or statutory damages, punitive damages, and any other relief deemed necessary or proper by the court. Idaho Code § 48-608. CLAIM FOR RELIEF VIOLATION OF THE ILLINOIS CONSUMER FRAUD AND DECEPTIVE BUSINESS PRACTICES ACT, 815 ILL. COMP. STAT. ANN. 505/10A, et seq. 543. The plaintiffs incorporates each and every allegation set forth in the preceding paragraphs of this complaint. 544. By reason of the conduct alleged herein, the defendants have violated 740 Ill. Comp. Stat. Ann. 10/3(1), et seq. 545. The defendants entered into a contract, combination, or conspiracy between two or more persons in restraint of, or to monopolize, trade or commerce in the abiraterone acetate market, a substantial part of which occurred within Illinois. 546. The defendants established, maintained, or used a monopoly, or attempted to establish a monopoly, of trade or commerce in the relevant market, a substantial part of which occurred within Illinois, for the purpose of excluding competition or controlling, fixing, or maintaining prices in the abiraterone acetate market. 547. The defendants’ conduct was unfair, unconscionable, or deceptive within the conduct of commerce within the State of Illinois. 548. The defendants’ conduct misled consumers, withheld material facts, and resulted in material misrepresentations to the plaintiffs and members of the class. 549. The defendants’ unlawful conduct substantially affected Illinois’s trade and commerce. 550. As a direct and proximate cause of the defendants’ unlawful conduct, the plaintiffs and members of the class were actually deceived and have been injured in their business or property and are threatened with further injury. 551. By reason of the foregoing, the plaintiffs and members of the class are entitled to seek all forms of relief, including actual damages or any other relief the Court deems proper under 815 Ill. Comp. Stat. Ann. 505/10a, et seq. CLAIM FOR RELIEF VIOLATION OF THE MICHIGAN CONSUMER PROTECTION ACT, MICH. COMP. LAWS ANN. § 445.901, et seq. 552. The plaintiffs incorporate each and every allegation set forth in the preceding paragraphs of this complaint. 553. By reason of the conduct alleged herein, the defendants have violated Mich. Comp. Laws Ann. § 445.901, et seq. 554. The defendants have entered into a contract, combination, or conspiracy between two or more persons in restraint of, or to monopolize, trade or commerce in the abiraterone acetate market, a substantial part of which occurred within Michigan. 555. The defendants established, maintained, or used a monopoly, or attempted to establish a monopoly, of trade or commerce in the abiraterone acetate market, for the purpose of excluding or limiting competition or controlling or maintaining prices, a substantial part of which occurred within Michigan. 556. The defendants’ conduct was conducted with the intent to deceive Michigan consumers regarding the nature of the defendants’ actions within the stream of Michigan commerce. 557. The defendants’ conduct was unfair, unconscionable, or deceptive within the conduct of commerce within the State of Michigan. 558. The defendants’ conduct misled consumers, withheld material facts, and took advantage of the plaintiffs’ and members of the class’ inability to protect themselves. 559. The defendants’ unlawful conduct substantially affected Michigan’s trade and commerce. 560. As a direct and proximate cause of the defendants’ unlawful conduct, the plaintiffs and members of the class have been injured in their business or property and are threatened with further injury. 561. By reason of the foregoing, the plaintiffs and the class are entitled to seek all forms of relief available under Mich. Comp. Laws Ann. § 445.911. CLAIM FOR RELIEF VIOLATION OF THE MINNESOTA CONSUMER FRAUD ACT, MINN. STAT. § 325F.68, et seq. 562. The plaintiffs incorporate each and every allegation set forth in the preceding paragraphs of this complaint. 563. By reason of the conduct alleged herein, the defendants have violated Minn. Stat. § 325F.68, et seq. 564. The defendants engaged in a deceptive trade practice with the intent to injure competitors and consumers through supra-competitive profits. 565. The defendants established, maintained, or used a monopoly, or attempted to establish a monopoly, of trade or commerce in the abiraterone acetate market, a substantial part of which occurred within Minnesota, for the purpose of controlling, fixing, or maintaining prices in the abiraterone acetate market. 566. The defendants’ conduct was unfair, unconscionable, or deceptive within the conduct of commerce within the State of Minnesota. 567. The defendants’ conduct, specifically in their pursuit of inter alia, filing and maintaining litigation against multiple would-be generic competitors despite knowing that the ‘438 patent was invalid and could not be enforced, created a fraudulent or deceptive act or practice committed by a supplier in connection with a consumer transaction. 568. The defendants’ unlawful conduct substantially affected Minnesota’s trade and commerce. 569. The defendants’ conduct was willful. 570. As a direct and proximate cause of the defendants’ unlawful conduct, the plaintiffs and members of the class have been injured in their business or property and are threatened with further injury. 571. By reason of the foregoing, the plaintiffs and members of the class are entitled to seek all forms of relief, including damages, reasonable attorneys’ fees and costs under Minn. Stat. § 325F.68, et seq. and applicable case law. CLAIM FOR RELIEF VIOLATION OF THE MONTANA UNFAIR TRADE PRACTICES AND CONSUMER PROTECTION ACT OF 1970, MONT. CODE, §§ 30-14-103, et seq., AND §§ 30-14-201, et. seq. 572. The plaintiffs incorporate each and every allegation set forth in the preceding paragraphs of this complaint. 573. The defendants have engaged in unfair competition or unfair, unconscionable, or deceptive acts or practices in violation of the Montana Unfair Trade Practices and Consumer Protection Act of 1970, Mont. Code, §§ 30-14-103, et seq., and §§ 30-14-201, et. seq. 574. The defendants’ unlawful conduct had the following effects: (1) abiraterone acetate price competition was restrained, suppressed, and eliminated throughout Montana; (2) abiraterone acetate prices were raised, fixed, maintained, and stabilized at artificially high levels throughout Montana; (3) the plaintiffs and members of the class were deprived of free and open competition; and (4) the plaintiffs and members of the class paid supra-competitive, artificially inflated prices for abiraterone acetate. 575. During the class period, the defendants’ illegal conduct substantially affected Montana commerce and consumers. 576. As a direct and proximate result of the defendants’ unlawful conduct, the plaintiffs and members of the class have been injured and are threatened with further injury. The defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of Mont. Code, §§ 30-14-103, et seq., and §§ 30-14-201, et. seq., and, accordingly, the plaintiffs and members of the class seek all relief available under that statute. CLAIM FOR RELIEF VIOLATION OF THE NEBRASKA CONSUMER PROTECTION ACT, NEB. REV. STAT. § 59-1602, et seq. 577. The plaintiffs incorporate each and every allegation set forth in the preceding paragraphs of this complaint. 578. By reason of the conduct alleged herein, the defendants have violated Neb. Rev. Stat. § 59-1602, et seq. 579. The defendants have entered into a contract, combination, or conspiracy between two or more persons in restraint of, or to monopolize, trade or commerce in the abiraterone acetate market, a substantial part of which occurred within Nebraska. 580. The defendants established, maintained, or used a monopoly, or attempted to establish a monopoly, of trade or commerce in the abiraterone acetate market, for the purpose of excluding or limiting competition or controlling or maintaining prices, a substantial part of which occurred within Nebraska. 581. The defendants’ conduct was conducted with the intent to deceive Nebraska consumers regarding the nature of the defendants’ actions within the stream of Nebraska commerce. 582. The defendants’ conduct was unfair, unconscionable, or deceptive within the conduct of commerce within the State of Nebraska. 583. The defendants’ conduct misled consumers, withheld material facts, and had a direct or indirect impact upon the plaintiffs’ and members of the-class’ ability to protect themselves. 584. The defendants’ unlawful conduct substantially affected Nebraska’s trade and commerce. 585. As a direct and proximate cause of the defendants’ unlawful conduct, the plaintiffs and members of the class have been injured in their business or property and are threatened with further injury. 586. By reason of the foregoing, the plaintiffs and members of the class are entitled to seek all forms of relief available under Neb. Rev. Stat. § 59- 1614. CLAIM FOR RELIEF VIOLATION OF THE NEVADA DECEPTIVE TRADE PRACTICES ACT, NEV. REV. STAT. § 598.0903, et seq. 587. The plaintiffs incorporate each and every allegation set forth in the preceding paragraphs of this complaint. 588. By reason of the conduct alleged herein, the defendants have violated Nev. Rev. Stat. § 598.0903, et seq. 589. The defendants engaged in a deceptive trade practice with the intent to injure competitors and to substantially lessen competition. 590. The defendants established, maintained, or used a monopoly, or attempted to establish a monopoly, of trade or commerce in the abiraterone acetate market, a substantial part of which occurred within Nevada, for the purpose of excluding competition or controlling, fixing, or maintaining prices in the abiraterone acetate market. 591. The defendants’ conduct was unfair, unconscionable, or deceptive within the conduct of commerce within the State of Nevada. 592. The defendants’ conduct, including their wrongful pursuit of sham litigation they knew they could not win, amounted to a fraudulent act or practice committed by a supplier in connection with a consumer transaction. 593. The defendants’ unlawful conduct substantially affected Nevada’s trade and commerce. 594. The defendants’ conduct was willful. 595. As a direct and proximate cause of the defendants’ unlawful conduct, the members of the class have been injured in their business or property and are threatened with further injury. 596. By reason of the foregoing, the class is entitled to seek all forms of relief, including damages, reasonable attorneys’ fees and costs, and a civil penalty of up to $5,000 per violation under Nev. Rev. Stat. § 598.0993. CLAIM FOR RELIEF VIOLATION OF THE NEW HAMPSHIRE CONSUMER PROTECTION ACT, N.H. REV. STAT. ANN. TIT. XXXI, § 358-A, et seq. 597. The plaintiffs incorporate each and every allegation set forth in the preceding paragraphs of this complaint. 598. By reason of the conduct alleged herein, defendants have violated N.H. Rev. Stat. Ann. tit. XXXI, § 358-A, et seq. 599. The defendants have entered into a contract, combination, or conspiracy between two or more persons in restraint of, or to monopolize, trade or commerce in the abiraterone acetate market, a substantial part of which occurred within New Hampshire. 600. The defendants established, maintained, or used a monopoly, or attempted to establish a monopoly, of trade or commerce in the abiraterone acetate market, for the purpose of excluding or limiting competition or controlling or maintaining prices, a substantial part of which occurred within New Hampshire. 601. The defendants’ conduct was conducted with the intent to deceive New Hampshire consumers regarding the nature of the defendants’ actions within the stream of New Hampshire commerce. 602. The defendants’ conduct was unfair or deceptive within the conduct of commerce within the State of New Hampshire. 603. The defendants’ conduct was willful and knowing. 604. The defendants’ conduct misled consumers, withheld material facts, and had a direct or indirect impact upon the plaintiffs’ and members of the class’ ability to protect themselves. 605. The defendants’ unlawful conduct substantially affected New Hampshire’s trade and commerce. 606. As a direct and proximate cause of the defendants’ unlawful conduct, the plaintiffs and the members of the class have been injured in their business or property and are threatened with further injury. 607. By reason of the foregoing, the plaintiffs and members of the class are entitled to seek all forms of relief available under N.H. Rev. Stat. Ann. tit. XXXI, §§ 358-A:10 and 358- A:10-a. CLAIM FOR RELIEF VIOLATION OF THE NEW MEXICO UNFAIR PRACTICES ACT, N.M. STAT. ANN. §§ 57-12-1, et seq. 608. The plaintiffs incorporate each and every allegation set forth in the preceding paragraphs of this complaint. 609. By reason of the conduct alleged herein, defendants have violated N.M. Stat. Ann. §§ 57-12-3, et seq. 610. The defendants entered into a contract, combination, or conspiracy between two or more persons in restraint of, or to monopolize, trade or commerce in the abiraterone acetate market, a substantial part of which occurred within New Mexico. 611. The defendants established, maintained, or used a monopoly, or attempted to establish a monopoly, of trade or commerce in the relevant markets, a substantial part of which occurred within New Mexico, for the purpose of excluding competition or controlling, fixing, or maintaining prices in the abiraterone acetate market. 612. The defendants’ conduct was unfair, unconscionable, or deceptive within the conduct of commerce within the State of New Mexico. 613. The defendants’ conduct misled consumers, withheld material facts, and resulted in material misrepresentations to the plaintiffs and members of the class. 614. The defendants’ unlawful conduct substantially affected New Mexico’s trade and commerce. 615. The defendants’ conduct constituted “unconscionable trade practices” in that such conduct, inter alia, resulted in a gross disparity between the value received by the New Mexico class members and the price paid by them for abiraterone acetate as set forth in N.M. Stat. Ann. § 57-12-2E. 616. The defendants’ conduct was willful. 617. As a direct and proximate cause of the defendants’ unlawful conduct, the plaintiffs and members of the class have been injured in their business or property and are threatened with further injury. 618. By reason of the foregoing, the plaintiffs and members of the class are entitled to seek all forms of relief, including actual damages or up to $300 per violation, whichever is greater, plus reasonable attorney’s fees under N.M. Stat. Ann. §§ 57-12-10, et seq. CLAIM FOR RELIEF VIOLATION OF THE NEW YORK GENERAL BUSINESS LAW GEN. BUS. LAW §§ 349,et seq. 619. The plaintiffs incorporate each and every allegation set forth in the preceding paragraphs of this complaint. 620. New York State General Business Law Section 349 (Section 349) broadly prohibits deceptive acts or practices in the state of New York toward the plaintiffs. In particular, Section 349 makes unlawful, inter alia, “[d]eceptive acts or practices in the conduct of any business, trade or commerce.” N.Y. Gen. Bus. Law §§ 349(a), (g). 621. The plaintiffs, the members of the class, and all the defendants are “persons” under N.Y. Gen. Bus. Law § 349(h), 622. The defendants’ actions as set forth herein occurred in the conduct of trade or commerce under Section 349. 623. As detailed above, the defendants engaged in deceptive acts in violation of New York and federal law in connection with Zytiga. 624. The defendants owed and continue to owe the plaintiffs and members of the Class a duty to refrain from the above-described unfair and deceptive practices. 625. The defendants knew or should have known that their conduct was in violation of Section 349. 626. The defendants’ unfair and deceptive acts or practices, omissions and misrepresentations were material to the plaintiffs and the members of the Class, and were likely to and/or did, in fact, deceive regulators and reasonable consumers, including the plaintiffs and members of the Class. 627. As a result of the foregoing willful, knowing, and wrongful conduct of the defendants, 628. The plaintiff and members Class have been damaged in an amount to be proven at trial, and seek all just and proper remedies, including but not limited to actual damages, treble damages up to $1,000, punitive damages to the extent available under the law, reasonable attorneys’ fees and costs, an order enjoining the defendants’ deceptive and unfair conduct, and all other just and appropriate relief available under Section 349 and New York law. CLAIM FOR RELIEF VIOLATION OF THE NORTH CAROLINA UNFAIR TRADE AND BUSINESS PRACTICES ACT, N.C. GEN. STAT. § 75-1.1, et seq. 629. The plaintiffs incorporate each and every allegation set forth in the preceding paragraphs of this complaint. 630. By reason of the conduct alleged herein, the defendants have violated N.C. Gen. Stat. § 75-1.1, et seq. 631. The defendants entered into a contract, combination, or conspiracy in restraint of, or to monopolize, trade or commerce in the abiraterone acetate market, a substantial part of which occurred within North Carolina. 632. The defendants’ conduct was unfair, unconscionable, or deceptive within the conduct of commerce within the State of North Carolina. 633. The defendants’ trade practices are and have been immoral, unethical, unscrupulous, and substantially injurious to consumers. 634. The defendants’ conduct misled consumers, withheld material facts, and resulted in material misrepresentations to the plaintiffs and members of the class. 635. The defendants’ unlawful conduct substantially affected North Carolina’s trade and commerce. 636. The defendants’ conduct constitutes consumer-oriented deceptive acts or practices within the meaning of North Carolina law, which resulted in consumer injury and broad adverse impact on the public at large, and harmed the public interest of North Carolina consumers in an honest marketplace in which economic activity is conducted in a competitive manner. 637. As a direct and proximate cause of the defendants’ unlawful conduct, the plaintiffs and members of the class have been injured in their business or property and are threatened with further injury. 638. By reason of the foregoing, the plaintiffs and members of the class are entitled to seek all forms of relief, including treble damages under N.C. Gen. Stat. § 7516. CLAIM FOR RELIEF VIOLATION OF THE NORTH DAKOTA UNFAIR TRADE PRACTICES LAW, N.D. CENT. CODE § 51-10, et seq. 639. The plaintiffs incorporate each and every allegation set forth in the preceding paragraphs of this complaint. 640. By reason of the conduct alleged herein, the defendants have violated N.D. Cent. Code § 1-10-01, et seq. 641. The defendants engaged in a deceptive trade practice with the intent to injure competitors and consumers through supra-competitive profits. 642. The defendants established, maintained, or used a monopoly, or attempted to establish a monopoly, of trade or commerce in the abiraterone acetate market, a substantial part of which occurred within North Dakota, for the purpose of controlling, fixing, or maintaining prices in the abiraterone acetate market. 643. The defendants’ conduct was unfair, unconscionable, or deceptive within the conduct of commerce within the State of North Dakota. 644. The defendants’ conduct amounted to a fraudulent or deceptive act or practice committed by a supplier in connection with a consumer transaction. 645. The defendants’ unlawful conduct substantially affected North Dakota’s trade and commerce. 646. The defendants’ conduct was willful. 647. As a direct and proximate cause of the defendants’ unlawful conduct, the plaintiffs and members of the class have been injured in their business or property and are threatened with further injury. 648. By reason of the foregoing, the plaintiffs and members of the class are entitled to seek all forms of relief, including damages and injunctive relief under N.D. Cent. Code § 51-10- CLAIM FOR RELIEF VIOLATION OF THE OREGON UNLAWFUL TRADE PRACTICES ACT, OR. REV. STAT. § 646.605, et seq. 649. The plaintiffs incorporate each and every allegation set forth in the preceding paragraphs of this complaint. 650. By reason of the conduct alleged herein, the defendants have violated Or. Rev. Stat. § 646.608, et seq. 651. The defendants have entered into a contract, combination, or conspiracy between two or more persons in restraint of, or to monopolize, trade or commerce in the abiraterone acetate market, a substantial part of which occurred within Oregon. 652. The defendants established, maintained, or used a monopoly, or attempted to establish a monopoly, of trade or commerce in the abiraterone acetate market, for the purpose of excluding or limiting competition or controlling or maintaining prices, a substantial part of which occurred within Oregon. 653. The defendants’ conduct was conducted with the intent to deceive Oregon consumers regarding the nature of the defendants’ actions within the stream of Oregon commerce. 654. Defendants’ conduct was unfair or deceptive within the conduct of commerce within the State of Oregon. 655. The defendants’ conduct misled consumers, withheld material facts, and had a direct or indirect impact upon the plaintiffs’ and members of the class’ ability to protect themselves. 656. The defendants’ unlawful conduct substantially affected Oregon’s trade and commerce. 657. As a direct and proximate cause of the defendants’ unlawful conduct, the plaintiffs and members of the class have been injured in their business or property and are threatened with further injury. 658. By reason of the foregoing, the plaintiffs and members of the class are entitled to seek all forms of relief available under OR. REV. STAT. § 646.638. 659. Pursuant to section 646.638 of the Oregon Unlawful Trade Practices Act, with the filing of this action, a copy of this complaint is being served upon the Attorney General of Oregon. CLAIM FOR RELIEF VIOLATION OF THE RHODE ISLAND DECEPTIVE TRADE PRACTICES ACT, R.I. GEN. LAWS § 6-13.1-1, et seq. 660. The plaintiffs incorporate each and every allegation set forth in the preceding paragraphs of this complaint. 661. By reason of the conduct alleged herein, the defendants have violated R.I. Gen Laws § 6-13.1-1, et seq. 662. The defendants engaged in an unfair or deceptive act or practice with the intent to injure competitors and consumers through supra-competitive profits. 663. The defendants established, maintained, or used a monopoly, or attempted to establish a monopoly, of trade or commerce in the abiraterone acetate market, a substantial part of which occurred within Rhode Island, for the purpose of controlling, fixing, or maintaining prices in the abiraterone acetate market. 664. The defendants’ conduct was unfair or deceptive within the conduct of commerce within the State of Rhode Island. 665. The defendants’ conduct amounted to an unfair or deceptive act or practice committed by a supplier in connection with a consumer transaction. 666. The defendants’ unlawful conduct substantially affected Rhode Island’s trade and commerce. 667. The defendants’ conduct was willful. 668. The defendants deliberately failed to disclose material facts to the plaintiffs and members of the class concerning the defendants’ unlawful activities, including inter alia, filing and maintaining litigation against multiple would-be generic competitors despite knowing that the ‘438 patent was invalid and could not be enforced. 669. The defendants’ deception, including its affirmative misrepresentations and/or omissions concerning the price of abiraterone acetate, constitutes information necessary to the plaintiffs and members of the class relating to the cost of abiraterone acetate purchased. 670. The plaintiffs and members of the class purchased goods, namely abiraterone acetate, primarily for personal, family, or household purposes. 671. As a direct and proximate cause of the defendants’ unlawful conduct, the plaintiffs and members of the class have been injured in their business or property and are threatened with further injury. 672. By reason of the foregoing, the plaintiffs and members of the class are entitled to seek all forms of relief, including actual damages or $200 per violation, whichever is greater, and injunctive relief and punitive damages under R.I. Gen Laws § 6-13.1-5.2. CLAIM FOR RELIEF VIOLATION OF THE SOUTH CAROLINA’S UNFAIR TRADE PRACTICES ACT, S.C. CODE ANN. §§ 39-5-10, et seq. 673. The plaintiffs incorporate each and every allegation set forth in the preceding paragraphs of this complaint. 674. By reason of the conduct alleged herein, the defendants have violated S.C. Code Ann. §§ 39-5-10. 675. The defendants have entered into a contract, combination, or conspiracy between two or more persons in restraint of, or to monopolize, trade or commerce in the abiraterone acetate market, a substantial part of which occurred within Oregon. 676. The defendants established, maintained, or used a monopoly, or attempted to establish a monopoly, of trade or commerce in the abiraterone acetate market, for the purpose of excluding or limiting competition or controlling or maintaining prices, a substantial part of which occurred within South Carolina. 677. The defendants’ conduct was conducted with the intent to deceive South Carolina consumers regarding the nature of the defendants’ actions within the stream of South Carolina commerce. 678. The defendants’ conduct was unfair or deceptive within the conduct of commerce within the State of South Carolina. 679. The defendants’ conduct misled consumers, withheld material facts, and had a direct or indirect impact upon the plaintiffs’ and members of the class’ ability to protect themselves. 680. The defendants’ unlawful conduct substantially affected South Carolina trade and commerce. 681. The defendants’ unlawful conduct substantially harmed the public interest of the State of South Carolina, as nearly all members of the public purchase and consume abiraterone acetate. CLAIM FOR RELIEF VIOLATION OF THE SOUTH DAKOTA DECEPTIVE TRADE PRACTICES AND CONSUMER PROTECTION LAW, S.D. CODIFIED LAWS § 37-24, et seq. 682. The plaintiffs incorporate each and every allegation set forth in the preceding paragraphs of this complaint. 683. By reason of the conduct alleged herein, the defendants have violated S.D. Codified Laws § 37-24-6. 684. The defendants engaged in a deceptive trade practice with the intent to injure competitors and consumers through supra-competitive profits. 685. The defendants established, maintained, or used a monopoly, or attempted to establish a monopoly, of trade or commerce in the abiraterone acetate market, a substantial part of which occurred within South Dakota, for the purpose of controlling, fixing, or maintaining prices in the abiraterone acetate market. 686. The defendants’ conduct, including inter alia, filing and maintaining litigation against multiple would-be generic competitors despite knowing that the ‘438 patent was invalid and could not be enforced, was unfair, unconscionable, or deceptive within the conduct of commerce within the State of South Dakota. 687. The defendants’ conduct amounted to a fraudulent or deceptive act or practice committed by a supplier in connection with a consumer transaction. 688. The defendants’ unlawful conduct substantially affected South Dakota’s trade and commerce. 689. The defendants’ conduct was willful. 690. As a direct and proximate cause of the defendants’ unlawful conduct, the plaintiffs and members of the class have been injured in their business or property and are threatened with further injury. 691. By reason of the foregoing, the plaintiffs and members of the class are entitled to seek all forms of relief, including actual damages and injunctive relief under S.D. Codified Laws § 37-24-31. CLAIM FOR RELIEF VIOLATION OF THE UTAH CONSUMER SALES PRACTICES ACT, UTAH CODE ANN. §§ 13-11-1, et seq. 692. The plaintiffs incorporate each and every allegation set forth in the preceding paragraphs of this complaint. 693. By reason of the conduct alleged herein, the defendants have violated Utah Code Ann. §§ 13-11-1, et seq. 694. The defendants entered into a contract, combination, or conspiracy between two or more persons in restraint of, or to monopolize, trade or commerce in the abiraterone acetate market, a substantial part of which occurred within Utah. 695. The defendants are suppliers within the meaning of Utah Code Ann. § 13-11-3. 696. The defendants established, maintained, or used a monopoly, or attempted to establish a monopoly, of trade or commerce in the abiraterone acetate markets, a substantial part of which occurred within Utah, for the purpose of excluding competition or controlling, fixing, or maintaining prices in the abiraterone acetate market. 697. The defendants’ conduct was unfair, unconscionable, or deceptive within the conduct of commerce within the State of Utah. 698. The defendants’ conduct and/or practices were unconscionable and were undertaken in connection with consumer transactions. 699. The defendants knew or had reason to know that their conduct was unconscionable. 700. The defendants’ conduct misled consumers, withheld material facts, and resulted in material misrepresentations to the plaintiffs and members of the class. 701. The defendants’ unlawful conduct substantially affected Utah’s trade and commerce. 702. As a direct and proximate cause of the defendants’ unlawful conduct, the plaintiffs and members of the class have been injured in their business or property and are threatened with further injury. 703. By reason of the foregoing, the plaintiffs and members of the class are entitled to seek all forms of relief, including declaratory judgment, injunctive relief, and ancillary relief, pursuant to Utah Code Ann. §§ 13-11-19(5) and 13-11-20. CLAIM FOR RELIEF VIOLATION OF THE UTAH UNFAIR PRACTICES ACT, UTAH CODE ALL. §§ 13-5-1, et seq. 704. The plaintiffs incorporate each and every allegation set forth in the preceding paragraphs of this complaint. 705. By reason of the conduct alleged herein, the defendants have violated Utah Code Ann. §§ 13-5-1, et seq. 706. The defendants entered into a contract, combination, or conspiracy between two or more persons in restraint of, or to monopolize, trade or commerce in the abiraterone acetate market, a substantial part of which occurred within Utah. 707. The defendants established, maintained, or used a monopoly, or attempted to establish a monopoly, of trade or commerce in the abiraterone acetate market, a substantial part of which occurred within Utah, for the purpose of excluding competition or controlling, fixing, or maintaining prices in the abiraterone acetate market. 708. The defendants’ conduct caused or was intended to cause unfair methods of competition within the State of Utah. 709. The defendants’ unlawful conduct substantially affected Utah’s trade and commerce. 710. As a direct and proximate cause of the defendants’ unlawful conduct, the plaintiffs and the members of the class have been injured in their business or property and are threatened with further injury. 711. By reason of the foregoing, the plaintiffs and the members of the class are entitled to seek all forms of relief, including actual damages or $2000 per class member, whichever is greater, plus reasonable attorney’s fees under Utah Code Ann. §§ 13-5-14, et seq. CLAIM FOR RELIEF VIOLATION OF THE VERMONT CONSUMER FRAUD ACT VT. STAT. ANN. TIT. 9, CH. 63 §2451, et seq. 712. The plaintiffs incorporate each and every allegation set forth in the preceding paragraphs of this complaint. 713. Title 9 of the Vermont Statutes generally governs commerce and trade in Vermont. Chapter 63 thereof governs consumer protection and prohibits, inter alia, unfair methods competition, unfair and deceptive acts and practices, and antitrust violations such as restraints of trade and monopolization. VT. STAT ANN. tit. 9, § 2453(a). 714. Members of the class purchased abiraterone acetate within the State of Vermont during the class period. But for the defendants’ conduct set forth herein, the price of abiraterone acetate would have been lower, in an amount to be determined at trial. 715. Under Vermont law, indirect purchasers have standing under the antitrust provisions of the Vermont Statutes to maintain an action based on the facts alleged in this complaint. Vt. Stat. Ann. tit. 9, § 2465(b). 716. The defendants competed unfairly by restraining trade as set forth herein, in violation of Vermont Statutes tit. 9, § 2453, et seq. 717. The plaintiffs and members of the class were injured with respect to purchases of Zytiga and its AB rated generic equivalents in Vermont and are entitled to all forms of relief, including actual damages, treble damages, and reasonable attorneys’ fees. CLAIM FOR RELIEF VIOLATION OF THE VIRGINIA CONSUMER PROTECTION ACT VA. CODE ANN. § 59.1- 196, et seq. 718. The plaintiffs incorporate each and every allegation set forth in the preceding paragraphs of this complaint. 719. By reason of the conduct alleged herein, defendants have violated Va. Code Ann. §§ 59.1-196, et seq. 720. The defendants entered into a contract, combination, or conspiracy between two or more persons in restraint of, or to monopolize, trade or commerce in the abiraterone acetate market, a substantial part of which occurred within Virginia. 721. The defendants established, maintained, or used a monopoly, or attempted to establish a monopoly, of trade or commerce in the abiraterone acetate market, a substantial part of which occurred within Virginia, for the purpose of excluding competition or controlling, fixing, or maintaining prices in the abiraterone acetate market. 722. The defendants’ conduct caused or was intended to cause unfair methods of competition within the State of Virginia. 723. The defendants’ unlawful conduct substantially affected Virginia’s trade and commerce. 724. As a direct and proximate cause of defendants’ unlawful conduct, the plaintiffs and members of the class have been injured in their business or property and are threatened with further injury. 725. By reason of the foregoing, the plaintiffs and the members of the class are entitled to seek all forms of relief, including actual damages, treble damages, plus reasonable attorney’s fees under Virginia Code Ann. § 59.1-196, et seq. CLAIM FOR RELIEF: UNJUST ENRICHMENT 726. The plaintiffs incorporate by reference the allegations in the preceding paragraphs. 727. To the extent required, this claim is pled in the alternative to the other claims in this complaint. 728. It would be futile for the plaintiffs, or any member of the class, to seek a remedy from any party with whom they had or have privity of contract; the defendants have paid no consideration to anyone for the improper benefits they received indirectly from the plaintiffs and members of the class. 729. As a result of their unlawful conduct described above, the defendants have and will continued to be unjustly enriched by the receipt of unlawfully inflated prices and unlawful profits of abiraterone acetate. 730. A constructive trust should be imposed upon all unlawful or inequitable sums the defendants received that are traceable to the plaintiffs and members of the class. ALABAMA 731. The defendants unlawfully overcharged Class Members, who made purchases of or reimbursements for Zytiga or its AB-rated generic equivalents in Alabama at prices that were more than they would have been but for the defendants’ actions. The defendants received money from the Class as a direct result of the unlawful overcharges and have retained this money. The defendants have benefitted at the expense of the Class from revenue resulting from unlawful overcharges for Zytiga or its AB-rated generic equivalents. It is inequitable for the defendants to accept and retain the benefits received without compensating the Class. ALASKA 732. The defendants unlawfully overcharged Class Members, who made purchases of or reimbursements for Zytiga or its AB-rated generic equivalents in Alaska at prices that were more than they would have been but for the defendants’ actions. The Class has conferred an economic benefit upon the defendants, in the nature of revenue resulting from unlawful overcharges to the economic detriment of the Class. The defendants appreciated the benefits bestowed upon them by the Class. The defendants accepted and retained the benefits bestowed upon them under inequitable and unjust circumstances arising from unlawful overcharges to the Class. Under the circumstances, it would be inequitable for the defendants to retain such benefits without compensating the Class. ARIZONA 733. The defendants unlawfully overcharged Class Members, who made purchases of or reimbursements for Zytiga or its AB-rated generic equivalents in Arizona at prices that were more than they would have been but for the defendants’ actions. The defendants have been enriched by revenue resulting from unlawful overcharges for Zytiga or its AB-rated generic equivalents. The Class has been impoverished by the overcharges for Zytiga or its AB-rated generic equivalents resulting from the defendants’ unlawful conduct. The defendants’ enrichment and the Class’s impoverishment are connected. There is no justification for the defendants’ receipt of the benefits causing their enrichment and the Class’s impoverishment, because the Class paid supra-competitive prices that inured to the defendants’ benefit, and it would be inequitable for the defendants to retain any revenue gained from their unlawful overcharges. The Class has no remedy at law. ARKANSAS 734. The defendants unlawfully overcharged Class Members, who made purchases of or reimbursements for Zytiga or its AB-rated generic equivalents in Arkansas at prices that were more than they would have been but for the defendants’ actions. The defendants received money from the Class as a direct result of the unlawful overcharges and have retained this money. The defendants have paid no consideration to any other person in exchange for this money. Under the circumstances, it would be inequitable for the defendants to retain such benefits without compensating the Class. CALIFORNIA 735. The defendants unlawfully overcharged Class Members, who made purchases of or reimbursements for Zytiga or its AB-rated generic equivalents in California at prices that were more than they would have been but for the defendants’ actions. The defendants have received a benefit from the Class as a direct result of the unlawful overcharges. The defendants retained the benefits bestowed upon them under inequitable and unjust circumstances at the expense of the DISTRICT OF COLUMBIA 736. The defendants unlawfully overcharged Class Members, who made purchases of or reimbursements for Zytiga or its AB-rated generic equivalents in the District of Columbia at prices that were more than they would have been but for the defendants’ actions. The Class has conferred an economic benefit upon the defendants, in the nature of revenue resulting from unlawful overcharges to the economic detriment of the Class. The defendants retained the benefit bestowed upon them under inequitable and unjust circumstances arising from unlawful overcharges to the Class. Under the circumstances, it would be inequitable and unjust for the defendants to retain such benefits. FLORIDA 737. The defendants unlawfully overcharged Class Members, who made purchases of or reimbursements for Zytiga or its AB-rated generic equivalents in Florida at prices that were more than they would have been but for the defendants’ actions. The Class has conferred an economic benefit upon the defendants, in the nature of revenue resulting from unlawful overcharges to the economic detriment of the Class. The defendants appreciated the benefits bestowed upon them by the Class. Under the circumstances, it would be inequitable for the defendants to retain such benefits without compensating the Class. GEORGIA 738. The defendants unlawfully overcharged Class Members, who made purchases of or reimbursements for Zytiga or its AB-rated generic equivalents in Georgia at prices that were more than they would have been but for the defendants’ actions. The Class has conferred an economic benefit upon the defendants, in the nature of revenue resulting from unlawful overcharges to the economic detriment of the Class. Under the circumstances, it would be inequitable for the defendants to retain such benefits without compensating the Class. HAWAII 739. The defendants unlawfully overcharged Class Members, who made purchases of or reimbursements for Zytiga or its AB-rated generic equivalents in Hawaii at prices that were more than they would have been but for the defendants’ actions. The Class has conferred an economic benefit upon the defendants, in the nature of revenue resulting from unlawful overcharges to the economic detriment of the Class. Under the circumstances, it would be inequitable for the defendants to retain such benefits without compensating the Class. IDAHO 740. The defendants unlawfully overcharged Class Members, who made purchases of or reimbursements for Zytiga or its AB-rated generic equivalents in Idaho at prices that were more than they would have been but for the defendants’ actions. The Class has conferred an economic benefit upon the defendants, in the nature of revenue resulting from unlawful overcharges to the economic detriment of the Class. The defendants appreciated the benefit conferred upon them by the Class. Under the circumstances, it would be inequitable for the defendants to retain such benefits without compensating the Class. ILLINOIS 741. The defendants unlawfully overcharged Class Members, who made purchases of or reimbursements for Zytiga or its AB-rated generic equivalents in Illinois at prices that were more than they would have been but for the defendants’ actions. The Class has conferred an economic benefit upon the defendants, in the nature of revenue resulting from unlawful overcharges to the economic detriment of the Class. The defendants retained the benefits bestowed upon them under unjust circumstances arising from unlawful overcharges to the Class. It is against equity, justice, and good conscience for the defendants to be permitted to retain the revenue resulting from their unlawful overcharges. IOWA 742. The defendants unlawfully overcharged Class Members, who made purchases of or reimbursements for Zytiga or its AB-rated generic equivalents in Iowa at prices that were more than they would have been but for the defendants’ actions. The defendants have been enriched by revenue resulting from unlawful overcharges for Zytiga or its AB-rated generic equivalents, which revenue resulted from anticompetitive prices paid by d the Class, which inured to the defendants’ benefit. The defendants’ enrichment has occurred at the expense of the Class. Under the circumstances, it would be unjust for the defendants to retain such benefits without compensating the Class. KANSAS 743. The defendants unlawfully overcharged Class Members, who made purchases of or reimbursements for Zytiga or its AB-rated generic equivalents in Kansas at prices that were more than they would have been but for the defendants’ actions. The Class has conferred an economic benefit upon the defendants, in the nature of revenue resulting from unlawful overcharges to the economic detriment of the Class. The defendants retained the benefits bestowed upon them under unjust circumstances arising from unlawful overcharges to the Class. Under the circumstances, it would be inequitable for the defendants to retain such benefits without compensating the Class. MAINE 744. The defendants unlawfully overcharged Class Members, who made purchases of or reimbursements for Zytiga or its AB-rated generic equivalents in Maine at prices that were more than they would have been but for the defendants’ actions. The Class has conferred an economic benefit upon the defendants, in the nature of revenue resulting from unlawful overcharges to the economic detriment of the Class. The defendants were aware of or appreciated the benefit bestowed upon them by the Class. Under the circumstances, it would be inequitable for the defendants to retain such benefits without compensating the Class. MARYLAND 745. The defendants unlawfully overcharged Class Members, who made purchases of or reimbursements for Zytiga or its AB-rated generic equivalents in Maryland at prices that were more than they would have been but for the defendants’ actions. The Class has conferred an economic benefit upon the defendants, in the nature of revenue resulting from unlawful overcharges to the economic detriment of the Class. The defendants were aware of or appreciated the benefit bestowed upon them by the Class. Under the circumstances, it would be inequitable for the defendants to retain such benefits without compensating the Class. MASSACHUSETTS 746. The defendants unlawfully overcharged Class Members, who made purchases of or reimbursements for Zytiga or its AB-rated generic equivalents in Massachusetts at prices that were more than they would have been but for the defendants’ actions. The Class has conferred an economic benefit upon the defendants, in the nature of revenue resulting from unlawful overcharges to the economic detriment of the Class. The defendants were aware of or appreciated the benefit conferred upon them by the Class. Under the circumstances, it would be inequitable for the defendants to retain such benefits without compensating the Class.32 32 Plaintiff intends to assert a claim under Mass. Gen Laws Ch. 93A, § 1, et seq., after providing notice to the appropriate party. MICHIGAN 747. The defendants unlawfully overcharged Class Members, who made purchases of or reimbursements for Zytiga or its AB-rated generic equivalents in Michigan at prices that were more than they would have been but for the defendants’ actions. The defendants have received a benefit from the Class in the nature of revenue resulting from the unlawful overcharges, which revenue resulted from anticompetitive prices that inured to the benefit of the defendants. The defendants retained the benefits bestowed upon them under unjust circumstances arising from unlawful overcharges to the Class. Under the circumstances, it would be inequitable for the defendants to retain such benefits without compensating the Class. MINNESOTA 748. The defendants unlawfully overcharged Class Members, who made purchases of or reimbursements for Zytiga or its AB-rated generic equivalents in Minnesota at prices that were more than they would have been but for the defendants’ actions. The Class has conferred an economic benefit upon the defendants, in the nature of revenue resulting from unlawful overcharges to the economic detriment of the Class. The defendants appreciated and knowingly accepted the benefits bestowed upon them by the Class. Under the circumstances, it would be inequitable for the defendants to retain such benefits without compensating the Class. MISSISSIPPI 749. The defendants unlawfully overcharged Class Members, who made purchases of or reimbursements for Zytiga or its AB-rated generic equivalents in Mississippi at prices that were more than they would have been but for the defendants’ actions. The defendants received money from the Class as a direct result of the unlawful overcharges. The defendants retain the benefit of overcharges received on the sales of Zytiga or its AB-rated generic equivalents, which in equity and good conscience belong to the Class on account of the defendants’ anticompetitive conduct. Under the circumstances, it would be inequitable for the defendants to retain such benefits without compensating the Class. MISSOURI 750. The defendants unlawfully overcharged Class Members, who made purchases of or reimbursements for Zytiga or its AB-rated generic equivalents in Missouri at prices that were more than they would have been but for the defendants’ actions. The Class has conferred an economic benefit upon the defendants, in the nature of revenue resulting from unlawful overcharges to the economic detriment of the Class. The defendants appreciated the benefit bestowed upon them by the Class. The defendants accepted and retained the benefit bestowed upon them under inequitable and unjust circumstances arising from unlawful overcharges to the MONTANA 751. The defendants unlawfully overcharged Class Members, who made purchases of or reimbursements for Zytiga or its AB-rated generic equivalents in Montana at prices that were more than they would have been but for the defendants’ actions. The Class has conferred an economic benefit upon the defendants, in the nature of revenue resulting from unlawful overcharges to the economic detriment of the Class. Under the circumstances, it would be inequitable for the defendants to retain such benefits without compensating the Class. NEBRASKA 752. The defendants unlawfully overcharged Class Members, who made purchases of or reimbursements for Zytiga or its AB-rated generic equivalents in Nebraska at prices that were more than they would have been but for the defendants’ actions. The defendants received money from the Class as a direct result of the unlawful overcharges and have retained this money. The defendants have paid no consideration to any other person in exchange for this money. In justice and fairness, the defendants should disgorge such money and remit the overcharged payments back to the Class. NEVADA 753. The defendants unlawfully overcharged Class Members, who made purchases of or reimbursements for Zytiga or its AB-rated generic equivalents in Nevada at prices that were more than they would have been but for the defendants’ actions. The Class has conferred an economic benefit upon the defendants in the nature of revenue resulting from unlawful overcharges for Zytiga or its AB-rated generic equivalents. The defendants appreciated the benefits bestowed upon them by the Class, for which they have paid no consideration to any other person. Under the circumstances, it would be inequitable for the defendants to retain such benefits without compensating the Class. NEW HAMPSHIRE 754. The defendants unlawfully overcharged Class Members, who made purchases of or reimbursements for Zytiga or its AB-rated generic equivalents in New Hampshire at prices that were more than they would have been but for the defendants’ actions. The defendants have received a benefit from the Class in the nature of revenue resulting from the unlawful overcharges, which revenue resulted from anticompetitive prices that inured to the benefit of the defendants. Under the circumstances, it would be unconscionable for the defendants to retain such benefits. NEW MEXICO 755. The defendants unlawfully overcharged Class Members, who made purchases of or reimbursements for Zytiga or its AB-rated generic equivalents in New Mexico at prices that were more than they would have been but for Defendants’ actions. The defendants have knowingly benefitted at the expense of the Class from revenue resulting from unlawful overcharges for Zytiga or its AB-rated generic equivalents. To allow the defendants to retain the benefits would be unjust because the benefits resulted from anticompetitive pricing that inured to the defendants’ benefit and because the defendants have paid no consideration to any other person for any of the benefits they received. NEW YORK 756. The defendants unlawfully overcharged Class Members, who made purchases of or reimbursements for Zytiga or its AB-rated generic equivalents in New York at prices that were more than they would have been but for the defendants’ actions. The defendants have been enriched by revenue resulting from unlawful overcharges for Zytiga or its AB-rated generic equivalents, which revenue resulted from anticompetitive prices paid by the Class, which inured to the defendants’ benefit. The defendants’ enrichment has occurred at the expense of the Class. It is against equity and good conscience for the defendants to be permitted to retain the revenue resulting from their unlawful overcharges. NORTH CAROLINA 757. The defendants unlawfully overcharged Class Members, who made purchases of or reimbursements for Zytiga or its AB-rated generic equivalents in North Carolina at prices that were more than they would have been but for the defendants’ actions. The Class has conferred an economic benefit upon the defendants in the nature of revenue resulting from unlawful overcharges to the economic detriment of the Class. The Class did not interfere with the defendants’ affairs in any manner that conferred these benefits upon the defendants. The benefits conferred upon the defendants were not gratuitous, in that they comprised revenue created by unlawful overcharges arising from arising from unlawful overcharges to the Class. The benefits conferred upon the defendants are measurable, in that the revenue the defendants have earned due to unlawful overcharges are ascertainable by review of sales records. The defendants consciously accepted the benefits conferred upon them. NORTH DAKOTA 758. The defendants unlawfully overcharged Class Members, who made purchases of or reimbursements for Zytiga or its AB-rated generic equivalents in North Dakota at prices that were more than they would have been but for the defendants’ actions. The defendants have been enriched by revenue resulting from unlawful overcharges for Zytiga or its AB-rated generic equivalents. The Class has been impoverished by the overcharges for Zytiga or its AB-rated generic equivalents resulting from the defendants’ unlawful conduct. The defendants’ enrichment and the Class’s impoverishment are connected. There is no justification for the defendants’ receipt of the benefits causing their enrichment, because the Class paid supra- competitive prices that inured to the defendants’ benefit, and it would be inequitable for the defendants to retain any revenue gained from their unlawful overcharges. The Class has no remedy at law. Under the circumstances, it would be unjust for the defendants to retain such benefits without compensating the Class. OREGON 759. The defendants unlawfully overcharged Class Members, who made purchases of or reimbursements for Zytiga or its AB-rated generic equivalents in Oregon at prices that were more than they would have been but for the defendants’ actions. The Class has conferred an economic benefit upon the defendants, in the nature of revenue resulting from unlawful overcharges to the economic detriment of the Class. The defendants were aware of the benefit bestowed upon them by the Class. Under the circumstances, it would be unjust for the defendants to retain such benefits without compensating the Class. PENNSYLVANIA 760. The defendants unlawfully overcharged Class Members, who made purchases of or reimbursements for Zytiga or its AB-rated generic equivalents in Pennsylvania at prices that were more than they would have been but for the defendants’ actions. The Class has conferred an economic benefit upon the defendants, in the nature of revenue resulting from unlawful overcharges to the economic detriment of the Class. The defendants appreciated the benefit bestowed upon them by the Class. Under the circumstances, it would be inequitable for the defendants to retain such benefits without compensating the Class. PUERTO RICO 761. The defendants unlawfully overcharged Class Members, who made purchases of or reimbursements for Zytiga or its AB-rated generic equivalents in Puerto Rico at prices that were more than they would have been but for the defendants’ actions. The defendants have been enriched by revenue resulting from unlawful overcharges for Zytiga or its AB-rated generic equivalents. The Class has been impoverished by the overcharges for Zytiga or its AB-rated generic equivalents resulting from the defendants’ unlawful conduct. The defendants’ enrichment and the Class’s impoverishment are connected. There is no justification for the defendants’ receipt of the benefits causing their enrichment and the Class’s impoverishment, because the Class paid supra-competitive prices that inured to the defendants’ benefit, and it would be inequitable for the defendants to retain any revenue gained from their unlawful overcharges. The Class has no remedy at law. RHODE ISLAND 762. The defendants unlawfully overcharged Class Members, who made purchases of or reimbursements for Zytiga or its AB-rated generic equivalents in Rhode Island at prices that were more than they would have been but for the defendants’ actions. The Class has conferred an economic benefit upon the defendants, in the nature of revenue resulting from unlawful overcharges to the economic detriment of the Class. The defendants appreciated the benefit bestowed upon them by the Class. Under the circumstances, it would be inequitable for the defendants to retain such benefits without compensating the Class. SOUTH CAROLINA 763. The defendants unlawfully overcharged Class Members, who made purchases of or reimbursements for Zytiga or its AB-rated generic equivalents in South Carolina at prices that were more than they would have been but for the defendants’ actions. The benefits conferred upon the defendants were not gratuitous, in that they comprised revenue created by unlawful overcharges arising from arising from unlawful overcharges to the Class. The defendants realized value from the benefit bestowed upon them by the Class. Under the circumstances, it would be inequitable for the defendants to retain such benefits without compensating the Class. SOUTH DAKOTA 764. The defendants unlawfully overcharged Class Members, who made purchases of or reimbursements for Zytiga or its AB-rated generic equivalents in South Dakota at prices that were more than they would have been but for the defendants’ actions. The defendants have received a benefit from the Class in the nature of revenue resulting from the unlawful overcharges, which revenue resulted from anticompetitive prices that inured to the benefit of defendants. The defendants were aware of the benefit bestowed upon them by the Class. Under the circumstances, it would be inequitable and unjust for the defendants to retain such benefits without reimbursing the Class. TENNESSEE 765. The defendants unlawfully overcharged Class Members, who made purchases of or reimbursements for Zytiga or its AB-rated generic equivalents in Tennessee at prices that were more than they would have been but for the defendants’ actions. The Class has conferred an economic benefit upon the defendants, in the nature of revenue resulting from unlawful overcharges to the economic detriment of the Class. The defendants appreciated the benefit bestowed upon them by the Class. Under the circumstances, it would be inequitable for the defendants to retain such benefits without compensating the Class. It would be futile for the Class to seek a remedy from any party with whom they have privity of contract. The defendants have paid no consideration to any other person for any of the unlawful benefits they received indirectly from the Class with respect to the defendants’ sales of Zytiga or its AB-rated generic equivalents. It would be futile for The Class to exhaust all remedies against the entities with which the Class has privity of contract because the Class did not purchase Zytiga or its AB-rated generic equivalents directly from any defendant. UTAH 766. The defendants unlawfully overcharged Class Members, who made purchases of or reimbursements for Zytiga or its AB-rated generic equivalents in Utah at prices that were more than they would have been but for the defendants’ actions. The Class has conferred an economic benefit upon the defendants, in the nature of revenue resulting from unlawful overcharges to the economic detriment of the Class. The defendants were aware of or appreciated the benefit bestowed upon them by the Class. Under the circumstances, it would be inequitable for the defendants to retain such benefits without compensating the Class. VERMONT 767. The defendants unlawfully overcharged Class Members, who made purchases of or reimbursements for Zytiga or its AB-rated generic equivalents in Vermont at prices that were more than they would have been but for the defendants’ actions. The Class has conferred an economic benefit upon defendants, in the nature of revenue resulting from unlawful overcharges to the economic detriment of the Class. The defendants accepted the benefit bestowed upon them by the Class. Under the circumstances, it would be inequitable for the defendants to retain such benefits without compensating the Class. VIRGINIA 768. The defendants unlawfully overcharged Class Members, who made purchases of or reimbursements for Zytiga or its AB-rated generic equivalents in Virginia at prices that were more than they would have been but for the defendants’ actions. The Class has conferred an economic benefit upon the defendants, in the nature of revenue resulting from unlawful overcharges to the economic detriment of the Class. The defendants were aware of the benefit bestowed upon them. The defendants should reasonably have expected to repay the Class. The benefits conferred upon the defendants were not gratuitous, in that they constituted revenue created by unlawful overcharges arising from the defendants’ illegal and unfair actions to inflate the prices of Zytiga or its AB-rated generic equivalents. The defendants have paid no consideration to any other person for any of the benefits they have received from the Class. WEST VIRGINIA 769. The defendants unlawfully overcharged Class Members, who made purchases of or reimbursements for Zytiga or its AB-rated generic equivalents in West Virginia at prices that were more than they would have been but for the defendants’ actions. The Class has conferred an economic benefit upon the defendants, in the nature of revenue resulting from unlawful overcharges to the economic detriment of the Class. The defendants were aware of or appreciated the benefit bestowed upon them by the Class. Under the circumstances, it would be inequitable for the defendants to retain such benefits without compensating the Class.33 WISCONSIN 770. The defendants unlawfully overcharged Class Members, who made purchases of or reimbursements for Zytiga or its AB-rated generic equivalents in Wisconsin at prices that were more than they would have been but for the defendants’ actions. The Class has conferred an economic benefit upon the defendants, in the nature of revenue resulting from unlawful overcharges to the economic detriment of the Class. The defendants appreciated the benefit bestowed upon them by the Class. Under the circumstances, it would be inequitable for the defendants to retain such benefits without compensating the Class. WYOMING 771. The defendants unlawfully overcharged Class Members, who made purchases of or reimbursements for Zytiga or its AB-rated generic equivalents in Wyoming at prices that were more than they would have been but for the defendants’ actions. The Class has conferred an economic benefit upon the defendants, in the nature of revenue resulting from unlawful overcharges to the economic detriment of the Class. The defendants accepted, used and enjoyed the benefits bestowed upon them by the Class. Under the circumstances, it would be inequitable for the defendants to retain such benefits without compensating the Class. COMPLIANCE WITH NOTICE REQUIREMENTS 772. In accordance with the requirements of Arizona Revised Statute § 44-1415, 5 Maine Revised Statute § 213(3), Nevada Revised Statute § 598A.210(3), New York General Business Law § 340(5), Rhode Island General Laws § 6-36-21, Utah Code Ann. § 76-10- 33 Plaintiff intends to assert a claim under W. Va. Code § 46A-6-101, et seq., after providing notice to the appropriate party. 2109(9), and West Virginia Code §46A-6-106(a) upon filing counsel will send letters by certified mail, return receipt requested, to: a. Mark Brnovich, Attorney General of Arizona; b. Aaron Frey, Attorney General of Maine; c. Aaron Ford, Attorney General of Nevada; d. Letita James, Attorney General of New York; e. Peter Neronha, Attorney General of Rhode Island; and f. Sean Reyes, Attorney General of Utah; and g. Patrick Morrisey, Attorney General of West Virginia. informing them of the existence of this Class Action Complaint, identifying the relevant state antitrust provisions, and enclosing a copy of this Class Action Complaint. CLAIM FOR RELIEF: VIOLATION OF SHERMAN ACT, 15 U.S.C. § 2 773. The plaintiffs incorporate by reference all previous allegations of fact. 774. This count seeks monetary relief under section 4 of the Clayton Act for conduct in violation of section 2 of the Sherman Act on behalf of the plaintiffs and all members of the class, for their purchases of Zytiga and/or generic abiraterone acetate. 775. Increasingly over the past decade, a distribution model of “specialty pharmacy” has become a dominant sector in the United States. While originally modelled to address a narrow range of non-self-administered pharmaceuticals that truly required special handling and service for patients, the use of the model has widened considerably over time, leading to a loose use of the term. Industry organizations have therefore developed definitions of the specialty model. As self-described, “[c]ommonalities seen within the definitions include the distribution of specialty pharmaceuticals and high-touch, patient-centered management that maximally benefits the patient’s medication experience. Ideally, this translates into improved care with measurable, positive clinical outcomes.” 776. Specialty pharmacies offer services beyond those typically offered by either distributors or traditional pharmacies. These include: 24-hour access to pharmacists; adherence management; benefits investigation; communication and follow-up with the physician; dispensing of specialty pharmaceuticals and shipping coordination; enrollment in patient assistance programs; financial assistance; patient education and medication adverse effect counseling; patient monitoring for safety and efficacy; payer and/or manufacturer reporting; proactive patient outreach for prescription refill and renewal, and; prior authorization assistance. 777. These services are designed not only to aid patient care, but also to foster use the manufacturer-sponsor’s products. The manufacturer pays the distributor for these services; because of those services, the manufacturer can commend higher prices for the product and can ensure better, more continued sales. For the same reason, the specialty pharmacy, i.e., the distributor earns greater revenue and profits the more it can foster the use of the manufacturer’s products. 778. Specialty pharmacy, which once occupied only a small niche in the marketplace, has become a major segment of the pharmaceutical industry. 779. Within the general area of specialty pharmacy, there is even a narrower sub- distribution system known as limited-distribution specialty pharmacy. While some medications are supplied by many different specialty pharmacies throughout the nation, limited distribution drugs, on the other hand, are only available through a select few. Pharmaceutical manufacturers typically identify this smaller group of specialty pharmacies by their higher capability to achieve the joint goals of the companies. 780. Pharmaceutical manufacturers therefore at times choose to limit the distribution of a drug to only a few specialty pharmacies. Common disease states managed by limited distribution specialty pharmacies include oncology, multiple sclerosis, rheumatoid arthritis, HIV/AIDS, and hepatitis C. 781. The manufacturer of a “specialty drug” and its limited distribution, specialty pharmacy are often referred to as “partners.” As one such limited distributor touts, it “is extremely proud to have been selected as a limited distribution drug partner by manufacturers for many different medications over the years . . . .” 782. Janssen causes Zytiga to be distributed into the United States marketplace through a carefully selected, small group of limited distribution specialty pharmacies controlled by Janssen. As a result, abiraterone is only available through an exclusive, limited-distribution specialty pharmacy network each member of which is paid by Janssen to distribute Zytiga. 783. In addition to acting as Janssen’s agent for the distribution of Zytiga, the small group of limited-distribution specialty pharmacies perform other services on behalf of Janssen. Janssen pays for these services. For example, these specialty pharmacies ostensibly have the capability of providing clinical support and patient oversight to enable the continued use of Zytiga and other Janssen products; along with dispensing the medication to the patient, these specialty pharmacies counsel the patient on the administration, ostensible expected benefits, and potential adverse effects of the medication; outbound phone calls by both pharmacists and the network’s nurses can be scheduled for Janssen’s therapies, designed to help guide the patient through his therapeutic care plan while enhancing the patient–pharmacy relationship. Many specialty pharmacies have the ability to monitor a patient’s disease progression, medication adherence, report quality of life, and can trigger interventions specific to the identified complication. These specialty pharmacy services have been critical to the success of Zytiga and have helped optimize use of Zytiga for thousands of patients in recent years. 784. On information and belief, the network of Janssen’s limited distribution specialty pharmacies for Zytiga has not, at any one time during the class period for this case, exceeded more than 16 members. These include the specialty pharmacy operations of Accredo Health, Avella Specialty Pharmacy, CVS/Caremark, Diplomat Specialty, U.S. Bioservices, and Alliance/Walgreens. 785. Given the unique business relationship between Janssen and the members of its limited distribution specialty pharmacy network for Zytiga, the limited distribution players act as agents for Janssen for Janssen’s distribution of Zytiga nationwide. And there are multiple reasons why the relationship between Janssen and its Zytiga distribution agents creates a situation where there is neither a likelihood nor ability for its distribution agents to enforce antitrust laws violated by Janssen where that violation is of the type raised by this case, i.e., depriving access to AB- rated generic equivalents. 786. First, unlike most manufacturer-distributor relationships (where the distributor makes its profit by buying low from the manufacturer and selling at a higher price to a downstream purchaser), here Janssen actually pays the distributor agents to distribute the product. And the more the distributor agent distributes Janssen’s Zytiga, the more money it makes from payments from Janssen. As a result, Janssen and the distributor agents share the goal of keeping Zytiga in a monopoly position—each make more and more revenue the longer the product remains on the market alone—rather than seeing the entry of a generic Zytiga that would take sales away from that arrangement. 787. Second, on information and belief, Janssen functionally controls not only the price paid by the Zytiga distribution agents to purchase Zytiga, but also the prices charged by those distributors to downstream purchasers. Among other things, purchases by downstream stakeholders including the patients themselves are closely monitored and coordinated by Janssen; as a result, competition between distributor agents is minimized. And because most revenue is earned by the distributor agent on the “buy-side,” and the Zytiga distributor agents provide the same, contractually-required specialty services, they lack reason to undercut efforts by Janssen to control the resale price of Zytiga. 788. For these and other reasons, Janssen functionally controls the resale price of Zytiga. For example, while a single health plan might be paying five or six of Janssen’s distributor agents for a 30-day supply of Zytiga at multiple locations across the nation and for different patients, the amounts charged by those different specialty pharmacies for the ingredient cost of Zytiga are, to the penny, exactly the same (e.g., $10,221.93). 789. Third—and not only do Janssen’s distributor agents make most of their revenues on the “buy-side” of the Zytiga transaction— Janssen’s distributor agents do not necessarily suffer an overcharge due to the absence of AB-rated generic competition for a limited distribution drug. In the usual distribution circumstances, all or virtually all distributors suffer an overcharge from the absence of AB-rated generics because all or virtually all of them purchase the brand and the generic versions of the drug. However, in the marketplace for Zytiga and its generic counterparts, no Janssen limited distributor is guaranteed access to directly purchase and sell the generic counterpart when, as and if it comes on the market, let alone play a role as the specialty pharmacy distributor who gets compensated by the generic seller to perform specialty services. As a result, absent a showing that they had a right to both purchase generic Zytiga and continue specialty services, they likely suffer no overcharge. 790. Fourth, being a member of Janssen’s limited distribution specialty pharmacy network for Zytiga is highly lucrative and carefully guarded. And unlike the traditional distribution system where brand manufacturers need the traditional distributors to make their products widely available, here manufacturers of limited distribution drugs may pick and choose who may become a member of their network. As a result, the distributor agents have no reason to upset a source of highly profitable work. They are not going to bite the hand that feeds them. 791. In summary, Janssen controls its distribution network through agents that it pays; these agents have no antitrust claim to bring against Janssen when the allegation is delayed generic entry; Janssen controls all aspects of the distribution arrangement, including the buy and sell price of its agents. As a result, it is the Zytiga purchasers from Janssen’s distributor agents, and the not distributor agents themselves, that are the direct purchasers for purposes of an antitrust case such as this that alleges delayed generic entry. 792. The plaintiffs purchased Zytiga directly from Janssen’s distributor agents during the class period, including of Accredo Health, Avella Specialty Pharmacy, CVS/Caremark, Diplomat Specialty, U.S. Bioservices, and Alliance/Walgreens. As a result, the plaintiffs have standing under section 4 of the Clayton Act to seek damages for violation of federal law under section 2 of the Sherman Act. 793. Janssen violated 15 U.S.C. § 2 through its acts of pursuing sham litigation, all as previously alleged. The plaintiff and all direct purchasers have been injured in their business or property by the violation of 15 U.S.C. § 2. The direct purchasers’ injury consists of having paid higher prices for Zytiga than they otherwise would have paid in the absence of that violation. X. DEMAND FOR JUDGMENT WHEREFORE, the plaintiffs, on behalf of themselves and the class of all others so similarly situated, respectfully requests judgment against the defendants as follows: 794. The Court determine that this action may be maintained as a class action under Rule 23(a), (b)(2), and (b)(3) of the Federal Rules of Civil Procedure, appoint the plaintiff as class representative and their counsel of record as class counsel, and direct that notice of this action, as provided by Rule 23(c)(2) of the Federal Rules of Civil Procedure, be given to the class, once certified; 795. The unlawful conduct, conspiracy or combination alleged herein be adjudged and decreed in violation of Section 2 of the Sherman Act, 15 U.S.C. § 2 and the listed state antitrust laws, unfair competition laws, state consumer protection laws, and common law; 796. The plaintiffs and the class recover damages, to the maximum extent allowed under the Sherman Act and the applicable state laws, and that a joint and several judgment in favor of the plaintiffs and members of the classes be entered in an amount to be trebled to the extent such laws permit; 797. The plaintiffs and the members of the class be awarded pre- and post- judgment interest as provided by law, and that such interest be awarded at the highest legal rate from and after the date of service of this complaint; 798. The plaintiffs and members of the class recover their costs of suit, including reasonable attorneys’ fees, as provided by law; and 799. The plaintiffs and members of the class have such other and further relief as the case may require and the Court may deem just and proper. XI. JURY DEMAND 800. Pursuant to Rule 38 of the Federal Rules of Civil Procedure, the plaintiffs, on behalf of themselves and the proposed class, demand a trial by jury of all issues so triable. Dated: April 18, 2019 /s/ William H. Monroe, Jr. (VSB No. 27441) Marc C. Greco (VSB No. 41496) Kip A. Harbison (VSB No. 38648) Michael A. Glasser (VSB No. 17651) William D. Moore, III (VSB No. 77097) Anders T. Sleight (VSB No. 84458) GLASSER AND GLASSER, P.L.C. Crown Center, Suite 600 580 East Main Street Norfolk, VA 23510 Telephone: (757) 625-6787 Facsimile: (757) 625-5959 bill@glasserlaw.com marcg@glasserlaw.com kip@glasserlaw.com michael@glasserlaw.com wmoore@glasserlaw.com asleight@glasserlaw.com Local Counsel for Plaintiffs Louisiana Health Service & Indemnity Company d/b/a Blue Cross and Blue Shield of Louisiana, HMO Louisiana, Inc. and the Proposed Class Thomas M. Sobol Lauren G. Barnes Gregory T. Arnold Bradley J. Vettraino HAGENS BERMAN SOBOL SHAPIRO LLP 55 Cambridge Parkway, Suite 301 Cambridge, MA 02142 Telephone: (617) 482-3700 Facsimile: (617) 482-3003 tom@hbsslaw.com lauren@hbsslaw.com grega@hbsslaw.com bradleyv@hbsslaw.com James R. Dugan II (pro hac vice forthcoming) David S. Scalia (pro hac vice forthcoming) THE DUGAN LAW FIRM, LLC One Canal Place, Suite 1000 365 Canal Street New Orleans, LA 70130 Telephone: (504) 648-0180 Facsimile: (504) 648-0181 jdugan@dugan-lawfirm.com dscalia@dugan-lawfirm.com Counsel for Plaintiffs Louisiana Health Service & Indemnity Company d/b/a Blue Cross and Blue Shield of Louisiana, HMO Louisiana, Inc. and the Proposed Class Allison N. Pham Jessica Chapman Charles A. O’Brien LOUISIANA HEALTH SERVICE & INDEMNITY COMPANY, D/B/A BLUE CROSS AND BLUE SHIELD OF LOUISIANA 5525 Reitz Avenue P.O. Box 98029 Baton Rouge, LA 70809 Telephone: (225) 295-2199 Facsimile: (225) 297-2760 Counsel for Plaintiffs Louisiana Health Service & Indemnity Company d/b/a Blue Cross and Blue Shield of Louisiana, HMO Louisiana, Inc.

antitrust

jcH9DIcBD5gMZwczrzvr

COIVIPLAINT JURT TRIAL DEMANDED v. J.C. PENNEY COMPANY, CORPORATION, Defendants. Plaintiffs (""Plaintiffs"), on behalf of themselves and all other "'"""''""'-U situated persons, and through their undersigned counsel, allege upon personal knowledge as to themselves and upon information and belief as to other tnatters (which is based on, among other things, their at Defendants' retail stores, review of Defendants' records, conversations with Defendants' employees and investigation of their counsel), t(.">llows: l. I Plaintiffs bring this action on behalf of thetnselves and all other sitnilarly situated current and fanner hourly paid sales associates r·sales associates" or '"employees") of the holding company, J.C. Penney Company, Inc. (the '"Company''), and its principal and sole operating subsidiary J.C. Penney Corporation, Inc. (collectively as "JCP'' or '"Defendants"). The Defendants in this action, by virtue of their management and control over the wages and work of JCP sales associates, are ''employers'' under applicable labor la\v. 2. JCP owns and operates a national chain of retail department stores with approxilnately 1,100 stores nationwide with over 159,000 employees as of January 28, 2012. As rn state stores work at the to round cornpc:!nsattc)n to stores to automatically which deduct "'m"''"'''""'"'-' are ""''I"''""'F~"" ..... in work on the Defendants' VVU.<.4 .... , Tl"\t31"'""'""'"' and overtime compensation to which .... 11'""rtCJ•l1 on employees to take affirmative they are entitled by steps to obtain "'"'C"Y\Y\t3Y\·C':lTlAM lunch breaks that Defendants .... ....,,,,..._,,"' and policies are uniform throughout requested and had Defendants for years. For these rea·sons, Plaintiffs JCP's stores and to recover unpaid Labor Standards Act (the •·FLSA .. ) §§ 20 I. et. and attorneys· and costs under the under McKinney's Labor Lavv (the ··NYLL"). §§ 190. et. :wq., §§ 650, et seq., and 12 NYCRR § 142-2.2. JURISDICTION AND VENUE 3. This Court has original jurisdiction pursuant to 28 U.S.C. § 1331 because the action involves a federal statute, the FLSA, 29 U.S.C. §216(b). 4. This Court has original jurisdiction over all claims in this action under the Class Action Fairness Act C'CAF A") 28 U .S.C. 1332( d). This is a putative class action in which: (a) ITIOre Ill proper pursuant to 1 (b)( 1) in this judicial district. THE PARTIES Plaintiffs 7. Plaintiff~ Anjum, is a resident of Staten Island, New York. Ms. Anjum was ~Inployed by JCP.on a full-titne basis in store nmnber 2463 located at 140 Marsh Avenue, Staten ·, J." Island, York, 10314, fron1 Septen1ber 13, 2003 until November 8, 2012 as a sales associate and an hourly rate approxitnately $10.65. Throughout Ms. Anjmn's e1nploytnent at JCP, was to did before her shift was scheduled to begin, work during some or all of her lunch breaks, and work after her shift was scheduled to end. However, because of Defendants' improper rounding policies and automatic deductions for lunch breaks as described n1ore fully below, Ms. Anjum was deprived of wages as required by the FLSA and New York state labor law. During any given week, Ms. Anjum worked approximately 2 hours of uncompensated straight time and 3.5 hours of uncompensated overtime. 8. Plaintiff~ Janet Terrana, is a resident of Staten Island, New York. Ms. Terrana was employed by JCP on a part-time basis in store number 2463 located at 140 Marsh Avenue, Staten Island, New York, 10314, from in or around October 2007 until October 2012 as a sales an L,..., ...... ~"'"''"" to end. deductions lunch more fully below, as required by hours time. Plaintiff: Veronica Monahan, 1s a .-ac···""'V'>., of Island, New York. Ms. located at 140 Marsh Monahan was employed by JCP on a part-time Avenue, Staten Island, New York, 1031 from or around November 2011 until December 2011 a and paid an hourly rate of Throughout Ms. Monahan's employment at JCP, she was asked to and did work before her shift was scheduled to begin, work during so)ne or all of her lunch breaks, •and work after her shift was scheduled to deductions for the New York state labor law. During any given Ms. ~1onahan worked approxi1nately hours of uncotnpensated straight tiine. 10. Plaintiff, Camille Forest, is a resident of Staten Island, New York. Ms. Forest was employed by JCP on a part-time basis in store number 2463 located at 140 Marsh Avenue, Staten Island, New York, 10314, from in or around November 2007 until May 2012 as a sales associate and paid an hourly rate of approximately $10.12. Throughout Ms. Forest's employment at JCP, she was asked to and did work before her shift was scheduled to begin, work during some or all of her lunch breaks, and work after her shift was scheduled to end. Defendants 11. Inc. is a Inc. Company has no independent assets or than JCP. a chain of retail department stores publically traded on under the symbol "JCP~'. Defendants have over 159,000 100 stores with roughly 43 stores in York and had the tiscal year ended December 31, 2011. JCP's business and to consun1ers through their department stores, 1 . arc are headquartered in 14. The and JCP are related organizations through, for exatnple, common tnembership, bodies, trustees and/or officers and benefit plans. 15. The wage and hour and all related employee compensation policies of Defendants are and were centrally and collectively dictated, controlled, and ratified. 16. Defendants had the power to control JCP's wage policies and practices through their oversight of day-to-day operating procedures, control over employee work schedules, ability to determine employees' rate of pay, and ability to control JCP's record keeping practices. Background hourly department within each store but not lin1ited to: (a) the department; (b) the bed & bath department; (c) the depat1ment; (d) the shoe department; (e) the jewelry department; (f) children's clothing and JCP location has a department supervisor, responsible for rvtr.t=>rc"'"'''"'y work of the associates in each particular department; a department manager, responsible for operability of each departtnent; and an assistant store· and store . . are responsible for operations the store. Depart1nent tnanagers positions, who are paid fixed salaries, are not tnetnbers of the classes that Plaintiffs to represent in this action. 21. JCP hired Plaintitis and promised to pay hourly wages for their work. On average, full-time employees are paid between minimum wage and $11.00 per hour and have a standard work week of approximately 35 to 38 hours. Part-time employees are paid, on average, between minimum wage and $11.00 per hour and have a standard work week of approximately 20 to 24 hours. 22. Each full-time employee is entitled to a daily unpaid lunch break of one hour. at out when store. to to out JCP's Time-Keeping System Is Configured to Deprive Employees of Compensation When They Perform Services on the Defendant's Behalf are scheduled to hours after their shift the store. Defendants also required co-worker did not return fro1n a lunch break. . 25. Although they request and are aware of the extra work employees perform~ Defendants have knowingly employees for sotne- if not all this time on the Company' behalf. Specifically, while the titne-keeping system records an employee's "in~· and "out" time in minutes. it "totals'' the employee's time in quantifiable incretnents and then systematically rounds the employee's "total" time worked. This rounding policy consistently and artificially reduces the total time etnployees are credited with working at the Company, sometimes by 20 or more minutes per day. 26. Plaintiffs and other JCP employees do not have access to their time reports that reflect these huge discrepancies and time shaving practices. Thus, 1nost JCP employees are unaware that Defendants have failed to cotnpensate them for work performed before and after shifts and during lunch breaks. out not ensure "'""'""''""h=u'f lunch at their duty tnembers routinely are required to "'"'""''""r:l"f"'rl lunch breaks. 1. Defendants do not prohibit Plaintiffs and class members from working during their lunch and routinely suffer or permit Plaintiffs and class members to perform Defendants routinely fail to ensure that unauthorized work is not being performed <9n1ployee lunch breaks. improperly the burden on JCP etnployees to take affinnative though Defendants know that Plaintiffs and class tnetnbers are working during lunch breaks, Defendants fail to compensate Plaintiffs and class tnembers tor their work, to accept the benefits of Plaintiffs' and class members' uncompensated work. FAIR LABOR STANDARDS ACT COLLECTIVE ACTION ALLEGATIONS 35. The preceding paragraphs are incorporated by reference as if the same were fully set forth herein. all 216(b ), specifically, on state years were: (a) not (b) were not -L., 'L'" ~ and (c) were not compensated tor time worked over forty hours per week at overtime rates (the '·FLSA Collective controlling interest in the Company or JCP. excluded are and entities who submit timely and otherwise proper requests for exclusion fro1n the Collective Plaintiti is unable to state the exact nmnber of the without discovery of Defendants' books and records but estimates the hundred if not thousands individuals. 39. and during required tneal periods and to perfonn work on-the-clock and/or off-the-clock for vvhich they were not fully compensated. Defendants also failed to pay Plaintiff and n1en1bers of the FLSA Collective Class time and one half their regular rate of pay tor hours worked beyond forty hours in a workweek. 40. Defendants' unlawful conduct has been \videspread, repeated and consistent. 41. Defendants' conduct was willful and in bad faith and has caused significant damages to Plaintiff and the FLSA Collective Class. the tn are known to Defendants and are identifiable NEW YORK CLASS ACTION ALLEGATIONS are incorporated by reference as if the same were fully set forth Anjum, Terrana, Veronica Monahan and Camille Forest bring own behalf and as a class action pursuant to Article 9 of New York on behalf of a Class consisting of: years not 'fJ'-'"k'"'"'"'". f(x all work perton11ed while clocked-in; (b) were not all work perfonned while off-the-clock; and (c) were not c01npensated for titne worked over torty hours per week at overtitne rates (the ··New York Class''). 45. Excluded from the New York Class are Defendants, their legal representatives, officers, directors, assigns, and successors, or any individual who has or had a controlling interest in the Company or JCP. Also excluded are persons and entities who submit timely and otherwise proper requests for exclusion from the New York Class. 46. As of January 28, 2012, JCP operated 43 stores in New York State. In addition, Defendants employed hundreds of hourly-wage employees at its New York based department numerous were not rv•~"""""'"~'<Cl1'£::.r1 and during meal H4U,l\,LLL<J and Defendants' to comply with the NYLL. The Plaintiffs and other New York have been to Defendants' that they have uncompensated or under-compensated comn1on uv''"'·.d,\.1.:>. practices, and patterns of conduct. Plaintiffs will fairly and adequately protect the interests of the York PlaintitTs have retained counsel competent and experienced in cmnplex class action and and hour litigation. There is no cont1ict between the Plaintiffs and the New York Con11non law and fact as to the that are not lin1ited to, the following: (a) vVhether Defendants failed and/or refused to pay Plaintiffs and the New York Class for off-the-clock tin1e spent working in violation of New York Law; (b) Whether Defendants failed and/or refused to pay PlaintitTs and the New York Class for all of the compensable time that they worked for Defendants while clocked-in; (c) Whether Defendants failed to keep true and accurate time records for all York Labor § the to the posting and notice Whether (f) practice York Plaintitis and New York Class to Defendants~ benefit which was not compensated; Whether (g) tailing to pay was instituted tC't"t:>Cr'l!r'rl of the law; and willfully or with (h) and the tneasure of datnages for The nature and extent of InJUrieS. adjudication of the controversy treattnent will pern1it a large nmnber of sitnilarly situated persons to prosecute their cmnn1on clain1s in a single forum siinultaneously, efficiently and 'Without the duplication of eflort and expense that numerous individual actions would entail. Individual class members' damages are inadequate to justify the costs of prosecuting their claims in any manner other than a class action. No difficulties are likely to be encountered in the management of this class action that would preclude its maintenance as a class action, and no superior alternative exists for the fair and efficient adjudication of this controversy. Members of the New York Class are readily identifiable from Defendants' own L their nr't'r..-..•~,,~,, course that will result ..,, ... T .... "''""' ~·-U11--~....,""" to Plaintitls and the New intend to send notice to all 1ne1nbers of the New York Class to the extent C.P.L.R. § 904. DEFENDANTS' EMPLOYMENT PRACTICES At all hereto, Defendants have had a consistent policy of: (a) Plainti and the members of the FLSA Collective Class and New York Class to off-the-clock work t(Jr which they were not cornpensated~ (b) will fully failing to pay in a prmnpt and Inanner to Plaintiffs and 1nen1bers of the FLSA on to seek fair appropriate con1pensation their titne and effmis~ and (d) willfully failing to adequately and accurately record the full cmnpensable hours worked by Plaintiffs and tnembers of the FLSA Collective Class and New York Class. Defendants consistently have refused or failed to pay Plaintiffs and the members of the FLSA Collective Class and New York Class for all time worked. 56. Despite their knowledge that time spent by Plaintiffs and the members of the FLSA Collective Class and New York Class was compensable time under the FLSA and New York law, Defendants willfully refused to compensate the affected workers for all of this time. FIRST CAUSE OF ACTION VIOLATION OF THE FAIR LABOR STANDARDS ACT (On Behalf of Plaintiff, Afza AnJum and the FLSA Collective Class) same were fully set forth herein. At all relevant Defendants and to be, "employers'' commerce, within the § At all relevant continue to etnploy, employees, including Plaintiff and of the of FLSA Collective Plaintiff consents in writing to be a part of this action pursuant to FLSA, U.S.C. § 216(b), and attached hereto as exhibit A is a copy of Plaintiff's Opt-in fonn. As this case proceeds, it is likely that other individuals will sign consent forms and join as Plaintiffs. 60. The FLSA requires ~ach covered etnployer such as Defendants to cotnpensate all at a than one f pay f()r pertormed in excess of forty hours per workweek. 61. The FLSA also requires each covered etnployer to pay the tninitnum wage for all hours worked. 62. Plaintiff and the members of the FLSA Collective Action were and are entitled to be paid minimum wage and overtime compensation for all hours worked. 63. Defendants, pursuant to their policies and practices, failed and refused to pay 1ninimum wage and overtime premiums to Plaintiff and the members of the FLSA Collective Class for all of their hours worked. 64. By failing to compensate Plaintiff and the members of the FLSA Collective Class Defendants violated, and ""L'''"'!;;.""' ..... constitutes a willful violation of the FLSA, within and the FLSA Collective Class, dan1ages in the atnount their compensation, interest, and such other legal and equitable as the 68. Plainti n: on and the Collective Class, seeks recovery of attorney' and to paid by Defendants, as provided by the FLSA, 29 U.S.C. § 216(b ). SECOND CAUSE OF ACTION ' . Violations New Yot~k Labor Law Nonpayrnent of Straight \Vages 190 et .\·eq. and (J50 et !>;eq. and "'12 NYCRR I C~unille Forest and the New York Class) 69. The preceding paragraphs are incorporated by reference as if the satne were fully set forth herein. 70. Pursuant to New York Labor Law §§ 190, 191, 193, 198 and 652, Defendants have willfully failed to pay the straight wages due as set forth in the preceding paragraphs of this Complaint to Plaintiffs and the New York Class in violation of New York Labor Law §§ 190, 191,193,198 and652 and 12 N.Y.C.R.R. 142-2.1 and 142-2.2. 71. Defendants were not and are not permitted by state or federal law, or by order of a court of competent jurisdiction, to withhold or divert any portion of the Plaintiffs' and the New concern to not court worked at established rate. New York Class, seek the amount of at least the tninimum Labor Law., and such other not but reserves their right to do so. THIRD CAUSE OF ACTION New York Labor Law- Unpaid Overtime (On Behalf of the New York Class) The preceding paragraphs are incorporated by reference as if the same were fully set forth herein. 78. The overtime wage provisions of Article 19 of the NYLL and its supporting regulations 12 N.Y.C.R.R. 142-2.1 and 142-2.2 apply to Defendants and protect Plaintiffs and to to and hours and '""'1"\rt"r'r•"V\"'1'~r of Regulations. members of the 1. Due to Defendants' violations of the NYLL, are entitled to recover from overtime attorneys' and costs of the action, and Plaintiffs do not seek liquidated NYLL on behalf of the In embers of the York Class but reserves their right to do so. PRAYER FOR RELIEF Collective seeks the following relief: A. Designation of this action as a collective action on behalf of the FLSA Collective Class (asserting FLSA claims) and prompt issuance of notice pursuant to 29 U.S.C. 16(b) to all similarly situated members, apprising them of the pendency of this action, and permitting them to assert timely FLSA claims in this action by filing individual Plaintiff Consent Forms pursuant to 29 U.S.C. § 216(b); B. Designation of Plaintiff Afza Anjum as the Representative of the FLSA Collective Class; ~"*''L''"''"""""' "*'"'""'~'" ..... , ........ to proof: including but not limited to unpaid Defendants; F. An including expert pursuant to u.s.c. § 216; H. ~""J~L'""''"L'" and post judgment interest, as provided by law; and this Court shall deem just and proper. I. Anjum, Janet Terrana, Veronica Monahan and Camille WHEREFORE, individually and on behalf of the York seek the following relief: A .. of this action as a class action ·under Rule and the appoi.ntinent of Plaintiffs B. Nonpaytnent of Straight Wages): 1. An award to Plaintiffs and members of the New York Class of damages for the amount of unpaid straight wages in addition to interest subject to proof; 2. An award to Plaintiffs and the members of the New York Class of reasonable attorneys· fees and costs pursuant to New York Labor Law; C. On the Third Cause of Action (Violation of New York Labor Law - Unpaid Overtime): 1. to amount DElVIAND FOR JURY TRIAL to Rule 38(b) of Federal Rules Civil Procedure, so triable. by of all York, New York January 13 S. Shalov (LS-7118) Brett Gallaway (BG-8585) McLAUGHLIN & STERN, LLP 260 Madison Ave. New York, NY 10016 Tel'ephone: (212) 448-1100 lshalov(fymclaughlinstem.com (LG-1 048) LA \V FIRM OF LOUIS GINSBERG, P.C. 1613 Northern Blvd. Roslyn, New York 11576 Telephone: (516) 625-0105 X.13 lg@louisginsberglawoftices.com Attorneysjor Plaint(ffs, the FLSA Collective Class and the New York Class

employment & labor

s_oUFIcBD5gMZwczm1RL

William A. Markham, California State Bar No. 132970 wm@markhamlawfirm.com Dorn Bishop, California State Bar No. 147994 db@markhamlawfirm.com Jason Eliaser, California State Bar No. 248394 je@markhamlawfirm.com LAW OFFICES OF WILLIAM MARKHAM, P.C. 550 West C Street, Suite 2000 San Diego, CA 92101 Tel: 619.221.4400 Ronald Marron, California State Bar No. 175650 ron@consumersadvocates.com Michael Houchin, California State Bar No. 305541 mike@consumersadvocates.com LAW OFFICES OF RONALD A. MARRON, P.C. 651 Arroyo Drive San Diego, CA 92103 Tel: 619.696.9006 Attorneys for Plaintiff and the Proposed Class UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA ) Case No: 3:16-cv-5400 PAM STILLINGS, on behalf of herself and all others similarly situated, ) ) PLAINTIFF’S CLASS-ACTION ) COMPLAINT FOR UNLAWFUL Plaintiff, ) RESTRAINTS OF TRADE IN ) VIOLATION OF 15 U.S.C. § 1 vs. ) ) PRAYER FOR RELIEF ) ) DEMAND OF JURY TRIAL 1-800-CONTACTS, INC. ) ) PROPOSED CLASS-ACTION Defendant. ) UNDER FED. R. CIV. P. 23 ) PLAINTIFF’S CLASS-ACTION COMPLAINT FOR UNLAWFUL RESTRAINTS OF TRADE, ETC. I. CONCISE STATEMENT OF THE CASE (FED. R. CIV. P. 8) Plaintiff is a proposed representative of a putative class of purchasers who within the past four years purchased contact lenses online from Defendant, 1-800- Contacts, Inc. (“800-Contacts”). 800-Contacts overcharged Plaintiff and each member of the proposed class of purchasers by charging supracompetitive prices for the contact lenses that it sold to them. 800-Contacts was able to charge these prices only by restraining and suppressing competition for the online sale of contact lenses in the United States; otherwise, it would have been constrained to charge competitive prices for its above sales of contact lenses to Plaintiff and all other members of the putative class. The specific trade restraints in question are a series of bilateral agreements that 800-Contacts made with fourteen of its direct competitors, which on information and belief 800-Contacts continues to enforce. These agreements, as enforced, have unlawfully restrained trade in violation of Section 1 of the Sherman Act, which is codified at 15 U.S.C. § 1 (“Section 1”). More specifically, these agreements have restrained trade as follows: (1) they have established an unlawful, ongoing bid- rigging conspiracy among direct competitors to rig their bids for search-engine advertising; (2) they have established an unlawful, ongoing conspiracy among direct competitors to allocate online sales according to pre-defined internet search queries; and (3) they have established an unlawful, ongoing conspiracy among direct competitors to suppress their advertising and the dissemination of information about their products and offers. To challenge these matters, Plaintiff now asserts a single cause of action against 800-Contacts for employing unlawful restraints of trade in violation of Section 1, and she brings this claim on behalf of herself and all other members of her proposed class of purchasers. As demonstrated by the Federal Trade Commission in its recently filed administrative complaint, 800-Contacts used improper coercion to oblige fourteen of PLAINTIFF’S CLASS-ACTION COMPLAINT FOR UNLAWFUL RESTRAINTS OF TRADE, ETC. its direct competitors to accept identical or similarly worded bilateral agreements with it. The principal provisions of these agreements constitute per se violations of Section 1 and favor 800-Contacts at the expense of its rivals. 800-Contacts was the instigator and has been the primary beneficiary of these anticompetitive agreements. 800-Contacts prevailed on its rivals to assent to its agreements by threatening to bring objectively baseless claims against them for trademark infringement unless they did so. With one exception, each of 800-Contacts’ rivals ceded in response to this threat. The one rival that refused to yield was obliged to defend itself against an objectively baseless litigation that 800-Contacts litigated with zeal in order to send a message to its other rivals and to punish the hold-out rival with costly, prolonged litigation. Foreseeably, 800-Contacts lost on the merits in this litigation at summary judgment and then again on appeal, but the litigation served its intended purpose of intimidating its rivals, disrupting their operations, and pressuring fourteen of them to assent or maintain their assent to its anticompetitive bilateral agreements. 800-Contacts’ agreements with its direct competitors established a coordinated bid-rigging conspiracy, an elaborate market-allocation scheme, and a related scheme to suppress advertising and the dissemination of information about the online sale of contact lenses. These agreements constitute trade restraints made between direct competitors that are unlawful under Section 1 under all three applicable standards of review: (1) the per se standard, which governs bid-rigging and the allocation of markets by horizontal agreement; (2) the quick-look standard, which governs apparently anticompetitive schemes with which the courts lack familiarity; and (3) the rule-of-reason standard (the “Rule of Reason”), which governs all other challenged restraints of trade. Plaintiff respectfully submits that the Court should apply well-recognized per se rules in order to condemn the challenged trade restraints, but in an abundance of caution she has pled her claim in the alternative so that it is raised not only under the per se rules, but also under the quick-look standard and the Rule of Reason. PLAINTIFF’S CLASS-ACTION COMPLAINT FOR UNLAWFUL RESTRAINTS OF TRADE, ETC. Plaintiff is an individual who during the past four years overpaid for contact lenses that she purchased from 800-Contacts because of its imposition of unlawful restraints of trade. She was also deprived of a meaningful choice between alternative products and services because of 800-Contact’s restraints of trade. She proposes to serve as the named representative of a class of persons who purchased contact lenses from 800-Contacts during the last four years, and who overpaid for these purchases and were deprived of alternative offerings because of 800-Contacts’ imposition of unlawful restraints of trade. If 800-Contacts had not employed the trade restraints that Plaintiff now challenges, it would not have been able to overcharge Plaintiff or the other class members and would not have done so. Plaintiff now seeks certification of the proposed class and all relief that the law affords to this class. II. THE PARTIES 1. Plaintiff, Pam Stillings, is an individual who maintains her domicile in Contra Costa County, California. 2. Defendant, 1-800-Contacts, Inc. (“800-Contacts”), is a corporation formed under the laws of the United States that maintains its headquarters in Draper, Utah. III. JURISDICTION AND VENUE 3. Subject-Matter Jurisdiction. Plaintiff’s sole cause of action arises under Section 1 – i.e., Section 1 of the Sherman Act, which is codified at 15 U.S.C. § 1. On the basis of this claim, Plaintiff seeks damages under Section 4 of the Clayton Act, which is codified at 15 U.S.C. § 15, as well as injunctive relief under 15 U.S.C. § 26. This Court has original and exclusive subject-matter jurisdiction over Plaintiff’s claim under Section 4 of the Clayton Act, and therefore it also has subject-matter jurisdiction over Plaintiff’s claim under 28 U.S.C. § 1331 (vesting all federal district courts with original jurisdiction over any claim that arises under a statute of the United States). PLAINTIFF’S CLASS-ACTION COMPLAINT FOR UNLAWFUL RESTRAINTS OF TRADE, ETC. 4. Personal Jurisdiction. This Court has personal jurisdiction over 800- Contacts under 15 U.S.C. §§ 15 and 22 because 800-Contacts conducts business in the Northern District of California and otherwise can be “found” in this judicial district. 5. Venue. This Court is the proper venue for the present action because (1) 800-Contacts conducts substantial commerce in this judicial district; (2) 800-Contacts has engaged in the challenged conduct and employed the challenged trade restraints in this judicial district; (3) Plaintiff purchased contact lenses from 800-Contacts within the past four years while residing in this judicial district; (4) 800-Contacts overcharged Plaintiff, deprived her of alternative offerings, and delivered contact lenses to her in this judicial district; and (5) Plaintiff suffered antitrust injury in this judicial district because of 800-Contacts’ challenged conduct. IV. COMMON ALLEGATIONS 6. Plaintiff re-pleads and incorporates by reference each of the preceding allegations. 7. Market Definitions Are Unnecessary. Plaintiff’s claim arises from 800- Contacts’ per se violations of Section 1 – namely, its organization and enforcement of a bid-rigging conspiracy and its further organization of a horizontal market-allocation scheme. In an abundance of caution, however, Plaintiff has alleged the relevant markets at issue and has pled how 800-Contacts’ conduct has harmed competitive processes in these markets. 8. The Relevant Markets at Issue. The relevant markets in which 800- Contacts has committed antitrust offenses are as follows: (1) the market for the sale of contact lenses in the United States as well as a submarket for the online sale of contact lenses in the United States (collectively, the “contact lens markets”); and (2) the market for search-engine advertising in the United States. Plaintiff and all members of the proposed class are consumers in each of these markets. PLAINTIFF’S CLASS-ACTION COMPLAINT FOR UNLAWFUL RESTRAINTS OF TRADE, ETC. 9. Contact Lenses Constitute a Relevant Product Market. Contact lenses are medical devices used to improve vision, treat defective vision, and/or improve the physical appearance of the user. For purposes of antitrust review, contact lenses constitute a relevant category of products whose sale 800-Contacts has unlawfully restrained. 10. A contact lens is composed of specialized material and encased in a special film. It is thin, curved, naturally clear, and specially shaped in order to be placed onto a human eye. Contact lenses are sold in pairs and placed directly on the surface of a user’s eyes in order to correct or improve the user’s vision or for cosmetic reasons, such as changing the apparent hue and shape of the user’s eyes. 11. Most consumers who purchase contact lenses use them for the same reason that others wear eye-glasses – to correct a vision impairment. For many users, however, contact lenses and eye-glasses are not reasonably interchangeable substitutes for one another because of the below-pled circumstances. 12. Many users strongly prefer contact lenses to eye-glasses because contact lenses correct or improve their vision without burdening them with the perceived disadvantages of wearing eye-glasses – their appearance and imposition of discomfort. Many users of contact lenses dislike how eye-glasses make them appear to others and/or find eye-glasses to be uncomfortable or awkward to wear. 13. Many users of contact lenses also dislike how eye-glasses readily accumulate dust, moisture and/or perspiration. 14. Many users of contact lenses find that eye-glasses are ill-suited or unsuitable for use when they participate in sporting activities, other outdoor activities or activities that require robust physical exertion. 15. Contact lenses also afford better peripheral vision than do most kinds of eye-glasses. 16. In addition, some users wear contact lenses only for cosmetic reasons rather than to correct any vision impairment. These users wear contact lenses only in PLAINTIFF’S CLASS-ACTION COMPLAINT FOR UNLAWFUL RESTRAINTS OF TRADE, ETC. order to alter the apparent hue (color) of their eyes or to give a different apparent shape to their eyes. Many users of contact lenses report that wearing them makes them feel much more physically attractive, and many who wear them to correct a vision impairment also do so for cosmetic reasons. 17. Some users of contact lenses wear them so that they can also wear sun- glasses, goggles or other kinds of eye-wear without having special fittings placed on eye-glasses. 18. For all of the foregoing reasons, contact lenses are medical devices for which there is no reasonably interchangeable substitute product. There is only one other product – eye-glasses – that in some cases can perform only some of the same functions. But owing to the above matters, those who wear contact lenses have such a strong preference for them that they would not stop wearing them and would not switch to eye-glasses even if the prices for contact lenses were to increase by a statistically significant amount for a non-transitory duration, which in antitrust jurisprudence is known as a “SSNIP” – a statistically significant, non-transitory increase in price. Rather, most users of contact lenses would continue to purchase and use them even if their price were increased by a SSNIP – a circumstance that means that contact lenses constitute a distinct relevant product according to the current Horizontal Merger Guidelines used by the United States Department of Justice for purposes of establishing the relevant product market in antitrust cases (i.e., determining the relevant category of products at issue for purposes of performing an antitrust evaluation of the practices challenged under the antitrust laws). 19. For many users, switching from contact lenses to eye-glasses is not even an option at any price, since they use contact lenses for purposes that eye-glasses cannot fulfill, such as cosmetic uses or the use of corrective lenses at sporting events. 20. By and large, there is either very limited or no cross-elasticity of demand between contact lenses and eye-glasses, and there is no cross-elasticity of demand at all between contact lenses and any other product. For most users of contact lenses, PLAINTIFF’S CLASS-ACTION COMPLAINT FOR UNLAWFUL RESTRAINTS OF TRADE, ETC. eye-glasses are not reasonably interchangeable substitute products because they do not afford the singular advantages offered only by contact lenses. For these users, there exists a distinct category of products that is limited to the various kinds and brands of contact lenses. 21. Sellers of contact lenses set their prices after carefully considering what other sellers of them charge, and they pay only passing attention to the prices charged for eye-glasses, since the two categories of products are not directly in competition with one another for most sales. 22. Manufacturers of contact lenses, distributors, online sellers, brick-and- mortar retailers, consumers and industry experts regard the sale of contact lenses in the United States as a distinct category of sales. The sale of these products is characterized by distinct demand curves, specialized manufacturers, specialized distribution channels, specialized retailers, distinct customers, and distinct uses. 23. For purposes of the present antitrust review, contact lenses constitute the relevant product market. It would be inappropriate to include any other product in the relevant product market when conducting an antitrust review of the business practices placed in issue by the present complaint. 24. Contact Lenses Are Sold in a National Market. The manufacturers of contact lenses market their products for distribution in the United States. They sell their products directly to specialized wholesale distributors, retailers, health-care purchasing organizations, healthcare providers, and others. 25. Defendant, 800-Contacts, is an online retailer that sells contact lenses online to customers located across the United States. All other online retailers of contact lenses likewise make sales to customers located across the United States. Online retailers face competition from one another and from brick-and-mortar retailers that make sales in localities and regions within the United States. 26. For purposes of evaluating Plaintiff’s present antitrust challenge, the relevant geographic market for the sale of contact lenses cannot be larger than the PLAINTIFF’S CLASS-ACTION COMPLAINT FOR UNLAWFUL RESTRAINTS OF TRADE, ETC. United States. In the United States, contact lenses are regulated as medical devices by the United States Food and Drug Administration, which imposes special regulatory requirements on their manufacture, distribution and sale that are not imposed on contact lenses that are made, distributed or sold abroad. In addition, in the United States contact lenses are sold in distinct “sales channels” that are not used to sell these products in any other region of the world. 27. The geographic market for contact lenses is therefore no larger than the United States. 28. How Contact Lenses Are Sold in the United States. In the United States, experts estimate that slightly more than forty million adults wear contact lenses, or approximately 16.7% of the adult population of the United States (an adult is defined as someone who is age eighteen or older). In addition, approximately four million adolescents and children also wear contact lenses. 29. Industry experts estimate that sales of contact lenses in the United States in 2015 generated revenues of approximately $2.7 billion. 30. Users of contact lenses replace them at periodic intervals, such as once per year, once per month, once every other week, once every week, or once every day. Many users prefer disposable contact lenses and replace them every day. Most users replace their contact lenses at least once every month or at shorter intervals. 31. Many users originally purchase contact lenses directly from a health-care provider, such as an optometrist, optician, contact lens technician or ophthalmologist. These health-care providers help users to determine which size and type of contact lens are best suited to their particular requirements and help them to place the lenses on the users’ eyes. Many users make their own purchases directly from online sellers and/or brick-and-mortar retailers after receiving initial fittings from health-care providers. 32. The Submarket for Online Sales of Contact Lenses in the United States. Like many other goods, contact lenses are increasingly advertised and sold PLAINTIFF’S CLASS-ACTION COMPLAINT FOR UNLAWFUL RESTRAINTS OF TRADE, ETC. over the internet rather than in brick-and-mortar stores: in the United States, health- care providers, specialized distributors of medical devices, and users by the millions browse online to consider and shop for contact lenses, place online orders, make online payment arrangements, and have specified contact lenses delivered to them by online sellers. 33. In the United States, online sales of contact lenses constituted 16.7% of all sales of contact lenses in 2012 (the most recent date for which Plaintiff has this information). The percentage of these sales made online has since increased. 34. For purposes of antitrust review, there exists a distinct submarket for the online sale of contact lenses in the United States. In this submarket, there are specialized sellers, distribution channels, logistics, promotional strategies, demand curves, and prices, and there exist a distinct subset of customers – the healthcare providers, medical device suppliers and especially the consumers who look only to online sellers in order to purchase contact lenses. There is widespread recognition among all of these market participants that the online sale of contact lenses has become a distinct market or submarket within a larger market for the sale of contact lenses in the United States. 35. Online Sales, Generally Described. An online sale is one that is made on the internet. It is typically conducted at the website of an online seller, which, crucially, serves as the online seller’s point of sale – i.e., its store. It is the place where an online seller shows and promotes its products and concludes sales. 36. In a typical transaction, a customer visits an online seller’s website, reviews information about the seller’s products, and, if persuaded to make a purchase, makes a purchase by placing an order, providing an electronic payment, and providing delivery instructions. After confirming the payment, the seller arranges to have the products delivered to the customer’s designated location. The entire transaction is conducted online and electronically, except for the physical delivery of the products (which is a separate operation that also depends on the use of online PLAINTIFF’S CLASS-ACTION COMPLAINT FOR UNLAWFUL RESTRAINTS OF TRADE, ETC. logistics). This is the typical manner in which online sales are conducted. 37. To make sales, an online seller hosts a website that provides information about its products and processes final sales. 38. To attract prospective customers to its website (i.e., to its store), an online seller strives to make its website attractive, useful, informative, accommodating, and as noticeable as possible. 39. To this end, a proficient online seller continually strives to create and maintain a website that internet search engines such as Google and Bing will list in the internet search findings that they offer in response to users’ search queries. Without having customers steered to its website by internet search engines, an online seller would largely lack customers and therefore could not make sales. Without the steering, most prospective customers would never come across its website at all. 40. Stated the other way around, internet search engines help to steer customers to online stores where they can find the goods and services that they seek. For example, if a user runs a query for “contact lenses, online,” a search engine such as Google or Bing will list in order of “relevance” various websites that it determines offer relevant information in response to the search query, such as the websites of various online sellers of contact lenses. An online seller of contact lenses will therefore strive to create and maintain a website that will be prominently listed in response to any such search query. 41. An online seller can reach prospective customers simply by hosting a useful, informative website. When a prospective customer runs a search query in a search engine about a topic on which the seller’s website offers useful information, the search engine might list the website as one of its findings. Users will be thereby directed to the online seller’s website. 42. Many online sellers, however, are not content merely to develop informative websites and do not limit their promotional efforts to the simple hosting of a website. In addition, they pay for advertising, whose purpose is to provide PLAINTIFF’S CLASS-ACTION COMPLAINT FOR UNLAWFUL RESTRAINTS OF TRADE, ETC. information about their products and especially to attract users to their websites. 43. To this end, an online seller can pay to run a “banner ad” on popular websites, so that all visitors to the popular websites will see the advertisement and possibly clink on an embedded link within the advertisement in order to visit seller’s website. Yahoo.com is one popular website that sells and displays such “banner ads.” 44. An online seller can also run advertisements in traditional media, such as newspapers, magazines, broadcast and cable television, and broadcast radio: the advertisements can tout the online seller’s products and identify and promote its website (“visit our crazy website at wow dot com!”) 45. By far the most effective advertising for an online seller is search-engine advertising, which is specifically targeted to users who see the seller’s advertisement at the very time when they are likely looking for the products or services that the seller offers. Search-engine advertising is run alongside internet search results that internet search engines provide in response to internet users’ search queries. 46. Specifically, an online seller can pay for advertising that will only appear alongside search findings that a search engine gives in response to designated search queries. Online sellers pay search engines such as Google or Bing to run their advertisements in this manner. By this means, an online seller can specifically target its advertising to prospective customers rather than the public at large. 47. Ultimately, the aim of all advertising run by online sellers is to promote their goods or services to customers and to attract customers to their websites. The most effective advertising for this purpose is the search-engine advertising that the online sellers pay search engines to place alongside search results that the search engines give in response to specified search queries. 48. Online Search Engines. Online search engines act as private curators of the extraordinary if not inconceivable volume of information available to internet users on the “worldwide web” of internet connections. PLAINTIFF’S CLASS-ACTION COMPLAINT FOR UNLAWFUL RESTRAINTS OF TRADE, ETC. 49. Using extraordinary resources that include state-of-the-art computer programs, an internet search engine continually combs over and organizes in myriad ways all of the available information in the worldwide web. It is then able to guide an internet user who uses its search-engine facilities to find specific information located in the worldwide web. For example, if a user seeks information on the internet about whether peanuts are healthy food, she can hazard the names of likely websites that might exist and provide such information (e.g., “peanuts.com”) or she can go to a search engine such as google and run an appropriate search query (e.g., “are peanuts good for you?”). Google will then list various websites that it believes will provide the requested information along with hyperlinks to these websites, so that the user can effortlessly proceed to them. 50. It is the search engines that in this manner organize the information available on the worldwide web, making it practically accessible to internet users. Without this service, it would be exceedingly difficult or impossible for an internet user to find relevant information on the worldwide web: an internet user who lacks a search engine would be akin to a person who finds herself inside a vast library building that holds millions of books that are not catalogued or placed in any particular order. Indeed, an internet user without a search engine would be at even a greater disadvantage than our hapless library visitor in the foregoing example. Search engines therefore perform an indispensable service that is principally funded by the search-engine advertising that they sell to online sellers. 51. Search engines use algorithms to perform their essential work. When an internet user enters a search query in the search engine, the search engine responds by running highly complex algorithms to direct the user to the information in the worldwide web that it determines is most “relevant” to the user’s query. 52. Search engines are private entities that are funded by the search-engine advertising that they sell to online advertisers, who are principally online sellers. When a search engine provides a search result in response to a query, it typically will PLAINTIFF’S CLASS-ACTION COMPLAINT FOR UNLAWFUL RESTRAINTS OF TRADE, ETC. also display paid advertising alongside its search findings. It is this paid search- engine advertising that provides the principal source of revenues for the search engine, making possible its ability to provide internet search services, which are indispensable services in the modern era. The paid advertisements fund its activities – the providing of ordered search results in response to online search queries. 53. Search-Engine Advertising. Search engines sell their advertising principally to online sellers, and they make these sales by conducting ongoing online auctions, which operate as follows. Each search engine allows an advertiser to give it ongoing instructions as to when it wishes to have its advertisements run and how much it will pay for the privilege. To this end, the advertiser designates specific “keywords” and “negative keywords” as well as various other parameters. These keywords, negative keywords and other parameters serve as the advertiser’s instructions to the search engine. These instructions are also accompanied by the advertiser’s bidding information – its statement of how much it is willing to pay to have each of its advertisements run in response to qualifying search queries. These bids can be very complex, and the advertiser can change them constantly. For example, the advertiser might be willing to pay one amount for a query that contains three particular keywords and that is run in the evening where the user is located, but another price for a different query made at a different time of day, and so on and so forth. 54. The keywords, negative keywords and other parameters that online sellers provide to search engines serve as a set of instructions to them: “please run our advertisement whenever these criteria are met, and we will pay you as follows every time you run our advertisement.” Online sellers accompany these instructions with complicated bids that indicate how much they will pay for every possible running of any of their advertisements. The search engines provide computer programs that greatly simplify and facilitate the online sellers’ provision of this information. PLAINTIFF’S CLASS-ACTION COMPLAINT FOR UNLAWFUL RESTRAINTS OF TRADE, ETC. 55. A keyword is an instruction to run an advertisement in response to any internet search query that includes the keyword (e.g., “run our ad showing the smiling, healthy woman eating a slice of blueberry pie whenever the term ‘pie’ appears in a search query.”). A negative keyword is an instruction not to run the advertisement if a negative keyword appears in a query that also includes a keyword (e.g., do not run our ad in any query that includes the word ‘pizza,’ even if it also includes any of our keywords.”) 56. For example, an online seller of cakes and pies might list as its keywords “cake,” “pie,” “batter,” “flour,” “chocolate” and “desert,” and it might list as negative keywords “pizza” and “survival”: it wants to show its advertisements to internet users who seek information about cakes, pies, after-dinner deserts and such matters, but not to users who seek information about pizza pies or surviving in the desert. 57. An online seller will therefore instruct a search engine to run its specified advertisement in response to search queries that contain one or some combination of its keywords, but not to do so if the query also contains one or some combination of negative keywords. It will also likely provide other parameters, varying which advertisements it wishes to run according to what search is made, at what time of day, from which location, etc. 58. When providing this information, an online seller will also provide its bidding for its advertisements, stating the highest price it is willing to pay to run a given advertisement in response to given internet queries. 59. Each online search engine conducts permanent, ongoing evaluations of advertisers’ instructions and bids, and it also considers how relevant each proposed advertisement will be to each specified search query. On this basis it decides (1) which paid advertisements it will run in response to each search query, and (2) the ordering of these paid advertisements. 60. Typically, an online seller who is willing to pay the most for its advertising will have its advertisement displayed first, and each advertiser’s PLAINTIFF’S CLASS-ACTION COMPLAINT FOR UNLAWFUL RESTRAINTS OF TRADE, ETC. advertisement will be displayed in order, according to how much each advertiser is willing to pay. 61. 800-Contacts’ Online Sales of Contact Lenses. As pled above, contact lenses are increasingly sold by online sellers, who make most of their sales by using online advertisements to attract customers to their websites, at which they make their promotions and sales. 62. 800-Contacts was an innovative pioneer in online sales of contact lenses, and over time it became the largest online seller. It now makes approximately 50% of all online sales of contact lenses in the United States. It is the dominant seller in a distinct submarket for the sale of contact lenses in the United States – their online sale. 63. Like all online sellers, 800-Contacts makes all of its sales from its website, which prospective customers visit in order to consider and possibly purchase its offerings. Like most online sellers, 800-Contacts uses internet advertising to attract customers to its websites, and it uses search-engine advertising in order to target its advertising specifically at internet browsers who seek information about contact lenses. 64. 800-Contacts’ Rivals Tried to Compete Against It. 800-Contacts’ success naturally invited competition. Other sellers of contact lenses established competing websites and ran their own online advertisements in order to introduce their own online products. Some of these rivals claimed that their contact lenses were better in quality or specially adapted to particular niche uses. Some offered lower prices than those offered by 800-Contacts for the same goods. Some offered innovative terms of sale or other services that 800-Contacts did not offer. 65. 800-Contacts Responded By Suppressing Competition. Rather than respond to this competitive threat by striving to improve its products and lower its prices, 800-Contacts went to elaborate lengths to protect its “internet turf” from competition. PLAINTIFF’S CLASS-ACTION COMPLAINT FOR UNLAWFUL RESTRAINTS OF TRADE, ETC. 66. To this end 800-Contacts circulated cease-and-desist letters to at least fifteen of its direct competitors that also sold contact lenses in the United States by means of online sales. In these cease-and-desist letters, 800-Contacts threatened to involve each of these business rivals in baseless trademark litigation that would be costly and disruptive, unless the rival assented to its proposed settlement agreement. Fourteen of the targeted rivals acquiesced and assented to its proposed settlement agreements, which included anticompetitive terms that constitute per se violations of Section 1. Plaintiff lacks the names of these fourteen rival sellers because the Federal Trade Commission, which has investigated this matter, has redacted them from the public version of its complaint, but Plaintiff will disclose these names after she has had occasion to conduct appropriate discovery in order to ascertain them. 67. By these agreements, made in response to 800-Contacts’ threat to initiate baseless litigation, 800-Contacts and the fourteen acquiescent direct competitors agreed by a series of bilateral agreements to do the following: (1) coordinate their bidding for search-engine advertising; (2) coordinate their competition and abstain from competing against one another for specified sales leads; and (3) coordinate and suppress their internet advertising and dissemination of information about their products and offers, so that only one online seller, usually 800-Contacts, would be permitted to show its advertising in response to specified sales leads. 68. More specifically, 800-Contacts and each of the above fourteen rivals agreed that only 800-Contacts would submit bids to run search-engine advertisements in response to any search query that included the term “800-Contacts” or any of 800- Contacts other trademarks, and that none of the rivals would bid to run their own advertisements in response to any such search query. Similarly, 800-Contacts and each of these rivals agreed that 800-Contacts would not bid to run its advertisements in response to any search inquiry that included mention of the rival’s name or any of its other trademarks. (Plaintiff does not know how 800-Contracts and its rivals agreed to handle search queries that included both 800-Contacts’ name and a rival’s name.) PLAINTIFF’S CLASS-ACTION COMPLAINT FOR UNLAWFUL RESTRAINTS OF TRADE, ETC. 69. 800-Contacts and each of the above rivals further agreed that each would list the other’s name and other trademarks as “negative keywords” in its instructions to search engines. If a customer included 800-Contacts’ name or other trademarks in a search query, none of 800-Contacts’ fourteen rivals would permit its advertising to appear in response to the query. 70. Since online sellers make their sales by attracting internet users to their websites, these fourteen agreements constituted an effectual market-allocation scheme. Whenever a prospective customer ran a search query on the internet that made any mention of 800-Contacts’ name or other trademarks, only 800-Contacts would bid to run advertisements, and only 800-Contacts would show its advertisements to the prospective customer. For these sales leads, only 800-Contacts would try to make sales, and its above fourteen rivals expressly agreed to refrain from doing so. 71. The several agreements between 800-Contacts and its fourteen rivals concerning bids for search-engine advertising constitute fourteen instances of unlawful bid-rigging as well as an overall, coordinated bid-rigging scheme. Bid- rigging in turn is a per se violation of Section 1. This matter is further explained below. 72. The several agreements between 800-Contacts and its fourteen rivals concerning which among them would try to make sales in response to specified search queries constitute an unlawful market-allocation scheme, which is a second per se violation of Section 1. This matter is further explained below. 73. 800-Contacts used improper tactics to coerce the fourteen acquiescent competitors to assent to these anticompetitive, unlawful agreements. To force them to do so, 800-Contacts threatened to bring a succession of objectively baseless claims against them without regard to the probable outcome of these claims, and it actually litigated and lost one objectively baseless litigation against a fifteenth rival that refused to yield to its demands. PLAINTIFF’S CLASS-ACTION COMPLAINT FOR UNLAWFUL RESTRAINTS OF TRADE, ETC. 74. The trademark litigation that 800-Contacts threatened to bring and actually brought in one case was indeed “objectively baseless”: in its cease-and-desist letters, it threatened to bring substantial trademark claims against any rival whose search-engine advertising appeared in response to any search query that mentioned any of 800-Contacts’ trademarks. According to these cease-and-desist letters, any advertisement that so appeared constituted a violation of 800-Contact's trademarks – an absurd proposition that 800-Contacts never had any reasonable basis to make. 75. If this theory of trademark infringement were correct, a company could register its trademarks, closely monitor Google analytics, and sue every other company whose ads were run in response to any query that mentioned its name or any of its other trademarks, even if the advertisements themselves in no way confused customers into incorrectly believing that the advertisers were authorized sellers of its products – which alone is the standard for determining whether an advertisement has infringed upon a trademark. This proposed application of trademark law, if accepted, would be oppressive, would impair the constitutional right of free speech, would not reasonably promote the proper aims of trademarks, and would encourage trademark trolls to engulf the courts in trademark litigation that did not protect anyone's trademarks, but only resulted in the senseless enrichment of trademark holders whose names happened to appear in internet search queries. 76. The cost of litigating these points likely appeared prohibitive to 800-Contacts' rivals, each of which operated on low margins in order to make profits by selling contact lenses at low prices. With one exception, the smaller rivals chose not to oppose 800-Contacts’ calculated threats to litigate baseless claims against them, but instead acquiesced in the above anticompetitive, unlawful agreements. The one rival that refused to yield was obliged to oppose the claims and incur costs to do so. Unsurprisingly, this hold-out rival prevailed at summary judgment and then again on appeal. See 1-800-Contacts, Inc. v. Lens.com, Inc., 722 F.3d 1229, 1256 (10th Cir. 2013). PLAINTIFF’S CLASS-ACTION COMPLAINT FOR UNLAWFUL RESTRAINTS OF TRADE, ETC. 77. As for the fourteen rivals that acquiesced, 800-Contacts agreed to drop its claims against them in exchange for their acceptance of the above agreements, which in turn include the above anticompetitive provisions, which constitute two per se antitrust violations: (1) an unlawful conspiracy to rig bids; and (2) an unlawful conspiracy among direct competitors to allocate sales and suppress advertising. By these provisions, 800-Contracts succeeded at having its threatening rivals desist from competing against it in its designated "internet turf" – all internet queries that so much as mentioned its name or any of its other trademarks. 78. 800-Contacts' Bid-Rigging Conspiracy. As pled above, 800-Contacts' settlement agreements obliged each coerced rival to agree not to bid in online auctions to run paid advertisements that would appear in response to any online search query that mentioned 800-Contacts’ name or any of its other trademarks (including all possible variations). 800-Contacts agreed reciprocally not to bid in online auctions for advertisements that would run in response to any online search query that mentioned any of its rivals' trademarks (including all possible variations).These agreements constitute unlawful bid-rigging, which is a per se violation of Section 1. See United States v. Guthrie, 814 F. Supp. 942, 950 (E.D. Wash. 1993), aff'd, 17 F.3d 397 (9th Cir. 1994) (bid rigging, which is a per se violation of Section 1, is “an agreement to interfere with competition for a transaction conducted by bid.”); United States v. Reicher, 983 F.2d 168, 170 (10th Cir. 1992) (bid-rigging is an agreement between direct competitors to make or withhold bids or specified contract offers; it constitutes a per se violation of Section 1). 79. The immediate victims of 800-Contacts’ bid-rigging scheme were the search engines, which lost sales revenues, and prospective purchasers of contact lenses, who were deprived of information about the products that they wished to purchase as well as competition for their business among rival sellers of these products. Since there was a lack of competition for their business, they inevitably paid higher prices for contact lenses that they purchased from 800-Contacts than they PLAINTIFF’S CLASS-ACTION COMPLAINT FOR UNLAWFUL RESTRAINTS OF TRADE, ETC. would have done in a competitive market. That was the whole point. 80. 800-Contacts’ rivals were also harmed even though they were coerced participants in the scheme, since they were forced to refrain from bidding to run ads in response to the many queries that mentioned 800-Contacts’ well-known name, even though their ads were not likely to confuse users into believing that they were authorized by 800-Contacts to sell its products. For example, none of these rivals could bid to run internet advertising in response to a search query for “contact lenses offered by 800-Contacts or any other online seller.” 81. 800-Contacts' Scheme to Allocate Markets and Suppress Advertising. As pled above, 800-Contacts’ settlement agreements also obliged its rivals to take positive steps to ensure that their ads would not run in response to an online search query that mentioned any of 800-Contacts trademarks, such as a search for “contact lenses from 1-800-Contacts or any other online seller.” 800-Contacts reciprocally agreed not to run its ads in response to any search query that included any of its rivals’ trademarks. To give effect to these agreements, 800-Contacts and each rival specified the other's trademarks as "negative keywords," which as explained above serve as an online seller’s instructions to search engines not to run its advertising whenever a designated negative keyword appears in a search query. 82. By these provisions in the settlement agreements, 800-Contacts and fourteen of its direct competitors agreed that for specified search queries only one of them would provide advertising and thereby offer products. This practice therefore constituted a market-allocation scheme, which is a per se violation of Section 1. See California ex rel. Harris v. Safeway, Inc., 651 F.3d 1118, 1137 (9th Cir. 2011) (market- allocation schemes among direct competitors are per se unlawful under Section 1); Palmer v. BRG of Georgia, Inc., 498 U.S. 46, 49-50, 111 S. Ct. 401, 402- 03 (1990) (“[A]greements between competitors to allocate territories to minimize competition are illegal.... Such agreements are anticompetitive regardless of whether the parties split a market within which both do business or whether they merely PLAINTIFF’S CLASS-ACTION COMPLAINT FOR UNLAWFUL RESTRAINTS OF TRADE, ETC. reserve one market for one and another for the other.”) 83. This practice also constitutes a conspiracy by direct competitors to suppress advertising - a practice that has been challenged in cases such as California Dental Association v. Federal Trade Commission, 526 U.S. 756, 119 S.Ct. 1604 (1999) and Nat'l Soc. of Prof'l Engineers v. United States, 435 U.S. 679, 98 S. Ct. 1355 (1978). In the present matter, the suppression of advertising was imposed only to ensure that each competitor would advertise and sell products only in its own designated “online territory.” It was not even arguably used to further a claimed benefit for consumers, such as ensuring that dental patients are not deceived (California Dental) or that engineers refrain from quoting prices when bidding for work so as to avoid the temptation to propose inexpensive but substandard structures (Professional Engineers). The present case is therefore best regarded as a market-allocation scheme that depends on the suppression of advertising, since the sellers are online providers that principally make sales by running online advertisements. 84. 800-Contact's market-allocation scheme deprived customers of information about contact lenses that they otherwise would have received from rival sellers’ advertising. Even worse, the scheme deprived them of the benefits of competition for their business. Whenever a prospective customer ran a covered search query, he or she failed to receive advertising or competing offers from the excluded rival providers. 85. More generally, 800-Contact purposefully used its restraints of trade to mislead customers into believing that it was a true discounter that offered contact lenses at discount prices, when in fact it suppressed bidding, competition and the dissemination of advertising precisely in order to ensure that true discounters would be less likely or unable to display their offers to prospective customers. 86. Harm to Competition. 800-Contacts’ bid-rigging scheme and its scheme to allocate sales and suppress advertising harmed competitive processes in the PLAINTIFF’S CLASS-ACTION COMPLAINT FOR UNLAWFUL RESTRAINTS OF TRADE, ETC. following relevant markets: (1) the contact lense markets – i.e., the market for the sale of contact lenses in the United States as well as the submarket for the online sale of contact lenses in the United States; and (2) the market for search-engine advertising in the United States. 87. In the contact lens markets, 800-Contacts used the above-pled practices to suppress competition for sales; this in turn permitted it to charge supracompetitive prices for its contact lenses – i.e., prices that were higher than those that it could have charged in a competitive market without losing substantial sales to rivals. That was the whole point of its conduct and anticompetitive schemes. 88. Although 800-Contacts’ trade restraints did not affect every prospective customer and instead reached only those that ran specified search queries, these trade restraints reached enough prospective customers so that 800-Contacts could protect itself sufficiently from competition in order to maintain supracompetitive prices and/or practice price discrimination by charging supracompetitive prices to those users who arrived at its site after using one of the specified search queries. Moreover, the general effect of these trade restraints was to limit competition on price and quality among rival online sellers of contact lenses - a circumstance that by itself permitted 800-Contacts to charge supracompetitive prices to all of its customers. 89. At a later stage of these proceedings, Plaintiff will furnish econometric evidence that 800-Contacts charged supracompetitive prices in the contact lens markets, and she will provide an econometric quantification of the probable amount of the overcharges (the amount by which 800-Contacts charged prices that exceeded competitive prices). 90. In the above contact lens markets, 800-Contacts also suppressed advertising, which is the dissemination of information about products and a form of output that is useful to consumers in these markets. 91. 800-Contacts therefore restricted output in the contact lens markets by charging supracompetitive prices, which inevitably restrict output, and also by PLAINTIFF’S CLASS-ACTION COMPLAINT FOR UNLAWFUL RESTRAINTS OF TRADE, ETC. suppressing advertising and the dissemination of information about products, which is a form of output. 92. In the contact lens markets, 800-Contacts also used its above-pled practices to impair or suppress (1) competition for sales and (2) its rivals’ ability to offer financing terms that it did not offer, alternative services that it did not offer, and more responsive and timely service than it offered. In this manner, 800-Contacts further restricted output in the contact lens markets by means of its above-pled practices. 93. 800-Contacts’ challenged practices therefore harmed competitive processes in the contact lens markets: these practices resulted in the imposition of supracompetitive prices and the further restriction of output by other means. 94. 800-Contacts’ challenged practices also harmed competitive processes in the market for search-engine advertising in the United States. In this market, 800- Contacts used the above-pled practices in order to depress the amounts it and other online sellers of contact lenses paid to search engines to run their advertisements in response to specified search queries, since these direct competitors agreed not to bid against one another to run their respective advertisements whenever the name or other trademark of one of them appeared in a search query. The above-pled practices thus suppressed all rival bids to run search-engine advertisements under specified circumstances. 95. Not only did these competitors agree not to bid against one another, but they further agreed that they would not run competing advertising for specified internet search queries. 96. By preventing its rivals from bidding for or showing internet advertising in response to specified search queries, 800-Contacts restricted the output of advertising in the market for search-engine advertising. Users who ran search queries received less advertising and information than they would have done in a competitive market for search-engine advertising. PLAINTIFF’S CLASS-ACTION COMPLAINT FOR UNLAWFUL RESTRAINTS OF TRADE, ETC. 97. 800-Contacts’ agreements with fourteen of its direct competitors therefore harmed competitive processes in the national market for search-engine advertising by suppressing competitive bidding to run search-engine advertisements and by suppressing search-engine advertising. 98. 800-Contacts’ challenged practices therefore harmed competition in the relevant markets placed in issue in the present case. Plaintiff need not make any such showing to prevail on her single cause of action, since 800-Contacts’ challenged practices should be condemned as per se violations of Section 1, but Plaintiff has pled this claim under three alternative standards of review and is prepared if necessary to prove harm to competitive processes in each of the above markets. 99. Plaintiff’s Antitrust Injuries. As pled more fully below, Plaintiff and each member of the proposed class suffered antitrust injuries in proximate consequence of the anticompetitive character, purpose, and effect of 800-Contacts’ bid-rigging scheme and scheme to allocate sales and suppress advertising: they each paid supracompetitive prices for contact lenses that they purchased online from 800- Contacts within the past four years; and they each were deprived of consumer choice, which is a form of antitrust injury. These matters are pled more fully in the following section of this complaint. V. CLASS-ACTION ALLEGATIONS 100. Plaintiff re-pleads and incorporates by reference each of the preceding allegations. 101. Plaintiff made online purchases of contact lenses from 800-Contacts within the past four years. For at least one of these purchases, she recalls having run a search query to look for online sellers of contact lenses. She was misled by 800- Contacts’ online advertising and promotions to believe that 800-Contacts was a bona fide discounter that offered the best possible prices for contact lenses and did not realize that it used the above trade restraints to charge supracompetitive prices, restrain competition, and suppress its rivals’ dissemination of their lower prices and PLAINTIFF’S CLASS-ACTION COMPLAINT FOR UNLAWFUL RESTRAINTS OF TRADE, ETC. alternative offers and services. 102. Had 800-Contacts not employed the above-pled restraints of trade, it would have been obliged to charge competitive rather than supracompetitive prices for the contact lenses that it sold to Plaintiff. She has been harmed because she paid to 800-Contacts the difference between its supracompetitive prices and competitive prices. 103. In addition, if 800-Contacts had not employed the above-pled restraints of trade, Plaintiff likely would have been exposed to paid advertising by rival providers when she ran the above search query. Since she was not exposed to this advertising, she was deprived of a corresponding opportunity to consider the rival providers’ competing products and services. This loss of choice, imposed by 800- Contacts’ above-pled restraints, is a form of antitrust injury and harm to Plaintiff. See Glen Holly Entm't, Inc. v. Tektronix Inc., 343 F.3d 1000, 1011 (9th Cir.), opinion amended on denial of reh'g, 352 F.3d 367 (9th Cir. 2003) (“One form of antitrust injury is coercive activity that prevents its victims from making free choices between market alternatives.”) (internal quotation omitted). 104. Plaintiff and all other similarly situated persons have been directly harmed by the anticompetitive character, purpose, and effect of 800-Contacts’ bid- rigging conspiracy and scheme to allocate sales and suppress advertising. Plaintiff, who belongs to the proposed class, now seeks to represent all legal persons located in the United States who during the past four years overpaid for contact lenses that they purchased online from 800-Contacts because of its bid-rigging conspiracy and/or its related scheme to allocate sales and suppress advertising. 105. By suppressing its rivals’ advertising and ability to make sales to customers that ran specified search queries, 800-Contacts was able to charge higher prices to these customers than it would have been able to do had it faced competition from its rivals for these sales. At a later stage of these proceedings, Plaintiff will provide econometric and other expert evidence of the amounts that 800-Contacts PLAINTIFF’S CLASS-ACTION COMPLAINT FOR UNLAWFUL RESTRAINTS OF TRADE, ETC. overcharged for these sales because of its above-pled antitrust violations. 106. Because of 800-Contacts’ above-pled anticompetitive practices, Plaintiff and each member of the proposed class overpaid for contact lenses that they purchased from 800-Contacts during the stated period. It is possible to develop econometric models that can furnish reasonable estimates of the amounts of these overcharges and to provide appropriate pro rata compensation to each member of the proposed class. Because of 800-Contacts’ above-pled anticompetitive practices, Plaintiff and each member of the proposed class were deprived of consumer choice and alternative promotions of products and services that were different from, better than, and/or less expensive than those offered by 800-Contacts. Unlike 800-Contacts, some online sellers of contact lenses were bona fide discounters that offered or systematically matched the lowest available prices for these products, but 800- Contacts was able to prevent them from making themselves known to prospective customers by its above-pled restraints of trade. 107. Plaintiff proposes to litigate the present case as a class-action because her claim against 800-Contacts satisfies the required criteria for litigating a claim as a class-action. These criteria are set forth at Federal Rule of Civil Procedure 23 and are addressed directly below. 108. Pursuant to Rule 23(b)(2) and (b)(3) of the Federal Rules of Civil Procedure, Plaintiff now brings a proposed class-action on behalf of herself and the following proposed class of similarly situated individuals: All persons in the United States who made online purchases of contact lens products from 800-Contacts for personal and household use and not for resale from September 21, 2012 until the date on which class notice is given. Excluded from the proposed class is Defendant (800-Contacts), any entity in which Defendant has a controlling interest or that has a controlling interest in Defendant, and Defendant's legal representatives, assignees, and successors. Also excluded are the judge and magistrate judge to whom this case is assigned and any member of the judge’s immediate family and the magistrate judge’s immediate family. PLAINTIFF’S CLASS-ACTION COMPLAINT FOR UNLAWFUL RESTRAINTS OF TRADE, ETC. 109. Numerosity. The proposed class consists of many thousands of persons. It is so numerous that joinder of all members is impracticable. 110. Common Issues Predominate. Each member of the proposed class claims that 800-Contacts employed unlawful restraints of trade in violation of Section 1, and that by so doing it overcharged each member for contact lenses that it sold to them and also deprived each member of consumer choice. The principal issues of fact and law that arise from this claim are common to the entire class, and these issues predominate. Any issue of fact or law that is peculiar to individual members is merely ancillary to the common, predominant issues. 111. The common issues of fact and law that are predominant in this case include the following: (1) Were 800-Contacts’ several agreements with its rivals unlawful per se under Section 1 because each agreement obliged each rival to refrain from bidding to run search-engine advertising in response to any search query that included mention of 800-Contacts’ name or any of its other trademarks? (2) Were 800-Contacts’ several agreements with its rivals unlawful under Section 1 because each agreement required each rival to withhold its search-engine advertising from any response given to a search query that included mention of 800-Contacts’ name or any of its other trademarks? (3) Using a “quick-look” analysis, were 800-Contacts’ several agreements with its rivals unlawful restraints of trade in violation of Section 1? (4) Under the “Rule of Reason,” were 800-Contacts’ several agreements with its rivals unlawful restraints of trade in violation of Section 1? (5) By approximately how much was 800-Contacts able to overcharge for contact lenses that it sold in the United States during the past four years because of its agreements with its rivals? How should these overcharges be allocated among each member of the proposed class? PLAINTIFF’S CLASS-ACTION COMPLAINT FOR UNLAWFUL RESTRAINTS OF TRADE, ETC. 112. 800-Contacts has engaged in a common course of conduct toward Plaintiff and members of the proposed class. The common issues arising from this conduct that affect Plaintiff and class members predominate over any individual issues. 113. Plaintiff’s Claim Is a Typical Claim. Plaintiff is a direct purchaser who within the past four years made online purchases of contact lenses from 800-Contacts. She overpaid for these contact lenses by paying supracompetitive prices for them after conducting an online query for contact lenses, and she was deprived of consumer choice and alternative offers of products and services that were different from, better than, and/or less expensive than those offered by 800-Contacts. She therefore has a typical claim that is essentially identical to the claim held by of each member of the proposed class, and her claim depends on the adjudication of the above-listed common issues of fact and law. 114. Adequacy. Plaintiff will fairly and adequately protect the interests of the proposed class. Plaintiff has retained competent, capable attorneys who have significant experience in antitrust litigation as well as complex and class-action litigation, including consumer class-actions. Plaintiff and her counsel are committed to prosecuting this action vigorously on behalf of the proposed class and have the financial resources to do so. Neither Plaintiff nor her counsel have interests that are contrary to, or in conflict with, those of the proposed class. 115. Plaintiff is therefore an appropriate representative of the proposed class members who can litigate the present antitrust challenge proficiently on behalf of the proposed class. 116. Superiority. A class-action is superior to other available methods for the fair and efficient adjudication of the present controversy. Adjudication of the common issues of fact and law in a single action will promote judicial economy, nor would it be practical to oblige each class member to litigate his or her claim independently. Doing so would be cost-prohibitive and so would never occur; but if PLAINTIFF’S CLASS-ACTION COMPLAINT FOR UNLAWFUL RESTRAINTS OF TRADE, ETC. each claimant were to litigate his or her claim separately, these litigations would necessarily result in duplicative procedures and might result in inconsistent adjudications of identical issues of fact and law. 117. Injunctive and Declaratory Relief Appropriate. Plaintiff’s proposed class-action is also appropriate under Fed. R. Civ. P. 23(b)(2) because 800-Contacts has committed the same legal wrong against all members of the proposed class, and on behalf of all class members Plaintiff seeks final injunctive relief against 800- Contacts in order to prevent it from persisting in its anticompetitive conduct. 118. Arbitration. On its website, 800-Contacts posts a notice of its purported requirement that its customers must submit to binding arbitration any claim that any of them might have in connection with the customer’s purchase of any product from 800-Contacts. During the four-year period that preceded the filing of this complaint, 800-Contacts did not require its customers to indicate their assent to this purported arbitration clause or to its other posted terms of sale. There was therefore never any meeting of the minds between 800-Contacts and its customers that any dispute between them must be arbitrated. 119. 800-Contacts’ purported arbitration clause that appears on its website is unenforceable under federal law because none of its customers was required to take any action to express his or her assent to it. See, e.g., Nguyen v. Barnes & Noble Inc., 763 F.3d 1171, 1175-1176 (9th Cir.2014); Knutson v. SiriusXM Radio Inc., 771 F.3d 559, 565 (9th Cir.2014); Specht v. Netscape Commc'ns Corp., 306 F.3d 17, 38 (2d Cir.2002). 120. Regardless, 800-Contacts failed to disclose its arbitration clause in a reasonable manner to its customers, each of whom can therefore be said to be “surprised” by its existence. In addition, each customer stood in a greatly inferior bargaining position in relation to 800-Contacts. Lastly, the substantive provisions of the arbitration clause are inequitable and oppressive: they are intended to deprive common victims of the same wrongful business practices from obtaining appropriate PLAINTIFF’S CLASS-ACTION COMPLAINT FOR UNLAWFUL RESTRAINTS OF TRADE, ETC. redress by means of class-action relief, which in many instances, including the present one, is the only practicable, viable manner in which any of them can obtain any redress at all for such practices, since the cost, delay and difficulty of privately arbitrating each customer’s separate claim would be prohibitive. For these reasons, 800-Contacts’ notice of a purported arbitration clause is unconscionable and should be declared contrary to public policy and therefore unenforceable. VI. FIRST CAUSE OF ACTION (Unlawful Restraints of Trade) (15 U.S.C. §1) 121. Plaintiff re-pleads and incorporates by reference each of the preceding allegations. 122. By orchestrating and enforcing the above-pled agreements with its rivals to suppress and manipulate bidding for online advertisements, 800-Contacts has restrained trade and interstate commerce in the United States. Its agreements with its rivals to allocate and restrict bidding are intended to restrain trade in an anticompetitive manner and foreseeably have had this effect. 123. As implemented and enforced by 800-Contacts, the above-pled agreements on bidding between 800-Contacts and fourteen of its direct competitors constitute restraints of trade that are unlawful per se under Section 1. 124. By orchestrating and enforcing the above-pled agreements with its rivals to allocate sales and suppress online advertising, 800-Contacts has restrained trade and interstate commerce in the United States. Its agreements with its rivals to allocate sales and restrict online advertising are intended to restrain trade in an anticompetitive manner and foreseeably have had this effect. 125. As implemented and enforced by 800-Contacts, 800-Contacts’ agreements with fourteen of its direct competitors on sales-allocation and the suppression of advertising constitute restraints of trade that are unlawful per se under Section 1. PLAINTIFF’S CLASS-ACTION COMPLAINT FOR UNLAWFUL RESTRAINTS OF TRADE, ETC. 126. 800-Contacts’ above-pled restraints of trade each constitute a per se violation of Section 1. Harm to competition is therefore presumed without any need to define the relevant markets in which these trade restraints were imposed, nor is there any need to show how these trade restraints have harmed competitive processes in any of the relevant markets. 127. Regardless, 800-Contacts’ restraints of trade have demonstrably and significantly undermined competitive processes in three properly defined markets – the market for the sale of contact lenses in the United States; the submarket for the online sale of contact lenses in the United States; and the market for search-engine advertising in the United States. In each of these markets, 800-Contacts’ restraints of trade have purposefully and foreseeably undermined ordinary competitive interplay, as is pled fully above. In the contact lens markets, 800-Contacts has used these restraints to exclude and impair the operations of its rivals so that it can subject its increasingly captive customers to higher prices and less accommodating service than it could offer in competitive markets, and it has also restricted output by suppressing advertising and the dissemination of information about contact lenses and by preventing its rivals from offering lower prices, different products, alternative financing terms and various services that it does not or cannot offer. In the market for search-engine advertising, 800-Contacts has orchestrated collusive bidding and suppressed advertising in furtherance of its market-allocation scheme. It has thus restricted the output of advertising in this market and thereby deprived customers of advertising and information about products and services. 128. Therefore, 800-Contacts’ restraints of trade are unlawful under both the “quick-look” standard of review and the “Rule of Reason.” 129. Plaintiff and all of the members of the proposed class have suffered antitrust injuries in proximate consequence of the anticompetitive purpose, effect and character of each of 800-Contacts’ anticompetitive agreements. These losses can be quantified. PLAINTIFF’S CLASS-ACTION COMPLAINT FOR UNLAWFUL RESTRAINTS OF TRADE, ETC. 130. More specifically, Plaintiff and all members of the proposed class have overpaid for contact lenses that they each purchased within the past four years from 800-Contacts. Plaintiff will demonstrate the probable amount of these overcharges at a later stage of these proceedings. In addition, Plaintiff and each member of the proposed class have been deprived of information about contact lenses, competition for their business, and the offer of alternative and better prices, products, and services. 131. 800-Contacts has employed its anticompetitive practices in interstate commerce and in a manner that has affected interstate commerce. Its challenged conduct is therefore subject to review under the antitrust laws of the United States. WHEREFORE, Plaintiff seeks redress for the harm that she and each member of the proposed class have suffered because of 800-Contacts’ violation of the antitrust laws of the United States. VII. PRAYER FOR RELIEF Plaintiff now prays to this Court for the following orders and redress, to which she is entitled under 15 U.S.C. §§ 15 and 26 and also under Fed. R. Civ. P. 23: 1. Certification of the proposed class. 2. Appointment of Plaintiff as the class representative and the Law Offices of William Markham, P.C. and the Law Offices of Ronald A. Marron, a Professional Corporation as class counsel or interim class counsel. 3. Costs for giving required notices to class members, and all associated costs. 4. Compensatory damages, trebled under 15 U.S.C. § 15. 5. Pre-judgment interest, as authorized by 15 U.S.C. § 15. 6. Injunctive and declaratory relief, as authorized under 15 U.S.C. § 26. 7. Costs of suit, including reasonable attorneys’ fees, as authorized by 15 U.S.C. §§ 15 and 26. 8. Such other relief as the Court deems appropriate and just. PLAINTIFF’S CLASS-ACTION COMPLAINT FOR UNLAWFUL RESTRAINTS OF TRADE, ETC. VIII. DEMAND OF JURY TRIAL So far as the law allows, Plaintiff demands that a jury of her peers try her claim against 800-Contacts. DATED: September 21, 2016 Respectfully submitted, /s/ William Markham By: William A. Markham, LAW OFFICES OF WILLIAM MARKHAM, P.C. Attorneys for Plaintiff, Pam Stillings. PLAINTIFF’S CLASS-ACTION COMPLAINT FOR UNLAWFUL RESTRAINTS OF TRADE, ETC.

antitrust

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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA CASE NO.: 0:19-CV-60572 MARTIN BRATT, Plaintiff, v. COMPLAINT – CLASS ACTION CREDIT PROTECTION ASSOCIATION, LP, Defendant. _______________________________________/ CLASS ACTION COMPLAINT SEEKING INJUNCTIVE RELIEF AND STATUTORY DAMAGES Plaintiff MARTIN BRATT (“Plaintiff”), by and through undersigned counsel, sues Defendant CREDIT PROTECTION ASSOCIATION, LP (“Defendant”) for Defendant’s violations of 15 U.S.C § 1692 et seq., the Fair Debt Collection Practices Act (“FDCPA”), and Fla. Stat. § 559.55 et seq., the Florida Consumer Collection Practices Act (“FCCPA”). Simply put, Defendant has mailed thousands unlawful collection notices to Florida consumers, whereby each such notice contains identical violations of § 559.72(10) of the FCCPA, and § 1692f(7), § 1692f(8), § 1692e(9), and § 1692e(10), of the FDCPA. DEMAND FOR JURY TRIAL 1. Plaintiff respectfully demands a trial by jury on all alleged counts and any issues so triable. See Sibley v. Fulton DeKalb Collection Service, 677 F.2d 830 (11th Cir. 1982). JURISDICTION AND VENUE 2. This Court has jurisdiction for all counts under 28 U.S.C. §§ 1331, 1337, 1367 and 15 U.S.C. § 1692k. 1 | P a g e 3. Jurisdiction of this Court arises under 15 U.S.C. § 1692k(d), 28 U.S.C § 1331, and 28 U.S.C § 1337. 4. Supplemental jurisdiction exists for the FCCPA claim(s) under to 28 U.S.C. § 1367. 5. Venue in this District is proper because Plaintiff resides here, Defendant transacts business here, and the complained conduct of Defendant occurred here. PARTIES 6. Plaintiff is a natural person, and a citizen of the State of Florida, residing in Palm Beach County, Florida. 7. Defendant is a Texas corporation, with its principal place of business located in Dallas, Texas. 8. Defendant engages in interstate commerce by regularly using telephone and mail in a business whose principal purpose is the collection of debts. 9. At all times material, Defendant was acting as a debt collector in respect to the collection of Plaintiff’s debts. FACTUAL ALLEGATIONS 10. The debt at issue is a financial obligation Plaintiff incurred primarily for personal, family, or household purposes. 11. In particular, the debt at issue (the “Consumer Debt”) represents an allegedly outstanding amount Plaintiff owes the current creditor on an unsecured line of credit, of which was allotted to, and utilized by, Plaintiff for personal purposes. 12. Defendant is registered as a “Consumer Collection Agency” with the Florida Office of Financial Regulation and Defendant’s “Consumer Collection Agency” license number is CCA0900251. 2 | P a g e 13. Defendant is a business entity engaged in the business of soliciting consumer debts for collection. 14. Defendant is a business entity engaged in the business of collecting consumer debts. 15. Defendant regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another. 16. The Consumer Debt is a “debt” governed by the FDCPA and FCCPA. See 15 U.S.C § 1692a(5); Fla. Stat. § 559.55(6). 17. Plaintiff is a “consumer” within the meaning of the FDCPA. See 15 U.S.C § 1692a(3). 18. Defendant is a “debt collector” as defined by the FDCPA and FCCPA. See 15 U.S.C § 1692a(6); Fla. Stat. § 559.55(7). 19. On a date better known by Defendant, Defendant began attempting collect the Consumer Debt from Plaintiff. 20. On a date better known to Defendant, Defendant mailed a postcard, dated December 31, 2018, to Plaintiff (the “Collection Notice”) in an attempt to collect the Consumer Debt. A copy of the Collection Notice is attached hereto as Exhibit “A.” 21. The Collection Notice outwardly displayed the following: See Exhibit A. 3 | P a g e CLASS ACTION ALLEGATIONS 22. This action is brought on behalf of the following class, to wit, the “FDCPA Class” and the “FCCPA Class.” 23. The “FDCPA Class” consists of: [1] between the March 5, 2019, and the preceding 12-months [2] all persons with Florida addresses [3] that Defendant mailed a collection notice to [4] in an attempt to collect a consumer debt [5] and the form of said notice was the same or substantially similar to that which was received by Plaintiff. 24. The “FCCPA Class” consists of: [1] between the March 5, 2019, and the preceding 24-months [2] all persons with Florida addresses [3] that Defendant mailed a collection notice to [4] in an attempt to collect a consumer debt [5] and the form of said notice was the same or substantially similar to that which was received by Plaintiff. A. NUMEROSITY 25. Plaintiff alleges the FDCPA Class and the FCCPA Class is so numerous that joinder of all members is impracticable because Defendant has dispatched thousands of identical dunning notices to addresses in Florida attempting to collect consumer debts. B. EXISTENCE AND PREDOMINANCE OF COMMON QUESTIONS OF LAW & FACT 26. Common questions of law and fact exist as to each class, and predominate over any issues involving only individual class members. 27. With respect to the FDCPA Class, the factual issues common to the class include, but are not limited, the following: (a) Whether Defendant mailed the class member a collection notice within the class period; (b) Whether the collection notice Defendant mailed to the class member attempted to collect a consumer debt; 4 | P a g e (c) Whether the collection notice creates a false impression as to its source, authorization, and/or approval, as prohibited by 15 U.S.C. § 1692e(9); and (d) Whether the collection notice uses any false representations and/or deceptive means to collect the applicable debt, as prohibited by 15 U.S.C. § 1692e(10). 28. With respect to the FDCPA Class, principal legal issues common to the class include, but are not limited, the following: (a) Whether the collection notice mailed by Defendant is a “postcard” within the context of 15 U.S.C § 1692f(7); and (b) Whether the information, language, and/or symbols, displayed on the outwards portion of the collection notice, see Infra ¶ 21, violate 15 U.S.C. § 1692f(8); 29. With respect to the FCCPA Class, the factual issues common to the class include, but are not limited, the following: (a) Whether Defendant mailed the class member a collection notice within the class period; and (b) Whether the collection notice Defendant mailed to the class member attempted to collect a consumer debt. 30. With respect to the FCCPA Class, principal legal issues common to the class include, but are not limited, the following: (a) Whether the collection notice mailed by Defendant unlawfully gives the appearance of being authorized, issued, or approved by a government, governmental agency, or attorney, as prohibited by Fla. Stat. § 559.72(10). 31. Excluded from each class is Defendant’s agents and employees, Plaintiff’s attorney(s) and their employees, the Judge to whom this action is assigned, and any member of the Judge’s staff and immediate family. C. TYPICALITY 5 | P a g e 32. Plaintiff’s claims are typical of the claims of each class member and are based on the same facts and legal theories. D. ADEQUACY 33. Plaintiff is an adequate representative of each of the classes. 34. Plaintiff will fairly and adequately protect the interests of the classes. 35. Plaintiff has retained counsel experienced in handling actions involving unlawful practices under the FDCPA, FCCPA, and consumer-based class actions. Neither Plaintiff nor Plaintiff’s counsel have any interests which might cause them (Plaintiff or Plaintiff’s counsel) to not vigorously pursue this action. E. PREDOMINANCE AND SUPERIORITY 36. Certification of the classes under Rule 23(b)(3) of the Federal Rules of Civil Procedure is also appropriate in that: (a) The questions of law or fact common to the members of the class predominate over any questions affecting an individual member. (b) A class action is superior to other available methods for the fair and efficient adjudication of the controversy. 37. Certification of a classes under Rule 23(b)(2) of the Federal Rules of Civil Procedure is also appropriate, in that, Defendant has acted on grounds generally applicable to the class thereby making appropriate declaratory relief with respect to the class as a whole. Plaintiff request certification of a hybrid class under Rule 23(b)(3) for monetary damages and to Rule 23(b)(2) for injunctive and equitable relief. COUNT I. VIOLATION OF 15 U.S.C. § 1692e(9), § 1692e(10), § 1692f(7), & § 1692f(8) 6 | P a g e 38. On behalf of the FDCPA Class, Plaintiff incorporates the preceding Factual and Class Action Allegations. 39. The FDCPA “is a consumer protection statute that imposes open-ended prohibitions on, inter alia, false, deceptive, or unfair” debt-collection practices. Crawford v. LVNV Funding, LLC, 758 F.3d 1254, 1257 (11th Cir. 2014) (quoting Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich LPA, 559 U.S. 573, 587 (2010)); see also Drossin v. Nat’l Action Fin. Servs., 641 F.Supp.2d 1314 (S.D. Fla. 2009).(“[t]he FDCPA establishes a strict liability standard; a consumer need not show an intentional violation of the Act by a debt collector to be entitled to damages.”). 40. Section 1692e of the FDCPA prohibits the use of “false, deceptive, or misleading representation or means in connection with the collection of any debt.” 15 U.S.C. § 1692e. The sixteen subsections of § 1692e set forth a non-exhaustive list of practices that fall within this ban, including, but not limited to, “[t]he use or distribution of any written communication which simulates or is falsely represented to be a document authorized, issued, or approved by any court, official, or agency of the United States or any State, or which creates a false impression as to its source, authorization, or approval,” see 15 U.S.C. § 1692e(9) (emphasis added), and “[t]he use of any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer,” see 15 U.S.C. § 1692e(10) (emphasis added). 41. Section 1692f of the FDCPA states “[a] debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt.” 15 U.S.C. § 1692f; see LeBlanc v. Unifund CCR Partners, 601 F.3d 1185, 1200 (11th Cir. 2010) (“An act or practice is deceptive or unfair if it has the tendency or capacity to deceive.”). The eight subsections of § 1692f set forth a non-exhaustive list of practices that fall within this ban, including, but not limited to, 7 | P a g e “[c]ommunicating with a consumer regarding a debt by post card,” see 15 U.S.C. § 1692f(7) (emphasis added), and “[u]sing any language or symbol, other than the debt collector's address, on any envelope when communicating with a consumer by use of the mails or by telegram, except that a debt collector may use his business name if such name does not indicate that he is in the debt collection business,” see 15 U.S.C. § 1692f(8) (emphasis added). 42. The “least sophisticated consumer” standard dictates a debt collector’s communication, or other conduct, violates the FDCPA or FCCPA. See Crawford v. LVNV Funding, LLC, 758 F.3d 1254, 1258 (11th Cir. 2014) (reiterating that the “least sophisticated consumer” standard governs “whether a debt collector's conduct is deceptive, misleading, unconscionable, or unfair under the statute.” (internal quotations omitted)); LeBlanc v. Unifund CCR Partners, 601 F.3d 1185, 1200 (11th Cir. 2010) (holding that the “least-sophisticated consumer” standard applies to evaluate claims under both § 1692e and § 1692f); Leonard v. Zwicker & Associates, P.C., 2017 WL 4979160, at *2 (11th Cir. Nov. 1, 2017) (applying the “least sophisticated consumer” standard to claims under § 1692g); see also Michael v. HOVG, LLC, 2017 WL 129111, at *5 (S.D. Fla. Jan. 10, 2017) (applying the least sophisticated consumer standard to determine whether a debt collector violated the FCCPA); Green v. Douglas, Knight & Assocs. (In re Cheaves), 439 B.R. 220 (Bankr. M.D. Fla. 2010 (same); Bank v. Schmidt, 124 So. 3d 1039 (Fla. Dist. Ct. App. 2013) (affirming class certification which applied the least sophisticated consumer standard to determine whether the FCCPA had been violated). Thus, in the context of the FDCPA and FCCPA, “[t]he inquiry is not whether the particular plaintiff- consumer was deceived or misled; instead, the question is whether the least sophisticated consumer would have been deceived by the debt collector's conduct.” Crawford, 758 F.3d 1254 at 1259 (citation and internal quotations omitted). 8 | P a g e 43. “The purpose of the least-sophisticated consumer standard is to ensure the protection of the gullible as well as the shrewd.” LeBlanc, 601 F.3d 1185 at 1194; see Crawford, 758 F.3d 1254 at 1258-59 (“[t]he ‘least-sophisticated consumer’ standard takes into account that consumer-protection laws are ‘not made for the protection of experts, but for the public—that vast multitude which includes the ignorant, the unthinking, and the credulous.’” (quoting Jeter v. Credit Bureau, 760 F.2d 1168, 1172-73 (11th Cir. 1985))). The fact that a false statement may be obviously false to those who are trained and experienced does not change its character, nor take away its power to deceive others less experienced." Jeter, 760 F.2d at 1168. 44. “Literally, the least sophisticated consumer is not merely ‘below average,’ he is the very last rung on the sophistication ladder. Stated another way, he is the single most unsophisticated consumer who exists. Even assuming that he would be willing to do so, such a consumer would likely not be able to read a collection notice with care, let alone interpret it in a reasonable fashion.” Gammon v. GC Servs., 27 F.3d 1254, 1257 (7th Cir. 1994); Russell v. Equifax A.R.S.,74 F.3d 30, 34 (2d Cir.1996) (‘“the test is how the least sophisticated consumer – one not having the astuteness of a ‘Philadelphia lawyer’ or even the sophistication of the average, every day, common consumer – understands the notice he or she receives.’”). As such, issues which require the application of the least sophisticated consumer standard are reserved for the jury. See Leonard v. Zwicker & Associates, P.C., 2017 WL 4979160, at *3 (11th Cir. Nov. 1, 2017) (“[g]enerally, the question of whether the least sophisticated consumer would be confused or misled by a debt collector's communication is one for the jury”); see, e.g., Pescatrice v. Orovitz, 539 F. Supp. 2d 1375, 1381 (S.D. Fla. 2008) (whether a communication was “deceptive is a material issue of disputed fact for the jury, as fact finder, to resolve”). 9 | P a g e 45. With respect to the matter at hand, Defendant mailed Plaintiff the Collection Notice in an attempt to collect a debt. First, the form of the Collection Notice is that of a postcard. Second, and blatantly more deceptive, the Collection Notice, immediately adjacent to the postmark, utilizes language and/or symbols which wrongfully gives the least sophisticated consumer the false impression as to the source of the Collection Notice. As such, by and through the Collection Notice, Defendant violated § 1692e(9), § 1692e(10), § 1692f(7), and § 1692f(8) of the FDCPA. 46. WHEREFORE, Plaintiff MARTIN BRATT requests that this Court enter an Order directing this action to proceed as a class action, and enter judgment in favor of Plaintiff and the FDCPA class, against Defendant CREDIT PROTECTION ASSOICATION, LP for: (a) Statutory damages, as provided under 15 U.S.C. § 1692k(a)(2)(B); (b) Attorney’s fees, litigation expenses and costs of the instant suit, as provided under 15 U.S.C. § 1692k(a)(3); and (c) Such other or further relief as the Court deems proper. COUNT II. VIOLATION OF FLA. STAT. § 559.72(9) 47. On behalf of the FCCPA Class, Plaintiff incorporates the preceding Factual and Class Action Allegations. 48. The FCCPA is “a laudable legislative attempt to curb what the Legislature evidently found to be a series of abuses in the area of debtor-creditor relations.” Harris v. Beneficial Finance Company of Jacksonville, 338 So. 2d 196, 200-201 (Fla 1976). The FCCPA was enacted to complement the FDCPA, and, as of present-day, the FCCPA continues to effectuate this goal by otherwise furthering the protections and prohibitions of the FDCPA. See Bianchi v. Bronson & Migliaccio, LLP, 2011 WL 379115 (S.D. Fla. Feb. 2, 2011) (stating, “[t]he Florida legislature through the FCCPA expresses its intent that the FCCPA be read as providing regulations that 10 | P a g e complement the FDCPA. Specifically, the FCCPA notes that any discrepancy between the two acts should be construed as to provide the consumer (or debtor) the greatest protection.” (citations omitted)). 49. In comparation to its federal counterpart, to wit, the FDCPA, the FCCPA governs the collection of debts with more scrutiny and specificity than that of the FDCPA. See Mays v. Citibank, N.A., 2005 WL 6111610, at *11 (S.D. Fla. 2005) (“The [FCCPA] applies to all persons who attempt to collect debts, and is not restricted to debt collectors.”); Bacelli v. MFP, Inc., 729 F.Supp. 2d 1328, 1333 n.7 (M.D. Fla. 2010) (“The FCCPA differs from the FDCPA, in part, in that it prohibits acts of ‘persons’ and, accordingly, is not limited to ‘debt collectors.’”); Heard v. Mathis, 344 So.2d 651, 654 (Fla. 1st Dist.Ct.App.1977) (The FCCPA applied to private individual attempting to collect oral, noninterest bearing loan). 50. Section 559.72, Fla. Stat., of the FCCPA contains nineteen subsections and otherwise codifies an extensive list of acts and/or omissions that the FDCPA does not explicitly prohibit. In particular, § 559.72(10) states that, in collecting a consumer debt, no person shall: “[u]se a communication that simulates in any manner legal or judicial process or that gives the appearance of being authorized, issued, or approved by a government, government agency, or attorney at law, when it is not.” Fla. Stat. § 559.72(10) (emphasis added). 51. Here, the Collection Notice mailed by Defendant, see Exhibit A; Infra ¶ 21, wrongfully gives the appearance of being a communication from a governmental agency, e.g., the Internal Revenue Service, in violation of § 559.72(10) of the FCCPA. 52. WHEREFORE, Plaintiff MARTIN BRATT requests that this Court enter an Order directing this action to proceed as a class action, and enter judgment in favor of Plaintiff and the FCCPA class, against Defendant CREDIT PROTECTION ASSOICATION, LP for: 11 | P a g e (a) Statutory damages, as provided under Fla. Stat. § 559.77(2) of the FCCPA; (b) Attorney’s fees, litigation expenses and costs of the instant suit, as provided under Fla. Stat. § 559.77(2); (c) An injunction prohibiting Defendant from engaging in further collection activities directed at Plaintiff that are in violation of the FCCPA; and (d) Such other or further relief as the Court deems proper. Dated: March 5, 2019 Respectfully Submitted, /s/ Thomas J. Patti . THOMAS J. PATTI, ESQ. Florida Bar No.: 118377 E-mail: tom@rodallaw.com /s/ Yechezkel Rodal YECHEZKEL RODAL, ESQ. Florida Bar No. 91210 E-mail: chezky@rodallaw.com RODAL LAW, P.A. 5300 N.W. 33rd Ave., Suite 219 Fort Lauderdale, Florida 33309 Phone: (954) 367-5308 Fax: (954) 900-1208 COUNSEL FOR PLAINTIFF 12 | P a g e

consumer fraud

b-DhEIcBD5gMZwczl5W0

CIVIL ACTION NO. ____________ IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN OF TEXAS HOUSTON DIVISION KEITH A. TAYLOR, on behalf of himself and other similarly situated persons, Plaintiffs, V. TRUEWATER, LLC, ROBERT DANGER BYRD, SUSAN BYRD, and CHRIS BRITT, Defendants. § § § § § § § § § § § § PLAINTIFF’S ORIGINAL COMPLAINT Plaintiff Keith Taylor (“Plaintiff” or “Taylor”), on behalf of himself and all other similarly situated persons, files this Original Complaint against Truewater, LLC, Robert Danger Byrd, Susan Byrd, and Chris Britt (collective “Defendants”), and shows the Court as follows: INTRODUCTION AND SUMMARY 1. This is a collective action lawsuit to recover unpaid overtime wages under the federal Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201, et seq., on behalf of IT professionals employed by Defendants. 2. This is also a lawsuit to recover damages from Defendants’ termination of the Plaintiff because he complained about their failure to pay him overtime pay in accordance with the law. 3. Defendants provide various IT services to their clients. In order to do this, they employ IT personnel. 4. Plaintiff is a former IT help desk consultant for the Defendants. 5. Plaintiff seeks to represent a collective action under the FLSA containing “all current and former IT personnel, including help desk and consultants, who were employed by Defendants in any workweek during the past three years, and who were not compensated at one and one half their regular rate of pay for hours worked over 40 in any workweek during this time period” (“the putative collective action members”). 6. Defendants incorrectly classified Plaintiff and the putative collective action members as exempt from overtime. 7. Defendants did not keep track of Plaintiff’s hours or the hours of similarly situated individuals in violation of the FLSA and its implementing regulations. 8. Because of the misclassification, Defendants failed to comply with the FLSA in a very fundamental way: Defendants did not pay Plaintiff and the putative collective action members one and one half times the regular rate of pay for hours worked over 40 in a workweek. 9. According to its website, “Truewater, with a staff of close to thirty Microsoft Certified engineers, has been helping companies and organization [sic] with IT Services for over 10 years. We are one of the largest Managed IT Services companies in Houston, Texas.”1 THE PARTIES, JURISDICTION AND VENUE 10. Plaintiff Keith Taylor is a natural person residing in Brazoria County, Texas. He has standing to file this suit. He was employed by Defendants from approximately February 9, 2011 through May 14, 2012. His notice of consent is attached as Exhibit A to Plaintiff’s Original Complaint. 11. The putative collective action members are all current and former IT personnel, including help desk and consultants, who were employed by Defendants in any workweek during the past three years. 1 http://www.truewater.com/managed_services.html 12. Like the named Plaintiff, these persons were and are engaged in interstate commerce in performing their duties for Defendants. 13. All of the putative collective action members are similarly situated to Plaintiffs and to one another, within the meaning of Section 216(b) of the FLSA. 14. Truewater, LLC (“Truewater”) is headquartered at 1208 N. Post Oak, Suite 190, Houston, Texas 77055. Truewater may be served with process through its registered agent, Loren R. Cook & Associates, Ltd., LLP, 790 West Sam Houston Parkway N, Suite 202, Houston, TX 77024. 15. Defendants Robert Danger Byrd, Susan Byrd, and Chris Britt, are the owners of Truewater. They are all natural persons who reside in this district. These individual defendants possessed the power to hire and fire employees; supervised or controlled employee work schedules or conditions of employment; determined the rate or method of payment for employees and maintained employee records. They may be served with process at 1208 N. Post Oak, Suite 190, Houston, Texas 77055. 16. The Court has personal jurisdiction over Defendants based on both general and specific jurisdiction. 17. The Court has subject matter jurisdiction over this case based on federal question jurisdiction because Plaintiffs base their claims on federal laws, specifically the FLSA. 18. The Court has venue over this matter because a substantial part of the events or omissions giving rise to Plaintiffs’ claims occurred in this district, many of the unlawful employment practices alleged in this case occurred in this district, and there are employment records relevant to Plaintiff’s claims maintained and administered by Defendants in this district. 28 U.S.C. § 1391(b); 42 U.S.C. § 12117(a); 42 U.S.C. § 2000e-5(f)(3). FACTUAL BACKGROUND 19. Plaintiff and putative collective action members worked for Defendants as so- called IT engineers, although they have and had different titles. Mainly, their role was to assist clients of Truewater by installing, configuring, and troubleshooting computer applications, networks, and hardware. They were not programmers or coders. Some work at a call-in help desk. Some work in a place called the “Network Operations Center.” Some travel in the field to client sites. 20. The primary duty of Plaintiff and putative collective action members did not involve the application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software, or system functional specifications. 21. Nor did (or does) the primary duty of the Plaintiff and putative collective action members include the design, development, documentation, analysis, creation, testing or modification of computer systems or programs, including prototypes, based on and related to user or system design specifications. 22. Nod did (or does) the primary duty of the Plaintiff and putative collective action members include the design, documentation, testing, creation or modification of computer programs related to machine operating systems. 23. Nod did (or does) the primary duty of the Plaintiff and putative collective action members include a combination of duties described in the three preceding paragraphs. 24. Sometimes the Plaintiff was paid an hourly rate and sometimes he was paid a salary. Regardless, he is not subject to any exemption under the FLSA. 25. Some putative collective action members were paid an hourly rate, and sometimes they were paid a salary; and sometimes they were paid one or the other or a combination of both. Regardless, they are not subject to any exemption under the FLSA. 26. Plaintiff and putative collective action members typically work (and worked) more than 40 hours in a workweek. 27. When they worked more than 40 hours in a workweek, Defendants did not pay Plaintiff and putative collective action members overtime and one and one half times their regular rate of pay. 28. Plaintiff complained to Chris Britt and Mike Long about the failure to pay him overtime as required by the law. He was terminated shortly thereafter. 29. At the termination meeting, Plaintiff was first told that he was fired for walking off the jobsite. Later, when Plaintiff established that this was not correct, this reason was struck from the separation notice. 30. Then, Plaintiff was told that he was terminated because he was not at a scheduled client meeting. Later, when Plaintiff established that this too was not correct, this reason was struck from the separation notice. 31. A third (and pretextual reason) was later proffered. COUNT ONE: UNPAID OVERTIME UNDER FLSA 32. The FLSA generally requires that an employer employing an employee for a workweek exceeding 40 hours must compensate the employee for hours worked over 40 “at a rate not less than one and one-half times the regular rate of pay.” 29 U.S.C. § 207(a)(1). 33. The FLSA has several exemptions, but no exemption applies to the facts of this 34. The FLSA has a two-year statute of limitations, which can extend an additional year in the case of a “willful violation” of the Act. 29 U.S.C. § 255(a). 35. This lawsuit seeks damages for Plaintiffs and the putative collective action members from June 13, 2009, to the present. 36. All conditions precedent, if any, to this suit, have been fulfilled. 37. At all material times, Plaintiffs were employees under the FLSA. 29 U.S.C. § 38. At all material times, the putative collective action members were similarly situated to the Plaintiff and to each other and were and are employees under the FLSA. 29 U.S.C. § 203(e). 39. At all material times, Defendants were and are eligible and covered employers under the FLSA. 29 U.S.C. § 203(d). 40. Plaintiffs and the putative collective action members worked some workweeks in excess of 40 hours per seven-day workweek from June 13, 2009, to the present. 41. At all material times, Plaintiff and the putative collective action members were and are entitled to overtime compensation at one and one-half times the regular rate of pay. 29 U.S.C. § 207(a)(1). 42. Defendants failed to pay Plaintiff and putative collective action members overtime compensation and one and one-half times their regular rate of pay for all hours worked over 40 in a seven-day workweek. 43. Defendants’ violation of the FLSA was and remains willful within the meaning of 29 U.S.C. § 255(a). 44. Defendants have not made a good faith effort to comply with the requirements of 29 U.S.C. § 260. Accordingly, Plaintiffs and the putative collective action members are entitled to liquidated damages. 45. Where, as here, Plaintiffs and the “employers’ actions or policies were effectuated on a companywide basis, notice may be sent to all similarly situated persons on a companywide basis.” Ryan v. Staff Care, Inc., 497 F. Supp. 2d 820, 825 (N.D. Tex. 2007). 46. Accordingly, Plaintiffs seek to represent a class under 29 U.S.C. § 216(b) on behalf of “all current and former IT personnel, including help desk and consultants, who were employed by Defendants in any workweek during the past three years, and who were not compensated at one and one half their regular rate of pay for hours worked over 40 in any workweek during this time period.” COUNT TWO: FLSA RETALIATION AGAINST TRUEWATER AND CHRIS BRITT 44. Firing an employee for complaining in good faith about their employer’s apparent FLSA violation violates the FLSA’s anti-retaliation provision, 29 U.S.C. § 215. 45. The U.S. Supreme Court has recently held that verbal intra-company complaints, such as the one made by Taylor during his employment with Defendants, are protected from retaliation under 29 U.S.C. § 215(a)(3). Kasten v. Saint-Gobain Performance Plastics, 131 S. Ct. 1325 (2011). 46. 29 U.S.C. § 216(b) states that any employer who violates the provisions of section 215(a)(3) shall be liable for such legal or equitable relief as may be appropriate, “including without limitation employment, reinstatement, promotion, and the payment of wages lost and an additional equal amount as liquidated damages.” Id. 47. The termination of Plaintiff was pretextual. DAMAGES AND PRAYER 48. WHEREFORE, PREMISES CONSIDERED, Plaintiff asks that the court issue citation for Defendant to appear and answer, and that Plaintiff and putative collective action members be awarded a judgment against Defendants for the following: a. Actual damages in the amount of unpaid overtime wages; b. Liquidated damages under the FLSA; c. Pre-judgment and post-judgment interest; d. Court costs; e. Reasonable attorneys’ fees; f. Lost wages; g. Liquidated damages for lost wages; and h. All other relief to which Plaintiffs and those similarly situated to Plaintiffs (the putative collective action members) are entitled. Respectfully submitted, /s/ Charles A. Sturm_______ Charles A. Sturm Attorney-in-Charge Texas Bar No. 24003020 Federal Bar No. 21777 STEELE STURM, PLLC Bank of America Center 700 Louisiana, 48th Floor Houston, Texas 77002 (713) 659-2600 [Telephone] (713) 659-2601 [Facsimile] csturm@steelesturm.com COUNSEL FOR PLAINTIFF KEITH TAYLOR OF COUNSEL: STEELE STURM, PLLC Michael Samford Texas Bar No. 17555650 Federal Bar No. 59171 Bank of America Center 700 Louisiana, 48th Floor Houston, Texas 77002 (713) 659-2600 [Telephone] (713) 659-2601 [Facsimile] msamford@steelesturm.com OBERTI SULLIVAN LLP Edwin Sullivan Texas Bar No. 24003024 Federal Bar No. 24524 723 Main Street, Suite 340 Houston, Texas 77002 (713) 401-3555 [Telephone] (713) 401-3547 [Facsimile] ed@osattorneys.com

employment & labor

LxVtF4cBD5gMZwczakAU

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION ____________________________________ ) ANTONIO MARTIN, ) on behalf of ) himself and all other similarly situated ) ) Case No. Plaintiffs, ) vs. ) ) HALSTED FINANCIAL SERVICES, LLC, ) ) Defendant. ) ____________________________________ ) COMPLAINT Plaintiff, ANTONIO MARTIN, by his undersigned attorneys, for his Complaint against the Defendant HALSTED FINANCIAL SERVICES, LLC., alleges as follows: NATURE OF ACTION AND PARTIES 1. This civil action is brought by the above-named individual plaintiff who seeks redress for the Defendant’s violations of his rights under the Fair Labor Standards Act, 29 U.S.C. § 201, et. seq. This action is brought as a collective action pursuant to 29 U.S.C. §216(b) alleging violations of the Fair Labor Standards Act. It is also brought as a Class action pursuant to Rule 23 for violations of the Illinois Minimum Wage Act (“IMWA”), 820 ILCS §105 et seq. and the Illinois Wage Payment and Collection Act, 820 ILCS §115 et seq.(“IWPCA”). 2. Plaintiff Antonio Martin was employed by Defendant in connection with the Defendant’s business of debt collection. 3. Defendant Halsted Financial Services, LLC., (“Halsted Financial”) implemented a common scheme whereby Plaintiff and all other similarly situated employees were not paid for all hours worked and were not paid overtime for hours worked in excess of forty hours in a given workweek, in violation of the Fair Labor Standards Act (“FLSA”). 4. The similarly situated individuals whom the Plaintiff seeks to represent are comprised of employees of the Defendant who were account representatives/collection agents employed by Defendant Halsted Financial. Defendant knowingly and willfully failed to pay their wages in accordance with applicable federal law, including but not limited to overtime wages that were improperly underpaid due to Defendant’s common compensation policy. Plaintiff seeks redress on behalf of himself and all others similarly situated. Plaintiff brings this action as a collective action pursuant to 29 U.S.C. §216(b) for violations of the FLSA and as a class action under Illinois law pursuant to Rule 23, F.R.C.P. 5. Upon information and belief, at all times hereinafter mentioned, Defendant Halsted Financial was and still is a domestic limited liability corporation with its headquarters in Skokie, Illinois. JURISDICTION AND VENUE 6. Jurisdiction is conferred upon this Court pursuant to 28 U.S.C. § 1331, this case arising under the laws of the United States, 28 U.S.C. § 1337, this action arising under Acts of Congress regulating commerce, and 28 U.S.C. § 1367. The Court has personal jurisdiction over Defendant pursuant to Federal Rule 4 (k)(1), in that Defendant has sufficient contact with the state of Illinois as it conducted business within the state. See 735 ILCS 5/2-209. 7. Venue is proper in this District pursuant to 28 U.S.C. § 1391(b) and (c). GENERAL ALLEGATIONS 8. This lawsuit arises out of Defendant’s practice of knowingly and willfully refusing to pay its account representatives for all hours worked and for denying them overtime pay for all hours worked in excess of forty hours each workweek. 9. At all times relevant, Plaintiff and all other account representatives were non- exempt employees of Defendant Halsted Financial as defined by the FLSA. Plaintiff was employed by the Defendant from May 2013 until March 12, 2015. 10. At all times relevant, Halsted Financial was an employer, as defined by the FLSA and Illinois state law. 11. Defendant Halsted Financial is engaged in interstate commerce as that term is used in the FLSA. 12. At all times relevant, Plaintiff and all misclassified employees, in their capacity as employees of Defendant Halsted Financial, were engaged in interstate commerce. 13. During the course of employment with Defendant Halsted Financial, employees, such as Plaintiff Martin, were not exempt from minimum wage and/or overtime wages. However, the employees were paid an hourly rate only, were not paid for all hours worked, and did not receive overtime compensation as required by the FLSA and the IMWA. 14. During the course of all their employment with Defendant Halsted Financial, the employees routinely worked in excess of 40 hours per week. For example, Plaintiff Martin typically worked more than 60 hours a week. 15. Despite the fact that the employees were not exempt, Defendant Halsted Financial did not pay the employees the proper wages they were owed, including payment for all hours worked and payment of overtime wages for work in excess of 40 hours per week. 16. Plaintiffs are entitled to actual and liquidated damages for Defendant’s actions. COLLECTIVE ACTION ALLEGATIONS OF THE FLSA CLASS 17. Plaintiff reasserts and re-alleges the allegations set forth in each of the paragraphs 18. Plaintiff seeks to maintain this suit as a collective action pursuant to 29 U.S.C §216(b) on behalf of himself and the following class of persons: All employees treated as independent contractors who worked for Defendant Halsted Financial at any time during the statutory period who give their consent in writing to become party plaintiffs ("FLSA Class"). 19. All putative members of the class are similarly situated because, inter alia, they all had similar duties; performed similar tasks; were entitled under the FLSA to be paid for all hours worked, and paid overtime for all work in excess of 40 hours per week; and had such rights undermined and negated by Defendant’s unlawful practices and policies. 20. Defendant has encouraged, permitted, and required the employees to work without overtime compensation. 21. Defendant has known that Plaintiff and other members of the FLSA Class have performed unpaid work and have been deprived of overtime compensation. Nonetheless, Defendant has operated under a scheme to deny the Plaintiff and the Class all compensation for work in excess of 40 hours in a week. 22. Defendant’s conduct, as alleged herein, was willful and has caused significant damage to Plaintiffs and other members of the FLSA Class. COUNT I FAILURE TO PAY OVERTIME WAGES UNDER THE FLSA 23. Plaintiff realleges and incorporates by reference all the above allegations. 24. Under the FLSA, the employees (hereinafter referred to as "The FLSA Class") were entitled to be paid at the overtime rate by Defendant for each hour worked in excess of 40 hours each workweek. 25. The overtime rate is computed by multiplying 1.5 times an employee’s regular hourly rate, which includes all nondiscretionary compensation paid to employees. 26. Defendant failed to compensate The FLSA Class for all of the hours that they worked for Defendant. 27. Defendant also failed to compensate The FLSA Class at the overtime rate for work performed in excess of 40 hours per week in violation of the FLSA. 28. Defendant’s violation of the FLSA for failure to pay The FLSA Class minimum and overtime wages was willful and deliberate. 29. Upon information and belief, Defendant’s practice as described above was not approved in writing by the United States Department of Labor. 30. Upon information and belief, Defendant’s practices were not based upon Defendant’s review of any policy or publication of the United States Department of Labor. 30. Due to Defendant’s violation of the FLSA, The FLSA Class is entitled to recover from Defendant their unpaid compensation, liquidated damages, reasonable attorneys’ fees, and the costs of this action, pursuant to 29 U.S.C. § 216(b). CLASS ALLEGATIONS 31. Plaintiff also brings this action as a class action on behalf of himself and all other persons similarly situated in Illinois, subject to entry of an Order certifying this cause as a class action pursuant to Rule 23, F.R.C.P. Class Action Law 32. Rule 23 provides that a cause of action may be maintained as a Class Action if: a. The Class is so numerous that the joinder of all members is impracticable; b. There are questions of fact or law common to the Class, which common questions predominate over any questions affecting only individual members; c. The representative parties will fairly and adequately protect the interest of the Class; and, d. The Class Action is an appropriate method for the fair and efficient adjudication of the controversy. Proposed Class 33. Plaintiff seeks certification of the following classes: “All individuals who were classified and paid by the Defendant as independent contractors.” The Employee Class Meets the Requirements for Class Certification Numerosity 33. The Class satisfies the numerosity standards. On information and belief, at the time this complaint was filed, Halsted Financial had approximately fifty employees classified as independent contractors. Over the last five years, there have been at least another fifty employees who worked at Halsted Financial and who have the same claims as the Plaintiff. There is no question therefore that this lawsuit encompasses up to 100 potential claimants. The proposed Class can be identified and located using Defendant’s payroll and personnel records. Therefore, the Class is so numerous that the joinder of all members is impracticable. Class members may be informed of the pendency of this Class Action by direct mail based upon payroll records and/or published and broadcast notice. Common Questions of Fact or Law 34. There are questions of fact and law common to the class that predominate over any questions affecting only individual members. The questions of law and fact common to the class arising from Defendant’s actions include, without limitation, the following: a. Whether Defendant failed to pay Plaintiff and Class members all compensation due them; b. Whether Defendant failed to pay Plaintiff and Class members all overtime compensation due to them; c. Whether Plaintiff and the Class were expected to work in excess of 40 hours per week; d. Whether Plaintiff and the Class worked in excess of 40 hours per week; e. Whether Defendant’s practices violate provisions of the Illinois Minimum Wage Law; f. Whether Defendant’s practices violate provisions of the Illinois Wage Payment and Collection Act; g. Whether the Defendant’s failure to pay compensation, including overtime, was willful; h. Whether Plaintiff and the Class have suffered damages and the proper measure of those damages; i. Whether Defendant withheld commissions owed to Plaintiff and the Class; and, i. Whether such withholdings constitute a breach of contract by Defendant. 35. The questions set forth above predominate over any questions affecting only individual persons, and a class action is superior with respect to considerations of consistency, economy, efficiency, fairness and equity, to other available methods for the fair and efficient adjudication of the controversy. Typicality 36. Plaintiff’s claims are typical of the claims of the Class members. The named Plaintiff suffered similar injuries as those suffered by other Class members as a result of Defendant’s failure to pay wages, including overtime compensation, for all hours actually worked. Adequacy 37. The named Plaintiff is an adequate representative of the Class because he is a member of the Class and his interests do not conflict with the interests of the members of the Class he seeks to represent. The interests of the Class will be fairly and adequately protected by the named Plaintiff and his undersigned counsel. Plaintiff has hired competent attorneys who are experienced in class action litigation of this type and who are committed to prosecuting this Superiority 39. A class action is superior to other available means for the fair and efficient adjudication of this controversy because individual joinder of the parties is impracticable. Class action treatment will allow a large number of similarly situated persons to prosecute their common claims in a single forum simultaneously, efficiently and without the unnecessary duplication of effort and expense if these claims were brought individually. Moreover, as the damages suffered by each class member may be relatively small, the expenses and burden of individual litigation would make it difficult for plaintiffs to bring individual claims. The presentation of separate actions by individual class members could create a risk of inconsistent and varying adjudications, establish incompatible standards of conduct for Defendant or substantially impair or impede the ability of class members to protect their interests. COUNT II FAILURE TO PAY WAGES EARNED UNDER ILLINOIS LAW 40. Plaintiff repeats and re-alleges the above paragraphs. 41. Illinois law provides that “every employer shall be required, at least semi- monthly, to pay every employee all wages earned during the semi-monthly pay period.” Illinois Wage Payment & Collection Act, 820 ILCS §115/3 et seq. 42. The employment agreement between Plaintiff and the Defendant provided for payment of all hours worked by Plaintiff and the Class. 43. Defendant failed to pay the Plaintiff and members of the Class for all hours worked. 44. The foregoing actions of Defendant constitute violations of Illinois Wage Payment and Collection Act, 820 ILCS §115/3 et seq. Defendant’s actions were willful and not in good faith. 45. Defendant is liable to Plaintiff and the Class for actual damages, equitable relief, recovery of attorneys’ fees and cost, and prejudgment interest as provided by law, pursuant to the Illinois Wage Payment and Collection Act, 820 ILCS §115 et seq. COUNT III FAILURE TO PAY OVERTIME UNDER ILLINIOS LAW 51. Plaintiff repeats and re-alleges the above paragraphs. 52. Illinois law provides that an employee must be paid overtime, equal to 1.5 times the employee’s regular rate of pay for all hours worked in excess of forty per week. Illinois Minimum Wage Law, 820 ILCS §105/4a et. seq. 53. Defendant failed to pay Plaintiff for overtime hours worked. Upon information and belief, Defendant also failed to pay other members of the Plaintiff class for overtime hours worked. 54. The foregoing actions of Defendant constitute violations of the Illinois Minimum Wage Law, 820 ILCS §105 et. seq. Defendant’s actions were willful and not in good faith. 55. Defendant is liable to Plaintiff and the Class for actual damages, equitable relief, recovery of attorneys’ fees and costs, and prejudgment interest as provided by law, pursuant to the Illinois Minimum Wage Law, 820 ILCS §105 et. seq. PRAYER FOR RELIEF WHEREFORE, Plaintiff respectfully requests that this Court grant the following relief: 1. Award all actual damages suffered by Plaintiff and the misclassified employees; 2. Order the disgorgement of all monies improperly retained or obtained by Defendant; 3. Enter an order declaring that Defendant willfully violated the wage and overtime provisions of the FLSA and the IMWA; 4. Award Plaintiff and the Class damages in the amount of wages and overtime wages required by the FLSA and the IMWA improperly denied them by Defendant’s actions; 5. Award Plaintiff liquidated damages equal to Plaintiff’s unpaid wages and overtime compensation under the FLSA; 6. Award Plaintiff punitive damages; 7. Award Plaintiff prejudgment interest pursuant to the IMWA; 8. Award Plaintiff post-judgment interest; 9. Award Plaintiff reasonable attorneys’ fees as well as the costs of this action; 10. Award such other and further relief as this Court deems necessary and proper, including but not limited to appropriate injunctive relief against any and all ongoing unlawful employment practices. DEMAND FOR A TRIAL BY JURY Pursuant to Fed. R. Civ. P. 38(b), Plaintiff demands a trial by jury on all issues raised by the Complaint. Dated: MARCH 13, 2015 Respectfully submitted, ANTONIO MARTIN By: ____/s/ Terrence Buehler _______ Terrence Buehler Touhy, Touhy, & Buehler, LLP 55 West Wacker Drive Suite 1400 Chicago, Illinois 60601 Telephone: (312) 372-220929 Peter Lubin Vincent DiTommaso DiTommaso-Lubin DiTommaso-Lubin P.C. The Oak Brook Terrace Atrium 17W220 22d Street, Suite 200 Oak Brook Terrace, IL 60181

employment & labor

5aRsCYcBD5gMZwczRIAO

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA AUTUMN MONTGOMERY CIVIL ACTION NO.: VERSUS WAITR HOLDINGS, INC. JUDGE _____________________________________________________________________________ COMPLAINT 1. This is an individual and collective action by Plaintiff AUTUMN MONTGOMERY for unpaid minimum wages, overtime pay, damages, penalties, attorney fees, expenses, and injunctive relief under the Fair Labor Standards Act, 29 U.S.C.A. §201 et seq. ("FLSA") and state law. 2. This Court has federal question jurisdiction pursuant to 28 U.S.C. §1331 because the Plaintiffs claims arise under the Fair Labor Standards Act, 29 U.S.C. 206, 207 et seq. 3. The Court has pendant jurisdiction over the state law claims pursuant to 29 U.S.C.A. §1367(a). 4. Defendant WAITR HOLDINGS, INC. is a Delaware corporation with a principal business establishment in Louisiana. 5. WAITR HOLDINGS, INC. and its predecessor Waitr Incorporated (collectively “WAITR”) are or were Employers within the meaning of the FLSA of all persons employed by either entity from March 6, 2016 to the present (the Relevant Time Period). A. INDIVIDUAL MINIMUM WAGE VIOLATIONS 6. WAITR is in the business of providing restaurant meal ordering services to customers by means of a mobile phone app., and restaurant food delivery service to customers using Delivery Drivers employed by WAITR. 1 7. Plaintiff was employed by WAITR as a Delivery Driver in the New Orleans market area from December 2017 to May 2018. 8. The Fair Labor Standards Act 29 U.S.C.A. §206(a) (1) (FLSA) requires employers to pay all employees a minimum wage of $7.25 per hour for each hour worked. 9. During the Relevant Time Period Defendant paid Plaintiff a cash wage of $6.00 per hour, and credited tips earned by Plaintiff to satisfy the balance of Defendant’s obligation to pay federal minimum wage ($7.25). 10. WAITR required all Delivery Drivers to provide and maintain at their own expense a licensed and insured automobile to make deliveries, and to bear all costs associated with operating the vehicle. 11. In a typical workweek Plaintiff worked 28.78 hours and drove her automobile 279 miles or more delivering food to customers. 12. In 2018 IRS considered $0.545 per mile an adequate and not excessive rate to reimburse employees for the cost of operating an automobile on business. At that rate during an average week Plaintiff and similarly situated Delivery Drivers incurred out of pocket expenses of not less than $152.05, or $5.28 per hour. 13. After deducting auto expenses Plaintiff received a net sub minimum wage each workweek: $7.25 - $5.28 = net wage $1.97. 14. Requiring Plaintiff and similarly situated Delivery Drivers to provide the tools of WAITR’s trade is a prohibited “kickback” under 29 C.F.R. § 531.35. 15. WAITR owes Plaintiff the difference between $7.25 and her net wage after auto expense deductions in each workweek, plus an equal additional amount as liquidated damages plus 2 Plaintiff’s reasonable attorney fees and expenses incurred to remedy the FLSA minimum wage violations. B. MINIMUM WAGE COLLECTIVE ACTION 16. Plaintiff brings this action in an individual capacity and pursuant to 29 U.S.C.A §216(b) in a representative capacity for all persons employed as a Delivery Driver by WAITR INCORPORATED or WAITR HOLDINGS, INC. in any state during the Relevant Time Period, for whom the employer reported wages on IRS Form W-2 (hereafter the “FLSA W2 Driver Class” or “W2 Drivers”. 17. During the Relevant Time Period WAITR paid W2 Drivers a regular hourly wage of $5.00 or $6.00, and took credit for Drivers’ tips to satisfy the balance of the employer’s obligation to pay federal minimum wage ($7.25). 18. Defendant required all Delivery Drivers to provide and maintain a safe, functioning, insured and legally operable automobile to make deliveries, and to bear all out of pocket costs associated with operating the vehicle. 19. WAITR expected all Delivery Drivers to make at least one (1) delivery each half hour during each four to seven hours shift, and assumed an average delivery distance of four (4) miles from restaurant to customer. 20. Delivery Drivers who did not meet those performance standards were subject to discipline or removal from the call list. Those who met Waitr’s performance standards incurred auto expenses of not less than $6.54 per hour1, and minimum wage shortages in an equal amount. 1Restaurant 1 to Customer 1 (4 miles) + C1 to R2 (4 miles) + R2 to C2 (4 miles), total 12 miles @ $0.545 = $6.54. 3 21. Requiring members of the W2 Driver Class to provide the tools of WAITR’s trade resulted in a “kickback” prohibited by the FLSA. 29 C.F.R. § 531.35. 22. WAITR is liable under 29 U.S.C.A. §206, §216(b) to Plaintiff and to all members of the FLSA W2 Driver Class reimbursement of all minimum wage shortages, for liquidated damages in an equal additional amount, and for Plaintiff’s reasonable attorney fees and expenses, pre and post judgment interest, costs and such other legal or equitable relief as the court may deem appropriate. C. INDIVIDUAL OVERTIME PAY VIOLATIONS 23. The FLSA requires employers to pay non-exempt employees overtime pay (OT) at a rate not less than one and one half times their regular rate for all hours worked over forty (40) in a workweek 29 U.S.C.A. §207. 24. Plaintiff’s regular hourly rate was $7.25, comprised of $6.00 cash wage plus tip credit for the difference. The minimum overtime rate payable under FLSA was (1.5) ($7.25) or $10.87. 25. WAITR paid Plaintiff for her overtime hours at the rate of 1.5 times the cash portion of her regular hourly wage: (1.5) (6.00) = $9.00. The result was an OT pay shortage of not less than $1.87 for each hour of work over 40 in a work week. 26. Defendants owes Plaintiff overtime pay at the rate of not less than $1.87 per hour for each work hour over 40 in a work week, plus an equal additional amount as liquidated damages, and Plaintiff’s reasonable attorney fees incurred to remedy the FLSA minimum wage violations 4 D. FLSA OVERTIME COLLECTIVE ACTION 27. Plaintiff brings this claim in her individual capacity and pursuant to 29 FLSA 216(b) in a representative capacity for members of the W2 Driver class. 28. Plaintiff adopts the allegations set out in ¶ 23 - 25 hereinabove by reference 29. The minimum FLSA overtime rate in all jurisdictions during the Relevant Time Period is (1.5) ($7.25) = $10.87 30. WAITR paid all members of the W2 Driver Class for overtime hours at the rate of 1.5 times their cash wage rather than the minimum FLSA overtime rate of 1.5 times $7.25. 31. Members of the W2 Driver Class who were paid a regular cash wage of $5.00 per hour suffered overtime pay shortages of $3.37 per hour ($10.87 - $7.50). 32. Members of the W2 Driver Class who were paid a regular cash wage of $6.00 per hour suffered overtime pay shortages of $1.87 per hour ($10.87 - $9.00). 33. Defendant is liable to all members of the W2 Driver Class for all overtime pay shortages, plus an equal additional amount as liquidated damages, and or Plaintiff’s reasonable attorney fees incurred to remedy the FLSA overtime pay violations. E. LOUISIANA STATE LAW CLAIMS 34. Plaintiff brings this action in her individual capacity and pursuant to F.R.C.P. Rule 23 on behalf of Delivery Drivers employed by WAITR INCORPORATED or WAITR HOLDINGS, INC. in Louisiana during the Relevant Time Period (the “Louisiana Driver Class”). 35. The Court has pendant jurisdiction over the state law claims pursuant to 29 U.S.C.A. §1367(a). 5 36. WAITR is in the business of providing restaurant meal ordering services to customers by means of a mobile phone app., and restaurant food delivery service to customers using Delivery Drivers employed by WAITR. 37. During the Relevant Time Period WAITR promised Plaintiff and all other members the Louisiana Driver Class a cash wage of either $6.00 (Orleans and Jefferson) or $5.00 (all other markets) per hour. Drivers classified as contract workers were promised $2.50 per delivery. 38. WAITR required all Delivery Drivers to provide and maintain at their own expense a licensed and insured automobile to make deliveries, and to bear all costs associated with operating the vehicle. 39. Members of the Louisiana Driver Class typically drove between 279 and 500 miles per week delivering WAITR’s services, and incurred out of pocket expenses of not less than $152.05 and as much as $272.50 per week, or more.2 40. Because Delivery Drivers were required to bear the cost of the tools of the defendant’s trade, members of the Louisiana Driver Class did not receive the cash wage promised by WAITR “free and clear”. 41. Members of the Louisiana Driver Class who were promised a hourly cash wage of $6.00 actually received only fifty-four cents ($0.54) (or less) after expenses. Drivers who were promised $5.00 per hour, or a fixed amount per delivery, were working for tips only. 2 Delivery Drivers who met Waitr’s minimum performance standards incurred auto expenses of not less than $6.54 per hour. 6 42. By requiring Delivery Drivers to provide the tools of the defendant’s trade and to bear that expense WAITR reduced operating expenses, improved its bottom line financial statements and enriched Waitr’s shareholders and investors, at the impoverishment of its workers. 43. WAITR was enriched without just cause at the expense of its employees, and is obligated under La. Civil Code Art. 2298 to reimburse all members of the Louisiana Drivers Class for the amount of their auto expenses 44. Because Delivery Drivers did not receive the cash wage promised by WAITR “free and clear” in the next regular paycheck, Defendant violated La. R.S. 23: 634 which provides that employees shall be entitled to all wages actually earned up to the date of their resignation or discharge. 45. Because Delivery Drivers did not receive the cash wage promised by WAITR “free and clear” in the next regular paycheck, Defendant violated La. R.S. 23:635(A) which prohibits unauthorized deductions from wages. 46. Because Delivery Drivers did not receive the cash wage promised by WAITR “free and clear” in the next regular paycheck, Defendant violated La. R.S. 23:631 which requires that all terminated employees receive all wages due under the terms and conditions of employment in the next regular payday or no later than fifteen days following the date of discharge. 47. Members of the class are so numerous that joinder of all members is impracticable 48. The representative parties have claims that are typical of the claims of the entire class3; and they will fairly and adequately protect the interests of the class. 3Recovery by Class members is based on acts or omissions by the defendant that give rise to the class representative’s right to relief. 7 49. Questions of fact common to the entire class include the allegations of fact set out in ¶ 37 – 41. 50. Common questions of law include (a) whether WAITR was enriched without cause at the expense of its employees within the meaning of La. Civil Code Art. 2298, (b) whether WAITR is required by Art. 2298 to reimburse all members of the Louisiana Drivers Class for their automobile expenses, (c) whether the defendant violated La. R.S. 23: 634, (d) whether the defendant violated La. R.S. 23:635(A), (d) whether the defendant violated La. R.S. 23:631 with respect to employees whose employment ended during the Relevant Time Period, and (e) whether the defendant is liable for penalty wages and attorney fees under La. R.S 23:632. 51. Common Relief includes reimbursement of all Class Members for the cost of providing and maintaining an automobile to make food deliveries, at the IRS mileage reimbursement rate of $0.545 per mile. 52. Questions of law and fact common to the members of the class predominate over any questions affecting only individual members, and a class action is superior to other available methods for fairly and efficiently adjudicating the controversy. 53. A class action may be maintained under F.R.C.P. Rule 23(a)(1) because separate actions by individual class members would create a risk of inconsistent adjudications with respect to individual class members that would establish incompatible standards of conduct for the defendant, or adjudications with respect to individual class members that, as a practical matter, would be dispositive of the interests of the other members not parties to the individual adjudications or would substantially impair or impede their ability to protect their interests; 8 54. The defendant has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole. F. CLASS NOTICE and EQUITABLE TOLLING 55. The right to recover unpaid minimum wage and overtime pay under the FLSA is subject to a time limitations period of two years, or three years for minimum wage violations. 56. Similarly situated members of the FLSA W2 Driver Class are entitled to receive notice of this action and of their right to opt in, or to pursue individual civil actions. 29 U.S.C.A. § 216(b). 57. Objections to certification of an FLSA collective action or over the form and content of notice may unduly delay notice to prospective members of this action and of their right to opt into the action. 58. For the foregoing reasons the Court should issue an immediate order tolling the limitations period for persons who may ultimately opt in as plaintiffs in the FLSA collective action. WHEREFORE, Plaintiffs pray that citation be issued and served on Defendant, and a. That this action be provisionally certified as an FLSA §216(b collective action for notice to prospective class members with respect to the claims asserted in §B and §D of the Complaint. b. That this action be certified as a Rule 23 class action with respect to the claims asserted in § E of the Complaint. c. That Defendant be ordered to provide the name, address, telephone number, cell phone number and email address for: FLSA W2 DRIVER CLASS 9 All Delivery Drivers employed by WAITR INCORPORATED or WAITR HOLDINGS, INC. in any state from March 6, 2016 to the present for whom the employer reported wages on IRS Form W2. LOUISIANA DRIVER CLASS All Delivery Drivers employed in Louisiana by WAITR INCORPORATED or WAITR HOLDINGS, INC. from March 6, 2016 to the present. d. That the Court authorize Notice of the pendency of the action and the opportunity to opt in as plaintiffs to all persons defined in the FLSA W2 Driver Class, and e. For an order tolling the limitations period for the filing of claims by putative members of the FLSA W2 Driver Class, and f. For judgment in favor of Plaintiff MONTGOMERY and all members of the FLSA W2 Driver Class for unpaid minimum wages and overtime pay due and for liquidated damages in equal additional amounts, g. for judgment in favor Plaintiff MONTGOMERY and all members of the Louisiana Driver Class ordering WAITR to reimburse all Class Members for the cost of providing and maintaining an automobile to make food deliveries, at the rate of not less than $.545 per mile, and h. For judgment in favor Plaintiff MONTGOMERY and all members of the Louisiana Driver Class whose employment was terminated for penalty wages under La. R.S. 23:632 at the employees’ regular rate of pay for a period of three months after date of demand, and i. For an order permanently enjoining the defendant from failing to pay the cash wage promised to employees “free and clear” of auto expenses. j. A service or incentive award to the named Plaintiff, and k. An award for Plaintiffs' reasonable attorney's fees and expenses, and l. For pre-judgment and post judgment interest on all sums due, taxable costs and for all other legal, equitable or other relief which the court may deem appropriate. 10 RESPECTFULLY SUBMITTED, BRINEY FORET CORRY /s/Christophe L. Zaunbrecher____ CHRISTOPHER L. ZAUNBRECHER (09546) BRINEY FORET CORRY, LLP 413 Travis Street, Suite 200 Post Office Drawer 51367 Lafayette, Louisiana 70505-1367 Telephone: (337) 456-9835 Facsimile: (337) 233-8719 E-mail: zaunbrecher@brineyforet.com Counsel for Plaintiff, Autumn Montgomery 11

consumer fraud

br_SDIcBD5gMZwcz7ONZ

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS RYAN CAIN on behalf of himself and others similarly situated, Plaintiff, v. SUPREME ADVOCATES, INC. Case No. CLASS ACTION COMPLAINT Defendant. : : : : : : : : : : CLASS ACTION COMPLAINT Preliminary Statement 1. As the Supreme Court recently explained, “Americans passionately disagree about many things. But they are largely united in their disdain for robocalls. The Federal Government receives a staggering number of complaints about robocalls—3.7 million complaints in 2019 alone. The States likewise field a constant barrage of complaints. For nearly 30 years, the people’s representatives in Congress have been fighting back. As relevant here, the Telephone Consumer Protection Act of 1991, known as the TCPA, generally prohibits robocalls to cell phones and home phones.” Barr v. Am. Ass'n of Political Consultants, No. 19-631, 2020 U.S. LEXIS 3544, at *5 (July 6, 2020). 2. Plaintiff Ryan Cain brings this action to enforce the consumer-privacy provisions of the TCPA. 3. Supreme Advocates, Inc. (“Supreme” or “Defendant”) sent pre-recorded calls to the cellular telephone of the Plaintiff and other putative class members. 4. The Plaintiff never consented to receive the calls, which were placed to him for telemarketing purposes. Because telemarketing campaigns generally place calls to hundreds of thousands or even millions of potential customers en masse, the Plaintiff brings this action on behalf of a proposed nationwide class of other persons who received illegal telemarketing calls from or on behalf of Defendant. Parties 5. Plaintiff Ryan Cain is a resident of the Commonwealth of Massachusetts and this District. 6. Defendant Supreme Advocates, Inc. has a principal place of business located at 6400 Oak Canyon, Suite 150, Irvine, CA 92618 and a registered agent of Samson Ly at the same address. Jurisdiction & Venue 7. The Court has federal question subject matter jurisdiction over these TCPA claims. Mims v. Arrow Financial Services, LLC, 132 S. Ct. 740 (2012). 8. Venue is proper pursuant to 28 U.S.C. § 1391(b)(2) because a substantial part of the events or omissions giving rise to the claim occurred in this District, as the telemarketing call to the Plaintiff was placed into this District. The Telephone Consumer Protection Act 9. In 1991, Congress enacted the TCPA to regulate the explosive growth of the telemarketing industry. In so doing, Congress recognized that “[u]nrestricted telemarketing . . . can be an intrusive invasion of privacy [.]” Telephone Consumer Protection Act of 1991, Pub. L. No. 102-243, § 2(5) (1991) (codified at 47 U.S.C. § 227). The TCPA Prohibits Automated Telemarketing Calls 10. The TCPA makes it unlawful “to make any call (other than a call made for emergency purposes or made with the prior express consent of the called party) using an automatic telephone dialing system or an artificial or prerecorded voice … to any telephone number assigned to a … cellular telephone service.” See 47 U.S.C. § 227(b)(1)(A)(iii). The TCPA provides a private cause of action to persons who receive calls in violation of 47 U.S.C. § 227(b)(1)(A). See 47 U.S.C. § 227(b)(3). 11. According to findings by the Federal Communication Commission (“FCC”), the agency Congress vested with authority to issue regulations implementing the TCPA, such calls are prohibited because, as Congress found, automated or prerecorded telephone calls are a greater nuisance and invasion of privacy than live solicitation calls, and such calls can be costly and inconvenient. 12. The FCC also recognized that “wireless customers are charged for incoming calls whether they pay in advance or after the minutes are used.” In re Rules and Regulations Implementing the Tel. Consumer Prot. Act of 1991, CG Docket No. 02-278, Report and Order, 18 F.C.C. Rcd. 14014, 14115 ¶ 165 (2003). 13. In 2013, the FCC required prior express written consent for all autodialed or prerecorded telemarketing calls (“robocalls”) to wireless numbers and residential lines. Specifically, it ordered that: [A] consumer’s written consent to receive telemarketing robocalls must be signed and be sufficient to show that the consumer: (1) received “clear and conspicuous disclosure” of the consequences of providing the requested consent, i.e., that the consumer will receive future calls that deliver prerecorded messages by or on behalf of a specific seller; and (2) having received this information, agrees unambiguously to receive such calls at a telephone number the consumer designates.[] In addition, the written agreement must be obtained “without requiring, directly or indirectly, that the agreement be executed as a condition of purchasing any good or service.[]” In the Matter of Rules & Regulations Implementing the Tel. Consumer Prot. Act of 1991, 27 F.C.C. Rcd. 1830, 1844 (2012) (footnotes omitted). Factual Allegations 14. Defendant is in the business of selling debt resolution services. 15. One of Defendant’s strategies for marketing its services and generating new customers is telemarketing. 16. That telemarketing strategy for generating new customers involves the use of pre- recorded messages. 17. Recipients of these calls, including Plaintiff, did not consent to receive them. 18. Defendant used this equipment because it allows for thousands of automated calls to be placed at one time, but its telemarketing representatives, only talk to individuals who pick up the telephone or respond to the contact from the recorded messages. Calls to Plaintiff Ryan Cain 19. Plaintiff Cain is, and at all times mentioned herein, a “person” as defined by 47 U.S.C. § 153(39). 20. Mr. Cain has received pre-recorded calls from the Defendant on his cellular telephone line (781) 435-XXX. 21. He received calls on at least June 17, 2020 and October 1, 2020. 22. The pre-recorded messages were generic regarding credit relief services and they invited the recipient to call back the telephone number of 949-591-8920. 23. In order to investigate the calls he had received, Mr. Cain called back the number left in the voicemail, 949-591-8920. 24. Mr. Cain spoke with “Evelyn” who said she worked for Supreme Advocates in Irvine, CA and asked about debt consolidation as well as COVID lending assistance needs. 25. Evelyn started to ask for personal information and Mr. Cain ended the conversation. 26. Evelyn referred Mr. Cain to www.supremeadvocates.com for more information. 27. That’s a website owned by the Defendant. 28. Plaintiff did not provide prior express written consent to receive prerecorded calls from, or on behalf of, Defendant. 29. The calls were not necessitated by an emergency. 30. Plaintiff’s privacy has been violated by the above-described telemarketing robocalls from, or on behalf of, Defendant. The calls were an annoying, harassing nuisance. 31. Other individuals have complained about receiving pre-recorded voice calls from that same 949-591-8920 number: These people leave me voicemails all the time. When they call they call from a spoofed number, it only rings once so you can’t answer and then they leave a voicemail of a recorded message from someone named “David” When you call sometimes they say their name is Quick Funding. Sometimes it’s Simple Funding. Definitely scammers. See https://www.reddit.com/r/ScamNumbers/comments/ihnft6/949_5918920/ (Last Visited November 30, 2020). 32. Individuals have also registered complaints with the Better Business Bureau: Got a voice-mail from David saying to call and he had my profile open. When i called i did not speak to David. When i asked the lady what was in my profile, she told me that there was no profile. And, they only say that to get people to call back. Sounds like a scam. See https://www.bbb.org/us/ca/irvine/profile/debt-consolidation-services/supreme-advocates- 1126-1000074140/customer-reviews (Last Visited November 30, 2020). 33. Plaintiff and all members of the Class, defined below, have been harmed by the acts of Defendant because their privacy has been violated, they were annoyed and harassed, and, in some instances, they were charged for incoming calls. The calls occupied their cellular telephone lines, rendering them unavailable for legitimate communication. Class Action Allegations 34. As authorized by Rule 23 of the Federal Rules of Civil Procedure, Plaintiff brings this action on behalf of a class of all other persons or entities similarly situated throughout the United States. 35. The class of persons Plaintiff proposes to represent is tentatively defined as: All persons within the United States: (a) Defendant and/or a third party acting on their behalf, made one or more non-emergency telephone calls; (b) to their cellular telephone number; (c) using an artificial or prerecorded voice; and (d) at any time in the period that begins four years before the date of filing this Complaint to trial. This proposed definition is referred to as the “Class”. 36. Excluded from the Class are the Defendant, and any entities in which the Defendant has a controlling interest, the Defendant’s agents and employees, any judge to whom this action is assigned and any member of such judge’s staff and immediate family. 37. The class as defined above is identifiable through phone records and phone number databases. 38. The potential class members number at least in the thousands, since automated and pre-recorded telemarketing campaigns make calls to hundreds or thousands of individual a day. Individual joinder of these persons is impracticable. 39. Plaintiff is a member of the Class. 40. There are questions of law and fact common to Plaintiff and to the proposed Class, including but not limited to the following: a) Whether Defendant violated the TCPA by using automated telemarketing to call cellular telephones; b) Whether Defendant placed calls without obtaining the recipients’ prior consent for the call; c) Whether the Plaintiff and the class members are entitled to statutory damages because of Defendant’s actions. 41. Plaintiff’s claims are typical of the claims of class members. Plaintiff’s claims, like the claims of the Class arise out of the same common course of conduct by Defendant and are based on the same legal and remedial theories. 42. Plaintiff is an adequate representative of the class because his interests do not conflict with the interests of the Class, he will fairly and adequately protect the interests of the Class, and he is represented by counsel skilled and experienced in class actions, including TCPA class actions. 43. Common questions of law and fact predominate over questions affecting only individual class members. The only individual question concerns identification of class members, which will be ascertainable from records maintained by Defendant and/or its agents. 44. Management of these claims is likely to present significantly fewer difficulties than are presented in many class claims because the calls at issue are all automated. Class treatment is superior to multiple individual suits or piecemeal litigation because it conserves judicial resources, promotes consistency and efficiency of adjudication, provides a forum for small claimants, and deters illegal activities. There will be no significant difficulty in the management of this case as a class action. 45. The likelihood that individual members of the Class will prosecute separate actions is remote due to the time and expense necessary to prosecute an individual case. 46. Plaintiff is not aware of any litigation concerning this controversy already commenced by others who meet the criteria for class membership described above. Legal Claims Count One: Violation of the TCPA’s Automated Calling provisions 47. Plaintiff incorporates the allegations from all previous paragraphs as if fully set forth herein. 48. The foregoing acts and omissions of Defendant and/or its affiliates, agents, and/or other persons or entities acting on Defendant’s behalf constitute numerous and multiple violations of the TCPA, 47 U.S.C. § 227, by making calls, except for emergency purposes, to the cellular telephone numbers of Plaintiff and members of the Class using an artificial or prerecorded voice. 49. As a result of Defendant’s and/or its affiliates, agents, and/or other persons or entities acting on Defendant’s behalf’s violations of the TCPA, 47 U.S.C. § 227, Plaintiff and members of the Class presumptively are entitled to an award of $500 in damages for each and every call made to their cellular telephone numbers using an artificial or prerecorded voice in violation of the statute, pursuant to 47 U.S.C. § 227(b)(3)(B). 50. Plaintiff and members of the Class are also entitled to and do seek injunctive relief prohibiting Defendant and/or its affiliates, agents, and/or other persons or entities acting on Defendant’s behalf from making pre-recorded calls, other than for emergency purposes, to any cellular telephone number in the future. 51. The Defendant’s violations were negligent and/or knowing. Relief Sought For themselves and all class members, Plaintiff request the following relief: A. Certification of the proposed Class; B. Appointment of Plaintiff as representative of the Class; C. Appointment of the undersigned counsel as counsel for the Class; D. A declaration that Defendant and/or its affiliates, agents, and/or other related entities’ actions complained of herein violate the TCPA; E. An order enjoining Defendant and/or its affiliates, agents, and/or other related entities, as provided by law, from making pre-recorded calls, other than for emergency purposes, to any cellular telephone number in the future. F. An award to Plaintiff and the Class of damages, as allowed by law; G. Leave to amend this Complaint to conform to the evidence presented at trial; and H. Orders granting such other and further relief as the Court deems necessary, just, and proper. Plaintiff request a jury trial as to all claims of the complaint so triable. PLAINTIFF, By his attorneys /s/ Anthony I. Paronich Anthony I. Paronich Paronich Law, P.C. 350 Lincoln Street, Suite 2400 Hingham, MA 02043 (508) 221-1510 anthony@paronichlaw.com Alex M. Washkowitz Jeremy Cohen CW Law Group, P.C. 160 Speen Street, Suite 309 Framingham, MA 01702 508-309-4880 alex@cwlawgrouppc.com Dated: December 2, 2020

privacy

cdEQD4cBD5gMZwcz3fhh

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA WHITNEY HANCOCK, ) 1650 Harvard Street, N.W., #504 Washington, DC 20009 ) on behalf of herself ) and all others similarly situated, ) and ) JAMIE WHITE, 4507c Hazeltine Court ) Alexandria, VA 22312 on behalf of herself ) Civil Action No.13-939 and all others similarly situated, JURY TRIAL DEMANDED ) Plaintiffs, ) v. ) URBAN OUTFITTERS, INC. 5000 S. Broad Street ) Philadelphia, PA 19112 SERVE: ) Richard Hayne, President 5000 S. Broad Street ) Philadelphia, PA 19112 ) and ) URBAN OUTFITTERS, INC. 3111 M Street, N.W. ) Washington, DC 20007 SERVE: ) Corporation Service Company 1090 Vermont Avenue, N.W. ) Washington, DC 20005 ) and ) URBAN OUTFITTERS, INC. 737 7th Street, N.W. ) Washington, DC 20001 SERVE: ) Corporation Service Company 1090 Vermont Avenue, N.W. ) Washington, DC 20005 ) and ) ANTHROPOLOGIE, INC. 5000 S. Broad Street ) Philadelphia, PA 19112 SERVE: ) Richard Hayne, President 5000 S. Broad Street ) Philadelphia, PA 19112 ) and ) ANTHROPOLOGIE, INC. 3222 M Street, N.W., #M-301 ) Washington, DC 20007 SERVE: ) Corporation Service Company 1090 Vermont Avenue, N.W. ) Washington, DC 20005 ) and ) ANTHROPOLOGIE, INC. 950 F Street, N.W. ) Washington, DC 20004 SERVE: ) Corporation Service Company 1090 Vermont Avenue, N.W. ) Washington, DC 20005 ) Defendants. ____________________________________) CLASS ACTION COMPLAINT Plaintiffs Whitney Hancock and Jamie White, by their attorneys Scott M. Perry, Mikhael D. Charnoff and Perry Charnoff PLLC, for their class action complaint, allege as follows: NATURE OF THE CASE 1. This action seeks to prohibit retail stores Urban Outfitters and Anthropologie from unlawfully requesting and obtaining consumers’ private identification information, and seeks damages for this unlawful act. Specifically, Urban Outfitters and Anthropologie (collectively, the “Retailers”) request and collect the customer’s ZIP code when a customer chooses to use a credit card to make a purchase. The Retailers ask the customer for this information under the guise that it is required when a customer makes a purchase with a credit card. However, ZIP codes are not required when using a credit card. To the contrary, District of Columbia law forbids retailers from requesting or collecting such Consumer Identification Information during credit-card transactions. 2. The Retailers can use the ZIP codes for their own pecuniary benefit, including by engaging in direct marketing campaigns without customers’ permission. The Retailers can do this, inter alia, by matching the customers’ names with their ZIP codes to identify the customers’ home/business address via commercially available databases. Thus, once the customer provides his/her ZIP code, the Retailers have all the information they need to secretly obtain customers’ home/business address. 3. The Retailers -- owned as a single publicly-traded corporation called Urban Outfitters, Inc. -- know or should know that District of Columbia law prohibits merchants from requesting or collecting Consumer Identification Information when they choose to pay by credit card. D.C. Code § 47-3153(a), entitled “Use of consumer identification information in connection with credit card payments,” provides: (a) Except as provided in subsection (b) of this section, no person shall, as a condition of accepting a credit card as payment for a sale of goods or services, request or record the address or telephone number of a credit card holder on the credit card transaction form. (b) A person may record the address or telephone number of a credit card holder if the information is necessary for the shipment, delivery, or installation of consumer goods, or special orders of consumer goods or services D.C. Code § 47-3153(a). 4. Pursuant to D.C. Code § 47-3154, any consumer whose Consumer Identification Information is obtained in violation of Section 3153 shall be entitled to actual damages or $500, whichever is greater, as well as to injunctive relief. 5. The Retailers also know, or should know, that the District of Columbia Consumer Protection Act (“DCCPA”), D.C. Code §28-3900 et seq., makes it illegal, whether a consumer is in fact misled, deceived or damaged thereby, to: (1) “misrepresent a material fact which has a tendency to mislead;” (2) “fail to state a material fact if such failure tends to mislead;” or (3) “use deceptive representations . . .” in connection with the sale of consumer goods. D.C. Code §28-3904(e), (f) & (t). 6. Pursuant to D.C. Code § 28-3905(k)(1), each violation of the DCCPA is subject to $1,500 or treble damages, whichever is greater, as well as injunctive relief, punitive damages and attorneys’ fees. Moreover, the DCCPA remedies are cumulative and in addition to remedies or penalties provided by other law. See id. at (k)(2). JURISDICTION AND VENUE 7. Jurisdiction is proper under 28 U.S.C. § 1332(d) pursuant to the existence of minimal diversity, the existence of more than 100 class members, and an amount in controversy greater than $5 million. 8. Venue is proper in this Court because the claims asserted are violations of District of Columbia law, and all violations occurred in the District of Columbia. PARTIES 9. Plaintiff Whitney Hancock is an adult resident of the District of Columbia 10. Plaintiff Jamie White is an adult resident of the Commonwealth of Virginia. 11. Defendant Urban Outfitters, Inc. is a publicly-traded Pennsylvania corporation with its principal place of business located in Pennsylvania. Urban Outfitters, Inc. owns and operates various brands via retail stores and direct-to-consumer marketing, such as e-commerce and traditional catalogues. Two of these brands are Defendants Urban Outfitters and Anthropologie. Urban Outfitters, Inc. operates two Urban Outfitters stores, and two Anthropologie stores, in the District of Columbia. 12. Defendant Anthropologie, Inc. is a Pennsylvania corporation with its principal place of business located in Pennsylvania. Upon information and belief, Anthropologie is wholly owned by Defendant Urban Outfitters, Inc. FACTUAL ALLEGATIONS 13. As long ago as 1991, the District of Columbia Council became concerned by merchants who improperly and unnecessarily obtained Consumer Identification Information when consumers made purchases using non-cash sources such as personal checks and credit 14. The Committee Report describing the District’s concerns -- authored by the Chairman of the D.C. Committee on Consumer & Regulatory Affairs -- found that “merchants have developed check acceptance policies and credit card sales policies that invade consumer privacy and expose consumers to potential credit fraud.” The Report further noted that “[t]he policies of Visa, Mastercard and American Express prohibit a merchant from refusing a sale to a customer who is paying by bankcard simply because he or she refuses to provide a telephone number or address.” 15. As a result, the D.C. Council passed D.C. Code § 47-3153, which made such activities illegal in the District of Columbia. This merchant activity has been unlawful in the District of Columbia for at least 16 years. 16. Urban Outfitters, Inc. describes itself as a “lifestyle specialty retail company” that owns and manages several brands, including Urban Outfitters and Anthropologie. 2012 Urban Outfitters 10-K, Annual Report, at 1 (hereinafter “Annual Report”). 17. Urban Outfitters targets young adults, ages 18 to 28. It describes it target customer as “culturally sophisticated, self-expressive and concerned with acceptance by their peer group.” Annual Report, at 2. 18. Anthropologie targets “sophisticated and contemporary” women, ages 28-45. Id. 19. In describing the two brands, Chief Executive Officer Richard Hayne has been quoted as stating: “The Urban customer, we always talk about, is the upscale homeless person, who has a slight degree of angst and is probably in the life stage of 18 to 26 … The Anthropologie customer is a bit more polished, a bit more older and she has much less angst … She tends to be a homeowner and she tends to be in a relationship and more likely than not, married with children.1 20. Given these narrow demographics, and its highly competitive market, Urban Outfitters, Inc.’s profitability is dependent on generating repeat business. As Urban Outfitters, Inc. notes, “[a]long with certain retail segment factors . . . other key competitive factors for our 1 Sapna Maheshwari, The Entertaining and Cringe-Inducing Ways Urban Outfitters Describes Its Customers to Wall Street,(2013), www.buzzfeed.com/sapna/the-entertaining-and-cringe-inducing-ways-urban-outfitters- describes-its-customers-to-wall-street. direct-to-consumer operations include the success or effectiveness of customer mailing lists . . . .” Annual Report at 8. 21. Among the mechanisms that Urban Outfitters, Inc. relies upon is its state-of-the- art cash registers referred to as point-of-sale register systems. They are “connected by a digital subscriber line (DSL) network to [its] home offices.” Id. As Urban Outfitters, Inc. states, “[t]hese systems provide for register efficiencies, timely customer checkout and instant back office access to register information, as well as daily updates of sales, inventory data and price changes.” Id. (emphasis added). 22. As a 2013 Forbes.com article, titled “Never Give Stores Your ZIP Code. Here’s Why.” explains, once a retailer has a customer’s name (indicated on the credit card), and their ZIP code, it can determine their address.2 One commercially available product, called GeoCapture, explains the simplicity of the process: “Users simply capture [sic] name from the credit card swipe and request a customer’s ZIP code during the transaction. GeoCapture matches the collected information to a comprehensive consumer database to return an address.” Id. URBAN OUTFITTERS REQUESTS AND COLLECTS PROHIBITED CONSUMER IDENTIFICATION INFORMATION 23. On June 5, 2013, Plaintiff Jamie White purchased an item of clothing at the Urban Outfitters retail store located at 3111 M Street, N.W., Washington, D.C. 24. Ms. White chose to pay by credit card. 25. Urban Outfitters uses a credit-card-swipe machine located next to its point-of-sale register. 26. After swiping her credit card in the swipe machine, the cashier asked Ms. White for her ZIP code. 2 See Adam Tanner, Never Give Stores Your Zip Code. Here’s Why., www.forbes.com/sites/adamtanner/2013/6/19. 27. Ms. White provided her ZIP Code to the cashier. 28. The cashier then entered Ms. White’s ZIP code into Urban Outfitters, Inc.’s point- of-sale register, not into the credit-card-swipe machine. 29. On June 5, 2013, at a different time, Plaintiff Jamie White made a second clothing purchase. 30. This time, a different cashier ran up Ms. White’s purchase. 31. Again, Ms. White chose to pay by credit card. She followed the same process, swiping her credit card through the swipe machine. 32. Again, after swiping her card, the cashier asked Ms. White for her Zip code. 33. When she provided her ZIP code, the cashier again entered the ZIP code into the point-of-sale register, not into the credit card swipe machine. ANTHROPOLOGIE REQUESTS AND COLLECTS PROHIBITED CONSUMER IDENTIFICATION INFORMATION 34. On May 24, 2013, Plaintiff Whitney Hancock purchased an item at the Anthropologie retail store located at 3322 M Street, N.W., Washington, D.C. 35. She chose to pay by credit card. 36. Anthropologie uses a credit card swipe machine located next to its point-of-sale register. 37. After swiping her credit card in the swipe machine, the cashier asked Ms. Hancock for her ZIP code. 38. Ms. Hancock provided her ZIP Code to the cashier. 39. The cashier then entered Ms. White’s ZIP code into the point-of-sale register, not into the credit card swipe machine. 40. As seen by Ms. White’s and Ms. Hancock’s three experiences in two different retail stores, Defendants employ a corporate policy by which their employees are trained to ask for customer’s ZIP codes in the District of Columbia when customers choose to pay by credit card, and then to enter that information into Defendant’s point-of-sale register. 41. Defendants know, or should know, that it is illegal in the District of Columbia to ask for a consumer’s ZIP code when the consumer chooses to pay by credit card. CLASS ACTION ALLEGATIONS 42. Plaintiffs bring this action, individually, and pursuant to Federal Rule of Civil Procedure 23(b)(3) and Local Rule 23.1, on behalf of a class of persons who bought merchandise from the Defendants in the District of Columbia via credit card, and whose ZIP codes were requested or recorded by Defendants. 43. The class period commences three years prior to the filing of this Complaint and continues through entry of final judgment. 44. The action is brought as a class for the following reasons: a. The Class consists of thousands of consumers, and therefore is so numerous that joinder of all members is impracticable; b. The Plaintiffs are adequate representatives of the Class because they, like all members of the Class, were illegally asked to provide their ZIP codes upon purchasing Defendants’ merchandise with a credit card, and they have no interest adverse to the Class; c. The Plaintiffs will fairly and adequately protect the interests of the Class; d. The common questions of law and fact include whether: (i) Defendants violated D.C. Code § 47-3151, 3153 and 3154, as well as the DCCPA, D.C. Code § 28-3901, et seq.; (ii) Defendants illegally made as a condition of accepting credit cards for payment of goods the provision of Class members’ ZIP codes; (iii) Defendants illegally requested Class members’ ZIP codes; (iv) Defendants illegally recorded Class members’ ZIP codes; (v) Defendants used the Class members ZIP codes to determine their home or business addresses; (vi) Defendants sent unsolicited mailings or other material to Class members or exposed them to potential identity fraud; (vii) Defendants’ actions constitute misrepresentations as to material facts that have a tendency to mislead; (viii) Defendants failed to state a material fact that tends to mislead; (ix) Defendants used deceptive representations; (x) Class members are entitled to statutory or other damages for the Defendants’ violations; (xi) Defendants should be enjoined from continuing to collect ZIP codes when consumers use credit cards; and (xii) other common questions of law and fact. e. Plaintiffs have retained counsel experienced in class and complex litigation; f. Prosecuting separate actions by individual class members would create a risk of inconsistent or varying adjudications with respect to individual class members that would create incompatible standards of conduct for Defendants; g. Defendants have acted in a way that applies generally to the Class by, inter alia, collecting ZIP codes; h. A class action is superior to other available methods of adjudication because: (i) absent this Class action, the Class, as a practical matter, will be unable to obtain relief, and the Defendants’ illegal actions will continue, causing harm to other consumers; (ii) pursuing individual actions would cause a substantial hardship for most members; (iii) once the liability of the Defendants is determined, the Court will be able to determine the damages of all members of the Class; (iv) a Class action will allow for orderly and expeditious resolution of the claims; (v) this action presents no difficulties that would impede management by the Court as a class action; (vi) Defendants have acted generally toward the Class in such a way that class-wide relief is appropriate; and (vii) it is desirable to concentrate the litigation of these claims in this forum because the acts complained of took place in this district. FIRST CAUSE OF ACTION (Violation of D.C. Code §47-3153 & 3154) 45. Plaintiffs incorporate all prior allegations as if stated herein. 46. D.C. Code § 47-3153 provides that: (a) Except as provided in subsection (b) of this section, no person shall, as a condition of accepting a credit card as payment for a sale of goods or services, request or record the address or telephone number of a credit card holder on the credit card transaction form. (b) A person may record the address or telephone number of a credit card holder if the information is necessary for the shipment, delivery, or installation of consumer goods, or special orders of consumer goods or services. 47. Defendants are “persons” under Section 3153 who accept credit cards as payment for sales of goods. 48. When a consumer uses a credit card at Defendants’ stores in the District of Columbia, the Defendants’ employees request the consumer’s ZIP code. The employees then enter the consumer’s ZIP code into the Defendants’ point-of-sale register. 49. A consumer’s ZIP code is part of his/her address. 50. District of Columbia law prohibits merchants such as Defendants from requesting or recording customers’ addresses. 51. With the combination of the consumer’s name (from the credit card) and the ZIP code, Defendants are able to identify the consumer’s full home or business address. 52. D.C. Code § 47-3154 provides that: (a) Any person aggrieved by a violation of § 47-3152 or § 47-3153 shall be entitled to institute an action to recover actual damages or $500, whichever is greater, and for injunctive relief against any person who has engaged in any act in violation of this chapter. (b) In the event the aggrieved party prevails, reasonable attorney’s fees and costs may be awarded in addition to any damages awarded. 53. The Class members are aggrieved by the Defendants when they ask for customer’s ZIP code when payment is made by credit card. They are further aggrieved because the Defendants’ illegal storage of this Consumer Identification Information puts the Class members at risk of identity fraud. They are further aggrieved by Defendants’ actions because the Class members’ privacy has been unlawfully invaded. 54. The Consumer Identification Information law creates a protected privacy interest in consumers’ addresses. WHEREFORE, Plaintiffs, individually, and on behalf of the Class, respectfully request that the Court enter judgment against the Defendants as follows: (a) Certifying this action as a class action; (b) Awarding statutory damages of $500 to each member of the Class; (c) Enjoining Defendants from requesting and collecting ZIP codes when consumers choose to pay for goods by credit card; (d) Awarding reasonable attorneys’ fees and costs; and (e) Awarding such other relief as the Court deems appropriate. SECOND CAUSE OF ACTION (Violation of District of Columbia Consumer Protection Act, §28-3901 et seq.) 55. Plaintiffs incorporate all prior allegations as if stated herein. 56. The DCCPA makes it illegal for the Defendants, whether or not a consumer is in fact misled, deceived or damaged thereby to: (a) misrepresent as to a material fact which has a tendency to mislead; (b) fail to state a material fact if such failure tends to mislead; or (c) use deceptive representations in connection with the sale of goods. 57. The DCCPA allows a person to bring an action to enforce the Act on behalf of himself and Class members. 58. Any person that violates the DCCPA is subject to: (a) treble damages or $1500 per violation, whichever is greater; (b) reasonable attorneys’ fees; (c) punitive damages; and (d) an injunction against the use of the unlawful practice. 59. The remedies provided under the DCCPA are cumulative and in addition to other penalties or remedies provided by law. 60. The Defendants are “persons” under the DCCPA. 61. The Defendants have violated the DCCPA by engaging in the illegal behavior described in this Complaint. 62. By asking for a consumer’s ZIP code when the consumer chooses to pay by credit card, the Defendants are misrepresenting a material fact that has a tendency to mislead; that provision of a ZIP code is necessary to complete the transaction. 63. By asking a consumer for a ZIP code when a credit card is used without disclosing that the provision of a ZIP code is optional, not necessary to complete the transaction and that Defendants are prohibited from requesting it, the Defendants are failing to state material facts that have a tendency to mislead. 64. By asking for ZIP codes when credit cards are used without disclosing that such information is optional and that such request is prohibited by law, or by implying that such information is necessary to complete the transaction, Defendants are using deceptive representations in connection with the sale of goods. 65. Each time that Defendants’ employees have asked for or recorded a consumer’s ZIP code when the consumer chooses to pay by credit card, they have committed a separate violation of the DCCPA, subjecting them to a penalty of treble damages or $1500, whichever is greater. 66. Defendants’ corporate policy whereby Defendants train and require that their District of Columbia employees ask credit-card-paying consumers for their ZIP codes is in direct contravention to District of Columbia law. 67. Defendants intentionally and/or with reckless disregard for the law, have perpetuated this corporate policy despite knowing, or being on constructive notice, that it violates District of Columbia law. This amounts to willful, wanton and reckless conduct. WHEREFORE, Plaintiffs, individually, and on behalf of the Class, respectfully request that the Court enter judgment against the Defendants as follows: (a) Certifying this action as a class action; (b) Awarding statutory treble damages or $1500, whichever is greater, for each and every violation of the DCCPA during the Class period; (c) Awarding punitive damages; (d) Enjoining Defendants from collecting ZIP codes when consumers choose to pay for goods by credit card; (e) Awarding reasonable attorneys’ fees and costs; and (f) Awarding such other relief as the Court deems appropriate. Respectfully submitted, PERRY CHARNOFF PLLC __/s/ Scott M. Perry______________ Scott M. Perry (#459841) Mikhael D. Charnoff (#476583) 2300 Wilson Boulevard, Suite 240 Arlington, VA 22201 P: (703) 291-6650 F: (703) 563-6692 scott@perrycharnoff.com mike@perrycharnoff.com Plaintiffs request a trial by jury. __/S/________________ Scott M. Perry

consumer fraud

Tq62CocBD5gMZwczEN43

Deval R. Zaveri, SBN 213501 James A. Tabb, SBN 208188 ZAVERI TABB APC 402 West Broadway, 29th Floor San Diego, CA 92101 Tel: (619) 398-4767 Fax: (619) 756-6991 dev@zaveritabb.com jimmy@zaveritabb.com James R. Patterson, SBN 211102 Allison H. Goddard, SBN 211098 PATTERSON LAW GROUP 402 W. Broadway, 29th Floor San Diego, CA 92101 Tel: (619) 756-6990 Fax: (619) 756-6991 jim@pattersonlawgroup.com ali@pattersonlawgroup.com Attorneys for Representative Plaintiff Brian Trenz UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA BRIAN TRENZ, on behalf of himself and all others similarly situated, Plaintiff, vs. Case No. CLASS ACTION COMPLAINT for Damages and Injunctive Relief Pursuant To The Telephone Consumer Protection Act, 47 U.S.C. § 227 et seq. Jury Trial Demanded ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ON-LINE ADMINISTRATORS, INC. (dba PEAK PERFORMANCE MARKETING SOLUTIONS), a California Corporation; VOLKSWAGEN GROUP OF AMERICA, INC., a Virginia Corporation; and DOES 1-5, Defendants. I. INTRODUCTION 1. This is a class action against Defendants On-Line Administrators, Inc. (dba Peak Performance Marketing Solutions) (“Peak Performance”) and Volkswagen Group of America, Inc. (“Volkswagen”) (collectively, “Defendants”) in negligently, and/or willfully, contacting Plaintiff on his cellular telephone in violation of the Telephone Consumer Protection Act, 47 U.S.C. § 227 et seq., (“TCPA”). 2. At Volkswagen’s direction, Peak Performance called Plaintiff Brian Trenz (“Plaintiff”) at least four times on his cellular telephone from an autodialer to solicit his business. Defendants did not have Plaintiff’s express written consent to contact him for such purposes. Plaintiff had an attorney write to Peak Performance on his behalf demanding that the solicitation calls stop, to no avail. Plaintiff has since discovered that many others across the country have received similar unlawful calls from Defendants. 3. Plaintiff brings this class action for damages, injunctive relief, and any other available legal or equitable remedies, resulting from Defendants' illegal actions. 4. Plaintiff alleges as follows upon his personal knowledge as to his own acts and experiences, and as to all other matters, upon information and belief, including investigation conducted by his counsel. II. PARTIES, JURISDICTION, AND VENUE 5. Plaintiff Brian Trenz is, and at all times mentioned herein was, a citizen and resident of the State of Texas who resides in San Antonio, Texas. 6. Defendant On-Line Administrators, Inc. (dba Peak Performance Marketing Solutions) is a marketing company. Plaintiff is informed and believes and thereon alleges, that at all times mentioned herein Peak Performance was a corporation founded under the laws of the State of California, whose primary corporate offices are located at: 26025 Mureau Road, Calabasas, CA 91302, making Peak Performance a citizen of California. Plaintiff alleges that at all times relevant herein Peak Performance conducted business in California because its California business offices are located at the same address, and it performed its business in the State of California, and in the County of Calabasas, and within this judicial district. Peak Performance markets to consumers who have purchased cars from certain dealerships with whom Volkswagen maintains contracts. 7. Plaintiff is informed and believes, and thereon alleges, that Defendant Volkswagen Group of America, Inc. is the American branch of an international car manufacturer with dealerships across the United States, and is, and at all times mentioned herein was, a corporation founded under the laws of the Commonwealth of Virginia, whose primary corporate offices are located at: 2200 Ferdinand Porsche Dr., Herndon, Virginia 20171. Plaintiff alleges that at all times relevant herein Volkswagen conducted business in, among others, the State of California, the County of Calabasas, and within this judicial district. Volkswagen is a car manufacturer and retailer and is the parent corporation for the Audi of America, which manufactures and sells Audi brand vehicles. Volkswagen, through Audi, also offers service packages to repair and perform maintenance on Audi brand vehicles purchased in the United States. 8. This Court has federal question subject matter jurisdiction under 28 U.S.C. § 1331 because this lawsuit seeks enforcement of rights under the TCPA, a federal statute. 9. This Court has personal jurisdiction over Defendants due to their substantial contacts with California, as alleged herein. Peak Performance is in fact headquartered in California, and Volkswagen operates throughout California. 10. Venue is proper in the United States District Court for the Central District of California. Under 28 U.S.C. § 1391(b)(1), venue is proper in any district where at least one defendant resides if all defendants are residents of the state in which the district is located. A corporate defendant is deemed to reside in any state where it is subject to personal jurisdiction (28 U.S.C. § 1391(c)), and as alleged herein, all Defendants are subject to personal jurisdiction in California. In a state with multiple judicial districts, a corporate defendant is also deemed to reside in any judicial district within the state in which it would be subject to personal jurisdiction if that district were a separate state (or, if no such district exists, then the district in which it has the most contacts). 28 U.S.C. § 1391(d). Here, at least one Defendant, Peak Performance, is a resident of this district – indeed, it is headquartered here. Thus, venue is proper under 28 U.S.C. § 1391(b)(1). Venue is also proper under 28 U.S.C. § 1391(b)(2) because, on information and belief, a substantial number of the calls complained of in this lawsuit originated from this district. III. THE TELEPHONE CONSUMER PROTECTION ACT OF 1991 (TCPA) 47 U.S.C. § 227 11. In 1991, Congress enacted the Telephone Consumer Protection Act (TCPA) in response to a growing number of consumer complaints regarding certain telemarketing practices. 12. The TCPA regulates, among other things, the use of automated telephone equipment, or “autodialers.” Specifically, the plain language of section 227(b)(1)(A)(iii) prohibits the use of autodialers to make any call to a wireless number in the absence of an emergency or the prior express consent of the called party. 47 U.S.C. § 227(b)(1)(A)(iii). 13. According to findings by the Federal Communication Commission (“FCC”), the agency Congress vested with authority to issue regulations implementing the TCPA, such calls are prohibited because, as Congress found, automated or prerecorded telephone calls are a greater nuisance and invasion of privacy than live solicitation calls, and such calls can be costly and inconvenient. The FCC also recognized that wireless customers are charged for incoming calls whether they pay in advance or after the minutes are used. Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, CG Docket No. 02-278, Report and Order, 18 FCC Rcd. 14014 (2003). 14. Since then the FCC promulgated several other orders necessarily limiting the phone calls that can be made by telemarketers. In 2012, the FCC expanded the scope of the TCPA by eliminating the established business relationship exemption for all telemarketing calls, mandating that all telemarketing calls require prior express written consent to be obtained from the called party. In the Matter of Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, CG Docket No. 02-278, FCC 12-21, issued Feb. 15, 2012 (holding in part, “Specifically, in this Order, we: (1) revise our rules to require prior express written consent for all autodialed or prerecorded telemarketing calls to wireless numbers and residential lines and accordingly eliminate the established business relationship exemption for such calls to residential lines while maintaining flexibility in the form of consent needed for purely informational calls.”). IV. FACTUAL ALLEGATIONS 15. At all relevant times, Plaintiff was and is a citizen of the State of Texas, and is a “person” as defined by 47 U.S.C. § 153(32). 16. Defendants are, and at all relevant times were, entities that meet the definition of “person,” as defined by 47 U.S.C. § 153(32). 17. At all relevant times, Defendants conducted business in the State of California and in the County of Calabasas, within this judicial district. 18. In 2011, Plaintiff purchased an Audi A4 automobile in Austin, Texas, from a used automobile dealer. At the time of the purchase, the car was equipped with an Audi manufacturer’s warranty covering the vehicle until 2012. 19. Shortly after purchasing the Audi, Plaintiff brought the car into Cavender Audi, a San Antonio Audi Dealership, for maintenance and service. Plaintiff provided his contact information to the dealership solely for the purpose of providing the dealership the ability to notify him when the servicing was complete. Plaintiff did not then give, nor at any other time has given, his written consent to receive autodialed telemarketing calls from Defendants or any other entity or agent acting on behalf Defendants. At the end of 2012, the Audi full service warranty expired and Plaintiff discontinued using the Audi Dealership to service his vehicle. 20. For several months following the expiration of the warranty, Plaintiff received multiple calls on his cell phone from Peak Performance. Based on information and belief, Peak Performance contacted Plaintiff on behalf of Volkswagen, the parent company of Audi, to encourage him to either purchase a new Audi or retain his use of the Audi service center. 21. Peak Performance is a marketing company that has agreements with Volkswagen to be its customer retention management (CRM) partner for all Audi vehicles. Peak Performance holds out on its website that is the preeminent and exclusive CRM marketing provider for Audi and Volkswagen. Peak Performance’s website states, “No other automotive CRM company is better equipped to help you acquire new customers… We return your lost customers with impressive efficiency, utilizing effective email marketing, highly targeted mail, customized offers and even phone calls.” http://gotopeak.com/service/recapturing-customers/ 22. Plaintiff avers based on information, belief, and research on Peak Performance’s and other websites, that Peak Performance contacts previous service customers of Volkswagen and Audi on their cell phones and using an autodialer in order to solicit business; specifically, to encourage previous customers to again utilize the dealership’s repair and maintenance services. Plaintiff spoke to a Peak Performance agent or employee who indicated to Plaintiff that the local dealership had given Peak Performance Plaintiff’s contact information to solicit repair and maintenance services to him. Thus, Peak Performance was acting as an agent for Volkswagen pursuant to CRM agreements for the benefit of Volkswagen. 23. In June 2013, Peak Performance called Plaintiff on his cellular telephone number, ending in “1870,” in an attempt to telemarket Volkswagen’s products and services. Between June 2013 and July 2013 Plaintiff received multiple calls from Peak Performance, and has, at the time of filing this complaint, received at least 4 telemarketing calls from Peak Performance on Defendant Volkswagen’s behalf. When Plaintiff answered, he briefly heard “dead air” then a “click” before the agent came on the line to speak to Plaintiff, evidencing that Peak Performance used an autodialer to make the call. Another time, Plaintiff called the number that was on his caller identification log and spoke to the agent who confirmed that the agent was calling on behalf of Peak Performance to sell its services. 24. Plaintiff did not provide Peak Performance with his cellular phone number, nor did he ever give his verbal or written consent to be called by any Defendant for the solicitation of services. Nor did Plaintiff give any Defendant prior express verbal or written consent to call him on his cellular telephone with the use of an autodialer, pursuant to 47 U.S.C. § 227(b)(1)(A). 25. Notwithstanding the fact that Plaintiff did not provide Peak Performance with his cellular number at any time, Volkswagen, or its agents, have called Plaintiff on his cellular telephone via an “automatic telephone dialing system,” as defined by 47 U.S.C. § 227(a)(1). This automatic telephone dialing system has the capacity to store or produce telephone numbers to be called, using a random or sequential number generator, to dial such numbers. 26. The telephone number Defendants and/or their agents called is assigned to a cellular telephone service for which Plaintiff incurs a charge for incoming calls pursuant to 47 U.S.C. § 227(b)(1). 27. These telephone calls constituted calls that were not for emergency purposes as defined by 47 U.S.C. § 227(b)(1)(A)(i). 28. These telephone calls by Defendants and/or their agents violated 47 U.S.C. § 227(b)(1). 29. Under the TCPA and pursuant to the FCC’s February 2012 Declaratory Ruling, the burden is on Defendants to demonstrate that Plaintiff provided prior express written consent within the meaning of the statute. V. CLASS ACTION ALLEGATIONS 30. Plaintiff brings this action on behalf of himself and on behalf of all others similarly situated (“the Class”). Plaintiff represents, and is a member of, the Class, consisting of: All persons within the United States who received any telephone call from Defendants or their agents to said person’s cellular telephone through the use of any automatic telephone dialing system and who did not provide prior express written consent to be called, within the four years prior to the filing of the Complaint in this action. 31. Excluded from the Class are Defendants; any entities in which any Defendant has a controlling interest; any of Defendant’s agent(s) and employee(s); Plaintiff’s counsel; the Court to whom this action is assigned and any member of the Court’s staff and immediate family; and claims for personal injury, wrongful death, and/or emotional distress. 32. Plaintiff does not know the number of members in the Class, but believes the Class members number in the tens of thousands, if not more. Plaintiff believes that Defendant engaged in a pattern and practice of contacting former dealership customers in the same manner that they used to contact him. Thus, this matter should be certified as a class action to assist in the expeditious litigation of this matter. 33. Plaintiff and members of the Class were harmed by the acts of Defendant in, but not limited to, the following ways: Defendants, directly and/or through their agents, illegally contacted or attempted to contact Plaintiff and the Class members via their cellular telephones by using an autodialer, thereby causing Plaintiff and the Class members to incur certain cellular telephone charges or reduce cellular telephone time for which Plaintiff and the Class members previously paid; by having to retrieve or administer messages left during those illegal calls; and invading the privacy of Plaintiff and the Class members. Plaintiff and the Class members were damaged thereby. 34. This suit seeks only damages and injunctive relief for recovery of economic injury on behalf of the Class and it expressly is not intended to request any recovery for any personal injury and claims related thereto. Plaintiff reserves the right to expand the Class definition to seek recovery on behalf of additional persons as warranted as facts are learned in further investigation and discovery. 35. The joinder of the Class members is impracticable and the disposition of their claims in the class action will provide substantial benefits both to the parties and to the Court. The disposition of the claims in a class action will provide substantial benefit to the parties and the Court in avoiding a multiplicity of identical suits. The Class can be identified through the records of Defendants and/or their agents. 36. There is a well-defined community of interest in the questions of law and fact involved affecting the parties to be represented. The questions of law and fact common to the Class predominate over questions that may affect individual Class members, including the following: a.) Whether, within the four years prior to the filing of this Complaint, Defendants and/or their agents made any call (other than a call made for emergency purposes or made with the prior express consent of the called party) to a Class member using any automatic telephone dialing system to any telephone number assigned to a cellular telephone service; b.) Whether Defendants’ conduct was knowing and/or willful; c.) Whether Defendants are liable for damages, and the extent of statutory damages for such violation; and d.) Whether Defendants should be enjoined from engaging in such conduct in the future. 37. As a person who received numerous calls by Defendants and/or their agents using an automatic telephone dialing system without his prior express consent, Plaintiff is asserting claims that are typical of the Class. Plaintiff will fairly and adequately represent and protect the interests of the Class in that Plaintiff has no interests antagonistic to any member of the Class. 38. Plaintiff and the members of the Class have all suffered irreparable harm as a result of Defendants’ unlawful and wrongful conduct. Absent a class action, the Class will continue to face the potential for irreparable harm. In addition, these violations of law would be allowed to proceed without remedy and Defendants would undoubtedly continue such illegal conduct. Because of the size of the individual Class members’ claims, few Class members could afford to seek legal redress for the wrongs complained of herein. 39. Plaintiff has retained counsel experienced in handling class action claims. 40. A class action is a superior method for the fair and efficient adjudication of this controversy. Class-wide damages are essential to induce Defendants to comply with federal and California law. The interest of Class members in individually controlling the prosecution of separate claims against Defendants is small because the maximum statutory damages in an individual action for a violation of this statute is minimal. Management of these claims is likely to present significantly fewer difficulties than those presented in many class claims. Defendants have acted on grounds generally applicable to the Class, thereby making appropriate final injunctive relief and corresponding declaratory relief with respect to the Class as a whole. FIRST CAUSE OF ACTION NEGLIGENT VIOLATIONS OF THE TELEPHONE CONSUMER PROTECTION ACT 47 U.S.C. § 227 ET SEQ. 41. Plaintiff incorporates by reference all of the above paragraphs of this Complaint as though fully stated herein. 42. The foregoing acts and omissions of Defendants constitute numerous and multiple negligent violations of the TCPA, including but not limited to each and every one of the above-cited provisions of 47 U.S.C. § 227 et seq. 43. As a result of Defendants’ negligent violations of 47 U.S.C. § 227 et seq., Plaintiff and the Class members are entitled to an award of $500.00 in statutory damages for each and every violation, pursuant to 47 U.S.C. § 227(b)(3)(B). Plaintiff and the Class are also entitled to and seek injunctive relief prohibiting such conduct in the future. 44. Plaintiff and the Class members are also entitled to an award of attorneys’ fees and costs. SECOND CAUSE OF ACTION KNOWING AND/OR WILLFUL VIOLATIONS OF THE TELEPHONE CONSUMER PROTECTION ACT 47 U.S.C. § 227 ET SEQ. 45. Plaintiff incorporates by reference the above paragraphs 1 through 42, inclusive, of this Complaint as though fully stated herein. 46. The foregoing acts and omissions of Defendants constitute numerous and multiple knowing and/or willful violations of the TCPA, including but not limited to each and every one of the above-cited provisions of 47 U.S.C. § 227 et seq. 47. As a result of Defendants’ knowing and/or willful violations of 47 U.S.C. § 227 et seq., Plaintiff and the Class members are entitled to treble damages, as provided by statute, up to $1,500.00, for each and every violation, pursuant to 47 U.S.C. § 227(b)(3)(B) and 47 U.S.C. § 227(b)(3)(C). 48. Plaintiff and the Class members are also entitled to and seek injunctive relief prohibiting such conduct in the future. PRAYER FOR RELIEF Wherefore, Plaintiff respectfully requests the Court grant Plaintiff and the Class members the following relief against Defendants: FIRST CAUSE OF ACTION FOR NEGLIGENT VIOLATION OF THE TCPA, 47 U.S.C. § 227 ET SEQ. 1. As a result of Defendants’ negligent violations of 47 U.S.C. § 227(b)(1), Plaintiff seeks for himself and each Class member $500.00 (five-hundred dollars) in statutory damages, for each and every violation, pursuant to 47 U.S.C. § 227(b)(3)(B). 2. Pursuant to 47 U.S.C. § 227(b)(3)(A), injunctive relief prohibiting such conduct in the future. 3. An order certifying this action to be a proper class action pursuant to Federal Rule of Civil Procedure 23, establishing an appropriate Class and any Subclasses the Court deems appropriate, finding that Plaintiff is a proper representative of the Class, and appointing the lawyers and law firms representing Plaintiff as counsel for the Class. 4. Any other relief the Court may deem just and proper. SECOND CAUSE OF ACTION FOR KNOWING AND/OR WILLFUL VIOLATION OF THE TCPA, 47 U.S.C. § 227 ET SEQ. 1. As a result of Defendants’ willful and/or knowing violations of 47 U.S.C. § 227(b)(1), Plaintiff seeks for himself and each Class member treble damages, as provided by statute, up to $1,500.00 (one-thousand-five- hundred dollars) for each and every violation, pursuant to 47 U.S.C. § 227(b)(3)(B) and 47 U.S.C. § 227(b)(3)(C). 2. Pursuant to 47 U.S.C. § 227(b)(3)(A), injunctive relief prohibiting such conduct in the future. 3. An order certifying this action to be a proper class action pursuant to Federal Rule of Civil Procedure 23, establishing an appropriate Class and any Subclasses the Court deems appropriate, finding that Plaintiff is a proper representative of the Class, and appointing the lawyers and law firms representing Plaintiff as counsel for the Class. 4. Any other relief the Court may deem just and proper. TRIAL BY JURY Pursuant to the Seventh Amendment to the Constitution of the United States of America, federal law, and FRCP 38, Plaintiff is entitled to, and demands, a trial by jury on all counts so triable. October 26, 2015 ZAVERI TABB APC By: /s/ Deval R. Zaveri Deval R. Zaveri, SBN 213501 James A. Tabb, SBN 208188 402 West Broadway, 29th Floor San Diego, CA 92101 Tel: (619) 398-4767 Fax: (619) 756-6991 dev@zaveritabb.com jimmy@zaveritabb.com James R. Patterson, SBN 211102 Allison H. Goddard, SBN 211098 PATTERSON LAW GROUP 402 W. Broadway, 29th Floor San Diego, CA 92101 Tel: (619) 756-6990 Fax: (619) 756-6991 jim@pattersonlawgroup.com ali@pattersonlawgroup.com Attorneys for Representative Plaintiff Brian Trenz

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BURSOR & FISHER, P.A. L. Timothy Fisher (State Bar No. 191626) Annick M. Persinger (State Bar No. 272996) Yeremey O. Krivoshey (State Bar No. 295032) 1990 North California Blvd., Suite 940 Walnut Creek, CA 94596 Telephone: (925) 300-4455 Facsimile: (925) 407-2700 E-Mail: ltfisher@bursor.com apersinger@bursor.com ykrivoshey@bursor.com Attorneys for Plaintiff UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA JEANETTE TAYLOR, on Behalf of Herself and all Others Similarly Situated, Plaintiff, v. Case No. CLASS ACTION COMPLAINT JURY TRIAL DEMANDED WORLD HEALING CENTER CHURCH, INC., and TOUFIK BENEDICTUS HINN, Defendants. Plaintiff Jeanette Taylor (“Plaintiff”), individually and on behalf of all others similarly situated, alleges the following on information and belief, except that Plaintiff’s allegations as to her own actions are based on personal knowledge. NATURE OF THE ACTION 1. Defendant Toufik Benedictus Hinn is a televangelist best known for his “Miracle Crusade” events, where Mr. Hinn allegedly performs miracles to heal sick participants. Mr. Hinn claims he has an “anointing power” that was given to him by god to carry out supernatural acts. His crusade events are often held in stadiums in major cities, and later broadcast worldwide on his television program, This is Your Day. 2. Mr. Hinn’s corporation, Defendant World Healing Center Church, Inc. d/b/a Benny Hinn Ministries (“Benny Hinn Ministries”), frequently solicits donations from the public online and through the use of telemarking. Controversy surrounds both Mr. Hinn’s theological claims, as well as Mr. Hinn’s suspected personal profit from donations made to his ministry. He has been investigated by the United States Senate Committee on Finance, Ministry Watch, NBC, CBS, HBO, and the Los Angeles Times. 3. For a period of roughly six months between 2015 and 2016, Defendants made dozens of unsolicited and harassing calls to Plaintiff on her cellular telephone using an automatic telephone dialing system and/or an artificial or prerecorded voice. Plaintiff did not give Defendants prior express written consent to make these calls. 4. Plaintiff brings this action for injunctive relief and statutory damages arising out of and relating to the conduct of Defendants in negligently, knowingly, and willfully contacting Plaintiff and class members on their telephones using an autodialer and/or artificial or prerecorded voice without their prior express written consent within the meaning of the Telephone Consumer Protection Act, 47 U.S.C. § 227 et seq. (“TCPA”). PARTIES 5. Plaintiff Jeanette Taylor is, and at all times mentioned herein was, a resident of, Sacramento, California and a citizen of the State of California. 6. Defendant World Healing Center Church, Inc. d/b/a Benny Hinn Ministries is a Florida corporation with its principal place of business located at 3400 William D. Tate Avenue, Grapevine, Texas, 76051. 7. Defendant Toufik Benedictus Hinn is a resident of Orange County, California, and the owner, operator, and alter-ego of World Healing Center Church, Inc. and Benny Hinn Ministries. These entities are shell corporations established by Hinn as a means to commit willful torts for his own personal gain. In 2007, the United States Senate Committee on Finance investigated Mr. Hinn, raising questions about his personal use of church-owned luxury good and a lack of financial oversight on the board of Benny Hinn Ministries, which is populated with Mr. Hinn’s family and friends. JURISDICTION AND VENUE 8. This Court has subject matter jurisdiction over this action pursuant to the Class Action Fairness Act of 2005, Pub. L. No. 109-2 Stat. 4 (“CAFA”), which, inter alia, amends 28 U.S.C. § 1332, at new subsection (d), conferring federal jurisdiction over class actions where, as here: (a) there are 100 or more members in the proposed classes; (b) some members of the proposed classes have a different citizenship from Defendants; and (c) the claims of the proposed class members exceed the sum or value of five million dollars ($5,000,000) in aggregate. See 28 U.S.C. § 1332(d)(2) and (6). 9. This Court also has federal question jurisdiction pursuant to 28 U.S.C. § 1331 because this action involves violations of federal statute, the TCPA. 10. Venue is proper in this Court under 28 U.S.C. § 1391 because Defendants transact significant business within this District, Plaintiff resides within this District, and a substantial part of the events giving rise to Plaintiff’s claims took place within this District. FACTS COMMON TO ALL CAUSES OF ACTION A. The Telephone Consumer Protection Act Of 1991 11. In 1991, Congress enacted the TCPA in response to a growing number of consumer complaints regarding certain telemarketing practices. 12. Among other things, the TCPA prohibits “initiat[ing] any telephone call to any residential telephone line using an artificial or prerecorded voice to deliver a message without the prior express consent of the called party. . . .” 13. According to findings by the Federal Communications Commission (“FCC”), such calls are prohibited because prerecorded telephone calls are a greater nuisance and invasion of privacy than live solicitation calls, and such calls are costly and inconvenient. 14. The FCC has issued rulings clarifying that in order to obtain an individual’s consent, a clear, unambiguous, and conspicuous written disclosure must be provided by the individual. 2012 FCC Order, 27 FCC Rcd. at 1839 (“[R]equiring prior written consent will better protect consumer privacy because such consent requires conspicuous action by the consumer—providing permission in writing—to authorize autodialed or prerecorded telemarketing calls. . . .”). B. Defendants’ Robocalls to Plaintiff and Class Members 15. Since August 2015, Defendants have called Ms. Taylor’s cellular telephone at least 50 times using an automatic telephone dialing system and/or artificial or prerecorded voice. Each time Ms Taylor picked up the telephone she would hear a prerecorded message and was not actually connected to a live person. 16. The following chart details three of the robocalls Defendants made to Ms. Taylor: Date Time Number Calling 2/19/16 11:36 AM (800) 725-6570 2/22/16 10:33 AM (800) 725-6570 2/23/16 9:56 AM (800) 725-6570 17. Ms. Taylor has never consented in writing, or otherwise, to receive these autodialed telephone calls from Defendants. 18. Ms. Taylor had never had any contact with Defendants prior to the telephone calls at issue in this Complaint. 19. Defendants have called Ms. Taylor from several difference phone numbers in an attempt to disguise the identity of the caller. 20. Online consumer complaints regarding Defendants’ unsolicited robocalls and autodialed calls are abundant: • “We continue to get calls from this Benny Hinn Ministries. We are on the do not call list and have never done any business with this organization. They continue to call all hours of the day and night.”1 • “We got this call also. We ARE on the do not call list and have never had any contact with this “ministry” before.”2 • “I get calls from 8007256570 constantly. If this is Benny Hinn, I want it to stop. I have never been involved with that group or in any contact with them whatsoever.”3 • “I too am tired of receiving these call from Benny. They call morning and night, several times a day. How do we stop these calls?!?!?!?!?!?!”4 • “A pre-recorded message. A religious scam. Hinn is NOT a non-profit.”5 • “Showed up as "UNKNOWN" but clearly automated dialer. Hung up immediately!”6 • “Benny Hinn Ministries has called us 3 times daily for nearly 2 weeks now. Same (800)725-6570 number calls every time. Sometimes they leave 1 minute long message on machine, sometimes they just hang up.”7 • “I receive a call at least three times a week from these people.”8 • “I received two automated calls from this number this week. (I guess my unpublished, unlisted phone # was "picked" anyways) I never answer unknown phone numbers but instead let my answering machine do the talking.”9 • “I received a call at least three times a week from these people.”10 • “Benny Hinn ministries, have asked for months not to call me.”11 CLASS ACTION ALLEGATIONS 21. Plaintiff brings this action on behalf of herself and on behalf of all other persons similarly situated. 1 http://whocallsme.com/Phone-Number.aspx/8007256570 2 Id. 3 Id. 4 Id. 5 http://800notes.com/Phone.aspx/1-800-725-6570 6 Id. 7 Id. 8 Id. 9 Id. 10 Id. 11 http://www.callercomplaints.com/SearchResult.aspx?Phone=800-725-6570 22. Plaintiff proposes the following Robocall Class definition, subject to amendment as appropriate: All persons within the United States who (a) received a non-emergency telephone call; (b) on his or her cellular telephone or residential telephone line; (c) made by or on behalf of Defendants; (d) for whom Defendants had no record of prior express written consent; (e) and such phone call was made with the use of an artificial or prerecorded voice; (f) at any time in the period that begins four years before the filing of the complaint in this action to the date class notice is disseminated. 23. Collectively, all these persons will be referred to as the “Robocall Class.” Plaintiff represents, and is a member of, this proposed class. Excluded from the Robocall Class are Defendants and any entities in which Defendants have a controlling interest, Defendants’ agents and employees, any Judge and/or Magistrate Judge to whom this action is assigned and any member of such Judges’ staffs and immediate families. 24. Plaintiff also proposes the following Autodialer Class definition, subject to amendment as appropriate: All persons within the United States who (a) received a non-emergency telephone call; (b) on his or her cellular telephone; (c) made by or on behalf of Defendants; (d) for whom Defendants had no record of prior express written consent; (e) and such phone call was made with the use of an automatic telephone dialing system as defined under the TCPA; (f) at any time in the period that begins four years before the filing of the complaint in this action to the date class notice is disseminated. 25. Collectively, all these persons will be referred to as the “Autodialer Class.” Plaintiff represents, and is a member of, this proposed class. Excluded from the Autodialer Class are Defendants and any entities in which Defendants have a controlling interest, Defendants’ agents and employees, any Judge and/or Magistrate Judge to whom this action is assigned and any member of such Judges’ staffs and immediate families. 26. Plaintiff does not know the exact number of members in the proposed classes, but reasonably believes based on the scale of Defendants’ business, and the number of online complaints, that the classes are so numerous that individual joinder would be impracticable. 27. Plaintiff and all members of the proposed classes have been harmed by the acts of Defendants in the form of multiple involuntary telephone and electrical charges, the aggravation, nuisance, and invasion of privacy that necessarily accompanies the receipt of unsolicited and harassing telephone calls, and violations of their statutory rights. 28. The disposition of the claims in a class action will provide substantial benefit to the parties and the Court in avoiding a multiplicity of identical suits. The proposed classes can be identified easily through records maintained by Defendants. 29. There are well defined, nearly identical, questions of law and fact affecting all parties. The questions of law and fact involving the class claims predominate over questions which may affect individual members of the proposed Class. Those common question of law and fact include, but are not limited to, the following: a. Whether Defendants made telephone calls to class members using an artificial or prerecorded voice without their prior express written consent; b. Whether Defendants made telephone calls to class members using an automatic telephone dialing system; c. Whether Defendants’ conduct was knowing and/or willful; d. Whether Defendants are liable for damages, and the amount of such damages, and e. Whether Defendants should be enjoined from engaging in such conduct in the future. 30. As a person who received numerous and repeated calls on her telephone through the use of an autodialer and/or artificial or prerecorded voice, without her prior express written consent, Plaintiff asserts claims that are typical of each member of the proposed classes. Plaintiff will fairly and adequately represent and protect the interests of the proposed classes, and has no interests which are antagonistic to any member of the proposed classes. 31. Plaintiff has retained counsel experienced in handling class action claims involving violations of federal and state consumer protection statutes. 32. A class action is the superior method for the fair and efficient adjudication of this controversy. Class wide relief is essential to compel Defendants to comply with the TCPA. The interest of the members of the proposed classes in individually controlling the prosecution of separate claims against Defendants is small because the statutory damages in an individual action for violation of the TCPA are relatively small. Management of these claims is likely to present significantly fewer difficulties than are presented in many class claims because the calls at issue are all automated and the members of the proposed classes, by definition, did not provide the prior express consent required under the statute to authorize calls to their telephones. 33. Defendants have acted on grounds generally applicable to the proposed classes, thereby making final injunctive relief and corresponding declaratory relief with respect to the proposed classes as a whole appropriate. Moreover, on information and belief, Plaintiff alleges that the TCPA violations complained of herein are substantially likely to continue in the future if an injunction is not entered. CAUSES OF ACTION FIRST COUNT KNOWING AND/OR WILLFUL VIOLATIONS OF THE TELEPHONE CONSUMER PROTECTION ACT, 47 U.S.C. § 227, et seq. 34. Plaintiff incorporates by reference the foregoing paragraphs of this Complaint as if fully stated herein. 35. The foregoing acts and omissions of Defendants constitute numerous and multiple knowing and/or willful violations of the TCPA, including but not limited to each of the above-cited provisions of 47 U.S.C. § 227 et seq. 36. As a result of Defendants’ knowing and/or willful violations of 47 U.S.C. § 227 et seq., Plaintiff and members of the proposed classes are entitled to treble damages of up to $1,500.00 for each and every call in violation of the statute, pursuant to 47 U.S.C. § 227(b)(3)(C). 37. Plaintiff and members of the proposed classes are also entitled to and do seek injunctive relief prohibiting such conduct violating the TCPA by Defendants in the future. 38. Plaintiff and members of the proposed classes are also entitled to an award of attorneys’ fees and costs. SECOND COUNT VIOLATIONS OF THE TELEPHONE CONSUMER PROTECTION ACT, 47 U.S.C. § 227, et seq. 39. Plaintiff incorporates by reference the foregoing paragraphs of this Complaint as if fully stated herein. 40. The foregoing acts and omissions of Defendants constitute numerous and multiple violations of the TCPA, including but not limited to each of the above-cited provisions of 47 U.S.C. § 227 et seq. 41. As a result of Defendants’ violations of 47 U.S.C. § 227 et seq., Plaintiff and members of the proposed classes are entitled to an award of $500.00 in statutory damages for each and every call in violation of the statute, pursuant to 47 U.S.C. § 227(b)(3)(B). 42. Plaintiff and members of the proposed classes are also entitled to and do seek injunctive relief prohibiting such conduct violating the TCPA by Defendants in the future. 43. Plaintiff and members of the proposed classes are also entitled to an award of attorneys’ fees and costs. PRAYER FOR RELIEF WHEREFORE, Plaintiff respectfully requests that the Court grant Plaintiff and all members of the proposed classes the following relief against Defendants: a. Injunctive relief prohibiting such violations of the TCPA by Defendants in the future; b. As a result of Defendants’ willful and/or knowing violations of the TCPA, Plaintiff seeks for herself and each member of the proposed classes treble damages, as provided by statute, of up to $1,500.00 for each and every call that violated the TCPA; c. As a result of Defendants’ violations of the TCPA, Plaintiff seeks for herself and each member of the proposed classes $500.00 in statutory damages for each and every call that violated the TCPA; d. An award of attorneys’ fees and costs to counsel for Plaintiff and the proposed classes; e. An order certifying this action to be a proper class action pursuant to Federal Rule of Civil Procedure 23, establishing appropriate classes, finding that Plaintiff is a proper representative of the classes, and appointing the lawyers and law firm representing Plaintiff as counsel for the class; f. Such other relief as the Court deems just and proper. DEMAND FOR JURY TRIAL Pursuant to Federal Rule of Civil Procedure 38(b), Plaintiff demands a trial by jury of any and all issues in this action so triable of right. Dated: April 27, 2016 Respectfully submitted, BURSOR & FISHER, P.A. By: /s/ Yeremey Krivoshey Yeremey Krivoshey L. Timothy Fisher (State Bar No. 191626) Annick M. Persinger (State Bar No. 272996) Yeremey O. Krivoshey (State Bar No. 295032) 1990 North California Blvd., Suite 940 Walnut Creek, CA 94596 Telephone: (925) 300-4455 Email: ltfisher@bursor.com apersinger@bursor.com ykrivoshey@bursor.com BURSOR & FISHER, P.A. Scott A. Bursor (State Bar No. 276006) 888 Seventh Avenue New York, NY 10019 Telephone: (212) 989-9113 Facsimile: (212) 989-9163 E-Mail: scott@bursor.com Attorneys for Plaintiff

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168. On August 25, 2003, IATA filed Resolution 001 W with the DOT and sought 169. On May 27, 2004 Giovanni Bisignani of IATA, stated: On average, fuel accounts for 16% of airline operating costs. Fuel prices are 55% higher than one year ago. This could add between US$8 and US$12 billion to our annual fuel bill and threatens to strangle our modest projected return to profitability. Instead of flying high, we could be left swimming in red ink The current crisis resulting from sky high fuel prices once again highlights the industry's vulnerability to external shocks We need to build a new industry structure capable of withstanding external shocks and delivering sustained profitability. 170. On May 28, 2004, IATA held a Special Composite Meeting of Passenger Tariff 171. On April 29, 2005, another Special Composite Meeting of Passenger Tariff 172. Despite IATA's efforts to obtain immunity for the collective rate-setting of fuel b. Defendants' Fuel Surcharges Which Commenced In 2004 Contrast With Their Conduct In The Preceding Years 173. Prior to 2004, the Defendants had not successfully imposed fuel surcharges on top 174. On May 11, 2004, Qantas publicly announced that it was introducing a fuel 175. The decision to introduce fuel surcharges required prior consideration by senior 176. Thus, in the late-spring/early summer, Air New Zealand imposed a fuel surcharge 177. Discreet examples of contemporaneous fuel surcharge increases exist for other 178. On February 1, 2005, ANA and JAL added a US $24.37 fuel surcharge on 179. In March of 2005, co-conspirator Northwest and Qantas introduced fuel 180. In July of 2005, ANA and JAL imposed a fuel surcharge of US $48.00 and181. In September-October of 2005, Cathay Pacific imposed a fuel surcharge of 182. In the spring of 2006, ANA and JAL increased their respective fuel surcharges to 183. During the summer 2006 travel season, Singapore Airlines raised its fuel 184. Later that summer, Thai Airways raised its fuel surcharge to approximately US 185. Moreover, during much of the Class Period, the Defendants and co-conspirators Air Carrier Fuel Surcharge Amount Effective Date HKD481 per coupon (long August 1, 2006 haul) (approximately US $62.00) HKD468 per coupon August 1, 2006 HKD481 per coupon (long August 1, 2006 haul) HKD481 per coupon August 1, 2006 Short haul: HKD117 per August 1, 2006 coupon Long haul: HKD481 per coupon HK/SIN HKD117 per coupon August 1, 2006 (short haul) HK/SFO HKD481 per coupon (long haul) HKD117 per coupon (short August 1, 2006 haul) HKD117 per coupon (short August 1, 2006 haul) HKD481 per coupon August 1, 2006 HKD117 per coupon (short August 1, 2006 haul) HKD117 per coupon (short August 1, 2006 haul) HKD481 per coupon August 1, 2006 HKD481 per coupon August 1, 2006 HKD117 per coupon (short August 1, 2006 haul) HKD481 per coupon August 1, 2006 HKD481 per coupon August 1, 2006 HKD117 per coupon (short August 1, 2006 haul) HKD117 per coupon August 1, 2006 HKD481 per coupon October 1, 2006 HKD481 per coupon (long October 1, 2006 haul) HK/SIN HKD117 per coupon October 1, 2006 (short haul) HK/SFO HKD481 per coupon (long haul) HKD117 per coupon (short October 1, 2006 haul) HKD481 per coupon October 1, 2006 HKD117 per coupon (short October 1, 2006 haul) HKD481 per coupon October 1, 2006 HKD117 per coupon (short October 1, 2006 haul) HKD117 per coupon (short October 1, 2006 haul) HKD481 per coupon October 1, 2006 HKD481 per coupon October 1, 2006 HKD117 per coupon (short October 1, 2006 haul) HKD117 per coupon October 1, 2006 HKD481 per coupon October 1, 2006 HKD117 per coupon (short October 1, 2006 haul) HKD481 per coupon October 1, 2006 HKD466 per coupon (long December 1, 2006 haul) HKD466 per coupon (long December 1, 2006 haul) HKD466 per coupon (long December 1, 2006 haul) HKD113 per coupon (short December 1, 2006 haul) HKD466 per coupon (long December 1, 2006 haul) HKD455 per coupon (long December 1, 2006 haul) HKD466 per coupon (long December 1, 2006 haul) HKD113 per coupon (short December 1, 2006haul) HKD466 per coupon (long December 1, 2006 haul) HK/SIN HKD113 per coupon December 1, 2006 (short haul) HK/SFO HKD466 per coupon (long haul) HKD466 per coupon (long December 1, 2006 haul) HKD113 per coupon (short December 1, 2006 haul) HKD113 per coupon (short December 1, 2006 haul) HKD113 per coupon (short December 1, 2006 haul) HKD113 per coupon (short December 1, 2006 haul) HKD113 per coupon (short December 1, 2006 haul) HKD113 per coupon (short December 1, 2006 haul) HKD113 per coupon (short December 1, 2006 haul) HKD438 per coupon (long February 1, 2007 haul) HKD438 per coupon (long February 1, 2007 haul) HKD438 per coupon (long February 1, 2007 haul) HKD438 per coupon (long February 1, 2007 haul) HKD438 per coupon (long February 1, 2007 haul) HKD438 per coupon (long February 1, 2007 haul) HKD106 per coupon (short February 1, 2007 haul) HKD438 per coupon (long February 1, 2007 haul) Short haul: HKD106 per February 1, 2007 coupon (short haul) Long haul: HKD438 per coupon HK/SIN HKD106 per coupon February 1, 2007 (short haul) HK/SFO HKD438 per coupon HKD438 per coupon (short February 1, 2007 haul) HKD106 per coupon February 1, 2007 HKD106 per coupon (short February 1, 2007 haul) HKD106 per coupon (short February 1, 2007 haul) HKD106 per coupon (short February 1, 2007 haul) HKD106 per coupon (short February 1, 2007 haul) HKD106 per coupon (short February 1, 2007 haul) HKD438 per coupon (short February 1, 2007 haul) HKD420 per coupon (long April 1, 2007 haul) HKD420 per coupon (long April 1, 2007 haul) HKD420 per coupon (long April 1, 2007 haul) HKD420 per coupon (long April 1, 2007 haul) HKD420 per coupon (long April 1, 2007 haul) HKD420 per coupon (long April 1, 2007 haul) HKD102 per coupon (short April 1, 2007 haul) HKD420 per coupon (long April 1, 2007 haul) Short haul: HKD102 per April 1, 2007 coupon Long haul: HKD420 per coupon HK/SIN HKD102 per coupon April 1, 2007 (short haul) HK/SFO HKD420 per coupon (long haul) HKD420 per coupon (long April 1, 2007 haul) HKD102 per coupon (short April 1, 2007 haul) HKD102 per coupon (short April 1, 2007 haul) HKD102 per coupon (short April 1, 2007 haul) HKD102 per coupon (short April 1, 2007 haul) HKD102 per coupon (short April 1, 2007 haul) HKD102 per coupon (short April 1, 2007 haul) HKD412 per coupon (long June 1, 2007 haul) HKD412 per coupon (long June 1, 2007haul) HKD412 per coupon (long June 1, 2007 haul) HKD412 per coupon (long June 1, 2007 haul) HKD412 per coupon (long June 1, 2007 haul) HKD412 per coupon (long June 1, 2007 haul) HKD100 per coupon (short June 1, 2007 haul) HKD412 per coupon (long June 1, 2007 haul) Short haul: HKD100 per June 1, 2007 coupon Long haul: HKD412 per coupon HK/SIN HKD100 per coupon June 1, 2007 (short haul) HK/SFO HKD412 per coupon (long haul) HKD100 per coupon (short June 1, 2007 haul) HKD100 per coupon (short June 1, 2007 haul) HKD100 per coupon (short June 1, 2007 haul) HKD100 per coupon (short June 1, 2007 haul) HKD100 per coupon (short June 1, 2007 haul) HKD100 per coupon (short June 1, 2007 haul) HKD100 per coupon (short June 1, 2007 haul) HKD424 per coupon (long August 1, 2007 haul) HKD424 per coupon (long August 1, 2007 haul) HKD424 per coupon (long August 1, 2007 haul) HKD424 per coupon (long August 1, 2007 haul) HKD424 per coupon (long August 1, 2007 haul) HKD424 per coupon (long August 1, 2007 haul) HKD103 per coupon (short August 1, 2007 haul) HKD424 per coupon (long August 1, 2007 haul) Short haul: HKD103 per August 1, 2007 coupon Long haul: HKD424 per coupon HK/SIN HKD103 per coupon August 1, 2007 (short haul) HK/SFO HKD424 per coupon (long haul) HKD424 per coupon (long August 1, 2007 haul) HKD103 per coupon (short August 1, 2007 haul) HKD103 per coupon (short August 1, 2007 haul) HKD103 per coupon (short August 1, 2007 haul) HKD103 per coupon (short August 1, 2007 haul) HKD103 per coupon (short August 1, 2007 haul) HKD per coupon (short August 1, 2007 haul) HKD428 per coupon (long October 1, 2007 haul) HKD428 per coupon (long October 1, 2007 haul) HKD428 per coupon (long October 1, 2007 haul) HKD428 per coupon (long October 1, 2007 haul) HKD428 per coupon (long October 1, 2007 haul) HKD428 per coupon (long October 1, 2007 haul) HKD104 per coupon October 1, 2007 HKD428 per coupon (long October 1, 2007 haul) Short haul: HKD104 per October 1, 2007 coupon Long haul: HKD428 per coupon HK/SIN HKD104 per coupon October 1, 2007 (short haul) HK/SFO HKD428 per coupon (long haul) HKD428 per coupon (long October 1, 2007 haul) HKD104 per coupon (short October 1, 2007 haul) HKD104 per coupon (short October 1, 2007 haul) HKD104 per coupon (short October 1, 2007 haul) HKD104 per coupon (short October 1, 2007 haul) HKD104 per coupon (short October 1, 2007 haul) HKD104 per coupon October 1, 2007 HKD104 per coupon October 1, 2007 HKD466 per coupon (long December 1, 2007 haul) HKD466 per coupon (long December 1, 2007 haul) HKD466 per coupon (long December 1, 2007 haul) HKD466 per coupon (long December 1, 2007haul) HKD466 per coupon (long December 1, 2007 haul) HKD466 per coupon (long December 1, 2007 haul) HKD113 per coupon (short December 1, 2007 haul HKD466 per coupon (long December 1, 2007 haul) Short haul: HKD113 per December 1, 2007 coupon Long haul: HKD466 per coupon HK/SIN HKD113 per coupon December 1, 2007 (short haul) HK/SFO HKD466 per coupon (long haul) HKD466 per coupon (long December 1, 2007 haul) HKD113 per coupon (short December 1, 2007 haul) HKD113 per coupon (short December 1, 2007 haul) HKD113 per coupon (short December 1, 2007 haul) HKD113 per coupon (short December 1, 2007 haul) HKD113 per coupon (short December 1, 2007 haul) HKD113 per coupon (short December 1, 2007 haul) HKD113 per coupon (short December 1, 2007 haul HKD508 per coupon (long February 1, 2008 haul) HKD508 per coupon (long February 1, 2008 haul) HKD508 per coupon (long February 1, 2008 haul) HKD508 per coupon (long February 1, 2008 haul) HKD508 per coupon (long February 1, 2008 haul) HKD508 per coupon (long February 1, 2008 haul) HKDI per coupon (short February 1, 2008 haul) HKD508 per coupon (long February 1, 2008 haul) Short haul: HKD123 per February 1, 2008 coupon (short haul) Long haul: HKD508 per coupon HK/SIN HKD123 per coupon February 1, 2008 (short haul) HK/SFO HKD508 per coupon (long haul) HKD508 per coupon (long February 1, 2008 haul) HKD113 per coupon (short February 1, 2008 haul) HKD123 per coupon February 1, 2008 HKD123 per coupon February 1, 2008 HKD113 (2/1/08 - 2/9/08) per February 1, 2008 coupon (short haul) HKD123 (2/10/08 - 3/31/08) per coupon HKD123 per coupon (short February 1, 2008 haul) HKD123 per coupon (short February 1, 2008 haul) HKD123 per coupon (short February 1, 2008 haul) HKD518 per coupon (long April 1, 2008 haul) HKD518 per coupon (long April 1, 2008 haul) HKD518 per coupon (long April 1, 2008 haul) HKD518 per coupon (long April 1, 2008 haul) HKD518 per coupon (long April 1, 2008 haul) HKD518 per coupon (long April 1, 2008 haul) HKD125 per coupon (short April 1, 2008 haul) HKD518 per coupon (long April 1, 2008 haul) Short haul: HKD125 per April 1, 2008 coupon Long haul: HKD518 per coupon HK/SIN HKD125 per coupon April 1, 2008 (short haul) HK/SFO HKD518 per coupon (long haul) HKD518 per coupon (long April 1, 2008 haul) HKD125 per coupon (short April 1, 2008 haul) HKD125 per coupon (short April 1, 2008 haul) HKD125 per coupon (short April 1, 2008 haul) HKD125 per coupon (short April 1, 2008 haul) HKD125 per coupon (short April 1, 2008 haul) HKD125 per coupon (short April 1, 2008 haul) HKD125 per coupon (short April 1, 2008 haul) c. Fuel Surcharges Were Implemented And Raised Through Collective Action 186. During and after various BAR meetings in Thailand, the Philippines, Malaysia, 187. Defendants Air New Zealand, Air France, ANA, Cathay Pacific, China Airlines,188. For example, on or before May 17, 2004, the exact date of which is unknown to 189. The next day, Tuesday, May 18, 2004, at the Thai BAR meeting in the Thai with a target implementation date of 1st June 2004." Each of the BAR members 190. According to the minutes for the May 18 meeting, participants included 191. On May 24, 2004, Carol Phatoomros (Thai Airways) followed up the May 18 they would apply the following " 192. A number of Defendants acquiesced to this letter, which was sent out on May 26, 193. On June 7, 2004, Thai Airways sent an e-mail confirming the imposition of fuel " 194. Thailand was not the only country in which collusive action was being taken on195. On May 25, 2004, Estrellita O. Inoturan from the Manilla BAR and a manager in 196. On May 26, 2004, Terada Haruhiku (JAL) indicated in an e-mail that "[w]e do not 197. Also in May of 2004, the members of the Malaysia BAR exchanged information 198. Various communications reflect collusion among numerous air carriers with 199. Another e-mail of that same date from Liu Zheng (JAL) to Mr. Yamasaki 200. On November 1, 2004, Naoma Kaori (JAL) sent an e-mail confirming that she 201. On June 15, 2004, Akira Mori (JAL) responded to an inquiry from Vietnam 202. On October 15, 2004, Inagaki Takashi of JAL wrote to Mohamed Habib of 203. From November 8, 2004 through November 10, 2004, Mr. Yamasaki engaged in204. Mamaoru Tsutsumi of JAL concluded in a November 8, 2004 e-mail that JAL 205. Mr. Tsutsumi then referenced the second round of fuel surcharges imposed by the 206. On November 10, 2004, Mr. Yamasaki confirmed the following current and Carriers that have implemented fuel surcharges: British Airways (USD17) American Airlines (USD25) Carriers that have not yet implemented fuel surcharges: SU (Aeroflot) (USD10) LH (Lufthansa) (USD17) CX (Cathay Pacific) (USD7) NW (USD25) CO (USD25) 207. On November 30, 2004, Hiroko Ueba (Cathay Pacific) e-mailed Yasuhiro 208. On December 26, 2004, Mr. Yamasaki reported in an e-mail to Irie Kesuke of 209. On January 5, 2005, Kubota Tomomi of JAL wrote to Mr. Yamasaki of JAL and Manila International sector: USD 20.00 or On January 7, 2005, Kubota Tomomi of JAL sent an e-mail to Toshiaki Oshima 211. Also, for a period of time commencing in 2004 and for the next several years212. As of December 24, 2005 JAL proposed implementing the surcharge only on 213. Participants in the earliest meetings between ANA and JAL included Mr. Shinobe 214. ANA and JAL agreed to raise and lower passenger fuel surcharges on nearly January 20, 2005. JAL announced it would add fuel surcharges on international passenger fares on February 1. The surcharges for transpacific flights were 2,500 yen (approximately US $24.37). June 7, 2005. ANA announced its intention to raise its international fuel surcharge effective July 7. January 23, 2006. ANA announced its intention to raise its international fuel surcharge, effective March 1. August 31, 2006. ANA announced its intention to raise its international fuel surcharge, effective October 15, from 8,000 yen to 13,600 yen ($66 to $113). November 16, 2006. ANA announced its intention to reduce the fuel surcharge in international passenger fares effective January 1, lowering the surcharge from 13,600 yen to 13,000 yen ($113 to $108). $108). March 20, 2007. ANA announced its intention to reduce the fuel surcharge on international passenger fares effective May 1, to 11,000 yen ($91). May 25, 2007. ANA announced its intention to raise the fuel surcharge on international passenger fares effective July 10, from 11,000 yen or $91 to 12,000 yen ($100). August 20, 2007. ANA announced its intention to raise the fuel surcharge on international passenger fares effective October 1, from 12,000 yen or $100 to 13,000 yen ($108). 215. On May 31, 2005, Hirai Noboru of JAL circulated an e-mail with a subject line 216. Collusion on air passenger surcharges continued in Thailand and other countries217. On September 1, 2005, a meeting of the Thai BAR was held. It was noted at the d. Coordination Of Fuel Surcharge Increases Are Not An Expected By- Product Of Competition The coordination of the Defendants' fuel surcharge increases cannot be explained e. Substantial Increases In Profitability Are Not An Expected By- Product Of Competition 219. The Defendants and their trade associations encourage a false public perception 220. While it is true that some airlines have been recently unprofitable-mainly U.S. Airline Profitability by Region USD billion 8 - 6 4 2 o -2 A .6 -8 - -10 -12 2002 2003 2004 2005 2006 US Europe i Asia Pacific 221. The 2007 financial report produced by the AAPA notes that carriers in Asia FY2006/2007 saw a significant improvement in profitability for Asia Pacific airlines. Net income tripled, while operating profit increased by 69% to USD 3.7 billion. The healthy performance was achieved with strong revenue growth, up 15.4%, outpacing the overall cost increase of 14.1%. (Emphases added). 222. AAPA's 2008 financial report demonstrated that the Asia Pacific carriers Asia Pacific airlines' net income grew by 38% to USD 5.1 billion while operating profit was USD 7.3 billion, up by 87%. AAPA member airline consolidated net income totaled USD 3.9 billion, up by 12.5% or USD 433 million. Operating profit surged 68% to a record high of USD 6.2 billion. 223. Moreover, Defendants' own data demonstrates that the imposition of fuel 224. For example, ANA reported a net profit of 7.68 billion Japanese yen for the first 225. On August 7, 2007, the Japan Times reported that JAL's operating loss shrank226. On August 8, 2007, Cathay Pacific announced that its passenger revenue had 3. Additional Evidence Establishes That There Was A Wide-Ranging Conspiracy To Impose Fuel Surcharges In The Closely Related Cargo Market During the Class Period 227. Defendants engaged in conspiratorial meetings in Asia, Europe, and the Middle 228. Indeed, in an April 30, 2009 press release from the ACCC, Australian 229. During the meetings described above, the participants, including the Defendants, 230. Airline cargo and passenger services are inextricably intertwined markets. The THE CLOSELY RELATED AIR CARGO INDUSTRY 231. The DOJ and competition authorities around the world are investigating 232. 233. The DOJ has "a policy of according leniency to corporations reporting their 234. Based on its report to the DOJ and consistent with and pursuant to the DOJ 235. Thereafter, Virgin Atlantic sought (and was granted) amnesty from the DOJ and 236. On August 1, 2007, the DOJ filed criminal information against KAL in the United 237. That same day, the DOJ announced that KAL had agreed to plead guilty and pay a 238. On August 23, 2007, British Airways pled guilty and was sentenced to pay a $300 239. On November 27, 2007, it was announced that Qantas had agreed to plead guilty240. On November 28, 2007, Qantas' CEO, Geoff Dixon, apologized for his Similar investigations to those being carried out by the US Department of Justice (DOJ) are being undertaken by antitrust regulators in other countries, including Australia. We understand more than 30 other airlines are included in these investigations. 241. In an April 29, 2009 press release by the DOJ announcing the guilty plea of Frank The 15 airlines that have pleaded guilty or agreed to plead guilty to date as a result of the Department's ongoing investigation into the air transportation industry are: British Airways Plc, Korean Air Lines Co. Ltd., Qantas Airways Limited, Japan Airlines International Co. Ltd., Martinair, Cathay Pacific Airways Limited, SAS Cargo Group A/S, Société Air France, Koninklijke Luchtvaart Maatschappij N.V. (KLM Royal Dutch Airlines), EL AL Israel Airlines Ltd., LAN Cargo S.A., Aerolinhas Brasileiras S.A., Cargolux Airlines International S.A., Nippon Cargo Airlines Co. Ltd., and Asiana Airlines Inc. Airline executives who have already pleaded guilty for their involvement in the illegal activity are Bruce McCaffrey of Qantas, Timothy Pfeil of SAS and Keith Packer of British Airways. 242. On December 22, 2007, ANA announced that it had received a statement of 243. Other air carriers, including a number of Defendants and their co-conspirators, 244. Thai Airways has further disclosed that it is being investigated by competition 245. In their 2007 Annual Reports, China Airlines and EVA acknowledged that the 246. On January 14, 2008, Qantas pled guilty and was sentenced to pay a $61 million 247. News reports indicated that during the week of March 10, 2008, the DOJ ordered 248. On March 11, 2008, the European Commission raided the offices of Lufthansa 249. The European Commission confirmed the raids by its personnel: The European Commission can confirm that on 11th March 2008 Commission officials carried out unannounced inspections at the premises of a number of international airline passenger carriers. These airline carriers provide scheduled passenger air transport services on long-haul routes between Europe and a third country. The Commission has reason to believe that the companies concerned may have violated EC Treaty rules on restrictive business practices (Article 81). 250. Following the raids, Lufthansa stated that "[a]ccording to information from the 251. On March 12, 2008, the European Commission announced that the Japanese 252. On April 16, 2008, the DOJ announced that JAL agreed to plead guilty to fixing253. On April 30, 2008, ANA announced that it had recorded an "extraordinary loss" 254. On May 8, 2008, the DOJ announced that Bruce McCaffrey, a Qantas executive, McCaffrey is the first individual to be charged, and this is the fifth case to arise, in the wide-ranging investigation into the air transportation industry. 255. Also on May 8, 2008, Air Canada disclosed that it, too, had received a statement 256. On June 17, 2008, the Business Spectator reported as follows: Qantas Airways has reached a confidential settlement agreement with the Australian Competition and Consumer Commission, in a deal expected to see the airline pay a multi-million dollar penalty for its alleged role in illegally fixing fuel surcharges as part of a global cartel, reports The Australian Financial Review. According to the paper, the European Commission is also in the final stages of its price-fixing investigations and is ready to take action against 26 airlines. Qantas has signaled to the European regulators that it will admit liability and is expected to pay a hefty fine, the paper said. 257. On June 26, 2008, the DOJ announced that it had filed informations against KLM, 258. 259. statutory notices that form part of a commission investigation is a 260. In July of 2008, Air France agreed to plead guilty to fixing cargo fares in the 261. In August of 2008, Timothy Pfeil, the former highest-ranking cargo executive in 262. On September 30, 2008, the DOJ announced that Keith Packer, former 263. On October 28, 2008, the ACCC announced that British Airways had agreed to a264. 265. On December 22, 2008, the ACCC announced that it had instituted proceedings 266. On January 22, 2009, El Al, Aerolinhas Brasileiras, and Lan Cargo agreed to 267. On February 16, 2009, a federal court in Australia ordered Air France to pay a 268. On March 31, 2009, Air France agreed to pay a penalty to antitrust authorities in 269. On April 9, 2009, Asiana, Nippon Cargo (an affiliate of ANA), and Cargolux 270. On or about April 20, 2009, the European Commission announced that it has 271. On April 30, 2009, the ACCC announced that it had filed suit against Cathay 272. Also on April 30, 2009, the DOJ announced that a Martinair Holland executive 273. On June 26, 2009, the Canadian Competition Bureau announced that Air France, 274. On July 7, 2009, the Canadian Competition Bureau announced that Qantas had 275. Total fines levied by the DOJ to date in this wide-ranging investigation exceed276. It is significant that Defendants' anticompetitive behavior is the subject of a FRAUDULENT CONCEALMENT 277. Plaintiff had no knowledge of the combination or conspiracy alleged herein, or of 278. Nor could Plaintiff and the members of the Class have discovered the violations 279. Only on or about August 1, 2007, when the DOJ announced the charges against 280. As an example of Defendants' concealment, Plaintiff has alleged herein an 281. Moreover, following the February 2006 raids by competition regulators, 282. Plaintiff has also alleged an instance in which one of the Defendants suggested 283. Further, Mr. Suebsantiongse referred to fuel surcharges as a "sensitive" issue 284. The existence of coordinated activity was further concealed by the way in which 285. Indeed, the existence, timing and amount of fuel surcharges are often difficult to286. Accordingly, Defendants engaged in a successful, illegal price-fixing conspiracy (a) By agreeing among themselves not to discuss publicly, or otherwise reveal, the nature and substance of the acts and communications in furtherance of the illegal scheme; (b) By engaging in secret meetings, telephone calls, and other communications in order to further their illicit cartel; (c) By staggering the dates on which changes to fares, including surcharges, became effective and/or were announced to the public; (d) By generating e-mails which recipients were told to destroy after reading; (e) By destroying documentary evidence of the alleged conspiracy after the regulatory raids described above; and/or (f) By giving false and pretextual reasons for their pricing of passenger fares and for the increases in those prices during the relevant period, and by describing such pricing and increases falsely as being a result of external costs, including the cost of fuel, rather than collusion. 287. As a result of the foregoing, Plaintiff and the members of the Class assert the CLASS ACTION ALLEGATIONS 288. The Plaintiff brings this action on her own behalf and as a class action pursuant to All persons and entities that purchased passenger air transportation at rates that were not immunized by the United States Department of Transportation and which included at least one flight segment between the United States and Asia or Oceania from Defendants or their co-conspirators, or any predecessor, subsidiary or affiliate thereof, at any time between January 1, 2000 and the present. Excluded from the class are purchases of passenger air transportation directly between the United States and the Republic of South Korea purchased from Korean Air Lines, Ltd. and/or Asiana Airlines, Inc.. Also excluded from the class are governmental entities, Defendants, any parent, subsidiary or affiliate thereof, and Defendants' officers, directors, employees and immediate families. 289. Plaintiff does not know the exact number of members of the Class because such 290. There are questions of law and fact which are common to the claims of Plaintiff (a) Whether Defendants engaged in a combination or conspiracy with their co-conspirators to fix, raise, maintain, and/or stabilize the prices for passenger air transportation, including surcharges; (b) Whether the purpose and/or effect of the acts and omissions alleged herein was to restrain trade, or to affect, fix, control, and/or maintain the prices for passenger air transportation, including surcharges; (c) The existence and duration of the horizontal agreements alleged herein to fix, raise, maintain, and/or stabilize the prices for passenger air transportation, including surcharges; (d) Whether Defendants violated Section 1 of the Sherman Act (15 U.S.C. § 1); (e) Whether Defendants fraudulently concealed the alleged conspiracy SO as to equitably toll any applicable statute of limitations; (f) Whether Defendants' agents, officers, employees, or representatives participated in correspondence and meetings in furtherance of the illegal conspiracy alleged herein, and, if so, whether such agents, officers, employees, or representatives were acting within the scope of their authority and in furtherance of Defendants' business interests; (g) Whether, and to what extent, the conduct of Defendants caused injury to Plaintiff and members of the Class, and, if so, the appropriate measure of damages; and (h) to prevent the continuation or furtherance of the violation of Section 1 of the Sherman Act and/or the foreign laws alleged. 291. Plaintiff's claims are typical of the claims of the members of the Class she seeks 292. Plaintiff will fairly and adequately assert and protect the interests of the Class 293. Plaintiff is represented by counsel competent and experienced in the prosecution 294. The questions of law and fact common to the members of the Class predominate295. A class action is superior to other available methods for the fair and efficient (a) The prosecution of separate actions by individual members of the Class would create a risk of inconsistent or varying adjudications, establishing incompatible standards of conduct for Defendants. (b) The Class is readily definable and one for which records should exist in the files of Defendants. (c) Prosecution as a class action will eliminate the possibility of repetitious litigation. (d) Treatment as a class action will permit a large number of similarly situated persons to adjudicate their common claims in a single forum simultaneously, efficiently, and without the duplication of effort and expense that numerous individual actions would require. (e) Class treatment will permit the adjudication of relatively small claims by many Class members who otherwise could not afford to litigate an antitrust claim such as is asserted in this complaint on an individual basis. 296. This class action presents no difficulties of management that would preclude its COUNT I VIOLATION OF SECTION 1 OF THE SHERMAN ACT, 15 U.S.C. § 1 297. Plaintiff incorporates by reference the preceding paragraphs as if fully set forth 298. Defendants and their co-conspirators engaged in a continuing contract, 299. Defendants and their co-conspirators agreed to, and did in fact, restrain trade or 300. In formulating and effectuating their contract, combination or conspiracy, (a) Agreeing to charge prices for passenger air transportation, including surcharges, at certain levels and otherwise fix, raise, maintain and/or stabilize prices for passenger air transportation, including surcharges; and (b) Charging for passenger air transportation, including surcharges at agreed upon levels. 301. The illegal combination and conspiracy alleged herein had the following effects, (a) The prices charged by Defendants to, and paid by Plaintiff and members of the Class for passenger air transportation, including surcharges were fixed, raised, maintained and/or stabilized at artificially high and non- competitive levels; (b) Plaintiff and members of the Class have been deprived of free and open competition in the purchase of passenger air transportation; (c) Plaintiff and members of the Class have been required to pay more for passenger air transportation, including surcharges, than they would have paid in a competitive marketplace absent Defendants' price-fixing conspiracy; (d) Competition in the sale of passenger air transportation has been restrained, suppressed or eliminated. 302. As noted above, Defendants' conduct as alleged herein constitutes or involves 303. As a direct and proximate result of Defendants' conduct, the Plaintiff andPRAYER FOR RELIEF WHEREFORE, Plaintiff prays: A. That the Court determine that this action may be maintained as a class action B. That the Court adjudge and decree that the contract, combination and conspiracy C. That the Court enter judgment against Defendants, jointly and severally, in favor D. That the Court award Plaintiff and the Class treble damages; E. That the Court award Plaintiff and the Class attorneys' fees and costs as well as F. That Defendants and their co-conspirators, their respective successors, assigns, G. That the Court award Plaintiff and the Class such other and further relief as may JURY TRIAL DEMANDED Pursuant to Federal Rule of Civil Procedure 38(b), Plaintiff demands a trial by jury of the Respectfully submitted, By: S. school G. Scott Emblidge (121613; Emblidge@mesllp.com) Sylvia M. Sokol (200126; Sokol@mesllp.com) Matthew Yan (257918; yan@mesllp.com) MOSCONE EMBLIDGE & SATER LLP 220 Montgomery Street, Suite 2100 San Francisco, CA 94104 Telephone: (415) 362-3599 Facsimile: (415) 362-2006 Appendix A Members of the Hong Kong Board of Airline RepresentativesAppendix B List of Attendees at May 18, 2004 Meeting of the Thailand Board of Airline Representatives Appendix C List of Recipients of Carol Phatoomros May 24, 2004 E-mail Re: Fuel Surcharges Appendix D List of Attendees at September 1, 2005 Meeting of the Thailand Board of Airline RepresentativesAppendix E List of Recipients of Carol Phatoomros August 18, 2005 E-mail Re: Fuel Surcharges Appendix F Recipients of Joanne Sotocinal E-mail of May 25, 2004 Re The Philippines BAR Fuel Surcharge ProposalAppendix G Summary of DOJ Investigation With Respect to Defendants And Co- Conspirators Named in the Transpacific Litigation FOREIGN INVESTIGATIONS AIR CARGO¹ PLED GUILTY AND/OR AIR TO US DOJ PASSENGER 2 CRIMINAL DEFENDANT CHARGES US DOJ FINE EC3 NZCC4 ACCC5 CCB6 AIR NEW ZEALAND X X X AIR FRANCE/KLM X X $350 million X X X X ALL NIPPON AIRWAYS CO. LTD X X BRITISH AIRWAYS X X $300 million X X X CATHAY PACIFIC AIRWAYS LTD X X $60 million X X X CHINA AIRLINES X CONTINENTAL AIRLINES EVA (TAIWAN) X JAL (JAPAN AIRLINES INT'L) X X $110 million X X LUFTHANSA/ SWISS Amnesty INTERNATIONAL X Applicant X X MALAYSIAN AIRLINES X X PHILIPPINE AIRLINES QANTAS (AUSTRALIA) X X $61 million X X X X SAS (SCANDINAVIAN) X X $52 million X SINGAPORE AIRLINES X X X X THAI AIRWAYS X X X X VIETNAM AIRLINES TOTAL $933 million

antitrust

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA LINDSAY FERRER, 610 Columbia Rd. NW, Washington, DC 20001, AMY HADDAD, 1398 Stratton Dr., Potomac, MD 20854, and SARAH SORSCHER, 623 Otis Place NW, Washington, DC 20010, on behalf of themselves and all others similarly situated, No. 16-CV-2162 JURY TRIAL DEMANDED Plaintiffs, v. CAREFIRST, INC.; GROUP HOSPITALIZATION AND MEDICAL SERVICES, INC. d/b/a CAREFIRST BLUECROSS BLUESHIELD; CAREFIRST OF MARYLAND, INC., d/b/a CAREFIRST BLUECROSS BLUESHIELD; CARE FIRST BLUECROSS BLUESHIELD; and CAREFIRST BLUECHOICE, INC., Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) CLASS ACTION COMPLAINT Plaintiffs Lindsay Ferrer, Amy Haddad and Sarah Sorscher (collectively the “Plaintiffs”), on behalf of themselves and all others similarly situated persons (“Class”, defined below), by and through undersigned counsel, bring this Class Action Complaint against CareFirst, Inc. (“CFI”), Group Hospitalization and Medical Services, Inc., d/b/a CareFirst BlueCross BlueShield (“GHMS”), CareFirst of Maryland, Inc., d/b/a CareFirst BlueCross BlueShield (“CFM”), CareFirst BlueCross BlueShield (“CareFirst BCBS”), and, CareFirst BlueChoice, Inc. (“CFBC”) (collectively referred to as “CareFirst” or “Defendants”). Plaintiffs hereby allege upon personal knowledge as to themselves and their own acts, and upon information and belief as to all other matters, based upon, inter alia, the investigation undertaken by their attorneys, as follows: SUMMARY OF THE CASE 1. Defendants have wrongfully denied and continue to deny Plaintiffs and the members of the Class access to and coverage for a vital women’s preventive service – breastfeeding support, supplies and counseling – which coverage is mandated by The Patient Protection and Affordable Care Act (the “ACA”) (as amended by the Health Care and Education Reconciliation Act of 2010 (“HCERA”) and other laws). 2. A key directive of the ACA was that all individual and group health plans would provide access to and coverage for preventive health care benefits.1 As stated by the U.S. Department of Health & Human Services (“HHS”), prior the enactment of the ACA “too many Americans did not get the preventive care they need to stay healthy, avoid or delay the onset of disease, and reduce health care costs, [and,] [o]ften because of cost, Americans used preventive services at about half the recommended rate.” See http://www.hhs.gov/healthcare/facts-and- features/fact-sheets/aca-rules-on-expanding-access-to-preventive-services-for-women/index.html (last visited 9/7/16). 3. In addition to the policy of promoting preventive health benefits for all, the ACA specifically recognized the need to address the unique preventive health needs of women throughout their lives. Id. Building upon the ACA’s women’s preventive health service mandate, on August 1, 2011 HHS adopted its Health Resources and Services Administration’s (“HRSA”) Health Plan Guidelines for Women’s Preventive Services (“HHS Guidelines”) which require access to and coverage for certain women’s preventive services by most non- 1 The only exception is health insurance plans that are grandfathered. To be classified as a “Grandfathered Plan” plans must have (1) been in existence prior to March 23, 2010; (2) refrained from making significant changes to the benefits or plan participants’ costs since that time; and (3) had at least one person enrolled in the plan on March 23, 2010 and continually covered at least one individual since that date. While there is no specific termination date for grandfathered status, it is expected that eventually all plans will lose their grandfathered status. As of 2014, only about a quarter of workers with employer sponsored coverage participated in Grandfathered Plans. Grandfathered Health Plans starting with the first plan or policy year beginning on or after August 1, 2012. 4. The HHS Guidelines, which were recommended by the independent Institute of Medicine (“IOM”) and based on scientific evidence, ensure women’s accessibility to a comprehensive set of preventive services, including health services related to breastfeeding support, supplies and counseling. Under the HHS Guidelines, pregnant and postpartum women must have access to comprehensive lactation support and counseling provided by a trained provider during pregnancy and/or in the postpartum period (“Comprehensive Lactation Benefits”), as well as breastfeeding equipment. See HHS Guidelines, http://hrsa.gov/womensguidelines/ (last visited 9/21/2016). 5. According to the Centers for Disease Control and Prevention (“CDC”), “[b]reastfeeding, with its many known health benefits for infants, children, and mothers, is a key strategy to improve public health.” http://www.cdc.gov/breastfeeding/pdf/2016breastfeedingreportcard.pdf (emphasis added). 6. While the protection, promotion and support of breastfeeding have been a national public policy for over 25 years, the CDC, the American Academy of Pediatrics and the enactment of the ACA with its Comprehensive Lactation Benefits coverage have brought breastfeeding to the forefront of women’s health issues. 7. As the then HHS Secretary Kathleen Sebelius announced in July 2012: Aug. 1, 2012 ushers in a new day for women’s health when, for the first time ever, women will have access to eight new services at no out-of- pocket cost to keep them healthier…..This benefit will take effect for millions of adult and adolescent women over the course of the next year— and it’s just one of many benefits of the health care law that let women and their doctors, not insurance companies, make decisions about a woman’s care. …. Instead of letting insurance companies decide what care women receive, the health care law requires insurers to cover these preventive services in new plans beginning Aug. 1. …Women’s health decisions shouldn’t be made by politicians or insurance companies. Rather than wasting time refighting old political battles, this Administration is moving forward and putting women in control of their own health care. If women are going to take care of their families and friends, they have to take care of themselves. The Affordable Care Act is making it easier for women to do that by making health care more accessible and affordable for millions of American women and families. “Giving Women Control Over Their Health Care”, Posted July 31, 2012, By Kathleen Sebelius, Secretary of Health and Human Services, http://wayback.archive- it.org/3909/20150925141312/http://www.hhs.gov/healthcare/facts/blog/2012/07/prevention0731 12.html (last visited 9-7-2016)(emphasis added). 8. Contrary to the ACA, the HHS Guidelines, and Secretary Sebelius’ expressed confidence that insurance companies could no longer dictate women’s health decisions, Defendants are denying Plaintiffs and the members of the Class the ACA mandated access to and coverage for Comprehensive Lactation Benefits from trained providers for insured pregnant and postpartum women. 9. Instead, Defendants (in their capacities as both insurers and third-party administrators of self-insured plans) have employed the following scheme to circumvent the ACA mandates: (A) Defendants do not establish a network of trained providers of Comprehensive Lactation Benefits.2 (B) Why? If Defendants do not establish a network and women are not provided a network as part of their insurance plan, one of three things occurs: 2 Comprehensive Lactation Support is unlike other preventive services. For example, prior to the ACA’s enactment, medical services like a male prostate exam were conducted by and covered with a cost by a network of urologists. After the ACA’s enactment, such services were deemed preventive services that are covered at no cost when provided by the network of providers. For Comprehensive Lactation Support, such services were not, prior to the ACA, covered health benefits and there were no established networks of trained providers. Defendants failed to establish networks of trained providers in the wake of the ACA’s mandate thereby circumventing the ACA’s preventive service provisions requiring women access to and coverage for Comprehensive Lactation Support. i. Women forego Comprehensive Lactation Benefits because they are unable to pay out-of-pocket, ergo, Defendants never have to administer and pay for the preventive service; or ii. Women pay out-of-pocket for Comprehensive Lactation Benefits, never seek reimbursement from Defendants, ergo, Defendants never have to administer or pay for the preventive service; or, iii. Women pay out-of-pocket for Comprehensive Lactation Benefits, seek reimbursement, and get either no or partial reimbursement, ergo, Defendants pay nothing or less for the preventive service than if they had established a network of trained providers of Comprehensive Lactation Benefits, and force women to pay out-of-pocket. (C) Because of Defendants’ failure to provide in-network trained providers, Plaintiffs and the members of the Class are forced to either forego the Comprehensive Lactation Benefits preventive service or go out-of-network to get it. It is not by Plaintiffs’ and the members of the Class own choosing to go “out-of-network.” It is of Defendants’ making. Yet, Defendants exploit their wrongful conduct by, at best, reimbursing only a portion of the out-of-pocket costs or flatly denying any reimbursement or coverage for Comprehensive Lactation Benefits, because Plaintiffs and the members of the Class used “out-of-network” providers. 10. The scheme, coupled with the Defendants’ other tactics to avoid giving women access to and coverage for Comprehensive Lactation Benefits, violates the ACA and their duties to Plaintiffs and the members of the Class. 11. Plaintiffs are enrolled in health care plans (“health care plans” or “plans”) insured or administered by Defendants, which health care plans include Employee Welfare Benefit Plans as that term is defined in 29 U.S.C. § 1002(1)(A), as well as individual and family health care plans offered directly by Defendants, or on an insurance exchange pursuant to the applicable provisions of the ACA (“ACA Exchanges”). Based on the Defendants’ conduct and the claims alleged herein, Plaintiffs on behalf of themselves and the members of the Class seek to put an end to, and secure monetary redress for, Defendants’ wrongful and harmful conduct. Such conduct is done in flagrant disregard of the ACA and the right it created for women to access preventive health benefits. 12. Such conduct violates: the ACA’s anti-discrimination provisions prohibiting discrimination on the basis of gender; the plan documents which incorporate by reference the ACA’s preventive service provisions; and, the Employee Retirement Income Security Act (“ERISA”). Defendants also have been unjustly enriched at Plaintiffs’ and the Class’ expense. Plaintiffs seek monetary and injunctive relief for themselves and the members of the Class to stop and redress the substantial harms inflicted by Defendants. PARTIES Plaintiffs. 13. Plaintiff Lindsay Ferrer (“Ferrer”) is an adult individual residing in Washington, D.C. Plaintiff Ferrer, through her husband’s employer, DC Lawyers for Youth, was insured by a non-grandfathered CareFirst, Inc. (“CFI”) plan through November 30, 2015 and a non- grandfathered CareFirst BlueChoice, Inc. (“CFBC”) plan effective December 1, 2015. After the birth of her child in November 2015, Plaintiff Ferrer sought coverage from CFBC for comprehensive lactation support and counseling, but was issued only partial reimbursement resulting in an out-of-pocket expenditure of $406.15. 14. Plaintiff Amy Haddad (“Haddad”) is an adult individual residing in Potomac, MD. Plaintiff Haddad is, and was, at all relevant times, insured by a non-grandfathered CareFirst BlueCross BlueShield (“CareFirst BCBS”) plan through her employer, the Association of Maternal and Child Health Programs. After the birth of her child in February 2015, Plaintiff Haddad sought coverage from CareFirst BCBS for comprehensive lactation support and counseling, but was issued only partial reimbursement resulting in an out-of-pocket expenditure of $290.73. 15. Plaintiff Sarah Sorscher (“Sorscher”) is an adult individual residing in Washington, D.C. Plaintiff Sorscher is, and was, at all relevant times, insured by a non- grandfathered CareFirst BlueCross BlueShield (“CareFirst BCBS”) plan through her employer, Public Citizen. After the birth of her child in July 2014, Plaintiff Sorscher sought coverage from CareFirst BCBS for comprehensive lactation support and counseling, but was issued only partial reimbursement resulting in an out-of-pocket expenditure of $100.73. Defendants. 16. Defendant CareFirst, Inc. (“CFI”) is a Maryland corporation doing business in the District of Columbia, Maryland and the Commonwealth of Virginia. CFI is the parent company of GHMS and CFM which, together, hold joint interests in CFBC. CFI’s principal place of business is located at 10453/10455 Mill Run Circle, Owings Mills, Maryland 21117. 17. Defendant Group Hospitalization and Medical Services, Inc. (“GHMS”) is a corporation incorporated under the laws of the District of Columbia with its principal place of business located at 840 First Street, NE, Washington, D.C. 20065. GHMS does business as CareFirst BlueCross BlueShield, and is an independent licensee of the Blue Cross and Blue Shield Association. GHMS provides insurance products and administrative services to individuals and groups, and does business, in Maryland, the District of Columbia, and the Commonwealth of Virginia. 18. Defendant CareFirst of Maryland, Inc. (“CFM”) is a Maryland corporation with its principal place of business located at 10453/10455 Mill Run Circle, Owings Mills, Maryland 21117. CFM does business as CareFirst BlueCross BlueShield, and is an independent licensee of the Blue Cross and Blue Shield Association. CFM provides insurance products and administrative services to individuals and groups, and does business, in the State of Maryland and the District of Columbia. 19. CareFirst BlueCross BlueShield (“CareFirst BCBS”) is a not-for-profit, non-stock health services company which, through its affiliates and subsidiaries, including Defendants GHMS and CFM, offers insurance products and administrative services to individuals and groups in Maryland, the District of Columbia and portions of Northern Virginia. CareFirst BCBS’ corporate headquarters are in Union Center Plaza, 840 First Street, NE, Washington, D.C. 20065. 20. Defendant CareFirst BlueChoice, Inc. (“CFBC”) is a corporation formed under the laws of the District of Columbia with a principal place of business located at 840 First Street, NE, Washington, D.C. 20065. CFBC is an affiliate company of the other Defendants and also offers health benefit products and services in the District of Columbia, Maryland, and the Commonwealth of Virginia. 21. Whenever in this Complaint reference is made to any act, deed or transaction of Defendants, the allegation is imputed to its officers, directors, agents, employees or representatives. 22. Defendants provide group and individual health insurance and managed care products that are subject to all provisions of the ACA, and purportedly operate the largest health care insurer in the Mid-Atlantic region serving individuals, businesses and governmental agencies totaling 3.2 million members, employing approximately 5,000 associates and contractors in Maryland, Washington, D.C. and Northern Virginia, and serving more than 577,000 members in the Federal Employees Health Program (FEP) – the largest FEP enrollment in the nation. See https://individual.carefirst.com/individuals-families/about-us/company- overview.page (last visited 10/24/2016). 23. Defendants also offer health insurance plans directly to individuals through the Exchanges.3 Defendants offered and administered the following ACA Exchange Plans, among 3 Under the ACA, starting in 2014, individuals were required to buy health insurance or face penalties. To facilitate that, the ACA requires every state to offer a public marketplace for its residents to research and purchase health insurance, the Exchange. States have a few options: A state can choose to create and run its own exchange; or, if a state decides not to run its own exchange, residents of that state can shop on an exchange that will be run by the federal government; or, a state can partner with the federal government, and the state and federal government share responsibility for operating that state’s exchange. No matter what each state decides to do, an Exchange is available to residents in every state and the health insurance plans that are made available on the Exchange are the ACA Exchange Plans. Among other things, the others: In the District of Columbia, GHMS and CFBC offered plans through the District of Columbia Exchange called DC Health Link for plan years 2014, 2015 and 2016. In Maryland, CFM, GHMS, and CFBC and offered plans through the Maryland Health Benefit Exchange called the “Maryland Health Connection” for plan years 2014, 2015 and 2016. In Virginia, CareFirst BCBS and CFBC offered plans on the Virginia Exchange called the Virginia Health Insurance Exchange for plan year 2014; for plan year 2015, CareFirst BCBS, GHMS, and CFBC offered plans; for plan year 2016 GHMS and CFBC offered plans. JURISDICTION AND VENUE 24. This Court has subject matter jurisdiction over this action based on diversity of citizenship under the Class Action Fairness Act and 28 U.S.C. § 1332(d)(2). The amount in controversy, exclusive of interest and costs, exceeds the sum or value of five million dollars ($5,000,000) and is a class action in which members of the Class are citizens of states different from Defendants. Further, greater than two-thirds of the members of the Class reside in states other than the state in which Defendants are citizens. 25. The Court also has federal question subject matter jurisdiction based on the ACA claims asserted herein. 26. In addition, this action is brought by Plaintiffs pursuant to ERISA § 502(a)(3), 29 U.S.C. § 1132(a)(3), to remedy Defendants’ violations of ERISA §§ 404(a) and 405(a), 29 U.S.C. §1104(a) and § 1105(a). This Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1331 and ERISA § 502(e)(1), 29 U.S.C. § 1132(e)(1). Moreover, ERISA § 502(e)(2), 29 U.S.C. § 1132(e)(2), provides for nationwide service of process. All Defendants are residents of the United States and subject to service in the United States, and this Court therefore has personal jurisdiction over them. Venue is proper in this district pursuant to ERISA § 502(e)(2), 29 U.S.C. § 1132(e)(2) and 28 U.S.C. § 1391(b), because Defendants reside or may be found in this district. ACA provides tax credits and subsidies for individuals who qualify, to help make insurance more affordable, when they purchase insurance on the Exchange. 27. This Court also has personal jurisdiction over Defendants pursuant to Fed. R. Civ. P. 4(k)(1)(A) because they would all be subject to the jurisdiction of a court of general jurisdiction in the District of Columbia. Each Defendant systematically and continuously conducts business in the District of Columbia and otherwise has minimum contacts with the District of Columbia sufficient to establish personal jurisdiction. Each Defendant is authorized to do business and is conducting business throughout the United States, including in this District, authorized to market and sell, and have in fact marketed and sold health insurance and healthcare products to citizens in this District, has sufficient minimum contacts with the various states of the United States, including this District, and/or sufficiently avails itself of the markets of the various states of the United States, including in this District, through its promotion, sales, and marketing within the United States, including in this District, to render the exercise of personal jurisdiction by this Court permissible. 28. Venue is proper in this District under 28 U.S.C. § 1391(b) because a substantial part of the events giving rise to this action occurred in this District and Defendants regularly conduct and transact business in this District and are therefore subject to personal jurisdiction in this District. Venue is also proper because Defendants are authorized to conduct business in this District and have intentionally availed themselves of the laws and markets within this District through promotion, marketing, and sales in this District. FACTUAL ALLEGATIONS A. Breastfeeding is a National Public Health Policy. 29. The protection, promotion and support of breastfeeding have been a national public policy for over 25 years. In October 2000, former Surgeon General David Satcher, M.D., Ph.D. issued the HHS Blueprint for Action on Breastfeeding, then reiterating the commitment of previous Surgeons General to support breastfeeding as a public health goal. See http://www.pnmc-hsr.org/wp-content/uploads/2011/01/BreastfeedingBlueprint.pdf (last visited 9/21/2016). 30. Breastfeeding, with its many known health benefits for infants, children, and mothers, is a key strategy to improve public health. According to the CDC, breastfeeding is one of the most effective preventive measures mothers can take to protect their health and that of their children. CDC, Strategies to Prevent Obesity and Other Chronic Diseases: The CDC Guide to Strategies to Support Breastfeeding Mothers and Babies. Atlanta: U.S. Department of Health and Human Services, 2013, available at: http://www.cdc.gov/breastfeeding/pdf/BF-Guide- 508.PDF (last visited 9-7-16). 31. In 2011, Regina M. Benjamin, M D., M.B.A. Vice Admiral U.S. Public Health Service Surgeon General and Kathleen Sebelius the then HHS Secretary jointly issued the HHS Call to Action specifying the society-wide responsibilities to encourage and support breastfeeding (“HHS Call to Action”). HHS, The Surgeon General's Call to Action to Support U.S. Department of Health and Human Services. The Surgeon General's Call to Action to Support Breastfeeding. 2011, available at: http://www.ncbi.nlm.nih.gov/books/NBK52682/pdf/ Bookshelf_NBK52682.pdf (last visited 9/7/2016). 32. Further, numerous prominent medical organizations, including but not limited to, the American Academy of Pediatrics, the American Academy of Family Physicians, the American College of Obstetricians and Gynecologists, the American College of Nurse- Midwives, the American Dietetic Association, and the American Public Health Association, recommend that breastfeeding commence immediately upon birth and continue uninterrupted until the child’s first birthday. HHS Call to Action, supra, p. 4. 33. Therefore, access to and coverage for Comprehensive Lactation Benefits advances the long held public policy goal to improve the health of Americans by increasing access and diminishing the cost barriers to sustained breastfeeding during the first year of a child’s life. As detailed in the HHS Call to Action: (a) the American Academy of Pediatrics stated, "Human milk is species- specific, and all substitute feeding preparations differ markedly from it, making human milk uniquely superior for infant feeding. Exclusive breastfeeding is the reference or normative model against which all alternative feeding methods must be measured with regard to growth, health, development, and all other short- and long-term outcomes." HHS Call to Action, supra, p. 5. (b) “The health effects of breastfeeding are well recognized and apply to mothers and children in developed nations such as the United States as well as to those in developing countries. Breast milk is uniquely suited to the human infant's nutritional needs and is a live substance with unparalleled immunological and anti-inflammatory properties that protect against a host of illnesses and diseases for both mothers and children.” Id. at p. 1. (c) Quality sustained breastfeeding provides health benefits to the mother, including lowered risk of breast and ovarian cancers, and long term health benefits to the infant, which in turn enhance the health of society and decrease costs due to poor childhood and adult health. Breast-fed babies suffer lower rates of hospitalizations for lower respiratory tract diseases in the first year, gastrointestinal infection, acute ear infection, Sudden Infant Death Syndrome, childhood leukemia, asthma, type 2 diabetes, and childhood obesity. Id. at p. 2. 34. The HHS Call to Action also cited psychological, economic and environmental benefits attributed to breastfeeding. Specifically that: breastfeeding may reduce the risk of postpartum depression; families who follow optimal breastfeeding practices could save more than $1,200 to $1,500 a year in expenditures for infant formula in the first year alone; If 90% of the US families followed guidelines to breastfeed exclusively for six months, the US would save $13 billion annually from reduced direct medical and indirect costs4 and the cost of premature death; if 80% of families followed the guidelines, $10.5 billion a year would be saved; and, environmentally, breastfeeding requires minimal additional resources (a small amount of 4 Costs related to illnesses reduced or avoided through breast-feeding include: sudden infant death syndrome, hospitalizations for lower respiratory tract infection in infancy, atopic dermatitis, childhood leukemia, childhood obesity, childhood asthma and type 1 diabetes mellitus. additional calories is all that is required) compared to infant formula that requires a significant carbon footprint of energy to produce formula, paper containers to store and ship that largely end up in landfills and fuel to prepare, ship and store. Id. at pp. 3-4. 35. The importance of education is a central theme in the HHS Call to Action: “Unfortunately, education about breastfeeding is not always readily available to mothers nor easily understood by them. Many women rely on books, leaflets, and other written materials as their only source of information on breastfeeding, but using these sources to gain knowledge about breastfeeding can be ineffective, especially for low income women, who may have more success relying on role models. The goals for educating mothers include increasing their knowledge and skills relative to breastfeeding and positively influencing their attitudes about it.” HHS Call to Action, supra, p. 11,(emphasis added). 36. The HHS Call to Action also highlighted that mothers need “access to trained individuals who have established relationships with members of the health care community, are flexible enough to meet mother’s needs outside of the traditional work hours and locations, and provide consistent information.” Id. Yet, outside of the hospital setting, mothers “may have no means of identifying or obtaining the skilled support needed to address their concerns about lactation and breastfeeding; further, there may be barriers to reimbursement for needed lactation care and services.” HHS, Call to Action, supra, p. 25. 37. According to the HHS Call to Action, International Board Certified Lactation Consultants (“IBCLCs”) are credentialed health care professionals specializing in the clinical management of breastfeeding, are the “only health care professionals certified in lactation management”, and are certificated by the International Board of Lactation Consultant Examiners which operates “under the direction of the U.S. National Commission for Certifying Agencies and maintains rigorous professional standards.” Id. at p. 27. IBCLCs work in many health care settings, such as hospitals, birth centers, physicians’ offices, public health clinics, and their own offices. There are over 15,000 certified IBCLCs in the United States; average charges range from $120 - $350 per session, based on location. 38. In 2013, the CDC set objectives, illustrated in the chart below, to promote, support, and ultimately increase breastfeeding rates in the United States by 2020. See CDC, Strategies to Prevent Obesity and Other Chronic Diseases: The CDC Guide to Strategies to Support Breastfeeding Mothers and Babies. Atlanta: HHS; 2013, available at: http://www.cdc.gov/breastfeeding/pdf/BF-Guide-508.PDF (last visited 9/7/2016). 39. Over the past few decades, the rate of breastfeeding has increased, but disparities have persisted. “Research suggests that 1) race and ethnicity are associated with breastfeeding regardless of income, and 2) income is associated with breastfeeding regardless of race or ethnicity.” Id. at p. 9. Wall Street Journal, 5 Reasons American Women Won’t Breastfeed, April 14, 2014, available at: http://blogs.wsj.com/briefly/2014/04/14/5-reasons-american-women-wont-breastfeed/ (last visited 9/21/ 2016). 40. As reported on September 3, 2016 by The New York Times Editorial Board, in “America’s Shocking Maternal Deaths”, the rate at which women die during pregnancy or shortly after childbirth has risen materially in the United States, with the United States having the second-highest maternal mortality rate among 31 members of the Organization for Economic Cooperation and Development; only Mexico had a higher rate. For example, in Texas “the maternal mortality rate doubled from 17.7 per 100,000 live births in 2000 to 35.8 in 2014. Compare that with Germany, which had 4.1 deaths per 100,000 live births in 2014.” As the article asserted: “A big part of the problem is the inequality embedded in America’s health care system. The [ACA] made health insurance more available, but millions of families still cannot afford the care they need.” The inequality of the United States health care system exists directly because of conduct of the type alleged herein: insurers’ bolstering their bottom lines by avoiding costs of mandated women’s health care services and shifting the cost, which is more than just dollars and cents, to women. 41. Addressing the pervasive disparities that existed in the American health care system (and continue to) and securing for all women and families the immense health benefits of breastfeeding are the impetuses of the preventive service mandates of the ACA and its inclusion of providing access to and coverage of Comprehensive Lactation Benefits. B. Breastfeeding and Comprehensive Lactation Benefits Are Time-Sensitive. 42. Importantly, and obviously, breastfeeding is an extremely time-sensitive event. Initiating breastfeeding within the first hours and days of a newborn’s life can significantly impact its success. HHS Call to Action, supra, pp. 21-22. 43. Moreover, the need for Comprehensive Lactation Benefits often arises days after birth, when the mother and child are home, and during this postpartum period the provision of Comprehensive Lactation Benefits is essential to the continuation of successful breastfeeding. Id. at p. 13. Further, continuation of breastfeeding upon illness or a mother’s return to work presents another critical milestone; it is at such times that a mother may seek Comprehensive Lactation Benefits, as well as access to breastfeeding pumps. Id. at pp. 29-32. 44. Lactation support, encouragement, education and counseling must be timely and occur during pregnancy, at the time of birth and until the child is weaned. Lactation equipment may be necessary immediately following birth, at one or several times during the first year, or continuously during the first year. Immediate access to lactation services and products is critical because the window to address such needs is narrow. C. Comprehensive Lactation Benefits Are a Preventive Service Required by the ACA. 45. The ACA provides the following in relevant part: A group health plan and a health insurance issuer offering group or individual health insurance coverage shall, at a minimum provide coverage for and shall not impose any cost sharing requirements for . . . (4) with respect to women, such additional preventive care and screenings . . . as provided for in comprehensive guidelines supported by the Health Resources and Services Administration for purposes of this paragraph... 42 U.S.C. § 300gg-13(a)(4). 46. The required preventive services derive from recommendations made by four expert medical and scientific bodies – the U.S. Preventive Services Task Force (“USPSTF”), the Advisory Committee on Immunization Practices, the HRSA, and the Institute of Medicine committee on women’s clinical preventive services. The USPSTF is an independent panel of sixteen nationally recognized experts in primary care and prevention who systematically reviews the evidence of effectiveness and develops recommendations for clinical preventive services. The panel is convened by the Agency for Healthcare Research and Quality, which is part of HHS. Recommendations issued by the USPSTF are considered to be the "gold standard" for clinical preventive services. When analyzing a particular preventive service, the USPSTF evaluates the balance of potential benefits against harms, and then assigns a letter grade to the service. A letter grade of "A" or "B" means the service is recommended and that the benefit is moderate to substantial.5 In its Final Recommendation Statement issued in October 2008, USPSTF recommended “intervention during pregnancy and after birth to promote and support breastfeeding” with a grade B.6 47. Section 2713 of the Public Health Service Act states: “Non-grandfathered group health plans and health insurance coverage offered in the individual or group market are required to cover without the imposition of any cost-sharing requirements, the following items or services: Evidenced-based items or services that have in effect a rating of “A” or “B” in the current recommendations of the United States Preventive Services Task Force (USPSTF) with respect to the individual involved, except for the recommendations of the USPSTF regarding breast cancer screening, mammography, and prevention issued in or around November 2009, which are not considered in effect for this purpose; * * * With respect to women, evidence-informed preventive care and screening provided for in comprehensive guidelines supported by HRSA, to the extent not included in certain recommendations of the USPSTF….” 48. The comprehensive HRSA Guidelines, Women’s Preventive Services: Required Health Plan Coverage Guidelines, were adopted and released on August 1, 2012, and expanded the previously required intervention to promote and support breastfeeding by requiring new plans, as of August 1, 2012, to cover comprehensive prenatal and postnatal lactation support and counseling, and breastfeeding equipment and supplies, such as breast pumps, for the duration of breastfeeding without co-payments, deductibles, or co-insurance.7 5 See USPSTF, available at http://www.uspreventiveservicestaskforce.org/ (last visited 5/ 11/2016). 6 See USPSTF, available at http://www.uspreventiveservicestaskforce.org/Page/Document/UpdateSummaryFinal/breastfeedi ng-counseling (last visited 10/26/2016). 7HHS, Women’s Preventive Services Guidelines, available at http://www.hrsa.gov/womensguidelines/ (last visited 10/26/2016). 49. Section 1001 of the ACA amends § 2713 of the Public Health Services Act to provide that all non-grandfathered group health plans and health insurance issuers offering group or individual coverage are required to cover one hundred percent (100%) of the costs of certain recommended preventive services for women, including “comprehensive lactation support and counseling and costs of renting or purchasing breastfeeding equipment for the duration of breastfeeding.”8 50. The ACA requirement mandating comprehensive prenatal and postnatal lactation support, supplies, and counseling applies to all private plans – including individual, small group, large group, and self-insured plans in which employers contract administrative services to a third party payer – with the exception of those plans that maintain “grandfathered” status.9 51. The DOL, HHS, and the Treasury Department (the “Departments”) are charged with establishing regulations and guidelines that specify the implementation of the ACA. The Departments have jointly prepared Frequently Asked Questions (“FAQs”) regarding the implementation of the ACA, including FAQs regarding preventive services and Comprehensive Lactation Benefits. These FAQs are publicly available, including through the DOL and CMS websites. 52. In the FAQs Part XXIX, dated October 23, 2015, the Departments reiterated previous guidance and “answer questions from stakeholders to help people understand the laws 8 See FAQs About Affordable Care Act Implementation (Part XII), Q20, which states that “coverage of comprehensive lactation support and counseling and costs of renting or purchasing breastfeeding equipment extends for the duration of breastfeeding,” available at www.dol.gov/ebsa/faqs/faq-aca12.html and www.cms.gov/CCIIO/Resources/Fact-Sheets-and- FAQs/aca_implementation_faqs12.html (last visited 10/10/2016). 9 To be classified as “grandfathered,” plans must have (1) been in existence prior to March 23, 2010; (2) refrained from making significant changes to the benefits or plan participants’ costs since that time; and (3) had at least one person enrolled in the plan on March 23, 2010 and continually covered at least one individual since that date. While there is no specific termination date for grandfathered status, it is expected that eventually all plans will lose their grandfathered status. As of 2014, only about a quarter of workers with employer sponsored coverage participated were in grandfathered plans. and benefit from them, as intended.” See https://www.dol.gov/sites/default/files/ebsa/about- ebsa/our-activities/resource-center/faqs/aca-part-xxix.pdf (last visited 10/18/2016). 53. Questions 1 through 5 of the FAQs Part XXIX, which specifically address Comprehensive Lactation Benefits under the ACA are provided here (emphasis added): Q1: Are plans and issuers required to provide a list of the lactation counseling providers within the network? Yes. The HRSA guidelines provide for coverage of comprehensive prenatal and postnatal lactation support, counseling, and equipment rental as part of their preventive service recommendations, including lactation counseling…group health plans subject to the Employee Retirement Income Security Act (ERISA)…must provide a Summary Plan Description (SPD) that describes provisions governing the use of network providers, the composition of the provider network, and whether, and under what circumstances, coverage is provided for out-of-network services …issuers of qualified health plans (QHPs) in the individual market Exchanges and the SHOPs currently must make their provider directories available online. Q2: My group health plan has a network of providers and covers recommended preventive services without cost sharing when such services are obtained in- network. However, the network does not include lactation counseling providers. Is it permissible for the plan to impose cost sharing with respect to lactation counseling services obtained outside the network? No. As stated in a previous FAQ, while nothing in the preventive services requirements under section 2713 of the PHS Act or its implementing regulations requires a plan or issuer that has a network of providers to provide benefits for preventive services provided out-of-network, these requirements are premised on enrollees being able to access the required preventive services from in-network providers…if a plan or issuer does not have in its network a provider who can provide a particular service, then the plan or issuer must cover the item or service when performed by an out-of-network provider and not impose cost sharing with respect to the item or service. Therefore, if a plan or issuer does not have in its network a provider who can provide lactation counseling services, the plan or issuer must cover the item or service when performed by an out-of-network provider without cost sharing. Q3: The State where I live does not license lactation counseling providers and my plan or issuer will only cover services received from providers licensed by the State. Does that mean that I cannot receive coverage of lactation counseling without cost sharing? No. Subject to reasonable medical management techniques, lactation counseling must be covered without cost sharing by the plan or issuer when it is performed by any provider acting within the scope of his or her license or certification under applicable State law. Lactation counseling could be provided by another provider type acting within the scope of his or her license or certification (for example, a registered nurse), and the plan or issuer would be required to provide coverage for the services without cost sharing. Q4: A plan or issuer provides coverage for lactation counseling without cost sharing only on an inpatient basis. Is it permissible for the plan or issuer to impose cost sharing with respect to lactation counseling received on an outpatient basis? No. If a recommendation or guideline does not specify the frequency, method, treatment, or setting for the provision of a recommended preventive service, then the plan or issuer may use reasonable medical management techniques to determine any such coverage limitations. However, it is not a reasonable medical management technique to limit coverage for lactation counseling to services provided on an in-patient basis. Some births are never associated with a hospital admission (e.g., home births assisted by a nurse midwife), and it is not permissible to deny coverage without cost sharing for lactation support services in this case. Moreover, coverage for lactation support services without cost sharing must extend for the duration of the breastfeeding which, in many cases, extends beyond the in-patient setting for births that are associated with a hospital admission. Q5: Are plans and issuers permitted to require individuals to obtain breastfeeding equipment within a specified time period (for example, within 6 months of delivery) in order for the breastfeeding equipment to be covered without cost sharing? No. The requirement to cover the rental or purchase of breastfeeding equipment without cost sharing extends for the duration of breastfeeding, provided the individual remains continuously enrolled in the plan or coverage.10 54. Among other things, the FAQs confirm that: (a) Defendants are required to provide a list of network lactation consultants. 10 CMS, “FAQs About Affordable Care Act Implementation (Part XXIX) And Mental Health Parity Implementation” (October 23, 2015), Q1-5, available at: https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/FAQs-Part- XXIX.pdf (last visited 10/14/2016) (emphasis added). (b) If a plan does not have in-network lactation consultant providers, the plan may not impose cost sharing for lactation consulting services obtained out of network. (c) If a state does not license lactation counselors and plans require providers to be licensed by the state, and the service could not be provided in the scope of another type of provider license (such as a registered nurse), the plan will have to provide coverage for the services without cost sharing. (d) Plans may not limit lactation counseling services without cost sharing to an inpatient basis. (e) Coverage for lactation support services must extend for the duration of breastfeeding. (f) Plans may not require individuals to obtain equipment within a specified time period, such as within six months of delivery, in order for it to be covered without cost sharing. 55. The fact of having in network providers of the required preventive service is key and is highlighted in the following relevant subsections of 29 CFR 2590.715-2713(a)(3) (titled “Coverage of preventive health services.”, emphasis added): “(3) Out-of-network providers - (i) Subject to paragraph (a)(3)(ii) of this section, nothing in this section requires a plan or issuer that has a network of providers to provide benefits for items or services described in paragraph (a)(1) of this section that are delivered by an out-of-network provider. Moreover, nothing in this section precludes a plan or issuer that has a network of providers from imposing cost- sharing requirements for items or services described in paragraph (a)(1) of this section that are delivered by an out-of-network provider. (ii) If a plan or issuer does not have in its network a provider who can provide an item or service described in paragraph (a)(1) of this section, the plan or issuer must cover the item or service when performed by an out-of-network provider, and may not impose cost sharing with respect to the item or service.” 56. Plainly, if an insurer maintains a network of providers for Comprehensive Lactation Benefits, then an insured who elects or prefers to go to an out-of-network provider may have a cost imposed on her. Plaintiffs and the members of the Class, however, had no such choice. Yet, Defendants have forced Plaintiffs and the members of the Class to either forego the preventive services or go out-of-network and pay the price. That violates the ACA, the anti- discrimination provisions of the ACA, the terms of the plan documents and ERISA. D. Defendants Have Engaged in a Systemic Practice With Respect to Comprehensive Lactation Benefits that Violates the Preventive Service Mandates of the ACA. 57. CareFirst provides and serves as an administrator for non-grandfathered health plans that are required to cover certain preventive health services and screenings, including Comprehensive Lactation Benefits, as alleged supra. 58. In addition, CareFirst’s health plans and plan documents set forth, in substantially the same manner, that each health plan provides preventive care benefits in accordance with the ACA, including for Breastfeeding support, supplies and consultation. For example, the CFBC plans provide: 59. CareFirst’s website provides a “health library” that directs women, with breastfeeding services, to get assistance and specifically so from IBCLCs. The following is just a sample of such statements from CareFirst’s health library: Source: http://carefirst.staywellsolutionsonline.com/ (last visited 10/27/2016) Source: http://carefirst.staywellsolutionsonline.com/Search/90,P02650 (last visited 10/26/2016) Source: http://carefirst.staywellsolutionsonline.com/Search/90,P02878 (last visited 10/26/2016) Source: http://carefirst.staywellsolutionsonline.com/Search/90,P02886 (last visited 10/26/2016) 60. With the expansion of women’s preventive services beginning August 1, 2012, “about 47 million women gained guaranteed access to additional preventive services without paying more at the doctor's office.” HHS, Affordable Care Act Rules on Expanding Access to Preventive Services for Women, http://www.hhs.gov/healthcare/facts-and-features/fact- sheets/aca-rules-on-expanding-access-to-preventive-services-for-women/index.html (last visited 9/7/2016) (emphasis added). And, under the ACA provisions, the nearly 4 million children born annually in the United States and their mothers are entitled to timely, comprehensive lactation education and support. CDC, National Vital Statistics Report, Vol. 4, number 1, at p. 1 (Jan. 1, 2015) (available at: http://www.cdc.gov/nchs/data/nvsr/nvsr64/nvsr64_01.pdf (last visited 9/7/2016). 61. Defendants, however, have prevented women from getting the guaranteed access to timely Comprehensive Lactation Benefits by circumventing the clear requirement that health plans provide, at no cost, Comprehensive Lactation Benefits as a preventive service, just like all other preventive services. 62. In contravention of the ACA’s preventive health services mandate and CareFirst’s plan documents, Defendants have failed to provide mandated preventive benefits coverage for Comprehensive Lactation Benefits to the detriment of plan members including by (among other things): (a) failing to establish a network of lactation consultants; (b) improperly attributing an out-of-network characterization to Comprehensive Lactation Benefits in response to insureds’ inquires and when such benefits are sought; (c) imposing major administrative barriers to insureds seeking to receive information about and access to Comprehensive Lactation Benefits; (d) failing to construct a list of in-network of providers of Comprehensive Lactation Benefits; (e) failing to provide any list of in-network providers of Comprehensive Lactation Benefits including failing to provide such list either by mail, through customer representatives that provide phone consultation to members, or through the CareFirst website; and (f) providing inaccurate information to insures, including in the Explanation of Benefits (“EOBs”), with respect to the cost of Comprehensive Lactation Benefits, state a denial of coverage for 100% of the cost of Comprehensive Lactation Benefits, treat it as an out-of-network benefit, and advise the member that the provider may balance bill the member for the difference between (a) the cost charged by the provider and (b) the amount allowed by the out of network benefit. 63. Defendants have, contrary to the plain intent and purpose of the ACA’s imposition of no-cost preventive services and the inclusion of Comprehensive Lactation Benefits as a preventive service, improperly shifted costs to the insured by failing to establish a network of providers of Comprehensive Lactation Benefits, and that such network is made known to and assessable by the Plaintiffs and insureds. 64. In addition to general administrative burdens, CareFirst has exhibited a pattern of conduct intentionally designed to: (1) frustrate a woman’s exercise of the appeal rights and to encourage women to give up seeking reimbursement and (2) deny providers guidance that would aid other plan beneficiaries in seeking coverage or reimbursement. Such abuses include: inconsistent guidance from CareFirst representatives, lack of timely responsiveness for pre- authorization or provider requests and changing purportedly applicable codes for Comprehensive Lactation Benefits. 65. Defendants have also wrongly erected significant administrative barriers that prevent and deter women from obtaining timely Comprehensive Lactation Benefits. Among these barriers, Defendants have failed to establish a network of providers and failed to provide plan participants with any list or directory that clearly disclose the in-network providers (if any) of Comprehensive Lactation Benefits.11 66. For example, CareFirst’s website (last visited 10/25/2016) provides “No results found” for lactation, breastfeeding, or IBCLC provider searches within 30 miles (greatest distance searchable) of Washington, D.C. for BlueChoice, Health Blue and Blue Preferred (PPO) 11 At times, insureds seeking the identity of a covered Comprehensive Lactation Benefit provider have been told to try to find one in a hospital or clinical practice group (obstetricians – gynecologists, pediatricians, and other providers of maternal and child care). Physicians and clinicians who “are ambivalent about breastfeeding or who feel inadequately trained to assist patients with breastfeeding may be unable to properly counsel their patients on specifics about breastfeeding techniques, current health recommendations on breastfeeding, and strategies to combine breastfeeding and work.” HHS, Call to Action, supra, p. 15. In a recent study of obstetricians’ attitudes, 75% admitted they had either inadequate or no training in how to appropriately educate mothers about breastfeeding. The information on breastfeeding included in medical texts is often incomplete, inconsistent, and inaccurate.” Id. at p. 26. 67. In addition, in response to requests by insureds for the identity of in-network providers of Comprehensive Lactation Benefits, Defendants take several weeks to issue a response that there is no in-network providers. 68. Also, Defendants have told insureds who are seeking Comprehensive Lactation Benefits to seek “prior authorization” for the preventive service, which takes weeks to approve before an insured may have provider to render the Comprehensive Lactation Benefits, assuming it is not too late. 69. Time is of the essence with breastfeeding. Mothers that seek out and need what was to be a no-cost guaranteed ACA women’s preventive service, have become victims to Defendants’ barriers, erected to prevent mothers from timely getting, if they can get at all, Comprehensive Lactation Support and then causing mothers to, if they get the Support, to pay 70. Each named Plaintiff, like the members of the Class, has been denied through Defendants’ wrongful conduct the women’s preventive service benefit for Comprehensive Lactation Benefits that is required by the ACA. Plaintiff Ferrer 71. Before the birth of her child on November 5, 2015, Plaintiff Ferrer contacted CFI to ask about coverage for lactation services. The CFI representative that she spoke with confirmed that CFI did not have any preferred providers for lactation services. The CFI representative therefore advised that Plaintiff Ferrer could seek up to six consultations from any provider and it would be covered as “in-network”. 72. Shortly after the birth of her child, Plaintiff Ferrer experienced difficulties with breastfeeding. Plaintiff Ferrer sought lactation support and counseling from the Breastfeeding Center of Greater Washington (“Breastfeeding Center”) on three occasions: November 12, 2015; November 28, 2015; and December 17, 2015. Plaintiff Ferrer paid $280 for the first visit and $180 for each of the two subsequent appointments, for a total out-of-pocket expenditure of $640. 73. Following her appointments at the Breastfeeding Center, Plaintiff Ferrer submitted the November 12, 2015 and November 28, 2015 under her CFI plan, which she was insured by through November 30, 2015, and submitted the December 17, 2015 claim under her CFBC plan, which went into effect on December 1, 2015. Each claim was denied as “not a covered service” under the plans. 74. Plaintiff Ferrer submitted a written appeal contesting the denial of her claims. On March 16, 2016, CFBC issued a Notice of Appeal Decision that approved coverage for all three of Plaintiff Ferrer’s lactation consultation claims at “the Blue Choice in-network benefit level.” The EOB forms indicated that CFBC would reimburse a portion of Plaintiff Ferrer’s out-of- pocket costs for her lactation consultations, but did not offer any explanation as to how the partial reimbursements were calculated or why the reimbursement amounts differed. The EOBs reflected the following reimbursement amounts: (a) November 11, 2015 Appointment: CareFirst reimbursed $79.27 of the $280. (b) November 28, 2015 Appointment: CareFirst reimbursed $79.27 of the $180. (c) December 17, 2015 Appointment: CareFirst reimbursed $75.31 of the $180. 75. Accordingly, because of Defendants’ wrongful conduct, Plaintiff Ferrer was denied the no-cost ACA preventive service to which she was entitled. Plaintiff Ferrer estimates that she spent approximately 10-12 hours trying to have her claims for lactation support processed and paid by CFI and CFBC, only to be reimbursed $233.85. Plaintiff Ferrer did not receive any additional reimbursements from CFI or CFBC for her lactation consultations, resulting in an outstanding out-of-pocket expenditure of $406.15. Plaintiff Haddad 76. Following the birth of her child in February 2015, Plaintiff Haddad sought lactation support and counseling. On February 22, 2015, Plaintiff Haddad had an in-home lactation consultation provided by Milk Matters Lactation Services, for which she paid $190 out- of-pocket. Then, on April 28, 2015, Plaintiff Haddad sought support and counseling from the Breastfeeding Center, for which she paid $180 out-of-pocket. 77. In June 2015, Plaintiff Haddad emailed CareFirst BCBS to ask about coverage for lactation services. CareFirst BCBS responded that it “does not have contracting lactation counseling providers as a specialty since these type services may be rendered by [another] provider type[]….”. 78. In October 2015, Plaintiff Haddad submitted to CareFirst BCBS the Breastfeeding Center claim and Milk Matters Lactation Services bill which totaled $370 in out-of-pocket expenditures. 79. After spending a considerable amount of time trying to obtain coverage for lactation benefits, CareFirst BCBS only processed the Breastfeeding Center claim and issued Plaintiff Haddad a reimbursement for purported “allowed charges” of $79.27, leaving Plaintiff Haddad with an out-of-pocket expenditure of $290.73. 80. Accordingly, because of Defendants’ wrongful conduct, Plaintiff Haddad was denied the no-cost ACA preventive service to which she was entitled. Plaintiff Sorscher 81. Following the birth of her child on July 20, 2014, Plaintiff Sorscher sought lactation support and counseling from the Breastfeeding Center on July 23, 2014. She paid $180 out-of-pocket for the Breastfeeding Center consultation. 82. On or about September 17, 2014, Plaintiff Sorscher contacted CareFirst BCBS to ask about lactation benefits and coverage. The CareFirst BCBS representative informed Plaintiff Sorscher that there were no in-network CareFirst BCBS lactation support providers in her area. The representative stated that lactation services would be covered if provided by Plaintiff Sorscher’s child's in-network pediatrician, or as an inpatient service through the hospital where she gave birth. Subsequently, Plaintiff Sorscher confirmed that her child’s in-network pediatrician, Mary’s Center, did not provide lactation support services. Plaintiff Sorscher also verified that the hospital where she gave birth, Washington Hospital Center, would not provide lactation support services once a mother was discharged. 83. Plaintiff Sorscher submitted the Breastfeeding Center claim for coverage to CareFirst BCBS. On or around October 7, 2014, Plaintiff Sorscher received an EOB from CareFirst BCBS that indicated that of the $180 lactation service fee, only $79.27 was considered “allowed charges”. The EOB did not offer any explanation as how the “allowed charge” amount was calculated. Furthermore, the EOB applied “allowed charges” to Plaintiff Sorscher’s out-of- network deductible as she had not reached her annual deductible. Therefore, Plaintiff Sorscher paid the entire $180 lactation consultation fee. 84. Plaintiff Sorscher submitted a written appeal contesting the denial of her claim. Thereafter, she received a second EOB, dated November 3, 2014, adjusting the lactation claim. The $79.27 amount was no longer applied to her out-of-network annual deductible and enclosed was a check for the allowed charges of $79.27. Plaintiff Sorscher also received a written notice of the Grievance Decision dated November 20, 2014, which stated that the billed amount was higher than some purported “maximum payment” CareFirst BCBS “allowed”; therefore, reimbursement was limited to $79.27. 85. Accordingly, because of Defendants’ wrongdoing, Plaintiff Sorscher was denied the no-cost ACA preventive service to which she was entitled. Plaintiff Sorscher estimates that she spent approximately 10 hours trying to have her claims for lactation support processed and paid by CareFirst BCBS, only to be reimbursed $79.27. She did not receive any additional reimbursements from CareFirst BCBS for her lactation consultation, resulting in an outstanding out-of-pocket expenditure of $100.73. E. Defendants’ Conduct Violates the Non-Discrimination Provision of the ACA. 86. Section 1557(a) of the ACA contains a “nondiscrimination” provision that provides, in relevant part: [A]n individual shall not, on the ground prohibited under . . . title IX of the Education Amendments of 1972 (20 U.S.C. 1681 et seq.) . . . be excluded from participation in, be denied the benefits of, or be subjected to discrimination under, any health program or activity, any part of which is receiving Federal financial assistance, including credits, subsidies, or contracts of insurance, or under any program or activity that is administered by an Executive Agency or any entity established under this title (or amendments). The enforcement mechanisms provided for and available under … title IX … shall apply for purposes of violations of this subsection. 42 U.S.C. § 18116(a). 87. The ACA nondiscrimination provision specifically prohibits discrimination on the basis of those grounds that are prohibited under other federal laws, including Title IX of the Education Amendments of 1972, 20 U.S.C. § 1681(a) (“Title IX”). 88. Title IX prohibits discrimination on the basis of sex. Plaintiffs and the members of the Class are being excluded from participation in, being denied the benefits of, and being subjected to discrimination by Defendants (in Defendants’ capacity as insurers and administrators of insurance plans) on the basis of their sex. 89. By their conduct alleged herein, Defendants are providing disparate levels of health benefits, and specifically ACA mandated preventive services, for women. 90. Defendants are subject to Section 18116 because Defendants are health programs and activities which are “receiving Federal financial assistance, including credits, subsidies, or contracts of insurance” may not discriminate on the basis of sex. See 42 U.S.C. § 18116(a) (incorporating Title IX by reference). 91. Defendants are health programs and activities because they provide and administer health insurance and plans. 92. Defendants are receiving Federal financial assistance, including credits, subsidies and contracts of insurance, at least in the following ways: 93. Defendants have entered into agreements or contracts of insurance with the federal government. Defendants provide health plans to federal employees who are covered through the Federal Employees Health Benefits (“FEHB”) Program. See https://www.opm.gov/healthcare-insurance/healthcare/plan- information/plans/2016/state/md/rates; https://www.opm.gov/healthcare- insurance/healthcare/plan-information/plans/2016/state/dc (last visited 10/26/2016). 94. Defendants also provide health plans through the ACA Exchanges (see ¶¶22-23 supra) and thereby receive Federal financial assistance in the form of the direct and/or indirect subsidies, including the “premium tax credit”, provided for under the ACA for qualified individuals who purchase health insurance from Defendants through the Exchange. A premium tax credit is a refundable tax credit designed to help eligible individuals and families with low or moderate income afford health insurance purchased through the Exchange. When enrolled in an Exchange plan, the insured can choose to have the Exchange compute an estimated credit that is paid to the insurance company to lower what the insured pays for monthly premiums (advance payments of the premium tax credit, or APTC). See http://fas.org/sgp/crs/misc/R41137.pdf (last visited 10/25/2016). On information and belief, Defendants have received such credits. 95. In addition to the premium credits, ACA establishes subsidies that are applicable to cost-sharing expenses. The HHS Secretary will provide full reimbursements to exchange plans that provide cost-sharing subsidies. It was estimated in early 2014, that such cost-sharing subsidies would increase federal outlays from FY2015 through FY2024 by $167 billion. See http://fas.org/sgp/crs/misc/R41137.pdf (last visited 10/26/2016). On information and belief, Defendants have received such credits. 96. Furthermore, the federal government routinely provides grants and/or other financial assistance to CareFirst. A review of the federal-government-run www.USASpending.gov – a website mandated by the Federal Funding Accountability and Transparency Act of 2006 (S. 2590) to give the American public access to information on how their tax dollars are spent – indicates that CareFirst, Inc. received nearly $17 million in grants from the federal government (HHS) between the years 2012 and 2015.12 97. Defendants violated and continue to violate Section 1557(a) of the ACA on the basis of sex discrimination because, as set forth herein, Defendants refuse and otherwise fails to comply with the ACA’s provisions with respect to preventive women’s care for Comprehensive Lactation Benefits. 98. By violating the women’s preventive services requirements under the ACA, plan participants have been and continue to be denied mandated access to coverage for breastfeeding 12 See https://www.usaspending.gov/Pages/AdvancedSearch.aspx?k=carefirst (last visited 5/10/2016). benefits. Defendants’ denial of benefits and unlawful cost sharing has – in addition to violating the ACA – unjustly enriched Defendants and deprived thousands of women of their mandated lactation benefits. If Defendants’ unlawful and discriminatory conduct is not foreclosed, many more mothers will be wrongfully denied the benefits they are entitled to receive under the ACA F. Defendants’ Status as, and Duties of, ERISA Fiduciaries. 99. ERISA fiduciaries include not only persons explicitly named as fiduciaries in the governing plan documents or those to whom there has been a formal delegation of fiduciary responsibility, but also any other person who in fact performs fiduciary functions. Under ERISA, a person is a fiduciary “to the extent . . . . he exercises any discretionary authority or discretionary control respecting management of such plan or exercises any authority or control respecting management or disposition of its assets. . . .,” ERISA § 3(21)(A)(i), 29 U.S.C. § 1002(21)(A)(i), or “he has any discretionary authority or discretionary responsibility in the administration of such plan.” ERISA § 3(21)(A)(iii), 29 U.S.C. § 1002(21)(A)(iii). Thus, if a Defendant exercises discretionary authority or control in managing or administering the plan, or, if it exercises any authority or control (discretionary or not) respecting management or disposition of plan assets, it is an ERISA fiduciary. 100. At all relevant times, each Defendant has been a fiduciary of the CareFirst health plans because (a) it had the authority with respect to the CareFirst health plans’ compliance with the ACA requirements; (b) it exercised discretionary authority and/or discretionary control with respect to the CareFirst health plans’ compliance with the ACA requirements; (c) it had the authority to establish a network of providers for Comprehensive Lactation Benefits for the CareFirst health plans; (d) it exercised discretionary authority and/or discretionary control with regard to establishing a network of providers for Comprehensive Lactation Benefits for the CareFirst health plans; (e) it had the authority and/or discretionary responsibility over the management and administration of preventive services as required by the ACA for the CareFirst health plans; and/or, (f) it exercised discretion over the CareFirst plans’ provider lists with respect to providers of Comprehensive Lactation Benefits, and, on information and belief, failed to establish a network of providers in order to maximize its profits and minimize its costs of coverage for ACA women’s preventive services. 101. ERISA §§ 404(a)(1)(A) and (B), 29 U.S.C. §§ 1104(a)(1)(A) & (B), provide, in pertinent part, that a fiduciary shall discharge his duties with respect to a plan solely in the interest of the participants and beneficiaries, for the exclusive purpose of providing benefits to participants and their beneficiaries, and with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims. These fiduciary duties under ERISA §§ 404(a)(1), 404(a)(1)(A), and (B) are referred to as the duties of loyalty and prudence and are the “highest known to the law.” Donovan v. Bierwirth, 680 F.2d 263, 272 n.8 (2d Cir. 1982). 102. In addition, a fiduciary that appoints another person to fulfill all or part of its duties, by formal or informal hiring, subcontracting, or delegation, assumes the duty to monitor that appointee to protect the interests of the ERISA plans and their participants. An appointing fiduciary must take prudent and reasonable action to determine whether the appointees are fulfilling their fiduciary obligations. 103. ERISA also holds fiduciaries liable for the misconduct of co-fiduciaries. ERISA § 405(a), 29 U.S.C. § 1105(a). Co-fiduciary liability is an important part of ERISA’s regulation of fiduciary responsibility. Because ERISA permits the fractionalization of the fiduciary duty, there may be, as in this case, more than one ERISA fiduciary involved in a given issue. Even if a fiduciary merely knows of a breach with which it had no connection, it must take steps to remedy that breach. See 1974 U.S.C.C.A.N. 5038, 1974 WL 11542, at 5080 (“[I]f a fiduciary knows that another fiduciary of the plan has committed a breach, and the first fiduciary knows that this is a breach, the first fiduciary must take reasonable steps under the circumstances to remedy the breach. . . .[T]he most appropriate steps in the circumstances may be to notify the plan sponsor of the breach, or to proceed to an appropriate Federal court for instructions, or bring the matter to the attention of the Secretary of Labor. The proper remedy is to be determined by the facts and circumstances of the particular case, and it may be affected by the relationship of the fiduciary to the plan and to the co- fiduciary, the duties and responsibilities of the fiduciary in question, and the nature of the breach.”). 104. ERISA § 502(a)(3), 29 U.S.C. § 1132(a)(3), authorizes individual participants and fiduciaries to bring suit “(A) to enjoin any act or practice which violates any provision of this subchapter or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this subchapter or the terms of the plan.” The remedies set forth in § 502(a)(3) include remedies for breaches of the fiduciary duties set forth in ERISA § 404, 29 U.S.C. §1104. 105. In addition, each Plaintiff has either exhausted the administrative remedies available to her and/or further pursuit of the administrative remedies would be futile. Futility here is clear because pursuit of administrative remedies could not address Defendants’ failure to provide, cover, and administer Comprehensive Lactation Benefits as a no-cost preventive service in accordance with the ACA for all CareFirst plans. Defendants’ health plans fail to comply with the provisions of the ACA with respect to preventive services, the redress for which is not accomplished by pursuit of administrative remedies. Since the action concerns Defendants’ violations with respect to the fundamental constructs of the CareFirst plans and networks, and does not evoke Defendants’ discretion with respect to the payment of an individual claim, any effort to exhaust administrative remedies is futile and is not required as a matter of law. 106. Plaintiffs therefore bring this action under the authority of ERISA § 502(a)(3), 29 U.S.C. § 1132(a)(3), for appropriate equitable relief from Defendants as fiduciaries (and, in the alternative, from Defendants as knowing participants in breaches of any of ERISA’s fiduciary responsibility provisions), including without limitation, injunctive relief and, as available under applicable law, imposition of a constructive trust, equitable surcharge, and restitution. CLASS ACTION ALLEGATIONS 107. Plaintiffs bring this action on behalf of themselves and the proposed Class pursuant to FED. R. CIV. P. 23(a), 23(b)(2), and/or 23(b)(3). Specifically, Plaintiffs seek to represent the following Class: All persons who, on or after August 1, 2012, are or were participants in or beneficiaries of any non-Grandfathered Health Plan sold, underwritten or administered by Defendants in their capacity as insurer or administrator, who did not receive full coverage for and/or reimbursement for Comprehensive Lactation Benefits. 108. Excluded from the Class are Defendants, their subsidiaries or affiliate companies, their legal representatives, assigns, successors, and employees. 109. The members of the Class are so numerous that joinder of all members is impracticable. Thousands of members are enrolled in Defendants’ health care plans. Although information is not publicly available at the present time as to the number of women who paid for Comprehensive Lactation Benefits, Plaintiffs allege on information and belief that discovery will show that the putative Class include at least hundreds if not thousands of geographically dispersed women, making joinder of all class members impracticable. Plaintiffs allege on information and belief that the identities and contact information of the members of the Class can be readily ascertained from Defendants’ records which include the identities of the Damages Class members who paid for Comprehensive Lactation Benefits. 110. There are common questions or law and fact within the meaning of Fed. Rule of Civ. P. 23(a)(2). These common legal and factual questions include, but are not limited to: a. Whether Defendants have violated the ACA’s mandate of providing access to and coverage for Comprehensive Lactation Benefits to the members of the Class; b. Whether Defendants unlawfully discriminated on the basis of sex in violation of the ACA by virtue of the conduct described herein; c. Whether Defendants owed ERISA fiduciary duties to Plaintiffs and the members of the Class and breached such duties under and/or violated ERISA; d. Whether Defendants have been unjustly enriched (and if so, in what amount); e. Whether Plaintiffs and the members of the Class are entitled to equitable relief, including but not limited to surcharge, disgorgement of profits, and/or restitution; f. Whether Plaintiffs and the members of the Class are entitled to a declaration regarding their rights under ERISA; g. Whether Plaintiffs and the members of the Class are entitled to a declaration regarding their rights under the ACA and/or ERISA; h. Whether Plaintiffs and the members of the Class are entitled to an Order enjoining Defendants from violating the ACA requirements related to Comprehensive Lactation Benefits and compelling compliance with the ACA; and i. The extent and measurement of damages to the Damages Class members for out- of-pocket payments for Comprehensive Lactation Benefits and the nature of other appropriate relief. 111. Plaintiffs’ claims are typical of the claims of the members of the Class within the meaning of Fed. R. Civ. P. 23(a)(3) because Defendants have breached the ACA, the terms of the plans, and their obligations to Plaintiffs and the Class in a uniform manner. Defendants failed to establish a network of providers of Comprehensive Lactation Benefits and thereby caused Plaintiffs and the members of the Class to pay out-of-pocket for Comprehensive Lactation Benefits. Defendants unjustly enriched themselves to the detriment of Plaintiffs and the members of the Class who sustained economic injuries arising from the same wrongful and unlawful conduct of the Defendants. 112. Plaintiffs will fairly and adequately protect the interests of the members of the Class, and none have interests antagonistic to it. Plaintiffs have retained attorneys experienced in the prosecution of class actions, including healthcare, antitrust, and consumer protection matters, and Plaintiffs and their counsel intend to prosecute this action vigorously. 113. Plaintiffs and the members of the Class have all suffered, and will continue to suffer harm, and damages as a result of Defendants’ unlawful and wrongful conduct. A class action is superior to any other available methods for the fair and efficient adjudication of this controversy, since joinder of all members of the Class is impracticable and the cost of litigation would far outweigh the likely value of individual class member claims. 114. Because of the relatively small size of the individual Class members’ claims, it is likely that only a few Class members could afford to seek legal redress for Defendants’ misconduct. Further, if individual Class members were required to bring separate actions, this and other courts would be confronted with a multiplicity of lawsuits that would burden the judicial system and risk inconsistent rulings and contradictory judgments. And, in contrast to the shared and unitary costs of a class action, case-by-case adjudication would greatly magnify the expense and time incurred by the parties and the courts. 115. Class certification is appropriate because Defendants engaged in a uniform and common practice, and all Class Members have the same legal right to, and interest in, redress for damages associated with violations of the ACA’s lactation coverage requirements. CLAIMS FOR RELIEF COUNT I Equitable Relief Pursuant to ERISA § 502(a)(3), 29 U.S.C. § 1132(a)(3) for Breach of Fiduciary Duties Under ERISA § 404(a), 29 U.S.C. § 1104(a) Against Defendants 116. Plaintiffs incorporate by reference each of the preceding paragraphs as if fully set forth herein. 117. Defendants are fiduciaries of the ERISA-governed health care plans in which Plaintiffs and the members of the Class are participants. 118. Defendants breached their fiduciary duties of prudence under ERISA § 404(a)(1)(B) by, as alleged herein, failing to provide and to administer their health plans in compliance with the preventive services provisions of the ACA with respect to Comprehensive Lactation Benefits thereby causing Plaintiffs and members of the Class to wrongfully pay for Comprehensive Lactation Benefits and/or to forego Comprehensive Lactation Benefits. 119. Defendants also breached their duty of loyalty under ERISA § 404(a)(1)(A) by, as alleged herein, failing to provide and to administer their health plans in compliance with the preventive services provisions of the ACA with respect to Comprehensive Lactation Benefits thereby causing Plaintiffs and members of the Class to wrongfully pay for Comprehensive Lactation Benefits and/or to forego Comprehensive Lactation Benefits in order to maximize their profits and cost-shift the ACA preventive service coverage requirement to the Plaintiffs and the members of the Class. 120. Defendants’ breaches of fiduciary duty caused direct injury and losses to Plaintiffs and each member of the Class. 121. Plaintiffs and the Class seek appropriate equitable relief along with such other and additional relief set forth in the Prayer and/or as may otherwise be available. COUNT II Claim for Equitable Relief under ERISA § 502(a)(3), 29 U.S.C. § 1132(a)(3) for Co-Fiduciary Liability Under ERISA § 405(a), 29 U.S.C. § 1105(a) Against Defendants 122. Plaintiffs incorporate by reference each of the preceding paragraphs as if fully set forth herein. 123. As Defendants are both fiduciaries under ERISA, they are liable under ERISA § 405(a) for each others’ violations of ERISA. 124. Under ERISA § 405(a), 29 U.S.C. § 1105(a), a fiduciary with respect to a plan shall be liable for a breach of fiduciary responsibility of another fiduciary with respect to the same plan in the following circumstances: (1) if he participates knowingly in, or knowingly undertakes to conceal, an act or omission of such other fiduciary, knowing such act or omission is a breach; (2) if, by his failure to comply with [ERISA § 404(a)(1)] in the administration of his specific responsibilities which give rise to his status as a fiduciary, he has enabled such other fiduciary to commit a breach; or (3) if he has knowledge of a breach by such other fiduciary, unless he makes reasonable efforts under the circumstances to remedy the breach. ERISA §§ 405(a)(1)-(3), 29 U.S.C. §§ 1105(a)(1)-(3). 125. Each Defendant knowingly participated in and enabled the other Defendants’ breaches of fiduciary duty by allowing Defendants to, as alleged herein, provide and administer health plans that were not in compliance with the preventive services provisions of the ACA with respect to Comprehensive Lactation Benefits thereby causing Plaintiffs and members of the Class to wrongfully pay for Comprehensive Lactation Benefits and/or to forego Comprehensive Lactation Benefits, and by failing to monitor Defendants’ compliance with the ACA and plan documents. 126. Defendants failed to fulfill their ongoing and continuing duty to determine whether the CareFirst health plans were being established and administered in accordance with the ACA, and in the best interests of Plaintiffs and the members of the Class. 127. Co-fiduciary liability is joint and several under ERISA, and thus Defendants are jointly and severally liable to Plaintiffs and the members of the Class for each of the other’s breaches of ERISA’s fiduciary responsibility provisions. COUNT III Discrimination in Violation of Section 1557(a), 42 U.S.C. § 18116(a), of the Patient Protection and Affordable Care Act Against Defendants 128. Plaintiffs incorporate by reference each of the preceding paragraphs as if fully set forth herein. 129. Section 1557(a) of the ACA contains a “nondiscrimination” provision that provides, in relevant part: [A]n individual shall not, on the ground prohibited under . . . title IX of the Education Amendments of 1972 (20 U.S.C. 1681 et seq.) . . . be excluded from participation in, be denied the benefits of, or be subjected to discrimination under, any health program or activity, any part of which is receiving Federal financial assistance, including credits, subsidies, or contracts of insurance, or under any program or activity that is administered by an Executive Agency or any entity established under this title (or amendments). The enforcement mechanisms provided for and available under … title IX … shall apply for purposes of violations of this subsection. 42 U.S.C. § 18116(a). 130. The ACA nondiscrimination provision specifically prohibits discrimination on the basis of those grounds that are prohibited under other federal laws, including Title IX of the Education Amendments of 1972, 20 U.S.C. § 1681(a) (“Title IX”). 131. Defendants are subject to Section 18116 because Defendants are health programs and activities which are “receiving Federal financial assistance, including credits, subsidies, or contracts of insurance” may not discriminate on the basis of sex. See 42 U.S.C. § 18116(a) (incorporating Title IX by reference), as alleged in ¶¶90-96, supra. 132. Title IX prohibits discrimination on the basis of sex. Plaintiffs and the members of the Class, who are necessarily all women, are being excluded from participation in, being denied the benefits of, and being subjected to discrimination by Defendants (in Defendants’ capacity as insurers and administrators of insurance plans) on the basis of their sex. 133. Defendants have violated and continue to violate Section 1557(a) of the ACA on the basis of sex discrimination because, as alleged herein, Defendants refuse and otherwise fail to provide parity in coverage for women’s preventive services required under the ACA. 134. Defendants have violated and continue to violate the ACA by discriminating on the basis of sex in Defendants’ failure to provide Comprehensive Lactation Benefits as a no-cost preventive service as mandated by the ACA; failure to provide a listing of in-network providers for Comprehensive Lactation Benefits; denial of coverage for Comprehensive Lactation Benefits secured by purported out-of-network providers in the absence of the availability of in-network providers; imposition of cost and unreasonable administrative burdens intended to deter Plaintiffs and the members of the Class from seeking Comprehensive Lactation Benefits; and placing of other restrictions or limitations on Comprehensive Lactation Benefits, all of which causes widespread detrimental consequences to women. 135. By violating the women’s preventive services requirements under the ACA, Plaintiffs and the members of the Class have been and continue to be denied mandated access to coverage for Comprehensive Lactation Benefits. Defendants’ unlawful conduct in violates the ACA and unjustly enriches Defendants, depriving thousands of women of their ACA- mandated women’s preventive services. 136. If Defendants’ unlawful and discriminatory conduct is not foreclosed, many more women will be wrongfully foreclosed from receiving or pay for benefits to which they are entitled under the ACA. 137. Plaintiffs and members of the Class have been aggrieved and damaged by this violation of Section 1557 of the ACA. COUNT V Violation of the Patient Protection and Affordable Care Act through its Incorporation by Reference in CareFirst Plan Documents Against Defendants 138. Plaintiffs incorporate by reference each of the preceding paragraphs as if fully set forth herein. 139. Plaintiffs’ and the members of the Class’ CareFirst plan documents describe the plan's terms and conditions related to the operation and administration of the CareFirst plans. 140. CareFirst’s plan documents incorporate by reference the ACA and its provisions, including the women’s preventive care provisions set forth in 42 U.S.C. § 300gg-13(a)(4), and state that the CareFirst plans comply with the ACA. 141. Accordingly, as plan participants Plaintiffs have the right to seek to enforce the provisions of the ACA, and in particular, as alleged herein, the provisions of the ACA requiring the provision of Comprehensive Lactation Benefits as a no cost women’s preventive service. 142. As a result of Defendants’ failure to provide Comprehensive Lactation Benefits to Plaintiffs and the members of the Class, Plaintiffs and the members of the Class have sustained monetary damages and, if Defendants’ conduct is not stopped, continue to be harmed by Defendants’ misconduct. COUNT VI Unjust Enrichment Against Defendants 143. Plaintiffs incorporate by reference each of the preceding paragraphs as if fully set forth herein. 144. Defendants have been unjustly enriched by the conduct alleged herein, including by (a) withholding money due to Plaintiffs and the members of the Class paid for Comprehensive Lactation Benefits; (b) implementing a course of conduct that prevents women from seeking Comprehensive Lactation Benefits (or makes them pay out-of-pocket), including by their failure to establish a network of providers for Comprehensive Lactation Benefits; and (c) shifting the cost of ACA-mandated no-cost women’s preventive services to women. 145. Although it is part of Defendants’ responsibilities and duties to provide and administer health insurance coverage that satisfies the ACA mandated preventive care requirements, including for Comprehensive Lactation Benefits, Defendants have failed to fulfill such responsibilities. 146. As a result, Plaintiffs and members of the Class conferred an unearned tangible economic benefit upon Defendants by paying out-of-pocket for a preventive service, namely, Comprehensive Lactation Benefits. 147. Equity militates against Defendants retaining these economic benefits, which should be returned to Plaintiffs and members of the Class. PRAYER FOR RELIEF WHEREFORE, Plaintiffs, individually, and on behalf of the members of the Class, pray for relief as follows as applicable for the particular cause of action: A. An order certifying this action to proceed on behalf of the Class, and appointing Plaintiffs and their counsel to represent the Class; B. An order finding that Defendants violated their fiduciary duties to Class Members and awarding Plaintiffs and Class members such relief as the Court deems proper; C. An order finding that Defendants violated the preventive services provisions of the ACA, and awarding Plaintiffs and members of the Class such relief as the Court deems D. An order finding that Defendants violated the ACA “nondiscrimination” provision, Section 1557(a), 42 U.S.C. § 18116(a), and awarding Plaintiffs and members of the Class such relief as the Court deems proper; E. An order finding that Defendants were unjustly enriched and awarding Plaintiffs and members of the Class such relief as the Court deems proper; F. Declaratory and injunctive relief as necessary and appropriate, including enjoining Defendants from further violating the duties, responsibilities, and obligations imposed on it by the ACA and ERISA with respect to Comprehensive Lactation Benefits; G. An order awarding, declaring or otherwise providing Plaintiffs and members of the Class all relief under ERISA, that the Court deems proper and such appropriate equitable relief as the Court may order, including damages, an accounting, equitable surcharge, surcharge, disgorgement of profits, equitable lien, constructive trust, or other remedy; H. An order finding that Defendants are jointly and severally liable as co-fiduciaries in violations of ERISA; I. An order awarding Plaintiffs and the members of the Class other appropriate equitable and injunctive relief to the extent permitted by the above claims; J. An order awarding Plaintiffs’ counsel attorneys’ fees, litigation expenses, expert witness fees and other costs pursuant to ERISA § 502(g)(1), 29 U.S.C. 1132(g)(1), and/or the common fund doctrine; and K. Such other and further relief as may be just and proper. JURY DEMAND Plaintiffs demand a trial by jury for all claims asserted in this Complaint so triable. Dated: October 28, 2016 By: /s/ Matthew E. Miller Jonathan W. Cuneo, D.C. Bar No. 939389 Pamela B. Gilbert, D.C. Bar. No. 418207 Matthew E. Miller, D.C. Bar. No. 442857 Katherine Van Dyck, D.C. Bar. No. 981272 CUNEO GILBERT & LADUCA, LLP 4725 Wisconsin Ave. NW, Suite 200 Washington, DC 20016 Phone: (202) 789-3960 Fax: (202) 789-1813 Nicholas E. Chimicles (to seek admission pro hac vice) Kimberly Donaldson Smith (to seek admission pro hac vice) Stephanie E. Saunders (to seek admission pro hac vice) CHIMICLES & TIKELLIS LLP 361 W. Lancaster Avenue Haverford, PA 19041 (610) 642-8500 NEC@Chimicles.com KMD@Chimicles.com SES@Chimicles.com Attorneys for Plaintiffs and the proposed Class

healthcare

x6NWCYcBD5gMZwczjdLE

David J. McGlothlin, Esq. (SBN 026059) david@westcoastlitigation.com Hyde & Swigart 2633 E. Indian School Road, Suite 460 Phoenix, AZ 85016 Telephone: (602) 265-3332 Facsimile: (602) 230-4482 Ryan L. McBride, Esq. (SBN 032001) ryan@kazlg.com Kazerouni Law Group 2633 E. Indian School Road, Suite 460 Phoenix, AZ 85016 Telephone: (602) 900-1288 Facsimile: (800) 520-5523 Attorneys for the Plaintiff Sherry Simms UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA Sherry Simms, on behalf of herself and all others similarly situated, Plaintiff, COMPLAINT FOR DAMAGES [CLASS ACTION] JURY TRIAL DEMANDED v. Nationstar Mortgage, LLC, Defendant. ) ) ) ) ) ) ) ) ) ) ) ) ) INTRODUCTION 1. The United States Congress has also found the banking system is dependent upon fair and accurate credit reporting. Inaccurate credit reports directly impair the efficiency of the banking system, and unfair credit reporting methods undermine the public confidence, which is essential to the continued functioning of the banking system. Congress enacted the Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq. (“FCRA”), to insure fair and accurate reporting, promote efficiency in the banking system, and protect consumer privacy. The FCRA seeks that consumer reporting agencies exercise their grave responsibilities with fairness, impartiality, and a respect for the consumer’s right to privacy because consumer reporting agencies have assumed such a vital role in assembling and evaluating consumer credit and other information on consumers. The FCRA also imposes duties on the sources that provide credit information to credit reporting agencies, called “furnishers.” 2. Sherry Simms, (“Plaintiff”), through Plaintiff’s attorneys, brings this action to challenge the actions of Nationstar Mortgage, LLC (“Defendant”), with regard to Defendant’s unauthorized and unlawful credit inquiry, and this conduct caused Plaintiff’s damages. 3. Plaintiff makes these allegations on information and belief, with the exception of those allegations that pertain to a plaintiff, or to a plaintiff's counsel, which Plaintiff alleges on personal knowledge. 4. While many violations are described below with specificity, this Complaint alleges violations of the statutes cited in their entirety. 5. Unless otherwise stated, Plaintiff alleges that any violations by Defendant were knowing and intentional, and that Defendant did not maintain procedures reasonably adapted to avoid any such violation. JURISDICTION AND VENUE 6. Jurisdiction of this Court arises pursuant to 28 U.S.C. § 1331, and 28 U.S.C. § 1367 for any supplemental state claims. 7. This action arises out of Defendant's violations of the Fair Credit Reporting Act, 15 U.S.C. §§ 1681 et seq. (“FCRA”). 8. Because Defendant is a foreign limited liability company registered with the Arizona Secretary of State and conducts business within the State of Arizona, personal jurisdiction is established. 9. Venue is proper pursuant to 28 U.S.C. § 1391 as events leading to this cause of action occurred in the County of Maricopa, State of Arizona. In addition, Defendant conducts business in the County of Maricopa, State of Arizona. PARTIES 10. Plaintiff Sherry Simms is a natural person who resides in the City of Chandler, County of Maricopa, State of Arizona. 11. Defendant is a registered business with the Arizona Secretary of State and carries out daily transactions with numerous customers in the District of Arizona. 12. Plaintiff is a “consumer” as that term is defined by 15 U.S.C. § 1681a(c). 13. Plaintiff is informed and believes, and thereon alleges, that Defendant is a “person” as the term is defined by 15 U.S.C. § 1681a(b). 14. Plaintiff is informed and believes, and thereon alleges, that Defendant acquired Plaintiff’s credit information through an unauthorized inquiry of Plaintiff’s “consumer report” as that term is defined by 15 U.S.C. 1681a(d)(1). STATUTORY BACKGROUND 15. The FCRA is a consumer protection statute which regulates the activities of credit reporting agencies and users of credit reports, and which provides certain rights to consumers affected by use of the collected information about them. 16. Congress designed the FCRA to preserve the consumer’s right to privacy by safeguarding the confidentiality of the information maintained by the consumer reporting agencies. Congress stated in the opening section of the FCRA that “[t]here is a need to insure that consumer reporting agencies exercise their grave responsibilities with fairness, impartiality, and a respect for the consumer’s right to privacy.” 15 U.S.C. § 1681(a)(4). 17. Under the FCRA, the term “consumer report” means any written, oral, or other communication of any information by a consumer reporting agency bearing on a consumer’s creditworthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in the underwriting of credit transactions involving the consumer. 18. Congress has chosen to protect the consumer’s right to privacy by prohibiting any release of consumer reports unless the release is for one of the permissible purposes listed in 15 U.S.C. § 1681b. 19. 15 U.S.C. § 1681b(f) in turn provides “[a] person shall not use or obtain a consumer report for any purpose unless – (1) the consumer report is obtained for a purpose for which the consumer report is authorized to be furnished under this section.” 20. The permissible purposes listed in 1681b usually arise only in connection with transactions initiated by the consumer. See 15 U.S.C. § 1681b(a)(3)(A)- (F). FACTUAL ALLEGATIONS 21. At all times relevant to this matter, Plaintiff was an individual residing within the State of Arizona. 22. At all times relevant, Defendant was a registered business with the Arizona Secretary of State and carried out daily transactions with numerous customers in the District of Arizona. 23. On or about September 3, 2009, Plaintiff jointly filed for a Chapter 13 Bankruptcy as a married couple in the U.S. States Bankruptcy Court, District of Nevada, Case number 2:09-bk-26505. 24. In Plaintiff’s bankruptcy filing, Defendant was included as a creditor. 25. Defendant voluntarily joined as a creditor in Plaintiff’s chapter 13 bankruptcy and was served notice of Plaintiff’s discharge. 26. Defendant also affirmatively made several filings in Plaintiff’s bankruptcy case including “Assignment/Transfer of Claim filed by Nationstar Mortgage, LLC” and “Notice of Assignment of Claim and Pending Order filed by Nationstar Mortgage, LLC”. 27. Plaintiff’s bankruptcy discharge occurred on January 21, 2015. 28. As a listed creditor in Plaintiff’s bankruptcy schedules, Defendant also received notice of Plaintiff’s discharge. 29. On or about June 21, 2016, Defendant made an account inquiry accessing Plaintiff’s Trans Union credit report indicating a permissible purpose of “Account Review”. 30. Plaintiff did not conduct any business nor incur any additional financial obligations with Defendant since the date of the discharge of her bankruptcy. 31. 15 U.S.C. § 1681b delineates the only permissible uses of, or access to, consumer reports. 32. Since any alleged debt owed to Defendant was discharged in bankruptcy, an account review by Defendant was not a permissible purpose to access Plaintiff’s consumer report information. 33. Defendant’s inquiry for Plaintiff’s consumer report information, without Plaintiff’s consent, falls outside the scope of any permissible use or access included in 15 U.S.C. § 1681b. 34. Defendant’s inquiry does not qualify as a “firm offer of credit” under the FCRA. 35. Since Defendant had notice of Plaintiff’s bankruptcy and should have been aware the debt was no longer owed, Defendant’s actions were willful. 36. Defendant’s actions were willful under 15 U.S.C. §§ 1681n because Defendant was aware of the FCRA’s prohibitions on impermissibly pulling consumers’ credit reports. See Doe v. Sentech Employment Services, Inc., E.D. Mich. May 16, 2016) (citing Singleton v. Domino's Pizza, LLC, 2012 WL 245965, *4 (D. Md. Jan. 25, 2012) (“[A]ssertions that a defendant is aware of the FCRA, but failed to comply with its requirements, are sufficient to support an allegation of willfulness and to avoid dismissal.”). 37. Plaintiff suffered an invasion of a legally protected interest when Defendant accessed her highly confidential personal information on her credit report at a time when Defendant had no right to do so, an invasion of Plaintiff’s right to privacy. The FCRA, through 15 U.S.C. § 1681b, protects consumers like Plaintiff from this precise behavior. 38. Plaintiff has a common law right to keep her personal credit information private. E.g., Samuel D. Warren & Louis D. Brandeis, The Right to Privacy, 4 Harv. L. Rev. 1155, 193 (1890). Congress sought to further protect that right by enacting the FCRA. Indeed, the common law tort of intrusion upon seclusion is preempted by the FCRA, and the FCRA expressly provides that Congress made the following finding: “There is a need to insure that consumer reporting agencies exercise their grave responsibilities with fairness, impartiality and a respect for the consumer’s right to privacy.” 15 U.S.C. §1681a(4) (emphasis added). 39. Plaintiff was affected personally because when Plaintiff realized the behavior of Defendant described above (pulling her credit report without any authorization), Plaintiff felt that her privacy had been invaded and that her personal and private information had been disclosed to Defendant, who had no right to Plaintiff’s private information. Defendant’s behavior caused Plaintiff to suffer mental and emotional distress as a result of Defendant’s invasion of Plaintiff’s privacy. 40. The injury suffered by Plaintiff is concrete because Defendant’s violation of 15 U.S.C. § 1681b caused Plaintiff to suffer from Defendant’s invasion of Plaintiff’s privacy. In enacting 15 U.S.C. § 1681b, Congress specifically sought to protect consumers from invasions of privacy and created restrictions on access to consumers’ sensitive financial information in their credit reports. 41. Further, Defendant increased the risk that Plaintiff will be injured if there is a data breach on Defendant’s computer systems by acquiring additional highly sensitive information about Plaintiff and saving that information onto its computer system. Data breaches are increasingly common (see, e.g., Data Breaches, Kerbs, available at http://krebsonsecurity.com/category/data- breaches/), and financial institutions like Defendant are frequent targets of cybercriminals (see, e.g., The Top 8 Largest Date Breaches in the Financial Services Industry, Association of Certified Financial Crime Specialists, available at http://www.acfcs.org/the-top-8-largest-data-breaches-in-the- financial-services-industry/). 42. As such, Plaintiff is entitled to the remedies available under 15 U.S.C. §1681n and 15 U.S.C. § 1681o. Class Action Allegations 43. Plaintiff brings this action on behalf of herself and on behalf of all others similarly situated (the “Class”). 44. Plaintiff represents, and is a member of the Class, consisting of: All persons with addresses within the United States within the past five (5) years whose consumer credit report from any of the three major credit reporting agencies (Transunion, Equifax, and Experian) reflects an unauthorized consumer credit report inquiry by Defendant after bankruptcy discharge. 45. Defendant and its employees or agents are excluded from the Class. Plaintiff does not know the number of members in the Class, but believes the Class members number in the hundreds, if not more. This matter should therefore be certified as a Class action to assist in the expeditious litigation of this matter. 46. Plaintiff and members of the Class were harmed by the acts of Defendant in at least the following ways: Defendant, either directly or through its agents, engaged in illegal and deceptive practices, when it submitted an unauthorized consumer report inquiry under 15 U.S.C. § 1681 et seq. Plaintiff and the Class members were damaged thereby. 47. This suit seeks only recovery of actual and statutory damages on behalf of the Class, and it expressly is not intended to request any recovery for personal injury and claims related thereto. Plaintiff reserves the right to expand the Class definition to seek recovery on behalf of additional persons as warranted as facts are learned in further investigation and discovery. 48. The joinder of the Class members is impractical and the disposition of their claims in the Class action will provide substantial benefits both to the parties and to the court. The Class can be identified through Defendant’s records or Defendant’s agents’ records. 49. There is a well-defined community of interest in the questions of law and fact involved affecting the parties to be represented. The questions of law and fact to the Class predominate over questions which may affect individual Class members, including the following: 50. Whether, within the five years prior to the filing of this Complaint, Defendant or its agents submitted any consumer credit report inquiries after the accounts of members of the Class have been discharged; and 51. Whether Plaintiff and the Class members were damaged thereby, and the extent of damages for such violations. 52. As a person who suffered an unauthorized consumer credit report inquiry by Defendant on her credit report, Plaintiff is asserting claims that are typical of the Class. Plaintiff will fairly and adequately represent and protect the interest of the Class in that Plaintiff has no interests antagonistic to any member of the Class. 53. Plaintiff and the members of the Class have all suffered irreparable harm as a result of the Defendant’s unlawful and wrongful conduct. Absent a class action, the Class will continue to face the potential for irreparable harm. In addition, these violations of law will be allowed to proceed without remedy and Defendant will likely continue such illegal conduct. Because of the size of the individual Class member’s claims, few, if any, Class members could afford to seek legal redress for the wrongs complained of herein. 54. Plaintiff has retained counsel experienced in handling class action claims and claims involving violations of the Fair Credit Reporting Act. 55. A class action is a superior method for the fair and efficient adjudication of this controversy. Class-wide damages are essential to induce Defendant to comply with federal law. The interest of Class members in individually controlling the prosecution of separate claims against Defendant is small because the maximum statutory damages in an individual action for FCRA violations are minimal. Management of these claims is likely to present significantly fewer difficulties than those presented in many class claims. 56. Defendant has acted on grounds generally applicable to the Class, thereby making appropriate declaratory relief with respect to the Class as a whole. CAUSES OF ACTION COUNT I FAIR CREDIT REPORTING ACT (FCRA) 15 U.S.C. §§ 1681 ET SEQ. 57. Plaintiff and the putative class repeat, re-allege, and incorporate by reference, all other paragraphs. 58. The foregoing acts and omissions constitute numerous and multiple willful, reckless or negligent violations of the FCRA, including but not limited to each and every one of the above-cited provisions of the FCRA, 15 U.S.C § 1681. 59. As a result of each and every negligent violation of the FCRA, Plaintiff and class members are entitled to actual damages as the Court may allow pursuant to 15 U.S.C. § 1681o(a)(1); statutory damages pursuant to 15 U.S.C. § 1681n(a)(1); and reasonable attorney’s fees and costs pursuant to 15 U.S.C. § 1681o(a)(2) from Defendant. 60. As a result of each and every willful violation of the FCRA, Plaintiff is entitled to actual damages or damages of not less than $100 and not more than $1,000 and such amount as the court may allowed for all other class members, pursuant to 15 U.S.C. § 1681n(a)(1)(A); punitive damages as the court may allow, pursuant to 15 U.S.C. § 1681n(a)(2); and reasonable attorney’s fees and costs pursuant to 15 U.S.C. § 1681n(a)(3) from Defendant. PRAYER FOR RELIEF 61. WHEREFORE, Plaintiff prays that judgment be entered against Defendant, and Plaintiff be awarded damages from Defendant, as follows: COUNT I FAIR CREDIT REPORTING ACT (FCRA) 15 U.S.C. §§ 1681 ET SEQ. 62. An award of actual damages pursuant to 15 U.S.C. § 1681n(a)(1); 63. An award of statutory damages pursuant to 15 U.S.C. § 1681n(a)(1); 64. An award of punitive damages as the Court may allow pursuant to 15 U.S.C. § 1681n(a)(2); and 65. An award of costs of litigation and reasonable attorney’s fees, pursuant to 15 U.S.C. § 1681n(a)(3), and 15 U.S.C. § 1681(o)(a)(1) against Defendant for each incident of negligent noncompliance of the FCRA. TRIAL BY JURY 66. Pursuant to the seventh amendment to the Constitution of the United States of America, Plaintiff is entitled to, and demands, a trial by jury. Date: November 2, 2016 Kazerouni Law Group By: /s/ Ryan L. McBride_____ Ryan L. McBride Attorney for the Plaintiff and Putative Class

consumer fraud