NEW CINGULAR WIRELESS HEADQUARTERS LLC Et Al v. MARSH & MCLENNAN COMPANIES INC Complaint

Case 1:06-cv-00796-BBM
2:06-cv-05120-GEB -PS
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ORIGINAL
FILED IN CCLR
ft'S ~~~r
U. S . ~.C. Atlanta
IN THE UNITED STATES DISTRICT COURT
FO R THE NORTHERN DISTRICT OF GE ORGIA App o 4 zoos
ATLANTA DIVISION LUTHER
. Clerk
NEW CINGULAR WIRELESS Depwv aem
HEADQUARTERS, LLC, as successor in

-interest to AT&T WIRELESS SERVICES,
:[NC. ; TYSON FOODS, INC . ; TYSON
FRESH MEAT, INC .; TYSON
:INTERNATIONAL CO ., LTD . ;
FOODBRANDS AMERICA, INC . ; EXELON
(_'ORPOR.ATIQN ; UNICOM CORP . ;
EXELON GENERATION COMPANY, LLC ;
COMMONWEALTH EDISON CO . ; PECO
ENERGY COMPANY ; AMERGEN
ENERGY COMPANY LLC ; PUBLIC
SERVICE ENTERPRISE GROUP ; PUBLIC
SERVICE ELECTRIC & GAS CO., INC. ;
PSEG RESOURCES, INC . ; TEXAS
1~°
INDEPENDENT ENERGY, LLP ; and TEXAS <>
INDEPENDENT ENERGY OPERATING
C O., LLC.
Plaintiffs,
V.
MARSH & McLENNAN COMPANIES,

INC., MARSH INC ., ANN CORPORATION,
AMERICAN INTERNATIONAL GROUP
INC ., AMERICAN INTERNATIONAL
SPECIALTY LINES IC, AMERICAN HOME
ASSURANCE CO ., ILLINOIS NATIONAL
INSURANCE CO ., INSURANCE CO . OF
THE STATE OF PA, STARK EXCESS
LIABILITY INSURANCE
INTERNATIONAL LIMITED, LEXINGTON
INSURANCE COMPANY, NATIONAL
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BUNION FIRE INSURANCE CO . OF PA,

ACE LTD ., ACE AMERICAN INSURANCE
CO., ACE BERMUDA INSURANCE
COMPANY, LTD . , ACE USA, ILLINOIS
UNION INSURANCE CO ., PACIFIC
EMPLOYERS INSURANCE COMPANY ,
THE CHUBB INSURANCE
CORPORATION, FEDERAL INSURANCE
CO . , CNA FINANCIAL CORP . , THE
CONTINENTAL INSURANCE CO .,
CONTINENTAL CASUALTY CO . ,
HARTFORD FINANCIAL SERVICES
GROUP INC ., TWIN CITY FIRE
INSURANCE CO., NUTMEG INSURANCE
CO . , ST . PAUL TRAVELERS CO . , INC.,
TRAVELERS INDEMNITY COMPANY,
TRAVELERS CASUALTY & SURETY CO.
OF AMERICA, GULF INSURANCE CO.,
ST. PAUL MERCURY INSURANCE CO . ,
TRAVELERS EXCESS & SURPLUS
INSURANCE, THE TRAVELERS
INDEMNITY OF AMERICA, TRAVELERS
PROPERTY CASUALTY INSURANCE CO .,
ST. PAUL FIRE & MAR INSURANCE CO .,
ZURICH AMERICAN INSURANCE CO . .
AMERICAN GUARANTY AND
LIABILITY, ZURICH AMERICAN OF
ILLINOIS, ZURICH SPECIALTIES
LONDON LIMITED, EMPIRE FIRE &
MARINE INSURANCE CO ., FIDELITY &
DEPOSIT COMPANY OF MARYLAND, XL
CAPITAL LTD ., XL INSURANCE
COMPANY LTD ., XL INSURANCE
AMERICA, INC ., XL SPECIALTY
INSURANCE COMPANY, GREENWICH
INSURANCE CO., FIREMAN'S FUND
INSURANCE CO ., NATIONAL SURETY
CORP., LIBERTY MUTUAL HOLDING
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COMPANY, INC ., LIBERTY MUTUAL

INSURANCE CO., EMPLOYERS
INSURANCE OF WAUSAU, GREAT
AMERICAN ASSURANCE CO., LIMITED,
AMERICAN PROTECTION INSURANCE
CO., AWA HOLDINGS, ALLIED WORLD
ASSURANCE COMPANY, AMERICAN
ALTERNATIVE INSURANCE
CORPORATION, ARCH CAPITAL GROUP,
ARCH INSURANCE COMPANY, ARCH
REINSURANCE LIMITED, ARCH
SPECIALTY INSURANCE CO ., ARCH
INSURANCE (BERMUDA) LTD .,
COMMONWEALTH INSURANCE
COMPANY, EMPLOYERS REINSURANCE
CORP., ENDURANCE SPECIALTY
INSURANCE LIMITED, ESSEX
INSURANCE COMPANY (DE), HCC
INSURANCE HOLDINGS, HOUSTON
CASUALTY COMPANY, LIBERTY
INSURANCE UNDERWRITERS INC .,
CERTAIN UNDERWRITERS AT LLOYD'S,
LONDON including Syndicates Nos . 0033
HIS, 0079 PJG, 0190 FRW, 0282 LSM, 0318
N[SP, 0435 FDY, 0588 NKB, 0623 AFB, 0861
NJM, 1003 SJC, 1096 RAS, 1183 TAL, 1200
ROC, 1209 MEB, 12 09 XL, 1211 SPL, 1225
AES, 1243 EUL, 1414 RTH, 1511 MEP, 2000
HAR, 2001 AML, 2003 SJC, 2020 WEL, 2027
COX, 2488 AGM, 2791 MAP, 2323 NLU,
2623 AFB, 3000 MKL, 5000 SPL, ROYAL &
SUN ALLIANCE, MARINE INSURANCE
COMPANY LIMITED,
WTJERTTEMBERGISCHE
VERSICHERRUNGS A .G., CIGNA
HEALTH CARE, AETNA,INC ., FACTORY
MUTUAL INSURANCE CO .,
LUMBERMENS MUTUAL CASUALTY,
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MAX RE LIMITED, HARTFORD STEAM )

BOILER I &I Co., and NAVIGATORS )
GROUP INC ., )
Defendants . )
COMPLAINT
Plaintiffs New Cingular Wireless Headquarters, LLC ("New
Cingular"), as successor in interest to AT&T Wireless Services, Inc . ("AT&T
Wireless") ; Tyson Foods, inc ., on its own account and as successor in interest to
ibp, inc ., Tyson Fresh Meat, Inc ., Tyson International Co ., Ltd ., Foodbrands
America, Inc . ("Foodbrands") (collectively "Tyson") ; Exelon Corporation, Unicorn
Corp., Exelon Generation Company, LLC, Commonwealth Edison Co ., PECO
Energy Company ; AmerGen Energy Company, LLC ("AmerGen") (collectively
"Exelon") ; Public Service Enterprise Group, Public Services Electric & Gas Co .,
Inc., PSEG Resources, Inc ., (collectively "PSEG") ; and Texas Independent
Energy, LLP, Texas Independent Energy Operating Co ., LLC (collectively "TIE")
(collectively, "Plaintiffs") ; by and through their attorneys, complain against
Defendants Marsh & McLennan Companies, Inc ., Marsh Inc ., Aon Corporation,
American International Group Inc ., American International Specialty Lines IC,
American Home Assurance Co ., Illinois National Insurance Co ., Insurance Co . of
the State of PA, Starr Excess Liability Insurance International Limited, Lexington
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Insurance Company, National Union Fire Insurance Co . of PA, ACE Ltd ., ACE
American Insurance Co ., ACE Bermuda Insurance Company, Ltd ., ACE USA,
Illinois Union Insurance Co ., Pacific Employers Insurance Company, The Chubb
Insurance Corporation, Federal Insurance Co ., CNA Financial Corp ., The
Continental Insurance Co ., Continental Casualty Co ., Hartford Financial Services
Group Inc ., Twin City Fire Insurance Co ., Nutmeg Insurance Co ., St. Paul
Travelers Co ., Inc ., Travelers Indemnity Company, Travelers Casualty & Surety
Co . of America, Gulf Insurance Co ., St . Paul Mercury Insurance Co ., Travelers
Excess & Surplus Insurance, The Travelers Indemnity of America, Travelers
Property Casualty Insurance Co ., St . Paul Fire & MAR Insurance Co ., Zurich
American Insurance Co ., American Guaranty and Liability, Zurich American of
Illinois, Zurich Specialties London Limited, Empire Fire & Marine Insurance Co .,
Fidelity & Deposit Company of Maryland, XL Capital Ltd ., XL Insurance
Company Ltd ., XL Insurance America Inc ., XL Specialty Insurance Company,
Greenwich Insurance Co., Fireman's Fund Insurance Co ., National Surety Corp .,
Liberty Mutual Holding Company, Inc ., Liberty Mutual Insurance Co ., Employers
Insurance of Wausau, Great American Assurance Co ., Limited, American
Protection Insurance Co ., AWA Holdings, Allied World Assurance Company,
American Alternative Insurance Corporation, Arch Capital Group, Arch Insurance

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Company, Arch Reinsurance Limited, Arch Specialty Insurance Co ., Arch
I-11surance (Bermuda) Ltd ., Commonwealth Insurance Company, Employers
Reinsurance Corp ., Endurance Specialty Insurance Limited, Essex Insurance
Company (DE), HCC Insurance Holdings, Houston Casualty Company, Liberty
Insurance Underwriters Inc ., Certain Underwriters at Lloyd's, London including
syndicates Nos . 0033 HIS, 0079 PJG, 0190 FRW, 0282 LSM, 0318 MSP, 0435
FDY, 0588 NKB, 0623 AFB, 0861 NJM, 1003 SJC, 1096 RAS, 1183 TAL, 1200
ROC, 1209 MEB, 1209 XL, 1211 SPL, 1225 AES, 1243 EUL, 1414 RTH, 1511
MEP, 2000 HAR, 2001 AML, 2003 SAC, 2020 WEL, 2027 COX, 2488 AGM,
2791 MAP, 2323 NLU, 2623 AFB, 3000 MKL, 5000 SPL (collectively "Certain
Underwriters at Lloyds, London"), Royal & Sun Alliance, Marine Insurance
Company Limited, Wuerttembergische Versicherrungs A .G., Cigna Health Care,
Aetna, Inc ., Factory Mutual Insurance Co ., Lumbermans Mutual Casualty, Max Re
]Limited, Hartford Steam Boiler I&I Co ., Navigators Group Inc ., as follows:
NATURE OF ACTION
1 . This is an action by Plaintiffs, corporate insureds, against
Defendants, Plaintiffs' insurance brokers and the named insurers, for actual, treble,
and punitive damages, disgorgement, restitution, other injunctive and equitable
relief, and attorneys' fees and costs for Defendants' (1) violations of the Sherman
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Act, (2) violations of Section 1962(c) of RICO, (3) violations of Section 1962(d) of
RICO, (4) breach of fiduciary duty, (5) inducement to breach fiduciary duty, (6)
unjust enrichment, (7) consumer fraud, and (8) fraud.
2. The conduct forming the basis of this complaint involves the
Defendants' use of a variety of illegal schemes and practices designed to, among
other things, allocate customers, rig bids for insurance products, and raise the
prices of insurance products paid by Plaintiffs for insurance products (collectively
the "Illegal Scheme") . In addition, the broker Defendants (as defined herein)
steered policyholders' business to preferred Insurer Defendants (as defined herein) .
The Broker Defendants were induced to engage in this practice because t he Insurer
]Defendants pa id substantial sums of money to steer business to that insurer or
refrain from moving the policyholders' business to other insurers . The net result of
these practices is that competition for policyholders' business did not occur, and
policyholders, including Plaintiffs, in turn, either paid more for insurance products
or received less beneficial terms than the competitive, non-rigged market would
have charged .
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PARTIES
3 . Plaintiff New Cingular Wireless Headquarters, LLC ("New
Cingular") i s a Delaware limited liability company w ith its principal place of .
business in Georgia .
4 . Plaintiff New Cingular is the successor in interest by merger to
AT&T Wireless Services, Inc . ("AT&T Wireless") .
5 . Plaintiff AT&T Wireless was, at all relevant times, a Delaware
corporation with its principal place of business in Washington .
6. Plaintiff Tyson Foods, Inc . is a Delaware corporation with its
principal place of business in Arkansas . Tyson Foods, Inc . also is the successor in
interest by merger to ibp, inc .
7 . Tyson Fresh Meat, Inc . is a Delaware corporation with its
principal place of business in Arkansas .
8 . Plaintiff Tyson International Co ., Ltd. is a foreign corporation
organized under the laws of Bermuda .
9. Plaintiff Foodbrands America, Inc . is a Delaware corporation
with its principal place of business in Arkansas .
10. Plaintiff Exelon Corp. is a Pennsylvania corporation with its
principal place of business in Illinois .
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11 . Plaintiff Unicorn Corp . was, at all relevant times, an Illinois
corporation with its principal place of business in Illinois .
12 . Plaintiff Exelon Generation Company, LLC is a Pennsylvania
limited liability corporation with its principal place of business in Pennsylvania .
13 . Plaintiff Commonwealth Edison Co . is an Illinois corporation
with its principal place of business in Illinois .
14. Plaintiff PECO Energy Company is a Pennsylvania corporation
with its principal place of business in Pennsylvania .
15 . Plaintiff AmerGen Energy Company LLC is a Delaware limited
liability corporation with its principal place of business in Pennsylvania .
16. Plaintiff Public Service Enterprise Group is a New Jersey
corporation with its principal place of business in New Jersey .
17. Plaintiff Public Service Electric & Gas Co ., Inc . is a New
Jersey corporation with its principal place of business in New Jersey .
18 . Plaintiff PSEG Resources, Inc . is a New Jersey corporation
with its principal place of business in New Jersey .
19 . Plaintiff Texas Independent Energy, LLP is a Texas corporation
with its principal place of business in Texas .
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20 . Plaintiff Texas Independent Energy Operating Co ., LLC is a
Texas corporation with its principal place of business in Texas .
21 . Upon information and belief, Defendant Marsh & McLennan
Companies, Inc . ("MMC") is a Delaware corporation with its principal place of
business in New York .
22 . Upon information and belief, Defendant Marsh Inc . ("Marsh
Inc.") is a Delaware corporation with its principal place of business in New York .
Upon information and belief, Marsh Inc . is a wholly-owned subsidiary of MMC .
(Marsh Inc . and MMC are collectively referred to here as "Marsh .")
23 . Upon information and belief, Defendant Aon Corporation
("Aon") is a Delaware corporation with its principal place of business in Illinois .
24 . Upon information and belief, Defendant American International
Group Inc . ("AIG") is a Delaware company with its principal place of business in
New York .
25 . Upon information and belief, Defendant American International
Specialty Lines IC is a subsidiary of AIG, domiciled in Alaska, with its principal
place of business in New York.
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26. Upon information and belief, Defendant American Home
Assurance Co . is a subsidiary of AIG, domiciled in New York, with its principal
place of business in New York .
27 . Upon information and belief, Defendant Illinois National
Insurance Co . is a subsidiary of AIG, domiciled in Illinois, with its principal place
of business in Illinois .
28. Upon information and belief, Defendant Insurance Co . of the
State of PA is a subsidiary of AIG, domiciled in Pennsylvania, with its principal
place of business in Pennsylvania .
29 . Upon information and belief, Defendant Starr Excess Liability
Insurance International Limited is a subsidiary of AIG, domiciled in Ireland, with
its principal place of business in Dublin, Ireland . At all times pertinent to this
complaint, Starr Excess Liability Insurance International Limited transacted
business in this District by, including but not limited to, providing general,
property casualty, life and excess insurance products .
30. Upon information and belief, Defendant Lexington Insurance
Company ("Lexington") is a subsidiary of AIG Inc . and is also partly owned by
National Union Fire Insurance Company of Pittsburgh, PA, The Insurance
Company of the State of Pennsylvania and Birmingham Fire Insurance Company
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of Pennsylvania, which are all subsidiaries of AIG . Lexington is incorporated
under the laws of Delaware with its principal place of business in Massachusetts .
31 . Upon information and belief, Defendant National Union Fire
Insurance Co . of Pittsburgh, PA ("National Union Pittsburgh") is a subsidiary of
AIG and is incorporated under the laws of Pennsylvania with its principal place of
business in New York .
32 . Upon information and belief, Defendant ACE Ltd . ("ACE") is a
Cayman Islands corporation with its principal place of business at 17 Woodbourne
Avenue, Hamilton HM08, Bermuda . At all times pertinent to this complaint, Ace
transacted business in this District by, including but not limited to, providing
property, casualty, accident and health insurance . Upon information and belief,
Marsh played a leading role in creating ACE, Ltd . in 1985 .
33 . Upon information and belief, Defendant ACE American
Insurance Co. ("ACE American") is a subsidiary of ACE Ltd . and is incorporated
under the laws of Pennsylvania, with its principal place of business in
Pennsylvania.
34. Upon information and belief, Defendant ACE Bermuda
Insurance Company Limited ("ACE Bermuda") is a subsidiary of ACE Ltd,
domiciled in Bermuda, with its principal place of business at 17 Woodbourne
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Avenue, Hamilton HM08, Bermuda . At all times pertinent to this complaint, ACE
Bermuda transacted business in this District by, including but not limited to,
providing general, property casualty, life and excess insurance products .
35 . Upon information and belief, Defendant ACE USA, Inc . ("ACE
USA") is a Delaware corporation with its principal place of business in
Pennsylvania.
36 . Upon information and belief, Defendant Illinois Union
Insurance Co . ("Illinois Union") is a subsidiary of ACE Ltd . and is incorporated
under the laws of Illinois with its principal place of business in Illinois .
37 . Upon information and belief, Defendant Pacific Employers
Insurance Company is a subsidiary of ACE Ltd . and a Pennsylvania company with
its principal place of business in Pennsylvania .
38 . Upon information and belief, Defendant The Chubb
Corporation ("Chubb Corp .") is a corporation incorporated under the laws of New
Jersey with its principal place of business in New Jersey .
39 . Upon information and belief, Defendant Federal Insurance Co .
("Federal insurance") is a subsidiary of Chubb Corp . and is incorporated under the
laws of Indiana with its principal place of business in New Jersey .
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40 . Upon information and belief, Defendant CNA Financial Corp .
("CNA Financial") is a corporation incorporated under the laws of Delaware with
its principal of business in Illinois .
41 . Upon information and belief, Defendant The Continental
Insurance Co . ("Continental Insurance") is a subsidiary of CNA Insurance
Companies and is incorporated under the laws of South Carolina, with its principal
place of business in Illinois .
42 . Upon information and belief, Defendant Continental Casualty
Company is a subsidiary of CNA Insurance Companies, domiciled in Illinois, with
its principal place of business in Illinois.
43 . Upon information and belief, Defendant Hartford Financial
~~ervices Group Inc . ("Hartford") is a Delaware corporation with its principal place
of business in Connecticut.
44. Upon information and belief, Defendant Twin City Fire
Insurance Co . ("Twin City") is a subsidiary of Hartford and is incorporated under
the laws of Indiana with its principal place of business in Connecticut .
45 . Upon information and belief, Defendant Nutmeg Insurance Co .
("Nutmeg") is a subsidiary of Hartford, domiciled in Connecticut, with its principal
place of business in Connecticut .
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46 . Upon information and belief, Defendant St . Paul Travelers Co.,
Inc . ("St . Paul") is a Minnesota corporation with its principal place of business in
Minnesota .
47 . Upon information and belief, Defendant Travelers Indemnity
Company ("Travelers Indemnity") is a subsidiary of St . Paul and is incorporated
under the laws of Connecticut with its principal place of business in Connecticut .
48 . Upon information and belief, Defendant Travelers Casualty &
Surety Co . of America ("Travelers Casualty") is a subsidiary of St . Paul, and is
incorporated under the laws of Connecticut, with its principal place of business in
Connecticut.
49. Upon information and belief, Defendant Gulf Insurance Co .
("Gulf Insurance") is a subsidiary of St . Paul, and is incorporated under the laws of
Connecticut with its principal place of business in New York .
50. Upon information and belief, Defendant St . Paul Mercury
Insurance Co . ("St . Paul Mercury") is a subsidiary of St . Paul, and is incorporated
under the laws of Minnesota, with its principal place of business in Minnesota .
51 . Upon information and belief, Defendant Travelers Excess &
Surplus Insurance is a subsidiary of St . Paul, domiciled in Connecticut, with its
principal place of business in Connecticut .
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52 . Upon information and belief, Defendant The Travelers
Indemnity of America is a subsidiary of St . Paul with its principal place of business
in Connecticut.
53 . Upon information and belief, Defendant Travelers Property
Casualty Insurance Company is a subsidiary of St . Paul, domiciled in Connecticut,
with its principal place of business in Connecticut .
54. Upon information and belief, Defendant St . Paul Fire & MAR
Insurance Co. is a subsidiary of St . Paul, domiciled in Minnesota, with its principal
place of business in Minnesota.
55 . Upon information and belief, Defendant Zurich American
Insurance Co . is a subsidiary of Zurich N .A ., domiciled in New York, with its
principal place of business in Illinois .
56 . Upon information and belief, Defendant American Guaranty
and Liability is a subsidiary of Zurich N .A., domiciled in Illinois, with its principal
place of business in Illinois .
57 . Upon information and belief, Defendant Zurich American of
Illinois is a subsidiary of Zurich N .A., domiciled in Illinois, with its principal place
of business in Illin ois .
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58 . Upon information and belief, Defendant Zurich Specialties
London Limited is a subsidiary of Zurich Global Corporate UK, domiciled in the
United Kingdom, with its principal place of business in London, England . At all
times pertinent to this complaint, Zurich Specialties London Limited transacted
59. Upon information and belief, Defendant Empire Fire & Marine
Insurance Ca is a subsidiary of Zurich N.A., domiciled in Nebraska, with its
principal place of business in Nebraska .
60. Defendant Fidelity & Deposit Company of Maryland ("Fidelity
& Deposit") is a subsidiary of Zurich American, and is incorporated under the laws
of Maryland, with its principal place of business in Illinois .
61 . Upon information and belief, Defendant XL Capital Ltd . ("XL
Capital") is incorporated under the laws of the Cayman Islands and has its
principal place of business in Bermuda . At all times pertinent to this complaint,
XL Capital transacted business in this District by, including but not limited to,
providing general, property casualty, life and excess insurance products .
62 . Upon information and belief, Defendant XL Insurance
Company Limited is a subsidiary of XL Capital, domiciled in the United Kingdom,
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with its principal place of business in London, England . At all times pertinent to
this complaint, XL Insurance Company Limited transacted business in this District
by, including but not limited to, providing general, property casualty, life and
excess insurance products .
63 . Upon information and belief, Defendant XL Insurance America
Inc . is a subsidiary of XL Capital and is a Delaware corporation with its principal
place of business in Connecticut .
64. Upon information and belief, Defendant XL Capital Ltd . is a
Delaware corporation with its principal place of business in Connecticut .
65 . Upon information and belief, Defendant XL Specialty
Insurance Company is a subsidiary of XL Capital and is a Delaware corporation
with its principal place of business in Illinois .
66. Upon information and belief, Defendant Greenwich Insurance
Company is a subsidiary of XL Capital and is a Delaware corporation with its
principal place of business in Connecticut.
67 . Upon information and belief, Defendant Fireman's Fund
Insurance Co . ("Fireman's Fund") is a subsidiary of Allianz AG, and is
incorporated under the laws of California, with its pr i ncipal place of business in
California.
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68 . Upon information and belief, Defendant National Surety Corp .
("National Surety") is a pooling affiliate of Fireman's Fund Inc ., and is
incorporated under the laws of Illinois, with its principal place of business in
Illinois.
69 . Upon information and belief, Defendant Liberty Mutual
Holding Company, Inc . ("Liberty Mutual Holding") is a corporation incorporated
under the laws of Massachusetts, with its principal place of business in
Massachusetts .
70 . Upon information and belief, Defendant Liberty Mutual
Insurance Co ., is a corporation incorporated under the laws of Massachusetts, with
its principal place of business in Massachusetts .
71 . Upon information and belief, Defendant Employers Insurance
of Wausau is a member of Liberty Mutual Insurance Companies, domiciled in
Wisconsin, with its principal place of business in Wisconsin .
72 . Upon information and belief, Defendant Great American
Assurance Co . is an Ohio company with its principal place of business in Ohio .
73 . Upon information and belief, Defendant American Protection
Insurance Co . is a subsidiary of Kemper Auto and Home Group and an Illinois
company with its principal place of business in Illinois .
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74. Upon information and belief, Defendant AWA Holdings is a
District of Columbia company with its principal place of business in Washington,
D.C.
75 . Upon information and belief, Defendant Allied World
Assurance Company is a Bermuda-based insurance and reinsurance company with
its principal place of business at 43 Victoria Street, Hamilton HM12, Bermuda . At
all times pertinent to this complaint, Allied World Assurance Company transacted
76 . Upon information and belief, Defendant American Alternative
Insurance Corporation is a subsidiary of Munich Re and a New York company
with its principal place of business in New Jersey .
77. Upon information and belief, Defendant ARCH Capital Group
is a Delaware company with its principal place of business in New York .
78 . Upon information and belief, Defendant Arch Insurance
Company is a subsidiary of Arch Capital Group and is a Missouri company with its
principal place of business in New York .
79 . Upon information and belief, Defendant Arch Reinsurance
Limited is a subsidiary of Arch Capital Group and is a Bermuda company with its
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principal place of business in Hamilton, Bermuda . At all times pertinent to this
complaint, Arch Reinsurance Limited transacted business in this District by,
including but not limited to, providing general, property casualty, life and excess
insurance products .
80. Upon information and belief, Defendant Arch Specialty
Insurance Company is a subsidiary of Arch Capital Group, domiciled in
Wisconsin, with its principal place of business in Wisconsin .
81 . Upon information and belief, Defendant Arch Insurance
(Bermuda) Ltd . is a subsidiary of Arch Capital Group and is a Bermuda company
with its principal place of business in Hamilton, Bermuda . At all times pertinent to
this complaint, Arch Insurance (Bermuda) Ltd . transacted business in this District
by, including but not limited to, providing general, property casualty, life and
excess insurance products .
82 . Upon information and belief, Defendant Commonwealth
Insurance Company is a part of Fairfax Financial Group and is a Washington
company with its principal place of business in Washington .
83 . Upon information and belief, Defendant Employers
Reinsurance Corp . is a part of GE Global Insurance Group and is a Missouri
company with its principal place of business in Kansas .
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84 . Upon information and belief, Defendant Endurance Specialty
Insurance Limited is a Bermuda company with its principal place of business at 90
Pitts Bay Road, Pembroke HM 08, Bermuda . At all times pertinent to this
complaint, Endurance Specialty Insurance Limited transacted business in this
District by, including but not limited to, providing general, property casualty, life
and excess insurance products .
85 . Upon information and belief, Defendant Essex Insurance
Company (DE) is a division of the Market Group, domiciled in Delaware, with its
principal place of business in Virginia .
86 . Upon information and belief, Defendant HCC Insurance
Holdings, Inc . is a Delaware corporation with its principal place of business in
Texas.
87 . Upon information and belief, Defendant Houston Casualty
Company Limited is a subsidiary of HCC Insurance Holdings, Inc ., domiciled in
Texas, with its principal place of business in Texas .
88 . Upon information and belief, Defendant Liberty Insurance
Underwriters Inc . is a New York company with its principal place of business in
New York .
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89 . The following Defendants, collectively referred to herein as
Certain Underwriters at Lloyd's, London, are foreign syndicates engaged in the
business of underwriting insurance : Lloyd's, London Syndicates Nos . 0033 HIS,
0079 PJG, 0190 FRW, 0282 LSM, 0318 MSP, 0435 FDY, 0588 NKB, 0623 AFB,
0861 NJM, 1003 SJC, 1096 RAS , 1183 TAL, 1200 ROC , 1209 MEB , 1209 XL ,
7 211 SPL, 1225 AES, 1243 EUL, 1414 RTH, 1511 MEP, 2000 HAR, 2001 AML,
2003 SJC, 2020 WEL, 2027 COX, 2488 AGM, 2791 MAP, 2323 NLU, 2623 AFB,
3 000 MKL, 5000 SPL .
90. Upon information and belief, Defendant Royal & Sun Alliance
is part of Royal & Sun Alliance Insurance Group, domiciled in the United
]kingdom, and has its principal place of business in the United Kingdom . At all
times pertinent to this complaint, Royal & Sun Alliance transacted business in this
]District by, including but not limited to, providing general, property casualty, life
91 . Upon information and belief, Defendant Marine Insurance
Company Limited is domiciled in the United Kingdom with its principal place of
business in London, England . At all times pertinent to this complaint, Marine
Insurance Company Limited transacted business in this District by, including but
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not limited to, providing general, property casualty, life and excess insurance
products .
92 . Upon information and belief, Defendant Wuerttembergische
Versicherrungs A .G . is domiciled in Germany with its principal place of business
in Stuttgart, Germany . At all times pertinent to this complaint, Wuerttembergische
Versicherrungs A .G. transacted business in this District by, including but not
limited to, providing general, property casualty, life and excess insurance products .
93 . Upon information and belief, Defendant Cigna Health Care is a
subsidiary of CIGNA Group which is a Delaware Corporation with its principal
place of business in Delaware .
94. Upon information and belief, Defendant Aetna, Inc . is a
Pennsylvania corporation with its principal place of business in Connecticut .
95 . Upon information and belief, Defendant Factory Mutual
Insurance Co . is a subsidiary of FM Global and is a Rhode Island company with its
principal place of business in Rhode Island .
96 . Upon information and belief, Defendant Lumbermens Mutual
Casualty is a part of Kemper Insurance Companies and is an Illinois company with
its principal place of business in Illinois .
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97 . Upon information and belief, Defendant Max Re Limited is a
Bermuda-based company with its principal place of business in Bermuda . At all
times pertinent to this complaint, Max Re Limited transacted business in this
district by, including but not limited to, providing general, property casualty, life
98 . Upon information and belief, Defendant Hartford Steam Boiler
I&I Co . is a Connecticut company with its principle place of business in
Connecticut .
99 . Upon information and belief, Defendant Navigators Group Inc .
is a Delaware Corporation with its principal place of business in New York .
JURISDICTION AN D VENUE
100 . This Court has subject-matter jurisdiction under, inter alia, 28
IJ.S .C . §§ 1331 and 1337 .
101 . This Court has personal jurisdiction over each Defendant as
each Defendant transacted business in this District by, including but not limited to,
providing either insurance brokerage services or general, property casualty, life,
excess, and a variety of other Insurance Products as defined herein .
102 . This District is the proper venue pursuant to Sections 4, 12 and
16 of the Clayton Act, 15 U .S .C . §§ 15, 22 and 26, 18 U .S .C. § 1965(a), and 28
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U.S .C . § 1391(b), (c) and (d) because Defendants reside, transacted business, were
or had agents in this District, and because a substantial portion of the affected
interstate trade and commerce described herein, is and has been carried out in this
District.
PLAINTIFFS
103 . There are basically three types of entities in the corporate
insurance market . First, there are clients : companies such as Plaintiffs that seek to
purchase Insurance Products for their businesses . Second, there are brokers,
consultants, and independent agents (collectively "brokers") that clients hire to
advise them as to needed coverage and to find insurance companies offering that
coverage . Brokers represent the client, obtain price quotes, and present the quotes
to the client . Third, there are insurance companies . They submit quotes to the
brokers and, if selected by the client, enter into a contract to provide insurance for
that client's risk .
104 . Plaintiffs are corporate insurance clients .
105 . All of the Plaintiffs were clients of Marsh and are pursuing
claims against Marsh and, except as indicated in the next paragraph, all other
Defendants .
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106. Plaintiff New Cingular, as a successor to AT&T Wireless, was
a client of Aon and is pursuing claims against Aon . Exelon has settled its claims
against Aon and therefore makes no claims and seeks no relief against Aon .
DEFENDANTS AND CO-CONSPIRATORS
107 . For purposes of this Complaint, Marsh and Aon will be referred
to collectively as the "Broker Defendants ."
108 . For purposes of this Complaint, AIG, American International
~~pecialty Lines IC, American Home Assurance Co ., Illinois National Insurance
Co., Insurance Co . of the State of PA, Starr Excess Liability Insurance
International, Limited, Lexington, National Union Fire Insurance Co . of PA, ACE,
ACE American Insurance Co ., ACE Bermuda Insurance Company Limited, ACE
USA, Pacific Employers Insurance Company, Chubb Corp ., Federal Insurance,
CNA Financial, Continental Insurance, Continental Casualty Company, Hartford,
Twin City, Nutmeg Insurance Co ., St . Paul Travelers Co ., Inc ., Travelers
Indemnity, Travelers Casualty, Gulf Insurance, St . Paul Mercury, Travelers Excess
.& Surplus Insurance, The Travelers Indemnity of America, Travelers Property
Casualty Insurance Co ., St . Paul Fire & MAR Insurance Co ., Zurich American,
American Guaranty and Liability, Zurich American of Illinois, Zurich Specialties
London Limited, Empire Fire & Marine Insurance Co., Fidelity & Deposit, XL
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Capital, XL Insurance Company Limited, XL Insurance America Inc ., XL
Specialty Insurance Company, Greenwich Insurance Company, Fireman's Fund,
National Surety, Liberty Mutual Holding, Liberty Mutual Insurance Co .,
Employers Insurance Co., Great American Assurance Co ., American Protection
Insurance Co ., AWA Holdings, Allied World Assurance Company, American
Alternative Insurance Corporation, Arch Capital Group, Arch Insurance Company,
Arch Reinsurance Limited, Arch Specialty Insurance Co ., Commonwealth
Insurance Company, Employers Reinsurance Corp ., Endurance Specialty
'[nsurance Limited, Essex Insurance Company, HCC Insurance Holdings, Houston
C
Casualty Company, Liberty Insurance Underwriters, Lloyds Syndicates, Royal &
Sun Alliance, Marine Insurance Company Limited, Wuerttembergische
Versicherrungs A .G ., Cigna Health Care, Aetna, Inc ., Factory Mutual Insurance
'Co ., Lumbermens Mutual Casualty, Max Re Limited, Hartford Steam Boiler I&I
Co ., Navigators Group Inc ., and Certain Underwriters at Lloyds will be referred to
collectively as the "Insurer Defendants ."
109. For purposes of this Complaint, the Broker Defendants and the
Insurer Defendants will be referred to collectively as "Defendants ."
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110. Various other persons, corporations, and other legal entities, not
named as Defendants herein, have participated as co-conspirators with Defendants
and have performed acts and made statements in furtherance of the conspiracy .
111 . Whenever reference is made in this Complaint 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 one or more of its respective
officers, directors, agents, employees or representatives while he, she, or they were
actively engaged in the management, direction, control or transaction of the
corporation's business or affairs .
THE RELEVANT MARKET
112 . For purposes of this Complaint, the term "Insurance Products"
includes without limitation, commercial general liability insurance, property and
casualty insurance, excess property or casualty or liability insurance, directors and
officers insurance, errors and omissions insurance, employment practices liability
insurance, surety insurance, health insurance, surplus lines insurance, personal life
and accident insurance, and reinsurance .
113. For purposes of this Complaint, the relevant market includes
'without limitation the market for Insurance Products and insurance brokerage
services .
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114 . For purposes of this Complaint, the relevant geographic market
is the United States and its territories as a whole .
115 . At all times pertinent to this Complaint, Defendants entered
into agreements and engaged in conduct directly and as co-conspirators which
unreasonably restrained and continues to restrain trade in the relevant market and
geographic markets .
TRADE AND INTERSTATE COMMERCE
116 . At all times pertinent to this Complaint, the Insurer Defendants
sold, and the Broker Defendants brokered, the sales of substantial quantities of
Insurance Products in a continuous and uninterrupted flow of interstate commerce .
117 . The activities of Defendants and their co-conspirators, as
described in this Complaint, were within the flow of and substantially affected
interstate commerce . The conduct of Defendants and their co-conspirators
foreseeably restrained interstate commerce .
MARSH
118 . Marsh is the largest provider of insurance brokerage and
consulting services in the world .
119 . Marsh's insurance brokerage business alone employed 42,000
employees in 410 offices located in over 1 00 countries .
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120 . According to its 2003 financial statement, Marsh's insurance
brokerage business generated annual revenues of over $6 .9 billion.
121 . Marsh cited its size and sophistication as a primary reason to
hire the company .
122 . Marsh held itself out to its clients, including Plaintiffs, as a
trusted expert in the analysis and placement of Insurance Products .
123 . Marsh assured its clients, including Plaintiffs, that its "guiding
principal is to consider our client's best interest in all placements ."
124. Marsh assured its clients, including Plaintiffs, that "We are our
clients' advocates, and we represent them in negotiations . We don't represent the
[insurance companies] ."
125 . Contrary to its assurances, Marsh violated the trust of its
clients, including Plaintiffs .
126 . Marsh did not consider the best interests of its clients, including
Plaintiffs, in all placements of insurance Products .
127. Marsh did not act as the disinterested advocate of its clients,
including Plaintiffs, in its brokerage and/or placement of Insurance Products .
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128 . To the contrary, Marsh placed its own interests, as well as those
of the Insurer Defendants and their co-conspirators, above those of its clients,
including Plaintiffs .
129. As part of its Illegal Scheme with the Defendant Insurers,
Marsh, beginning in the 1990s, reconfigured its brokerage business, centralizing
power in a group based at its headquarters in New York City .
130. Marsh created an office in Manhattan that came to be called
Marsh Global Braking (also known as "MBG" or "MMGB"), which oversaw
policy placement decisions in Marsh's major business lines .
131 . Marsh gave Marsh Global Broking control over both business
placement and Marsh's so-called "commission" arrangements . These included
Excess Casualty, Health, FinPro (Financial Products) and Middle Market
(businesses paying less than one million dollars in annual insurance premiums) .
132. At the same time, Marsh created lists of insurers whose
products its employees were to sell more vigorously to clients, including Plaintiffs .
These lists were not based on price or service, but on the amount of money the
Insurer Defendants would pay Marsh .
133 . Marsh rewarded those employees who sold clients more
Insurance Products from favored insurers, and chastised those who did not .
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AON
134. Aon is the second largest provider of insurance brokerage and
consulting services in the world .
135 . Aon Corporation employed approximately 47,000 employees in
offices located across the world .
136. According to its 2004 annual report, Aon's risk and insurance
brokerage business generated annual revenues of over $5 .7 billion.
137 . Aon held itself out to its clients as a trusted expert in the
analysis and placement of Insurance Products .
138 . Aon violated the trust of its clients, including Plaintiffs, in its
brokerage of Insurance Products .
139 . Aon did not consider the best interests of its clients, including
Plaintiffs, in all placements of Insurance Products .
140. Aon did not act as the disinterested advocate of its clients,
including Plaintiffs, in its brokerage of Insurance Products .
14 i . To the contrary, Aon placed its own interests, as well as those
of the Insurer Defendants and their co-conspirators, above those of its clients,
:including Plaintiffs .
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142 . Aon created lists of insurers whose products its employees were
to sell more vigorously to clients, including Plaintiffs . These lists were not based
on price or service, but on the amount of money the Insurer Defendants would pay
Aon.
143 . Aon rewarded those employees who sold clients more
Insurance Products from favored insurers, and chastised those who did not .
THE ILLEGAL SCH EME : STEERING AN D CUSTOMER ALLOCATI ON
144 . Since at least the early 1990s, the Broker Defendants entered
into a scheme with the Insurer Defendants and their co-conspirators under which
the Insurer Defendants have paid the Broker Defendants in excess of a billion
dollars in so-called "commissions" to steer them business and shield them from
competition.
145 . The agreements by the Insurer Defendants to pay improper
commissions to the Broker Defendants have gone by various names, including
without limitation "contingent commissions," "placement service agreements"
("PSAs"), "market services agreements" ("MBAs"), "underwriter service
agreements" ("USAs"), "special producer agreements," "quality business
incentives awards," "preferred broker compensation plans," "competitive bonus
programs," "extra compensation agreements," "overrides," and/or "bonuses ."
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Despite the name or title, these agreements are kickbacks from the Insurer
Defendants to the Broker Defendants .
146 . The kickbacks from the Insurer Defendants have generated
substantial revenues for the Broker Defendants . In 2003 alone, approximately
$800 million of Marsh's earnings were attributable to so-called "commission"
payments . That year, Marsh overall reported approximately $1 .5 billion in net
income.
147 . Upon information and belief, the kickback arrangements are not
just monetary in nature, but also include stock in the Insurer Defendants and/or
loan forg iveness of interest and/or principal .
148 . Whatever the agreements were named, the agreements between
the Broker Defendants and the Insurer Defendants created an improper incentive
for the Broker Defendants to steer business to favored insurers and away from
disfavored insurers .
149 . The Broker Defendants solicited and obtained fictitious high
quotes for Insurance Products from insurance companies in order to deceive their
clients, including Plaintiffs, into believing that true competition had taken place .
150 . The Broker Defendants promised to protect the Insurer
Defendants from competition, and did so .
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151 . The Broker Defendants threatened to hurt the business of those
insurers who considered truly competing for particular placements .
152 . A central part of the Illegal Scheme of the Broker Defendants
has been to promote the interests of insurers with which they have so-called
"commission" agreements .
153 . When the Broker Defendants steered business to favored
Insurer Defendants, those insurance companies, in turn, paid the Broker
Defendants higher "commissions ."
154. When the Broker Defendants helped favored Insurer
Defendants retain their existing business at renewal time, those insurance
companies paid the Broker Defendants higher "commissions ." The scheme
resulted in a de facto, illegal customer allocation conspiracy between all
Defendants that was orchestrated and/or enforced by the Broker Defendants .
155 . The Broker Defendants assured insurers that "commission"
agreements more favorable to the Broker Defendants would result in the Broker
]Defendants sell ing more of their Insurance Products .
156 . The Broker Defendants made it clear to insurers that, if an
insurer wished to be awarded any business, it would have to "pay to play" by
agreeing to pay a "commission" or kickback to the Broker Defendants .
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15 7 . The Broker Defendants rewarded employees for steering- and
admonished employees who failed to steer - business to favored insurers .
THE ILLEGAL SCHEME : INCREASED PREMIUMS
158 . To finance these additional improper "commissions," and to
compensate themselves for the risk of their illegal activities, the Insurer
Defendants increased the premiums chargedd to clients, including Plaintiffs, for
Insurance Products.
159 . When the Broker Defendants' clients, including Plaintiffs, paid
higher premiums for Insurance Products, the volume and profitability of the
Insurer Defendants' business rose, again increasing the Broker Defendants' illegal
"commissions ."
THE ILLEGAL SCHEME : CONCEALMENT
160 . The Broker Defendants consistently concealed from their
clients, including Plaintiffs, the true nature of the so-called "commission"
arrangements .
161 . According to their agreements with their clients, including
Plaintiffs, the Broker Defendants' compensation for their consulting and brokerage
services generally derives from (a) a flat fee or (b) commissions representing a
percentage of the premiums paid by their clients .
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1 62. What the client agreements have generally not disclosed, and
did not disclose to Plaintiffs, is that the Broker Defendants have secret side
arrangements with the Insurer Defendants, under which the Broker Defendants
received additional so-called "commissions ."
163 . On occasion, the Broker Defendants styled their "commission"
~irrangements with the Insurer Defendants as payments for "services ." Any such
services were non-existent or minimal and did not extend beyond those services
the Broker Defendants were already obligated to provide as brokers for their
clients.
164. However the "commission" agreements were characterized,
they were a vehicle by which the Broker Defendants and the Insurer Defendants
furthered their Illegal Scheme .
165 . The "service" that the Broker Defendants provided pursuant to
the so-called "commission" arrangements was to steer business to the insurer
Defendants, to reduce price competition for Insurance Products, and to increase
premiums received by the Insurer Defendants .
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THE I LLEGAL SCHEME : BID RIGGING
166 . As part of their Illegal Scheme, the Insurer Defendants colluded
with the Broker Defendants to rig bids and submit false quotes to unwitting clients,
including Plaintiffs .
167 . A common method for purchasing Insurance Products involves
the use of requests for proposals ("RFPs") by a prospective client through a broker
to a group of insurers . The successful insurer will then enter into a contract with
the insured client to provide Insurance Products .
168 . The Broker Defendants repeatedly provided clients with false
and inflated quotes .
169 . The Broker Defendants frequently designated a winner, and
then solicited inflated bids from other insurance companies, including the Insurer
Defendants, who provided such bids, knowing that later they themselves would
have a turn to get business without meaningful competition .
170. Defendants' actions as set forth above were gross, wanton and
willful, were aimed at the public generally, and involved a high degree of moral
culpability . Defendants' conduct also was specifically intended to harm Plaintiffs
and did, in fact, cause such harm.
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THE ILLEGAL SCHEME : EFFECTS
171 . Defendants' unlawful material misrepresentations and
omissions, contracts, combinations or conspiracies have had at least the following
effects since the early 1990s :
a . Plaintiffs had to pay more for Insurance Products than
they would have paid in a competitive marketplace,
unfettered by Defendants' and their co-conspirators'
collusive and unlawful activities ;
b . Price competition in the sale of Insurance Products
was restrained, suppressed and eliminated in the
United States ; and
c . Plaintiffs have been injured and financially damaged
in their business and property, in amounts that are
presently undetermined .
THE ILLEGAL SCHEME: FRAUDULENT C ONCEALMENT
172 . Defendants engaged in successful, illegal, price-fixing, bid-
rigging and customer allocation conspiracies that, by their nature, were inherently
self-concealing .
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173 . Since the inherently self-concealing contracts, combinations or
conspiracies were kept secret by Defendants, Plaintiffs were unaware of the anti-
competitive agreements .
174. Plaintiffs had no knowledge prior to the announcement by the
Attorney General of the State of New York on October 14, 2004, of Defendants'
unlawful self-concealing conspiracies .
175 . Plaintiffs could not have discovered the illegal contracts,
conspiracies or combinations at an earlier date by the exercise of reasonable
diligence because of the deceptive practices, fraudulent concealment, and
techniques of secrecy employed by Defendants and their co-conspirators to avoid
detection of their Illegal Scheme .
176 . The illegal contracts, conspiracies, or combinations were
fraudulently concealed by Defendants by various means and methods, including,
but not limited to, secret meetings, minimization of written records, failure to
disclose bid-rigging, price-fixing and customer allocations to clients and
surreptitious communications between the Defendants by the use of the telephone
or in-person meetings in order to prevent the existence of written records . In
addition, certain of the Broker Defendants' former employees have admitted that
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they engaged in deception to hide the existence, nature, and effect of the Illegal
Scheme .
177 . Defendants also fraudulently concealed their illegal contracts,
conspiracies or combinations in other ways as well . For example, Defendants
falsely represented to their clients that prices for Insurance Products were arrived
at competitively when, in fact, these price increases were the direct result of
collusive activity among Defendants . The Broker Defendants also disseminated
false and misleading information concerning their use of MSAs, PSAs, and CSUs .
178 . By virtue of the fraudulent concealment by Defendants and
their co-conspirators, the running of any statute of limitations has been tolled and
suspended with respect to any claims that Plaintiffs have as a result of the illegal
contracts, conspiracies or combinations alleged in this Complaint .
THE ILLEGAL SCHEME : INJURY TO PLAINTIFFS
179 . At all times pertinent to the Complaint, Plaintiffs purchased a
substantial amount of Insurance Products through and/or from Defendants .
180. As a direct result of the material misrepresentations and
omissions, contracts, conspiracies or combinations of Defendants and their co-
conspirators, Plaintiffs paid substantially more for Insurance Products than they
would have paid in the absence of Defendants' Illegal Scheme .
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18 1 . As a direct result of Defendants' Illegal Scheme, including
Defendants' violations of the common law, consumer protection statutes,
racketeering laws, and antitrust laws, Plaintiffs have been directly and proximately
injured in their business and property and have suffered damages in an amount
presently undetermined .
182 . The contracts, conspiracies or combinations complained of
herein will continue (and to the extent temporarily and only partially abandoned,
will resume) absent an injunction . Plaintiffs will buy Insurance Products in the
future and will be injured repeatedly unless the continuation of this Illegal Scheme
is enjoined.
COUNT I
(Sherman Act Against all Defendants)
183 . Plaintiffs restate and incorporate by reference as if fully set
forth herein paragraphs 1 through 182.
184. Defendants and their co-conspirators engaged in continuing
illegal contracts, combinations or conspiracies with respect to the sale of Insurance
Products in the United States in an unreasonable restraint of interstate trade and
commerce, in violation of Section 1 of the Sherman Act, 15 U .S .C . § 1 .
185 . The purpose and effect of Defendants' illegal contracts,
combinations or conspiracies were to suppress or eliminate competition, and to
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raise, maintain or stabilize prices for Insurance Products in the United States at
artificially high levels .
186. The illegal contracts, combinations or conspiracies consisted of
agreements among the Defendants and their co-conspirators, the substantial terms
of which were to rig bids and allocate clients with respect to Insurance Products
sold in the United States .
187. As part of the illegal contracts, combinations or conspiracies,
the Broker Defendants received so-called "commissions" from the Insurer
Defendants and their co-conspirators when the Broker Defendants placed
Insurance Products.
188 . In formulating and effectuating the aforesaid contracts,
combinations or conspiracies, Defendants and their co-conspirators illegally
contracted, combined or conspired to do, among other things, the following :
a . Rigged bids and allocated customers with respect to
the sale of Insurance Products in the United States;
b. Created the "A, B, C" quote system to facilitate and
implement their bid-rigging scheme ;
c. Allocated customers to incumbent insurance carriers ;
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d . Boycotted customers with respect to the sale of
Insurance Products in the United States ; and
e . Paid contingent commissions to the Broker
Defendants .
189 . Defendants and their co-conspirators engaged in continuing
illegal contracts, combinations and conspiracies in restraint of trade to fix prices
O f, rig bids for, and allocate customers of Insurance Products sold in the United
States.
190 . Defendants' acts complained of herein do not constitute the
business of insurance regulated under state law.
191 . In formulating and effectuating the illegal contracts,
conspiracies or combinations, Defendants and their co-conspirators engaged in
anti-competitive activities, the purpose andd effect of which were to fix prices of,
rig bids for, and allocate customers of Insurance Products in the United States .
These activities included the following :
a . The Broker Defendants agreed with the Insurer
Defendants to rig bids for Insurance Products ;
b . The Broker Defendants agreed with the Insurer
Defendants to allocate customers ; and
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c . The Broker Defendants agreed with the Insurer
Defendants to steer business to those who paid the
most favorable commissions including under MSAs,
PSAs or CSUs .
192 . Defendants and their co-conspirators engaged in the activities
described above for the purpose of effectuating the unlawful agreements described
in this Complaint . During and throughout the period of the conspiracies alleged in
this Complaint, Plaintiffs purchased Insurance Products from Defendants (or their
,subsidiaries or controlled affiliates) or their co-conspirators at inflated and supra-
competitive prices .
conspiracies or combinations, Defendants 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 Insurance Products sold in the United
;states . These activities included the following :
a . Defendants participated in meetings, written
exchanges, and /or conversat ions to rig bids and/or
allocate customers with respect to Insurance Products
sold in the United States ;
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b. Defendants agreed during those meetings and
conversations to rig bids for and allocate customers of
Insurance Products sold in the United States ; and
c . Defendants agreed during those meetings and
conversations to fix the price of Insurance Products
194. As a result of Defendants' Illegal Scheme, Plaintiffs have been
injured in their business and property because they have paid more for Insurance
products than they would have paid in a competitive market.
195 . The illegal contracts, conspiracies and/or combinations have
had the following effects since at least the early 1990s, among others :
a. Price competition in the market for Insurance
Products has been artificially restrained ;
b. Prices for Insurance Products sold by the Defendants
have been raised, fixed, maintained, or stabilized at
artificially high and non-competitive levels ; and
c. Purchasers of Insurance Products from the Defendants
have been deprived of the benefit of free and open
competition in the markets for Insurance Products .
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196. Defendants have participated in one or more overt acts in
furtherance of the illegal contracts, conspiracies or combinations alleged herein
and have participated in conspiratorial activities described herein.
197 . As a result of this Illegal Scheme, clients, including Plaintiffs,
purchased Insurance Products at prices higher than they would have paid, and on
terms less favorable than would have been available, in a competitive market .
198 . Defendants' acts area per se violation of the Sherman Act .
_Alternatively, Defendants' acts violate the Sherman Act under a rule of reason
analysis .
199 . Various persons, not named as Defendants, participated as co-
conspirators in the violations alleged, and performed acts and made statements in
furtherance of that conspiracy .
WHEREFORE, Plaintiffs demand judgment against Defendants,
jointly and severally, as follows :
A . For damages caused by Defendants' violation of the Sherman
Act;
B. For treble damages ;
C . Directing that Defendants pay Plaintiffs' costs, including
attorneys' fees as provided by law ;
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D. Directing such other equitable relief as may be necessary to
redress illegal conduct ; and
E . Granting such other and further relief as may be just and proper.
COUN T II
(Sherman Act Against Defendant Participants
in the Broker-Centered Conspiracies)
200. Plaintiffs restate and incorporate by reference as if fully set
forth herein paragraphs 1 through 182.
201 . Beginning at least by the early 1990s and continuing through at
least 2004, Marsh, together with the Insurer Defendants and others conspired
unreasonably to restrain trade and commerce in violation of the Sherman Act by,
among other things : (1) providing persons seeking to purchase primary Insurance
Products with collusive, fictitious or otherwise non-competitive bids or other terms
of sale ; (2) allocating the opportunity to sell, and the sale of, Insurance Products to
clients ; and (3) creating a scheme to pay Marsh to implement the unlawful
conspiracy .
202. Beginning at least by the early 1990s and continuing through in
or about 2004, Aon, together with the Insurer Defendants and others conspired
unreasonably to restrain trade and commerce in violation of the Sherman Act by,
among other things : (1) providing persons seeking to purchase primary Insurance
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Products with collusive, fictitious or otherwise non-competitive bids or other terms
of sale ; (2) allocating the opportunity to sell, and the sale of, Insurance Products to
clients ; and (3) creating a scheme to pay Aon to implement the unlawful
conspiracy.
203 . Each of these conspiracies is referred to herein as a "Broker-
Centered" conspiracy .
204 . This claim is brought by the following Plaintiffs against the
following Defendants :
a . Marsh clients against participants in the Marsh
Broker-Centered conspiracy ;
b . Aon clients against participants in the Aon Broker-
Centered conspiracy (except Exelon) ;
c . All Plaintiffs against all Defendants because they
participated in an industry wide conspiracy that
centered on the brokers with the brokers connecting
through the insurers . The Exelon Plaintiffs were
clients of Marsh and are pursuing claims against
Marsh . Exelon has settled its claims against Aon and
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therefore makes no claims and seeks no relief against
Aon.
205 . Each Defendant in the Broker-Centered conspiracies has, with
their co-conspirators, engaged in continuing illegal contracts, combinations or
conspiracies with respect to the sale of Insurance Products in the United States in
unreasonable restraint of interstate trade and commerce, in violation of Section 1 of
the Sherman Act, 15 U .S .C . § 1 .
206 . The purpose and effect of Defendants' illegal contracts,
combinations or conspiracies was to suppress or eliminate competition, and to
raise, maintain or stabilize prices for Insurance Products in the United States at
artificially high levels .
207 . The illegal contracts, combinations or conspiracies consisted of
agreements among each of the Defendants in the Broker-Centered conspiracies and
their co-conspirators, the substantial terms of which were to rig bids and allocate
customers with respect to Insurance Products sold in the United States .
208 . As part of the conspiracies, each of the Broker Defendants
received so-called "commissions" from the Insurer Defendants and their co-
conspirators when they placed Insurance Products .
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209 . In formulating and effectuating the aforesaid illegal contracts,
combinations or conspiracies, each of the Defendants in the Broker-Centered
conspiracies and their co-conspiratoxs engaged in, among other things, the
following conduct :
a . Rigged bids and allocated customers with respect to
the sale of Insurance Products in the United States ;
b . Created the "A, B, C" quote system to facilitate and
implement their bid-rigging scheme ;
c . Allocated customers to incumbent insurance carriers ;
d . Boycotted customers with respect to the sale of
e. Paid contingent commissions to the Broker
Defendants .
210 . Each of the Defendants in the Broker-Centered conspiracies,
with their co-conspirators, engaged in continuing illegal agreements,
understandings, and conspiracies in restraint of trade to fix prices of, rig bids for,
and allocate customers of Insurance Products sold in the United States .
211 . Defendants' acts complained of herein do not constitute the
business of insurance regulated under state law .
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conspiracies or combinations, each of the Defendants in the Broker-Centered
conspiracies, with their co-conspirators, engaged in anti-competitive activities, the
purpose and effect of which were to fix prices of, rig bids for, and allocate
customers of Insurance Products in the United States . These activities included the
following:
a. Each of the Broker Defendants agreed with the
Insurer Defendants to rig bids for Insurance Products ;
b . Each of the Broker Defendants agreed with the
Insurer Defendants to allocate customers; and
c . Each of the Broker Defendants agreed with the
Insurer Defendants to steer business to those who paid
the most favorable commissions including under
MSAs, PSAs or CSUs.
213 . Defendants and their co-conspirators engaged in the activities
described above for the purpose of effectuating the Illegal Scheme .
214. During and throughout the period of the conspiracies alleged in
this Complaint, Plaintiffs purchased Insurance Products from Defendants (or their
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subsidiaries or controlled affiliates) or their co-conspirators at inflated and supra-
competitive prices .
conspiracies or combinations, each of the Defendants in the Broker-Centered
conspiracies, with 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 Insurance Products sold in the United States . These activities included
the following :
a. Each of the Broker Defendants participated in
meetings, written exchanges, and/or conversations
with the Insurer Defendants to rig bids and/or allocate
customers with respect to Insurance Products sold in
the United States ;
b. Defendants agreed during those meetings and
conversations to rig bids for and allocate customers of
c . Defendants agreed during those meetings and
conversations to fix the price of Insurance Products
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216. As a result of Defendants' Illegal Scheme, Plaintiffs have been
injured in their business and property because they have paid more for Insurance
Products than they would have paid in a competitive market .
217 . The illegal contracts , conspirac ies and/or combinations have
had the following effects, among others :
a. Price competition in the market for Insurance
Products has been artificially restrained ;
b . Prices for Insurance Products sold by the Defendants
have been raised, fixed, maintained, or stabilized at
artificially high and non-competitive levels ;
c . Purchasers of Insurance Products from the Defendants
have been deprived of the benefit of free and open
competition in the markets for Insurance Products .
218 . Defendants have participated in one or more overt acts in
furtherance of the illegal contracts, conspiracies or combinations alleged herein
and have participated in conspiratorial activities described herein.
219 . As a result of this conspiracy, clients purchased Insurance
Products at prices higher than they would have paid, and on terms less favorable
than would have been available, in a competitive market .
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220. Defendants' acts area per se violation of the Sherman Act .
Alternatively, Defendants' acts violate the Sherman Act under a rule of reason
analysis .
221 . Various persons, not named as Defendants, participated as co-
conspirators in the violations alleged, and performed acts and made statements in
furtherance of that conspiracy .
A. For damages caused by Defendants' violation of the Sherman
Act ;
B . For treble damages ;
E. Granting such other and further relief as may be just and proper .
C O UNT III
(RICO - 18 U.S .C. §§ 1962(c) a nd (d) Agai nst All Defendants)
forth herein paragraphs 1 through 182 .
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223 . This cause of action is brought under 18 U .S .C. § 1964(c) for
violations of 18 U.S .C . § 1962(c) . Plaintiffs are "persons" within the meaning of
18 U.S .C. § 1961(3).
224. The following persons constitute a group of persons associated
in fact and comprise an Enterprise, as defined in 18 U.S.C. § 1961(4) (the "RICO
Enterprise") :
a. Marsh & McLennan Companies, Inc . ;
b . Marsh Inc.;
c . Aon Corporation;
d. American International Group Inc .;
e. American International Specialty Lines IC ;
f. American Home Assurance Co .;
g• Illinois National Insurance Co . ;
h. Insurance Co . of the State of PA ;
1. Stan Excess Liability Insurance International
Limited ;
J• Lexington Insurance Company ;
k. National Union Fire Insurance Co . of PA ;
1 . ACE Ltd.,
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m. ACE American Insurance Co . ;
n. ACE Bermuda Insurance Company;
0. ACE USA;
p• Illinois Union Insurance Co . ;
q• Pacific Employers Insurance Company ;
r. The Chubb Insurance Corporation ;
S. Federal Insurance Co . ;
t. CNA Financial Corp . ;
U. The Continental Insurance Co .;
V. Continental Casualty Co . ;
w. Hartford Financial Services Group Inc . ;
x. Twin City Fire Insurance Co . ;
Y- Nutmeg Insurance Co . ;
z. St. Paul Travelers Cos ., Inc . ;
aa. Travelers Indemnity Company ;
bb. Travelers Casualty & Surety Co . of America;
cc . Gulf Insurance Co .,
dd. St . Paul Mercury Insurance Co .;
ee . Travelers Excess & Surplus Insurance ;
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ff. Travelers Indemnity of America ;
gg. Travelers Property Casualty Insurance Co . ;
hh. St. Paul Fire & MAR Insurance Co . ;
ii . Zurich American Insurance Co .;
JJ American Guaranty and Liability;
kk. Zurich American of Illinois ;
11. Zurich Specialties London Limited ;
mm . Empire Fire & Marine Insurance Co . ;
nn. Fidelity &. Deposit Company of Maryland ;
00 . XL Capital Ltd . ;
pP• XL Insurance Company Ltd . ;
qq• XL Insurance America Inc .;
rr. XL Specialty Insurance Company ;
ss . Greenwich Insurance Co . ;
tt . Fireman's Fund Insurance Co .;
uu . National Surety Corp .;
vv. Liberty Mutual Holding Company, Inc . ;
ww. Liberty Mutual Insurance Co . ;
xx . Employers Insurance Co . of Wausau ;
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YY• Great American Assurance Co ., Limited ;
zz. American Protection Insurance Co . ;
aaa. AWA Holdings ;
bbb. Allied World Assurance Company ;
ccc . American Alternative Insurance Corporation ;
ddd. Arch Capital Group ;
eee. Arch Insurance Company ;
fff. Arch Reinsurance Limited ;
ggg• Arch Specialty Insurance ;
hhh. Arch Insurance (Bermuda) Ltd . ;
iii . Commonwealth Insurance Company of America ;
jjj . Employers Reinsurance Corp . ;
kkk. Endurance Specialty Insurance Limited ;
Ill . Essex Insurance Company ;
. HCC Insurance Holdings ;

mm-n
nnn. Houston Casualty Company;
000. Liberty Insurance Underwriters Inc .;
ppp. Certain Underwriters at Lloyd's, London, Syndicates

Nos. 0033 HIS, 0079 PJG, 0190 FRW, 0282 LSM,
0318 MSP, 0435 FDY, 058 8 NKB, 0623 AFB, 0 8 61
NJM, 1003 SJC, 1096 RAS, 1183 TAL, 1200 ROC,
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1209 MEB, 1209 XL, 1211 SPL, 1225 AES, 1243

EUL, 1414 RTH, 1511 MEP, 2000 HAR, 2001 AML,
2003 SJC, 2020 WEL, 2027 COX, 2488 AGM, 2791
MAP, 2323 NLU, 2623 AFB, 3000 MKL, 5000 SPL . ;
qqq. Royal & Sun Alliance ;
rrr. Marine Insurance Company Limited ;
sss . Wuerttembergische Versicherrungs A .G. ;
ttt . Cigna Health Care ;
uuu . Aetna ;
vvv. Factory Mutual Insurance Co .;
www . Lumbermans Mutual Casualty ;
xxx. Max Re Li mited;
yyy. Hartford Steam Boiler I&I Co . ;
zzz . Navigators Group Inc . ; and
aaaa . Other insurers not named as Defendants in this
Complaint who paid so-called "commissions" to the
Broker Defendants .
225 . The "RICO Enterprise" referred to herein consists of : (a) the
Broker Defendants ; (b) other insurance brokers not named as Defendants ; (c) the
Insurer Defendants ; (d) other insurers not named as Defendants that paid
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contingent fees, agreed to rig bids, and/or agreed to allocate customers ; and (e)
insurance brokerage and insurance industry groups that facilitated the practices
described herein, such as the Council of Insurance Agents & Brokers ("CIAB"),
and the Property Casualty Insurers Association of America ("PCIAA") . This
RICO Enterprise engaged in activities that affected interstate commerce .
226 . Each Defendant is a distinct and separate entity from the RICO
Enterprise as a whole .
227. The RICO Enterprise is an ongoing organization engaging in
activities that are within the flow of, and substantially affect, interstate commerce .
228 . Defendants have participated directly in the operation and
management of the RICO Enterprise . The RICO Enterprise has an existence and
.structure separate and apart from its constituent members . The RICO Enterprise
has an existence and structure separate and distinct from the pattern of unlawful
racketeering activity set out in this Complaint .
229. Defendants have participated in the conduct and operation of
the RICO Enterprise by :
a . Sharing and disseminating information among
Defendants regarding bids and potential bids for
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Insurance Products to policyholders, including
Plaintiffs ;
b . Coordinating Insurance Product placement strategies
among Defendants ;
c . Rigging bids or fixing prices for Insurance Products
for policyholders, including Plaintiffs ;
d . Using insurance trade associations as vehicles for
disseminating and sharing information necessary to
the bid-rigging, customer allocation and contingent
commission practices described above ;
e . Developing the bid-rigging, customer allocation and
contingent commission practices described above ; and
f. Recommending purchase of Insurance Products from
the Insurer Defendants for the purposes of
maximizing illegal contingent commissions and
suppressing a free market for such products .
230 . Defendants conducted the activities of and operated the
aforementioned RICO Enterprise through predicate acts of mail and wire fraud that
violated 18 U .S .C . §§ 1341 and 1343 . Defendants also aided and abetted
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violations by others of these laws, within the meaning of 18 U .S.C . § 2 . Thus,
Defendants :
a. Used the United States mail to deliver and/or
disseminate agreements, correspondence, policy
materials, fee schedules and payments by clients and
insurers for the purpose of an unlawful scheme to
obtain money by false pretenses or misrepresentations
in violation of 18 U .S .C. § 1341 ; and
b . Transmitted by wire the same types of materials for
the purpose of an unlawful scheme to obtain money
by false pretenses or misrepresentations in violation of
18 U.S.C . § 1343 .
231 . The materials transmitted by mail or by wire contained
knowing and intentional misrepresentation or omissions that were intended to
deceive Plaintiffs . These misrepresentations and omissions included :
a. False statements that Defendants were acting in the
best interests of their clients in obtaining Insurance
Products when in fact Defendants were engaged in a
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conspiracy to maximize their own profits at the
expense of their clients ;
b . False statements that Defendants served the interests
of their clients in negotiating for Insurance Products
on their clients' behalf with the Insurer Defendants ;
c. Failure to disclose that bids submitted to clients for
Insurance Products by the Insurer Defendants were
the product of conspiratorial bid-rigging ;
d. Failure to disclose the market allocation schemes
agreed to by the Broker Defendants and the Insurer
Defendants ; and
e. Failure to disclose the ex istence and/or terms of
contingent commission agreements between the
Broker Defendants and the Insurer Defendants and the
conflicts of interest created by those arrangements .
232 . Defendants knew or recklessly disregarded that the
misrepresentations or omissions described above were material, and Plaintiffs
relied on them in buying Insurance Products .
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233 . As a result, Plaintiffs have been injured in their business or
property by the Defendants' overt acts of mail and wire fraud and by their aiding
and abetting others to commit such acts .
234. Defendants have committed a "pattern of racketeering activity"
as defined in 18 U .S .C . § 1961(5 ) by committing or aiding and abetting the
commission of thousands of acts of racketeering activity (violations of 18 U .S .C .
§ § 1341, 1343) as described above .
235. Each act of racketeering activity was related, had a similar
purpose, involved the same or similar participants and method of commission, had
similar results, and impacted similar victims, including Plaintiffs .
236 . These acts of racketeering activity were undertaken in
furtherance of the Illegal Scheme described above and thus constitute a "pattern of
racketeering activity ."
237 . In violation of 18 U .S .C. § 1962(c), Defendants have conducted
or participated in the conduct of the affairs of the aforementioned RICO Enterprise
through a pattern of racketeering activity .
238 . Defendants have participated in the control and operation of the
RICO Enterprise as follows :
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a . By communicating with other RICO Enterprise
members with respect to the placement of Insurance
Products ;
b. By communicating with RICO Enterprise members as
necessary to create rigged bids so as to maximize
contingent comrriissions and insurance premiums ;
c. By allocating and "binding" Plaintiffs to insurers who
have participated in the RICO Enterprise ; and
d. By tying Insurance Products for Plaintiffs to other
coverage and reinsurance covered by the brokerage
firms .
239 . Racketeering activity, as defined at 18 U.S .C . § 1961(1),
includes acts indictable under 18 U .S .C . § 1341, relating to mail fraud, and 18
U.S .C . § 1343, relating to wire fraud.
240 . Defendants have knowingly and willfully participated in an
Illegal Scheme to defraud Plaintiffs through the RICO Enterprise by engaging in
conduct violative of 18 U .S .C. § 1341 and 18 U .S.C . § 1343 .
241 . Defendants have participated in the Illegal Scheme with
specific intent to defraud Plaintiffs .
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242. To effectuate their Illegal Scheme, Defendants have placed in
post offices and/or official depositories of the United States Postal Service things
to be delivered by the Postal Service, caused things to be delivered by commercial
interstate carrier, and received things from the Postal Service or commercial
interstate carriers, including, but not limited to, agreements and correspondence
relating to Insurance Products offered for sale to Plaintiffs .
243 . To effectuate their Illegal Scheme, Defendants have transmitted
and received by wire, matters and things including, but not limited to, agreements,
communications, correspondence and payments relating to Insurance Products
offered for sale to Plaintiffs .
244. Defendants' illegal activities have had the following effects :
a. Plaintiffs have paid more for Insurance Products than
they would have paid in a competitive market
unfettered by the RICO Enterprise ;
b . Price competition in the sale of Insurance Products
was restrained, suppressed and eliminated in the
United States ; and
c. As a direct and proximate result of the RICO
Enterprise, Plaintiffs have been injured and financially
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damaged in their business and property, including
payment of inflated insurance premiums and
commissions .
245 . Defendants have engaged in a "pattern of racketeering activity,"
defined at 18 U .S .C . § 1961(5), by committing at least two acts of racketeering as
set out in this Complaint within the past ten years .
246. Each of Defendants' acts of racketeering activity was related
and had a similar purpose, involving similar participants and methods of
commission, and impacted similar victims, including Plaintiffs .
247 . Through the pattern of racketeering activity described above,
Defendants have conducted or participated in the conduct of the RICO Enterprise
violative of 18 U .S.C. § 1962(c) .
248 . Defendants' conspiracy relating to the unlawful operation of the
RICO Enterprise to rig bids is a violation of 18 U .S .C . § 1962(d).
249 . As a direct result, Plaintiffs have been injured in their business
or property by the predicate acts constituting the pattern of racketeering activity .
Plaintiffs paid excessive premiums for Insurance Products that they purchased and
which were inferior to those that would have been made available to them absent
the Illegal Scheme described herein .
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250 . Defendants are therefore liable for treble damages as proven
and costs and attorneys' fees .
WHEREFORE, Plaintiffs demand judgment against the Defendants,
A. For damages caused by Defendants violation of 18 U .S .C . §§
1962 (c) and (d) ;
B. For treble damages ;
C. Directing that Defendants pay Plaintiffs' costs, including
D . Directing such other equitable relief as may be necessary to
E. Granting such other and further relief as may be just and proper .
COUNT IV
(Breach of Fiduciary Duty Against the Broker Defendants)
forth herein paragraphs l through 182 .
252. This claim is brought by the following Plaintiffs against the
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a . Marsh clients against Marsh ;
b . Aon clients against Aon (except the Exelon Plaintiffs) .
253 . The Broker Defendants were in a confidential fiduciary
relationship with Plaintiffs and owed Plaintiffs the highest duties of due care,
loyalty, honesty, and good faith and fair dealing . The Broker Defendants were
obligated to refrain from favoring their own interests or those of their co-
conspirators at the expense and to the detriment of Plaintiffs .
254 . By its acts, practices and conduct described in this Complaint,
each of the Broker Defendants breached its fiduciary duties to Plaintiffs . As a
direct and proximate result of the Broker Defendants wrongful conduct, Plaintiffs
have suffered damages .
255 . The Broker Defendants knowingly and willingly assumed a
fiduciary responsibility to their clients, including Plaintiffs . As brokers for
Plaintiffs, the Broker Defendants acted as representatives, agents and fiduciaries .
Plaintiffs reasonably relied on the Broker Defendants to inform them of the best
possible competitively determined price for the Insurance Products Plaintiffs
nought to purchase, any compensation the Broker Defendants would receive for
their services, and what expenses Plaintiffs would incur .
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256. Plaintiffs placed trust and confidence in the Broker Defendants
to deal fairly and employ due diligence in obtaining Insurance Products for
Plaintiffs . Federal and/or State common law required the Broker Defendants to
deal fairly with Plaintiffs in the procurement of Insurance Products .
257. Plaintiffs had a legal expectation that the Broker Defendants
would not place their own financial gain above the interests of Plaintiffs .
258. As brokers for Plaintiffs , acting as their representative, agent
~~nd fiduciary, the Broker Defendants had a duty to disclose material facts to
Plaintiffs that were relevant to the parties' relationships . The Broker Defendants
were obligated to disclose fully to Plaintiffs the existence of bid rigging schemes,
kickbacks, so-called contingent fees, or other payments made by insurance
companies which were material facts relating to and affecting the subject matter of
'the parties' relationships and the procurement of Insurance Products .
259. As brokers for Plaintiffs, acting as the representative, agent and
fiduciary for each Plaintiff, the Broker Defendants had a duty to remit to Plaintiffs
any undisclosed profit the Insurance Broker Defendants collected in connection
with or because of the procurement of Insurance Products on behalf of Plaintiffs .
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260 . The Broker Defendants breached fiduciary duties owed to
Plaintiffs, including the duties of good faith, loyalty and trust, the duty to disclose
material facts and the duty to remit undisclosed profits by, inter alias
a . Entering into undisclosed agreements with insurance
companies including the Insurer Defendants for
contingent fees or other payments, thereby knowingly
creating an obvious conflict of interest ;
b . Secretly profiting at the expense of Plaintiffs ;
c . Failing to disclose to Plaintiffs the existence of the
contingent fees and agreements with insurance
companies including Insurer Defendants ;
d . Failing to remit to Plaintiffs the undisclosed profits
collection in connection with or because of the
procurement of Insurance Products on behalf of
Plaintiffs ; and
e . Facilitating Plaintiffs' procurement of more expensive
Insurance Products and services than necessary
through the implementation of the Illegal Scheme,
while secretly profiting from such arrangement .
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26 1 . By virtue of the foregoing, Plaintiffs should be awarded
damages in an amount to be determined at trial .
262. As a result of the breach of fiduciary duties owed to them by
the Broker Defendants, Plaintiffs are entitled to the disgorgement of all profits or
benefits improperly received by the Broker Defendants via contingent fees and
related payments by insurance companies .
263 . Defendants' conduct was intentional, willful, wanton, and
specifically intended to cause harm to plaintiffs, and justifies an award of punitive
damages.
WHEREFORE, Plaintiffs demand judgment against the each of the
Broker Defendants, jointly and severally, as follows :
A . Directing that the Broker Defendants disgorge to their clients
all profits obtained, including all fees collected from any source whatsoever ;
B . Directing that the Broker Defendants pay all restitution, and
damages caused, directly or indirectly by the breaches of the fiduciary duties
complained of herein .
C. Directing that the Broker Defendants pay to their clients
Plaintiffs' costs, including attorneys' fees as provided by law;
D. Awarding punitive damages against the Broker Defendants ;
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E . Directing such other equitable relief as may be necessary to
F . Granting such other and further relief as may be just and proper .
COUNT V
(Inducement to Breac h Fiduciary Duty Aga inst Insurer Defendants)
forth herein paragraphs I through 182 .
265 . As alleged above, a fiduciary relationship existed between each
Broker Defendant and each brokers' clients, including Plaintiffs .
266 . The Broker Defendants breached these fiduciary duties as
described above .
267 . The Insurer Defendants knowingly participated in and/or
induced that breach by, among other things, engaging in the fraudulent and
conspiratorial conduct described above .
268 . Plaintiffs have suffered damages proximately caused by the
][usurer Defendants' participation in and inducement of the Broker Defendants'
breaches of fiduciary duties to Plaintiffs .
269 . Defendants' conduct was intentional, willful, wanton and
justifies an award of punitive damages .
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WHEREFORE, Plaintiffs demand judgment against the Insurer
Defendants, jointly and severally, as follows :
A. Directing that the Insurer Defendants disgorge all profits
obtained, including fees collected, and pay all restitution, and damages caused,
directly or indirectly by the participation in and inducement of the Broker
Defendants' breaches of fiduciary duties complained of herein .
B. Directing that the Insurer Defendants pay Plaintiffs' costs,
including attorneys' fees as provided by law ;
C. Awarding punitive damages against the Insurer Defendants ;
E . Granting such other and further relief as may be just and proper.
COUNT VI
(Unjust Enrichment Against All Defendants)
forth herein paragraphs I through 182 .
271 . Plaintiffs conferred a financial benefit upon the Broker
]Defendants as a result of Plaintiffs' purchasing Insurance Products from the Broker
]Defendants . This benefit not only consists of the fees that they paid to the Broker
Defendants for their services, but also the additional contingent fees and other
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profits that the Broker Defendants were able to receive (a) from the Insurer
Defendants with which the Broker Defendants had contingent fee agreements ; and
(b) by the Illegal Scheme the Broker Defendants engaged in, as set forth above .
272 . Plaintiffs conferred a financial benefit upon the Insurer
Defendants as a result of their purchasing of the Insurer Defendants' Insurance
Products . This benefit not only consists of the premiums that they paid to the
Insurer Defendants for their Insurance Products, but also amounts consisting of
inflated premiums over and above those Plaintiffs would have paid, and on terms
less favorable than would have been available, in a competitive market .
273 . The Broker Defendants have been financially enriched by the
brokerage fees received from Plaintiffs and by the contingent fees and kickbacks
received from the Insurer Defendants for providing those carriers' Insurance
Products to Plaintiffs .
274. The Insurer Defendants have been financially enriched by the
excessive premiums received from Plaintiffs .
275 . Defendants obtained this financial enrichment to the detriment
and at the expense of Plaintiffs . Among other things, as a result of the Defendants'
Illegal Scheme, Plaintiffs paid more for Insurance Products than they would have
otherwise had to pay and / or received less and/or inappropriate Insurance Products .
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276 . It would be against equity and good conscience to allow
Defendants to retain payments and proceeds that they derived and received,
indirectly or directly, from the Illegal Scheme described in this Complaint . By
engaging in the acts and conduct described above, Defendants unjustly enriched
themselves and deprived policyholders, including Plaintiffs, of a fair marketplace
for Insurance Products.
A. Directing that Defendants disgorge all profits obtained,
including fees collected, and pay all restitution, and damages caused, directly or
indirectly by the wrongful acts complained of herein .
B. Directing such other equitable relief as may be necessary to
redress wrongful conduct ; and
C. Granting such other and further relief as may be just and proper .
COUNT VII
(Common Law Fraud Again st the Broker D efendants)
277. Plaintiffs restate and incorporate by reference as if fully set
forth herein paragraphs 1 through 182 .
278 . This claim is brought by the following Plaintiffs against the
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a . Marsh clients against Marsh ;
b . Aon clients against Aon (except the Exelon Plaintiffs) .
279 . The Broker Defendants had a duty to fully disclose to Plaintiffs
the facts concerning the services provided by the Broker Defendants to their
Plaintiff clients .
280 . In fact, the Broker Defendants concealed and omitted material
facts concerning their participation in the Illegal Scheme .
281 . In addition, the Broker Defendants affirmatively misrepresented
material facts concerning their conduct .
282. Among other things, by engaging in the aforementioned acts
and practices, the Broker Defendants falsely represented or omitted stating that :
a. the Broker Defendants were securing the best
coverage for Plaintiffs at the best price when, in fact,
they did not ;
b. the Broker Defendants would act in the best interests
of Plaintiffs when, in fact, they did not;
c . the Broker Defendants would be remunerated solely
for their service either through a flat fee paid by the
client or disclosed commissions paid by the Insurer
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Defendants when, in fact, they received additional,
undisclosed compensation for other sources ;
d. the brokerage commissions would be only the amount
disclosed when, in fact, they were not ;
e . the Broker Defendants would act as a fiduciary solely
for the Plaintiffs' interests when, in fact, they would
not ;
f. Plaintiffs' insurers had been recommended solely on
their qualifications alone when, in fact, they had not
been; and
g. Plaintiffs would receive a competitively determined
price for an array of insurance Products when, in fact,
the bidding had been rigged .
283 . The Broker Defendants' silence in failing to inform Plaintiffs of
the material omissions and misrepresentations of facts were intended by the Broker
Defendant to induce, and did in fact induce, Plaintiffs to reasonably rely on the
material omissions and misrepresentations of material facts .
284. The Broker Defendants knew that their false communications
and material omissions would induce reliance by Plaintiffs .
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285. Plaintiffs reasonably and justifiably relied on the
misrepresentations and omissions of the Broker Defendants . Had Plaintiffs known
of the Broker Defendants' illegal conduct and the misrepresentations and
omissions, they would not have purchased their Insurance Products through the
Broker Defendants .
286 . Such reliance was to the detriment of Plaintiffs and proximately
caused damage to Plaintiffs .
287. The acts and practices of the Broker Defendants alleged herein
constitute actual and/or constructive fraud under the law of the State of Arkansas .
288 . The acts and practices of the Broker Defendants alleged herein
constitute actual and/or constructive fraud under the law of the State of Georgia .
constitute actual and/or constructive fraud under the law of the State of Iowa .
290. The acts and practices of the Broker Defendants alleged herein
constitute actual and/or constructive fraud under the law of the State of Nebraska .
constitute actual and/or constructive fraud under the law of the State of New
Jersey .
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constitute actual and/or constructive fraud under the law of the State of
Pennsylvania.
constitute actual and / or constructive fraud under the law of the State o f South
Dakota.
constitute actual and/or constructive fraud under the law of the State of Texas .
constitute actual and/or constructive fraud under the law of the State of
Washington .
296 . Defendants' conduct was intentional, willful, wanton, and
specifically intended to cause harm to Plaintiffs, and justifies an award of punitive
damages .
WHEREFORE, Plaintiffs demand judgment against the Broker
Defendants, jointly and severally, as follows :
A . Awarding damages against the Broker Defendants ;
B . Awarding punitive damages against the Broker Defendants ;
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C. Directing such other equitable relief as may be necessary to
redress wrongful conduct complained of herein ; and
D. Granting such other and further relief as may be just and proper .
COUNT VIII
(Statutory and Consumer Fraud Against All Defendants)
forth herein paragraphs l through 182 .
298 . The Broker Defendants are providers of insurance brokerage
services.
299 . The Insurer Defendants are providers of Insurance Products .
300 . Plaintiffs are consumers of Insurance Products and insurance
brokerage services .
301 . Among other things, by engaging in the aforementioned acts
and practices, the Broker Defendants falsely represented or omitted to state that :
a . The Broker Defendants were securing the best
coverage for Plaintiffs at the best price when, in fact,
they were not ;
b. The Broker Defendants would act in the best interests
of Plaintiffs when, in fact, they would not and did not ;
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c . The Broker Defendants would be remunerated solely
for their services to Plaintiffs either through a flat fee
paid by the client or disclosed commissions paid by
the Insurer Defendants when, in fact, they received
additional , undisclosed kickbacks or other illegal
compensation from other sources ;
d . The brokerage commissions would be only the
amount disclosed when, in fact, they were not ;
e . The Broker Defendants would act as a fiduciary solely
for the Plaintiffs' interests when, in fact, they would
not ; and
f. The Insurer Defendants had been recommended to
Plaintiffs by the Broker Defendants based their
qualifications and pricing, however, neither the
Broker Defendants, nor the Insurer Defendants
disclosed to the Plaintiffs the existence of the Illegal
Scheme .
302 . The Insurer Defendants had actual or constructive knowledge
that the Broker Defendants were representing to Plaintiffs that the bids, quotes, and
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terms of insurance related to the Insurance Products provided by the Insurer
Defendants were in fact legitimate and not the product of the illegal and wrongful
acts described above.
303 . The Insurer Defendants knowingly facilitated the
misrepresentations and omissions by the Broker Defendants concerning the
Insurance Products provided by the Insurer Defendants to Plaintiffs .
304. Defendants' acts and practices, as alleged herein, constitute
material misrepresentations and omissions .
305 . These misrepresentations and omissions were negligent .
306. These misrepresentations and omissions were intentional .
307 . Plaintiffs reasonably and justifiably relied on Defendants
misrepresentations and omissions .
308 . These acts proximately caused damages to Plaintiffs .
309 . Defendants' acts and practices, as alleged herein, are immoral,
unethical, oppressive or unscrupulous and have caused substantial injury .
310. Defendants' acts or practices constitute consumer fraud or
deceptive acts or practices in violation of the Arkansas Deceptive Trade Practices
Act, Ark . Code Ann . § § 4-88-101 to 4-88-115 .
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3 11 . Defendants' acts or practices constitute deceptive acts or
practices in violation of the Georgia Unfair and Deceptive Trade Practices Act,
O.C.G.A. §§ 10-1-370 to 10-1-375 .
deceptive acts or practices in violation of the Nebraska Consumer Protection Act,
Neb . Rev. Stat. §§ 59-1b01 to 59-1623 .
313 . Defendants' acts or practices constitute consumer fraud or
deceptive acts or practices in violation of the New Jersey Unfair Trade Practices
Act, N .J . Stat . Ann. § 56:8, et sue.
deceptive acts or practices in violation of the Pennsylvania Unfair Trade Practices
and Consumer Protection Law, 73 P .S . §§ 201-1 to 201-9 .3 .
315 . Defendants' acts or practices constitute consumer fraud or
deceptive acts or practices in violation of the South Dakota Deceptive Trade
Practice and Consumer Protection, S .D . Codified Laws §§ 37-24-1 to 37-24-40 .
deceptive acts or practices in violation of the Texas Deceptive Trade Practices -
Consumer Protection Act, Tex . Bus. & Com . Code §§ 17 .41 to 17 .62 .
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deceptive acts or practices in violation of the Washington Consumer Protection
Act, Wash. Ann. § § 19 .86.010 to 1 9 .86.920 .
318. The conduct described herein entitles Plaintiffs to an award of
punitive damages .
A . Enjoining and restraining Defendants, their affiliates, assignees,
subsidiaries, successors and transferees, their officers, directors, partners, agents
and employees, and all other persons acting or claiming to act on their behalf or in
concert with them, from engaging in any conduct, conspiracy, contract, agreement,
arrangement or combination, and from adopting or following any practice, plan,
program, scheme, artifice or device similar to, or having a purpose and effect
similar to, the conduct complained of above .
B . Awarding Plaintiffs damages caused, directly or indirectly by
the fraudulent and deceptive acts complained of herein ;
attorneys' fees as provided by law;
D . Awarding punitive damages against Defendants ;
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E . If not punitive damages, awarding treble damages to Plaintiffs ;
F. Directing such other equitable relief as may be necessary to
G . Granting such other and further relief as may be just and proper .
JURY TRI AL DEMANDED
Plaintiffs respectfully demand a trial by jury of all issues so friable .
Respectfully submitted this 4th day of Apr~, ~06,
Jeffre' 1~ rst
Georg ar o . 367834
3 3 y,
~
David A. Sirna
Georgia Bar No . 613513
KREVOLIN & HORST, LLC

1175 Peachtree Street, N .E .
Suite 2150, 100 Colony Square
Atlanta, Georgia 30361
(404) 888-9594
(404) 888-9577 (facsimile)
William G . Schopf
Steven A . Weiss
Patrick J . Heneghan
Veronica Gomez
SCHOPF & WEISS, LLP
312 W . Randolph Street, Suite 300
Chicago, Illinois 60606-1721
(312) 701-9300
Attorneys for Plaintiffs
88

NEW CINGULAR WIRELESS HEADQUARTERS LLC Et Al v. MARSH & MCLENNAN COMPANIES INC Complaint

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NEW CINGULAR WIRELESS HEADQUARTERS LLC Et Al v. MARSH & MCLENNAN COMPANIES INC Complaint

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Case 1:06-cv-00796-BBM

HEADQUARTERS, LLC, as successor in

MARSH & McLENNAN COMPANIES,

BUNION FIRE INSURANCE CO . OF PA,

COMPANY, INC ., LIBERTY MUTUAL

MAX RE LIMITED, HARTFORD STEAM )

Plaintiffs New Cingular Wireless Headquarters, LLC ("New

Cingular"), as successor in interest to AT&T Wireless Services, Inc . ("AT&T

America, Inc . ("Foodbrands") (collectively "Tyson") ; Exelon Corporation, Unicorn

Corp., Exelon Generation Company, LLC, Commonwealth Edison Co ., PECO

Energy Company ; AmerGen Energy Company, LLC ("AmerGen") (collectively

Inc., PSEG Resources, Inc ., (collectively "PSEG") ; and Texas Independent

Energy, LLP, Texas Independent Energy Operating Co ., LLC (collectively "TIE")

(collectively, "Plaintiffs") ; by and through their attorneys, complain against

American International Group Inc ., American International Specialty Lines IC,

American Home Assurance Co ., Illinois National Insurance Co ., Insurance Co . of

American Insurance Co ., ACE Bermuda Insurance Company, Ltd ., ACE USA,

Illinois Union Insurance Co ., Pacific Employers Insurance Company, The Chubb

Insurance Corporation, Federal Insurance Co ., CNA Financial Corp ., The

Continental Insurance Co ., Continental Casualty Co ., Hartford Financial Services

Travelers Co ., Inc ., Travelers Indemnity Company, Travelers Casualty & Surety

Co . of America, Gulf Insurance Co ., St . Paul Mercury Insurance Co ., Travelers

Excess & Surplus Insurance, The Travelers Indemnity of America, Travelers

Property Casualty Insurance Co ., St . Paul Fire & MAR Insurance Co ., Zurich

American Insurance Co ., American Guaranty and Liability, Zurich American of

Fidelity & Deposit Company of Maryland, XL Capital Ltd ., XL Insurance

Company Ltd ., XL Insurance America Inc ., XL Specialty Insurance Company,

Greenwich Insurance Co., Fireman's Fund Insurance Co ., National Surety Corp .,

Liberty Mutual Holding Company, Inc ., Liberty Mutual Insurance Co ., Employers

Insurance of Wausau, Great American Assurance Co ., Limited, American

Protection Insurance Co ., AWA Holdings, Allied World Assurance Company,

American Alternative Insurance Corporation, Arch Capital Group, Arch Insurance

Company, Arch Reinsurance Limited, Arch Specialty Insurance Co ., Arch

I-11surance (Bermuda) Ltd ., Commonwealth Insurance Company, Employers

Reinsurance Corp ., Endurance Specialty Insurance Limited, Essex Insurance

Company (DE), HCC Insurance Holdings, Houston Casualty Company, Liberty

Insurance Underwriters Inc ., Certain Underwriters at Lloyd's, London including

Underwriters at Lloyds, London"), Royal & Sun Alliance, Marine Insurance

Company Limited, Wuerttembergische Versicherrungs A .G., Cigna Health Care,

Aetna, Inc ., Factory Mutual Insurance Co ., Lumbermans Mutual Casualty, Max Re

]Limited, Hartford Steam Boiler I&I Co ., Navigators Group Inc ., as follows:

1 . This is an action by Plaintiffs, corporate insureds, against

and punitive damages, disgorgement, restitution, other injunctive and equitable

unjust enrichment, (7) consumer fraud, and (8) fraud.

2. The conduct forming the basis of this complaint involves the

prices of insurance products paid by Plaintiffs for insurance products (collectively

steered policyholders' business to preferred Insurer Defendants (as defined herein) .

]Defendants pa id substantial sums of money to steer business to that insurer or

3 . Plaintiff New Cingular Wireless Headquarters, LLC ("New

Cingular") i s a Delaware limited liability company w ith its principal place of .

4 . Plaintiff New Cingular is the successor in interest by merger to

AT&T Wireless Services, Inc . ("AT&T Wireless") .

5 . Plaintiff AT&T Wireless was, at all relevant times, a Delaware

corporation with its principal place of business in Washington .

6. Plaintiff Tyson Foods, Inc . is a Delaware corporation with its

interest by merger to ibp, inc .

7 . Tyson Fresh Meat, Inc . is a Delaware corporation with its

principal place of business in Arkansas .

8 . Plaintiff Tyson International Co ., Ltd. is a foreign corporation

organized under the laws of Bermuda .

9. Plaintiff Foodbrands America, Inc . is a Delaware corporation

with its principal place of business in Arkansas .

10. Plaintiff Exelon Corp. is a Pennsylvania corporation with its