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Court Grants Motion to Compel Guardian
to Turn Over Documents in Anti-Trust Suit
The U.S. District Court for the Western District
of Pennsylvania has granted the plaintiffs’ motion to compel Guardian
Industries to produce several documents that were reviewed during the
European Commission’s (EC) price-fixing investigation. In the suit, the
plaintiffs, which include a range of glass shops across the United States,
allege that several glass manufacturers engaged in a conspiracy to fix
Guardian had objected to the motion, “arguing that the requests are overly
broad, unreasonably burdensome and violative of principles of international
comity,” according to the court’s opinion, released in July.
The memo granting the motion, authored by Chief District Judge Donetta
Ambrose, notes that “courts have traditionally taken a liberal view of
relevance in determining the scope of discovery” in anti-trust cases.
“I agree that liberal discovery is necessary in an alleged antitrust conspiracy
case where the alleged wrongdoing is generally covert,” writes Ambrose.
“I further agree with the Class Plaintiffs that the documents sought could
be relevant to motive and opportunity for defendants to conspire in the
United States, the scope and nature of such conspiracy and how defendants
may have concealed any unlawful activities. Further, these documents may
assist Class Plaintiffs in identifying witnesses for their case.”
Ambrose also writes that while producing the documents could be a “substantial
burden” to Guardian, because the documents are within the scope of the
allegations, and because the class plaintiffs have alleged a link between
the EC investigation, the EC cartel and “the alleged [U.S.] cartel, that
is a burden that must be assumed.”
In November 2007, the EC had levied fines against Guardian Industries,
Pilkington, Saint-Gobain and AGC Flat Glass Europe for alleged price-fixing
practices in the European flat glass market. In November 2008, further
fines were imposed on Asahi, Pilkington, Saint-Gobain and Soliver for
illegal market sharing and exchange of information regarding delivdeliveries
of auto glass in the European Economic Area.
Plaintiffs include a list of glass companies, including both auto and
flat, throughout the United States.
In addition to Guardian, among the other defendants are Pilkington North
America and PPG Industries. Plaintiffs allege that the manufacturers agreed
to raise and fix prices “through a combination of collusive energy surcharges
and price increases.”
The manufacturers previously had motioned for the judge to dismiss the
suit. That motion was denied in February.
Lee & Cates Glass VP Arrested for
Lee and Cates Glass Inc.’s vice president of
operations, Scott Cates, recently was arrested for alleged involvement
in a fraud case brought by the Florida Financial Services Department’s
Division of Insurance Fraud. A former Lee and Cates employee, Jennifer
Lamunyon Cribb, also was arrested. The arrests were made as part of an
ongoing investigation originally announced in April.
The state claims that four of the company’s locations allegedly overbilled
numerous insurance companies more than $540,000 on more than 1,300 separate
fraudulent insurance claims.
Cates was charged with “scheming to defraud, conduct of or participation
in an enterprise through a pattern of racketeering activity and three
counts of conspiracy to commit fraud.” Cribb has been charged with scheming
to defraud and presenting a false insurance claim.
When the investigation was announced initially, four employees were arrested
under similar charges and since then, a total of 10 (including Cates and
Cribb) have been charged.
The Division of Insurance Fraud alleges that the employees involved overbilled
windshields and associated parts by billing insurance companies for a
more expensive dealer windshield but installing a less expensive substitute.
Tom Lee Jr., president of the company, told AGRR magazine/glassBYTEs.com™
that he wasn’t aware of what was happening until he received notification
from a major insurance company.
“We were notified by State Farm in September of last year that our company
was under investigation for fraud,” says Lee. “They met with us once and
told us they had found an anomaly in the billing practices at two of our
“We launched our own investigation immediately and found that some employees
at two of our shop locations had manipulated our software to allow customers
to be billed for dealer items as opposed to NAGS pricing,” he said. “Those
individuals were fired and we cooperated full in the investigation.”
Lee says the state’s department of financial services (which includes
insurance oversight) also began an investigation.
“We are an 83-year-old company founded on strong principles. This has
just been a horrible thing to go through and I am really kicking myself
that it happened,” added Lee. “You do a lot of second-guessing on what
you could do differently or better to keep it from occurring.”
When asked if he had any suggestions for other glass shop owners, Lee
offered some. “Sadly, you have to look at everything, every little thing
and you can’t assume honesty. ‘Trust but verify’ is the best advice I
have. Multiple location companies bring special challenges for management
and require a lot of controls. Don’t ever think it can’t happen to you,
because it can.”
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