A structured settlement factoring company’s complaint alleges that a competitor – that has more than seventy-percent of the secondary market for structured settlement payments – violated federal anti-trust laws.
Novation Ventures, L.L.C., filed a complaint in federal court in California, alleging that J.G. Wentworth Company has, since a merger with Peachtree Settlement Funding in 2011, violated the Sherman Anti-Trust Act and the Clayton Act.
Novation, which says its market share of the business of obtaining rights to structured settlement payments is around 7%, claims that the Wentworth companies control around 75% of that market.
The business of purchasing structured settlement payment rights is governed by state structured settlement protection acts (SSPAs), which provide that such transactions are not effective unless approved by a court.
Novation alleges that the J.G. Wentworth companies did not disclose to courts – which have been making decisions about whether to approve such transfers – the fact that J.G. Wentworth and Peachtree Settlement Funding are controlled by the same entity, JGWPT Holdings, Inc.
News stores about the lawsuit include the following:
- Wentworth-Peachtree Deal Created Monopoly, $15M Suit Says on Law360.com (stating that Novation’s complaint alleges that the J.G. Wentworth-Peachtree merger left “consumers with fewer choices to find the best deals” on transfers of structured settlement payment rights);
- J.G. Wentworth-Peachtree merger violates antitrust law, competitor claims, LegalNewsLine.Com (incorrectly identifying the market as that for “structured settlements” – which would mean the primary market involved in establishing structured settlements – instead of the secondary market for structured settlement payment rights);
- J.G. Wentworth sued for monopolizing cash-for-settlements market on globalcompetitionreview.com (noting that Novation alleges that J.G. Wentworth’s monopolistic activities include “misrepresenting the combined entity as two separate brands in online advertisements”).
The lawsuit is captioned Novation Ventures, L.L.C. v. The J.G. Wentworth Company, L.L.C., et al., case number 2:15-cv-00954, U.S. District Court, Central District of California, and a docket list is available here.