IN THE UNITED STATES DISTRICT COURT FOR ... - Las Vegas Sun

Case 1:10-cv-00377-HHK Document 1

Filed 03/08/10 Page 1 of 23

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

Pulte Homes, Inc., Pulte Home

Corporation,

100 Bloomfield Hills Parkway, Suite 300

Bloomfield Hills, Michigan 48304,

and

Pulte Mortgage LLC,

7390 S. Iola Street,

Englewood, Colorado 80112,

Plaintiffs,

Civil Action No. ________________

v.

Terry Goddard,

In his Official Capacity as Attorney

General for the State of Arizona

Office of the Attorney General

1275 West Washington Street

Phoenix, Arizona 85007,

and

Catherine Cortez Masto,

In her Official Capacity as Attorney

General for the State of Nevada

Office of the Attorney General

100 North Carson Street

Carson City, Nevada 89701,

Defendants.

COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF

INTRODUCTION

1.

The Arizona Attorney General¡¯s Office and the Nevada Attorney General¡¯s Office

have separately engaged a private plaintiffs firm, Cohen Milstein Sellers & Toll PLLC (¡°Cohen

Milstein¡±), to conduct an investigation of Pulte Homes, Inc., Pulte Home Corporation, and Pulte

Case 1:10-cv-00377-HHK Document 1

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Mortgage LLC (collectively ¡°Pulte¡± or the ¡°Pulte Companies¡±) in violation of Pulte¡¯s due

process rights.

2.

The Cohen Milstein lawyers conducting these investigations represent a labor

union, the Laborers¡¯ International Union of North America (¡°LIUNA¡±), that is waging an

extensive campaign against Pulte consisting of activities, including potentially illegal activities,

designed to damage Pulte¡¯s business and harm its shareholders. The purpose of this campaign

against Pulte and other homebuilders is to coerce Pulte and other homebuilders into forcing their

subcontractors to sign union agreements. The rules of professional conduct prohibit Cohen

Milstein from representing Arizona and Nevada in this matter while also representing LIUNA in

matters adverse to Pulte.

3.

Additionally, the Arizona Attorney General¡¯s Office and the Nevada Attorney

General¡¯s Office have each retained Cohen Milstein on an impermissible contingency fee basis,

giving the Cohen Milstein lawyers an inappropriate pecuniary interest in the outcome of these

investigations.

4.

Pulte has made extensive efforts to comply with the Arizona Attorney General¡¯s

investigation. To date, and before Pulte became aware of the violations to its constitutional

rights, Pulte has produced over 70,000 pages of materials and extensive amounts of data

requested by the Arizona Attorney General¡ªinformation Pulte understands the Arizona

Attorney General¡¯s Office has shared with the Nevada Attorney General¡¯s Office. Pulte has

repeatedly informed the Arizona and Nevada Attorneys General that Pulte will cooperate with

both investigations if conducted properly. While Pulte does not challenge the authority of either

state Attorney General to conduct these investigations through proper means, the means

currently utilized are improper and violate Pulte¡¯s due process rights.

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Case 1:10-cv-00377-HHK Document 1

5.

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For the reasons identified above, the participation of the Cohen Milstein lawyers

in these investigations is fundamentally unfair to Pulte and violates Pulte¡¯s due process rights

under the United States Constitution and under Federal Law. The Pulte Companies bring this

action for declaratory and injunctive relief against defendants Terry Goddard, in his official

capacity as Attorney General for the State of Arizona, and Catherine Cortez Masto, in her

official capacity as Attorney General for the State of Nevada (collectively the ¡°Attorneys

General¡±), to preserve the Pulte Companies¡¯ due process rights.

PARTIES

6.

Pulte Homes, Inc. (¡°Pulte Homes¡±) is a corporation incorporated and

headquartered in Michigan, with its principal place of business located at 100 Bloomfield Hills

Parkway, Suite 300, Bloomfield Hills, Michigan 48304. Pulte Homes, Inc. is the parent

company and ultimate owner of Pulte Home Corporation and Pulte Mortgage LLC. Currently,

subsidiaries of Pulte Homes build single-family homes in 69 markets in 29 states, including

Arizona and Nevada, and the District of Columbia. Pulte Homes was ranked as the nation¡¯s

largest homebuilder in 2009. Subsidiaries of Pulte Homes, including Pulte Home Corporation,

PN II, Inc., Del Webb Communities, Inc., and Centex Corporation operate homebuilding

businesses in the States of Arizona and Nevada. Pulte Homes¡¯ subsidiary, Del Webb

Corporation, has built homes in Arizona since 1960.

7.

Pulte Home Corporation is a corporation incorporated and headquartered in

Michigan, with its principal place of business located at 100 Bloomfield Hills Parkway, Suite

300, Bloomfield Hills, Michigan 48304.

8.

Pulte Mortgage LLC (¡°Pulte Mortgage¡±) is a limited liability company organized

under the laws of Delaware, with its principal place of business at 7390 S. Iola Street,

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Englewood, Colorado 80112. Pulte Mortgage is an independently licensed mortgage company

and is regulated by the 28 states and the District of Columbia in which it is licensed. In Arizona

and Nevada, the Company enjoys a customer satisfaction rating approaching 90% among area

homebuyers who obtained a mortgage from the Company.

9.

The Arizona Attorney General is an elected position in the State of Arizona, and

is responsible for enforcement of the Arizona criminal code, as well as certain civil statutes. The

Attorney General maintains offices in Phoenix and Tucson.

10.

The Nevada Attorney General is an elected position in the State of Nevada, and is

responsible for enforcement of the Nevada criminal code as well as certain civil statutes. The

Attorney General maintains offices in Carson City, Reno, and Las Vegas.

JURISDICTION AND VENUE

11.

This action is brought pursuant to 28 U.S.C. ¡ì 2201 and 42 U.S.C. ¡ì 1983 to

declare the rights and other legal relations of the parties. Because Plaintiffs¡¯ claims raise a

federal question, the jurisdiction of this Court is founded upon 28 U.S.C. ¡ì 1331. Many of the

events underlying this action occurred in the District of Columbia. The private plaintiffs firm,

Cohen Milstein, whose actions are at the core of this action, is located in the District of

Columbia. The contract between the Arizona Attorney General¡¯s Office and Cohen Milstein

lawyers was executed by Cohen Milstein lawyers based in the District of Columbia. The

contract between the Nevada Attorney General¡¯s Office and the Cohen Milstein lawyers was

executed by Cohen Milstein lawyers based in the District of Columbia. The Arizona Attorney

General¡¯s Office has required Pulte to produce all documents and information responsive to the

Arizona Attorney General¡¯s Civil Investigative Demand (¡°CID¡±) to Cohen Milstein lawyers in

the District of Columbia. Upon information and belief, the Nevada Attorney General intends to

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require Pulte to produce all documents and information responsive to the Nevada Attorney

General¡¯s subpoena to Cohen Milstein lawyers in the District of Columbia. The majority of

activities conducted by Cohen Milstein lawyers on behalf of the Arizona Attorney General and

the Nevada Attorney General have been conducted in the District of Columbia. Upon

information and belief, the majority of activities conducted by Cohen Milstein lawyers on behalf

of LIUNA have been conducted in the District of Columbia. Upon information and belief, if the

Cohen Milstein lawyers are allowed to continue their participation in these investigations, the

Cohen Milstein lawyers would continue to conduct the majority of its operations from their

offices in the District of Columbia.

12.

Pulte¡¯s right to immediate judicial review in this Court with respect to the Arizona

and Nevada Attorneys General¡¯s alleged conduct is based on the Federal Declaratory Judgment

Act, 28 U.S.C. ¡ì 2201 et seq., and the Fourteenth Amendment of the United States Constitution.

13.

Venue is proper in this district under 28 U.S.C. ¡ì 1391(b) and because a

substantial part of the events or omissions giving rise to the claims herein occurred in the District

of Columbia.

THE LIUNA CAMPAIGN AGAINST PULTE

14.

Cohen Milstein¡¯s involvement in this matter is particularly troubling given the

Cohen Milstein lawyers¡¯ representation of LIUNA in matters adverse to Pulte. LIUNA is a labor

union headquartered in the District of Columbia with membership throughout the United States

and Canada. LIUNA has engaged in a harassment campaign against Pulte and other

homebuilders in an attempt to coerce the homebuilders into forcing their independent

subcontractors to sign union agreements.

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