In one of a pair of communications to MHProNews from an attorney with a law firm involved in a large, new antitrust case was the following statement. “Nine mobile home community management companies and a mobile home market data provider conspired to fix, raise, and systemically inflate mobile home lot rental prices as more than 150 locations across the United States, according to antitrust class action lawsuit filed today. The first-of-its-kind lawsuit, filed on behalf of mobile home community residents impacted nationwide, alleges that since 2019, the mobile community management companies have used competitively sensitive, non-public market data provided by Michigan-based Datacomp Appraisal Systems Inc. to exchange pricing information and conspire to systematically devise mobile home lot rent increases.” Several of the firms involved are known to be Manufactured Housing Institute (MHI) members, a point which will be further developed herein and in a planned follow up to this initial report and analysis with commentary.

Defendants include, but may not be limited to,

• Datacomp Appraisal Systems, Inc. (“Datacomp”),
• Equity LifeStyle Properties, Inc. (“ELS”),
• Hometown America Management, L.L.C. (“Hometown America”),
• Lakeshore Communities, Inc. (“Lakeshore”),
• Sun Communities, Inc. (“Sun Communities”),
• RHP Properties, Inc. (“RHP”),
• YES! Communities, Inc. (“YES! Communities”),
• Inspire Communities, L.L.C. (“Inspire Communities”),
• Kingsley Management, Corp. (“Kingsley”),
• Cal-Am Properties, Inc.’s (“Cal-Am”),
• together called the “Defendants” in Case: 1:23-cv-06715 filed on 08/31/23 – an 85-page document that suggests that others may be added to the suit.
• The suit alleges violations of federal antitrust laws and common law.

Note most are either directly members of MHI and/or are members of an MHI linked “state affiliate.”

 

 

Part I of this report will include the formal press release by DiCello Levitt, Hausfeld, and Myron M. Cherry & Associates which filed the suit on 9.1.2023.

Part II will provide additional information and commentary, including but not limited to facts and insights not found in their press release. It will also begin to explore how this information appears to confirm several concerns raised by MHProNews and/or MHLivingNews in previous reports. As a teaser, besides the named firms, the pleading suggests other possible “unnamed” parties may yet be added to this class action suit. Part II will therefor tee up a planned deeper dive report which may be published as soon as next week.

Note some of the parties involved in the suit have been directly contacted by MHProNews for comments.

Part III will be our Daily Business News on MHProNews macro- and MHVille-specific stocks, REITs, and equities market reports update, including our signature left (CNN) right (Newsmax) headline time-saving and insight creating market-moving news recap.

 

Part I – Press Release from Plaintiffs Attorneys (MHProNews note: note terminology errors are in the original)

Mobile home park owners accused of rental price-fixing in new US lawsuit

DiCello Levitt, Hausfeld File Significant Lawsuit Against Corporate Landlords Over Nationwide Price Fixing Scheme Affecting Residents of Manufactured Homes

In a case of nationwide significance  against nine manufactured home community management companies and one manufactured home market data provider, the plaintiffs allege that they suffered substantial financial losses due to their landlords’ conspiracy to fix, raise, and systematically inflate manufactured home (also referred to as mobile home) lot rental prices at more than 150 locations across the United States.

“With nearly one-third of the 10.3 million adults living in manufactured homes being over the age of 60, the corporate greed of these manufactured home community management companies targeted some of our nation’s most vulnerable citizens,” DiCello Levitt Partner and Chair of the Firm’s Antitrust and Competition Litigation Group Gregory S. Asciolla said. “In the face of these significant manufactured home lot rent increases, some manufactured home residents were not only facing severe financial pressures, but even the threat of eviction.”

“These individuals–whose median annual household income is approximately $35,000–were overcharged for what was meant to be affordable housing,” DiCello Levitt Co-Founding Partner Adam J. Levitt added.

“Manufactured home lot rental prices were blatantly inflated at a staggering rate of 9.1% per year between 2019 and 2021.”

“Manufactured home parks now comprise one of the largest sources of low-income housing in the country. Many residents are senior citizens, veterans, and people with disabilities,” said Hausfeld LLP Partner Reena Gambhir. “These communities should not be the targets of anticompetitive and coordinated excessive rent hikes.”

The complaint details how the large corporate manufactured home community management companies have bought up these communities across the United States and used competitively sensitive market data provided by Michigan-based Datacomp Appraisal Systems Inc. to exchange pricing information and conspire to systematically devise manufactured home lot rent increases.

The case is Ronald Kazmirzak and Carla Hajek v. Datacomp Appraisal Systems Inc., et al. Case No. 1:23-cv-6715 in the United States District Court for the Northern District of Illinois. …##

 

Part II – Additional Information with More MHProNews Analysis and Commentary in Brief

The essence of the suit could be boiled down to this notion.  The plaintiffs’ attorneys have advanced the thesis that Datacomp is being used by the named parties in a collusive scheme to drive up site fees of residents in violation of antitrust laws. They seek triple damages for residents and other injunctive relief.

When the sheer number of residents in the class are considered, and the large sums involved in aggressively hiked lot rents are considered, this suit could involve perhaps record sums for a manufactured housing industry litigation.

The pleadings in suit No. 1:23-cv-6715 in some respect confirms prior concerns raised by MHProNews and/or our MHLivingNews sister-site about apparent antitrust violations involving several Manufactured Housing Institute (MHI) member firms. More on that further below.

From a report by Reuters about the suit cited in case no. 1:23-cv-6715 are the following additional insights not necessarily found in the law firms press release.

The defendants include Chicago-based Equity LifeStyle Properties (ELS.N), which bought Datacomp in 2021 for $43 million; Michigan-based RHP Properties, which bills itself as the country’s largest privately-held manufactured home community owner with assets of more than $6 billion; and Michigan’s Sun Communities (SUI.N), a real estate investment trust.

Other defendants include Lakeshore Communities in Illinois; YES! Communities in Denver, which the lawsuit said was partially owned by private equity firm Stockbridge Capital Group; and Inspire Communities in Phoenix, owned by private equity firm Apollo Global Management.

Representatives from Datacomp and the other corporate defendants did not immediately respond to requests for comment.”

 

Case Pleadings in Case No. 1:23-cv-6715 in the United States District Court for the Northern District of Illinois.

MHProNews has obtained a copy of the pleadings, which will likely be provided in the planned follow up report as we did the pleadings in the Cavco suit.

Editorially speaking, MHProNews initial analysis of the pleadings has, as noted herein, hit on antitrust and other legal/business ethics concerns raised in recent years of reports on our platforms involving several MHI member firms.

The pleadings tend to confirm prior reports and analysis by MHProNews that detail-minded and longer-term readers here will recall suggested that manufactured housing was becoming a target rich environment for plaintiffs’ attorneys.

There have been contacts made by attorneys to MHProNews and/or by our parent firm’s service providers regarding expert witness (“consulting”) services in developing and pending cases. Suffice it to say for now that law firms as well as by public officials which have engaged with our platform have said that they found the evidence developed in reports and analysis published on MHProNews/MHLivingNews to be compelling and relevant. That is mentioned because some newer readers may wonder about the connection between past reports and this most recent case.  There are, in our expert view, issues that attorneys and others will find relevant and of interest.

 

 

That disclosure noted, MHProNews reached out to MHVillage/Datacomp and MHI for remarks. As of 7.06 AM ET, neither MHI nor Datacomp/MHVillage have not responded. But in fairness, the outreach was after normal business hours. Some are good about responding to MHProNews promptly – even on weekends – regardless of the time or day, but others are less so.  MHProNews plans to contact other defendants to offer them an opportunity to respond to the allegations involved in this case.

Having read the pleadings, there are modest areas of terminology or other possible errors in them. But those errors appear to be modest and common in nature. They likely won’t make much difference for the defendants. Possible errors in pleadings could be important, as ELS – for example – has a known history of fighting such cases involving residents and others ‘tooth and nail.’

Virtually every defendant, as well as possible ‘unnamed’ parties that the pleadings indicate are on the plaintiffs’ attorneys’ radar, have been the subject of prior MHProNews and/or MHLivingNews reports for business ethics, “predatory” practices allegations, and antitrust concerns. Some prior reports involving the firms named in this legal action are as follows.

 

 

 

 

 

 

 

 

 

 

MHI and Frank Rolfe (et al) have not (as yet) been formally named in the pleadings. However, they have been mentioned in the pleadings filed in Case No. 23-cv-6715.

MHI has been mentioned in ways that are arguably in line with legal concerns raised by our reports and by the remarks made by others cited by our publications.

Rolfe has also been mentioned in a quotation that MHProNews/MHLivingNews has cited previously. But perhaps oddly, the plaintiffs’ attorneys have not as yet cited some of Rolfe’s arguably more egregious remarks by Rolfe and Dave Reynolds which could prove quite useful to plaintiffs in Case No. 23-cv-6715. Put differently, it would not be a surprise if MHI and/or Rolfe, and possibly one or more state associations and others could be drawn into the case. More on that in our planned follow up.

 

 

Reuters noted that: “Plaintiffs’ attorneys at DiCello Levitt and Hausfeld, who said they filed the lawsuit based on their own investigation, estimated a class size of “hundreds of thousands” of members in the U.S.” While the initial messages from that law firm which contacted MHProNews indicated certain numbers of locations involved, in our professional and expert view, this suit could easily blossom into something much larger.  Other defendants added and/or new and related suits be brought. As noted, it may become the largest case to date in terms of dollar figures.

Given that aggressive site fee hikes and other ‘predatory’ practices at times results in de facto evictions that may cost some manufactured home owners who were residents their homes, the sums could be substantially beyond the mere difference in lot rents that were being charged vs. what resulted from the purported conspiracy to collude and rig prices.

Furthermore, recall that in the case of Cavco Industries (CVCO), they had several shareholders ‘probes’ and related legal actions, beyond that of the U.S. Securities and Exchange Commission (SEC). There are several ways that this case could morph and/or draw other law firms into the manufactured home industry arena.

 

Legal Woes and MHI Oriented Trade Associations

MHProNews has observed that not all MHI member firms are ‘black hats’ with predatory or collusive intent. But given that this case could blossom into something far more extensive, it may fuel the efforts to form a new post-production trade group that is ‘white hat’ oriented. Why? Because MHI is arguably increasingly tainted in the minds of those ‘in the know.’

This Case No. 23-cv-6715 could add to that ‘tainting’ of MHI, precisely because MHI has been referenced by attorneys in their case pleadings.

Firms that wish to avoid the various legal, business ethics, and related pitfalls that MHI’s ‘insiders’ have arguably crafted could thus desire to distance themselves, hedge their bets or bail out on MHI. Some MHI members may keep a foot in both worlds, just as some have been both Manufactured Housing Association for Regulatory Reform (MHARR) members and MHI members, but may seek to avoid doing business in a fashion that has sparked the litigation in Case No. 23-cv-6715.

At this point, based on the known pleadings and allegations, it would appear that the plaintiffs’ attorneys are just at the tip of the proverbial iceberg for possible items to be discovered and wrinkles that may result in this or other attorneys and/or public officials diving into the dark underbelly of the once far larger and more noble manufactured housing industry. See the related reports to learn more and stay tuned to the only trusted source for such information in all of the known trade media and bloggers in MHVille. ##

 

 

 

 

 

Part III. Daily Business News on MHProNews Markets and Headline News Segment

 

Headlines from left-of-center CNN Business – from the evening of 9.6.2023

• Tom Brady has a new job
• The seven-time Super Bowl champion is joining Delta Air Lines as a ‘strategic advisor’
• A view shows oil pump jacks outside Almetyevsk in the Republic of Tatarstan, Russia June 4, 2023. REUTERS/Alexander Manzyuk
• Oil could hit $107 due to Saudi Arabia’s and Russia’s supply cuts, Goldman Sachs warns
• Bill Gates, co-chairman of the Bill and Melinda Gates Foundation, recently bought 1.7 million worth of shares of Anheuser-Busch.
• Bill Gates made a nearly $100 million bet on Bud Light
• Wendy’s new Pumpkin Spice Frosty and Pumpkin Spice Frosty Cream Cold Brew.
• Wendy’s newest Frosty tastes like a fan-favorite flavor
• TikTok may be looking to grow its messaging features, job listings suggest
• Customers experience the newly released Huawei Mate 60 Pro flagship phone at Huawei’s flagship store in Shanghai, China, September 5, 2023.
• The US government is investigating China’s breakthrough smartphone
• Steering wheel hands STOCK
• 52 million air bags should be recalled because of explosion risk, safety regulator warns
• Roku is laying off 10% of its workforce
• Manchester United shares plunge on report the Glazers won’t sell
• Climate change is hurting Six Flags, SeaWorld and Disney World
• A severe drought is affecting the Panama Canal. That’s not a good sign for supply chains — or your holiday shopping
• Wall Street Journal: China bans use of iPhones for government officials
• Why Cup Noodles is going ‘gamer-friendly’
• Trump’s Truth Social merger partner granted key extension to avoid liquidation
• The auto strike deadline is close, but any deal has ‘a long way to go’
• She’s conquered the silver screen. Now Barbie’s new career has more in common with Messi
• Reese Witherspoon sells her fashion brand, Draper James
• What’s going on with China’s shadow banking system?
• Ukraine says its war-torn economy is beginning to recover
• Britain’s second-largest city effectively declares itself bankrupt amid $950 million equal pay claims
• China’s biggest homebuilder just dodged default. It faces a rocky road ahead
• How the ultra-wealthy infiltrated anti-capitalist Burning Man