Case 1:11-cv-10930-DJC Document 1 Filed 05/24/11 Page 1 of 12

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

)
MCGRATH & COMPANY, LLC, )
)
Plaintiff, )
)
v. ) Case No. 11-10930
)
PCM CONSULTING, INC., )
)
Defendant. )
)

COMPLAINT AND JURY TRIAL DEMAND

Plaintiff McGrath & Co, LLC brings this action to enjoin defendants' false advertising

and unlawful promotion of its commercial activities in violation of the Lanham Act, 15 U.S.C. §

1125(a), G.L. c. 266, § 91, and G.L. c. 93A. In addition to injunctive relief, McGrath & Co.,

LLC also seeks damages, multiple damages, the disgorgement of all profits obtained as a result

of the Defendant’s false advertising and unlawful promotion of its commercial activities,

attorney's fees, and expenses suffered and incurred as a consequence of defendants' unlawful

conduct.

Parties

1. Plaintiff McGrath & Company, LLC (“McGrath”) is a Delaware limited liability

company with headquarters in Portsmouth, New Hampshire.

2. Defendant PCM Consulting, Inc. (“PCM”) is a New Hampshire corporation with

U.S. headquarters at 800 Turnpike Street, Suite 300, Andover, MA 01845. PCM operates in a

variety of states and countries through fictitious name entities and sister companies.

Jurisdiction and Venue

3. This Court has jurisdiction pursuant to the Lanham Act under 28 U.S.C., §1331.
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Furthermore, this Court has supplemental jurisdiction over McGrath’s state law claims. Venue is

proper in this district because the defendant is headquartered within the district.

Facts

4. McGrath and PCM are each professional service companies offering, among other

services, project management services for companies engaged in major construction projects. In

essence, both McGrath and PCM serve as owners’ agents, overseeing and managing major

construction projects.

5. For a number of years, the president of McGrath, Liam McGrath (“Mr.

McGrath”), and the president of PCM, David Lane (“Mr. Lane”) were partners in McLane

Associates, Inc. (“McLane”). During its operation, McLane provided professional services

which were substantially similar to those provided by McGrath and PCM.

6. In 2007, Messrs. McGrath and Lane decided to put an end to their partnership and

the operation of McLane. Pursuant to the agreement reached between Messrs. McGrath and

Lane, McLane would not take on any new projects under its name, but would instead complete

those projects already underway. McLane concluded providing services in early 2008 and has

not bid on contracts or provided additional services since that time.

7. Following the breakup of McLane, each of Messrs. McGrath and Lane were

permitted to pursue and bid on new work on behalf of themselves or any company that they

might operate.

8. Following the breakup of McLane, Mr. McGrath formed McGrath & Company,

LLC, which pursues and bids on various project management jobs.

9. Following the breakup of McLane, Mr. Lane resumed providing services directly

through PCM Consulting, Inc., an entity that Mr. Lane had originally formed in or around 1999.

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11. McGrath and PCM are direct competitors with one another, offering near-

identical project management services.

12. In addition to providing services directly under the PCM name, PCM also

operates under a variety of fictitious business names and sister companies. For example, in New

York, PCM operates under the fictitious name “PCM Consulting Lane Logan.” Similarly, PCM

provides services in Israel and Ireland through so-called “sister companies.”

13. Prior to the breakup of McLane, McLane provided services to, among others,

Intel Corporation (“Intel”).

14. Following the breakup of McLane, PCM sought to bid for new work on Intel

projects. To do so, however, PCM was required to first submit to a prequalification procedure

before it would be permitted to provide services to Intel. The prequalification process is

designed to ensure that companies have sufficient resources to perform on the large jobs that

Intel was putting out to bid.

15. As part of the prequalification process, companies seeking prequalification are

required to submit to Intel, among other things, information concerning the bidders’ headcount

and financial assets. Knowing that it would not be prequalified to provide services to Intel if it

provided truthful information, PCM instead submitted to Intel falsified information concerning

both its staffing resources and financial condition.

16. More specifically, PCM combined its own staffing numbers with McLane’s

former staffing numbers and claimed the combined numbers as its own. This misrepresentation

was a substantial one. Whereas PCM actually employed fewer than 10 people worldwide, after

combining its numbers, it reported a headcount of approximately 70 employees.

17. Similarly, although PCM had only minimal cash on hand, it reported to Intel that

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it had in excess of $1.4 million dollars in cash. PCM backed up its falsified information by

providing Intel with the bank account numbers and banking information of McLane.

18. PCM made these false representations to Intel, knowing and intending that Intel

would rely upon them.

19. PCM also made its false representations knowing that Intel would not seek to

audit or verify the responses and documentation provided to it by PCM.

20. Intel did, in fact, rely on PCM’s false representations in awarding work to PCM.

21. Although PCM claims to have been coached and advised by certain Intel

employees to submit fraudulent information in support of its prequalification, PCM knew that if

Intel’s accounting or legal departments were aware of its fraud, it would not receive

prequalification or be awarded any Intel jobs.

22. PCM actively took steps to prevent Intel from learning of the false information

that it had provided to them, lest it lose the jobs already awarded to it or lose its prequalification

status for future jobs.

23. PCM perceived its submission of the prequalification information not simply as

bid information, but also as marketing materials to promote PCM in the marketplace.

24. PCM understood that – if it was not perceived by Intel to be larger than it actually

was – it would not have a chance at getting the Intel work.

25. Intel jobs represent between 75 percent and 80 percent of all of PCM’s income.

These jobs are located across the United States, Israel, and Ireland. Each of the Intel jobs

awarded to PCM were premised upon the false information submitted to Intel by PCM.

26. PCM also provides – or has provided – services to Wyeth Biopharma, Advanced

Micro Devices, and the State of New York. Wyeth was also previously a client of McLane.

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27. On information and belief, PCM made false statements concerning its staff and

resources to Wyeth Biopharma, Advanced Micro Devices, and the State of New York in its

pursuit of jobs with those entities.

28. PCM has also sought to provide services to other companies including, but not

limited to, Amgen, Inc., in Rhode Island and Comcast Corporation.

29. On information and belief, PCM made false statements concerning its staff and

resources to Amgen, Inc., Comcast, and other companies to which PCM sought to provide

services.

30. The false statements outlined above were made to companies, and in connection

with projects, throughout the United States, Israel, and Ireland.

31. The statements made by PCM concerning its size, workforce, and financial

resources were all literally false and designed to mislead the purchasers of its services.

32. In addition to the false statements made directly to purchasers and potential

purchasers of its services, PCM also maintains a website which serves as advertising for its

services and which is available to be viewed anywhere in the world. See Exhibit 1.

33. On its website, PCM makes additional false statements intended to give the

incorrect impression that PCM is a larger company than it actually is. Some of these statements

are literally false and some are impliedly false.

34. For example, on its website, PCM claims that its “workforce is currently

consulting on over three billion dollars of active capital construction work.” This statement is

literally false.

35. Indeed, as with many of PCM’s misrepresentations, this statement actually refers

to past work performed not by PCM, but by McLane. On information and belief, PCM does not

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currently consult on anything close to three billion dollars of active capital construction work.

36. Similarly, PCM claims that it “currently manages projects in five countries and 17

states across the United States.” This statement, too, is literally false.

37. Throughout its website, PCM also attempts to blur the lines between PCM’s

experience and McLane’s experience in a manner designed to mislead consumers of its services.

38. For example, early on in a paragraph which purports to discuss PCM’s history and

experience, PCM mentions in passing its affiliation with McLane, and then continues using only

misleading pronouns (such as “its”) and nouns (“the company”). In this manner, PCM makes it

appear that it is referring to PCM’s growth and experience when, in reality, it is referring to the

qualifications and accomplishments of McLane.

39. For example, the website states that “through a six year span, the company

experienced an average annual growth of 45%...” This growth refers not to PCM, but rather the

growth experienced by McLane. As presented on PCM’s website this information is either

literally false or, at a minimum, presented in a manner designed to mislead and confuse the

average consumer of PCM’s services.

40. Similarly, the website’s references to “new divisions supporting Financial and

Insurance Institution’s real estate transaction work and government funded projects,” refers not

to PCM, but McLane. As presented on PCM’s website this information is either literally false

or, at a minimum, presented in a manner designed to mislead and confuse the average consumer

of PCM’s services.

41. The website states also that, “in 2004, the Project Management group of William

A. Berry & Son, Inc. was merged into the firm, which further expanded its project management

business into the Health Care and Education Institutional marketplaces.” Again, to the extent

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that this statement is in any way accurate, it is accurate with respect to McLane, not PCM. Even

then, however, the statement is incorrect. Although a small number of employees from William

A. Berry & Son, Inc. were indeed hired by McLane in 2004, the majority of them left McLane

soon thereafter. As presented on PCM’s website this information is either literally false or, at a

minimum, presented in a manner designed to mislead and confuse the average consumer of

PCM’s services.

COUNT I
(Violation of Lanham Act, 15 U.S.C. § 1125(a))

42. McGrath repeats and realleges the allegations of the above-numbered paragraphs

as if set forth in full herein.

43. PCM and McGrath are competitors.

44. PCM has made false and misleading descriptions of fact and representations of

facts in commercial advertising and promotion about its own services.

45. PCM’s false statements and misrepresentations were and are material, in that

they are likely to influence the purchasing decision.

46. PCM’s false statements and misrepresentations have actually deceived, will

continue to actually deceive, and have the tendency to deceive a substantial segment of those

who have seen the false statements and misrepresentations.

47. PCM placed the false and misleading statements in interstate commerce.

48. PCM’s conduct violated, and continues to violate, the Lanham Act, 15

U.S.C. § 1125(a).

49. McGrath has suffered irreparable harm and, absent immediate injunctive relief,

will continue to suffer irreparable harm as a result of PCM’s false statements and

misrepresentations. Such harm includes, but is not limited to, the loss of McGrath’s right to

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fairly compete in the marketplace and the loss of jobs which it would have obtained but for

PCM’s false statements and misrepresentations.

50. To prevent PCM from being unjustly enriched and to deter additional willful false

and misleading representations, PCM should be required to disgorge all profits and/or pecuniary

gain derived directly or indirectly from PCM’s unlawful conduct, as permitted by 15 U.S.C.,

§1117.

COUNT II
(Violation of Mass. Gen. Laws c. 266, § 91)

51. McGrath repeats and realleges the allegations of the above-numbered paragraphs

as if set forth in full herein.

52. PCM has published, disseminated, circulated and placed before the public in

Massachusetts promotional materials, and its website, which contain assertions, representations

and statements of fact which are untrue, deceptive and misleading.

53. PCM is continuing to make such false statements and misrepresentations.

54. PCM knew, and continues to know, that such assertions, representations and

statements of fact are untrue, deceptive and misleading.

55. PCM made – and is continuing to make – such false statements and

misrepresentations with the intent to sell its services and with the intent to increase the

consumption and demand for its services.

56. PCM’s conduct violated, and continues to violate, G.L. c. 266, § 91.

57. As a consequence of PCM’s violations of Mass. Gen. Laws c. 266, § 91,

McGrath has suffered and continues to suffer irreparable harm.

58. PCM’s violations should be enjoined pursuant to Mass. Gen. Laws c. 266, § 91.

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COUNT III
(Violation of Mass. Gen. Laws c. 93A)

59. McGrath repeats and realleges the allegations of the above-numbered paragraphs

as if set forth in full herein.

60. At all material times, McGrath and PCM were engaged in trade or commerce

within the meaning of Mass. Gen. Laws c. 93A.

61. PCM’s conduct described above constitutes unfair and deceptive acts and

practices within the meaning of G.L. c. 93A, §§ 2 and 11, and 940 CMR 3.02.

62. PCM’s wrongful conduct took place primarily and substantially within the

Commonwealth of Massachusetts.

63. PCM’s conduct described above was willful and knowing.

64. McGrath has suffered irreparable harm and, absent immediate injunctive relief,

will continue to suffer irreparable harm as a result of PCM’s false statements and

misrepresentations. Such harm includes, but is not limited to, the loss of McGrath’s right to

fairly compete in the marketplace and the loss of jobs which it would have obtained but for

PCM’s false statements and misrepresentations.

65. Pursuant to G.L. c. 93A, McGrath is also entitled to recover treble damages, costs,

and attorney’s fees.

COUNT IV
(Common Law Unfair Competition)

66. McGrath repeats and realleges the allegations of the above-numbered paragraphs

as if set forth in full herein.

67. By making false statements and misrepresentations in connection with its

advertising and promotions, PCM has engaged in unfair competition.

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68. McGrath has suffered irreparable harm and, absent immediate injunctive relief,

will continue to suffer irreparable harm as a result of PCM’s false statements and

misrepresentations. Such harm includes, but is not limited to, the loss of McGrath’s right to

fairly compete in the marketplace and the loss of jobs which it would have obtained but for

PCM’s false statements and misrepresentations.

WHEREFORE, MCGRATH & COMPANY, LLC respectfully prays that this Court

grant the following relief:

1. That the Court find in favor of McGrath and against PCM on all Counts of the

Complaint;

2. That, pursuant to Fed. R. Civ. P. 65; 15 U.S.C., § 1116; G.L. c. 266, § 91; and

and G.L. c. 93A, the Court issue a preliminary injunction – and, following trial, a permanent

injunction which restrains and enjoins PCM, along with its officers, agents, servants, employees

and any persons in active concert or participation with them, from making any false or

misleading statement in their advertisements, promotions, bids, or prequalifications. Without

limiting the forgoing, PCM shall not misrepresent in any way its headcount, financial resources,

growth rate, qualifications, experience, or levels of work in progress.

3. That, pursuant to Fed. R. Civ. P. 65; 15 U.S.C., § 1116; G.L. c. 266, § 91; and

and G.L. c. 93A, the Court issue a preliminary injunction – and, following trial, a permanent

injunction which restrains and enjoins PCM, along with its officers, agents, servants, employees

and any persons in active concert or participation with them, from fulfilling, satisfying, or

accepting any jobs or assignments derived directly or indirectly, or resulting in any way, from

PCM’s unlawful conduct,

4. That, pursuant to Fed. R. Civ. P. 65; 15 U.S.C., § 1116; G.L. c. 266, § 91; and

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and G.L. c. 93A, the Court issue a preliminary injunction – and, following trial, a permanent

injunction – which requires PCM to inform all recipients of bids, prequalifications, advertising,

or promotions containing the false and misleading statements that the previously provided

information concerning headcount, financial resources, growth rate, qualifications, experience, or

levels of work in progress were untrue.

5. That, pursuant to Fed. R. Civ. P. 65; 15 U.S.C., § 1116; G.L. c. 266, § 91; and

and G.L. c. 93A, the Court issue a preliminary injunction – and, following trial, a permanent

injunction – which requires PCM by prominent placement on its website a statement that the

previously provided information concerning headcount, financial resources, growth rate,

qualifications, experience, or levels of work in progress were untrue.

6. That, pursuant to 15 U.S.C., §1117, the Court order that PCM be required to

disgorge all profits and/or pecuniary gain derived directly or indirectly from its unlawful

conduct.

7. That, pursuant to G.L. c. 93A, the Court award McGrath not less than two and not

more than three times its actual damages.

8. That the Court award McGrath its costs and reasonable attorney’s fees.

9. That the Court award such other and further relief as it deems just.

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A TRIAL BY JURY IS DEMANDED ON ALL COUNTS SO TRIABLE.

Respectfully submitted,

MCGRATH & COMPANY, INC.,

By its attorney,

s/Evan Fray-Witzer
Evan Fray-Witzer (BBO # 564349)
Ciampa Fray-Witzer, LLP
20 Park Plaza, Suite 804
Boston, MA 02116
(617) 723-5630
Evan@CFWLegal.com

Dated: May 23, 2011

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