/raid1/www/Hosts/bankrupt/CAR_Public/080129.mbx
C L A S S A C T I O N R E P O R T E R
Tuesday, January 29, 2008, Vol. 10, No. 20
Headlines
AMERIPRISE: Former Advisor Franchisees Sue for Contract Breach
AVX CORP: Wants Two Myrtle Beach Environmental Suits Joined
BEST BUY: Former Workers Allege N.Y. State Labor Laws Violations
BIG BURRITO: Settles “Reed” FACTA Violations Suit in Penn.
CALIFORNIA: SCIF Accused of Diverting $25M of Workers Money
CALIFORNIA: Alameda County, Sheriff Face Strip-Search Lawsuit
CELEBRATION STUDIOS: Faces N.Y. Suit Over Undelivered Mementos
CHOICEPOINT INC: Agrees to Settle Investors' Suit for $10M
CITIGROUP INC: Faces N.Y. Litigation Alleging ERISA Violations
COUNTRYWIDE FINANCIAL: New York City Expands Shareholder Suit
FEDERAL HOME: Ohio Attorney General Files Securities Fraud Suit
FOX COLLISION: Goes Bankrupt; Suit by Former Workers on Hold
GRAND TRAVERSE: Reaches Tentative Settlement in Labor Litigation
HTC USA: HTC Smartphone Owners Say Units Lack Driver Support
KINGS FAMILY: Offers Vouchers to Settle FACTA Lawsuit in Penn.
LEHMAN BROTHERS: Aussie Councils Might Sue Over Losses in CDOS
LOJACK CORP: “Rutti” Litigation Removed to Calif. Federal Court
LOUISIANA CITIZENS: Court Certifies “Chalona” Policyholders Suit
MILAN RESTAURANT: Faces Suit in Va. Over Alleged FLSA Violations
MODINE MANUFACTURING: Settles Environmental Lawsuit in Ill.
MORTGAGE ELECTRONIC: Accused of Illegal Foreclosures in Minn.
MTN NIGERIA: Lawyers Plan to Sue Over Poor Service to Customers
NU HORIZONS: Securities Fraud Lawsuit in California Dismissed
QUANEX CORP: Investors File TRO to Block Spin-off to Gerdau
RESPIRONICS INC: Faces Investor Suit in Del. Over $5.1B Sale
SEARS ROEBUCK: Faces Customer Privacy Breach Suit in Illinois
T-MOBILE USA: Court Allows Wash. Consumer Lawsuit to Proceed
New Securities Fraud Cases
TELETECH HOLDINGS: KGS Files Securities Fraud Lawsuit in N.Y.
*********
AMERIPRISE: Former Advisor Franchisees Sue for Contract Breach
--------------------------------------------------------------
Zimmerman Reed law firm filed a class action in Hennepin County
District Court, Minneapolis, Minnesota. The case was filed on
behalf of current and former Ameriprise investment advisor
franchisees.
The Franchisees allege that when American Express Financial
Advisors was "spun off" from The American Express Company, they
as franchisees were deprived of the use of a well-recognized
brand name, as required by their franchise agreements. The class
action seeks remedies as a result of the breach of contract and
violations of the Minnesota Franchise Act.
Specifically, the complaint alleges that AEFA breached its
franchise agreements when it replaced the American Express brand
affiliation with the new "Ameriprise" brand, an unknown in the
marketplace.
The lawsuit further alleges that The American Express Company
unlawfully interfered with the franchise agreements when, in
"spinning off" AEFA, it disallowed the use of its brand name,
and that AEFA and Ameriprise have violated the Minnesota
Franchise Act.
The American Express brand was an essential component of the
franchise agreement. According to the complaint, "The switch to
operations under 'Ameriprise' robbed Plaintiff and the Class of
the benefit of their bargain and left them with only an
unbranded trade name. By analogy, McDonald's could not inform
its franchisees that it was spinning off its fast-food
operation, and prohibiting their further use of the 'Golden
Arches,' when its franchisees paid for use of the McDonald's
trade name."
For more information, contact:
Carolyn Anderson
Zimmerman Reed
Phone: (612) 341-0400
AVX CORP: Wants Two Myrtle Beach Environmental Suits Joined
-----------------------------------------------------------
The lawyer representing Myrtle Beach residents in an
environmental lawsuit against AVX Corp. has asked a judge to
dismiss a request by the company to have residents pay part of
the costs to clean up contamination at the site, the Myrtle
Beach Sun News reports.
Gene Connell of Surfside Beach (S.C.) filed a class action on
behalf of all home and business owners in a neighborhood near
AVX Corp. facility in Myrtle Beach where toxic contamination has
been found.
The suit follows that of Horry Land Co., which claims
trichloroethylene contamination has migrated onto its property
from AVX. Horry Land wants the manufacturer to pay $5.4 million
in damages.
Mr. Connell wants AVX to pay those property owners the fair-
market value for their contaminated land, an amount that could
top tens of millions of dollars. That is because S.C. law
requires property sellers to disclose all defects and dangerous
conditions to prospective buyers.
In recent developments, AVX asked a federal judge to order
residents of that neighborhood to help pay for testing and
cleanup costs. Kevin Dunlap, a Spartanburg lawyer, filed the
request for AVX in a proposed amended complaint. AVX, in that
court filing, wants to add the Myrtle Beach residents as
plaintiffs in the suit filed by Horry Land.
According to the report, AVX asked a judge to hold Horry Land
and the residents responsible for attorney's fees, expert fees,
the costs of conducting environmental investigations and
"containment, removal or mitigation of the contamination at the
properties." AVX also wanted Horry Land and residents to pay
interest on those debts "at the maximum rate allowable by law."
Mr. Connell argued that homeowners had nothing to do with the
company's contamination and the manufacturer's request should be
dismissed.
No hearing has been scheduled on either request, according to
the report.
Mr. Connell's suit was originally filed in state court. AVX
moved it to federal court because the manufacturer said the case
should be tried under federal environmental laws. Mr. Connell
is asking the court to move the case back to state court.
A third lawsuit was filed last week against AVX on behalf of
property owners along Beaver Roadm, according to the report.
For more information, contact:
Gene M. Connell Jr., Esq.
Kelaher, Connell & Connor, P.C.
P.O. Box 14547
1500 Us Hwy 17 N
Surfside Beach, SC 29587-4547
Phone: (843) 238-5648
(843) 238-1033
(843) 238-5017
Fax: (843) 238-5050
Kevin A. Dunlap, Esq.
Parker Poe Adams & Bernstein LLP
100 Dunbar Street, Suite 206
Spartanburg, South Carolina 29306
(Spartanburg Co.)
Phone: 864.591.2030
Fax: 864.591.2050
http://www.parkerpoe.com
BEST BUY: Former Workers Allege N.Y. State Labor Laws Violations
----------------------------------------------------------------
A lawsuit has been filed in the Supreme Court of New York on
behalf of a class of current and former Best Buy employees who
are alleging violations of New York state labor laws against the
company.
The lawsuit contends that employees at 33 New York Best Buy
stores are subjected to off-the-clock security checks at the end
of each shift which can take up to 15 minutes. It also accuses
the Richfield, Minnesota-based company of forcing employees to
work through meal and rest breaks without compensation.
The suit was filed by Gerald Lawrence of Lowey Dannenberg Cohen
and Eric Young of Kenney Egan McCafferty & Young, and alleges
that after clocking out, employees are required to wait in line
at a security checkpoint along with customers and submit to a
search. Employees who work the closing shift are subjected to
the longest waits since store policy dictates that all employees
gather at the front of the store before beginning security
checks.
"Workers are not being paid for mandatory searches which
frequently add up to a half hour or more a week per employee,"
said Lawrence.
The suit also maintains that employees are routinely required to
work during paid meal and/or rest breaks.
For more information, contact:
Gerald Lawrence
Lowey Dannenberg Cohen, P.C.
Phone: 610-941-2760
- and -
Eric Young
Kenney Egan McCafferty & Young
Phone: 610-940-9099
BIG BURRITO: Settles “Reed” FACTA Violations Suit in Penn.
----------------------------------------------------------
A settlement was reached in the suit "Reed v. Whole Enchilada,
Inc. d/b/a Big Burrito Restaurant Group, et al., Case No. cv 07-
00357,” filed in the U.S. District Court for the Western
District of Pennsylvania.
The settlement will benefit all persons who were provided
electronically printed credit or debit card receipts from any of
these restaurants affiliated with and/or managed or operated by
Whole Enchilada, Inc. d/b/a Big Burrito Restaurant Group:
Eleven, Kaya, Casbah, Cafe Phipps*, Warhol Cafe*, Soba, Umi, Big
Catering or any Mad Mex Restaurant at the point of sale or
transaction, in a transaction occurring between the dates
indicated below may be eligible to receive a Settlement Relief
Card redeemable at any Mad Mex Restaurant.
Class Period Restaurant
October 1, 2005 - March 31, 2007 Mad Mex Columbus, OH
January 1, 2006 - March 31, 2007 Mad Mex Philadelphia, PA
May 1, 2006 - March 31, 2007 Mad Mex Monroeville, PA
January 1, 2005 - December 7, 2007 Cafe Phipps
December 4, 2006 - March 31, 2007 Eleven, Kaya, Casbah, Warhol
Cafe , Soba, Umi, Big
Catering and any other Mad
Mex Restaurant not listed
above
* Cafe Phipps and Warhol Cafe are managed by big Burrito under
management agreements.
The settlement resolves a lawsuit over whether the Defendants
violated certain requirements imposed by the Fair and Accurate
Credit Transactions Act.
Specifically, plaintiff claims that the Defendants, at the
Eleven, Kaya, Casbah, Café Phipps, Warhol Cafe, Soba, Umi, Big
Catering and Mad Mex restaurants printed more than the last five
digits of the card numbers and/or the expiration date of their
customers’ credit or debit cards on receipts presented to them
at the store, in violation of FACTA
Deadline to file proofs of claim is March 10, 2008. The Court
will hold a hearing on March 20, 2008, to decide whether to
approve the settlement.
For more information, visit:
http://secure.bigburrito.com/settlement/
CALIFORNIA: SCIF Accused of Diverting $25M of Workers Money
-----------------------------------------------------------
Businesses in California filed a class-action complaint against
the State Compensation Insurance Fund and its directors alleging
the defendants unnecessarily diverted more than $25 million of
workers' comp payments to SCIF insiders and former board
members," the CourtHouse News Service reports.
Defendants include:
-- Collecto Inc., dba Collection Company of America;
-- SCIF's former President James C. Tudor;
-- its former Vice President Renee Koren;
-- its General Counsel Charles Savage;
-- former board members and Safety Group Administrators
Frank Del Re and Kent Dagg;
-- Mr. Del Re's company, Western Insurance Administrators;
-- Dagg's companies Shasta Builder's Exchange and Shasta
Builder's Exchange Community Fund; and
-- John Dunlop, who administered a Safety Group for the
California Restaurant Association.
Notis Enterprises filed the suit on behalf of all California
employers insured by SCIF in the past four years.
The complaint alleges "that on or about March 30, 2007, State
Compensation Insurance Commissioner Steve Polzner reported that
SCIF executives mislabeled costs related to administrative fees
to groups run by former Board Members on financial reports
submitted to the Board of Directors.
The complaint states that according to (state) Senator Dean
Flores, SCIF 'may have paid as much as $25 million in
administrative fees to organizations controlled by two former
Board Members, Del Re and Dagg, who resigned from the Board last
year.
Further, it stated that “although defendants knew that the
administrative services had little or no value, payments were
made to Messers. Del Re, Dagg, Dunlop and their affiliated
entities in a sum not less than $25 million during the four
years preceding the filing of this complaint."
Representing plaintiffs are:
Y. Gina Lisitsa
Payman Taheri
Lisitsa Law Corporation
1717 S Brand Blvd
Glendale, CA 91204
Phone: (323) 876-7535
CALIFORNIA: Alameda County, Sheriff Face Strip-Search Lawsuit
-------------------------------------------------------------
The County of Alameda, California, and Sheriff Greg Ahern face a
purported class action in the U.S. District Court for the
Northern District of California that accuses defendants of
conducting strip searches without evidence that detainees are
hiding weapons or contraband, Henry K. Lee of The San Francisco
Chronicle reports.
The suit was filed on Jan. 14, 2008 by Ron Charles Roth, an
Oakland man, who says he was strip searched at a county-run jail
after a drunken-driving arrest.
Attorney Mark Merin of Sacramento, who is representing Mr. Roth,
said that on Feb. 3, 2007, a California Highway Patrol officer
arrested Mr. Roth in front of his home, for allegedly being
under the influence when he moved his car.
Mr. Roth, 47, was taken to the Glenn E. Dyer Detention Facility,
a jail in downtown Oakland run by the Alameda County sheriff's
office. While at the facility, he was ordered to take his
clothes off for an inspection, according to the suit.
However, according to the suit, it would later be learned that
Mr. Roth had a warrant for an outstanding ticket for fishing
without a license from San Mateo County, and transferred him
there.
To that end, the suit accuses county jailers of routinely
conduct strip searches and visual body-cavity searches without
having a “reasonable suspicion that the search will be
productive of contraband or weapons.”
Mr. Roth's complaint claims the county violated privacy rights
under state law and the U.S. Constitution. He is thus seeking
damages of at least $5,000 for everyone subjected to similar
searches since Jan. 1, 2007.
The suit is “Roth v. County of Alameda et al., Case No. 3:08-cv-
00236-BZ,” filed in the U.S. District Court for the Northern
District of California under Judge Bernard Zimmerman
Representing the plaintiff is:
Mark E. Merin, Esq.
Law Offices of Mark E. Merin
2001 P Street, Suite 100
Sacramento, CA 95814
Phone: 916-443-6911
Fax: 916-447-8336
E-mail: mark@markmerin.com
CELEBRATION STUDIOS: Faces N.Y. Suit Over Undelivered Mementos
--------------------------------------------------------------
Celebration Studios faces a purported class action in State
Supreme Court in Manhattan, New York for failing to deliver the
photos or video of clients, Tina Kelley of The New York Times
reports.
The suit was filed on December 2007 by attorney Nathaniel Burney
of The Burney Law Firm, LLC. Mr. Burney is seeking a class-
action certification for the case.
The wedding photography firm with offices in New York, New
Jersey, and Pennsylvania, closed this month and is filing for
bankruptcy, according to its attorneys.
Jeffrey Herrmann, a lawyer for Celebration Studios, provided a
copy of a company statement to The New York Times, which read:
“The primary intent of Celebration Studios has been and remains
to preserve the memories of its customers. Unforeseen financial
difficulties have made it impossible to continue our business
operations and deliver photos and videos in a timely manner.”
The statement added that “to our knowledge, no photos or videos
have been lost or destroyed.” Mr. Herrmann reiterated that the
copyrights of the images currently belonged to Celebration
Studios.
Mr. Herrmann also said that Celebration Studios would be filing
for Chapter 7 bankruptcy in U.S. District Court for the District
of New Jersey within the month.
Citing problems at least two years old, Mr. Burneyalleges stated
in the suit: “As of 2005, obviously Celebration Studios knew
that people were not getting their pictures, and since then they
continued soliciting and taking people’s money.”
For more details, contact:
Nathaniel Burney, Esq.
The Burney Law Firm, LLC
747 Third Ave., 32nd Fl.
New York, NY 10017
Phone: 1.212.797.2975
Fax: 1.800.341.7752
E-mail: info@burneylawfirm.com
CHOICEPOINT INC: Agrees to Settle Investors' Suit for $10M
----------------------------------------------------------
Choicepoint Inc. said it a regulatory filing it has entered into
a Letter of Understanding pursuant to which parties would,
subject to notice to the class, court approval and certain other
conditions, settle a class action filed against the Company and
certain of its officers on behalf of purchasers of the Company’s
common stock between March 12, 2004, and March 5, 2005.
Under the terms of the Letter of Understanding, the Company will
pay $10 million to the plaintiffs, subject to court approval.
The settlement will be funded through a combination of insurance
proceeds and cash on hand. The Company anticipates filing a
definitive settlement agreement with the U.S. District Court for
the Northern District of Georgia by March 31, 2008.
The Company and the other defendants in the Litigation do not
admit to any liability by the Company or such defendants. The
Company anticipates that the settlement as outlined in the
Letter of Understanding will have no effect on the Company’s
financial results as the Company had previously reserved funds
to pay for the portion of the settlement amount not covered by
insurance.
ChoicePoint (NYSE: CPS) -- http://www.ChoicePoint.com--
provides businesses, government agencies and non-profit
organizations with technology, software, information and
marketing services to help manage economic and physical risks as
well as identify business opportunities.
CITIGROUP INC: Faces N.Y. Litigation Alleging ERISA Violations
--------------------------------------------------------------
Citigroup, Inc. faces a purported class action in the U.S.
District Court for the Southern District of New York, alleging
violations of the ERISA.
The suit is “Woodward et al v. CitiGroup, Inc. et al., Case No.
1:07-cv-11207-SHS,” which was filed on Dec. 13, 2007. Listed as
plaintiffs in the matter are:
-- Patricia Woodward,
-- William Woodward, and
-- Stephen Gray, who was recently appointed lead
plaintiff in the case.
Aside from Citigroup, others that were named as defendants in
the case are:
-- Charles Prince
-- Robert E. Rubin
-- Michael C. Armstrong
-- Alain J.P. Belda
-- George David
-- Kenneth T. Derr
-- John M. Deutch
-- Roberto Hernandez Ramirez
-- Andrew N. Liveris
-- Ann Mulcahy
-- Richard D. Parsons
-- Judith Rodin
-- Robert L. Ryan
-- Franklin A. Thomas
-- Ann Dibble Jordan
-- Klaus Kleinfeld
-- Dudley C. Mecum
-- John Does
-- Jane Does
-- Alan Stevens
-- Mark Geroulo
-- Shaun Rose
The suit was brought on behalf of the Citigroup 401(k) Plan, and
the Citibuilder 401(k) Plan for Puerto Rico (“Plans”), pursuant
to Sections 502(a)(2) and (a)(3) of ERISA.
Plaintiffs' claims arise from the failure of defendants, who are
fiduciaries of the Plans, to act solely in the interest of the
participants, and beneficiaries of the Plans, and to exercise
the require skill, care, prudence and diligence in administering
the Plans, and the Plans' assets from Jan. 1, 2007 to the
present (Class Period).
Plaintiffs allege that defendants allowed the heavy, imprudent
investment of the Plans' assets in Citigroup common stock
throughout the Class Period, despite the fact that they clearly
knew or should have known that such investment was unduly risky
and imprudent due to Citigroup's serious mismanagement and
improper business practices, including, among other practices:
-- Citigroup's rapid expansion into high-risk financial
products without corresponding risk management
controls;
-- Citigroup's failure to limit its exposure to losses
from subprime mortgages and mortgage-backed
securities;
-- Citigroup's failure accurately to account for
subprime-related assets; and
-- Citigroup's misrepresentations regarding its financial
condition.
This practices caused Citigroup's financial statements to be
misleading and which artificially inflated the value of shares
of Citi stock, andCitigroup Common Stock Fund in the Plans.
In short, during the Class Period, Citigroup was seriously
mismanaged and faced deteriorating financial circumstances that
rendered Citigroup stock an unduly risky and inappropriate
options for Plan participants retirement savings.
The complaint alleges four counts of causes of action. They
are:
-- Count I = Failure to Prudently and Loyally Manage the
Plans and Assets of the Plans
-- Count II = Failure to Monitor Fiduciaries
-- Count III = Breach of Fiduciary Duty – Failure to
Provide Complete and Accurate Information to the
Plans' Participants and Beneficiaries
-- Count IV = Co-Fiduciary Liability
The suit seeks a class that includes all persons, who were
participants in or beneficiaries of the Plans at any time
between Jan. 1, 2007, and the present, and whose accounts
included investments in Citigroup stock.
The complaint lists the following as plaintiffs' prayer for
relief:
-- A declaration that defendants breached their ERISA
fiduciary duties to the participants;
-- A declaration that defendants are not entitled to the
protection of ERISA;
-- An order compelling defendants to make good to the
Plans all losses to the Plans resulting from
defendants' breaches of their fiduciary duties,
including losses to the Plans resulting from imprudent
investment of the Plans' assets, and to restore to the
Plans all profits the defendants made through use of
the Plans' assets, and to restore to the Plans all
profits which the participants would have made if
defendants had fulfilled their fiduciary obligations;
-- Imposition of a Constructive Trust on any amounts by
which any defendant was unjustly enriched at the
expense of the Plans as the result of breaches of
fiduciary duty;
-- An Order requiring defendants to appoint one or more
independent fiduciaries to participate in the
management of the Plans' investment in Citi stock.
-- Actual damages in the amount of any losses the Plans
suffered, to be allocated among participants'
individual accounts in proportion to the accounts'
losses;
-- An order awarding costs pursuant to ERISA;
-- An order awarding attorneys' fees pursuant to the
common doctrine of ERISA, and other applicable law;
and
-- An order for equitable restitution, and other
appropriate equitable, and injunctive relief against
defendants.
A copy of the complaint is available free of charge at:
http://researcharchives.com/t/s?2775
The suit is “Woodward et al. v. CitiGroup, Inc. et al., Case No.
1:07-cv-11207-SHS,” filed in the U.S. District Court for the
Southern District of New York under Judge Sidney H. Stein.
Representing the plaintiffs are:
Tyler L. Farmer, Esq.
Keller Rohrback, LLP
1201 Third Avenue, Suite 3200
Seattle, WA 98101
Phone: (206) 623-1900
Fax: (206) 623-3384
James Clayton Kelly, Esq.
Wolf Popper LLP
845 Third Avenue
New York, NY 10022
Phone: (212)-451-9635
Fax: (212)-486-2093
E-mail: jkelly@wolfpopper.com
- and -
Lynda J. Grant, Esq.
Cohen, Milstein, Hausfeld & Toll, P.L.L.C.
150 East 52nd Street
New York, NY 10022
Phone: 212-907-0700
Fax: 212-883-7057
E-mail: lgrant@cmht.com
Representing the defendants is:
Susanna Michele Buergel, Esq.
Paul, Weiss, Rifkind, Wharton & Garrison LLP (NY)
1285 Avenue of the Americas
New York, NY 10019
Phone: 212-373-3553
Fax: 212-492-0553
E-mail: sbuergel@paulweiss.com
COUNTRYWIDE FINANCIAL: New York City Expands Shareholder Suit
-------------------------------------------------------------
New York City and the state have expanded a shareholder class
action filed against Countrywide Financial Corp. (NYSE: CFC) and
have named additional company officers and directors, 26
underwriters and two accounting firms as defendants.
The underwriters sued include:
-- ABN Amro Inc. (NYSE: ABN),
-- AG Edwards & Sons, Inc. (NYSE: AGE),
-- Banc of America Securities LLC (NYSE: BAC),
-- Citigroup Global Markets Inc. (NYSE: C),
-- Countrywide Securities Corporation,
-- Deutsche Bank Securities Inc. (NYSE: DB),
-- Goldman, Sachs & Co. (NYSE: GS),
-- HSBC Securities (USA) Inc. (NYSE: HBC),
-- J.P. Morgan Securities Inc. (NYSE: JPM),
-- Lehman Brothers Inc. (NYSE: LEH),
-- Merrill, Lynch, Pierce, Fenner & Smith Inc. (NYSE: MER),
-- Morgan Stanley & Co. Inc. (NYSE: MS) and
-- UBS Securities LLC (NYSE: UBS).
New York City comptroller William Thompson, who helps run the
New York City Pension Funds, said that executives of Countrywide
cashed out to the tune of almost $700 million while borrowers
lost homes and the value of investors' shares fell sharply.
Thompson and New York state comptroller Thomas DiNapoli, who
oversees the New York State Common Retirement Fund, jointly
disclosed the expansion of the lawsuit.
The New York City and state pensions in November were named as
co-lead plaintiffs for the five class actions accusing
Countrywide of inflating earnings and overstating its ability to
weather the housing slump.
The two accounting firms added to the suit, which seeks to
recover millions of dollars, are Grant Thornton LLP and KPMG
LLP.
About Countrywide Financial
Based in Calabasas, California, Countrywide Financial
Corporation (NYSE: CFC) -- http://www.countrywide.com/-- is a
diversified financial services provider and a member of the S&P
500, Forbes 2000 and Fortune 500. Through its family of
companies, Countrywide originates, purchases, securitizes,
sells, and services residential and commercial loans; provides
loan closing services such as credit reports, appraisals and
flood determinations; offers banking services which include
depository and home loan products; conducts fixed income
securities underwriting and trading activities; provides
property, life and casualty insurance; and manages a captive
mortgage reinsurance company.
FEDERAL HOME: Ohio Attorney General Files Securities Fraud Suit
---------------------------------------------------------------
Ohio Attorney General Marc Dann has filed a securities fraud
class action in the U.S. District Court for the Northern
District of Ohio against Federal Home Loan Mortgage Corp., more
commonly known as Freddie Mac.
The suit alleges that Freddie Mac secretly and intentionally
participated in one of the largest housing investment deceptions
in modern U.S. economic times.
It names a s defendants:
-- Freddie Mac;
-- Richard F. Syron;
-- Patricia L. Cook;
-- Anthony S. Piszel;
-- Eugene M. McQuade; and
-- the directors who served on Freddie Mac's Audit,
Finance and Risk Oversight Committees.
The suit was filed on behalf of the Ohio Public Employees
Retirement System (OPERS) and all other purchasers of Freddie
Mac common stock from Aug. 1, 2006 through Nov. 23, 2007.
The lawsuit alleges that despite repeated public denials and
assurances to the contrary, Freddie Mac was deeply invested in
the sub-prime mortgage industry and failed to disclose that it
was not protecting itself from the billion-dollar risks it
incurred.
In addition to Freddie Mac and its officers, the lawsuit seeks
to hold Freddie Mac committee directors personally responsible
for their recklessness and secrecy about Freddie Mac's
investments and resulting losses in the sub-prime housing
mortgage industry.
The complaint alleges that Freddie Mac and its top executives,
and directors, artificially inflated the company's publicly
traded common stock through false public financial statements
and other public statements, including denials of Freddie Mac's
billion dollars of exposure to the sub-prime mortgage industry.
In violation of the Securities Exchange Act and Securities and
Exchange Commission rules, the complaint alleges that Freddie
Mac and its officers and directors intentionally hid the
essential facts that:
-- Freddie Mac had invested billions of dollars in sub-
prime based securities;
-- Freddie Mac had failed to establish adequate internal
controls, checks and balances to identify the types
and amounts of risks it had taken on;
-- Freddie Mac had failed to disclose its inability to
determine the amount of its loan guarantee exposure,
the inadequacy of its loan loss reserves, and the
failure of its insurers and counterparties to meet
their obligations to Freddie Mac.
OPERS losses as a result of the alleged fraud could be as high
as $27.2 million. It has asked the court to appoint it the Lead
Plaintiff for all of the class members who have been harmed.
In a press release issued by his office, Mr. Dann said, “I would
like to commend the trustees and staff at OPERS for supporting
my effort to hold Freddie Mac accountable for the role the
company and its top executives played in bilking investors and
fueling the foreclosure crisis that is destroying neighborhoods
across our state and the entire nation.”
He adds, “By authorizing me to bring this suit on their behalf
they are protecting the interests of the pension plan, the
workers and retirees who depend upon it, and the taxpayers whose
hard-earned dollars fund it. And they are also sending a loud
and clear message to Wall Street that this type of fraud and
manipulation will not be tolerated by the people who live on the
Main Streets that are being devastated by what Freddie Mac has
done.”
The suit is “Ohio Public Employees Retirement System v. Federal
Home Loan Mortgage Corp., et al., Case No. 4:08-cv-00160-JRA,”
filed in the U.S. District Court for the Northern District of
Ohio, Judge John R. Adams, presiding.
Representing the plaintiffs are:
Marc E. Dann, Esq.
Office of the Attorney General - East Broad Street
State of Ohio
30 East Broad Street
Columbus, OH 43215
Phone: 614-728-5454
Fax: 614-995-0246
E-mail: nmiller@ag.state.oh.us
- and -
Stanley M. Chesley, Esq.
Waite, Schneider, Bayless & Chesley
1513 Fourth & Vine Tower
One West Fourth Street
Cincinnati, OH 45202
Phone: 513-621-0267
Fax: 513-621-0262
E-mail: stanchesley@wsbclaw.cc
FOX COLLISION: Goes Bankrupt; Suit by Former Workers on Hold
------------------------------------------------------------
U.S. District Judge Claire Eagan put on hold a class action
filed by several former employees of auto repair company Fox
Collision Center after the company filed for bankruptcy,
Associated Press reports.
Troubled Company Reporter reports that Fox Collision Center and
Fox Real Estate filed for protection under chapter 11 with the
U.S. Bankruptcy Court for the District of Kansas on Jan. 23,
2008.
According to documents filed with the court, Fox has assets and
debts between $1 million and $10 million. Former workers of the
Debtors are asked to file proofs of claims for unpaid salaries.
The class action against the company was filed against the
company and company president Todd Fox and other family
operations. Mr. Fox closed his 18 auto-repair shops in three
states in October leaving many employees without jobs.
The suit was filed by Dustin Jeffries, Brandon Harris and
Jessica Lovelady against Fox Collision Center, Inc., Fox Body
Shop, LLC, Fox Family Body Shop, LLC and Todd Fox on Nov. 20,
2007.
Charles C. Vaught, Esq., represents the Debtor's former
employees, numbering about 50, who filed the class action,
according to the Troubled Company Reporter.
The case is "Jeffries et al. v. Fox Collision Center, Inc. et
al.," filed in the U.S. District Court for the Northern District
of Oklahoma under Chief Judge Claire V. Eagan with referral to
Magistrate Judge Paul J. Cleary.
GRAND TRAVERSE: Reaches Tentative Settlement in Labor Litigation
----------------------------------------------------------------
The Grand Traverse Resort and Spa reached a proposed settlement
with about 150 employees in a class action that accuses it of
violating labor laws and employees’ rights, Victor Skinner of
Record Eagle reports.
Parties involved in the matter declined to disclose details of
the settlement until a judge formally approves the deal.
Attorney Mark Clark, one of two lawyers who represent about 150
current and former employees, told The Traverse City Record
Eagle that a settlement was reached through mediation in
December 2007.
Mr. Clark explains, "Until the court approves it we have agreed
that it will remain confidential. Because it is a class-action
the court has to approve the settlement." He adds, "We have the
framework for an agreement, it just needs to be approved by the
court."
Case Background
The class action was filed in July 2007 in 13th Circuit Court.
It claims that the Acme, Michigan-based resort violated state
employment and wage laws for imposing $150 paycheck deductions
on several spa workers to help fund marketing efforts for the
last six years (Class Action Reporter, July 6, 2007).
According to the plaintiffs’ attorney, Enrico Schaefer, the
employees started raising their grievances last year. As a
result, the Grand Traverse disclosed that it has been
unilaterally and without the employees’ knowledge, deducting
$150 from their paychecks as a marketing expense.
He added that a Michigan statute “makes it unlawful for
employers to deduct amounts from an employee's paycheck without
their full, free, and written consent. This particular
deduction was never disclosed to employees and they never even
knew about it.”
According to reports, KSL Recreation Inc., the resort’s former
owner, started this practice when it first opened in 1999.
Grand Traverse Band of Ottawa and Chippewa Indians acquired the
spa in March 2003 and put an end to the policy in December 2006.
For more information, contact:
Enrico Schaefer, Esq.
Mark Clark, Esq.
Traverse Legal, PLC
810 Cottageview Drive Unit G-20
Traverse City, MI 49684
Phone: (231) 668-4633
Fax: (231) 932-0636
Web site: http://tcattorney.typepad.com/
HTC USA: HTC Smartphone Owners Say Units Lack Driver Support
------------------------------------------------------------
A Web site http://HTCClassAction.orghas been set up to spread
awareness about problems with recent HTC Smartphones and
PocketPCs, and gather information for a possible class action.
According to the site, HTC neglected to include the necessary
drivers needed for its latest SmartPhone and PocketPC devices to
come to their full potential. Those affected are all HTC
devices based on the MSM7200 and MSM7500 chipsets from Qualcomm.
The site states: None of these devices seem to use the hardware
acceleration provided by it's ATi Imageon based technology, or
the QTV or Q3Dimension technologies. These devices include, but
are not necessarily limited to:
* HTC TyTN II (MSM7200)
* HTC Touch Dual (MSM7200)
* HTC Touch Cruise (MSM7200
* HTC Wings (MSM7200).
* HTC Titan (MSM7500),
* HTC Vogue (MSM7500),
* HTC Libra (MSM7500),
* HTC Iris (MSM7500)
KINGS FAMILY: Offers Vouchers to Settle FACTA Lawsuit in Penn.
--------------------------------------------------------------
Kings Family Restaurants settled a purported class action in the
U.S. District Court for the Western Pennsylvania that accused it
of violating the Fair and Accurate Credit Transactions Act.
The suit was filed Michael V. Palamara on March 14, 2007. In
it, he claims that Kings Family Restaurants violated certain
requirements imposed by FACTA by printing the expiration date of
its customers credit or debit cards on receipts presented to
them at the restaurant.
FACTA requires that the expiration date be deleted from the
credit card receipts presented to customers at the point of
sale.
Though Kings officials disagreed with the allegations in the
suit, they decided it would be better to offer vouchers to the
affected customers rather than go to court.
Under the settlement, the company will be offering settlement
vouchers to customers who used their credit or debit cards at
any Kings restaurant, except Bentleyville, between Dec. 4, 2006,
and March, 9, 2007, or at Bentleyville between Feb. 7, 2005, and
March 9, 2007.
The terms of the settlement dictated that any eligible customers
will be entitled to a voucher for one of the following:
-- a free appetizer and mini-sundae;
-- a free homemade bowl of soup and a slice of apple or
pumpkin pie;
-- a free cup of soup and appetizer;
-- or a free dinner salad and scoop of Kings premium ice
cream.
The suit is “Palamara v. Kings Family Restaurants, Case No.
2:07-cv-00317-GLL,” filed in the U.S. District Court for the
Western District of Pennsylvania under Judge Gary L. Lancaster.
Representing the plaintiff is:
R. Bruce Carlson, Esq.
Carlson Lynch
P.O. Box 367, 231 Melville Lane
Sewickley, PA 15143
Phone: (412) 749-1677
E-mail: bcarlson@carlsonlynch.com
Representing the defendant is:
Wendelynne J. Newton, Esq.
Buchanan Ingersoll & Rooney
301 Grant Street
One Oxford Centre, 20th Floor
Pittsburgh, PA 15219
Phone: (412) 562-8932
E-mail: wendelynne.newton@bipc.com
LEHMAN BROTHERS: Aussie Councils Might Sue Over Losses in CDOS
--------------------------------------------------------------
Brian Robins of The Sydney Morning Herald reports on Jan. 26
that there is a speculation of a class action being taken
against Lehman Brothers over investments by councils in high-
risk "collateralized debt obligations."
Most councils, though, are still negotiating with Lehman
Brothers to buy back their investments while legal action
remains under study, according to Mr. Robins.
On a Jan. 15 report, the Morning Herald stated that several
councils are considering a suit against the Australian
subsidiary of the Wall Street bank that sold them CDOs linked to
the failed U.S. subprime mortgage market.
Wingecarribee Shire Council has already filed a federal court
action against Lehman Brothers over what its council's general
manager estimated as a potential loss of AU$3 million in
capital. The suit alleges misleading and deceptive conduct in
the management of its investment portfolio.
The councils that have invested hundreds of millions of dollars
in CDOs include Newcastle, Gosford, Manly, Woollahra and
Tumbarumba.
LOJACK CORP: “Rutti” Litigation Removed to Calif. Federal Court
---------------------------------------------------------------
Attorneys for LoJack Corp. have removed the purported class
action, “Mike Rutti et al. v. Lojack Corporation, Inc. et al.,”
from state court to the U.S. District Court for the Central
District of California, E.B. McCoy of Legal News Line reports.
Generally, the suit accuses the company, which employs
technicians in California to install stolen vehicle recovery
systems, of ripping off employees.
The suit was originally filed on November 2007 by Mike Rutti and
Gerson Anaya in a California state court. The plaintiffs
alleged that LoJack violated various California labor, business
and professional codes, and demanded that the issue be heard
before a jury. The two are represented by the Reghetti Law
Firm of San Francisco.
The complaint alleges that employees were routinely required to
work through both meal and rest breaks, improperly charged for
damages done to company vehicles and mandated to purchase tools
without reimbursement.
On Jan. 2, 2008, attorneys for the law firm of McDermott, Will
and Emery, removed the case to the U.S. District Court for the
Central District of California, arguing that the claim arises
under the Class Action Fairness Act (CAFA).
CAFA can be invoked when the putative class consists of more
than 100, and any member of the class is from a different state
than defendant, and the amount in controversy exceeds $5
million.
According to the complaint, the 228 class members seek damages
totaling $8,010,912. That amount was reached after adding:
-- $1,686,024 for failure to provide rest breaks,
-- $1,947,284 for missed meal periods,
-- $3,894,568 for minimum wage violations,
-- $438,060 for failure to pay wages in full upon
separation of company,
-- $819,000 for failure to provide accurate and timely
wage statements, and
-- $912,000 for failure to indemnify employees for
expenses.
The suit is “Mike Rutti et al v. Lojack Corporation, Inc. et
al., Case No. 2:2008cv00006,” filed in the U.S. District Court
for the Central District of California, Judge David O. Carter,
presiding.
Representing the plaintiffs is:
John Glugoski, Esq.
Righetti Law Firm P C
456 Montgomery Street Suite 1400
San Francisco, CA 94104
Phone: 415-983-0900
E-mail: jglugoski@righettilaw.com
Representing the defendant is:
Dan Chammas, Esq.
McDermott Will & Emery LLP
2049 Century Park East 34th Floor
Los Angeles, CA 90067-3208
Phone: 310-277-4110
E-mail: dchammas@mwe.com
LOUISIANA CITIZENS: Court Certifies “Chalona” Policyholders Suit
----------------------------------------------------------------
Judge Robert A. Buckley of the 34th Judicial District Court in
St. Bernard Parish (La.) certified as class action a suit filed
against Louisiana Citizens Property Insurance Corp. over the
timeliness of settlement offers on hurricane claims, Rebecca
Mowbray of The Times-Picayune reports.
The suit is "Adrian P. Chalona Sr. et al. v. Louisiana
Citizens." The resolution of the action could potentially
affect 76,000 Citizens policyholders with claims from Hurricanes
Katrina and Rita. They were policyholders who remained unpaid
after the 2005 storms.
Plaintiffs' attorney Madro Bandaries said the suit deals with
policyholders who did not get a settlement offer from Citizens
within 60 days of providing proof of damage at their home,
regardless of when Citizens began investigating the claim.
Judge Buckley's opinion says "Chalona" will exclude anyone who
already fits into the class action, "Oubre v. Louisiana
Citizens," filed in the 24th Judicial District Court in
Jefferson Parish or who has already reached an individual
settlement with Citizens.
MILAN RESTAURANT: Faces Suit in Va. Over Alleged FLSA Violations
----------------------------------------------------------------
Milan Restaurant, Inc., and its owner Charanjeet Ghotra face a
purported class action in the U.S. District Court for the
Western District of Virginia, alleging violations of the Fair
Labor Standards Act (FLSA), The C-Ville Weekly reports.
The suit was filed on Jan. 9, 2008 by the Virginia Legal Aid
Justice Center on behalf of former employee Sandeep Dias, a
resident of Virginia, but a native of Bombay, India.
In his complaint, Mr. Dias charges that the Indian restaurant,
specifically owner Charanjeet Ghotra, failed to pay proper
minimum wage by retaining tips left by patrons for the waiters,
as well as failing to pay proper overtime wages, which is in
violation of FLSA.
During his two year stint with Milan, his suit alleges that the
restaurant required him and others to turn over the tips they
received from restaurant patrons.
In addition, the complaint states that Mr. Dias regularly worked
more than 40 hours a week but was not paid the overtime rate of
one and a half times the regular wage.
The suit is seeking an award of monetary damages and declaratory
relief on behalf of Mr. Dias and all others similarly situated.
The suit is “Dias v. Milan Restaurant, Inc. et al., Case No.
3:08-cv-00004-nkm,” filed in the U.S. District Court for the
Western District of Virginia under Judge Norman K. Moon.
Representing the plaintiff is:
James Melvin Knoepp, Esq.
Erin Margaret Trodden, Esq.
Legal Aid Justice Center
Suite A, 1000 Preston Avenue
Charlottesville, VA 22903
Phone: 434-977-0553
Fax: 434-977-0558
E-mail: jim@justice4all.org
erin@justice4all.org
MODINE MANUFACTURING: Settles Environmental Lawsuit in Ill.
-----------------------------------------------------------
Modine Manufacturing Company (NYSE: MOD) jointly announced with
plaintiffs’ counsel -- Aaron Freiwald of Layser & Freiwald, PC
-- that Modine and plaintiffs have reached a settlement in
principle in connection with litigation against Modine, alleging
environmental contamination in McCullom Lake Village, McHenry
County, Illinois, where Modine operates a manufacturing
facility.
The case, “Gates, et al. v. Rohm and Haas Co., et al., Case No.
06-1743,” involves allegations of personal injury from exposure
to solvents that were allegedly released to groundwater and air
for an undetermined period of time (Class Action Reporter, Nov.
21, 2007).
It seeks damages for medical monitoring and property value
diminution for a putative class of residents of a community that
are allegedly at risk for personal injuries as a result of
exposure to this same allegedly contaminated groundwater and
air.
Under an agreement reached with Plaintiffs, 22 personal injury
cases filed in the Philadelphia Court of Common Pleas and an
alleged class action lawsuit that was filed in federal court in
the Eastern District of Pennsylvania, were settled. Litigation
against other named companies in the lawsuits continues.
In addition to a payment to the various plaintiffs of a fixed
amount in the state court cases, representative plaintiffs,
plaintiffs’ counsel, Aaron Freiwald, and Modine will be
proposing to the federal court a class settlement that will
involve specified funds for medical monitoring and property
claims for appropriate individuals who lived or owned property
in the McCullom Lake Village area.
Specific terms of the settlement were not disclosed and Modine
has not admitted liability in any way by the settlement.
Settlement is contingent on execution of a mutually agreeable
settlement agreement and approval by the various courts in each
case.
Commenting on the settlement, the plaintiffs’ attorney, Aaron
Freiwald, said, “Modine, which was not a primary target in this
litigation, has defended itself both vigorously and responsibly.
We have identified no substantiated scientific link between
Modine’s McHenry facility and the groundwater contamination in
McCullom Lake Village, therefore, we believe it is in the best
interests of the plaintiffs to settle this matter and pursue no
further litigation against Modine. We further commend Modine and
its representatives for the proactive manner in which the
company has approached and settled this matter.”
Mr. Freiwald added, “We are especially gratified that, as a
result of the settlement with Modine, we will soon be able to
offer medical monitoring to certain current and former residents
of the Village.”
Modine Vice President – Americas, James R. Rulseh, commented,
“This agreement makes sense for our company because it is an
opportunity to end a long and difficult litigation that has
spanned nearly two years and that could continue to stretch on
for many more years.”
Mr. Rulseh continued, “Modine takes its environmental
responsibilities very seriously. We consider the settlement fair
and reasonable to all concerned and in keeping with our long-
standing commitment to conduct business in an environmentally
responsible manner and according to the highest standards of
business conduct. Although we are convinced that the scientific
evidence indicates that we are in no way responsible for any of
the illnesses or damages alleged to have resulted from the
asserted environmental contamination, we believe it is both
appropriate and in the best interest of our shareholders,
employees and global business operations to settle this matter
at this time.”
Plaintiffs requesting additional information should contact
Layser & Freiwald, PC at 215.875.8000.
The suit is “Gates, et al. v. Rohm and Haas Company, et al.,
Case No. 06-1743,” filed in the U.S. District Court for the
Eastern District of Pennsylvania Gene E.K. Pratter.
Representing the plaintiffs is:
Aaron J. Freiwald, Esq.
Layser & Freiwald PC
1500 Walnut St., 18th Fl.
Philadelphia, PA 19102
Phone: 215-875-8000
E-mail: ajf@layserfreiwald.com
Representing the defendants is:
Albert G. Bixler, Esq.
Eckert Seamans Cherin & Mellott, LLC
1515 Market Street, 9th Floor
Philadelphia, PA 19102
Phone: 215-851-8412
E-mail: abixler@eckertseamans.com
MORTGAGE ELECTRONIC: Accused of Illegal Foreclosures in Minn.
-------------------------------------------------------------
As the economy continues to suffer from fall-out from subprime
mortgage foreclosures, Mortgage Electronic Registration Systems,
Inc. (MERS) is accused of skipping legally required steps to
remove people from their homes in Minnesota. A group of Hennepin
County homeowners with subprime mortgages filed a class action
to stop illegal foreclosures by MERS, a Virginia-based company.
The suit alleges that MERS, which handles 40% of the
foreclosures in the seven-county metropolitan area, violates
Minnesota law by expediting foreclosures without following
mandatory procedures. Some states require mortgage lenders to
file a lawsuit before they can foreclose. In Minnesota, lenders
have an alternative that is often called 'foreclosure by
advertisement' because it allows a party to foreclose after
publishing a notice of foreclosure in the newspaper. For
lenders, it is faster, easier, and less expensive than going to
court. However, the law requires the foreclosing party to meet
certain basic requirements before forcing homeowners out of the
home.
"Foreclosure by advertisement is a privilege, not a right," said
Amber Hawkins, an attorney for the Legal Aid Society of
Minneapolis, one of the law firms representing the plaintiffs.
"If a mortgage lender wants to use a quick and easy process to
take someone's house, at the very least they should have to
follow the steps that Minnesota law requires."
The central issue is whether MERS routinely initiates
foreclosures without listing all loan "assignments" - that is,
all changes in ownership that occur with the mortgage in
question, since mortgages often go through a chain of
"assignees." A basic requirement on Minnesota's books is that
mortgage assignments must be recorded with the county if the
mortgage is no longer held by the original lender. Additionally,
assignments must also be listed in the Notice of Mortgage
Foreclosure Sale, published in the newspaper. and delivered to
the homeowner prior to the sale.
The lawsuit alleges that MERS systematically ignores these
requirements and routinely forecloses upon mortgages that have
been assigned without recording those assignments or listing
them in the published foreclosure notice. Ironically, MERS was
established for the very purpose of tracking loan assignments
privately, rather than recording them with government officials.
In the midst of the subprime foreclosure crisis, this case
highlights the lack of accountability among subprime lenders,
who often aggressively marketed subprime loans without properly
underwriting them, then avoided assuming any risk by selling the
loan to investors. The result is that homeowners can be left
homeless, but all too often it is difficult to even ascertain
who is responsible for the mortgage. Among the families MERS
seeks to remove without taking proper steps include single
mothers and a man who is caring for a family member with
terminal cancer.
According to Eric Halperin, director of the Washington office of
the Center for Responsible Lending, "When lenders or other
foreclosing parties neglect to identify the entities that
support bad loans, the public is deprived of critical
information about who the real players are in this foreclosure
mess.
The attorneys representing the plaintiffs are from the Legal Aid
Society of Minneapolis, the Center for Responsible Lending, and
Crowder Teske, PLLP. For more information, contact Kathleen Day
at the Center for Responsible Lending, (202) 349-1871.
Minnesota Homeowners who are being or have been foreclosed upon
by MERS can call the following number for more information:
(612) 746-3740. If an interpreter is needed, please call (612)
332-1441.
MTN NIGERIA: Lawyers Plan to Sue Over Poor Service to Customers
---------------------------------------------------------------
A group of lawyers plan to file a class action against mobile
company MTN Nigeria and its rival players over pervasive network
congestions suffered by subscribers across the country, Shina
Badaru of This Day (Africa) reports.
According to the report, the suit may involve hundreds,
thousands or millions of subscribers and may set a major legal
landmark in the nation's judicial system. A source told This
Day that the lawyers are studying the appropriate legal
instruments, including the Nigerian Communications Act 2003, and
the enabling laws of the Nigerian Communications Commission and
other relevant provisions of the nation's consumer protection
laws.
The lawyers, according to the source, hope to claim damages over
alleged contractual breach by operators that continue to take up
subscribers, "even though they have inadequate capacity to
handle the increased traffic." The practice amounts to
deception of the marketplace, according to him.
Of 41, 512, 449 active lines in Nigeria at the end of December
2007, GSM operators account for the highest number at 39,534,296
lines. The top GSM operators are MTN, Glo Mobile, Celtel, and
Mtel, the report states, citing statistics from the NCC.
NU HORIZONS: Securities Fraud Lawsuit in California Dismissed
-------------------------------------------------------------
A class action against Nu Horizons Electronics Corp. and its
wholly-owned subsidiary Titan Supply Chain Services Corp. (as
co-defendant), which was previously commenced by a group of
Vitesse shareholders, has been dismissed against both
defendants.
On or about Oct. 4, 2007, a Consolidated Amended Class Action
Complaint for Securities Fraud was filed in the U.S. District
Court for the District of California in the matter filed by
Louis Grasso, individually and on behalf of all others similarly
situated against:
-- Vitesse Semiconductor Corp.,
-- Louis Tomasetta,
-- Yatin Mody,
-- Eugene F. Hovanec,
-- Silicon Valley Bank,
-- Nu Horizons Electronics Corp.,
-- Titan Supply Chain Services, Corp. (formerly Known as
Titan Logistics Corp.), and
-- KPMG LLP
Pursuant to the Amended Complaint, Nu Horizons, Titan, Silicon
Valley Bank, and KPMG LLP were added as defendants to the
putative class action which had been commenced by certain
purchasers of Vitesse common stock.
In the Amended Complaint, plaintiff alleges that Nu Horizons and
Titan violated Section 10(b) of the U.S. Securities Exchange Act
of 1934 and Rule 10b-5 promulgated thereunder and seeks
rescission or unspecified damages on behalf of a purported class
which purchased Vitesse common stock during the period from Jan.
27, 2003 to and including April 27, 2006.
As of Jan. 4, 2008, a class has not been certified in the
matter.
Nu Horizons and Titan moved to dismiss the Amended Complaint for
failing to state a claim under the federal securities laws
(Class Action Reporter, Jan. 22, 2008).
Under the judges recent ruling, the judge cited the recent
Supreme Court decision in “Stoneridge Investment v. Scientific-
Atlanta, Inc. et al.” as controlling and foreclosing the
plaintiff's attempt to plead liability on the part of Nu
Horizons and Titan for Vitesse's alleged financial
misstatements.
The action was dismissed with prejudice, although the plaintiffs
have the ability to appeal the court's decision.
Nu Horizons Electronic Corp. -- http://www.nuhorizons.com/-- is
engaged in the distribution of, and supply chain services for,
high technology active and passive electronic components.
QUANEX CORP: Investors File TRO to Block Spin-off to Gerdau
-----------------------------------------------------------
Quanex Corporation (NYSE:NX) announced that a motion for
temporary restraining order has been filed by plaintiff in a
putative stockholder derivative and class action lawsuit,
“Momentum Partners v. Raymond A. Jean, et al., Cause No. 2008-
01592,” filed in the 25th Judicial District of Harris County,
Texas.
The motion asks the court to enter a temporary restraining order
and seeks to enjoin the proposed spin-off by Quanex of its
building products division and the subsequent merger of Quanex
into a subsidiary of Gerdau S.A.
The original lawsuit named Quanex as a "nominal defendant," as
is customary in putative derivative lawsuits, and did not claim
money damages or seek to institute a restraining order or enjoin
the transactions.
Quanex believes that the effort to enjoin the spin-off and the
merger is without merit and intends to vigorously defend this
action. No hearing or trial has yet been set. Quanex does not
expect this to delay its previously announced anticipated
closing of the transaction by the end of the first calendar
quarter.
For more information, contact:
Valerie Calvert
Quanex Corporation
Phone: 713-877-5305
E-mail: http://www.quanex.com
RESPIRONICS INC: Faces Investor Suit in Del. Over $5.1B Sale
------------------------------------------------------------
A shareholder of Respironics, Inc. filed a purported class
action in Delaware Chancery Court over the company's $5.1
billion acquisition by Royal Philips Electronics, Rick Stouffer
of The Pittsburgh Tribune-Review reports.
Made public on Dec. 21, 2007, the deal will make medical device
maker Respironics' Murrysville headquarters the U.S. base for
Philips' Home Healthcare Solutions unit. Philips agreed to pay
$66 in cash for each Respironics share, a 24 percent premium.
The suit was filed on Jan. 8, 2008 by Respironics shareholder
Vera Guttman. She is alleging that the $66 a share was too low
for Respironics shares, and that company directors and
executives, Respironics itself, along with Royal Philips
Electronics, and various subsidiaries breached their fiduciary
duty to all Respironics shareholders.
Ms. Guttman's is represented in the case by, Joseph A. Rosenthal
with the Wilmington, Delaware-based law firm, Rosenthal, Monhait
& Goddess.
For more details, contact:
Joseph A. Rosenthal, Esq.
Rosenthal, Monhait, Gross & Goddess, P.A.
919 Market Street, Suite 1401, P.O. Box 1070
Wilmington, DE 19899-1070
Phone: (302) 656-4433
Fax: (302) 658-7567
SEARS ROEBUCK: Faces Customer Privacy Breach Suit in Illinois
-------------------------------------------------------------
Sears, Roebuck and Co. faces a purported class action in the
Circuit Court of Cook County, Illinois for violating customer
privacy on their site.
The suit, “Christine Desantis, et al. v. Sears, Roebuck and
Co.,” alleges that the lack of privacy protections at Sears’s
http://www.managemyhome.comweb site violated its own privacy
promises to consumers, and in so doing ran afoul of the Illinois
Consumer Fraud Act, which prohibits “unfair and deceptive
practices.”
It was filed by Christine Desantis, a New Jersey resident, on
Jan. 4, 2008. Attorney Jay Edelson of KAMBEREDELSON, LLC, an
Illinois law firm, is representing Ms. Desantis in the matter.
According to the complaint, in an effort to promote its website
and increase sales, Sears has established a web-based system to
allow customers to view their purchase history on-line at
http://www.managemyhome.com.
The complaint alleges though that Sears' system is fatally
flawed and was designed in such a way as to significantly
compromise the private information of its customers.
The system works as follows:
-- A user goes to Managemyhome website, creates an
account and logs-in.
-- The user then need only enter in publicly-available
information (such as the name, phone number and street
address) of a Sears customer in order to view the
customer's history of on-line and even in-store
purchases. The Managemyhome website provides detailed
histories of past purchases, including model numbers,
purchase dates, warranty information, and protection
plans.
However, according to complaint, the Managemyhome website will
provide purchase history of all residents of a particular
address, regardless of whether the residents are still living
there.
For instance, a Sears customer querying the Managemyhome website
with their current address will receive not only their purchase
history, but also the purchase history of prior residents at
that address.
Additionally, the Managemyhome website will provide information
about third-party warranties, even where a Sears customer
purchased the item only from Sears (and not the warranty), the
complaint states.
Plaintiffs alleges that there are staggering consequences to
customers with regards to Sears' system. Such consequences,
according to the complaint include:
-- Anyone can now access Sears's customers private
purchase history, meaning that a nosy person can find
out how much his neighbor spent on a new washing
machine or lawnmower.
-- Marketing companies can mine the Managemyhome website
for data about Sears customers, in order to transmit
detailed advertisements for additional products and/or
warranties.
-- Hackers can systematically access this data for much
more insidious purposes. They can use the data to
commit fraud by, for example, sending e-mails or
making phone calls purporting to be from Sears
alerting individuals to a recall of a specific
product. They then can use the information they have
obtained from Sears's website to gain trust over the
unsuspecting victim and obtain access to a person's
credit information, social security numbers or even a
person's house.
It is alleged that “Sears has known about this problem and has,
to date, done nothing to fix it.”
The complaint alleges two counts of violations:
-- COUNT I = Breach of Contract
-- COUNT II = Breach of Fiduciary Duty
= Violation of the Consumer Fraud Act
Common questions of law and fact exist as to all members of the
Class and predominate over questions affecting individual
members of the Class. Common questions include:
-- Does Sears' conduct constitute a breach of contract?
-- Does Sears' conduct violate its fiduciary duties to
the Class?
-- Is the Class entitled to an accounting?
-- Did Sears violate the Illinois Consumer Fraud and
Deceptive Trade Practices Act?
-- Is the Class entitled to injunctive relief?
The suit was filed by the KamberEdelson, LLC law firm on behalf
of Christine Desantis, a New Jersey resident. It was brought on
behalf of Ms. Desantis and a class of similarly situated
individuals.
The class consists of Ms. Desantis and all other individuals
whose purchase history is available to the public through the
http://www.managemyhome.comweb site, according to the
complaint.
It seeks class-action status, and more than $5 million in
damages, including attorneys’ fees. In essence, Plaintiff prays
for the following relief:
-- An order certifying the class as defined above;
-- An award of the aggregated actual damages of the
members of the Class;
-- An injunction requiring Defendant to secure the
private information it has obtained from the Class and
to notify the Class of the possibility of security
breaches;
-- An accounting to determine whether any security
breaches occurred;
-- Reasonable Attorney's fees and costs; and
-- Such further and other relief the Court deems
appropriate.
A copy of the complaint is available free of charge at:
http://researcharchives.com/t/s?2758
The suit is “Christine Desantis, et al. v. Sears, Roebuck and
Co.,” filed in the Circuit Court of Cook County, Illinois
Representing the plaintiff is:
Jay Edelson, Esq.
Ethan Preston, Esq.
KAMBEREDELSON, LLC
53 West Jackson Blvd; Suite 1530
Chicago, IL 60604
Phone: 312-589-6370
Web site: http://www.kamberedelson.com/
T-MOBILE USA: Court Allows Wash. Consumer Lawsuit to Proceed
------------------------------------------------------------
The U.S. Circuit Court of Appeals for the Ninth Circuit allowed
consumers to proceed with a class action against T-Mobile USA,
Inc., ruling that the wireless carrier's service contract
compelling mandatory arbitration can't be enforced under state
law, Phuong Cat Le of The Seattle Post Intelligencer.
Specifically, the court concluded that “T-Mobile's arbitration
provision is substantively unconscionable and unenforceable
under Washington state law.”
The decision was in connection to a lawsuit on appeal that was
filed by T-Mobile customers Kathleen Lowden and John Mahowald in
King County Superior Court in 2005.
The suit alleged the wireless carrier wrongly charged the
plaintiffs for roaming, long distance, night time and other fees
that should have been free.
The plaintiffs also claim that T-Mobile charged them for fees,
such as "a universal service fund fee," which weren't
advertised.
T-Mobile removed the case to federal district court and tried to
compel mandatory arbitration, arguing that the customers had
agreed to resolve their disputes in this manner.
Last year, the Washington Supreme Court ruled that former
Cingular Wireless, now AT&T, cannot enforce a waiver in its
service contract prohibiting customers from pursuing a class
action.
Citing that court's decision, the Ninth Circuit Court concluded
that T-Mobile's class action waiver couldn't be enforced.
In explaining the decision, Daniel F. Johnson, Esq., who is
representing the plaintiffs in the case said, “It means that the
company cannot avoid consumer claims against it by forcing
consumers to bring their claims in individual arbitration,
rather than group litigation.”
Mr. Johnson also explains, "What these cases are about are
large, national and international companies using arbitration
clauses to avoid class actions." He adds, "There are a lot of
consumer claims that are just too small to pursue individually."
The suit is “ Case No. CV-05-01482-MJP,” filed the U.S. District
Court for the Western District of Washington, Judge Marsha J.
Pechman, presiding.
Representing the plaintiffs is:
Daniel F. Johnson, Esq.
Breskin Johnson & Townsend
999 Third Avenue, Suite 4400
Seattle, WA 98104
Phone: 206-652-8660
Fax: 206-652-8290
Web site: http://www.bjtlegal.com
Representing the defendant is:
Fred B. Burnside, Esq.
Davis Wright Tremaine LLP
1201 Third Avenue, Suite 2200
Seattle, WA 98101-3045
Phone: (206) 628-7691
Fax: (206) 757-7700
Web site: http://www.dwt.com
New Securities Fraud Cases
TELETECH HOLDINGS: KGS Files Securities Fraud Lawsuit in N.Y.
-------------------------------------------------------------
Kahn Gauthier Swick, LLC filed a class action against TeleTech
Holdings, Inc. in the United States District Court for the
Southern District of New York, on behalf of shareholders who
purchased the common stock of the Company between February 8,
2007 and November 8, 2007, inclusive.
TeleTech and certain of the Company's officers and directors are
charged with making a series of materially false and misleading
statements related to the Company's business and operations in
violation of the Securities Exchange Act of 1934 (the "Exchange
Act"). In addition, defendants and its underwriters for the
Company's March 30, 2007 Secondary Offering are charged with
issuing a materially false and misleading Registration Statement
and joint Proxy-Prospectus in violation of the Securities Act of
1933 (the "Securities Act").
On November 8, 2007, defendants shocked investors by announcing
that TeleTech was conducting a "review of equity-based
compensation practices and likely restatement of previous issued
financial statements" would be required -- possibly as far back
as 1999. At that time, investors learned that TeleTech would
likely be forced to take millions of dollars in charges and
reserves, and that the Company would be forced to restate almost
a full decade of financial results to account for the Company's
true employment costs, expenses, reserves, payroll taxes, fines
and penalties.
Interested parties may move the court no later than March 25,
2008 for lead plaintiff appointment.
For more information, contact:
Lewis Kahn
Kahn Gauthier Swick, LLC
Poydras Center, 650 Poydras Street, Suite 2150
New Orleans, Louisiana 70130
Phone: 866-467-1400, ext. 100
E-mail: Lewis.kahn@kgscounsel.com
*********
S U B S C R I P T I O N I N F O R M A T I O N
Class Action Reporter is a daily newsletter, co-published by
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USA. Glenn Ruel Senorin, Ma. Cristina Canson, and Janice
Mendoza, Editors.
Copyright 2008. All rights reserved. ISSN 1525-2272.
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