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C L A S S A C T I O N R E P O R T E R
Thursday, September 10, 2009, Vol. 11, No. 179
Headlines
ARKANSAS: Inmates Challenge Law Preventing "Good Time" Credits
BORDERS GROUP: Suit Over Calif. Labor Code Violations Pending
BORDERS GROUP: Lawsuit Over Sale of Non-Redeemable Cards Pending
COMPUTER LEARNING: School Sued for False Advertising & Job Claims
DELL: Sept. 2009 Trial Set for Appeal to Junked Securities Suit
DYCOM INDUSTRIES: Faces Wage and Hour Violations Suit in Wash.
FARMLAND FOODS: D. Neb. Certifies Class Employee Class
FIRST AMERICAN: Sonnenschein Disqualified as Defense Counsel
FLAG TELECOM: 2nd Cir. Ruling Combines '33 & '34 Act Plaintiffs
FLORISSANT INJURY: Pain Relief Center Sued Over Junk Faxes
GOOGLE INC: Consumer Group Urges Court to Reject Book Settlement
GOOGLE INC: Microsoft Slams Google Book Deal as Monopolistic
HANNAFORD BROTHERS: Andrew Serwin, Esq., Comments on Dismissal
PARK WEST: Art Dealers Collection of Lawsuits Is Growing
SRAM LLC: Recalls 24,000 Bicycle Chains with PowerLock Connectors
TEAM WORK TRADING: Recalls 1,400 Lead-Containing Animal Masks
TOLL BROTHERS: Still Faces Amended Complaint in Securities Suit
TORO CO: Mediation on Consolidated Consumer Fraud Suit Ongoing
TORO CO: Mediation on Consolidated Consumer Fraud Suit Ongoing
TWENTIETH CENTURY FOX: Sued to Stop Text Message Movie Ads
New Securities Fraud Cases
PACIFIC CAPITAL: Stull Stull Files Complaint in C.D. Calif.
*********
ARKANSAS: Inmates Challenge Law Preventing "Good Time" Credits
--------------------------------------------------------------
The Associated Press reports that more than two dozen Arkansas
inmates are suing the state over a law that requires them to
serve at least 70 percent of their sentences before they can get
credit for good behavior and qualify for parole.
The AP relates that 28 inmates are attempting a constitutional
challenge in Pulaski County Circuit Court in four basically
identical lawsuits. The men are acting as their own attorneys
and are seeking class-action status, claiming as many as 3,000
inmates could be affected.
They are challenging the 14-year-old law that prevents inmates
convicted of certain Class Y felonies from having their time
behind bars decreased for good behavior, the AP says.
Assistant Attorney General Eileen Harrison tells The AP that the
suit is worthless and says inmates have no constitutionally
protected right to "good time" credits.
BORDERS GROUP: Suit Over Calif. Labor Code Violations Pending
-------------------------------------------------------------
Borders Group, Inc., intends to defend the purported class-action
lawsuit over the alleged violation of the California Labor Code.
In February 2009, three former employees, individually and on
behalf of a purported class consisting of all current and former
employees who work or worked as General Managers in Borders
stores in the State of California at any time from Feb. 19,
2005, through Feb. 19, 2009, have filed an action against the
company in the Superior Court of California for the County of
Orange.
The Complaint alleges, among other things, that the individual
plaintiffs and the purported class members were improperly
classified as exempt employees and that the company violated the
California Labor Code by failing to (i) pay required overtime
and (ii) provide meal periods and rest periods, and (iii) that
those practices also violate the California Business and
Professions Code.
The relief sought includes damages, restitution, penalties,
injunctive relief, interest, costs, and attorneys' fees and such
other relief as the court deems proper.
Discovery has not commenced yet, according to the company's Sept.
3, 2009 Form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarter ended Aug. 1, 2009.
Borders Group, Inc. -- http://www.bordersgroupinc.com/--
through its subsidiaries, operates book, music and movie
superstores, and mall-based bookstores.
BORDERS GROUP: Lawsuit Over Sale of Non-Redeemable Cards Pending
----------------------------------------------------------------
Borders Group, Inc. intends to defend an action filed by Amanda
Rudd, on behalf of herself and a putative class consisting of
all other customers who received Borders Gift Cards from March
2005 to March 2009.
In March 2009, Ms. Rudd filed an action in the Superior Court
for the State of California, County of San Diego alleging that
the company sells gift cards that are not redeemable for cash in
violation of California's Business and Professionals Code
Section 17200, et seq.
The Complaint seeks disgorgement of profits, restitution,
attorney's fees and costs and an injunction.
Discovery has not yet commenced, according to the company's Sept.
3, 2009 Form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarter ended Aug. 1, 2009.
Borders Group, Inc. -- http://www.bordersgroupinc.com/--
through its subsidiaries, operates book, music and movie
superstores, and mall-based bookstores.
COMPUTER LEARNING: School Sued for False Advertising & Job Claims
-----------------------------------------------------------------
Sarah Hull at Courthouse News Service reports that The Computer
Learning Center of Metropolitan New York lured students with ads
that promised job interviews but were actually pitches for
students, then failed to offer the training or job placements it
promised after charging as much as $15,000, according to a class
action complaint filed in Diakonikolas v. New Horizons Worldwide,
Inc., et al., Index No. 09112565 (N.Y. Sup. Ct., N.Y. Cty.).
Lead plaintiff Anthony Diakonikolas claims that "prior to
enrolling in the defendant's courses, the plaintiffs . . . found
the defendant's advertisement in several job listing Web sites
and newspapers. Because of the intentionally misleading nature
of the advertisement, the plaintiffs understood the job placement
advertisement as a job interview, not an advertisement for
education services."
Mr. Diakonikolas says that "upon attending the initial 'seminar'
advertised, the plaintiffs learned that the seminar was not a job
interview at all, but a means of enrolling the plaintiffs in
certification courses with a supposed guarantee of job placement
at the end of their classwork."
After spending more than $15,000 for the defendant's services,
Mr. Diakonikolas says the school "did not provide any member of
the class with job placement," and "failed to provide 100 hours
of paid training," as promised.
Mr. Diakonikolas says that in 2004 the Bureau of Proprietary
School Supervision found the school had violated New York
Education Law, including using "false and misleading advertising"
to lure students, and teaching "unapproved curriculum."
He wants his money back, costs, and other relief. He is
represented by:
Diane McFadin, Esq.
11 Broadway, Suite 715
New York, NY 10004
Telephone: (646) 723-2757
A copy of the complaint is available at:
http://www.courthousenews.com/2009/09/08/NYSchoolAds.pdf
DELL: Sept. 2009 Trial Set for Appeal to Junked Securities Suit
---------------------------------------------------------------
A hearing on the appeal the dismissal of the consolidated
securities fraud class-action lawsuit against Dell, Inc.,
is scheduled for September 2009, according to the company's Sept.
3, 2009, Form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarter ended July 31, 2009.
Initially, four putative securities class-action complaints were
filed in the U.S. District Court for the Western District of
Texas against Dell and certain of its current and former
officers. These complaints have been consolidated as "In re
Dell Inc. Securities Litigation" and Judge Sam Sparks named
Union Asset Management Holding AG as lead plaintiff in the
matter.
The lead plaintiff has asserted claims under sections 10(b),
20(a), and 20A of the U.S. Securities Exchange Act of 1934 based
on alleged false and misleading disclosures or omissions
regarding our financial statements, governmental investigations,
known battery problems, business model, and insiders' sales of
the company's securities.
The action also includes the company's independent registered
public accounting firm, PricewaterhouseCoopers LLP, as a
defendant.
On Oct. 6, 2008, the court dismissed all of the plaintiff's
claims with prejudice and without leave to amend.
On Nov. 3, 2008, the plaintiff appealed the dismissal of Dell
and the officer defendants to the Fifth Circuit Court of
Appeals.
The suit is In re Dell, Inc. Securities Litigation, Case No.
06-cv-00726 (W.D. Tex.) (Sparks, J.).
Representing the plaintiffs are:
James M. Hughes, Esq.
Lauren S. Antonino, Esq.
Motley Rice LLC
P.O. Box 1792, 28 Bridgeside Blvd.
Mount Pleasant, SC 29465
Phone: 843-216-9000
Fax: 843-216-9290
E-mail: jhughes@motleyrice.com
E-mail: lantonino@motleyrice.com
DYCOM INDUSTRIES: Faces Wage and Hour Violations Suit in Wash.
--------------------------------------------------------------
Dycom Industries, Inc. faces a putative class action lawsuit over
alleged wage and hour violations.
In May 2009, the company and one of its subsidiaries were named
as defendants in a lawsuit in the U.S. District Court for the
Western District of Washington.
The plaintiffs, former employees of the subsidiary, allege
various wage and hour claims, including that employees were not
paid for all hours worked.
They seek to certify as a class current and former employees of
the subsidiary who worked in the State of Washington.
There has been no discovery in the matter, according to the
company's Sept. 3, 2009, Form 10-K filing with the U.S.
Securities and Exchange Commission for the fiscal year ended July
25, 2009.
Dycom Industries, Inc. -- http://www.dycomind.com/-- is a
provider of specialty contracting services. These services are
provided throughout the United States and include engineering,
construction, maintenance and installation services to
telecommunications providers; underground locating services to
various utilities, including telecommunications providers, and
other construction and maintenance services to electric utilities
and others. The Company also provides services on a limited
basis in Canada.
FARMLAND FOODS: D. Neb. Certifies Class Employee Class
------------------------------------------------------
The Honorable F. A. Gossett certified a class of current and
former slaughterhouse employees in Morales, et al. v. Farmland
Foods, et al., Case No. 08-cv-00504 (D. Neb.).
As reported in the Class Action Reporter on Nov. 19, 2008, the
lawsuit alleges violations of the Fair Labor Standards Act
because hourly employees haven't been paid for time spent
dressing in protective gear, sanitizing tools, sharpening knives
and walking to work stations.
All current and former employees who worked at the slaughterhouse
since August 2006 will be notified about the lawsuit.
Farmland is a division of Smithfield, Va.-based Smithfield Foods
Inc. -- http://www.smithfieldfoods.com/
The plaintiffs are represented by:
Philip A. Downey, Esq.
Downey Law Firm
P.O. Box 736
Unionville, PA 19375
Phone: (610) 324-2848
Fax: (610) 347-1073
E-mail: downeyjustice@gmail.com
- and -
Christopher P. Welsh, Esq.
Welsh, Welsh Law Firm
9290 West Dodge Road
100 The Mark
Omaha, NE 68114
Phone: (402) 384-8160
Fax: (402) 384-8211
E-mail: cwelsh@welsh-law.com
Farmland Foods is represented by:
L. Dale Owens, Esq.
JACKSON, LEWIS LAW FIRM
1155 Peachtree Street, NE, Suite 1000
Atlanta, GA 30309-3600
Phone: (404) 586-1838
Fax: (404) 525-1173
E-mail: owensd@jacksonlewis.com
- and -
Allison D. Balus, Esq.
Steven D. Davidson, Esq.
BAIRD, HOLM LAW FIRM
Suite 1500, Woodmen Tower
1700 Farnam Street
Omaha, NE 68102-2068
Phone: (402) 344-0500
Fax: (402) 231-8554
E-mail: abalus@bairdholm.com
FIRST AMERICAN: Sonnenschein Disqualified as Defense Counsel
------------------------------------------------------------
Darrell Delamaide at DSNews.com reports that First American Title
Insurance, the country's largest in this field, had a California
judge disqualify its defense counsel as it fends off four class
action suits in the state.
According to a press release from the plaintiffs' attorneys, Mr.
Delamaide reports, First American's defense team at Sonnenschein,
Nath & Rosenthal was disqualified by Los Angeles Superior Court
Judge Anthony Mohr because of a potential conflict of interest.
The class action cases involve allegations that First American is
charging customers higher rates for title insurance than it is
authorized to do according to a schedule it has filed with the
state. The cases are similar to those the company has faced in
Idaho, Maine, and other states.
The ruling on defense counsel, coming at the end of a six-month
procedure that entailed half a dozen hearings, stems from the
role of a former general counsel at the California Department of
Insurance who joined Sonnenschein after plaintiffs' attorneys had
held detailed talks with him about representing the plaintiffs.
According to the plaintiffs' attorneys Steven Jay Bernheim and
Taras Kick, the former state official, Gary Cohen, was the
recipient of extensive confidential work product information in
the course of these talks.
Messrs. Bernheim and Kick contacted Mr. Cohen again at
Sonnenschein to work on behalf of the plaintiffs, but he declined
after a conflict check with the firm.
Only after that, according to plaintiffs' attorneys, Sonnenschein
filed a substitution of attorney and became counsel of record
against plaintiffs. Several members of First American's defense
team had recently left their original firm to join Sonnenschein.
As a result, Sonnenschein was now adverse to a party in the very
litigation where they had nearly been retained only weeks before.
Plaintiffs filed the motion to disqualify Mr. Cohen and the
entire Sonnenschein firm in March.
Sonnenschein countered that they had built an "ethical wall"
around Mr. Cohen, barring all communications pertaining to these
cases between him and the First American defense team.
But then Sonnenschein asked for a dismissal of the class action
suits based on a ruling in another case involving First American
-- a case that Mr. Cohen worked on. Messrs. Bernheim and Kirk
argued that in this manner Mr. Cohen, who had confidential
information from the plaintiffs' side, was working adversely to
plaintiffs' interests despite Sonnenschein's claim of an ethical
wall.
In the course of the proceedings, First American's in-house
counsel said that the company had paid $5.5 million in attorneys'
fees in connection with the cases, and an additional $1 million
in defending their counsel.
But the stakes are high, Mr. Delamaide says. In testimony
regarding the allegations of high insurance rates, one of First
American's title officers said the company had paid her $1.5
million in compensation over five years, most of it in
commissions. According to her testimony, "the more premium the
buyers, sellers, and refinancers of homes pay to First American,"
the more money she personally makes.
FLAG TELECOM: 2nd Cir. Ruling Combines '33 & '34 Act Plaintiffs
---------------------------------------------------------------
David P. Saunders and Howard S. Suskin, writing for Law.com, say
that the recent Second Circuit Opinion in In re Flag Telecom
Holdings, Ltd. Securities Litigation, Nos. 07-4017 and 07-4025,
2009 WL 2169197, slip op. http://is.gd/31OqU(2d Cir. July 22,
2009), is of interest to both plaintiff and defense counsel
because the Court says plaintiffs suing under the Securities Act
of 1933 and the Securities Exchange Act of 1934 may co-exist
within the same plaintiff class even if the allegations of
misrepresentation underlying the '33 act and '34 act claims
differ. The Second Circuit's decision will likely have the
effect of enlarging the size of plaintiff classes in securities
class actions as well as increasing the number of claims that
defendants will be subject to in class action suits, Messrs.
Saunders and Suskin say, adding that it bears close consideration
by counsel involved in class actions in which both '33 act and
'34 act claims may be asserted.
Messrs. Saunders and Suskin's full report is available at
http://is.gd/31P2L
FLORISSANT INJURY: Pain Relief Center Sued Over Junk Faxes
----------------------------------------------------------
Kelly Holleran at The St. Clair Record reports that a putative
class action suit has been filed by Locklear Electric of Wood
River against Florissant Injury and Pain Relief Center and its
owner, William Straughn, alleging its employees wasted their time
receiving unsolicited faxes from the pain center.
With this new case, Ms. Holleran reports, Locklear has now filed
at least eight class action lawsuits over unsolicited faxes since
February 2005 in Madison and St. Clair counties.
Locklear is represented by:
Robert J. Sprague, Esq.
Sprague and Urban
26 E. Washington
Belleville, IL 62220
Telephone: (618) 233-8383
- and -
Brian J. Wanca, Esq.
Anderson and Wanca
3701 Algonquin Rd., Suite 760
Rolling Meadows, Illinois 60008
Telephone: (847) 368-1500
- and -
Phillip A. Bock, Esq.
Bock & Hatch
134 N. La Salle St., Suite 1000
Chicago, IL 60602
Telephone: (312) 658-5500
- and -
Max G. Margulis, Esq.
Margulis Law Group
14236 Cedar Springs Dr.
Chesterfield, MO 63017
Telephone: (314) 434-8502
By sending the advertisement to Locklear and at least 39 other
companies, Florissant and Straughn violated the Telephone
Consumer Protection Act, which prohibits the use of any fax
machine or computer to send an unsolicited advertisement to a fax
machine, the suit states. "Receiving Defendants' junk faxes
caused the recipients to lose paper and toner consumed in the
printing of Defendants' faxes," the complaint says. "Moreover,
Defendants' faxes used Plaintiff's fax machine. Defendants' faxes
cost Plaintiff time, as Plaintiff and its employees wasted their
time receiving, reviewing and routing Defendants' illegal faxes."
In the two-count suit, Ms. Holleran relates, Locklear and the
putative class are asking the court to decree the case as a class
action, to award $500 for each violation of the Telephone
Consumer Protection Act, to enter an injunction prohibiting
Florissant and Straughn from sending future unsolicited faxes and
to award further costs it deems just of not more than $150,000
per individual. They are also seeking additional appropriate
damages and costs.
The case was filed in St. Clair County Circuit Court and is
docketed as Case No. 09-L-454.
GOOGLE INC: Consumer Group Urges Court to Reject Book Settlement
----------------------------------------------------------------
Consumer Watchdog filed an amicus brief this week urging a
federal court to reject the proposed Google Books settlement
because it is anticompetitive and violates both U.S. and
international law. Separately, the consumer group called a Books
privacy policy Google offered late last week inadequate.
"The proposed class-action settlement is monumentally overbroad
and invites the Court to overstep its legal jurisdiction, to the
detriment of consumers and the public," said Consumer Watchdog in
a friend-of the-court brief. "The proposed Settlement Agreement
would strip rights from millions of absent class members,
worldwide, in violation of national and international copyright
law, for the sole benefit of Google."
Google had resisted releasing a Books privacy policy unless the
settlement were approved, but posted a policy late last Thursday
in response to pressure from the Federal Trade Commission.
Google needs to give users the option to have no data gathered at
all, Consumer Watchdog said. Google failed to say how long it
intended to keep accumulated data and failed to say whether it
would co-mingle the books data with other information and use it
to target advertising.
"The proposed book settlement was negotiated in secret by the
parties in the suit and there was no opportunity to represent and
protect the broad interests of all consumers," said John M.
Simpson, consumer advocate with Consumer Watchdog. "This deal
simply furthers the relatively narrow agenda of Google, The
Authors Guild and the Association of American Publishers."
If approved the settlement would give Google unprecedented
control of a digital book database without adequate user privacy
guarantees, Consumer Watchdog said.
In its federal court brief the nonprofit, nonpartisan consumer
group said the proposed settlement should be rejected by U.S.
District Judge Denny Chin because:
-- It is not fair, adequate or reasonable because it far
exceeds the actual controversy before the court and
abuses the class-action process: "The proposed class
action settlement claims to resolve the actual dispute
between the parties, but it also goes much, much farther,
and purports to enroll millions of absent class members
in a series of new business 'opportunities.' For those
absent class members who fail to step forward and claim
their share, however, this 'opportunity' operates as a
theft -- essentially the parties propose to sell the
copyrighted works of absent class members, and then split
the proceeds among themselves."
-- It is an unauthorized attempt to revise the rights and
remedies of U.S. Copyright law. "The proposed Settlement
Agreement, if approved, would so massively reallocate the
existing rights and remedies under copyright law that it
would effectively rewrite the existing statutory regime
for the benefit of a single player -- Google. But
Supreme Court precedent is clear: courts may not modify
copyright law. Only Congress has 'the constitutional
authority and the institutional ability to accommodate
fully the varied permutations of competing interests'
that must be balanced when amending the Copyright Act.'"
-- It conflicts with international law, specifically The
Berne Convention for the Protection of Literary and
Artistic Works, an international copyright treaty. "Not
only does the proposed Settlement Agreement attempt to do
an end-run around the legislative process, but it also
proposes a scheme that Congress could not have adopted
because of its clear violation of the United States'
international obligations under the Berne Convention for
the Protection of Literary and Artistic Works. As
Congress has noted, '[a]dherence to [Berne] is in the
national interest because it will ensure a strong,
credible U.S. presence in the global marketplace . . .'
The Court should not approve what is tantamount to
private legislation for the benefit of Google that would
violate an international agreement and jeopardize the
public's interest in international copyright relations."
-- It gives Google an unlawful and anti-competitive
monopoly. "Finally, because the settlement effectively
suspends existing copyright law just for Google, it opens
the door for Google to become the dominant player in new
markets for online book search engines and book
Subscription programs. Accordingly, the settlement
should be further rejected because it would violate
Section 2 of the Sherman Act, which makes it an offense
for any person to "monopolize, or attempt to monopolize,
or combine or conspire with any other person or persons,
to monopolize any part of the trade or commerce among the
several States."
Consumer Watchdog's full amicus curiae brief is available at:
http://www.consumerwatchdog.org/resources/Googleamicusbrief.pdf
The brief was filed for Consumer Watchdog by:
Daniel J. Fetterman, Esq.
Peter J. Toren, Esq.
Charlotte A. Pontillo, Esq.
KASOWITZ, BENSON, TORRES & FRIEDMAN LLP
1633 Broadway
New York, NY 10019
Phone: (212) 506-1700
Fax: (212) 506-1800
E-mail: dfetterman@kasowitz.com
ptoren@kasowitz.com
cpontillo@kasowitz.com
"Consumer Watchdog asked Judge Chin to reject the proposed Google
Books Settlement because it gives Google an unfair advantage in
the book-search market, violates both U.S. and international
copyright laws and is not in the public interest," said Daniel
Fetterman, Esq., of Kasowitz, Benson.
The settlement provides a mechanism for Google to deal with
"orphan works." Orphan works are works under copyright, but with
the rightsholders unknown or not found. The danger of using such
works is that a rightsholder will emerge after the book has been
exploited and demand substantial infringement penalties. The
proposed settlement protects Google from such potentially
damaging exposure, but provides no protection for others. This
effectively is a barrier for competitors to enter the digital
book business.
"If the settlement were approved, it would give Google a default
monopoly to books for which the rightsholders cannot be located,
resulting in unfair competitive advantages to Google in the
search engine, electronic book sales, and other markets," the
brief said.
Consumer Watchdog -- http://www.consumerwatchdog.org/-- formerly
the Foundation for Taxpayer and Consumer Rights is a nonprofit,
nonpartisan consumer advocacy organization with offices in
Washington, D.C., and Santa Monica, Calif.
Kasowitz, Benson, Torres & Friedman LLP --
http://www.kasowitz.com/is a national law firm with over 300
lawyers specializing in high stakes, complex litigation. The
firm has With offices in New York, Newark, Houston, Atlanta,
Miami and San Francisco.
Consumer Watchdog urged the U.S. Department of Justice to
intervene in Authors Guild, Inc. v. Google, Inc., Case No.
05-cv-8136 (S.D.N.Y.) (Chin, J.), five months ago, and Justice
subsequently announced it was investigating the deal. (Class
Action Reporter, April 8, 2009)
Judge Chin has scheduled a hearing on the settlement for Oct. 7.
GOOGLE INC: Microsoft Slams Google Book Deal as Monopolistic
------------------------------------------------------------
Chloe Albanesius at PC Magazine reports that Microsoft has voiced
its opposition to the Google Books deal. In a brief submitted in
Authors Guild, Inc. v. Google, Inc., Case No. 05-cv-8136
(S.D.N.Y.) (Chin, J.), this week, Microsoft argues that Google
has no right to "restructure copyright" and that any changes to
copyright law should be handled by Congress. If the proposed
$125 million agreement with publishers is approved, Microsoft
argues, the court will be authorizing a Google monopoly on
digital books. "A class action settlement is the wrong
mechanism, this court is the wrong venue, and monopolization is
the wrong means to carry out the worthy goal of digitizing and
increasing the accessibility of books," Microsoft's lawyers
wrote.
HANNAFORD BROTHERS: Andrew Serwin, Esq., Comments on Dismissal
--------------------------------------------------------------
Andrew Serwin, Esq., at Foley & Lardner LLP in San Diego, Calif.,
says that a decision in __________ v. Hannaford Bros. Co., Case
No. 08-cv-_____ (D. Me.), is notable because while it dismisses
the case based upon a lack of damages, it is the second recent
case that permits an unfair trade practice claim based upon a
data breach to survive, and it is the first that explicitly ties
into the FTC's cases based upon its unfairness authority in the
data-security realm.
Hannaford Bros. Co., a grocer, faced a number of class-action
lawsuits from its customers as a result of a third party stealing
electronic payment data from credit cards and debit cards used by
its customers to purchase groceries. The alleged data breach
impacted over 4,000,000 of Hannaford's consumers. The lawsuits
were consolidated into one multi-district litigation in the U.S.
District Court for the District of Maine. The case offers some
interesting guidance regarding the current contours of privacy
litigation. While the Court dismissed the majority of pending
claims against Hannaford, certain claims were allowed to remain
pending. While the decision reinforces the general thought that
privacy litigation in many cases faces difficult hurdles, the
decision allows the door to remain open for certain causes of
action related to privacy violations.
The plaintiffs brought a number of claims, including claims for
breach of implied warranty, breach of confidential relationship,
failure to advise of the breach (independent of the existing
statutory requirements), and strict liability. The District Court
followed these cases and dismissed the breach of implied
warranty, breach of confidential relationship, failure to advise
of the breach, and strict liability claims. However, the District
Court found that certain claims, including breach of implied
contract, negligence, and a claim arising from Maine's unfair
trade practices statute could potentially be stated, and these
claims were not dismissed by the court. Part of the basis for
this ruling by the District Court was its belief that there could
be an implied term when a consumer purchases goods that a seller
will take reasonable measures to protect information. Of
relevance to the District Court were the FTC's data security
enforcement actions brought under its "unfairness" authority,
which do not require a representation regarding security and
instead rely upon the argument that a lack of data security is
independently violative of Section 5 of the FTC Act.
However, the District Court then considered the damage issues in
the case and followed a line of reasoning that began with Trikas
v. Universal Card Services Corp., 351 F. Supp. 2d 37 (E.D. N.Y.
2005), in which the court rejected a plaintiff's claim for
violation of the Fair Credit Reporting Act. In Trikas, the
plaintiff brought an action based upon the assertion that an
account erroneously remained open on his credit report. The
plaintiff claimed that he suffered emotional distress because of
this, even though it was admitted that no creditor actually saw,
or relied upon, the erroneous information. Ultimately, the court
dismissed the claim because the plaintiff could not prove damages
that were caused by the alleged violation. The court in Forbes
v. Wells Fargo Bank, N.A. reached a similar conclusion. In this
case, the plaintiffs' personal information was obtained due to a
theft of computers that contained unencrypted customer
information including names, addresses, Social Security numbers
and account numbers. It again was undisputed that plaintiffs had
expended time and money to monitor credit, but there was no
indication that the information had been accessed or misused. The
court rejected the plaintiffs' claim that they had suffered
damage due to the time and money they had spent because the
plaintiffs could only recover for loss of time in terms of
earning capacity or wages. The court therefore rejected both the
breach of contract and negligence claim in that case.
In the Hannaford case, the District Court found that the
plaintiffs could not state damages based upon consequential
losses, such as costs related to identity theft insurance, credit
monitoring, overdraft fees, fess related to pre-authorized
payment arrangements and loss of accumulated rewards points, and
that the plaintiffs also could not rely upon allegations of
emotional distress damages. The Court did find that to the extent
the plaintiffs faced fraudulent charges that remain on their
credit cards, those charges are actual damages regardless of the
plaintiffs' ability to recover those charges from their bank.
The Class Action Reporter reported about the dismissal of the
majority of class-action claims brought against Hannaford
on July 21 and May 15, 2009.
PARK WEST: Art Dealers Collection of Lawsuits Is Growing
--------------------------------------------------------
Tresa Baldas at The National Law Journal reports that Park West
Gallery, Inc., charged in five class action lawsuits and one
individual lawsuit with duping consumers into buying phony art
while aboard cruise ships in international waters to avoid
compliance with state consumer protection laws, now faces a
seventh lawsuit. This latest lawsuit, a defamation action, filed
on Aug. 26 in federal court in Detroit, accuses a Park West
appraiser who specializes in authenticating the works of Spanish
surrealist painter Salvador Dali conspired with the gallery to
destroy the reputation of Fine Art Registry, which has
investigated hundreds of complaints against Park West. The
appraiser is accused of posting false and "vicious" comments
about the registry in a blog.
Ms. Baldas' full report is available at http://is.gd/31NH8
SRAM LLC: Recalls 24,000 Bicycle Chains with PowerLock Connectors
-----------------------------------------------------------------
The U.S. Consumer Product Safety Commission, in cooperation with
SRAM LLC, of Chicago, Ill., is voluntary recalling about 24,000
10 Speed SRAM Bicycle Chains with PowerLock connector links.
Consumers should stop using recalled products immediately unless
otherwise instructed.
The recalled PowerLock connector links, used on bicycle chains,
are brittle and can crack, allowing the chain to separate from
the bicycle and posing a fall hazard to the rider.
One incident has been reported in the United States and three
outside. No injuries have been reported.
The recall involves SRAM PowerLock connector links, which are
sold individually, on 10-speed bicycle chains and as original
equipment on some bicycles. The recalled PowerLock connector
links are identified by a date code of M or N, which is located
on the side of the PowerLock connector link. 10-speed SRAM
chains that were equipped with recalled PowerLock connector links
include chain model numbers: PC-1030, PC-1050, PC-1070, PC-1090
and PC-1090R. The recalled chains were also installed on some
Guru, Surly, Salsa, BMC, Serotta, Seven, and Ridley brand
complete bicycles. The individual PowerLock connectors and bike
chains with these connectors were sold from January 2009 through
August 2009; bicycles with affected chains were sold from April
2009 through August 2009. Pictures of the recalled product are
at http://www.cpsc.gov/cpscpub/prerel/prhtml09/09342.html
The connectors and chains were sold at specialty bicycle retailer
stores nationwide from January 2009 through August 2009.
PowerLock connector links were sold separately for about $5 or as
part of 10-speed chains for between $35 and $85, and were
manufactured in Portugal.
Consumers should immediately stop using the recalled PowerLock
connectors, chains and bicycles with these connectors and contact
their SRAM retailer for a free replacement PowerLock connector
link.
For additional information, contact SRAM at (800) 346-2928
between 9 a.m. and 5 p.m. Monday through Friday CT or visit the
firm's Web site at http://www.sram.com/
TEAM WORK TRADING: Recalls 1,400 Lead-Containing Animal Masks
-------------------------------------------------------------
The U.S. Consumer Product Safety Commission, in cooperation with
Team Work Trading, of Los Angeles, Calif., is voluntary recalling
about 1,400 Children's Animal Masks and Pendants. Consumers
should stop using recalled products immediately unless otherwise
instructed.
The recalled children's animal masks and pendants contain high
levels of lead. Lead is toxic if ingested by young children and
can cause adverse health effects.
No injuries have been reported to date.
This recall involves a children's animal mask and four styles of
metal pendants. The mask resembles the face of a cat. The
pendants have various animated symbols including a dog tag with
fire symbol (Bleach), knife and lion symbol (Final Fantasy),
Mickey Mouse symbol (Kingdom of Hearts), and a burning sun symbol
(Naruto). The pendants were sold with silver-colored chains.
The products were sold at gift shop and modeling stores
nationwide, and the Team Work Trading store from November 2008
through March 2009 for between $4 and $8, and were manufactured
in China. Pictures of the recalled product are available at
http://www.cpsc.gov/cpscpub/prerel/prhtml09/09338.html
Consumer should immediately stop using the recalled items and
contact Team Work Trading for a refund or exchange.
For additional information, contact Team Work Trading collect at
(213) 680-4489 between 9 a.m. and 5 p.m. PT Monday through
Friday.
TOLL BROTHERS: Still Faces Amended Complaint in Securities Suit
----------------------------------------------------------------
Toll Brothers, Inc., continues to face an amended complaint in a
securities class action suit in the U.S. District Court for the
Eastern District of Pennsylvania, according to its Sept. 3, 2009
Form 10-Q Filing with the U.S. Securities and Exchange Commission
for the quarter ended July 31, 2009.
In April 2007, a securities class action suit was filed against
Toll Brothers, Inc., and Robert I. Toll and Bruce E. Toll in the
U.S. District Court for the Eastern District of Pennsylvania on
behalf of a purported class of purchasers of the company's
common stock between Dec. 9, 2004 and Nov. 8, 2005.
In August 2007, an amended complaint was filed adding additional
directors and officers as defendants.
The amended complaint filed on behalf of the purported class
alleges that the defendants violated federal securities laws by
issuing various materially false and misleading statements that
had the effect of artificially inflating the market price of the
company's stock. It further alleges that the individual
defendants sold shares for substantial gains during the class
period.
The purported class is seeking compensatory damages, counsel
fees, and expert costs.
Toll Brothers, Inc. -- http://www.tollcareercenter.com/-- is
engaged in designing, building, marketing and arranging finance
for single-family detached and attached homes in luxury
residential communities. The company is also involved, directly
and through joint ventures, in projects where it is building, or
converting existing rental apartment buildings into high-, mid-
and low-rise luxury homes. The company caters to the move-up,
empty-nester, active-adult, age-qualified and second-home buyers
in 21 states of the United States.
TORO CO: Mediation on Consolidated Consumer Fraud Suit Ongoing
--------------------------------------------------------------
Formal mediation proceedings are continuing in a consolidated
consumer fraud class action against The Toro Co. in the U.S.
District Court for the Eastern District of Wisconsin over
horsepower labels on its lawnmowers.
On June 3, 2004, eight individuals who claim to have purchased
lawnmowers in Illinois and Minnesota filed a lawsuit in Illinois
state court against the company and eight other defendants
alleging that the horsepower labels on the products the
plaintiffs purchased were inaccurate.
On May 17, 2006, the plaintiffs filed an amended complaint to
add 84 additional plaintiffs and an engine manufacturer as an
additional defendant. The amended complaint asserts violations
of the federal Racketeer Influenced and Corrupt Organizations
(RICO) Act and statutory and common law claims arising from the
laws of 48 states. The plaintiffs seek certification of a class
of all persons in the U.S. who, beginning Jan. 1, 1994 through
the present, purchased a lawnmower containing a two-stroke or
four-stroke gas combustible engine up to 30 horsepower that was
manufactured or sold by the defendants. The amended complaint
seeks an injunction, unspecified compensatory and punitive
damages, treble damages under the RICO Act, and attorneys fees.
In late May 2006, the case was removed to U.S. District Court
for the Southern District of Illinois. On Aug. 1, 2006, all of
the defendants, except MTD Products Inc., filed motions to
dismiss the claims in the amended complaint. On Aug. 4, 2006,
the plaintiffs filed a motion for preliminary approval of a
settlement agreement with MTD Products, Inc., and certification
of a settlement class.
All remaining non-settling defendants have filed counterclaims
against MTD Products, Inc. for potential contribution amounts,
and MTD Products, Inc. has filed cross claims against the non-
settling defendants. On Dec. 21, 2006, another defendant,
American Honda Motor Co., notified the company that it had
reached an agreement of settlement with the plaintiffs.
On March 30, 2007, the court entered an order dismissing
plaintiffs complaint, subject to the ability to re-plead certain
claims pursuant to a detailed written order to follow.
In May 2008, the court issued a memorandum and order that (I)
dismissed the RICO claim in its entirety with prejudice; (ii)
dismissed all non-Illinois state-law claims without prejudice
and with instructions that such claims must be filed in local
courts; and (iii) rejected the proposed settlement with MTD.
The proposed Honda settlement was not under consideration by the
court and was not addressed in the memorandum and order. Also
in May 2008, the plaintiffs (i) re-filed the Illinois claims
with the court; and (ii) filed non-Illinois claims in federal
courts in the District of New Jersey and the Northern District
of California with essentially the same state law claims.
In June 2008, the plaintiffs filed a motion with the U.S.
Judicial Panel on Multidistrict Litigation (the "MDL Panel")
that (i) stated their intent to file lawsuits in all 50 states
and the District of Columbia; and (ii) sought to have all of the
cases transferred for coordinated pretrial proceedings. In
August 2008, the MDL Panel issued an order denying the transfer
request. Additional lawsuits, some of which included additional
plaintiffs, were filed in various federal and state courts
asserting essentially the same state law claims.
In September 2008, the company and other defendants filed a
motion with the MDL Panel that sought to transfer the multiple
actions for coordinated pretrial proceedings. In early December
2008, the MDL Panel issued an order that (i) transferred 23
lawsuits, which collectively asserted claims under the laws of
16 states, for coordinated or consolidated pretrial proceedings,
(ii) selected the U.S. District Court for the Eastern District
of Wisconsin as the transferee district, and (iii) provided that
additional lawsuits will be treated as "tag-along" actions in
accordance with its rules.
An initial hearing was held in the U.S. District Court for the
Eastern District of Wisconsin in January 2009. At that hearing,
the Court (i) appointed lead plaintiffs' counsel, and (ii)
entered a stay of all litigation for 120 days so that the
parties could explore mediation. Formal mediation proceedings
commenced and are ongoing, according to the company's Sept. 3,
2009, Form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarter ended July 31, 2009.
The Toro Company -- http://www.toro.com/-- is engaged in
designing, manufacturing and marketing professional turf
maintenance equipment and services, turf and micro irrigation
systems, landscaping equipment, and residential yard products.
The company classifies its operations in two business segments:
professional and residential. A third segment called other
consists of domestic company-owned distributorships, corporate
functions, and Toro Credit Company, a wholly owned financing
subsidiary. The company's products are advertised and sold at
the retail level under the trademarks of Toro, Exmark, Irritrol,
Hayter, Pope, Lawn-Boy and Lawn Genie. Toro manufactures its
products in the United States, Mexico, Australia, Italy, and the
United Kingdom.
TORO CO: Mediation on Consolidated Consumer Fraud Suit Ongoing
--------------------------------------------------------------
Formal mediation proceedings are continuing in a consolidated
consumer fraud class action against The Toro Co. in the U.S.
District Court for the Eastern District of Wisconsin over
horsepower labels on its lawnmowers.
On June 3, 2004, eight individuals who claim to have purchased
lawnmowers in Illinois and Minnesota filed a lawsuit in Illinois
state court against the company and eight other defendants
alleging that the horsepower labels on the products the
plaintiffs purchased were inaccurate.
On May 17, 2006, the plaintiffs filed an amended complaint to
add 84 additional plaintiffs and an engine manufacturer as an
additional defendant. The amended complaint asserts violations
of the federal Racketeer Influenced and Corrupt Organizations
(RICO) Act and statutory and common law claims arising from the
laws of 48 states. The plaintiffs seek certification of a class
of all persons in the U.S. who, beginning Jan. 1, 1994 through
the present, purchased a lawnmower containing a two-stroke or
four-stroke gas combustible engine up to 30 horsepower that was
manufactured or sold by the defendants. The amended complaint
seeks an injunction, unspecified compensatory and punitive
damages, treble damages under the RICO Act, and attorneys fees.
In late May 2006, the case was removed to U.S. District Court
for the Southern District of Illinois. On Aug. 1, 2006, all of
the defendants, except MTD Products Inc., filed motions to
dismiss the claims in the amended complaint. On Aug. 4, 2006,
the plaintiffs filed a motion for preliminary approval of a
settlement agreement with MTD Products, Inc., and certification
of a settlement class.
All remaining non-settling defendants have filed counterclaims
against MTD Products, Inc. for potential contribution amounts,
and MTD Products, Inc. has filed cross claims against the non-
settling defendants. On Dec. 21, 2006, another defendant,
American Honda Motor Co., notified the company that it had
reached an agreement of settlement with the plaintiffs.
On March 30, 2007, the court entered an order dismissing
plaintiffs complaint, subject to the ability to re-plead certain
claims pursuant to a detailed written order to follow.
In May 2008, the court issued a memorandum and order that (I)
dismissed the RICO claim in its entirety with prejudice; (ii)
dismissed all non-Illinois state-law claims without prejudice
and with instructions that such claims must be filed in local
courts; and (iii) rejected the proposed settlement with MTD.
The proposed Honda settlement was not under consideration by the
court and was not addressed in the memorandum and order. Also
in May 2008, the plaintiffs (i) re-filed the Illinois claims
with the court; and (ii) filed non-Illinois claims in federal
courts in the District of New Jersey and the Northern District
of California with essentially the same state law claims.
In June 2008, the plaintiffs filed a motion with the U.S.
Judicial Panel on Multidistrict Litigation (the "MDL Panel")
that (i) stated their intent to file lawsuits in all 50 states
and the District of Columbia; and (ii) sought to have all of the
cases transferred for coordinated pretrial proceedings. In
August 2008, the MDL Panel issued an order denying the transfer
request. Additional lawsuits, some of which included additional
plaintiffs, were filed in various federal and state courts
asserting essentially the same state law claims.
In September 2008, the company and other defendants filed a
motion with the MDL Panel that sought to transfer the multiple
actions for coordinated pretrial proceedings. In early December
2008, the MDL Panel issued an order that (i) transferred 23
lawsuits, which collectively asserted claims under the laws of
16 states, for coordinated or consolidated pretrial proceedings,
(ii) selected the U.S. District Court for the Eastern District
of Wisconsin as the transferee district, and (iii) provided that
additional lawsuits will be treated as "tag-along" actions in
accordance with its rules.
An initial hearing was held in the U.S. District Court for the
Eastern District of Wisconsin in January 2009. At that hearing,
the Court (i) appointed lead plaintiffs' counsel, and (ii)
entered a stay of all litigation for 120 days so that the
parties could explore mediation. Formal mediation proceedings
commenced and are ongoing, according to the company's Sept. 3,
2009, Form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarter ended July 31, 2009.
The Toro Company -- http://www.toro.com/-- is engaged in
designing, manufacturing and marketing professional turf
maintenance equipment and services, turf and micro irrigation
systems, landscaping equipment, and residential yard products.
The company classifies its operations in two business segments:
professional and residential. A third segment called other
consists of domestic company-owned distributorships, corporate
functions, and Toro Credit Company, a wholly owned financing
subsidiary. The company's products are advertised and sold at
the retail level under the trademarks of Toro, Exmark, Irritrol,
Hayter, Pope, Lawn-Boy and Lawn Genie. Toro manufactures its
products in the United States, Mexico, Australia, Italy, and the
United Kingdom.
TWENTIETH CENTURY FOX: Sued to Stop Text Message Movie Ads
----------------------------------------------------------
Jennifer Fernicola at Chicago Now reports that a complaint was
filed this week against a film studio for unauthorized text
message advertising of upcoming films.
Victor Lozano is suing FoxStore, a Twentieth Century Fox Film
Corporation company, for unauthorized text messages, or "wireless
spam," such as "GEAR UP 4 THE HILARIOUS ANIMATED FILM ROBOTS ON
DVD @FOXSTORE.COM."
The complaint states that "Defendants caused actual harm, not
only because consumers were subjected to the aggravation that
necessarily accompanies wireless spam, but also because consumers
frequently have to pay their cell phone service providers for the
receipt of such wireless spam."
The complaint seeks an injunction requiring defendants to cease
the wireless spam as well as statutory damages to the class
(defined as anyone who has received one of these messages).
A copy of the Complaint in Lozano v. Twentieth Century Fox Film
Corp., et al., Case No. 09CH32310 (Ill. Cir. Ct., Cook Cty.), is
available at no charge at http://is.gd/34rtG
Mr. Lozano is represented by:
Michael J. McMorrow, Esq.
Ryan D. Andrews, Esq.
KAMBEREDELSON, LLC
350 North LaSalle Street
Chicago, IL 60654
Telephone: (312) 589-6470
Fax: (312) 589-6378
New Securities Fraud Cases
PACIFIC CAPITAL: Stull Stull Files Complaint in C.D. Calif.
-----------------------------------------------------------
Stull, Stull & Brody announced this week that a class action
lawsuit has been commenced in the United States District Court
for the Central District of California on behalf of purchasers of
the common stock of Pacific Capital Bancorp (Nasdaq:PCBC) between
April 30, 2009, and July 30, 2009, inclusive seeking to pursue
remedies under the Securities Exchange Act of 1934.
If you wish to serve as a lead plaintiff, you must move the Court
no later than 60 days from today. If you wish to discuss this
action or have any questions concerning this notice or your
rights or interests, please contact plaintiff's counsel Jason
D'Agnenica, Esq., at Stull, Stull & Brody at 800/337-4983 or
212/687-7230, or via e-mail at pcbc@ssbny.com. Any member of the
putative class may move the Court to serve as lead plaintiff
through counsel of their choice, or may choose to do nothing and
remain an absent class member.
The complaint alleges that Pacific Capital and certain of its
senior executive officers issued materially false and misleading
statements or concealed material information relating to the
Company's reserves for losses on its loan portfolio in violation
of Exchange Act sections 10(b) and 20(a). The complaint also
alleges that a stock analyst covering Pacific Capital issued a
"buy" rating on the Company's common stock despite knowingly or
recklessly failing to conduct a standard analysis of Pacific
Capital's banking operations that would have revealed that it was
not appropriate to issue a "buy" rating.
As alleged in the complaint, purchasers of Pacific Capital common
stock during the Class Period were misled to believe that the
Company was maintaining a strong allowance for loan losses which
would enable it to absorb losses in its portfolio. As alleged in
the complaint, defendants` misstatements and omissions relating
to Pacific Capital's loan loss provision caused the Company's
common stock to trade at artificially inflated levels between
April 30, 2009, when the Company reported that it maintained its
loan loss provision at a very high level, through July 30, 2009,
when the Company admitted that it had not adequately reserved for
loan losses, had not applied a conservative reserve methodology,
and needed to record an additional loan loss provision of $117
million. The "buy" rating issued by the analyst defendants on
the Company's common stock also contributed, as alleged, at
certain times during the Class Period to the artificial inflation
in the price of Pacific Capital stock.
The complaint alleges that investors who purchased the Company's
common stock at artificially inflated prices during the Class
Period suffered damages when the truth about the Company's
financial condition was revealed to the market at certain times
during the Class Period and the price of the Company's common
stock declined. According to the complaint, as the truth about
the Company's financial condition became known to the market, the
price of the Company's common stock declined from a closing price
of $6.94 per share on April 30, 2009, to a closing price of $2.12
per share on July 31, 2009.
Stull, Stull & Brody -- http://www.ssbny.com/-- has been
retained by a purchaser of Pacific Capital common stock seeking
to recover damages on his own behalf and on behalf of a class of
purchasers of Pacific Capital common stock. Stull, Stull & Brody
has litigated many class actions for violations of securities
laws on behalf of defrauded investors over the past 40 years and
has obtained court approval of substantial settlements on
numerous occasions. Stull, Stull & Brody has offices in New York
and Los Angeles.
*********
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
Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland
USA. Gracele D. Canilao, Leah Felisilda and Peter A. Chapman,
Editors.
Copyright 2009. All rights reserved. ISSN 1525-2272.
This material is copyrighted and any commercial use, resale or
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re-mailing and photocopying) is strictly prohibited without prior
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Information contained herein is obtained from sources believed to
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