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/raid1/www/Hosts/bankrupt/CAR_Public/090910.mbx 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 publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. 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