/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/100107.mbx C L A S S A C T I O N R E P O R T E R Thursday, January 7, 2010, Vol. 12, No. 4 Headlines ARROW TRUCKING: Drivers File Class-Action Suit in N.D. Okla. CELLCOM ISRAEL: Subscribers' Lawsuit Dismissed with Prejudice CERTAINTEED CORP: $400-$600 Mil. Homeowner Settlement Projected CHUBB INSURANCE: Texas Judge Sets Strict Discovery Deadline COUNTRYWIDE FINANCIAL: Data Breach Fairness Hearing on July 19 COVERALL CLEANING: Faces Class-Action Lawsuit in Mass. DOREL JUVENILE: Recalls 213,000 Disney & Eddie Bauer Play Yards KENDAMASPOT LLC: Recalls 300 Wooden Skill Ball Toys KOSS CORP: Lawyers Looking for Defrauded Shareholders LG ELECTRONICS: Recalls 98,000 Portable Dehumidifiers MRT HOLDINGS: Plaintiffs Suspect Related Ponzi Scheme in Tenn. OSI RESTAURANT: Settles Sex-Bias Lawsuit for $19 Million RC2 CORP: Agrees to Pay $1.25 Mil. Penalty After Toy Recall SAN DIEGO: Class Action Suit Seeks Refund of City Taxes UNITEDHEALTH GROUP: ETF's Confirm Receipt of Settlement Payments UNITED STATES: ACORN Adds Class Action Count to USDA/EEO Suit WILHELMENIA MODEL: Five Charities Share $2 Mil. Cy Press Fund ********* ARROW TRUCKING: Drivers File Class-Action Suit in N.D. Okla. ------------------------------------------------------------ Laurent Belsie at The Christian Science Monitor reports that a class-action lawsuit against Arrow Trucking was filed in federal court last week. A principal charge: The Tulsa, Okla., flatbed carrier broke federal law by not giving its employees 60 days' notice about its precarious financial state. Instead, Arrow last week stranded hundreds of its drivers around the country. Many of them found out their employer was shutting down when their company-issued fuel cards wouldn't work. Two weeks ago, the company abruptly told its headquarters staff to pack up and go home. The suit is Smith, et al. v. Arrow Trucking Co., Case No. 09-cv-00810 (N.D. Okla.) (Kern, J.). "It was just outrageous conduct, I think, to do it on the eve of Christmas," said the Plainitffs' lead counsel: Charles A. Ercole, Esq. Klehr Harrison Harvey Branzburg LLP 1835 Market St., Suite 1400 Philadelphia, PA 19103 "People's paychecks on the 15th bounced." The Plaintiffs' local counsel is: Kevin R Donelson, Esq. Fellers Snider Blankenship Bailey & Tippens 100 N. Broadway, Ste. 1700 Oklahoma City, OK 73102-8820 Telephone: 405-232-0621 Mr. Ercole, who said he's been contacted by some 100 Arrow employees, planned to file suit Dec. 28 in federal district court in Tulsa, Okla. The suit claims the company violated the federal Worker Adjustment and Retraining Notification Act (WARN), which mandates that employees with at least 100 employees give them 60 days' notice before a plant closing or mass layoff. The suit will also address other violations of state and local laws that Arrow employees have alleged, including bounced paychecks, unpaid medical premium payments, and nonreimbursement of out-of-pocket expenses, Mr. Ercole said. With the company in apparent limbo -- and company executives unreachable -- Arrow's next step was unclear. If it files for bankruptcy, that might make for a more orderly disposition of assets, the attorney said, although employees' claims would come behind banks that loaned money to Arrow as well as Daimler Trucks and Navistar, which leased trucks to the company. The two companies swung into action to help the stranded drivers after reports of Arrow's shutdown last week. Daimler booked at least 75 Greyhound tickets to get drivers home and gave $200 in compensation for personal travel to another 150 drivers or more. As of Monday, Daimler had recovered 590 of the nearly 1,000 Freightliner trucks it had leased to Arrow. A key question in the lawsuit is whether Arrow executives knew their company was in trouble or whether a lender pulled out unexpectedly. Apparently, the company's operations broke down after the weekend of Dec. 19, when its drivers could no longer use their company credit cards to buy fuel. Transportation Alliance Bank, an Ogden, Utah, issuer of credit cards to truck owner-operators and trucking companies, would not confirm that it was the issuer of those cards. But in an ad earlier this year, it prominently featured a quote by Arrow's chief financial officer calling the bank "a strategic partner." In court, Arrow will claim that a creditor pulled out suddenly, Mr. Ercole predicts. But "my experience has been in these cases that we're going to find evidence months earlier that things were precarious." CELLCOM ISRAEL: Subscribers' Lawsuit Dismissed with Prejudice ------------------------------------------------------------- RTT News reports that Israeli cellular provider Cellcom Israel Ltd. (CEL: News ) said that a purported class action filed against the company in May 2007, in the District Court of Tel- Aviv-Jaffa, by two subscribers of the company, has been dismissed with prejudice with plaintiffs' consent. Two subscribers had alleged that the company, unlawfully and in violation of its license, raised its tariffs, in pricing plans that included a commitment to purchase certain services for a predefined period, Cellcom said. The company said, had the lawsuit been certified as a class action, the total amount claimed from Cellcom was estimated by the plaintiffs to be about NIS 875 million. Late November, Cellcom said that a purported class action lawsuit against the company, two other cellular operators and the Minister of Communications was filed in the District Court of Jerusalem, by four plaintiffs alleging to be subscribers of the two other cellular operators. The company then said that the plaintiffs had alleged that the defendant cellular operators unlawfully discriminated against non orthodox customers by offering them less favorable prices and terms. Cellcom Israel noted that if the lawsuit is certified as a class action, the total amount claimed is estimated by the plaintiffs to be about NIS 900 million, without specifying the amount attributed to the company individually. CERTAINTEED CORP: $400-$600 Mil. Homeowner Settlement Projected --------------------------------------------------------------- A nationwide class action settlement received preliminary approval by Judge Louis Pollak, U.S. District Court Judge for the Eastern District of Pennsylvania, to make payments to tens of thousands of homeowners across the U.S. and Canada whose roofs have been adversely affected by defective organic shingles manufactured by CertainTeed Corporation. The settlement has an expected value to the class of between $400 and $600 million, depending on the number of claims made. Clayton D. Halunen, Esq., of HALUNEN & ASSOCIATES, one of the lead attorneys representing consumers in Minnesota as well as 17 other states, stated that, "The number of people who have been affected by these faulty shingles is truly shocking. The result we achieved for the plaintiffs proves that consumers can achieve real change if they are willing to stand up to corporations such as CertainTeed." The Complaint filed against CertainTeed on behalf of the consumers alleges that the CertainTeed organic shingles on their homes were substandard. The shingles were marketed as durable and offering long-lasting protection, yet not long after their installation many consumers experienced noticeable damage to their roofs and the underlying felt and plaster, as well as to their walls and ceilings. Mr. Halunen noted that "the settlement was reached after over 3 years of contentious litigation . It will benefit all people who have owned, or currently own, a home or structure on which CertainTeed organic shingles were installed from July 1987 through the present." Based in Valley Forge, PA with about 300 offices throughout the United States and in Canada, CertainTeed sells the shingles under dozens of brand names including Centennial Slate, Hallmark, Hearthstead, Horizon, Independence, Landmark, Sealdon and Woodscape. Qualified individuals who own, or have owned, buildings affected by the defective shingles can expect to receive between $34 and $74 per square, depending on whether or not they have a valid warranty. For more information on the settlement and details on how to file a claim, consumers are encouraged to visit http://www.halunenlaw.com/ About Halunen & Associates Halunen & Associates was established in 1998. With offices in Minneapolis and Chicago, the firm focuses on employment law and consumer rights litigation, working tirelessly to protect the rights of working people and consumers across the country. CHUBB INSURANCE: Texas Judge Sets Strict Discovery Deadline ----------------------------------------------------------- Lynn LaRowe at the Texarkana Gazette reports that a Miller County, Tex., judge has imposed a deadline on major insurance companies to obey court orders in a class-action lawsuit alleging they cheated policyholders. "The facts show that the defendant, Chubb, has refused for years to comply with discovery requests of plaintiffs regarding production of e-mails unless it could dictate the parameters of the search," states a Dec. 21 order by Circuit Judge Kirk Johnson. "To avoid other piecemeal litigation on this issue, the court orders that all defendants in this litigation comply with discovery requests. . . ." COUNTRYWIDE FINANCIAL: Data Breach Fairness Hearing on July 19 ---------------------------------------------------------------- WKLY.com reports that a federal judge has given preliminary approval to a settlement between Countrywide Financial Corp. and millions of customers whose detailed financial information was exposed during a security breach. Under terms of the settlement, Countrywide, now owned by Bank of America, would give free credit monitoring to up to 17 million people whose information was exposed during the security breach. That group includes anyone who obtained a mortgage and anyone who used Countrywide to service a mortgage prior to July 1, 2008. U.S. District Judge Thomas B. Russell in Paducah, Ky., who oversaw more than 35 lawsuits related to the security breach, granted class-action status to the suit and gave preliminary approval of the settlement last month. A fairness hearing is scheduled for July 19 in Louisville. Brett Barrouquere at The Associated Press reports that the settlement entitles a person up to $50,000 in reimbursements from Countrywide per instance of identity theft, provided they actually lost something of value, were not reimbursed and it is more likely than not the theft stemmed from Countrywide. Mr. Barrouquere relates that the lawsuits stem from the arrest of Rene Rebollo Jr., of Pasadena, Calif., a former senior analyst for Countrywide, and Wahid Siddiqi, of Thousand Oaks, Calif. Federal investigators said Rebollo used a flash drive to download data from about 20,000 customers a week for two years from 2006 through August 2008. Mr. Rebollo then sold the information to Mr. Siddiqi for $500 and earned a combined $50,000, federal investigators said. Mr. Siddiqi pleaded guilty on Dec. 9 to 10 counts of fraud and admitted to selling the information to third parties, including an undercover FBI agent. Mr. Rebollo has pleaded not guilty and is scheduled for trial in January. Countrywide has said it has worked closely with the FBI and federal investigators and that the security breach does not appear to have resulted in anyone's identities being stolen. COVERALL CLEANING: Faces Class-Action Lawsuit in Mass. ------------------------------------------------------ David Segal's The Haggler column published in The New York Times relates that a class-action lawsuit is pending in Boston against Coverall Cleaning, in his response to a reader's question. Here's a reprint of the reader's question and Mr. Segal's answer: Q. I am writing on behalf of my housekeeper, Jagoda Walczak, a Polish immigrant who has been cleaning homes for years. She thought she could find new clients by investing in a franchise called Coverall Cleaning. She borrowed $17,600 from her brother and friends to cover the franchise fee, and Coverall guaranteed that it would send her $5,000 worth of commercial cleaning business - basically janitorial services for offices - every month. They assure people that they can make $18 to $20 an hour with these accounts. More than three months later, she had been offered less than $2,500 worth of business, and the monthly payments for these jobs were so low that, calculated at an hourly rate, they were minimum wage. She tried to get her money back, but Coverall will not send her a refund. Is there any way the Haggler can help? Channa Steinberg New York City A. The commercial cleaning franchise world is a new one to the Haggler, but it's been around since the mid-1970s, and Coverall is just one of several national players. It works like this: You give Coverall a big fat check and it provides training, some start-up supplies and initial leads to companies in need of cleaning service. The goal is steady income from cleaning gigs that are serviced, ideally, with your own employees. In theory, it's not a bad idea, and the company, which is based in Boca Raton, Fla., says it has 8,000 franchisees servicing 50,000 customers in the United States. It also has a pretty lengthy record of settling lawsuits brought by former Coverall franchisees - more than two dozen suits since 1998, according to its 2008 franchise disclosure document, with one settlement as high as $450,000. In every instance, the company denies wrongdoing. Read through a summary of the complaints, and themes emerge. Again and again, franchisees allege that Coverall presented them with a job at a set fee that required so much time and/or additional employees that the income, per hour, was a pittance. Shannon Liss-Riordan, a lawyer in Boston who has filed a class-action lawsuit against Coverall, says that this is standard operating procedure. "Companies like Coverall are competing for commercial cleaning contracts against regular janitorial companies that pay their workers as employees, which means they pay worker's compensation and have to abide by minimum-wage laws," she says. "Using the independent contractor model, Coverall doesn't have to worry about any of that, so they underbid for contracts and obviously the person who gets hurt is the worker." Ms. Walczak says she was offered a job cleaning a Vidal Sassoon salon -- six nights a week -- for just over $1,300 a month. A Coverall manager gave her a tour of the premises and said the whole job should take two and a half hours an evening. It took five hours, minimum, Ms. Walczak said she discovered. After three weeks, she told Coverall that the job was financially unfeasible. When she demanded her money back, Coverall refused and suggested that she sell her franchise. Ultimately, she was paid less than $700 for all of her Coverall-related work, including the three weeks at that Sassoon salon. A spokeswoman for Coverall, Jacqueline Vlaming, sent a lengthy e-mail message in response to the Haggler's inquiries about Ms. Walczak. In it, Ms. Vlaming says that the company doesn't guarantee $5,000 worth of cleaning jobs a month, but instead promises an initial set of jobs worth that sum of money, after which you're basically on your own. She also said that Ms. Walczak declined nine perfectly good cleaning gigs - worth $7,000, altogether - and that the Sassoon salon is now serviced by another Coverall franchisee for the same fee that Ms. Walczak found inadequate. "Ms. Walczak was difficult to work with from the outset," Ms. Vlaming wrote. "We tried repeatedly to explain to her the methodology inherent in bidding commercial accounts. She simply did not want to hear it." For a competing perspective, we turn to Steven Cumbow, a former chief financial officer at Coverall who has left the company and was recently deposed by Ms. Liss-Riordan as part of her class-action lawsuit. "Coverall has built its business around charging individuals - many of whom are non-English speakers - thousands of dollars in exchange for a promise that it will provide paid cleaning work," a court document says, paraphrasing Mr. Cumbow's deposition. "Instead of supplying this business, however, Coverall utilizes a 'churning' model whereby it offers business to workers who, Coverall knows, will be unable to accept or to adequately service the account, or revokes business for pretextual reasons." Ms. Vlaming called Mr. Cumbow a "disgruntled terminated employee with a grudge." The Haggler spoke to Ms. Walczak last week, and she described her struggles to make a living and provide for two teenage children. "I called the company and I just cried," she said. "I told them: 'You lied to me. You said I could make money and I can't and now I'm borrowing money and I'm in a worse situation than before.'" See? The Haggler warned you that this is not a feel-good story. But in the e-mail message, Ms. Vlaming said Coverall would be willing to discuss Ms. Walczak's situation with her and to "work toward a solution." The Haggler will follow those discussions and report on their outcome in a forthcoming column. DOREL JUVENILE: Recalls 213,000 Disney & Eddie Bauer Play Yards --------------------------------------------------------------- The U.S. Consumer Product Safety Commission and Health Canada, in cooperation with Dorel Juvenile Group Inc., of Columbus, Ind., announced a voluntary recall of about 213,000 Safety 1st Disney Care Center(tm) Play Yard and Eddie Bauer Complete Care Play Yard products. Consumers should stop using recalled products immediately unless otherwise instructed. The one piece metal bars supporting the floorboard of the bassinet attachment can come out of the fabric sleeves and create an uneven sleeping surface, posing a risk of suffocation or positional asphyxiation. No incidents or injuries have been reported. The play yards are portable and were sold with a bassinet attachment and a built-in changing station. Models included in this recall are 05025, 05026, 05037, 05088 and 05350. The model number is printed on a sticker on one of the support legs underneath the play yard. "Safety 1st" or "Eddie Bauer" are printed near the bottom of the fabric sides of the play yards. Pictures of the recalled products are available at http://www.cpsc.gov/cpscpub/prerel/prhtml10/10097.html The recalled products were manufactured in China and sold at Babies "R" Us, Kmart, Sears, Target and Walmart from January 2007 through October 2009 for between $100 and $130. Consumers should immediately stop using the bassinet attachment to the play yard and contact Dorel Juvenile Group for a free repair kit including replacement bassinet fabric, bassinet bars and installation instructions. For additional information, contact Dorel Juvenile Group toll-free at (866) 762-2166 between 8:00 a.m. and 5:00 p.m., Eastern Time, Monday through Thursday, 8:00 a.m. and 4:30 p.m., Eastern Time, Friday, or visit the firm's Web site at http://www.djgusa.com/ KENDAMASPOT LLC: Recalls 300 Wooden Skill Ball Toys --------------------------------------------------- The U.S. Consumer Product Safety Commission and Health Canada, in cooperation with Kendamaspot LLC, of Redmond, Wash., announced a voluntary recall of about 300 Wooden Skill Ball Toys. Consumers should stop using recalled products immediately unless otherwise instructed. The surface paint coating on the ball contains excessive levels of lead, violating the federal lead paint standard. No incidents or injuries have been reported. This recall involves Oozora and Shin-Fuji Kendama Japanese wooden skill toys. The toys have a ball connected by a string to a handle with three cups and spike on top. A Japanese Kendama Association sticker is affixed to the toy. The red and green balls on the Oozora and only the red balls on the Shin Fuji are included in the recall. Pictures of the recalled products are available at: http://www.cpsc.gov/cpscpub/prerel/prhtml10/10095.html The recalled toys were manufactured in Japan and sold at Kendamaspot's Web site and cultural festivals in Washington State from July 2008 through April 2009 for about $20. Consumers should immediately take the recalled toys away from children and contact Kendamaspot to receive a free replacement ball. For additional information, contact Kendamaspot toll-free at (866) 903-7795 between 8:00 a.m. and 5:00 p.m., Pacific Time, Monday through Friday, or visit the firm's Web site at http://www.kendamaspot.com/ KOSS CORP: Lawyers Looking for Defrauded Shareholders ----------------------------------------------------- Rich Kirchen at The Business Journal in Milwaukee reports that two law firms are seeking plaintiffs in possible class-action lawsuits against Koss Corp. for possible securities law violations after the company said an embezzlement case may cause it to restate financial statements going back to 2006. The law firms are Bronstein, Gewirtz & Grossman LLC of New York City and the Law Offices of Howard G. Smith in Philadelphia. Milwaukee-based Koss (NASDAQ: KOSS) on Christmas Eve announced it had fired its longtime vice president of finance, Sujata Sachdeva, after the company discovered unauthorized financial transactions that may exceed $20 million. Mr. Sachdeva made an initial appearance last week in U.S. District Court in Milwaukee on charges of using interstate wire communications to defraud Koss Corp. of more than $4.5 million in 2008 and this year. She is free on bond. Koss Corp. also announced Christmas Eve that its financial statements since at least the end of fiscal 2006 are no longer reliable. The law firms are seeking anyone who has purchased shares of Koss since January 2006 to possibly participate in a suit. LG ELECTRONICS: Recalls 98,000 Portable Dehumidifiers ----------------------------------------------------- The U.S. Consumer Product Safety Commission and Health Canada, in cooperation with LG Electronics Tianjin Appliance Co., of China, announced a voluntary recall of about 98,000 Portable Dehumidifiers. Consumers should stop using recalled products immediately unless otherwise instructed. The power connector for the dehumidifier's compressor can short circuit, posing fire and burn hazards to consumers. LG has received 11 reports of property damage incidents involving arcing, heat, smoke, including four fires that spread to the building structure and involved significant smoke/water damage. No injuries have been reported. This recall involves 30-pint portable dehumidifiers sold under these brand names: Brand Model No. Serial Number Range Sold at ----- --------- ------------------- ------- Goldstar GHD30Y7 611TAxx00001~08400 Home Depot 611TAxx08401~40600 612TAxx00001~20400 612TAxx21001~30600 Goldstar DH305Y7 612TAxx00001~00600 Wal-Mart 701TAxx00001~16800 702TAxx00001~03000 Comfort-Aire BHD-301-C 611TAxx00001~01697 Heat Controller 612TAxx00001~04200 Inc. 701TAxx00001~00578 710TAxx00001~00599 The dehumidifiers are white with a red shut-off button, controls for fan speed and humidity control and a front-loading water bucket. "Goldstar" or "Comfort-Aire" is printed on the front. The model and serial numbers are printed on the interior of the dehumidifiers and can be viewed after the water bucket is removed. Pictures of the recalled products are available at http://www.cpsc.gov/cpscpub/prerel/prhtml10/10096.html The recalled appliances were manufactured in China and sold at The Home Depot, Walmart and Heat Controller Inc. nationwide from January 2007 through June 2008 for between $140 and $150. Consumers should immediately stop using the recalled dehumidifier, contact LG to determine if it is included in the recall and return it to an authorized LG service center for a free repair. For additional information, contact LG toll-free at (877) 220-0479 between 8:00 a.m. and 7:00 p.m., Central Time, Monday through Friday and between 8:00 a.m. and 2:00 p.m., Central Time, on Saturday for the location of an authorized LG service center for the repair, or visit the firm's Web site at http://www.30pintdehumidifierrecall.com/ MRT HOLDINGS: Plaintiffs Suspect Related Ponzi Scheme in Tenn. -------------------------------------------------------------- Tony Rutherford at Huntington News reports that James Clements is listed as a defendant in the Tennessee securities fraud civil suit which involves one or more defendants from the Apostolic Life Church. In November 2008, a Florida court awarded 600 class action plaintiffs a total of $50 million dollars in a ponzi scheme securities fraud trial, according to WTVJ, Miami, Florida. An attorney for the plaintiffs in that case believe that Clements and MRT Holdings possibly has a connection to a similar ponzi scheme in Tennessee. "We believe some of the money may have been secreted overseas and we also think that the con man may have gotten conned," said attorney Jeff Sonn, whose law firm won the judgment. "Some of the money was ultimately invested in yet what we believe is another Ponzi scheme in Tennessee, and now we're going to be pursuing the promoters in Tennessee as well." Mark, Mike and Greg Manuel are named in a Tennessee securities fraud suit along with Clements related to Mpire Holdings, MRT, LLC and the Momentum Group. MANUEL BROTHERS The Manuel Brothers --- Mike, Greg, and Mark --- in the mid 90s were part of the Manuel Family Band where their three gospel songs climbed to the Singing News Top Forty. They reached #1 in the Christian County and County Gospel markets, traveling to hundreds of churches and concert halls. In 1996 Mike split from his brothers and moved to Nashville where he soloed with a progressive country sound. Manuel had fifteen number one radio singles and over twenty awards from organizations such as the County Gospel Music Association and was named 1999 CCMA Male Vocalist of the Year. The securities fraud civil action filed May 30, 2008 charged them with selling unlicensed securities and a ponzi scheme. FLORIDA GOVERNOR Ironically, Fort Lauderdale has endured another similar scheme. A prominent attorney, Scott Rothstein, had been running a scheme while wining and dining with political elite, such as Florida Governor Charlie Crist. Florida's Governor claimed in a Sun-Sentinel interview he had no reason to suspect his high rolling lawyer friend could be behind an alleged $1.2 billion Ponzi scheme. "I give people the benefit of the doubt...Unless I have a reason to believe that somebody is doing something wrong, then I don't have a reason to believe they're doing something wrong," the Florida governor said. Gov. Crist received major political contributions from Rothstein. The U.S. attorney has charged the 47-year-old attorney with five counts of fraud and racketeering. A copy of the class action complaint is available from Sonn & Erez at http://is.gd/5O9km APOSTOLIC LIFE The bank's complaint against Apostolic Life, et al., alleges that the on Oct. 14, 2009, "a release of mortgage [and] note prepared by DigiGreeters, LLC and Mark Shannon Manuel" was recorded in the Office of the Clerk of the County Commission of Cabell County, Tenn. OSI RESTAURANT: Settles Sex-Bias Lawsuit for $19 Million -------------------------------------------------------- Kathy Shwiff at Dow Jones Newswires reports that OSI Restaurant Partners LLC agreed to pay $19 million to settle a class-action lawsuit alleging sex discrimination against thousands of women at hundreds of its Outback Steakhouse restaurants. The Equal Employment Opportunity Commission said Outback discriminated against female employees and denied them equal opportunities for advancement. The lawsuit, filed by the EEOC in federal court in Colorado in 2006, said female employees couldn't get promoted to the higher- level profit-sharing management positions in the restaurants and were denied favorable job assignments, particularly kitchen management experience, which was required for employees to be considered for the top management job. "There are still too many glass ceilings left to shatter in workplaces throughout corporate America," said EEOC Acting Chairman Stuart Ishimaru. "The EEOC will continue to bring class lawsuits like this one against employers who engage in gender discrimination on a systemic scale." In addition to the money, the settlement requires that Outback launch an online application system for employees interested in managerial and other supervisory positions; hire a human resource executive in the newly created position of vice president of people; employ an outside consultant for at least two years who will determine compliance with the settlement terms and analyze data from the online application system to determine whether women have equal opportunities for promotion. OSI noted that the settlement includes no finding of fault by Outback and said it settled with insurance funds because that was preferable to the cost and distraction of further litigation. OSI Chief Executive Liz Smith said, "I am very pleased the company and the EEOC have resolved this legacy issue. There is no glass ceiling at OSI, and we do not tolerate discrimination in any form." RC2 CORP: Agrees to Pay $1.25 Mil. Penalty After Toy Recall ----------------------------------------------------------- As part of its commitment to protecting the safety of children, the U.S. Consumer Product Safety Commission (CPSC) announced today that RC2 Corp., of Oak Brook, Ill. has agreed to pay a $1.25 million civil penalty for allegedly violating the federal lead paint ban. The penalty settlement, which has been provisionally accepted by the Commission, resolves CPSC staff allegations that RC2 Corp. and one of its wholly-owned subsidiaries Learning Curve Brands Inc., knowingly (as defined by the Consumer Product Safety Act) imported and sold various Thomas & Friends(tm) Wooden Railway toys with paints or other surface coatings that contained lead levels above legal limits. In 1978, a federal ban was put in place which prohibited toys and other children's articles from having more than 0.06 percent lead (by weight) in paints or surface coatings. As a result of the Consumer Product Safety Improvement Act of 2008, the regulatory limit was reduced to 0.009 percent on August 14, 2009. CPSC staff alleged that RC2 failed to take adequate action to ensure that the toys would comply with the lead paint ban. This failure created a risk of lead poisoning and adverse health effects to children. In May 2007, RC2 reported that more than two dozen styles of vehicles, buildings and other train set components from the Thomas & Friends(tm) Wooden Railway product line were determined to have paints with lead levels that exceeded the then-applicable regulatory limit of 0.06 percent. Later, in August and September 2007, RC2 further reported that five additional toys from this product line were determined to have exceeded this limit. This civil penalty settles the following allegations: * RC2 imported up to 1.5 million units of non-compliant Thomas & Friends(tm) Wooden Railway toys between January 2005 and June 2007, and distributed them to its retail customers for sale to U.S. consumers. These toys were recalled in June 2007. * RC2 imported up to 200,000 units of five additional non- compliant toys from this product line between March 2003 and April 2007, and distributed them to its retail customers for sale to U.S. consumers. In September 2007, the original June 2007 recall was expanded to include these additional units. "The highly publicized recall of Thomas & Friends(tm) Wooden Railway toys was a catalyst for Congressional action aimed at strengthening CPSC and making the lead-in-paint limits under federal law even stricter," said CPSC Chairman Inez Tenenbaum. This settlement also resolves other potential matters. In agreeing to the settlement, RC2 denies that it knowingly violated federal law, as alleged by CPSC staff. SAN DIEGO: Class Action Suit Seeks Refund of City Taxes ------------------------------------------------------- The San Diego Union-Tribune reports that a Mira Mesa, Calif., small business owner has filed a class-action lawsuit against the city of San Diego seeking an estimated $13.5 million in refunds of fees the city charged to cover the cost of collecting business taxes. From approximately July 2004 through September 2009, San Diego charged a processing fee when landlords and other businesses paid their rental unit taxes or sought annual business licenses. The fee started out at $25 per year but was lowered to $15. After the 4th District Court of Appeals ruled in favor of two landlords who argued the fees were illegal taxes, San Diego dropped them and agreed to refund money collected from landlords citywide over the past 12 months. The refund offer, however, did not extend to non-landlord businesses, and the city is not returning fees collected since 2004 -- the entire duration the fees were in effect -- citing statutes of limitations. "We think it's unfair. We think they got it wrong," Eric Schumacher, owner of Swift Frame Picture Framing in Mira Mesa, said at a news conference in front of his business last week. The latest lawsuit could affect tens of thousands of people. Last year, the city collected taxes from 95,000 businesses and owners of 67,000 rental units. Mr. Schumacher is being represented by Edward Teyssier, Esq., a local libertarian leader and attorney who sued the city on behalf of the landlords to overturn the processing fee. Mr. Teyssier said it doesn't make sense for the city to repeal the fee for everybody, but not refund it to non-landlord businesses. "I think they are indicting themselves when they do that," Mr. Teyssier said. He noted that the inconsistency is particularly glaring considering that the processing fee charged to landlords and non- landlords were approved on the same day in the same resolution by the City Council as a way to generate revenue to close a budget gap. City Attorney Jan Goldsmith said he hasn't seen the lawsuit but he reiterated his earlier position that the appellate court ruling only applied to landlords. He said the processing fee charged to non-landlord businesses is not the same as that levied on landlords. "The business charge may have a somewhat different legal analysis as the proceeds were used for city services to businesses, according to the City Treasurer's Office," Goldsmith wrote in an email message. "It is certainly a gray area, however, which is the reason we acted to eliminate the charge going forward." Mr. Teyssier said a second lawsuit against the city is necessary because he doesn't believe the city should be allowed to limit refunds to a 12-month period. He noted it took almost four years for the landlords' lawsuits to wind through the court system, and while the case was being adjudicated, they had to continue paying the processing fee. "If the city in this case is allowed to keep any of the fees it has collected to date, then every other municipality throughout the state would be emboldened to impose similar, unconstitutional fees because they would know they would be able to keep, without penalty, everything they can collect while any legal challenge winds its way through the courts," the lawsuit said. Mr. Teyssier has set up a website at http://www.stopfee.org/to help businesses file claims against the city. UNITEDHEALTH GROUP: ETF's Confirm Receipt of Settlement Payments ---------------------------------------------------------------- The SPDR(R) S&P 500 ETF (SPDR Trust, Series I, NYSE:SPY, The Health Care Select Sector SPDR(R) Fund (NYSE: XLV) and SPDR(R) Dow Jones Large Cap Growth ETF (NYSE: ELG) confirmed last week that they collectively received about $13 million in payments as authorized claimants from a class action settlement related to UnitedHealth Group, Inc. UNITED STATES: ACORN Adds Class Action Count to USDA/EEO Suit ------------------------------------------------------------- On December 21, 2009 Michael McCray, National Spokesman for the ACORN 8 included a Class Action count in a formal EEO Complaint Number 19028 filed against USDA yesterday. In the cover letter addressed to Pearlie Reed, Assistant Secretary for Administration, Mr. McCray alleges that the entire EEO Process -- as applied -- at USDA has a disparate impact on minority complainants under Title VII and seeks EEO class certification. A USDA civil rights veteran from the Clinton Administration, Secretary Vilsack tapped Mr. Reed to solve USDA's lingering civil rights claims. The Agriculture Department plans to review more than 14,000 civil rights complaints that have been filed against the agency since 2000. Agriculture Secretary Tom Vilsack said only a small number of those complaints were eventually decided against the department and that 3,000 of the complaints have not even been processed. "This issue has lingered too long," Vilsack told reporters. Vilsack said the department would create a task force to review a sample of the complaints filed in the last nine years, supported by an independent legal counsel. On August 24, 2009, U.S. Senator Blanch Lincoln (D-AR) wrote a letter to Secretary Vilsack encouraging him to process Mr. McCray's and others unresolved EEO issues. Ironically, Michael McCray started his career in community development, and became a whistleblower after he suffered retaliation for his efforts to ensure that government funds actually benefited the low and moderate income communities it was intended to serve; just like he did as a national board delegate for the Association of Community Organizations for Reform Now (ACORN). McCray alleges that he was demoted, discharged and "blacklisted" from subsequent federal and non-profit employment after he reported government waste, fraud and abuse by USDA. McCray alleges that this case was unusual because USDA officials refused to cooperate with the investigation or sign their own affidavits. "This was the rare case where the complainant presented a prima fascia case with evidence and collaboration and the government presented no legitimate defense. No evidence and no corroboration, but the civil rights division refused to process the complaints." Unfortunately, this case was never processed, investigated or heard. Mr. McCray established a prima facie case of discrimination and retaliation with admissible evidence, eyewitness testimony and legal admissions. However, after 4,380 days (from May 20, 2007) Attorney McCray never received a hearing or any due process; he alleges due to baseless, dilatory litigation tactics and reported judicial misconduct amounting to coordinated judicial wrongdoing. Judicial Complaint No. 03-9 (June 11, 2003). Undaunted, Mr. McCray continues to fight for the rights of others; including low and moderate income families and federal worker's rights as National Spokesperson for the ACORN 8, co- chair of the International Association of Whistleblowers and member of the No FEAR Coalition. The ACORN 8, L.L.C. -- http://www.ACORN8.com/-- is an organization of ACORN leaders; current and former board members who are struggling to reform the association following the discovery of a multi-million dollar embezzlement; and is dedicated to empowering low and moderate income people through advocacy, direct action and integrity in community organizing. In May 26, 2009, the No FEAR Coalition wrote a letter to Secretary Vilsack requesting that Michael McCray's prior EEO case be immediately processed at this time EEO Case Number 990026. Consequently, the ACORN 8 join with the No FEAR Coalition in their support of Michael McCray and federal workers rights at USDA. The Associated Press reports that, charges of discrimination at the department of Agriculture are nothing new. Black farmers, mostly from the South, have long complained that they have been consistently denied loans, grants and other assistance by a "good old boy" network of local USDA field offices. Hispanic and American Indian farmers have also filed lawsuits against the department. "What know now, but didn't know then, was that McCray's case was not an isolated event, ignoring EEO/whistleblower cases was business as usual for USDA." states Retired Chief Deputy Marshal Matthew Fogg. "Secretary Vilsack recently announced his intention to reopen 14,000 EEO cases over the last ten years; 3,000 of which were never even processed at all." Chief Deputy Fogg won a historic $4 Million verdict against the Justice Department; "declaring the U.S. Marshal's service as a discriminating agency for African-Americans." Chief Deputy Fogg, is Co-chair of the No FEAR Coalition and is the EEO representative for Michael McCray. The No FEAR Coalition is committed to the full enforcement and implementation of the Notification of Federal Employees Anti-Discrimination and Retaliation Act (No FEAR) of 2002 and the introduction of new No FEAR II legislation. "It is a shame that USDA could blatantly violate these worker's civil service protections and constitutional rights." concludes Chief Deputy Marshal Fogg. According to the Associated Press, USDA settled a class-action lawsuit from black farmers, in 1999, agreeing to pay $50,000 plus tax benefits to those who could show they faced discrimination. The government has paid out nearly $1 billion in damages on almost 16,000 claims. In closing, "Secretary Vilsack promised a New Era for Civil Rights at USDA," McCray concludes. "We will see how they respond to the first Class Action filed in this celebrated New Era." WILHELMENIA MODEL: Five Charities Share $2 Mil. Cy Press Fund ------------------------------------------------------------- Alison Gendar at the New York Daily News reports that five women's charities -- including an eating disorder program -- will share $2 million from a class-action settlement with major modeling agencies in Fears v. Wilhelmina Model Agency, Case No. 02-CV-4911 (S.D.N.Y.), a federal judge ordered last week. The money is what is left over after thousands of aspiring and established models got their share of a $21 million settlement with the agencies, including Wilhelmenia, Ford and Click. The models sued in 2002, claiming the agencies fixed prices. A settlement was reached in 2005, but legal disputes delayed the final payouts, court records show. Manhattan Federal Judge Harold Baer originally ruled that after the models and their lawyers were paid, the remaining $6 million would be divvied up among the charities. The models and their lawyers appealed his decision, and after recalculating the payouts, a $2 million pool was left. Baer signed a final order Tuesday that included $347,826 for Columbia University's eating disorders program and $173,913 for its heroin detox program. The National Heart, Lung and Blood Institute will receive $86,956 for its "Heart Truth" campaign and New York University School of Medicine will receive $347,826 for two heart research studies aimed at women. ********* 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 2010. All rights reserved. ISSN 1525-2272. 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