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/raid1/www/Hosts/bankrupt/CAR_Public/100203.mbx C L A S S A C T I O N R E P O R T E R Wednesday, February 3, 2010, Vol. 12, No. 23 Headlines ALBERTA: Court Says Seniors Must Be Told Of Class Action Suit AMERICAN INTERNATIONAL: Insurers Accused of Not Paying Claims AMX: Recalls 8,600 Rechargeable Batteries CHASE MANHATTAN: Loses Bid to Nix Calif. HELOC Suspension Lawsuit COMCAST CABLE: Class Action Labor Lawsuit filed in California DUKE ENERGY: Summary Notice of Retirement Plan Class Action Suit EMBARQ MANAGEMENT: Kan. Lawsuit About Secret Internet Spyware FAF INC: Recalls 55,000 Children's Metal Necklaces H&R BLOCK: Expert Admits He Bought "Peace of Mind" for His Wife HANN & HANN: Agrees to Settle Workers' Suit for $600,000 HOLLAND AMERICA: Filipino Workers Allege Bait-and-Switch Deal KAISER FOUNDATION: Appeals Court Reinstates UCL Class Action Suit LAUDERDALE COUNTY: Suit Complains About Arrest & Detention Policy MORGAN STANLEY: 2d Cir. Says Conflicts Don't Have to Be Disclosed NATIONAL CORRECTIVE: Collection Tactics Draw Fire in M.D. Pa. REPUBLIC OF IRAQ: Kurdish Genocide Survivor Files Suit in D.C. SAGE SOFTWARE: Accused of Not Giving Activation Code by Customer SPRINT NEXTEL: Calif. Suit Says Unlimited Messaging Not Unlimited SUMMIT TREESTANDS: Recalls 6,800 Talon Hang-on Tree Stands VIVENDI SA: Will Appeal Jury's Verdict in Securities Fraud Trial VONAGE AMERICA: Accused in Calif. of Improper Contract Extensions WALT DISNEY: Baby Einstein Ad Claims Challenged in Calif. Suit YELLOWPAGES.COM: Accused of Deceit & Fraud in Calif. Lawsuit ZIONS FIRST: Accused of Assisting Fraud Telemarketers in Pa. Suit ********* ALBERTA: Court Says Seniors Must Be Told Of Class Action Suit ------------------------------------------------------------- CBC News reports that seniors in nursing homes and hospitals across Alberta must be notified about a class action lawsuit that contends they may have been overcharged for accommodation, a Court of Queen's Bench judge has ruled. Details of the litigation against the provincial government must be sent to those seniors or their representatives and posted on the Alberta Health Services website, the court ruled, adding that ads must also be placed in major Alberta newspapers. The case began when James Darwish questioned the amount his late mother Johanna was charged for accommodation at a Calgary seniors home. "There was one huge increase of 40 per cent in accommodation rate there at a time when, you know, people that were renting out places were offering first month free sort of thing. It just didn't make sense to me," Mr. Darwish said. The lawsuit alleges the increase was unjustified and it accuses the province of using the extra fees to pay for health care costs, in violation of the Canada Health Act. Mr. Darwish and a group called the Elder Advocates of Alberta Society are named as plaintiffs in the suit, on behalf of more than 13,000 seniors who have been housed in nursing homes or hospitals since August 2003. A copy of the Honourable Madam Justice S.J. Greckol's Reasons for Judgment certifying a plaintiff class in Elder Advocates of Alberta Society v. Alberta, ABQB 490, Docket 0503 13196 (Alberta Ct. of Queen's Bench, Edmonton Registry), is available at http://is.gd/7pxZm Mr. Darwish didn't want to discuss the numbers connected to his mother's situation, but said he believed she was overcharged by roughly $700 a month. "It's been going a long time and my mother passed away two or three years ago," Mr. Darwish said. "And then to be faced with a huge trial, it would be nice to have it settled." The province denies overcharging seniors and is trying to get the Supreme Court of Canada to rule on whether the class action should be allowed. AMERICAN INTERNATIONAL: Insurers Accused of Not Paying Claims ------------------------------------------------------------- Courthouse News Service reports that American International Group, Granite State Insurance, and 21st Century Insurance refuse to pay for property lost when an auto is totaled, a class action claims in Los Angeles Superior Court. AMX: Recalls 8,600 Rechargeable Batteries ----------------------------------------- The U.S. Consumer Product Safety Commission, in cooperation with AMX, of Richardson, Texas, announced a voluntary recall of about 8,600 Rechargeable Batteries sold with MVP 5000 Series Wireless Touch Panels. Consumers should stop using recalled products immediately unless otherwise instructed. A defect in the battery can cause the battery pack to overheat and rupture. This poses a fire and burn hazard to consumers. No incidents or injuries have been reported. This recall involves AMX 5000 series (MVP-5100, MVP-5150, MVP- 5200i) wireless touch panels. The model number can be found on a label on the back of the unit. These touch panels can be used as remote controls for residential or commercial audio/visual systems. AMX 5000 series touch panels are available in black or white and include a 5.2" wide screen color LCD display. The touch panel's dimensions are 4-3/4" x 7-9/16" x 13/16". Pictures of the recalled products are available at: http://www.cpsc.gov/cpscpub/prerel/prhtml10/10035.html The recalled batteries were manufactured in the United States and Mexico and sold by AMX dealers nationwide from May 2008 through October 2009 for between $2,400 and $4,200. Consumers should immediately stop using the touch panels and contact AMX for instructions on how to receive a replacement battery at no cost. For additional information, contact AMX at (800) 222-0193 between 6:00 a.m. and 6:00 p.m., Eastern Time, Monday through Friday, visit the firm's Web site at http://www.amx.com/or e-mail the firm at service@amx.com and reference "XPX5000B." CHASE MANHATTAN: Loses Bid to Nix Calif. HELOC Suspension Lawsuit ----------------------------------------------------------------- A federal judge in San Francisco refused to dismiss a class action accusing Chase Manhattan Bank of suspending borrowers' home equity accounts based on its inaccurate and mysterious formula for assessing home values. A copy the Honorable William Alsup's Jan. 25, 2010, Order in Yakas v. Chase Manhattan Bank, U.S.A., N.A., Case No. 09-cv-02964 (N.D. Calif.), is available at: http://www.courthousenews.com/2010/01/27/Chase.pdf The Plaintiff is represented by: Christopher Collins, Esq. Frank James Janecek, Jr. , Esq. COUGHLIN STOIA GELLER RUDMAN & ROBBINS LLP 655 West Broadway, Suite 1900 San Diego, CA 92101 Telephone: 619-231-1058 - and - Jack Landskroner, Esq. Drew Legando, Esq. LANDSKRONER - GRIECO - MADDEN, LLC 1360 W. 9th St,. Suite 200 Cleveland, OH 44113 Telephone: 216-522-9000 Chase Manhattan is represented by: Victoria R. Collado, Esq. LeAnn Pedersen Pope Danielle Jean Szukala BURKE WARREN MACKAY & SERRITELLA, P.C. 330 N. Wabash Ave., 22nd Floor Chicago, IL 60611-3607 Telephone: 312-840-7000 - and - George Geoffrey Weickhardt, Esq. ROPERS MAJESKI KOHN & BENTLEY 201 Spear Street, Suite 1000 San Francisco, CA 94105 Telephone: 415-543-4800 COMCAST CABLE: Class Action Labor Lawsuit filed in California ------------------------------------------------------------- Courthouse News Service reports that Comcast Cable Communications faces a class action complaint from employees, in Santa Clara County Court, Calif. A copy of the Complaint in Amery v. Comcast Cable Communications, LLC, et al., Case No. 110CV162056 (Calif. Super. Ct., Santa Clara Cty.), is available at: http://www.courthousenews.com/2010/01/27/Employ.pdf The Plaintiff is represented by: Michael Hoffman, Esq. HOFFMAN EMPLOYMENT LAWYERS, LLP 100 Pine Street, Suite 1550 San Francisco, CA 94111 Telephone: 415-362-1111 DUKE ENERGY: Summary Notice of Retirement Plan Class Action Suit ---------------------------------------------------------------- IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF SOUTH CAROLINA ANDERSON DIVISION KENNETH WALTON GEORGE, et al., ) Case No. 06-CV-00373 ) Plaintiffs, ) CLASS ACTION ) v. ) SUMMARY NOTICE OF ) CLASS ACTION DUKE ENERGY RETIREMENT ) CASH BALANCE PLAN, et al., ) Judge: R. Bryan Harwell ) Defendants. ) TO: (1) All present and/or former vested employees of Duke who were participants In Duke's Cash Balance Plan at any time between January 1, 1997 and December 31, 1998, excluding participants who had retired on or before December 31,1996. ("Interest Rate Class") (2) All former employees of Duke who were participants in Duke's Cash Balance Plan, between January 1, 1997 and December 31, 2002, who retired and took lump sum benefits on or before August 17, 2006, prior to age 65, and whose lump sum benefits were calculated during a calendar quarter when the Plaintiffs claim that the applicable Interest crediting rate under the relevant Plan documents exceeded the applicable Interest rate for discounting to present value under the Plan documents. ("Whipsaw Class") THIS NOTICE MAY AFFECT YOUR RIGHTS. PLEASE READ IT CAREFULLY. 1. DESCRIPTION OF THE LAWSUIT This lawsuit is about Duke Energy Corporation''s Retirement Cash Balance Plan and its administration and calculation of retirement benefits under that Plan. Plaintiffs claim that Duke acted in violation of the Employment Retirement Income Security Act of 1974 in how it has administered and calculated benefits under the Plan and that it violated fiduciary duties owed to the participants. Duke Energy denies that it did anything wrong. 2. CLASS CERTIFICATION The Court has certified an "Interest Rate Class" and a "Whipsaw Class." The definition for each Class is above. The Court decided that this lawsuit could be a class action because it met the requirements of Federal Rule of Civil Procedure 23, which governs class actions in federal courts. The Court has not decided whether the Plaintiffs or the Defendants are correct. The Plaintiffs must prove their claims at trial. 3. RIGHT TO BE INCLUDED OR OPT OUT OF THE CLASS To Remain a Class Member. If you are a member of the Interest Rate Class or the Whipsaw Class and do not request exclusion, you will remain a Class Member. Your interests in connection with those claims will be represented by the Class Representatives and Class Counsel. You do not need to take any action to remain a Class Member. To Opt Out of the Class. You have the right to opt out of the Interest Rate Class, the Whipsaw Class, or both of them. If you opt out of one or both of those Classes, you will not be bound by or subject to any judgment or settlement of the litigation. If you opt out, however, you will also not be entitled to receive any money or other benefit that those Classes may receive in a settlement or in a judgment. If you wish to opt out, you must submit a written, signed request to opt out, stating (1) your name, address, and telephone number, (2) a reference to this lawsuit (i.e., George v. Duke Energy Retirement Cash Balance Plan, Case No. 8:06-CV- 373-RBH), (3) the date of your first employment and, if applicable, the date you left your employment with Duke, and (4) your desire to opt out of the Classes. Requests to opt out must be sent by first class mail, postage pre-paid, to Wallace and Graham, P.A., 525 North Main Street, Salisbury, NC 28144, ATTN: Duke Cash Balance Opt-Out, and post-marked no later than March 17, 2010. If you do not submit a timely opt-out request that complies with these requirements, your opt-out request will be deemed invalid and you will not be excluded from the Classes. 4. FOR ADDITIONAL INFORMATION You can obtain more information including the Long-Form Class Notice by contacting Class Co-Counsel, Wallace and Graham, P.A., at 1-800-849-5291, emailing info@wallacegraham.com or visiting http://www.wallacegraham.com/ EMBARQ MANAGEMENT: Kan. Lawsuit About Secret Internet Spyware ------------------------------------------------------------- Barbara Leonard at Courthouse News Service reports that two Internet providers secretly installed "unprecedented, extraordinarily pervasive" spyware on their broadband networks, allowing them to spy on and profile their customers for targeted online advertising, according to a federal class action in Kansas City, Kan. The class claims that from late 2007 to July 2008, Delaware-based Embarq Management and United Telephone Co. of Eastern Kansas funneled Internet users' communications to NebuAd, a third-party advertising company. The spyware, which was tied to users' Internet Services Provider addresses, left undeletable tracking cookies and could not be detected through individual privacy or security settings, according to the complaint. NebuAd monitored and profiled individual users -- eavesdropping on their email and search histories -- to send targeted advertising on Web pages that the users visited, the class claims. NebuAd is not named as a defendant. Both Embarq and United Telephone do business as CenturyLink, according to the complaint. Named plaintiffs Kathleen and Kerry Kirch say people's online data can reveal enormous personal information, including finances, movie rental choices, attorney-client privilege and information about minor children. Embarq and United Telephone were paid on a per-customer, per- month basis, according to the complaint. The class says the Internet providers gave little warning before activating the spyware and simply amended their online privacy policies with misleading information two weeks before they did so. Embarq told Congress that the NebuAd test affected 26,000 subscribers in Kansas and 6 million across the country, according to the complaint. But the class claims that many more people were affected, since one subscription typically includes multiple users in a household. "Assuming a single user from each of 26,000 customer accounts visited one Web site per day during a five-month period, the number of diverted incoming and outgoing communications would be approximately 4 million," according to the complaint. The class says Embarq made misleading statements about the spyware in response to congressional inquiries, claiming the "foray into profiling and ad distribution with NebuAd was 'brief.'" Embarq also bent the truth by claiming that it did not use personally identifiable information, though tracking users through online behavior profiles is as personally identifiable as a phone number, according to the complaint. Embarq and United Telephone are accused of invasion of privacy, wiretapping and computer fraud. The class seeks an injunction, disgorgement of ill-gotten gains, punitive damages and deletion of all the date it wrongfully collected. A copy of the Complaint in Kirch, et ux. v. Embarq Management Co., et al., Case No. 10-cv-02047 (D. Kan.), is available at: http://www.courthousenews.com/2010/01/28/Spyware.pdf The Plaintiffs are represented by: Glenn A. Stockton, Esq. STOCKTON LAW OFFIC, LLC 207 East Main Street Gardner, KS 66030 Telephone: (913) 856-2828 - and - Scott A. Kamber, Esq. David A. Stampley, Esq. KAMBERLAW, LLC 11 Broadway, Suite 2200 New York, New York 10004 Telephone: (212) 920-3071 - and - Brian J. Panish, Esq. Rahul Ravipudi, Esq. PANISH, SHEA & BOYLE, LLP 11111 Santa Monica Boulevard, Suite 700 Los Angeles, CA 90025 Telephone: (310) 477-1700 - and - Joseph H. Malley, Esq. LAW OFFICE OF JOSEPH H. MALLEY, P.C. 1045 North Zang Boulevard Dallas, TX 75208 Telephone: (214) 943-6100 - and - David C. Parisi, Esq. PARISI & HAVENS LLP 15233 Valleyheart Drive Sherman Oaks, CA 91403 Telephone: (818) 990-1299 FAF INC: Recalls 55,000 Children's Metal Necklaces -------------------------------------------------- The U.S. Consumer Product Safety Commission, in cooperation with FAF Inc., of Greenville, R.I., announced a voluntary recall of about 55,000 Children's Metal Necklaces. Consumers should stop using recalled products immediately unless otherwise instructed. The recalled necklaces contain high levels of cadmium. Cadmium is toxic if ingested by young children and can cause adverse health effects. No incidents or injuries have been reported. The recalled jewelry is shaped as a metal crown or frog pendant on a metal link chain necklace in a crown hinged box. The packaging has the words "The Princess and the Frog" on it and contains these model numbers and UPC codes: Crown Model # 4616-4187 UPC # 72783367144 Frog Model # 4616-4190 UPC # 72783367147 Pictures of the recalled products are available at: http://www.cpsc.gov/cpscpub/prerel/prhtml10/10127.html The recalled jewelry was manufactured in China and sold exclusively at Walmart retail stores nationwide from November 2009 through January 2010 for $5. Consumers should immediately take this recalled jewelry away from children. Consumers should return the recalled jewelry to any Walmart store for a full refund or a free replacement product. For additional information, contact F.A.F. Inc. at (800) 949-3311 between 8:00 a.m. and 4:30 p.m., Eastern Time, Monday through Friday, or visit the firm's Web site at http://www.faf.com/ H&R BLOCK: Expert Admits He Bought "Peace of Mind" for His Wife --------------------------------------------------------------- Steve Korris at The Madison and St. Clair Record reports that class action expert Don Kovacic plans to swear that tax preparer H & R Block shouldn't sell peace of mind, but apparently his wife made him buy it. According to H & R Block lawyer Jason Rankin of Edwardsville, Kovacic confirmed in a deposition that he and his wife bought a peace of mind warranty on their tax return. Warranties protect customers from charges and penalties on errors. LakinChapman lawyers designated Kovacic as an expert in federal court for a claim that peace of mind lacks value because 99.7 percent of customers don't need it. They moved to certify a class action in December, and Rankin opposed it on Jan. 4. He wrote that Kovacic disagreed with his wife about peace of mind. "In both the Kovacic household and the proposed class, there is no single measure of 'value' that can permit objective determination whether a purchaser was misled or deceived in buying POM," Rankin wrote. "There is real value to certain individuals to have the comfort of knowing they have eliminated all serious risk of paying more taxes or having to face the IRS alone," he wrote. The former Lakin Law Firm sued H & R Block in Madison County circuit court in 2002, on behalf of Lorie Marshall. They later added Debra Ramirez as a plaintiff. Madison Associate Judge Ralph Mendelsohn certified a 48 state class in 2003. In 2006, following the Illinois Supreme Court's Avery decision that disfavored national consumer fraud class actions, Lakin lawyers amended the complaint. Although they shrank it to 11 states, they multiplied the liability. Mendelsohn again certified a class action. H & R Block removed it to federal court, arguing that under the Class Action Fairness Act, Mendelsohn turned an old case into a new one that a state court couldn't touch. District Judge Michael Reagan tried to toss it back to Mendelsohn, but appeals judges in Chicago intercepted it last April and tossed it back to Reagan. They held that "from the standpoint of the original claim, the expansion of potential liability was a surprise." On Dec. 11, Mark Brown of LakinChapman moved to certify Marshall and Ramirez as representatives of a class in 11 states. "The overwhelming majority of Block's clients do not need POM because their returns are so simple that the chance of additional taxes being owed is infinitesimal," he wrote. He wrote that H & R Block conceals its low error rate, the extremely low IRS audit rate, and the difference between the cost of coverage and the average claim. He wrote that it conceals a 15 percent commission on peace of mind payments. He claimed damages back to 1997, in Arizona, California, Connecticut, Florida, Illinois, Massachusetts, Michigan, Missouri, New Jersey, New York and North Carolina. He sought separate class certification on a claim that in four states, peace of mind constituted insurance that H & R Block needed a license to sell. He wrote that "the jury will not be required to examine individual tax returns to determine liability and damages." Rankin answered that the allegations of Marshall and Ramirez didn't match. "Ms. Marshall, who purchased POM for four consecutive years, alleges that her tax preparer told her POM was insurance and that it would guarantee that her taxes were prepared correctly," he wrote. "She says she was told that if her taxes were not prepared correctly, the entity that sold her the POM would act as her representative with the Internal Revenue Service," he wrote. She testified she bought it because she was afraid not to, he wrote. "Quite to the contrary, Ms. Ramirez testified that she did not recall if she was told anything about POM, did not know she had bought it until she saw it on her statement, had no interest in the product and claimed to have received no value from it," he wrote. A reply from Marshall and Ramirez on Jan. 19 didn't offer new argument but it introduced a new lawyer. Brown didn't file it. Scott Macrae of San Francisco filed it. HANN & HANN: Agrees to Settle Workers' Suit for $600,000 -------------------------------------------------------- Ruben Castaneda at The Washington Post reports that a Rockville, Md.-based construction services contractor accused in a federal class-action lawsuit of failing to pay overtime and regular pay to hundreds of workers has agreed to settle the suit by paying more than $600,000 to current and former employees. Hann & Hann construction services agreed to pay overtime plus 50 percent to every hourly employee who worked for the company from May 8, 2006, to May 8, 2008, who was not paid for overtime. The agreement also calls for Hann & Hann to pay the plaintiffs' attorney's fees. The settlement will benefit more than 200 of the firm's current and former employees, almost all of whom are Spanish-speaking immigrants, said Laura E. Varela, director of the Immigrant and Refugee Rights Project at the Washington Lawyers' Committee for Civil Rights and Urban Affairs. The group represented the workers in the suit, along with attorneys with the firm Arnold & Porter LLC, who provided their services pro bono. "It's a fantastic result," Ms. Varela said. She said the lawyers' committee receives about 10 phone calls a week from people, usually Latino manual laborers, who report that their employers have not paid them for their work. Ms. Varela said she hopes the settlement deters employers from defrauding workers. The lawsuit was filed in May 2008. In a news release put out by the Lawyers' Committee and Arnold & Porter, Terry R. Hann, president of the construction company, said, "Hann & Hann strives to comply with the law in all respects, including the compensation of its employees, and embraced the opportunity to resolve these allegations." "We're very happy with the outcome," said Miguel Moya, 48, one of the workers who will benefit from the settlement. Moya, of Gaithersburg, said he hopes it will encourage other workers who have been cheated of their wages to come forward and seek legal help. "These problems are very common," he said. According to the lawsuit, Hann & Hann had total sales of about $19 million in 2007. A "significant percentage" of the firm's business comes from federal contracts, according to the suit. HOLLAND AMERICA: Filipino Workers Allege Bait-and-Switch Deal ------------------------------------------------------------- June Williams at Courthouse News Service reports that a federal class action claims Holland America Tours promised thousands of Filipino workers "free passage" to jobs on ships, then demanded thousands of dollars in reimbursement from each of them, under threat of dumping them off at the next port. The lead plaintiff says he was dumped in Florida after the steamship company demanded nearly one-third of his annual salary for its travel "reimbursement." A copy of the Crewmembers' Verified Class Action Complaint for Wages and Maritime Arrest filed in Balen v. HAL Antillen N.V., et al., Case No. 10-cv-00138 (W.D. Wash.), is available at: http://www.courthousenews.com/2010/01/28/Filipino.pdf The Plaintiff is represented by: Charles P. Moure, Esq. HARRIS & MOURE, pllc 600 Stewart Street, Suite 1200 Seattle, WA 98101 Telephone: 206-224-5657 - and - Ross B. Toyne, Esq. TOYNE & MAYO, P.A. Chase Building 150 SE 2nd Avenue, Suite 1025 Miami, FL 33131 Telephone: 305-377-1910 - and - David W. Brill, Esq. Juan M. Garcia, Esq. DOWNS BRILL WHITEHEAD Mercantile Bank Building One SW 129th Ave., Suite 305 Pembroke Pines, FL 33027 Telephone: 954-447-3556 KAISER FOUNDATION: Appeals Court Reinstates UCL Class Action Suit ----------------------------------------------------------------- Avery Fellow at Courthouse News Service reports that a California appeals court has reinstated a class action accusing Kaiser Foundation Health Plan of categorically denying coverage to autism patients for behavioral and speech therapy. The Second District Court of Appeal overturned an order sustaining Kaiser's demurrer to the lawsuit, filed by the guardian of a 4-year-old autistic child. Guillermo Arce claimed that Kaiser refused to cover the boy's behavioral and speech therapy on the basis that the treatments were not medical necessary. Mr. Arce filed suit under the Unfair Competition Law, citing breach of contract and violations of the Mental Health Parity Act, which mandates coverage for medically necessary health care services. Kaiser objected to the class action, arguing that it should be thrown out because it would require looking into plaintiffs' cases on an individual basis to determine if autism treatments were medically necessary. The trial court sustained the demurrer, citing a lack of commonality and judicial abstention from deciding economic policy issues, including what forms of therapy are covered in health plans. But the appeals court found that Mr. Arce could likely establish enough common issues to support a class action. "Arce's allegations that Kaiser systematically breached its health plan contract by refusing to provide all putative class members with contractually covered services is sufficient to state a class action claim under the Unfair Competition Law," Justice Laurie Zelon wrote. The trial court read Mr. Arce's allegations and the Mental Health Parity Act too narrowly, the court ruled. The case does not require the court to make individual determinations of medical necessity, the ruling states. Mr. Arce asserts that Kaiser is denying coverage to all plan members without even considering medical necessity, the court noted. If the court finds that behavioral and speech services are covered under Kaiser's health plans, then there is a breach of contract, it concluded. The state appeals court reversed the order sustaining Kaiser's demurrer. A copy of the decision in Arce, et al. v. Kaiser Foundation Health Plan, Inc., et al., Case No. BC388689 (Calif. App. Ct.), is available at: http://www.courtinfo.ca.gov/opinions/documents/B215861.PDF In this appeal, The Plaintiffs-Appellants are represented by: Scott C. Glovsky, Esq. LAW OFFICES OF SCOTT C. GLOVSKY 225 South Lake Avenue, Suite 1000 Pasadena, CA 91101 Telephone: 626-243-5598 and Kaiser is represented by: William A. Helvestine, Esq. Andrew J. Hefty, Esq. Lisa Caccavo, Esq. EPSTEIN BECKER & GREEN One California Street, 26th Floor San Francisco, CA 94111-5427 - and - Damian D. Capozzola, Esq. EPSTEIN BECKER & GREEN 1925 Century Park East, Suite 500 Los Angeles, CA 90067-2506 LAUDERDALE COUNTY: Suit Complains About Arrest & Detention Policy ----------------------------------------------------------------- Liz Potocsnak at Courthouse News Service reports that a Tennessee sheriff routinely jails people for up to 2 days without charging them with a crime, and without probable cause to believe that they committed a crime, a class action claims in Federal Court. The named plaintiffs, a married couple, say Lauderdale County Sheriff Steve Sanders had them arrested at home after they attended an evening church service, and jailed them for more than 36 hours. Paul and Raychel Rhodes say Sheriff Sanders' arrest and detention policy is unconstitutional. The Rhodes say deputies arrested them in their home at 10:45 p.m. on Sunday, Jan. 17, and told them they were "being 'detained,' not arrested, for suspicion of burglary." According to the complaint, a woman whom Mrs. Rhodes knew through her work in child support litigation had accused the Rhodes of breaking into her home and stealing her heart medication. The Rhodes say they were "placed in solitary confinement in a small detention cell that smelled of urine, with a concrete slab for a bed and a steel toilet." "Neither Mr. nor Mrs. Rhodes were charged with an offense, nor offered the opportunity to post bail," the complaint states. The Rhodes said they had been at the Ripley Church of God during the alleged burglary and told the investigator that church services were videotaped if he needed proof. But they were not released until noon Tuesday, Jan. 19. The Rhodes denounce as unconstitutional the sheriff's policy of "allowing forced arrest and detention of persons in Lauderdale County Jail for periods of up to 48 hours, without probable cause, in order to investigate possible crimes." Numerous citizens have been jailed without reasonable cause, the Rhodes say. They seek declaratory and injunctive relief. A copy of the Complaint in Rhodes, et al. v. Lauderdale County, et al., Case No. 10-cv-02068 (W.D. Tenn.), is available at: http://www.courthousenews.com/2010/01/29/TennSheriff.pdf The Plaintiffs are represented by: Robert L. Hutton, Esq. GLANKLER BROWN, PLLC One Commerce Square, 17th Floor Memphis, TN 38103-2566 Telephone: (901) 525-1322 MORGAN STANLEY: 2d Cir. Says Conflicts Don't Have to Be Disclosed ----------------------------------------------------------------- Tim Hull at Courthouse News Service reports that Mutual fund offering statements are not required to disclose potential conflicts of interest arising from the dismantling of the "information barrier" between investment bankers and stock researchers, the United States Court of Appeals for the Second Circuit ruled. Upholding a lower court decision, the Manhattan-based appellate panel found that two essentially identical class actions against two open-ended Morgan Stanley mutual funds failed to identify any illegal omissions in the mutual funds' registration statements or prospectuses. Investors argued that they should have been told that the mutual funds' managers relied on broker-dealers for stock research, and that this could taint the objectivity of the research. They sued Morgan Stanley under various sections of the Securities Act of 1933, claiming the broker's offering documents for technology and information industry mutual funds omitted the potential conflict of interest, thereby increasing the risks associated with the funds. The named plaintiffs allegedly lost more than $500,000 total due to the omissions; they estimated the combined class losses to "exceed $1 billion." But a federal judge in New York dismissed the actions, saying they failed to prove that the law requires disclosure of potential conflicts of interest. Relying primarily on the logic of an amicus curiae brief filed by the Securities and Exchange Commission, the three-judge circuit upheld the lower court's decision. The SEC said that what the plaintiffs see as risks specific to the Morgan Stanley funds are actually "generic risks" encountered by every investor. "All investors, including the funds' managers, face the risk that the research they use to make their decisions may be biased or flawed, and that the prices they pay for securities may not accurately reflect the securities' intrinsic value," Judge Richard Wesley wrote. The ruling quotes the SEC's brief: "[T]he danger that analyst reports ... will be tainted by undisclosed conflicts of interest or actual corruption is but one of an indefinitely large number of factors that could cause a fund (or any other investor) to buy overpriced securities, and it would not be useful to investors to require an attempt to set all of those forth in the prospectus." The 2nd Circuit added that the "true object" of the plaintiffs' claims is "the alleged malfeasance of the mutual funds' affiliated broker-dealer entities and not the public offerings conducted by the funds themselves." A ruling for the plaintiffs would require the court to expand liability under certain sections of the Act, and would mandate affiliate disclosures "not otherwise called for by the securities laws," the panel concluded. A copy of the decision in In re Morgan Stanley Information Fund Securities Litigation, Case No. 09-0837-cv (2nd Cir.), and In re Morgan Stanley Technology Fund Securities Litigation, Case No. 09-0858-cv (2nd Cir.), is available at http://is.gd/7mVap The attorneys for the Plaintiffs-Appellants are: Daniel W. Krasner, Esq. Jeffrey S. Nobel, Esq. Nancy A. Kulesa, Esq. IZARD NOBEL LLP 29 South Main Street, Suite 215 West Hartford, CT 06107 - and - Robert B. Weintraub, Esq. WOLF HALDENSTEIN ADLER FREEMAN & HERZ LLP 270 Madison Avenue New York, NY 10016 and Morgan Stanley is represented by: Walter Rieman, Esq. PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP 1285 Avenue of the Americas New York, NY 10019-6064 Telephone: 212-373-3000 NATIONAL CORRECTIVE: Collection Tactics Draw Fire in M.D. Pa. ------------------------------------------------------------- Erin Mcauley at Courthouse News Service reports that a federal class action claims a collection agency uses district attorneys' letterheads to threaten debtors with jail time in a "bad check restitution program" -- and that the district attorneys allow it. The class says "approximately twenty" Pennsylvania counties have contracts with the National Corrective Group, allowing the collectors to use the "district attorney brand." The class says such contracts are unconstitutional, as they violate due process. The class sued Lackawanna County District Attorney Andrew J. Jarbola III and the National Corrective Group (NCG). It claims that on March 31, 2009, NCG assumed the "duties and responsibilities under its contracts with Pennsylvania district attorneys" from its predecessor, American Corrective Counseling Services. "NCG has continued to operate the bad check restitution program in Lackawanna and other counties in the same, or substantially the same manner as ACCS. "Pursuant to this contract, Defendant Jarbola permits NCG to use his office, his official letterhead and his signature in communicating with individuals who have issued checks which have been dishonored. NCG thereupon uses the district attorney's identity in threatening prosecution and imprisonment, stating or implying that criminal charges have been filed and that court appearances will be required, and stating that payments are due that far exceed the amount of the dishonored check. These notices are sent for the purpose of collecting private debt as well as fees to the Defendants. NCG has the same arrangement with certain other Pennsylvania district attorneys. "Through its ability to use the "district attorney brand" and its superior performance relative to other debt collectors, NCG solicits and then receives from merchants reports of debts owed to them due to dishonored checks," according to the complaint. After receiving a complaint from a merchant or other creditor, "NCG sends the individual accused of writing the dishonored check a notice, ostensibly from the district attorney, on official district attorney letterhead, with a reproduction of the district attorney's signature," threatening the debtor with criminal prosecution, the complaint states. It adds that the complaints "are never reviewed by any employee of the district attorney. NCG alone evaluates the complaints and initiates participation in the bad check restitution program. It has a purely financial incentive in doing so." In threatening criminal prosecution, NCG's demand letter states that if the recipient "may contact 'the District Attorney's Bad Check Restitution Office' at a toll free number or fax or mail a written dispute within 30 days to a fax number or post office box. The phone and fax numbers provided, as well as the P.O. box, connect the individual with representatives of NCG in California, not with defendant Jarbola's or any other district attorney's office," according to the complaint. In violation of Pennsylvania law, NCG's demand letters say the debtor may not pay the merchant directly. The complaint adds: "These notices are sent for the purpose of collecting private debt as well as fees to the Defendants. NCG has the same arrangement with certain other Pennsylvania district attorneys." The class claims that Jarbola and other district attorneys "have also authorized NCG to use their name, signature and letterhead to charge individuals numerous incidental fees over and above an administrative and accountability class fee. These incidental fees include late payment fees, rescheduling fees, Payment/Convenience fees and Overpayment/Handling fees. "Pursuant to the contract with NCG, Defendant Jarbola receives 100% of the administrative fees generated by NCG. NCG receives 100% of the class fees and incidental fees." The two named plaintiffs say they each had to pay more than three times the amount of their alleged debts in fees. They say they were never informed that the "restitution program" was voluntary and never were told that they were being contacted by a debt collection agency. In the past two years, approximately 12,000 people have been harassed into participating in the "program," according to the complaint. "Neither defendant Jarbola nor other Pennsylvania district attorneys have the authority under Pennsylvania law to operate a pre-charge, extra judicial diversion, restitution or debt collection program, nor are the fees charged pursuant to such programs authorized by law. Most Pennsylvania district attorneys have declined to participate in NCG's scheme," the complaint states. "Pennsylvania has authorized, through state rule, diversion programs which require that criminal charges first be actually filed and which require judicial oversight and approval." The class seeks an injunction and damages for violations of the state and federal constitutions, violations of the Fair Debt Collection Practices Act, misrepresentation, unfair trade, and other charges. A copy of the Complaint in Shouse, et al. v. National Corrective Group, Inc., et al., Case No. 10-cv-_____ (M.D. Pa.), is available at: http://www.courthousenews.com/2010/01/27/Letterhead.pdf The Plaintiffs are represented by: Donald Driscoll, Esq. Margaret W. Schuetz, Esq. COMMUNITY JUSTICE PROJECT 429 Forbes Avenue, Suite 1705 Pittsburgh, PA 15219 - and - Andrew Hailstone, Esq. KREDER, BROOKS, HAILSTONE, LLP 220 Penn Av., Suite 200 Scranton, PA 18503 REPUBLIC OF IRAQ: Kurdish Genocide Survivor Files Suit in D.C. -------------------------------------------------------------- Ryan Abbott at Courthouse News Service reports that an Iraqi Kurd, who says he is the only survivor of Saddam Hussein's genocidal poison gas attacks, sued the Republic of Iraq for war crimes in a federal class action. Ironically, the complaint was filed on the day that Saddam's cousin, Ali Hassan al-Majid, known as "Chemical Ali," was hanged in Iraq for war crimes. Taimour Ahmad, who says he testified at Saddam's 2004 trial under U.S. protection, was 12 years old in 1988 when Saddam launched a series of chemical and biological attacks against the Kurds in northern Iraq, which became known as the Anfal, or "Spoils of War." Iraqi paramilitary forces known as Jahsh captured and deported Ahmad and his family to a prison in Kirkuk. Mr. Ahmad says he was taken with truckloads of Kurds to a place near the Saudi Arabian border, where they were unloaded and led, blindfolded, to several 5-foot-deep pits dug into the desert. Mr. Ahmad and his family "were tossed into the pit like cattle," and two Iraqi soldiers, armed with automatic weapons, "began shooting at the blindfolded defenseless women and children," including Ahmadand his family. Mr. Ahmad was shot in the shoulder, he says. He ran from the pit and begged an officer to spare his life, but the officer threw him back into the pit and shot him again, Ahmad says. Though wounded and bleeding, Mr. Ahmadlived, and waited until the soldiers stopped shooting and walked away. He says he hid in an empty pit where he watched bulldozers cover up the pits "with the bodies of his family and others around him." Mr. Ahmadescaped the pits and was taken in by a Bedouin Arab family who risked their lives to hide his Kurdish identity. Mr. Ahmadsays he constantly fled capture until he was "saved by U.S. government personnel" just after the first Gulf War. Years later, he says, he testified in Saddam Hussein's trail that 110 members of his extended family were missing and considered dead. Mr. Ahmadsays he no longer has any immediate family left, due to "the extreme systematic barbaric conduct" of Iraq. Mr. Ahmadseeks damages for violation of international law, assault and battery, and infliction of emotional distress. Although the United States is not listed as a defendant, Mr. Ahmad's complaint says the United States assisted Saddam's government with money and military support. He seeks $20 million for each member of the class. A copy of the Complaint in Ahmad v. The Republic of Iraq, Case No. 10-cv-00147 (D.C.) (Leon, J.), is available at: http://www.courthousenews.com/2010/01/28/Anfal.pdf The Plaintiff is represented by: Athan T. Tsimpedes, Esq. TSIMPEDES LAW FIRM 1050 Connecticut Ave., N.W., Suite 1000 Washington, DC 20036 Telephone: 202-772-3159 SAGE SOFTWARE: Accused of Not Giving Activation Code by Customer ---------------------------------------------------------------- Elizabeth Banicki at Courthouse News Service reports that Sage Software sold software to a business for 50 computers, and when the investment firm bought new computers, Sage refused to give it the "activation code," but insisted it upgrade to a newer version, the business claims in a class action in Superior Court. Israel Investment says it bought ACT! software from Sage in 2006, to install on 50 computers. ACT! is a contact and customer relationship management program. Israel says it upgraded its computers in 2009 and needed an activation code from Sage to download ACT! onto the new computers. But Israel says Sage "refused to issue the needed activation code," saying the software "is old and unsupported," in an effort to force Israel to spend "tens of thousands of dollars" on an upgrade. Israel says its license to use ACT! had no notice of an expiration date. Israel says it never would have purchased the program at the price it did, or bought it at all, had it known it would become useless after 3 years. Israel alleges false advertising, unfair competition and violation of consumer law. It seeks restitution, disgorgement and injunction. The Plaintiff is represented by: Michael Louis Kelly, Esq. KIRTLAND & PACKARD LLP 2361 Rosecrans Avenue, Fourth Floor El Segundo, CA 90245 Telephone: 310-536-1000 SPRINT NEXTEL: Calif. Suit Says Unlimited Messaging Not Unlimited ----------------------------------------------------------------- Courthouse News Service reports that Sprint Nextel promised "unlimited messaging" on its "Everything Messaging" cell phone plan, then billed customers extra if they sent pictures, a class action claims in Los Angeles Federal Court. A copy of the Complaint in Eoff v. Sprint Nextel Corporation, et al., Case No. 10-cv-00591 (C.D. Calif.), is available at: http://www.courthousenews.com/2010/01/28/SprintNextel.pdf The Plaintiff is represented by: Christopher P. Ridout, Esq. Devon M. Lyon, Esq. RIDOUT & LYON, LLP 555 E. Ocean Boulevard, Suite 500 Long Beach, CA 90802 Telephone: 562-216-7380 - and - Eric D. Freed, Esq. FREED & WEISS LLC 111 West Washington St., Suite 1331 Chicago, IL 60602 Telephone: 312-220-0000 SUMMIT TREESTANDS: Recalls 6,800 Talon Hang-on Tree Stands ---------------------------------------------------------- The U.S. Consumer Product Safety Commission, in cooperation with Summit Treestands LLC, of Decatur, Ala., announced a voluntary recall of about 6,800 Talon Hunting Hang-on Tree Stands and Brackets and Straps. Consumers should stop using recalled products immediately unless otherwise instructed. The tree stand can unexpectedly detach from the tree when the brackets fail, posing a fall hazard to consumers. The firm has received four reports of the brackets failing, resulting in reports of falls and injuries including broken bones. This recall involves Talon Raptor brackets and straps and Cabelas Realtree series hang-on tree stands with the Talon brackets and straps. A safety label sewn onto the bracket reads "Treestand Strap Assembly." Tree stands involved in this recall have the following model numbers: rsEagle 82044, rsOsprey 82041, rsFalcon 82042, rsHawk 82043 and Cabelas Realtree Outfitters Series Hawk Deluxe 81509. Model information is printed on the tree stand warning label that is sewn onto the seat. A picture of the recalled product is available at: http://www.cpsc.gov/cpscpub/prerel/prhtml10/10126.html The recalled products were manufactured in the United States and sold at hunting stores and in catalogs nationwide from May 2009 through November 2009 for about $25 for the bracket only, for between $130 and $180 for the tree stand. Consumers should immediately stop using the brackets and contact Summit Treestands to receive a replacement bracket and strap. For additional information, contact Summit Treestands toll-free at (800) 241-5559 anytime, or visit their Web site at http://www.summitstands.com/ VIVENDI SA: Will Appeal Jury's Verdict in Securities Fraud Trial ---------------------------------------------------------------- Vivendi S.A. says it will appeal the jury's verdict in In re Vivendi Universal, S.A., Securities Litigation, Case No. 02-cv-5571 (S.D.N.Y.) (Holwell, J.). Friday, a jury found that 57 public statements made by Vivendi between October 30, 2000, and August 14, 2002, violated the U.S. securities laws because they hid the company's liquidity crisis. Vivendi strongly disagrees with the findings against the company, which the company believes are contrary to the facts and the law, in particular with respect to an alleged hidden liquidity risk. VONAGE AMERICA: Accused in Calif. of Improper Contract Extensions ----------------------------------------------------------------- Courthouse News Service reports that Vonage extends subscribers' contracts for as long as 2 years without their consent, and collects "unfair and fraudulent" early termination fees, a class action claims in Orange County Court, Calif. A copy of the Complaint in Sarabi v. Vonage America, Inc., et al., Case No. 30-1020-00338457 (Calif. Super. Ct., Orange Cty.) (Sanders, J.), is available at: http://www.courthousenews.com/2010/01/28/CCAVonage.pdf The Plaintiff is represented by: Joshua B. Swigart, Esq. Robert L. Hyde, Esq. David C. Leimbach, Esq. HYDE & SWIGART 411 Camino Del Rio South, Suite 301 San Diego, CA 92108-3551 Telephone: 619-233-7770 - and - Abbas Kazerounian, Esq. KAZEROUNI LAW GROUP 2700 North Main Street, Suite 1050 Santa Ana, CA 92866 Telephone: 800-400-6808 WALT DISNEY: Baby Einstein Ad Claims Challenged in Calif. Suit -------------------------------------------------------------- Elizabeth Banicki at Courthouse News Service reports that Disney can't turn babies into Einsteins, despite its claims for its "Baby Einstein" videos, parents say in a class action in Superior Court. The parents say the video series can be "actually quite harmful" and can contribute to "attention and learning problems later on." A copy of the Complaint in Yusuf v. The Walt Disney Company, et al., Case No. 00338298 (Calif. Super. Ct., Orange Cty.) (Andler, J.), is available at: http://www.courthousenews.com/2010/01/28/DisneyEinstein.pdf The Plaintiff is represented by: Shawn F. Khorrami, Esq. Matt C. Bailey, Esq. KHORRAMI POLLARD & ABIR LLP 444 S. Flower St., 33rd Floor Los Angeles, CA 90071 Telephone: 213-596-6000 - and - Scott J. Ferrell, Esq. Roger E. Borg, Esq. NEWPORT TRIAL GROUP 610 Newport Center Drive, Suite 700 Newport Beach, CA 92660 Telephone: 949-706-6464 YELLOWPAGES.COM: Accused of Deceit & Fraud in Calif. Lawsuit ---------------------------------------------------------------- Courthouse News Service reports that business owners claim Yellowpages.com deceived and defrauded them by selling them ads by making claims on which it knew it could not deliver, in San Diego Federal Court. A copy of the Complaint in Hermann, et al. v. YellowPages.com, LLC, Case No. 10-cv-00195 (S.D. Calif.), is available at: http://www.courthousenews.com/2010/01/27/CCA.pdf Frank James Janecek, Jr. , Esq. Christopher Collins, Esq. COUGHLIN STOIA GELLER RUDMAN & ROBBINS LLP 655 West Broadway, Suite 1900 San Diego, CA 92101 Telephone: 619-231-1058 - and - Peter S. Pearlman, Esq. COHN LIFLAND PEARLMAN HERRMAN & KNOPF LLP Park 80 Plaza West-One Saddle Brook, NJ 07663 Telephone: 201-845-7423 - and - Paul I. Perkins, Esq. LYNCH LAW FIRM, P.C. 45 Eisenhower Drive, Suite 300 Paramus, NJ 07652 Telephone: 800-656-9529 - and - J. Gordon Rudd, Jr., Esq. David M. Cialkowski, Esq. ZIMMERMAN REED, P.L.L.P. 651 Nicollet Mall, Suite 501 Minneapolis, MN 55402 Telephone: 612-341-0400 ZIONS FIRST: Accused of Assisting Fraud Telemarketers in Pa. Suit ----------------------------------------------------------------- Barbara Leonard at Courthouse News Service reports that five national banks, including Wells Fargo and Wachovia, helped "unscrupulous telemarketers" launder millions of dollars they swiped from consumers, a class action claims in Philadelphia Federal Court. The class sued three processing companies -- NetDeposit, MP Technologies dba Modern Payments and Teledraft -- and five banks: Zions First National Bank of Utah, Wells Fargo, Wachovia, National Penn Bank and Harleysville National Bank. Named plaintiff Reynaldo Reyes says a telemarketer tricked him into revealing his bank account information and then withdrew almost $400 from his account. Payment processors assist "fraudulent telemarketers" by opening bank accounts and transferring money from unsuspecting victims into the account, after deducting a fee for their services, according to the complaint. Banks follow directions from their telemarketer clients, transferring funds to offshore accounts in the Caribbean, Canada and India, according to the complaint. Mr. Reyes says that NHS Systems, one of 20 allegedly fraudulent telemarketers mentioned in the lawsuit but not named as a defendant, told him in November 2007 that he was eligible for a government grant that could be deposited directly to his bank account. Mr. Reyes says Modern Payments took $29.95 out of his account and deposited the money in an NHS account at Zions Bank, then a week later the agency transferred $299.95 to the Zions account. "Neither of the transactions was authorized by Mr. Reyes, nor did Mr. Reyes receive a government grant or any other consideration from NHS," according to the complaint. Mr. Reyes says he had to pay penalties after the debits created an account overdraft. Modern Technologies and Teledraft have more than 36,000 consumer accounts that are connected to NHS, according to the complaint. Telemarketers often prey on senior citizens, according to the complaint: "AARP, the National Association of Attorneys General and the Federal Trade Commission have estimated that 85 percent of the victims of fraudulent telemarketing are age 65 or older." The class claims that telemarketers and payment processors illegally transfer victims' money through an Automated Clearing House (ACH) debit or a remotely created check (RCC), but banks know to look out for a high rate of suspicious transfers as "red flags" for money laundering. "RCCs are well known to be used by unscrupulous telemarketers to perpetrate consumer fraud," according to the complaint. The class claims that by processing fraudulent transactions, the defendants are "clearing millions of dollars in ACH transactions for the benefit of telemarketers." Zions "deliberately closed its eyes" to the fact that its clients were fraudulent telemarketers and it facilitated their "unlawful conduct," according to the complaint. The class seeks treble damages for RICO violations. A copy of the Complaint in Reyes v. Zions First National Bank, et al., Case No. 10-cv-00345 (E.D. Pa.) (Pollak, J.), is available at: http://www.courthousenews.com/2010/01/29/TelemarketPhilly.pdf The Plaintiff is represented by: Judah I. Labovitz, Esq. Howard Langer, Esq. Judah I. Labovitz, Esq. John Grogan, Esq. Edward A. Diver, Esq. Irv Ackelsberg, Esq. LANGER GROGAN & DIVER, P.C. 1717 Arch Street, Suite 4130 Philadelphia, PA 19103 Telephone: (215) 320-5660 Fax: (215) 320-5703 ********* 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. 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. The CAR subscription rate is $575 for six months delivered via e-mail. 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