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/raid1/www/Hosts/bankrupt/CAR_Public/100224.mbx C L A S S A C T I O N R E P O R T E R Wednesday, February 24, 2010, Vol. 12, No. 38 Headlines AUSTRALIA: Homeowners Complain about RAAF Fighter Jet Noise BANK OF NOVA SCOTIA: Court Certifies Employee Overtime Class BGL LTD: Nigerian Court Certifies Investor Plaintiff Class BRAZILIAN CONSULATE: Accused of Not Paying Overtime Compensation CIBC: Bank Awarded Legal Fees in Overtime Class Action Lawsuit HALLIBURTON CO: Class Loses Second Bid to Secure Certification HEWLETT-PACKARD: Suit Complains About Defective Computer Chip HUGHES COMMS: Most of Satellite Internet Service Suit Survives NEW YORK: Settlement Inked in Abuse & Mistreatment Registry Case PFIZER INC: Class Certified in Canadian Neurotin Drug Case PORSCHE CARS: Wins Dismissal of N.J. 911 Carrera Defect Lawsuit PULTE HOMES: N.D. Calif. Dismisses Marketing & Lending Suit RUSSIA: Poland Joins Katyn Massacre Class Action Suit UNIVERSITY OF CALIFORNIA: Proposition 209 Enforcement Challenged WACHOVIA CORP: Judge Cuts Ehrenhaus v. Baker Fees by $1 Million WAL-MART STORES: Fires Lead Plaintiff in Sexual Harassment Case ********* AUSTRALIA: Homeowners Complain about RAAF Fighter Jet Noise ----------------------------------------------------------- Ben Smee at The Herald reports that support is growing for a $150 million class action against Australia's Department of Defence over noise from the Joint Strike Fighter aircraft. A group of Port Stephens councillors will bring up the issue at a council meeting next month, claiming new noise exposure forecasts around RAAF Base Williamtown will reduce the value of 1,500 properties that have been reclassified. The accuracy of the noise forecast contours, which are used to restrict development, has been called into question by the department's response to compensation calls. Defence claimed the forecasts were not an appropriate method for directing compensation, admitting the lines were effectively irrelevant. "Actual noise levels and noise effects on the ground will depend on how the aircraft is operated," a Defence spokeswoman said. "[The noise map used to restrict development] is only a forecast of aircraft noise exposure." Defence also said it was "highly probable" that use of the Salt Ash Weapons Range would be limited once the Joint Strike Fighter arrived. Modelling using a publicly available RAAF computer program shows decreasing the use of the range by 50 per cent would move the noise forecast contours away from affected residential areas at Medowie. Despite the uncertainty, the noise contours have been adopted and are already affecting development. Port Stephens councillor Steve Tucker briefly raised the prospect of a class action at last week's council meeting, and said he had support to have the plan adopted. "The Department of Defence has imposed this on us," he said. "Imagine if you had a go-kart track and you wanted to turn it into a V8 Supercar track. You wouldn't be allowed to do it or you'd have to pay so much for noise attenuation. "We've got all these homes and we're going to wipe $100,000 off the value off each of them." Councillor Glenys Francis said last week that Defence had treated the people of Port Stephens "with disdain". "They're sitting back there and treating us like a bunch of idiots," Cr. Francis said. "Over the years we've not ever had input, we've not ever had consultation and I don't understand how we think that's OK." Mayor Bruce MacKenzie said he thought the idea of suing the RAAF was "tooth fairy stuff". BANK OF NOVA SCOTIA: Court Certifies Employee Overtime Class ------------------------------------------------------------ Tara Perkins at CTV News reports that an Ontario Superior Court judge has certified a national class action suit that alleges Bank of Nova Scotia did not properly pay overtime to its employees. The case relates to the pay of about 5,000 employees who have worked in Scotiabank branches since the year 2000. Justice George Strathy said in reasons released Friday that he has concluded there is evidence of "systemic wrongs" in this situation, stemming "from a policy that failed to reflect the realities of the workplace because it put the onus on the employee to obtain prior approval for overtime rather than requiring the employer to ensure that employees were paid for overtime that they were permitted or required to work. "The systemic wrongs included the failure of Scotiabank to establish a system-wide procedure to record overtime, making it all the more difficult for employees to obtain fair compensation for their overtime work," he wrote. "We're disappointed with the certification," said Scotiabank spokeswoman Ann DeRabbie. "We've got some time before we need to make any decisions, so we'll be reviewing the judge's comments and determining our next steps." She added that "we're committed to treating our employees fairly and with respect." Mr. Justice Strathy noted that his conclusions differ from those in a recent similar case against CIBC, which was not certified. Unlike that case, "there is evidence in this case that the failure to pay overtime occurred because of the policy, not independent of the policy," Mr. Justice Strathy wrote. He said that he thinks employees of Scotiabank would have a justifiable concern that they would not be perceived as team players if they tried to go through internal or other channels to obtain overtime. Coverage of Scotiabank's motion to dismiss appeared in the Class Action Reporter on Nov. 20, 2009. BGL LTD: Nigerian Court Certifies Investor Plaintiff Class ---------------------------------------------------------- Peter Nkanga at 234NEXT.com reports that a Lagos High Court has given nod to 80 aggrieved investors, bonded in a class action suit, to seek legal remedies against a Lagos asset management company, BGL Ltd., for an alleged N30 billion financial fraud in a private placement offer. In the nation's first class action lawsuit in the margin loan crisis, Justice Charles Archibong of the Federal High Court, Ikoyi, Lagos, certified the suit and appointed two investment houses, EP Staff Investments Ltd. and Gold and Gate Resources Ltd., to act as representatives for "all the investors" who subscribed to BGL's PP. "Any unnamed person falling within the Class of Plaintiffs/Applicants on whose behalf this action has been brought in a representative capacity are hereby restrained from filing any separate action(s) except with the leave of this Honourable Court," said Mr. Archibong in his court order. Ope Banwo of Banwo, Adeyemo and Igbokwe Chambers, representing the 80 investors, said the court order is being brought against BGL Plc, three banks, the Nigerian Stock Exchange (NSE), the Securities and Exchange Commission (SEC), and the Chartered Institute of Stockbrokers (CIN) over BGL Ltd.'s Private Placement held between 2007 and 2008. In the beginning In November 2007, BGL Limited (now Plc), a registered broker and capital market operator, advertised a Private Placement offer of 4.3Billion Ordinary Shares at N7 per share to raise N30.1Billion ($250million). BGL approached some staff of Shell Petroleum Development Company (SPDC) in Port Harcourt whom they considered "a select list of potential investors" with the capacity to subscribe to "a minimum of 1,000,000 shares and multiples of 100,000 shares thereafter". After only few of them purchasing the minimum N7million share units, BGL encouraged others to form a Special Purpose Vehicle (SPV) in order to avail them funds it had obtained from First Inland Bank (now Finbank), the lead underwriters for the Private Placement. BGL promised them that "within the next 18-24 months", it would be listed on the Nigerian Stock Exchange via an Initial Public Offering and that the value of the shares would increase to between N15-N30 by December 2008. It also said that allotment of shares and share certificates would be issued soon after the placement. BGL's stock broking subsidiary, BGL Securities Ltd., said it would provide an Over the Counter (OTC) market on "Bloomberg" and "Reuters" for shareholders seeking liquidity, while it was promised that an Annual General Meeting (AGM) would hold after the placement. By March 13, 2008, to further convince them, BGL's executive director, Henry Laraiyetan, a former senior employee of First Inland Bank, wrote: "I can only assure you are making a worthwhile investment & would be shaking hands with Edgar (handling the transaction) in about 13 months from now. Do encourage as many of your colleagues as possible to Investment (sic) in the BGL PP and even increase your level of business dealings with us." Convinced, about 80 SPDC Staff incorporated EP Staff Investments Ltd. In turn, BGL Securities Ltd gave them two separate loans totalling over N700million for them to invest in its Private Placement; while EP Staff contributed over N235million as 30% equity. The set-up By August 2009, Finbank Plc. was found guilty of excessive non- performing loans. BGL with Finbank officials then decided to shift its debt unto BGL shareholders who received margin loans, by allegedly forging documents authorising a facility from the bank to them. To achieve this, a staff of BGL's Corporate Treasury, Bolaji Oyemade, said "there is urgent need for BGL to provide Finbank with the passport photographs of our shareholders who took advantage... to invest in BGL PP." The photographs were said to be needed to update KYC (Know-Your-Customer) requirements with Finbank. Mr. Oyemade scheduled a meeting between BGL, its shareholders and Finbank at the bank's head office in Lagos on August 31 and September 2, 2009 where EFCC operatives led by Wakili Mohammed, an Assistant Commissioner of Police, allegedly intimidated, harassed and detained the shareholders so as to force them sign documents and issue post-dated cheques showing their perceived indebtedness to Finbank. Counselled by their lawyer and a financial analyst, Olufemi Awoyemi of Proshare Nigeria Ltd., they refused, stating that before they took the loan, BGL had told them there was a corporate guarantee in place with Finbank, thus not making them liable for BGL's debt. "These people are been hounded to pay a loan BGL took. These same people invested their own money based on promises BGL made, which as at today, have not been fulfilled. They are not listed on the Stock Exchange, the shares cannot be traded. There's no OTC, no AGM, nothing," Mr. Awoyemi said. Who is to blame? Finbank's External Relations Group Head, Ekuma Eze's response on the matter was "...disclosure by us will be a breach of our duty of confidentiality in the Banker-customer relationship." EFCC's spokesperson, Femi Babafemi, said he needed time to get facts on the allegations of Mr. Mohammed's involvement, who he said was now based in Kano. Meanwhile, regulators lapsed into a blaming game. Nigerian Stock Exchange spokesman, Sola Oni, said his agency did not play any role in BGL's Private Placement and added "You may wish to contact the Apex Regulator, SEC, on the issues of Private Placement." SEC spokesperson, Lanre Oloyi, however, said his agency had no regulatory authority over BGL's Private Placement being that it was a limited liability company during its PP. He asked that further enquiries on BGL's non-listing on the Exchange be directed to NSE. "Whether BGL was a private company or otherwise, it is subject to regulations under the SEC. Therefore they should be held accountable for incompetence and failure of execution of responsibility. SEC cannot escape that," Mr. Awoyemi said. When contacted, BGL's legal representative, Ishmael Ebhodaghe, said "the case is in court and it would be sub judice to say anything on this matter." When Mr. Oyemade was approached at BGL office located on Catholic Mission Street, Lagos Island, he questioned NEXT's interest in the matter. "I won't just give you an audience because you are a third party. You do not have the capacity to come and say you want to report on this. I don't see the strength of your presence in this matter. I don't see what you are representing," Mr. Oyemade said. Legally, Mr. Banwo said BGL contravened section 159 (1) and (2) of the Companies and Allied Matters Act by "giving financial assistance directly or indirectly" to EP Staff to acquire shares in its own Private Placement. He also said BGL is guilty of rendering "false and misleading statements" as spelt out in sections 107 and 108 of the Investments and Securities Act (ISA). "This class action is critical for these investors because they stand to lose their jobs, their investments and their entire live savings, all because some people are allowing illegalities to thrive. It is now for any person who has suffered the same wrong to apply to be joined in the suit or be excluded in the action," Mr. Banwo said. Mr. Archibong adjourned the case till March 22, 2010 ordering the notice certifying the Class Action be advertised in at least two national dailies newspapers. BRAZILIAN CONSULATE: Accused of Not Paying Overtime Compensation ---------------------------------------------------------------- Courthouse News Service reports that a class action claims The Consulate General of Brazil in Houston stiffs workers for overtime, in Houston Federal Court. A copy of the Complaint in Ayoub v. The Consulate General of Brazil in Houston, Case No. 10-cv-00503 (S.D. Tex.), is available at: http://www.courthousenews.com/2010/02/19/Brazil.pdf The Plaintiff is represented by: Glenn W. Patterson, Jr., Esq. GREEN, PATTERSON & SCHULTZ, P.C. 11 Greenway Plaza, Suite 2820 Houston, TX 77046 Telephone: 713-961-1200 CIBC: Bank Awarded Legal Fees in Overtime Class Action Lawsuit -------------------------------------------------------------- Tara Perkins at CTV News reports that Justice Joan Lax, who in June 2009 dismissed a motion for class certification in an overtime case against CIBC, ordered last week that CIBC be reimbursed for $525,000 in legal costs, noting that the allegations raised significant reputational and financial issues for the bank and attracted widespread media attention. Coverage of Justice Lax's decision that the lawsuit against CIBC didn't meet the test of a class-action suit because each employee would have an individual claim that lacked commonality with the others appeared in the Class Action Reporter on Nov. 20, 2009. HALLIBURTON CO: Class Loses Second Bid to Secure Certification -------------------------------------------------------------- Courthouse News Service reports that the United States Court of Appeals for the Fifth Circuit upheld the denial of class certification in a securities fraud lawsuit accusing Halliburton and former CEO David Lesar of overstating the company's assets and understating its potential liability in asbestos litigation. The federal appeals court in New Orleans upheld the district court's assessment that investors failed to prove "loss causation" -- that Halliburton's correction of previous misstatements caused the stock price to fall and investors to lose money. Halliburton and Mr. Lesar argued that the lower court had applied the wrong standard for loss causation by requiring them to actual fraud. "Our review of the district court's order and the evidence leads us to conclude, however, that the district court fully understood loss causation under our precedent and correctly applied the legal standard," Senior Judge Thomas Reavley wrote. Investors accused Halliburton and Mr. Lesar of understating the company's exposure in asbestos litigation by $20 million to $30 million, providing an inaccurate accounting of engineering and construction revenue, and overstating the cost-savings of a merger with Dresser Industries. A copy of the Honorable Judge Thomas Reavley's Feb. 12, 2010, decision in The Archdiocese of Milwaukee Supporting Fund, Inc. v. Halliburton Co., et al., No. 08-11195 (5th Cir.), is available at: http://www.ca5.uscourts.gov/opinions/pub/08/08-11195-CV0.wpd.pdf The Plaintiff-Appellant is represented by: Richard S. Schiffrin, Esq. SCHIFFRIN & BARROWAY 280 King of Prussia Rd. Radnor, PA 19087 Telephone: 610-667-7706 - and - Marc R. Stanley, Esq. STANLEY MANDEL & IOLA 3100 Monticello Ave., Suite 750 Dallas, TX 75205 Telephone: 214-443-4301 [Erroneous content redacted Feb. 2, 2010] Halliburton Co., the Defendant-Appellee, is represented by: Thomas E. Bilek, Esq. HOEFFNER & BILEK 1000 Louisiana St., Suite 1302 Houston, TX 77002 Telephone: 713-227-7720 HEWLETT-PACKARD: Suit Complains About Defective Computer Chip ------------------------------------------------------------- Courthouse News Service reports that Hewlett-Packard Pavilion Notebook and Presario Series 6000 and 9000 come with a defective nVidia C51 chip that makes it difficult or impossible to connect to the wireless Internet, according to a class action in San Jose Federal Court. A copy of the Complaint in Perron, et al. v. Hewlett-Packard Company, Case No. 10-cv-00695 (N.D. Calif.), is available at: http://www.courthousenews.com/2010/02/19/HP.pdf The Plaintiffs are represented by: Michael F. Ram, Esq. RAM & OLSON 555 Montgomery St., Suite 820 San Francisco, CA 94111 Telephone: 415-433-4949 - and - Marc H. Edelson, Esq. EDELSON & ASSOCIATES, LLC 45 W. Court St. Doylestown, PA 18901 Telephone: 215-230-8043 - and - Jeffrey L. Kodroff, Esq. John A. Macoretta, Esq. SPECTOR, ROSEMAN KODROFF & WILLIS, P.C. 1818 Market St., Suite 2500 Philadelphia, PA 19103 Telephone: 215-496-0300 HUGHES COMMS: Most of Satellite Internet Service Suit Survives -------------------------------------------------------------- Maria Dinzeo at Courthouse News Service reports that a federal judge in San Francisco refused to dismiss a class action accusing a California satellite Internet service provider of touting "super-fast" Internet access that turned out to be "slow and spotty." The lead plaintiffs, representing about 80,000 California customers, claimed that "HughesNet customers consistently receive slow and spotty service that falls woefully short of the fanciful claims" outlined on the company's Web site and in advertisements. HughesNet said its maximum download speed ranged from 1.0 megabits per second for residential service to 5 megabits per second for "ElitePremium Plan" subscribers. But users said the "service during peak times generally performs at speeds lower even than what HughesNet states as 'typical' speeds." They added that HughesNet charges "unconscionable" early cancellation fees of $400, in breach of its own subscriber agreement. U.S. District Judge Samuel Conti ruled that California law should be applied to the case, as the class members would be unable to seek punitive damages under Maryland law. Judge Conti dismissed their claims regarding the early termination fees, as they failed to explain how the fees were "unconscionable," but found that the class has shown how they relied on Hughes' allegedly false promises of fast Internet. Judge Conti said the plaintiffs could amend their claims over the early termination fees. A copy of the Honorable Judge Samuel Conti's Order in Walter, et al. v. Hughes Communications, Inc., et al., Case No. 09-cv-02136 (N.D. Calif.), is available at: http://www.courthousenews.com/2010/02/19/Hughes.pdf Plaintiff Tina Walter is represented by: Robert M. Bramson, Esq. Jennifer Susan Rosenberg, Esq. BRAMSON, PLUTZIK, MAHLER & BIRKHAEUSER LLP 2125 Oak Grove Rd., Suite 120 Walnut Creek, CA 94598 Telephone: 925-945-0200 - and - Derek T. Braslow, Esq. Harris Lee Pogust, Esq. Robert N. Wilkey, Esq. POGUST, BRASLOW, & MILLROOD, LLC 161 Washington St., Suite 1520 Conshohocken, PA 19428 Telephone: 610-941-4204 - and - Joshua Caleb Ezrin, Esq. AUDET & PARTNERS, LLP 221 Main St., Suite 1460 San Francisco, CA 94105 Telephone: 415-568-2555 Plaintiff Christopher Bayless is represented by Ms. Walter's lawyers as well as: Frank James Johnson, Esq. JOHNSON BOTTINI LLP 501 W. Broadway, Suite 1720 San Diego, CA 92101 Telephone: 619-230-0063 - and - Alan R. Plutzik, Esq. BRAMSON PLUTZIK MAHLER & BIRKHAEUSER, LLP 2125 Oak Grove Rd., Suite 120 Walnut Creek, CA 94598 Telephone: 925-945-0200 Plaintiff Eric Schumacher is represented by: William M. Audet, Esq. AUDET & PARTNERS, LLP 221 Main St., Suite 1460 San Francisco, CA 94105 Telephone: 415-568-2555 - and - Francis A. Bottini, Jr., Esq. JOHNSON BOTTINI, LLP 501 W. Broadway, Suite 1720 San Diego, CA 92101 Telephone: 619-230-0063 Hughes Communications, Inc. and Hughes Network Systems LLC, the Defendants, are represented by: Robert B. Hawk, Esq. J. Christopher Mitchell, Esq. HOGAN & HARTSON LLP 525 University Ave., 4th Floor Palo Alto, CA 94301 Telephone: 650-463-4008 NEW YORK: Settlement Inked in Abuse & Mistreatment Registry Case ---------------------------------------------------------------- A class action legal settlement has been reached in Finch, et al. v. New York State Office of Children and Family Services, et al., Case No. 04-cv-01668 (S.D.N.Y.), that could restore the employment rights of up to 25,000 New Yorkers. According to the settlement agreement-reached between Class Counsel: Thomas Hoffman, Esq. LAW OFFICES OF THOMAS HOFFMAN, P.C. 250 W. 57 St., Suite 1020 New York, N.Y. 10107 Telephone: 212-581-1180 E-mail: thoff93452@aol.com and the New York State Office of Children and Family Services (OCFS), thousands of people listed on a statewide "Abuse and Maltreatment Register" could receive hearings to have their names cleared. The Abuse and Maltreatment Register, which is maintained by the OCFS, a New York State Agency, contains the names of individuals accused of maltreating children. Most child-related employment and licensing agencies must check the Register before hiring. As a result, prospective hires generally cannot work with children until their names are cleared from the Register. Since placement on the Register restricts employment rights, people listed have a constitutional right to a name-clearing hearing. The class action lawsuit alleges that this right was violated between January 1, 2003 and December 31, 2007 because a large percentage of 25,000 requested hearings were terminated, with no hearing held. Citing statistics that show that 50% to 70% of those who receive hearings are exonerated, Mr. Hoffman says that the difference between a hearing and no hearing is often the difference between a steady job and unemployment. Under the terms of the settlement, the State will send notices to the roughly 25,000 people on the Register whose Requests for Hearings were terminated between 2003 and 2007. The notice will inform people that they may have a right to request a new hearing. Those who respond by expressing interest in a hearing will have their records reviewed by OCFS, which must produce documentation of a hearing decision. If the State agency is unable to produce a decision, a new hearing will be scheduled. OCFS also agreed not to re-institute a project that terminated Hearing Requests when an employer or licensing agency lost interest in an applicant. The right to a hearing, according to Mr. Hoffman, is independent of an employer's interest in an applicant. This is especially true since most employers cannot afford to maintain interest in job candidates unable to work while they await hearings. Judge Shira A. Scheindlin of the U.S. District Court, Southern District of New York gave preliminary approval for the settlement on February 17, 2010. A Fairness Hearing will be held on April 20, 2010 in which Judge Scheindlin will decide whether to grant final approval. If she does grant final approval, Class Counsel Thomas Hoffman will monitor the implementation of the terms of the settlement for up to three years. Judge Scheindlin must still determine how swiftly the state must schedule and decide requested hearings. Currently, an average of 8 to 10 months or longer pass before hearing requests are decided. "This is much too long a time period while the individual is waiting to become employed," says Mr. Hoffman. During these difficult economic times, Mr. Hoffman said, it is particularly important that people receive a prompt hearing to decide whether their name belongs on this list. A Web site has been established at: http://www.registryclassaction.com/ to provide information for people who have not received a requested hearing. The attorneys who negotiated the settlement on behalf of OCFS are Assistant Attorney General Robert L. Kraft and OCFS Senior Counsel Emily Reeb Bray. PFIZER INC: Class Certified in Canadian Neurotin Drug Case ---------------------------------------------------------- Cary O'Reilly at Bloomberg News reports that Mr. Justice Paul Perell certified a plaintiff class is Goodridge v. Pfizer Canada Inc., Court File No. 06-cv-307728CP (Ont. Super. Ct. J.), which claims that Pfizer failed to warn consumers about the risks of its Neurontin epilepsy drug. The class includes individuals in every province except Quebec, according to court records. Mr. Justice Perell declined to certify claims the drugmaker promoted Neurontin for unapproved uses or that it might be liable for generic versions of the medicine. The suit alleges that use of Neurontin, a prescription anticonvulsant, causes an increased risk of suicidal behavior in patients, and that Pfizer didn't warn consumers about it. The company faces about 1,200 similar lawsuits in the U.S. Pfizer disputes any connection between suicide and Neurontin use. "We are very pleased that Canadians who experienced suicidal behavior from using Neurontin, and their family members, will be allowed to go forward with their claims," said: Michael J. Peerless, Esq. SISKINDS LLP 680 Waterloo Street P.O. Box 2520 London, Ontario N6A 3V8 CANADA Telephone: (519) 672-2121 who is representing the class. Chris Loder, a spokesman for Pfizer, told Bloomberg the company is "disappointed" at the judge's ruling, though it welcomed his decision to strike the claims on improper marketing and generic liability. Mr. Justice Perell also refused to allow a claim for punitive damages to remain a common issue, Mr. Loder said in an e-mailed statement to Bloomberg. "Neurontin is an important medicine that has been widely studied for more than two decades," Mr. Loder said. "There is an extensive body of science on the use of Neurontin and physicians have prescribed it to treat millions of patients safely and effectively." PORSCHE CARS: Wins Dismissal of N.J. 911 Carrera Defect Lawsuit --------------------------------------------------------------- The Honorable Susan D. Wigenton dismissed Noble v. Porsche Cars North America, Inc., Case No. 08-cv-03658 (D. N.J.), which, as detailed in the Class Action Reporter on July 25, 2008, alleged that the Porsche 911 has a defective Porsche 996 water-cooled engine and sought payment for all repair and replacement costs. A copy of Judge Wigenton's Feb. 19, 2010, Opinion is available at: http://www.leagle.com/unsecure/page.htm?shortname=infdco20100219b95 The Plaintiff is represented by: Andrew Lowe O'Connor, Esq. Elliott Louis Pell, Esq. Robert H. Solomon, Esq. Bruce H. Nagel, Esq. NAGEL RICE, LLP 103 Eisenhower Parkway Roseland, NJ 07068 Telephone: 973-618-0400 Porsche is represented by: Matthew A. Goldberg, Esq. Eric M. Henry, Esq. Joseph Kernen, Esq. DLA PIPER LLP One Liberty Place 1650 Market Street, Suite 4900 Philadelphia, PA 19103 Telephone: 215-656-3377 PULTE HOMES: N.D. Calif. Dismisses Marketing & Lending Suit ----------------------------------------------------------- On February 18, 2010, the United States District Court for the Northern District of California dismissed with prejudice a putative class action lawsuit filed against Pulte Homes, Inc., Pulte Home Corporation and Pulte Mortgage LLC. Kaing v. Pulte Homes, Inc., et al., Case No. 09-cv-05057 (N.D. Calif.) (Conti, J.), alleged, among other things, that Pulte engaged in misconduct that contributed to the mortgage crisis, as related in the Class Action Reporter on Nov. 3, 2009. The suit drew from reports issued by the Laborer's International Union of North America ("LiUNA") and other union-related groups that attempt to blame Pulte and other large homebuilders for the mortgage crisis. In fact, the attorneys who drafted the suit lifted sections of one union sponsored report and inserted them verbatim into the complaint. The lawsuit was filed by Hagens Berman Sobol Shapiro, LLP, which has worked with LiUNA to file at least one other class action lawsuit against another national homebuilder. According to Pulte Homes, for some time, LiUNA and other union groups have engaged in an intimidation campaign against Pulte in order to coerce the Company to force its independent trade partners to sign union agreements. As part of that campaign, these union groups have been behind false claims that Pulte and other residential homebuilders engaged in improper practices with respect to the sale of homes. They have pressed these same false claims through official-looking, but misleading, reports, lawsuits, media articles and testimony before various State and Federal regulatory and rulemaking proceedings. The Court had the opportunity to address many of these allegations in the lawsuit and found them lacking in merit, specifically citing that the Plaintiff did not have a "plausible claim" and that the Plaintiff had an "insurmountable problem" because Plaintiff could not show that the alleged damages were caused by the alleged misconduct of Pulte. The Court found that Plaintiff's legal theory depended on a myriad of factors beyond Pulte's control, such as unemployment, a general weakening economy and other economic factors that can have unpredictable effects on the housing market. The swift dismissal, which came only four months after the case was filed, was with prejudice, meaning that the Plaintiff's attorneys cannot amend their complaint. A copy of the final order is available at http://is.gd/8WQcY About Pulte Homes Pulte Homes (NYSE: PHM) -- http://www.pulteinc.com/-- is one of America's largest home building companies with operations in 69 markets, 29 states and the District of Columbia. In 2009, Pulte Homes brands received more top rankings than any other homebuilder in the annual J.D. Power and Associates 2009 New-Home Builder Customer Satisfaction Studysm. Pulte Mortgage LLC is a nationwide lender offering Pulte customers a variety of loan products and superior service. RUSSIA: Poland Joins Katyn Massacre Class Action Suit ----------------------------------------------------- Legalbrief Today reports that the Polish Government has joined a class-action on a lawsuit brought against Russia for the 1940 Katyn Massacre where 20,000 Poles were killed by the USSR, citing a report at: http://jurist.law.pitt.edu/paperchase/2010/02/poland-government-joins-suit-against.php The suit, filed in May in the European Court of Human Rights, is being brought by 13 Polish citizens who are relatives of the victims. They allege that the Russian Government failed to provide adequate investigations into the incident and did not grant the relatives victim status. The Polish Government joining the suit gives it more legitimacy and enables the government to submit proposals to the court. Russia has until 19 March to respond to the allegations. UNIVERSITY OF CALIFORNIA: Proposition 209 Enforcement Challenged ---------------------------------------------------------------- Maria Dinzeo at Courthouse News Service reports that in a federal class action, Hispanic and black students say California Proposition 209's ban on affirmative action "has created a racial caste system" by admitting a disproportionate number of white and Asian students into the University of California system. The class compares Prop. 209 to the Tuskegee experiment -- in which the government left poor black sharecroppers with untreated syphilis, so it could study the progression of the fatal disease -- and Plessy v. Ferguson's notorious "separate but equal" ruling. It claims that Prop. 209 passed in 1996 only because California's white majority electorate "overrode the overwhelming opposition" of minority voters. "Proposition 209 promised a 'color blind' Constitution. But that was and is a lie," the complaint states. It says that Prop. 209 actually "has been the sentry at the gate, denying the plaintiffs the chance for an equal and integrated education as promised by the Fourteenth Amendment." Also called the California Civil Rights Initiative, the campaign for Prop. 209 was led by African-American UC Regent Ward Connerly, an opponent of affirmative action and racial preferences, which he claims actually discriminate against minorities. This class action, led by the Coalition to Defend Affirmative Action, Integration and Immigrant Rights and Fight for Equality by Any Means Necessary (BAMN), claims Prop. 209 discriminates against poor minority students who are unable to inflate their grade point averages because their high schools do not offer the required advanced placement courses. (Advanced placement courses can offer a multiplier, so that an A may count as 6 points rather than 4, or a B as 4.5 points rather than 3.) Most of the plaintiffs are applying to prestigious schools such as UC-Berkeley or UCLA, according to their attorney Ronald Cruz. Mr. Cruz says his clients are concerned that their grade point averages will not be high enough to ensure their acceptance. Mr. Cruz said in an interview that the average grade point average of a UC Berkeley student is 4.2 -- an average impossible to attain without an AP multiplier. The plaintiffs' grade point averages range from 3.0 to 4.25, Mr. Cruz said. He said many are worried that "they will be rejected because they can't compete" with white and Asian students from more prosperous school districts. Plaintiffs who attend UC Berkeley and UCLA say they feel uncomfortable being underrepresented. "In class, if they are the only black or Latino student and race is being discussed, they are being looked at and expected to be the authority," Mr. Cruz said. The University of California's enforcement of Prop. 209 "puts a stamp of inferiority on black and Hispanic students," Mr. Cruz said. He said that if affirmative action were reinstated, minority students "won't feel like they have to prove themselves or represent their entire race" on UC campuses. The UC president's office said it is "too early in the process" to comment on the merits of the lawsuit. But the office did say, "It's the law. If this opens up another discussion, that's well and good, but, as long as Proposition 209 is the law, we're obliged to follow it. Meanwhile, our academic preparation programs are helping underrepresented minority students fulfill our admissions requirements and compete for admission." The class demands a permanent injunction preventing the UC system from enforcing Prop. 209. A copy of the Complaint in Coalition to Defend Affirmative Action, Integration and Immigrant Rights and Fight for Equality by Any Means Necessary, et al. v. Schwarzenegger, et al., Case No. 10-cv-00641 (N.D. Calif.), is available at: http://www.courthousenews.com/2010/02/19/ByAnyMeans.pdf The Plaintiffs are represented by: George B. Washington, Esq. Shanta Driver, Esq. SCHEFF, WASHINGTON & DRIVER, P.C. 645 Griswold St., Suite 1817 Detroit, MI 48226 Telephone: 313-963-1921 - and - Ronald Cruz, Esq. SCHEFF, WASHINGTON & DRIVER, P.C. 2015 Filbert St. Oakland, CA 94607 Telephone: 510-501-2435 WACHOVIA CORP: Judge Cuts Ehrenhaus v. Baker Fees by $1 Million --------------------------------------------------------------- Chris Baysden at the Triangle Business Journal reports that North Carolina Business Court Judge Albert Diaz recently cut attorneys' fees in a class-action case by $1 million because he thought lawyers had charged too much per hour and spent too much time working on the case. The ruling sprung from Ehrenhaus v. Baker -- the shorthand name of a class-action lawsuit filed in Mecklenburg County by a shareholder after a 2008 announcement that Wells Fargo & Co. was buying Wachovia Corp. for $15 billion. That complaint alleged that Charlotte-based Wachovia and its board had breached their fiduciary duties to shareholders in regard to the merger. The lawsuit ended up settling and did not prevent the companies from merging. As part of the settlement, Wells Fargo agreed to pay as much as $1.98 million in attorney fees to the plaintiff's counsel, which consisted of lawyers from Greg Jones & Associates and Wolf Popper. Jones is a Wilmington attorney known for doing personal injury work, while New York City-based Wolf Popper has expertise in securities litigation. Judges typically don't get involved in fee arrangements between clients and their attorneys. But class-action cases are an exception because most members of the class don't have an opportunity to negotiate a fee arrangement with the attorney that ends up representing them. For that reason, judges have the power to act as a guardian or fiduciary for the class, says Press Millen, Esq., a Womble Carlyle attorney who was not involved in the Wachovia case but has experience with such issues. Judge Diaz, in a Feb. 5 order, exercised that authority and reduced the plaintiff's attorneys fees down to just $932,622. According to court documents, Wolf Popper's billing rates ranged from $285 per hour for work done by paralegals up to $750 per hour for work done by partners. In explaining the reduction, Judge Diaz wrote that the court found, "That the time spent by counsel on the case appears to be somewhat excessive, given that litigation on the merits in this case effectively ended at the preliminary injunction stage." Judge Diaz added in the order that the hourly rates of Wolf Popper attorneys are much higher than those typically charged by attorneys in North Carolina. "I respect the court's ruling even though we did not get the fee that we had asked for," says: Gregory Jones, Esq. GREG JONES & ASSOCIATES, PA 3015 Market St. Wilmington, NC 28403 Telephone: (910) 338-2629 "I hate it especially for my co-counsel because I know the expertise, time and perseverance they put into this." Mr. Jones says he was originally approached about the case due to his Internet marketing presence. He then contacted Wolf Popper about joining him on the case. Judge Diaz declined to comment on the case, as did: Robert M. Kornreich, Esq. WOLF POPPER, LLP 845 Third Avenue New York, NY 10022 Telephone: (212) 759-4600 Asked about the order, Wells Fargo spokeswoman Christine Shaw wrote in an e-mail that, "The amount of the fee awarded was solely within the province of the judge and we respect his decision. We are pleased that the matter is resolved." Ted Frank, the founder and president of the Washington, D.C.- based nonprofit Center for Class Action Fairness, says it's common to see class-action lawsuits filed after mergers. "There's some token relief," says Frank. "You pay the attorneys to go away and everybody's happy except the shareholders." He complains that, unlike Judge Diaz, judges often will rubber stamp the settlement that's in front of them. Mr. Frank is not familiar with the Ehrenhaus v. Baker case. It's uncertain whether North Carolina judges will follow Diaz's lead in the future. Recession aside, the state's recent economic growth has attracted the attention of big businesses and outside law firms. That could lead to more mergers and more class-action lawsuits in the state. But Mr. Millen, the Womble Carlyle attorney, says that could be offset by a 2005 federal law called the Class Action Fairness Act, which made it easier to move class-action cases from state to federal courts. WAL-MART STORES: Fires Lead Plaintiff in Sexual Harassment Case --------------------------------------------------------------- Tresa Baldas at The National Law Journal reports that Wal-Mart Stores Inc. may have opened the door to yet more legal troubles when it fired the lead plaintiff in a sexual harassment lawsuit last week, along with the woman's husband, according to their lawyer: Cory Rosenbaum, Esq. ROSENBAUM FARIA LLP 11 Penn Plaza, Fifth Floor New York, NY 10001 Telephone: 212-732-7922 Thursday, Mr. Rosenbaum said that he is preparing to file retaliation charges against the retailer over what he called a "bizarre" decision to fire his client and her husband just weeks after the sexual harassment suit was filed. The plaintiff, Melissa Jackson, is one of several women who is suing Wal-Mart, alleging the retailer knowingly allowed an associate at a store in Monticello, N.Y., to work alongside them, despite their complaints that he had sexually harassed them. The suit, Jackson, et al. v. Wal-Mart Stores, Inc., Case No. 10-cv-00499 (S.D.N.Y.) (Robinson, J.), was filed on Jan. 22, 2010. On Feb. 16, 2010, after working the midnight shift, Mrs. Jackson and her husband were fired, according to Mr. Rosenbaum. "I don't know why they would do that," said Mr. Rosenbaum, who called his clients model employees. "They've both been there for a decade, and within two weeks of filing a lawsuit they get fired. It doesn't make any sense. It's clearly retaliation." Officials at Wal-Mart were not available for comment. The lawyer who represents the Monticello store: Michael S. Hanan, Esq. FOX ROTHSCHILD LLP Princeton Pike Corporate Center 997 Lenox Drive, Building 3 Lawrenceville, NJ 08648-2311 Telephone: 609-896-3600 did not return calls for comment. And a response to the sexual harassment lawsuit has not been filed yet. Mr. Rosenbaum also has an age discrimination lawsuit pending against the same Wal-Mart store. In that suit, filed Feb. 11, a group of nine employees is suing Wal-Mart for $20 million, alleging the Monticello store routinely fires older, more experienced workers and replaces them with younger, less experienced employees. ********* 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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