/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/101004.mbx C L A S S A C T I O N R E P O R T E R Monday, October 4, 2010, Vol. 12, No. 195 Headlines ADVANCE AMERICA: Lawyers Seek Fees Under Class Suit Settlement AMERICAN COMMERCIAL: Suit Over Mile Marker 97 Collision Stayed APOLLO GROUP: Sued Over "Manipulative Recruiting Tactics" ARENA PHARMA: Girard Gibbs Files Securities Class Action Suit BANKATLANTIC BANCORP: CEO Not Expert, Class Action Lawyers Say BAYSIDE FURNISHINGS: Recalls 2,000 Twin Trundle Beds BIMINI CAPITAL: Awaits Approval of "Kornfeld" Settlement Pact BUCKEYE GP: Faces Suit by Broadbased Equities in Texas BUCKEYE GP: Faces Suit in Texas Over Planned Merger Agreement BUCKEYE GP: Faces Suit by James Steward in Texas CF INDUSTRIES: Maryland Court Dismisses Suit Against Terra CF INDUSTRIES: Terra Files Motion to Dismiss Suit in Iowa CIGNA GROUP: Sued for Denying Insurance Benefits to Customers CROPLIFE INT'L: Judge Grants Motion to Dismiss Mancozeb Suit HARRAH'S ENTERTAINMENT: Loses Suit Over Misleading Advertising HERTZ GLOBAL: New Jersey Suit vs. Hertz Equipment in Discovery HERTZ GLOBAL: Unit Agrees to Settle "Lydia Lee" Suit HERTZ GLOBAL: TCPA-Related Suit vs. Hertz Equipment Still Stayed HERTZ GLOBAL: Dismissal of Antitrust Claim Against CTTC Affirmed HERTZ GLOBAL: Plaintiffs' Appeal on Dismissed Suit Still Pending JOHNSON & JOHNSON: Class Action Lawsuit Filed Over Motrin Recall KRAFT FOODS: Judge Grants Class Action Status to Pollution Lawsuit MIDWEST-CBK: Recalls 4,450 "S T U F F" and Paw Wall Hooks NEWS CORP: No Trial Date Yet in California Consolidated Suit NIGHTHAWK RADIOLOGY: Defends Amended Securities Suit in Idaho ORMAT TECHNOLOGIES: Wants Consolidated Amended Suit Dismissed PALM BEACH TAN: Accused in Texas Suit of Not Paying Overtime SENSA PRODUCTS: Accused of Selling Bogus Weight Loss Products SILVER SPRING: Suit Complains About Defective Electricity Meters SPIRAL FOODS: Faces Class Action Suit in Australia Over Bonsoy STUDENT LOAN: Being Sold to Discover for Too Little, Suit Claims TIM GOLDBURT: Sued for Breach of Contract, Theft and Fraud TOBACCO COMPANIES: Judge Scalia Stays $270MM Tobacco Suit Ruling VOLKSWAGEN GROUP: Class Suit Over Sludge Tentatively Settled WASHINGTON: Sanctioned by Federal Judge Over Child-Welfare Suit ********* ADVANCE AMERICA: Lawyers Seek Fees Under Class Suit Settlement -------------------------------------------------------------- David Ranii, writing for The Charlotte Observer, reports the N.C. Justice Center and a Raleigh law firm are among several nonprofit groups and private-practice lawyers seeking $6.25 million in attorneys' fees in a class action lawsuit that produced an $18.75 million settlement with a payday lender. The fees, which must be approved by the court, average $1 million for each of the three nonprofits and three law firms that represented consumers in the case. The amount sought by each attorney will be based on the amount of time each put into the case. Consumers across the state are expected to receive an average of $83 each, although some will receive hundreds of dollars. At the same time, the settlement is expected to benefit a lot of people: 144,000 North Carolina consumers would share $12 million after attorneys' fees and other expenses are deducted, including the costs of administering the settlement announced earlier this month. The settlement also must be approved by a New Hanover County Superior Court judge. A fee that amounts to one-third of the total payout is "very common" and is "fully defensible" given the massive amount of work involved during six years of hard-fought litigation, said Carlene McNulty, an attorney with the N.C. Justice Center, an anti-poverty group in Raleigh. Any fees awarded to the nonprofit attorneys who worked on the case would go to their organizations, which would enable them to pursue other public-interest cases, Ms. McNulty said. "It sounds like a lot of money -- and it is -- but we are very glad to have it because it means we can keep our shop open," she said. In addition to Ms. McNulty, the other nonprofit attorneys seeking fees are Mallam Maynard of the Financial Protection Law Center in Wilmington and Paul Bland of Public Justice in Washington, D.C. The private attorneys are Jerome Hartzell of Hartzell & Whiteman in Raleigh; Mona Lisa Wallace and John Hughes of Wallace & Graham in Salisbury; and Richard Fisher of Richard Fisher Law Office in Cleveland, Tenn. The lawsuit accused Advance America, the nation's largest payday lender, of charging illegally high interest rates -- sometimes exceeding 450% a year -- to consumers who received short-term cash advances. State law caps the interest rate on short-term loans at 36%. Advance America, which no longer operates in North Carolina, agreed to the multimillion-dollar settlement earlier this month without admitting any violations of law. A study of fees awarded in class action suits from 1993-2008 conducted by professors at the Cornell and New York University law schools found that in "high-risk" consumer cases, the average fee amounted to 31.3% of the total award. In "low/medium risk" consumer cases, the average fee amounted to 24.7% of the total award. The study also found that fee requests were granted in full by the courts in more than 70% of cases. Consumers will have an opportunity to object to the fee request, Ms. McNulty said. Attorneys who represented consumers say the lawsuit was risky, noting that it was initially dismissed by the trial court but they successfully appealed to overturn that ruling. Mr. Bland and Ms. McNulty said that the case necessitated multiple appeals in state and federal courts, as well as the filing of friend-of-the-court briefs in two other cases that dealt with related issues. The lawyers involved also hired more than 20 experts and spent $100,000 pursuing the case, Ms. McNulty said The private lawyers, she added, faced the prospect of receiving nothing for their efforts if the litigation wasn't successful. AMERICAN COMMERCIAL: Suit Over Mile Marker 97 Collision Stayed -------------------------------------------------------------- A lawsuit against American Commercial Lines Inc., in connection with a collision incident at Mile Marker 97 of the Mississippi River, remains stayed. The company and or American Commercial Lines LLC, an indirect wholly owned subsidiary of the company, have been named as defendants in these putative class action lawsuits, filed in the U.S. District Court for the Eastern District of Louisiana: 1. Austin Sicard et al on behalf of themselves and others similarly situated vs. Laurin Maritime (America) Inc., Whitefin Shipping Co. Limited, D.R.D. Towing Company, LLC, American Commercial Lines, Inc. and the New Orleans-Baton Rouge Steamship Pilots Association, Case No. 08-4012, filed on July 24, 2008; 2. Stephen Marshall Gabarick and Bernard Attridge, on behalf of themselves and others similarly situated vs. Laurin Maritime (America) Inc., Whitefin Shipping Co. Limited, D.R.D. Towing Company, LLC, American Commercial Lines, Inc. and the New Orleans-Baton Rouge Steamship Pilots Association, Case No. 08-4007, filed on July 24, 2008; and 3. Alvin McBride, on behalf of himself and all others similarly situated v. Laurin Maritime (America) Inc.; Whitefin Shipping Co. Ltd.; D.R.D. Towing Co. LLC; American Commercial Lines Inc.; The New Orleans-Baton Rouge Steamship Pilots Association, Case No. 09-cv-04494 B, filed on July 24, 2009. The McBride v. Laurin Maritime, et al. action has been dismissed with prejudice because it was not filed prior to the deadline set by the Court. The claims in the Class Action Lawsuits stem from the incident on July 23, 2008, involving one of American Commercial LLC's tank barges that was being towed by DRD Towing Company L.L.C., an independent towing contractor. The tank barge was involved in a collision with the motor vessel Tintomara, operated by Laurin Maritime, at Mile Marker 97 of the Mississippi River in the New Orleans area. The tank barge was carrying approximately 9,900 barrels of #6 oil, of which approximately two-thirds was released. The tank barge was damaged in the collision and partially sunk. There was no damage to the towboat. The Tintomara incurred minor damage. The Class Action Lawsuits include various allegations of adverse health and psychological damages, disruption of business operations, destruction and loss of use of natural resources, and seek unspecified economic, compensatory and punitive damages for claims of negligence, trespass and nuisance. The Class Action Lawsuits are stayed pending the outcome of the Limitation Actions. Claims under the Oil Pollution Act of 1990 were dismissed without prejudice. There is a separate administrative process for making a claim under OPA 90 that must be followed prior to litigation. The company is processing OPA 90 claims properly presented, documented and recoverable. The company has also received numerous claims for personal injury, property damage and various economic damages, including notification by the National Pollution Funds Center of claims it has received. Additional lawsuits may be filed and claims submitted. The company is in early discussions with the Natural Resource Damage Assessment Group, consisting of various State and Federal agencies, regarding the scope of environmental damage that may have been caused by the incident, according to the company's Aug. 6, 2010, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended June 30, 2010. Headquartered in Jeffersonville, Indiana, American Commercial Lines Inc. -- http://www.aclines.com/-- is an integrated marine transportation and service company operating in the United States Jones Act trades, with approximately $850 million in revenues and approximately 2,570 employees as of Dec. 31, 2009. APOLLO GROUP: Sued Over "Manipulative Recruiting Tactics" --------------------------------------------------------- Jamie Ross at Courthouse News Service reports that The Apollo Group, which owns the for-profit University of Phoenix, used "manipulative recruiting tactics" to inflate its reported growth, shareholders claim in a federal class action. Apollo is one of more than a dozen chains of colleges being scrutinized by Congress. The class claims the Apollo Group sold $46 million in stock based on its false and misleading reports. Lead plaintiff John Fitch claims the Apollo Group falsely reported "strong financial performance and forecasted stable and predictable revenue growth," and attributed this to "competent management," though the "defendants had propped up the company's results by fraudulently inducing students to enroll in Apollo's scholastic and educational programs." The class claims Apollo's misrepresentations and omissions included failing to report that it had participated in "illicit and improper recruiting activities." The Apollo Group also falsely claimed that it had "adequate systems of internal operational or financial controls . . . [and] that Apollo's reported operational statements and foreseeable growth prospects were true, accurate or reliable," according to the 50-page complaint. But on Aug. 3 the class learned that Apollo "could no longer foreseeably maintain its growth expectations or meet guidance," after the U.S. General Accountability Office reported "for-profit educational institutions like Apollo had engaged in an illegal and fraudulent course of action designed to deceptively recruit students and overcharge the federal government for the cost of such education," according to the complaint. GAO investigators posed as students and applied for admission, and reported that staff members at 15 for-profit colleges encouraged them to falsify financial aid information, gave them inaccurate information about tuition costs and accreditation. Shares in Apollo declined by almost 10% between Aug. 3 and Aug. 5, "eradicating over $684.53 million of the company's market capitalization in only four trading days," according to the complaint. Apollo shares are traded on NASDAQ. The Obama administration is drafting a proposal to regulate for- profit colleges. The colleges have responded with furious, full- page ads in The New York Times, claiming that the administration is trying to limit opportunities for students at so-called career colleges. The Apollo Group operates campuses in 39 states, Washington, D.C., and Puerto Rico. It purports to offer associates, bachelor's, master's, and doctoral degrees in business, criminal justice, and psychology, among other fields. The class claims it was deceived about the company's business operations and the actual value of its stock, and that the Apollo Group inflated its share price through misrepresentations. It seeks compensatory damages, costs and expenses. Six officers and executives are also named as defendants: John Sperling, founder and executive chairman; Gregory Cappelli, co- CEO; Charles Edelstein, co-CEO; Joseph D'Amico, president and COO; Brian Swartz, CFO and senior vice president; and Gregory Iverson, chief accounting officer, controller and vice president. A copy of the Complaint in Fitch v. Apollo Group, Inc., et al., Case No. 10-cv-02044 (D. Ariz.), is available at: http://www.courthousenews.com/2010/09/28/Apollo.pdf The Plaintiff is represented by: Michael Salcido, Esq. MOLEVER CONELLY PLLC Indian Bend Corporate Centre 8161 E. Indian Bend Rd., Suite 103 Scottsdale, AZ 85250 Telephone: 480-268-2659 E-mail: ms@arizonalegal.com - and - U. Seth Ottensoser, Esq. Joseph R. Seidman, Jr., Esq. BERNSTEIN LIEBHARD LLP 10 East 40th St., 22nd Floor New York, NY 10016 Telephone: 212-779-1414 E-mail: ottensoser@bernlieb.com seidman@bernlieb.com ARENA PHARMA: Girard Gibbs Files Securities Class Action Suit ------------------------------------------------------------- The law firm of Girard Gibbs LLP has filed a class action lawsuit on behalf of investors of Arena Pharmaceuticals, Inc. who purchased Arena common stock between December 8, 2008, and September 16, 2010. The complaint charges Arena Pharmaceuticals with violations of federal securities laws for issuing false and misleading statements regarding its principal drug in development, Lorcaserin (lorcaserin hydrochloride), an experimental weight loss drug. The lawsuit, captioned Velasquez v. Arena Pharmaceuticals, Inc. et al., 10-cv-2026, is pending in the United States District Court for the Southern District of California. The defendants are Arena Pharmaceuticals, Inc. and certain of its officers and directors. The complaint alleges that Defendants violated the Securities Exchange Act of 1934 by issuing a series of misrepresentations and omissions that actively concealed and failed to disclose certain health risks associated with Lorcaserin. Throughout the class period, Defendants promoted Lorcaserin as an effective and safe weight loss treatment option, without disclosing certain health risks associated with the drug. As a result of Defendants' false statements, Arena's stock traded at artificially inflated prices during the Class Period, reaching a high of $7.95 per share on July 30, 2010. On September 14, 2010, the Food and Drug Administration issued a briefing document in advance of its advisory panel meeting in which the agency questioned both the safety and efficacy of Lorcaserin. The market price of Arena common stock fell $2.72 per share on this news to close at $4.13 per share on September 14, 2010 -- a one-day decline of 40% on high volume. Then, on September 16, 2010, the FDA advisory panel voted 9 to 5 to reject Lorcaserin, in large part because of the results of rat carcinogenicity studies which revealed, among other things, that Lorcaserin caused cancer in rats in certain preclinical studies and that the drug provided modest therapeutic benefits. On this news, Arena's stock fell another $1.75 per share to close at $1.99 per share on September 17, 2010 -- a one-day decline of over 46% and a 75% decline from the stock's Class Period high. That same day, in a conference call with analysts, Defendants admitted that they were aware of the test results, but chose not to disclose them to the investing public. Plaintiff seeks to recover damages on behalf of the Class and is represented by Girard Gibbs LLP. If you wish to discuss this action or have any questions concerning your rights as an investor in Arena Pharmaceuticals, please contact Girard Gibbs LLP (www.girardgibbs.com/arena.asp) or call toll-free at (866) 981- 4800. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of his or her choice, or may choose to do nothing and remain an absent class member. If you would like to serve as lead plaintiff in this action, you must move the Court no later than November 19, 2010. A copy of the complaint is available from the Court, or can be viewed on Girard Gibbs LLP's Web site at http://www.girardgibbs.com/ Girard Gibbs LLP is one of the nation's leading firms representing individual and institutional investors in securities fraud class actions and litigation to correct abusive corporate governance practices, breaches of fiduciary duty and proxy violations. For more information, please access the firm's Web site, http://www.girardgibbs.com/ BANKATLANTIC BANCORP: CEO Not Expert, Class Action Lawyers Say -------------------------------------------------------------- Brian Bandell, writing for the South Florida Business Journal, reports that BankAtlantic Bancorp Chairman and CEO Alan Levan can testify in defense of his company, but he shouldn't be considered an expert, argue the plaintiff attorneys in the shareholder class action lawsuit against the bank. After getting a look at what Mr. Levan planned to say to fend off the lawsuit in the trial starting on Oct. 6, the plaintiff attorneys filed a motion on Sept. 22 to exclude his expert opinion. They asked the judge to do the same for two other high- level employees at the Fort Lauderdale-based banking company (NYSE: BBX). The lawsuit was filed against BankAtlantic Bancorp, Mr. Levan and other company executives in 2007. It accuses them of misleading investors about the bank's loan problems until it suffered big loan-related losses. The bank disputes the allegations and filed a motion for sanctions against the plaintiff attorneys for using false witness testimony in their complaint. However, the judge determined that four statements about the bank's loan portfolio made by Mr. Levan during a July 2007 investor conference call were false. The plaintiffs must still prove that caused damage to shareholders. In an interview with the Business Journal, Mr. Levan called the motion to exclude his expert testimony "utterly ridiculous." "Obviously the plaintiffs are afraid of what I'm going to say," Mr. Levan said. "We are confident about the outcome and clearly that is why they don't want me testifying in our defense." Most shareholder class action lawsuits are settled with the plaintiff attorneys collecting their fees, but Mr. Levan said he made it a point from the beginning not to settle this case because he didn't want to pay attorneys for their "bad behavior." "We are going to force them to prove their case in a court of law, which we believe they will not be able to do," Mr. Levan said. I wrote a story on Friday that discussed how much BankAtlantic could have at stake in the trial. When the trial comes around, expert testimony carries extra weight and credibility in court. U.S. District Court Judge Ursula Ungaro previously barred the expert testimony of Jack DeWitt, a banking expert that BankAtlantic wanted to use. BankAtlantic had planned for DeWitt to counter the testimony of plaintiff's expert Charles D. Umberger, the president of Old Towne Bank of Waynesboro, N.C., and previous president of Coconut Grove Bank. However, the judge has previously ruled that Umberger also will not be permitted to provide expert testimony. The plaintiff attorneys' motion stated that Mr. Levan's planned testimony was an impermissible legal argument that shows "extreme bias" in favor of his bank. There were seven opinions that Mr. Levan proposed to make at trial as expert testimony: * "BankAtlantic Bancorp's public disclosures during the [class action] period between October 2006 and October 2007 gave to investors the information that I believe an investor would have considered important in making an investment decision." * "The cause of the decline in Bancorp's stock price was a materialization of the fully disclosed risk that a decline in the Florida real estate market would cause Bancorp loan losses." * "The October 25, 2007 earnings release contained multiple elements of bad news, none of which involved materialization of any fraud or concealment." * "Candace Preston [expert on damages for plaintiff attorneys] failed to disaggregate from the stock price decline following the October 2007 earnings release the bad news elements unrelated to any claim of fraud or omission." * "Candace Preston's use of a national banking index to draw conclusions regarding company specific price declines fails to remove from the stock price decline the impact of the collapse of the Florida economy which fell sooner and harder than the rest of the banks making up virtually all of her index." * "BankAtlantic's exposure to the Florida real estate market caused it to suffer financially earlier than other banks with little or no Florida real estate market exposure because Florida entered the recession before the rest of the country and because the recession was more severe and lasted longer in Florida than the rest of the country." * "Bancorp's competitors suffered the same or similar losses driven by the same adverse conditions but deferred loss recognition." The plaintiff attorneys said Mr. Levan shouldn't be allow to make these statements as an expert because he didn't use any analysis or methodology to come up with these conclusions. Whether BankAtlantic suffered earlier or later than other Florida banks has nothing to do with whether bank officials lied about the state of its land loan portfolio to investors, the plaintiff attorneys argued. "The proposed testimony is rank speculation that should not be permitted into evidence at all, let alone as an 'expert' opinion," New York-based law firm Labaton Sucharow stated in its motion. It also moved to exclude the expert testimony of BankAtlantic Chief Credit Officer Jeffrey Mindling and Controller David Friedman. On another topic, Mr. Levan chimed in on the filing BankAtlantic Bancorp made to raise up to $125 million in a new stock offering. He said there is no timeline for the offering because it's still in the Securities and Exchange Commission review process. BAYSIDE FURNISHINGS: Recalls 2,000 Twin Trundle Beds ---------------------------------------------------- The U.S. Consumer Product Safety Commission, in cooperation with Black & Decker (U.S.) Inc., of Towson, Md., announced a voluntary recall of about 160,000 Black & Decker and Craftsman brand cordless electric lawnmowers (these lawnmowers were previously recalled in September 2002 for a fire hazard, and that recall was expanded in August 2006). Consumers should stop using recalled products immediately unless otherwise instructed. The lawnmower's motor and blade can unexpectedly turn on after the mower's safety key is removed, posing a laceration hazard to consumers. Removing the safety key is designed to keep this from occurring. Black & Decker has received 34 reports of the motor operating after removal of the safety key, including two incidents that resulted in finger lacerations, one requiring stitches. This recall involves cordless electric mowers were sold under both the Black & Decker and Craftsman brand names. The recalled Black & Decker mowers have model number CMM1000 or CMM1000R. All date codes and types are included. The date code and type information are both located on a silver and black label affixed to the rear door of the mower. The Black & Decker mowers have either an orange or green deck with a black motor cover. The Craftsman-brand mowers have model number 900.370520 and include all date codes and types. The model number is located on the silver and black label affixed to the rear door of the mower. The Craftsman-brand mowers have a dark green deck with a black motor cover. Pictures of the recalled products are available at: http://www.cpsc.gov/cpscpub/prerel/prhtml10/10356.html The recalled products were manufactured in the United States, Canada and Mexico and sold through home center, hardware and discount stores and authorized Black & Decker dealers nationwide from September 1995 through December 2006 for about $450. Craftsman-brand mowers were sold at Sears and Orchard Supply Hardware stores nationwide from January 1998 through December 2000 for about $450. Consumers should stop using the recalled lawnmowers immediately and call Black & Decker or Sears for a free inspection and repair, or a credit towards a new cordless lawnmower. Consumers who had their mowers repaired as a result of the previous recalls should also have their mowers inspected and repaired as part of this recall. For additional information, consumers with Black & Decker mowers should contact Black & Decker toll-free at (866) 229-5570 between 8:00 a.m. and 5:00 p.m., Eastern Time, Monday through Friday or visit the firm's Web site at http://www.blackanddecker.com/ Consumers with Craftsman-brand mowers should call Sears toll-free at (888) 281-5314 between 7:00 a.m. and 9:00 p.m., Central Time, Monday through Saturday or visit the firm's Web site at http://www.sears.com/ BIMINI CAPITAL: Awaits Approval of "Kornfeld" Settlement Pact ------------------------------------------------------------- Bimini Capital Management, Inc., continues to await approval of a settlement agreement resolving a suit filed by William Kornfeld in the U.S. District Court for the Southern District of Florida. On Sept. 17, 2007, a complaint was filed against Bimini Capital, certain of its current and former officers and directors, Flagstone Securities, LLC and BB&T Capital Markets alleging various violations of the federal securities laws and seeking class action certification. At a mediation held on Feb. 12, 2010, the parties reached a tentative settlement of this matter for $2.35 million. As of Dec. 31, 2009, the company had accrued approximately $500,000 related to the settlement. This amount represented the remainder of the $1.0 million retention that the company was required to pay under the terms of its Directors and Officers insurance policy. As of Aug. 5, 2010, approximately $400,000 of the accrual remains. The remainder of the settlement and legal fees and costs associated with finalizing the settlement will be paid by the insurance carrier. The settlement is contingent upon the parties' executing a written stipulation of settlement, presenting the settlement to the Court for preliminary approval, providing notice to the Class and an opportunity to opt out of the settlement, and receiving final approval from the Court at a final fairness hearing. The company says it expects this process to be completed during the current year. Bimini Capital made no admission of liability in connection with the settlement, according to the company's Aug. 6, 2010, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended June 30, 2010. Bimini Capital Management, Inc. -- http://www.biminicapital.com/ -- is a REIT that invests primarily in, but is not limited to, residential mortgage-related securities issued by the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac) and the Government National Mortgage Association (Ginnie Mae). Its objective is to earn returns on the spread between the yield on its assets and its costs, including the interest expense on the funds it borrows. BUCKEYE GP: Faces Suit by Broadbased Equities in Texas ------------------------------------------------------ Buckeye GP Holdings L.P., faces a putative class action captioned Broadbased Equities v. Forrest E. Wylie, et al., filed in the District Court of Harris County, Texas. On July 30, 2010, a putative class action was filed by a unitholder against BGH, MainLine Management LLC, BGH GP Holdings, LLC, and each of MainLine Management's directors. In the Petition, the plaintiff alleges that MainLine Management and its directors breached their fiduciary duties to BGH's public unitholders by, among other things, acting to facilitate the sale of BGH to Buckeye Partners, L.P., in order to facilitate the gradual sale by BGH GP of its interest in BGH and failing to disclose all material facts in order that the BGH unitholders can cast an informed vote on the Merger Agreement. Among other things, the Petition seeks an order certifying a class consisting of all BGH unitholders, a determination that the action is a proper derivative action, damages in an unspecified amount, and an award of attorneys' fees and costs. The defendants have not yet answered or otherwise responded to the Petition, according to the company's Aug. 6, 2010, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended June 30, 2010. Buckeye GP Holdings L.P. -- http://www.buckeyegp.com/-- is a limited partnership that owns Buckeye GP LLC, the general partner of Buckeye Partners, L.P. -- http://www.buckeye.com/-- which owns 100% of the incentive distribution rights in Buckeye Partners, L.P. Buckeye GP Holdings L.P. also indirectly owns the general partner interests in certain operating subsidiaries of Buckeye Partners, L.P. BUCKEYE GP: Faces Suit in Texas Over Planned Merger Agreement ------------------------------------------------------------- Buckeye GP Holdings L.P., faces a putative class action captioned Henry James Steward v. Forrest E. Wylie, et al., filed in the District Court of Harris County, Texas. On Aug. 2, 2010, a putative class action was filed by a unitholder against BGH, MainLine Management LLC, Grand Ohio, LLC, Buckeye Partners, L.P., Buckeye GP Holdings L.P., and each of MainLine Management's directors. In the Petition, the plaintiff alleges that MainLine Management and its directors breached their fiduciary duties to BGH's public unitholders by, among other things, failing to disclose all material facts in order that the BGH unitholders can cast an informed vote on the Merger Agreement. The Petition also alleges that Buckeye, Buckeye GP and Grand Ohio, LLC aided and abetted the breaches of fiduciary duty. Among other things, the Petition seeks an order certifying a plaintiff class consisting of all of BGH unitholders, an order enjoining the Merger, rescission of the Merger, damages in an unspecified amount, and an award of attorneys' fees and costs. Neither the company nor the other defendants have yet answered or otherwise responded to the Petition, according to the company's Aug. 6, 2010, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended June 30, 2010. Buckeye GP Holdings L.P. -- http://www.buckeyegp.com/-- is a limited partnership that owns Buckeye GP LLC, the general partner of Buckeye Partners, L.P. -- http://www.buckeye.com/-- which owns 100% of the incentive distribution rights in Buckeye Partners, L.P. Buckeye GP Holdings L.P. also indirectly owns the general partner interests in certain operating subsidiaries of Buckeye Partners, L.P. BUCKEYE GP: Faces Suit by James Steward in Texas ------------------------------------------------ Buckeye GP Holdings L.P., faces a putative class action captioned Henry James Steward v. Forrest E. Wylie, et al., filed in the District Court of Harris County, Texas. On Aug. 2, 2010, a putative class action was filed by a unitholder against BGH, MainLine Management LLC, BGH GP Holdings, LLC, ArcLight Capital Partners, LLC, Kelso & Company, Buckeye Partners, L.P., Buckeye GP Holdings L.P. and each of MainLine Management's directors. In the Petition, the plaintiff alleges that MainLine Management and its directors breached their fiduciary duties to BGH's public unitholders by, among other things, accepting insufficient consideration, failing to condition the Merger on a majority vote of public unitholders of BGH, and failing to disclose all material facts in order that the BGH unitholders can cast an informed vote on the Merger Agreement. The Petition also alleges that Buckeye, Buckeye GP, BGH GP, ArcLight and Kelso aided and abetted the breaches of fiduciary duty. Among other things, the Petition seeks an order certifying a class consisting of all of BGH's unitholders, an order enjoining the Merger, damages in an unspecified amount, and an award of attorneys' fees and costs. Neither the company nor the other defendants have yet answered or otherwise responded to the Petition, according to the company's Aug. 6, 2010, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended June 30, 2010. Buckeye GP Holdings L.P. -- http://www.buckeyegp.com/-- is a limited partnership that owns Buckeye GP LLC, the general partner of Buckeye Partners, L.P. -- http://www.buckeye.com/-- which owns 100% of the incentive distribution rights in Buckeye Partners, L.P. Buckeye GP Holdings L.P. also indirectly owns the general partner interests in certain operating subsidiaries of Buckeye Partners, L.P. CF INDUSTRIES: Maryland Court Dismisses Suit Against Terra ---------------------------------------------------------- The Circuit Court for Baltimore City, Maryland, has dismissed a consolidated complaint against Terra Industries Inc. On April 5, 2010, CF Industries Holdings, Inc., acquired a controlling interest in Terra Industries. On April 15, 2010, pursuant to the March 12, 2010 Agreement and Plan of Merger, Composite Merger Corporation, an indirect wholly-owned subsidiary of the company, merged with and into Terra, with Terra continuing as the surviving corporation and becoming an indirect wholly-owned subsidiary of the company. Accordingly, the results of Terra are included in CF Industries Holdings' consolidated financial statements since April 5, 2010. Purported shareholders of Terra commenced putative class actions against Terra and its directors in the Circuit Court for Baltimore City, Maryland. The Maryland court consolidated these into a single action, In re Terra Industries, Inc. Shareholder Litigation. On March 30, 2010, the plaintiffs filed a consolidated putative class action complaint, as well as a motion for partial summary judgment as to liability. The consolidated complaint generally alleges that the director defendants breached their fiduciary duties by, among other things, approving the merger agreement with Yara International ASA without engaging in an adequate process to determine that such agreement was the best available transaction. The complaint seeks monetary damages based on the $123 million termination fee that CF Industries paid to Yara, on Terra's behalf, in connection with the termination by Terra of the Yara merger agreement. The defendants filed a motion to dismiss or, in the alternative, for summary judgment, as well as an opposition to the plaintiffs' motion for partial summary judgment. On July 14, 2010, the Maryland Court denied the plaintiffs' motion for partial summary judgment and granted the defendants' motion to dismiss. The case remains open to allow counsel for the plaintiffs to file an application for attorneys' fees, and to allow the plaintiffs to file an appeal, according to the company's Aug. 6, 2010, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended June 30, 2010. Headquartered in Deerfield, Illinois, CF Industries Holdings, Inc. -- http://www.cfindustries.com/-- is the holding company for the operations of CF Industries, Inc. CF Industries is a global leader in nitrogen and phosphate fertilizer manufacturing and distribution, serving both agricultural and industrial customers. CF Industries operates world-class nitrogen fertilizer manufacturing complexes in the central U.S. region and Canada; conducts phosphate mining and manufacturing operations in Central Florida; and distributes fertilizer products through a system of terminals, warehouses, and associated transportation equipment located primarily in the Midwestern United States. The company also owns a 50% interest in KEYTRADE AG, a global fertilizer trading organization headquartered near Zurich, Switzerland. In addition, the company's majority-owned subsidiary, Terra Industries, owns a 50% stake in GrowHow UK Limited, a fertilizer manufacturer in the United Kingdom as well as a 50% interest in an ammonia facility in The Republic of Trinidad and Tobago. CF INDUSTRIES: Terra Files Motion to Dismiss Suit in Iowa --------------------------------------------------------- Terra Industries Inc. has filed a motion to dismiss the matter In re Terra Industries, Inc. Shareholder Litigation, pending in the Iowa District Court for Woodbury County. On April 5, 2010, CF Industries Holdings, Inc., acquired a controlling interest in Terra Industries. On April 15, 2010, pursuant to the March 12, 2010 Agreement and Plan of Merger, Composite Merger Corporation, an indirect wholly-owned subsidiary of the company, merged with and into Terra, with Terra continuing as the surviving corporation and becoming an indirect wholly-owned subsidiary of the company. Accordingly, the results of Terra are included in CF Industries Holdings' consolidated financial statements since April 5, 2010. Purported Terra shareholders filed a putative shareholder class action, captioned In re Terra Industries, Inc. Shareholder Litigation, in the Iowa District Court for Woodbury County. The plaintiffs filed a consolidated putative class action complaint against Terra and its directors on April 14, 2010. Like the putative action in Maryland, the consolidated complaint in Iowa generally alleges that the director defendants breached their fiduciary duties by, among other things, approving the Yara International ASA merger agreement without engaging in an adequate process to determine that such agreement was the best available transaction. The complaint seeks monetary damages based on the $123 million termination fee that CF Industries paid to Yara, on Terra's behalf, in connection with the termination by Terra of the Yara merger agreement. On July 23, 2010, the defendants moved to dismiss in light of the decision by the Circuit Court for Baltimore, Maryland, dismissing the virtually identical action in Maryland, according to the company's Aug. 6, 2010, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended June 30, 2010. Headquartered in Deerfield, Illinois, CF Industries Holdings, Inc. -- http://www.cfindustries.com/-- is the holding company for the operations of CF Industries, Inc. CF Industries is a global leader in nitrogen and phosphate fertilizer manufacturing and distribution, serving both agricultural and industrial customers. CF Industries operates world-class nitrogen fertilizer manufacturing complexes in the central U.S. region and Canada; conducts phosphate mining and manufacturing operations in Central Florida; and distributes fertilizer products through a system of terminals, warehouses, and associated transportation equipment located primarily in the Midwestern United States. The company also owns a 50% interest in KEYTRADE AG, a global fertilizer trading organization headquartered near Zurich, Switzerland. In addition, the company's majority-owned subsidiary, Terra Industries, owns a 50% stake in GrowHow UK Limited, a fertilizer manufacturer in the United Kingdom as well as a 50% interest in an ammonia facility in The Republic of Trinidad and Tobago. CIGNA GROUP: Sued for Denying Insurance Benefits to Customers ------------------------------------------------------------- Courthouse News Service reports that Cigna and Connecticut General Life Insurance deny benefits to customers who should be covered, a class action claims in Miami Federal Court. CROPLIFE INT'L: Judge Grants Motion to Dismiss Mancozeb Suit ------------------------------------------------------------ Joe Celentino at Courthouse News Service reports that a federal judge in the nation's capital said he lacked jurisdiction over a class action accusing a multinational banana producer of concealing a fungicide's dangerous health effects on Ecuadorian workers. Workers exposed to Mancozeb, an agrochemical used to prevent the "black banana" fungus, sued CropLife's international, Ecuadorian and U.S. branches. CropLife specializes in crop protection and plant biotechnology. Class members included pilots who sprayed the banana plants, ground crew members, plantation workers, nearby residents, and the Ecuadorian municipality of Pueblo Viejo. They said CropLife "failed to warn [banana plantation] workers and other exposed persons of [Mancozeb's] hazardous nature" and hid information about the fungicide's toxicity. Class members argued that the District of Columbia's long-arm statute gave the district court in Washington, D.C., jurisdiction over their claims, even though the alleged misconduct took place in Ecuador. However, U.S. District Judge Reggie Walton pointed out that the long-arm statute is for cases with a significant connection between the claims and the District of Columbia, something he found lacking in the CropLife case. Because Judge Walton has already dismissed the claims against Crop Life America and CropLife International, the alleged hub of the Mancozeb conspiracy in Ecuador, the judge said he lacked jurisdiction over CropLife Ecuador. He also denied a request for further discovery, saying even firm evidence of communication would not confer jurisdiction. The plaintiffs' claims against Dole Food Company, which sold Mancozeb-sprayed bananas, were dismissed in 2009. A copy of the Memorandum Opinion in Orellana, et al. v. Croplife International, et al., Case No. 08-cv-01790 (D.D.C.), is available at http://is.gd/fyNOB HARRAH'S ENTERTAINMENT: Loses Suit Over Misleading Advertising -------------------------------------------------------------- Casino City Times, citing My Fox Philly, reports Harrah's has lost a class action lawsuit over misleading advertising. Total Rewards members took the lawsuit in response to misleading advertising, My Fox Philly said. The promo was "birthday cash" but the ads did not state that the $15 vouchers could not be used until 8am, My Fox Philly said. My Fox Philly noted that 80,000 customers should receive $100 damages according to the ruling, however Harrah's will appeal the ruling. HERTZ GLOBAL: New Jersey Suit vs. Hertz Equipment in Discovery -------------------------------------------------------------- A suit against Hertz Equipment Rental Corporation pending in the U.S. District Court for the District of New Jersey is in the discovery stage. Hertz Equipment is a wholly owned equipment rental subsidiary of Hertz Global Holdings, Inc. On Aug. 15, 2006, Davis Landscape, Ltd., individually and on behalf of all others similarly situated, filed a complaint against Hertz Equipment Rental Corporation. In November 2006, the complaint was amended to add another plaintiff, Miguel V. Pro, and more claims. The Davis Landscape matter purports to be a nationwide class action on behalf of all persons and business entities who rented equipment from HERC and who paid a Loss Damage Waiver, or an Environmental Recovery Fee. The plaintiffs seek a declaratory judgment and injunction prohibiting HERC from engaging in acts with respect to the LDW and ERF charges that violate the New Jersey Consumer Fraud Act and claim that the charges violate the Uniform Commercial Code. The plaintiffs also seek an unspecified amount of compensatory damages with the return of all LDW and ERF charges paid, attorneys' fees and costs as well as other damages. The court has granted class certification and denied the company's motion for summary judgment. The case is in the discovery stage, according to the company's Aug. 6, 2010, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended June 30, 2010. Hertz Global Holdings, Inc. is the world's largest general use car rental brand, operating from approximately 8,300 locations in 146 countries worldwide. Hertz is the number one airport car rental brand in the U.S. and at 81 major airports in Europe, operating both corporate and licensee locations in cities and airports in North America, Europe, Latin America, Asia, Australia and New Zealand. HERTZ GLOBAL: Unit Agrees to Settle "Lydia Lee" Suit ---------------------------------------------------- The Hertz Corporation has agreed to settle the matter Janet Sobel, Daniel Dugan, PhD. and Lydia Lee, individually and on behalf of all others similarly situated v. The Hertz Corporation and Enterprise Rent-A-Car Company. Hertz Corporation, is Hertz Global Holdings, Inc.'s primary operating company. The suit was filed on Oct. 13, 2006, in the U.S. District Court for the District of Nevada. The plaintiffs have agreed to not pursue claims against Enterprise for the time being and the case has thus far only proceeded against Hertz. The Sobel case purports to be a nationwide class action on behalf of all persons who rented cars from Hertz at airports in Nevada and were separately charged airport concession recovery fees by Hertz as part of their rental charges. The plaintiffs seek an unspecified amount of compensatory damages, restitution of any charges found to be improper and an injunction prohibiting Hertz from quoting or charging those airport fees that are alleged not to be allowed by Nevada law. The complaint also seeks attorneys' fees and costs. Relevant documents were produced and depositions were taken. The parties have each filed motions for summary judgment, and the motions are now before the court awaiting a decision. In June 2010, the Lydia Lee case was refiled separately against Enterprise. Thereafter, Hertz and Enterprise jointly engaged in a mediation with the plaintiffs. That mediation has now resulted in a proposed settlement for an immaterial amount that will need to be incorporated into a Settlement Agreement. Once executed by the parties, the Settlement Agreement will be presented to the court for its approval, according to the company's Aug. 6, 2010, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended June 30, 2010. Hertz Global Holdings, Inc. is the world's largest general use car rental brand, operating from approximately 8,300 locations in 146 countries worldwide. Hertz is the number one airport car rental brand in the U.S. and at 81 major airports in Europe, operating both corporate and licensee locations in cities and airports in North America, Europe, Latin America, Asia, Australia and New Zealand. HERTZ GLOBAL: TCPA-Related Suit vs. Hertz Equipment Still Stayed ---------------------------------------------------------------- A suit against Hertz Equipment Rental Corporation relating to the Telephone Consumer Protection Act remains stayed. Hertz Equipment is a wholly-owned equipment rental subsidiary of Hertz Global Holdings, Inc. On May 3, 2007, Fun Services of Kansas City, Inc., individually and as the representative of a class of similarly-situated persons, v. Hertz Equipment Rental Corporation was commenced in the District Court of Wyandotte County, Kansas. The case was subsequently transferred to the District Court of Johnson County, Kansas. The Fun Services matter purports to be a class action on behalf of all persons in Kansas and throughout the United States who on or after four years prior to the filing of the action were sent facsimile messages of advertising materials relating to the availability of property, goods or services by HERC and who did not provide express permission for sending such faxes. The plaintiffs seek an unspecified amount of compensatory damages, attorney's fees and costs. In August 2009, the court issued an order that stayed all activity in this litigation pending a decision by the Kansas Supreme Court in Critchfield Physical Therapy, Inc. v. Taranto Group, Inc., another Telephone Consumer Protection Act case. The Kansas Supreme Court heard oral argument in the Critchfield case in January of 2010. The company believes that the stay in the Fun Services litigation will remain in effect until approximately mid-2010, according to the company's Aug. 6, 2010, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended June 30, 2010. Hertz Global Holdings, Inc. is the world's largest general use car rental brand, operating from approximately 8,300 locations in 146 countries worldwide. Hertz is the number one airport car rental brand in the U.S. and at 81 major airports in Europe, operating both corporate and licensee locations in cities and airports in North America, Europe, Latin America, Asia, Australia and New Zealand. HERTZ GLOBAL: Dismissal of Antitrust Claim Against CTTC Affirmed ---------------------------------------------------------------- The U.S. Court of Appeals for the Ninth Circuit has affirmed the dismissal of antitrust claim against the California Travel and Tourism Commission. The company is currently a defendant in a proceeding that purports to be a class action brought by Michael Shames and Gary Gramkow against The Hertz Corporation, Dollar Thrifty Automotive Group, Inc., Avis Budget Group, Inc., Vanguard Car Rental USA, Inc., Enterprise Rent-A-Car Company, Fox Rent A Car, Inc., Coast Leasing Corp., The California Travel and Tourism Commission, and Caroline Beteta. Hertz Corporation, one of the defendants, is Hertz Global Holdings, Inc.'s primary operating company. Originally filed in November of 2007, the action is pending in the U.S. District Court for the Southern District of California, and plaintiffs claim to represent a class of individuals or entities that purchased rental car services from a defendant at airports located in California after Jan. 1, 2007. The complaint alleges that the defendants agreed to charge consumers a 2.5% tourism assessment and not to compete with respect to this assessment, while misrepresenting that this assessment is owed by consumers, rather than the rental car defendants, to the CTTC. The complaint also alleges that defendants agreed to pass through to consumers a fee known as the Airport Concession Fee, which fee had previously been required to be included in the rental car defendants' individual base rates, without reducing their base rates. Based on these allegations, the complaint seeks treble damages, disgorgement, injunctive relief, interest, attorneys' fees and costs. The court has dismissed all claims against the CTTC, and plaintiffs dropped their claims against Caroline Beteta. The court also dismissed all claims against the rental car defendants except for the federal antitrust claim. The plaintiffs' have appealed the dismissal of their claims against the CTTC to the U.S. Court of Appeals for the Ninth Circuit. The remaining claim against the company, the federal antitrust claim, is in the discovery stage. In June 2010, a three judge panel of the U.S. Court of Appeals for the Ninth Circuit affirmed the dismissal of the plaintiffs' antitrust claim against the CTTC as a state agency immune from an antitrust complaint because the California legislature foresaw the alleged price-fixing conspiracy that was the subject of the plaintiffs' complaint. The plaintiffs subsequently filed a petition with the U.S. Court of Appeals for the Ninth Circuit seeking to have all of the judges on the Ninth Circuit review the decision of the three judge panel, according to the company's Aug. 6, 2010, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended June 30, 2010. Hertz Global Holdings, Inc. is the world's largest general use car rental brand, operating from approximately 8,300 locations in 146 countries worldwide. Hertz is the number one airport car rental brand in the U.S. and at 81 major airports in Europe, operating both corporate and licensee locations in cities and airports in North America, Europe, Latin America, Asia, Australia and New Zealand. HERTZ GLOBAL: Plaintiffs' Appeal on Dismissed Suit Still Pending ---------------------------------------------------------------- The appeal of the plaintiffs on the dismissal of a consolidated action against Hertz Global Holdings, Inc., remains pending in the U.S. Court of Appeals for the Ninth Circuit. The company is currently a defendant in a consolidated action captioned In re Tourism Assessment Fee Litigation pending in the U.S. District Court for the Southern District of California. Originally filed as two separate actions in December of 2007, the consolidated action purports to be a class action brought on behalf of all persons and entities that have paid an assessment since the inception of the Passenger Car Rental Industry Tourism Assessment Program in California on Jan. 1, 2007. The other defendants include various of the company's competitors, including Avis Budget Group, Inc., Vanguard Car Rental USA, Inc., Dollar Thrifty Automotive Group, Inc., Advantage Rent-A-Car, Inc., Avalon Global Group, Enterprise Rent-A-Car Company, Fox Rent A Car, Inc., Beverly Hills Rent-A-Car, Inc., Rent4Less, Inc., Autorent Car Rental, Inc., Pacific Rent-A-Car, Inc., ABC Rent-A- Car, Inc., as well as The California Travel and Tourism Commission, and Dale E. Bonner. The complaint sought injunctive and declaratory relief, that all assessments collected and to be collected be held in trust, unspecified monetary damages, interest, attorneys' fees and costs. The district court has dismissed all of plaintiffs' claims against all defendants. Plaintiffs have appealed to the U.S. Court of Appeals for the Ninth Circuit, according to the company's Aug. 6, 2010, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended June 30, 2010. Hertz Global Holdings, Inc. is the world's largest general use car rental brand, operating from approximately 8,300 locations in 146 countries worldwide. Hertz is the number one airport car rental brand in the U.S. and at 81 major airports in Europe, operating both corporate and licensee locations in cities and airports in North America, Europe, Latin America, Asia, Australia and New Zealand. JOHNSON & JOHNSON: Class Action Lawsuit Filed Over Motrin Recall ---------------------------------------------------------------- AboutLawsuits.com reports an investor class action lawsuit has been filed against Johnson & Johnson, alleging that the company tried to hide a Motrin recall by having consultants repurchase it off store shelves and made misleading statements before recalling more than 40 children medications earlier this year. The Johnson & Johnson class action lawsuit was filed by investor Ronald Monk on September 21 in U.S. District Court in Newark, New Jersey. The complaint comes as the drug maker is under criminal investigation surrounding the "phantom" recall of Motrin, which some say appears to have been an illegal attempt by the company to avoid an official recall notice. The lawsuit also accuses the company of making misleading statements before revealing that there were contamination problems at its plants in Pennsylvania and Puerto Rico, and points to the massive children's medicine recall issued by McNeil Consumer Healthcare earlier this year. The complaint seeks class action status for all investors who purchased Johnson & Johnson shares between October 2008 and July 2010. On April 30, a recall was announced for nearly 40 liquid children's medications by Johnson & Johnson subsidiary, McNeil Consumer Healthcare, including infant Tylenol, Benadryl, and Motrin. The products were recalled due to particulate contamination and irregularities in potency and resulted in a warning letter from FDA regarding quality control issues at a Johnson & Johnson manufacturing plant in Ft. Washington, Pennsylvania. The recall affected 136 million bottles of children's medications, and resulted in the shutdown of the company's Ft. Washington, Pennsylvania, plant, and the suspension of the production of all of McNeil's children medications. Congressional inquiries into the recall discovered documents that suggested that the company had tried to hide an earlier Motrin recall by sending consultants to stores to buy the product off shelves instead of having it pulled. Johnson & Johnson officials deny the allegations and say that the FDA was fully aware of the Motrin recall. KRAFT FOODS: Judge Grants Class Action Status to Pollution Lawsuit ------------------------------------------------------------------ Justin L. Mack, writing for jconline.com, reports when Rod Andres purchased his Taylor Street home in July 2007, he was unaware that property contamination came at no extra charge. "I learned about the chemicals about two years after I got the house, and no one made any mention of it to me when I bought it. Not the Realtors, not the company, no one," he said. "I don't know what drives people to do something like that. Is it greed? Is it profit? All I know is I was a little bit bummed. "I wouldn't have paid 70 grand for the house if I knew contamination might knock the value down to 10." That's why Mr. Andres and 129 other Attica families are gearing up for a Feb. 28 court date to hold a company linked to the contamination responsible. In March 2009, lawyers for a northeast Attica neighborhood filed a class action lawsuit in U.S. District Court in Indianapolis against Kraft Foods Global Inc. Homeowners allege that the water and air pollution coming from an inactive factory Kraft acquired through mergers is lowering property values and putting their health at risk. The suspect chemicals -- tetrachloroethene, or PCE, and trichloroethene, or TCE -- were used as cleaners and degreasers at the now-defunct Radio Materials Corp. factory located off East Summit Street. On Tuesday, residents and their attorneys held a press conference to announce that a judge has granted class action status to the 130 families affected by the pollution. They also announced the court's decision to reject Kraft's attempt to have the case dismissed on the basis that the company has been working to clean up the pollutants. "(The court) didn't say that we were right. They said we can have our day in court to prove our case . . . we knew that if we didn't go in together, we didn't have a case," said Naperville, Ill.- based attorney Shawn Collins, whose law firm is representing the families. "To go one-on-one and toe-to-toe with Kraft alone would be too much for one family to bear. This is the day in court these people deserve, and we're proud to give it to them." MIDWEST-CBK: Recalls 4,450 "S T U F F" and Paw Wall Hooks --------------------------------------------------------- The U.S. Consumer Product Safety Commission, in cooperation with Midwest-CBK, Inc., of Union City, Tenn., announced a voluntary recall of about 4,450 "S T U F F" and Paw Wall Hooks. Consumers should stop using recalled products immediately unless otherwise instructed. Paint on the metal hooks and on the blue paw hook contains excessive levels of lead, violating the federal lead paint standard. No injuries or incidents have been reported. This recall involves the wall hook sets were sold in three models: model numbers 74641 and 74642, constructed of five separate wooden letters spelling out the word "S T U F F" and model number 65262 consisting of four separate, different colored wooden paws. Model number 74641 has a Purple S, a Red T, an Orange U, a Green F and a Pink F. Model number 74642 has an Olive S, a Blue T, a Yellow U, a White-striped F, and a Blue F. Attached to each letter is a painted metal coat hook with a painted wooden ball at the end. Each letter is approximately 4 inches long, 3/4 inches wide and 9-3/4 inches tall. Model number 65262 has four separate paw- shaped wooden pieces of different colors -- red, blue, green and pink. Attached to each paw is a wooden peg with a wooden ball at the end. The "S T U F F" wall hook sets have a label on the back of the letter "S" that includes the models 74641 or 74642. The Paw wall hook sets have the model number 65262 on the outside of the box. Pictures of the recalled products are available at: http://www.cpsc.gov/cpscpub/prerel/prhtml10/10357.html The recalled products were manufactured in China and sold through gift stores, drug stores, furniture stores, decor outlets and variety stores nationwide from December 2008 through August 2010 for between $10 and $30. The wall hook set should be returned to Midwest-CBK for a full refund. Contact Midwest-CBK at the number provided below to receive a prepaid shipping label and merchandise credit. For additional information, contact Midwest-CBK toll-free at (800) 422-5583 between 7:30 a.m. and 5:00 p.m., Central Time, Monday through Friday. NEWS CORP: No Trial Date Yet in California Consolidated Suit ------------------------------------------------------------ The U.S. District Court for the Central District of California has yet to set a trial date in a consolidated class action lawsuit in connection with a transaction whereby Intermix was to be acquired by Fox Interactive Media, a subsidiary of News Corporation. On June 14, 2006, a purported class action lawsuit, captioned Jim Brown v. Brett C. Brewer, et al., was filed against certain former Intermix directors and officers in the U.S. District Court for the Central District of California. The plaintiff asserted claims for alleged violations of Section 14a of the Exchange Act and SEC Rule 14a-9, as well as control person liability under Section 20a of the Exchange Act. The plaintiff alleged that certain defendants disseminated false and misleading definitive proxy statements on two occasions: one on Dec. 30, 2003 in connection with the stockholder vote on Jan. 29, 2004 on the election of directors and ratification of financing transactions with certain entities of VantagePoint; and another on August 25, 2005 in connection with the stockholder vote on the FIM Transaction. The complaint named as defendants certain VantagePoint related entities, the former general counsel and the members of the Intermix Board who were incumbent on the dates of the respective proxy statements. Intermix was not named as a defendant, but has certain indemnity obligations to the former officer and director defendants in connection with these claims and allegations. On Aug. 25, 2006, plaintiff amended his complaint to add certain investment banks as defendants. Intermix has certain indemnity obligations to the Investment Banks as well. Plaintiff amended his complaint again on Sept. 27, 2006, which defendants moved to dismiss. On Feb. 9, 2007, the case was transferred to Judge George H. King, the judge assigned to the LeBoyer action, on the grounds that it raises substantially related questions of law and fact as LeBoyer, and would entail substantial duplication of labor if heard by different judges. On June 11, 2007, Judge King ordered the Brown case be consolidated with the LeBoyer action, ordered plaintiffs' counsel to file a consolidated first amended complaint, and further ordered the parties to file a joint brief on defendants' contemplated motion to dismiss the consolidated first amended complaint. On July 11, 2007, plaintiffs filed the consolidated first amended complaint, which defendants moved to dismiss. By order dated Jan. 17, 2008, Judge King granted defendants' motion to dismiss the 2003 proxy claims (concerning VantagePoint transactions) and the 2005 proxy claims (concerning the FIM Transaction), as well as a claim against the VantagePoint entities alleging unjust enrichment. The FIM Transaction was the transaction whereby Intermix was to be acquired by Fox Interactive Media, a subsidiary of the company. The court found it unnecessary to rule on dismissal of the remaining claims, which are related to the 2005 FIM Transaction, because the dismissal disposed of those claims. On Feb. 8, 2008, plaintiffs filed a consolidated second amended complaint, which defendants moved to dismiss on Feb. 28, 2008. By order dated July 15, 2008, the court granted in part and denied in part defendants' motion to dismiss. The 2003 claims and the claims against the Investment Banks were dismissed with prejudice. The Section 14a, Section 20a and the breach of fiduciary duty claims related to the FIM Transaction remain against the officer and director defendants and the VantagePoint defendants. On Nov. 14, 2008, plaintiff filed a motion for class certification to which defendants filed their opposition on Jan. 14, 2009. On June 22, 2009, the court granted plaintiff's motion for class certification, certifying a class of all holders of Intermix common stock from July 18, 2005 through consummation of the FIM Transaction, who were allegedly harmed by defendants' improper conduct as set forth in the complaint. The parties have completed fact and expert discovery. On June 17, 2010, the court granted in part and denied in part defendants' summary judgment motion filed on Oct. 19, 2009. Specifically, the court denied plaintiff's motion for summary adjudication of a factual issue and denied defendants' motion to exclude plaintiff's damages expert, which was filed on Nov. 30, 2009. In the court's June 17 order, the court found that plaintiff could not proceed on any fiduciary duty claim based upon alleged violations of the duty of care, but found material issues of fact prohibiting summary judgment on alleged violations of fiduciary duty of loyalty. On plaintiff's Section 14a claim, the court found material issues of fact that prohibited summary judgment on the entire claim, but granted defendants' motion as to certain purported omissions, finding the allegedly omitted information immaterial. Further, the court granted defendants' motion as to two damage theories for the Section 14a claim, finding benefit of the bargain damages not viable and lost opportunity damages too speculative, and permitting plaintiff to proceed only based upon a theory of out- of-pocket damages. No trial date has been set yet, according to the company's Aug. 6, 2010, Form 10-Q filing with the U.S. Securities and Exchange Commission for the fiscal year ended June 30, 2010. News Corp. -- http://www.newscorp.com/-- is a diversified entertainment company with operations in eight industry segments, including Filmed Entertainment, Television, Cable Network Programming, Direct Broadcast Satellite Television, Magazines and Inserts, Newspapers and Information Services, Book Publishing and Other. The activities of News Corporation are conducted principally in the United States, the United Kingdom, Continental Europe, Australia, Asia and the Pacific Basin. Through its subsidiaries, it is engaged in the operation of broadcast television stations, and the development, production and distribution of network and television programming. The company engages in the direct broadcast satellite business through its subsidiary, SKY Italia. It also owns interests in BSkyB and Premiere, which are engaged in the direct broadcast satellite business. NIGHTHAWK RADIOLOGY: Defends Amended Securities Suit in Idaho ------------------------------------------------------------- NightHawk Radiology Holdings, Inc., defends an amended complaint captioned In re Nighthawk Radiology Holdings, Inc. Securities Litigation pending in the U.S. District Court for the District of Idaho. On Dec. 17, 2009, a putative shareholder class action lawsuit was filed against the company and certain of its former officers. The case is captioned City of Marysville General Employees Retirement System v. NightHawk Radiology Holdings, Inc., et al., Case No. CIV 09-659-N-CWD. On July 13, 2010, plaintiffs filed an amended complaint under the new caption In re Nighthawk Radiology Holdings, Inc. Securities Litigation, Master File No. 09-cv-00659 (EJL/CWD). The complaint purports to be brought on behalf of a class of persons who purchased or otherwise acquired the company's stock during the period May 2, 2007 to May 7, 2008, and asserts claims under Section 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder. Plaintiffs contend that the company and the individual defendants violated the federal securities laws by issuing false and misleading statements concerning the company's operations, business, and prospects during the purported class period, and thereby artificially increased the price of the company's stock. Plaintiffs seek unspecified compensatory damages, interest, and attorneys' fees and costs. On April 29, 2010, the court issued an order appointing Plymouth County Contributory Retirement System as lead plaintiff, and approving Plymouth's selection of the law firms Scott + Scott LLP and Holland & Hart LLP as co-lead counsel. Pursuant to a stipulated case management order, defendants had until Sept. 13, 2010 to move to dismiss the complaint, according to the company's Aug. 6, 2010, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended June 30, 2010. NightHawk Radiology Holdings, Inc. -- http://http://www.nighthawkrad.net/-- headquartered in Scottsdale, Arizona, is the nation's leading provider of professional radiology solutions. NightHawk is leading the transformation of the professional practice of radiology by providing high-quality, cost-effective radiology services to radiology groups and hospitals throughout the United States. NightHawk's suite of solutions, including its advanced, proprietary workflow technology, is reshaping the way radiology groups practice by increasing efficiencies and improving the quality of patient care. With its team of U.S. board certified, state-licensed and hospital-privileged physicians, NightHawk services medical groups twenty-four hours a day, seven days a week at approximately 1,600 hospitals in the U.S. from centralized facilities located in the United States, Australia and Switzerland. ORMAT TECHNOLOGIES: Wants Consolidated Amended Suit Dismissed ------------------------------------------------------------- Ormat Technologies, Inc., seeks to dismiss the consolidated amended class action complaint pending in the U.S. District Court for the District of Nevada. Following the company's public announcement that it would restate certain of its financial results due to a change in the company's accounting treatment for certain exploration and development costs, three securities class action lawsuits were filed in the U.S. District Court for the District of Nevada on March 9, 2010, March 18, 2010 and April 7, 2010. These complaints assert claims against the company and certain officers and directors for alleged violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. One complaint also asserts claims for alleged violations of Sections 11, 12(a)(2) and 15 of the Securities Act. All three complaints allege claims on behalf of a putative class of purchasers of company stock between May 6, 2008 or May 7, 2008 and Feb. 23, 2010 or Feb. 24, 2010. These three lawsuits were consolidated by the Court in an order issued on June 3, 2010 and the Court appointed three of the company's stockholders to serve as lead plaintiffs. Lead plaintiffs filed a consolidated amended class action complaint on July 9, 2010 that asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 on behalf of a putative class of purchasers of Company stock between May 7, 2008 and February 24, 2010. The consolidated amended class action complaint alleges that certain of the company's public statements were false and misleading for failing to account properly for the company's exploration and development costs based on the company's announcement on Feb. 24, 2010 that it was going to restate its financial results to change its method of accounting for exploration and development costs in certain respects. The consolidated amended class action complaint also alleges that certain of the company's statements concerning the North Brawley project were false and misleading and seeks compensatory damages, expenses, and such further relief as the Court may deem proper, according to the company's Aug. 6, 2010, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended June 30, 2010. Ormat Technologies, Inc. -- http://www.ormat.com/-- is the only vertically-integrated company primarily engaged in the geothermal and recovered energy power business. The company designs, develops, owns and operates geothermal and recovered energy-based power plants around the world. Additionally, the company designs, manufactures and sells geothermal and recovered energy power units and other power-generating equipment, and provides related services. The company has more than four decades of experience in the development of environmentally-sound power, primarily in geothermal and recovered-energy generation. Ormat products and systems are covered by 75 U.S. patents. Ormat has engineered and built power plants, that it currently owns or has supplied to utilities and developers worldwide, totaling approximately 1300 MW of gross capacity. Ormat's current generating portfolio includes the following geothermal and recovered energy-based power plants: in the United States -- Brady, Brawley, Heber, Mammoth, Ormesa, Puna, Steamboat, OREG 1, OREG 2 and Peetz; in Guatemala -- Zunil and Amatitlan; in Kenya -- Olkaria III; and, in Nicaragua -- Momotombo. PALM BEACH TAN: Accused in Texas Suit of Not Paying Overtime ------------------------------------------------------------ Michelle Massey, writing for The Southeast Texas Record, reports a federal class action has been filed against a chain of tanning salons for allegedly not paying its employees overtime wages. Claiming violations of the Fair Labor Standards Act, Kristin Bennington filed a lawsuit against Palm Beach Tan Inc. on Sept. 20 in the Eastern District of Texas, Sherman Division. Ms. Bennington, who was employed as an assistant store manager and a manager, accuses the defendant of paying non-exempt employees a salary to avoid paying overtime wages. She claims her job duties only constituted a small percentage of managerial duties. As an assistant manager and manager, she spent the majority of her time cleaning the tanning beds, operating the cash register, assisting customer and stocking merchandise. Therefore, Ms. Bennington argues, the positions are misclassified as exempt from the overtime requirements of the Fair Labor Standards Act. On behalf of the proposed class, Ms. Bennington is asking the court for an award of overtime wages, liquidated damages, attorney's fees and costs. Ms. Bennington is represented by Timothy M. Dortch of Cooper & Scully in Dallas. U.S. District Judge Michael H. Schneider is assigned to the case. Case No. 4:10cv00489 SENSA PRODUCTS: Accused of Selling Bogus Weight Loss Products ------------------------------------------------------------- Courthouse News Service reports that Sensa Products LLC, of El Segundo, and General Nutrition Centers sell bogus weight-loss products that claim to use "tastants," a "scent-based weight-loss product" that allegedly are "proven to help trigger the brain mechanism that signals when you are full," a class action claims in Los Angeles Superior Court. SILVER SPRING: Suit Complains About Defective Electricity Meters ---------------------------------------------------------------- Courthouse News Service reports that Silver Spring Networks installed defective "smart" electricity meters that made homeowners' bills jump by as much as 729%, a class action claims in San Mateo County Court. A copy of the Complaint in Edwards, et al. v. Silver Spring Networks, Inc., Case No. 498700 (Calif. Super. Ct., San Mateo Cty.), is available at: http://www.courthousenews.com/2010/09/28/SmartMeters.pdf The Plaintiffs are represented by: Paul R. Kiesel, Esq. KIESEL BOUCHER & LARSON LLP 8648 Wilshire Blvd. Beverly Hills, CA 90211-2910 Telephone: 310-854-4444 - and - Paul O. Paradis, Esq. Gina M. Tufaro, Esq. HORWITZ, HORWITZ & PARADIS 405 Lexington Ave., 61st Floor New York, NY 10174 Telephone: 212-986-4500 - and - Brant C. Martin, Esq. WICK PHILLIPS GOULD & MARTIN LLP 100 Throckmorton St., Suite 550 Forth Worth, TX 76102 Telephone: 817-332-7788 SPIRAL FOODS: Faces Class Action Suit in Australia Over Bonsoy -------------------------------------------------------------- Melissa Singer, writing for The Sydney Morning Herald, reports customers who claim to have fallen sick from contaminated batches of soy milk are suing the manufacturers. Bonsoy, made by Spiral Foods, was withdrawn from sale last year after 10 people, including an infant, became sick with thyroid problems. The product tested positive for elevated iodine levels, thought to result from a seaweed-derived ingredient called kombu. Spiral Foods was given the all-clear in April after the iodine levels returned to normal but a group of customers has joined a class action for compensation for ongoing health problems and time taken off work. Maurice Blackburn, the law firm running the action, is also behind the multimillion-dollar case over alleged illegal and unfair bank fees charged by the major banks. Last week it fired the first salvo by lodging a $50 million claim against ANZ in the Federal Court in Victoria. According to reports, more than 50 people who claim to have fallen sick from drinking Bonsoy contacted Maurice Blackburn and another firm, Slater & Gordon. Symptoms of excessive iodine consumption can include anxiety, hot flushes and erratic weight loss or gain. Food Standards Australia New Zealand received 38 notifications of thyroid illness believed to be linked to Bonsoy between December and March. One Sydney cafe was placed on the NSW Food Authority's name and shame list after it was caught stocking Bonsoy after a national recall was announced. The owners deny serving the milk to customers but will have their details recorded on the infamous list for 12 months. ABC News reports the case will be heard in Victoria's Supreme Court in the next few months. Bonsoy's distributors have not returned the ABC's calls. STUDENT LOAN: Being Sold to Discover for Too Little, Suit Claims ---------------------------------------------------------------- Chris Coughlin at Courthouse News Service reports that shareholders say The Student Loan Corporation is selling itself for less than half of its book value to Discover Financial Services and Citigroup. Citigroup already owns 80% of the shares of Student Loan Corp., and the buyout will give it and Discover the entire student loan business and $4 billion in outstanding private loans, according to the class action in Superior Court. Discover Financial Services announced the agreement to buy The Student Loan Corp. for $600 million, or $30 a share -- less than half of the company's book value of $65 per share, and 38% less than its liquidation value of $48 per share, according to the complaint. Citigroup owned more than 16 million shares of SLC before the buyout, according to the complaint. Named plaintiff John A. Zengel says the deal will enrich the defendants at the expense of SLC stockholders. Under terms of the deal, which was announced Sept. 17, Student Loan will sell $28 billion of its loans and assets to Sallie Mae, and $8.7 billion of its loans and assets to Citigroup. After the buyout was announced, Citigroup declared that it had "entered into definitive agreements that will result in the divestiture of its private student loan business and approximately $32 billion of its $46 billion in assets to Discover," according to the complaint. Although this will result in a $500 million after-tax loss, Fitch Ratings stated that "this loss is considered minimal in the context of [Citigroup's] core earnings and capital," according to the complaint. Although Student Loan Corp. "had experienced a downturn due to the economy, it has recently been steadily improving and was poised for significant growth," the complaint states. The class claims that the "buyout transaction is, in effect, a change-of-control of SLC, with Citigroup, as the controlling shareholder, engaging in both sides of the transaction; particularly, the acquisition of SLC's key assets for itself." The complaint adds: "had the company simply wound down its business and sold its assets separately for cash, shareholders would have obtained an almost 50% greater value for their holdings than through the buyout transaction." The class sued Student Loan Corp. and its officers and directors for breach of fiduciary duty, and Citigroup and Discover Financial Services for aiding and abetting breaches of fiduciary duties. They seek an injunction rescinding the buyout and damages and interest if it is consummated. The complaint reports mixed, but far from dismal financial results for SLC: "On July 16, 2010, SLC reported a decrease in profit for the second quarter 2010. For the quarter, net income declined to $20.82 million from $25.26 million last year. On a per-share basis, earnings fell to $1.04 from $1.26 for the comparable quarter a year ago. However, SLC's net interest income grew 33% to $94.46 million from $70.88 million last year. After provision for loan losses, net interest income more than doubled to $53.06 million from $26.06 million a year ago. Provisions for loan losses were lower at $41.40 million compared to $44.83 million last year." A copy of the Complaint in Zengel v. The Student Loan Corporation, et al., Case No. _____ (Conn. Super. Ct., Stamford Cty.), is available at: http://www.courthousenews.com/2010/09/28/StudentLoan.pdf The Plaintiff is represented by: Jeffrey S. Nobel, Esq. Wayne T. Boulton, Esq. IZARD NOBEL LLP 29 South Main St. West Hartford, CT 06107 Telephone: 860-493-6293 - and - David A.P. Brower, Esq. BROWER PIVEN 488 Madison Ave., Eight Floor New York, NY 10022 Telephone: 212-501-9000 TIM GOLDBURT: Sued for Breach of Contract, Theft and Fraud ---------------------------------------------------------- Joseph Lehey, individually and as a member of FSJ, LLC, and on behalf of himself and all other members of FSJ, LLC similarly situated and in the right of FSJ, LLC v. Tim Goldburt, et al., Case No. 112623/2010 (N.Y. Sup. Ct., New York Cty. September 24, 2010), brings claims against the defendants for breach of contract, refusal to transfer the Patents for the "Message System" and the "Medea Vodka" Trademark to the Company, Goldburt's refusal to step down as co-manager of the Company despite members of the Company voting to remove him as co-manager for misconduct relating to the Company funds (he is alleged, among other things, to have pledged the Company's $2,000,000 Citibank certificate of deposit as collateral for General's line of credit obtained from Citibank -- General defaulted and the CD was liquidated by Citibank), fraud, refusal to allow Plaintiff to inspect and photocopy the Company's financial and corporate records, and against defendants Goldburt and Sandy alone, for misappropriating, looting, wasting, embezzling and diverting Company funds for non-business purposes for their own use and benefit, and for fraudulent conveyance directly resulting from transfers -- made to defendants Goldburt, Sandy, Rubin, FSJ Imports, Ram and General -- without fair consideration. Mr. Lehey also accuses defendants Rubin and Mullins for substantially assisting defendants Goldburt and Sandy in breaching their fiduciary duties to the Company. Mr. Lehey asks the Court to order a full accounting of the Company's affairs and finances and of his investment of $7,500,000 in the Company; to direct the Defendants to provide complete and accurate copies of the Company's filed state and federal income tax returns, and to make available for Plaintiff's inspection and photocopying all of the Company's financial and business records. Mr. Lehey also demands judgment, in the alternative, rescinding his Subscription Agreement and the Operating Agreement and directing defendants to pay over to Plaintiff the entire amount of his $7,500,000 investment in the Company. Under the Operating Agreement which plaintiff and the other members of the Company executed on June 15, 2007, expenditures exceeding $50,000 require plaintiff's written consent. According to Mr. Lehey, defendants Goldburt and Sandy caused the Company to transfer funds to defendant FSJ Imports without his written consent, in breach of the Operating Agreement. Tim Goldburt's co-defendants are: Matt Sandy, David Perillo, FSJ Imports, LLC, Ram Phosphorix, LLC, Company counsel Joseph Rubin, Company accountant Kevin Mullins, AMJG, LLC, and Francis Massie. Plaintiff Lehey owns 10% of the outstanding membership interests of FSJ, LLC, a Delaware limited liability company which manufactures and distributes a unique brand of distilled spirit products under the trade name "Medea Vodka". Medea Brand Products are bottled in patented containers incorporating a wireless electronic, illuminating message system capable of displaying and transmitting personal messages, commercial advertising or other commercial content on a screen on the exterior of the bottle container. Defendant Goldburt is the registered owner and inventor of the patents or patent applications for the components of the Message System and bottle container designs while defendant Sandy is the registered owner of the "Medea Vodka" trademark. The Lehey Complaint alleges that the Patents and Trademarks are owned by the Company and that Mr. Goldburt holds the Patents in constructive trust for the Company and that Mr. Sandy holds any interest in the Trademark, as registrant or otherwise, in constructive trust for the Company. Plaintiff relates that he has made demands upon defendants Goldburt and Sandy to execute and deliver appropriate assignments of the Patents and Trademarks to the Company but Goldburt and Sandy have refused to do so. Mr. Lehey and defendants Ram Phosphorix, Mr. Sandy, Mr. Perillo, Mr. Massie, and AMJG own all of the membership interests in the Company. Defendant Joseph Rubin is the Company counsel and also holds an economic interest in defendants Ram Phosphorix and General Phosphorix. Defendant Kevin Mullins, a CPA, is the Company accountant. Plaintiff asserts no claims against AMJG, a necessary party joined as a defendant in order to afford complete relief. Plaintiff Lehey alleges that that defendants Ram Phosphorix and General Phosphorix are the alter egos of defendants Goldburt and Sandy. The Plaintiff is represented by: Jules A. Epstein, Esq. JULES A. EPSTEIN, P.C. 600 Old Country Road, Suite 505 Garden city, NY 11530 Telephone: (516) 745-1325 TOBACCO COMPANIES: Judge Scalia Stays $270MM Tobacco Suit Ruling ---------------------------------------------------------------- Jon Hood, writing for ConsumerAffairs.Com, reports Supreme Court Justice Antonin Scalia, in his role as circuit justice for the Fifth Circuit Court of Appeals, has stayed a $270 million tobacco verdict for Louisiana smokers, ruling that the lower court likely erred in failing to require that the plaintiffs show reliance on the tobacco companies' advertisements. A bit of context: each Supreme Court justice also serves as a circuit justice for at least one appellate court, a role that often presents the question of whether a stay should be granted so that the full court can hear an appeal. The case involves a suit that was brought as a class action on behalf of all Louisiana smokers, accusing several tobacco manufacturers of misleading the public about the addictive effects of nicotine. A Louisiana state court eventually gave the plaintiffs a verdict for a whopping $241 million, plus around $30 million of "accumulated interest." The money was to be paid into an account set up to fund smoking cessation programs. The defendant companies eventually petitioned for a stay pending a writ of certiorari to federal court, which is apparently in the works. Judge Scalia, conceding that the companies bore a "heavy burden" in showing that such a stay is necessary, nevertheless found that the companies had met that burden. In his opinion, Judge Scalia wrote that, while the tobacco companies had potentially been subjected to "many violations of due process," one especially stuck in his craw: in Louisiana, Judge Scalia wrote, a fraud case requires the plaintiff to prove "that the plaintiff detrimentally relied on the defendant's misrepresentations." But, according to Judge Scalia, the Louisiana court "held that this element need not be proved . . . since the defendants are guilty of "a distortion of the entire body of public knowledge" regarding tobacco, which the "class on a whole" relied on. Consequently, Judge Scalia continued, "the [Louisiana] court eliminated any need for plaintiffs to prove, and denied any opportunity for applicants to contest, that any particular plaintiff who benefits from the judgment (much less all of them) believed applicants' distortions and continued to smoke as a result." Judge Scalia's ruling is certainly a victory for the defendant companies, which previously tried unsuccessfully to get the ruling thrown out by a state court. But his opinion is more noteworthy for its sweeping language regarding class actions in general -- and what it could mean for their future. "The extent to which class treatment may constitutionally reduce the normative requirements of due process is an important question," Judge Scalia wrote, adding that the issue is reflective of what he says is "national concern of the abuse of the class action device." The alleged due process violations to which Judge Scalia refers include the inability to cross-examine every member of the class to ensure that they relied on the defendants' advertisements, inaccurate estimations of the class's size, and "constant revision of the plaintiffs' claim during the course of litigation." These concerns, along with Judge Scalia's prediction that it is "significantly possible" that the award will be reversed, suggests that the Supreme Court is looking to make sweeping changes in class action law. And a decision making class actions harder to bring would be in line with the court's recent corporate-friendly trend. That trend came to a head earlier this year, when, in Citizens United v. Federal Election Commission, the court ruled that corporations must be allowed to use general treasury funds to support political candidates, a major shift likely to change the nature of political advertising. That case, which essentially embraced the theory of "corporate personhood" -- that corporations are subject to the same rights as individual people -- offers a glimpse into class actions under the Roberts court. It's not likely to be pretty for consumers. VOLKSWAGEN GROUP: Class Suit Over Sludge Tentatively Settled ------------------------------------------------------------ Christopher Jensen, writing for The New York Times, reports The Volkswagen Group of America has tentatively settled a class-action suit claiming that the engines of nearly a half million VWs and Audis were prone to damage from sludge, and that the automaker did not provide enough help to owners. Under the agreement, Volkswagen would pay at least 50% of the cost of fixing the engines, according to documents filed in United States District Court in Boston. Judge Joseph L. Tauro is scheduled to consider whether to give final approval to the settlement in March. The vehicles involved are the 1997-2004 Audi A4 (sedan, wagon and convertible variants) and the 1998-2004 VW Passat with the 1.8- liter 4-cylinder engine. Combined, almost 480,000 vehicles are covered. Some owners complained they had to pay $4,000 to $8,000 for repairs. Sludge is a thickening of the oil created as moisture and contaminants build up and break down the oil, causing it to gel and reducing the oil flow and lubrication. The problem, according to the suit, is that the VWs and Audis have "an undersized 3.7 quart oil supply, which provides an inadequate quantity of oil to dissipate the heat" generated by the turbocharged engines. The suit also claims VW committed fraud by telling owners it was their fault for not changing the oil often enough. In agreeing to settle the case, Volkswagen Group of America, which sells VWs and Audis, denied any wrongdoing. In 2004, Volkswagen and Audi addressed the sludge problem by extending the warranty to eight years and unlimited mileage, and by promising to help consumers who could prove they changed the oil according to the manufacturer's recommendations. But some consumers complained to the Center for Auto Safety that VW and Audi rejected their claims if they missed only one oil change or were a few miles late. That left them facing expensive repairs. In a 2005 interview with The Plain Dealer of Cleveland, Len Hunt, who was then vice president of VW, said he thought the requirements for consumers to get reimbursed were too strict. "I think we were a little Teutonic in our rules," he said. "When you've got a reputation for not such stellar quality, you've to treat the customer properly. Sometimes your rules and regulations and the culture of the company can be a little bit harsh when it gets translated down to the customer level," he said. "We've got to have some latitude in there." VW then eased the restrictions on sludge claims. According to court documents, the new settlement appears to make it even easier for consumers to be reimbursed. These are the two major provisions of the tentative settlement: * The automaker will compensate owners for 100% of the repair costs if they can prove "that the last two required oil changes prior to the sludge-related problem or engine failure were performed within the recommended time and mileage intervals, with a permissible variance of 20% of the time and mileage intervals." * The automaker will compensate owners for 50% of the repair cost "where the settlement class member cannot submit proof that the last two required oil changes prior to the sludge-related problem or engine failure were performed within the recommended time and mileage." It is not yet clear how much the plaintiffs' lawyers will be paid. They are to submit a bill later this fall for consideration by the judge. The lawyers for the plaintiffs were not available or declined to discuss details of the case. A spokeswoman for VW said the company had no comment. WASHINGTON: Sanctioned by Federal Judge Over Child-Welfare Suit --------------------------------------------------------------- The Washington Post reports the federal judge overseeing the long- running class-action suit against the District's child welfare system leveled a sanction against the city Tuesday for disregarding court orders in the case. Last year, Mayor Adrian M. Fenty (D) selected a new Child and Family Services Agency director, Roque Gerald, without consulting with the plaintiffs in the case as the judge, Thomas F. Hogan, had ordered. In April, Judge Hogan found the city in contempt for that and other actions, and at a hearing last month, he said he could have forced Mr. Gerald out as director. But neither the judge nor the plaintiffs sought such a dramatic penalty, which could have caused considerable disruption at the agency. The plaintiffs proposed that the mayor be required to meet with them every six months. In his order Tuesday, Judge Hogan stopped short of that idea, instead requiring a single meeting between the plaintiffs and the mayor or the mayor's designee. In the April decision, the city was also found in contempt for failing to submit an adequate annual plan on time, and in particular for its failure to offer specific steps for improving services for older foster children aging out of the system. ********* 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, Rousel Elaine Fernandez, Joy A. Agravante, Ronald Sy, Christopher Patalinghug, Frauline Abangan 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. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *