/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/101124.mbx C L A S S A C T I O N R E P O R T E R Wednesday, November 24, 2010, Vol. 12, No. 232 Headlines ADVOCAT INC: Continues to Defend Lawsuit in Arkansas ALLIANCE ONE: Continues to Defend "Tobacco Contracts" Lawsuit AON CORP: Reports No Appeals Were Filed From ERISA Suit Dismissal AON CORP: Awaits Court Approval of Buckner Suit Settlement AQUA DOTS: Voluntary Refund Program Defeated Class Certification ASTORIA FINANCIAL: January 25 Fairness Hearing Set AT&T MOBILITY: Justices Remand Class Action to Brooke County AT&T MOBILITY: Argument in Consumer Arbitration Case Heard AVX CORP: Continues to Defend Suit on Environmental Contamination BAYER CORP: Supreme Court to Decide on Class Certification in 2011 BAYER CORP: Court Dismisses OCSPA Class Action Allegations BECKMAN COULTER: Faces Two Securities Suits in California BRP US: Recalls 1,000 Ski-Doo (R) Snowmobiles BUCKEYE PARTNERS: Seeks Approval of Broadbased Suit Settlement CALAMOS ASSET MANAGEMENT: Parties Move Lawsuit to District Court CALAMOS ASSET MANAGEMENT: Plaintiff Refiles Suit in Circuit Court CARGILL MEAT: Class Action Over Wages Set for Trial Next Month CASCADE BANCORP: Faces Firkins Class Suit in Idaho CBS CORP: Seeks Dismissal of Securities Suit in New York CELERA CORP: Continues to Defend Against "Washtenaw" Suit CELERA CORP: Has Indemnity Agreement With Life Technologies CHARLES SCHWAB: Court to Rule on Class Settlement This Week CIBC TRUST: Faces Class Action Over Trust Fund Embezzlement CLEARWIRE CORP: Awaits Ruling on Appeal in "Minnick" Suit CLEARWIRE CORP: Class Certification Briefing Set for This Quarter COLLEGE NOTRE DAME: Two More Plaintiffs Join Class Action Suit CONVERIUM HOLDING: Dutch Court Can Declare Settlement Binding DOMTAR CORP.: Faces Price-Fixing Lawsuits & Seeks Dismissal DUCATI NORTH: Sued for Violations of Consumer Protection Laws EMERGENCY MEDICAL: AMR Awaits Court Approval of Suit Settlement EMERGENCY MEDICAL: Four Wage & Hour Violations Suits Still Pending FALCONSTOR SOFTWARE: Class Action Lead Plaintiff Deadline Nears FRANKLIN AMERICAN: Sued for Non-Payment of Overtime Wage FULL SPEED: Recalls 9,300 Full Speed Ahead Gossamer Crank Sets GREEN BANKSHARES: Glancy Binkow & Goldberg Files Class Action HANOVER INSURANCE: Continues to Defend "Durand" Litigation HANOVER INSURANCE: Appeal in "Hurricane Katrina" Suit Pending HARLAND CLARKE: Ill. Court Approves Settlement in "Kitson" Suit HARMAN INTERNATIONAL: Awaits Ruling on Motion to Dismiss Suit HARMAN INTERNATIONAL: Awaits Ruling on Russell Suit Dismissal Plea HEWLETT-PACKARD: Agrees to $5MM Inkjet Settlement in N.D. Calif. HUGHES COMMUNICATIONS: Defends Consolidated Complaint in Calif. HUGHES COMMUNICATIONS: Defends Suit Over Early Termination Fees HUNTSMAN CORP: Court Sets May 2012 Hearing for Antitrust Suits HURON CONSULTING: Discovery in Consolidated Illinois Suit Ongoing INSIGHT ENTERPRISES: Motion to Dismiss Pending in Arizona Suit INTEGRYS ENERGY: Final Settlement Hearing Set for November 30 KEYCORP: Faces Two Lawsuits Alleging ERISA Violations in Ohio KINDER MORGAN: Judge Approves $200MM Class Action Settlement KKR FINANCIAL: Motion to Dismiss Amended Complaint Still Pending KOPPERS HOLDINGS: Continues to Defend Against Contamination Suit LIVE NATION: Stay on Live Concert Antitrust Litigation Lifted LIVE NATION: Motion to Decertify UPS Consumer Class Suit Pending LIVE NATION: Canadian Consumer Class Action Litigation Ongoing LIVE NATION: U.S. Consumer Class Action Litigation Ongoing LIZ CLAIBORNE: Seeks Dismissal of NY Securities Lawsuit MCAFEE INC: Motion to Dismiss Data-Pass Class Action Denied MEAD JOHNSON: Court Certifies Class in Enfamil FDUTPA Suit NEWS CORP: Parties Agree to Settle California Consolidated Suit NIGHTHAWK RADIOLOGY: Shareholder Class Suit Still Pending in Idaho NIGHTHAWK RADIOLOGY: Faces Seven vRad Merger-Related Suits ORMAT TECHNOLOGIES: Motion to Dismiss Nevada Suit Still Pending PNM RESOURCES: Appeal on Dismissal of Navajo Suit Pending QWEST CORP: Parent Continues to Defend Suit Over Retirees Benefits REACHLOCAL INC: Still Faces Class Action Suit in California SAFEGUARD SCIENTIFICS: Accused of Breach of Fiduciary Duty SCANA CORP: Awaits Court Ruling on Rights-of-Way Suit Settlement SCE&G CO: Settles "Right-of-Way" Lawsuit & Awaits Final Approval SEARS ROEBUCK: 7th Cir. Halts Repetitive Class Suits Over Dryers SEI INVESTMENTS: Unit Faces Lawsuits Over Leveraged Funds SEI INVESTMENTS: Securities Lawsuit Ongoing in East Baton Rouge SMART BALANCE: Has Yet to Answer Complaint Involving Nucoa SMART TECHNOLOGIES: May Face Securities Class Action Lawsuit SOMFY SYSTEMS: Recalls 4,600 Motorized Awnings STRYKER CORP: Securities Class Action Lawsuit Still Pending TIME WARNER: Files Motion to Dismiss Antitrust Lawsuits TIME WARNER: Class Certification Hearing Set for February 14 TOYOTA MOTOR: Judge Gives Tentative Ruling on Acceleration Cases UNITED STATES: Senate Approves Cobell Class Action Settlement WELLCARE HEALTH: Settles Suit; Estimates $200 Million Liability * EBG Sees Significant Rise in Discrimination Class Actions * Rule 23(b)(2) Class Suits Easier to Certify, Greenberg Says ********* ADVOCAT INC: Continues to Defend Lawsuit in Arkansas ---------------------------------------------------- Advocat Inc. remains a defendant in a lawsuit currently pending in the Circuit Court of Garland County, Arkansas, according to the company's November 4, 2010, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended September 30, 2010. In January 2009, a purported class action complaint was filed in the Circuit Court of Garland County, Arkansas against the Company and certain of its subsidiaries and Garland Nursing & Rehabilitation Center. The complaint alleges that the defendants breached their statutory and contractual obligations to the residents of the Facility over the past five years. The lawsuit remains in its early stages and has not yet been certified by the court as a class action. The Company intends to defend the lawsuit vigorously. ALLIANCE ONE: Continues to Defend "Tobacco Contracts" Lawsuit ------------------------------------------------------------- Alliance One Brazil Exportadora de Tobaccos Ltda. remains a defendant in an action seeking, among other things, the modification of other contractual terms historically used in the purchase of tobacco, according to Alliance One International, Inc.'s November 4, 2010, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended September 30, 2010. On June 6, 2008, Alliance One Brazil Exportadora de Tobaccos Ltda. and a number of other tobacco processors were notified of a class action initiated by the ALPAG -- Associacao Lourenciana de Pequenos Agricultrores. The class action's focus is a review of tobacco supplier contracts and business practices, specifically aiming to prohibit processors from notifying the national credit agency of producers in debt, prohibiting processors from deducting tobacco suppliers' debt from payments for tobacco, and seeking the modification of other contractual terms historically used in the purchase of tobacco. The Company presented its defense locally and the case has been transferred to the Federal Court in Brasilia. No hearing date has been set. The Company believes this claim to be without merit and intends to vigorously defend it. Ultimate exposure if an unfavorable outcome is received is not determinable, the Company said. AON CORP: Reports No Appeals Were Filed From ERISA Suit Dismissal ----------------------------------------------------------------- Aon Corporation reports that no appeals were filed from the dismissal of ERISA class action lawsuits, according to the Company's November 4, 2010, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended Sept. 30, 2010. At the time of the 2004-2005 investigation of the insurance industry by the Attorney General of New York and other regulators, putative classes filed actions against Aon in the U.S. District Court for the Northern District of Illinois under the federal securities laws and ERISA. Plaintiffs in the federal securities class action originally submitted purported expert reports estimating a range of alleged damages of $353 million to $490 million, and plaintiffs in the ERISA class actions originally submitted revised purported expert reports estimating a range of alleged damages of $74 million to $349 million. To protect against the uncertain outcome of litigation and to contain exposure to the Company, Aon settled the securities suit for $30 million in 2009 and later the ERISA suit for $1.8 million. On November 24, 2009, the Court entered a final order approving the securities settlement and dismissing the securities suit. On September 15, 2010, the Court entered a final order approving the ERISA settlement and dismissing the lawsuit. No appeals were taken from that order. AON CORP: Awaits Court Approval of Buckner Suit Settlement ---------------------------------------------------------- Aon Corporation is awaiting final court approval of its settlement of a class action lawsuit captioned Buckner v. Resource Life, according to the Company's November 4, 2010, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended September 30, 2010. The putative class action was filed in state court in Columbus, Georgia, against a former subsidiary of Aon Corporation, Resource Life Insurance Company. The complaint alleged that Resource Life, which wrote policies insuring repayment of auto loans, was obligated to identify and return unearned premiums to policyholders whose loans terminated before the end of their scheduled terms. In connection with the sale of Resource Life in 2006, Aon agreed to indemnify Resource Life's buyer in certain respects relating to this action. In October 2009, the court certified a nationwide class of policyholders whose loans terminated before the end of their scheduled terms and who Resource Life cannot prove received a refund of unearned premium. Resource Life took an appeal from that decision. Also in October 2009, Aon filed a lawsuit in Illinois state court seeking a declaratory judgment with respect to the rights and obligations of Aon and Resource Life under the indemnity agreement. In July 2010, Aon entered into settlements of both cases, subject to providing notice to the Buckner class and obtaining court approval of the Buckner settlement. Aon agreed to pay $47,750,000 on Resource Life's behalf in complete settlement with the plaintiff class in Buckner, of which a pretax expense of $37,750,000 was reflected in Income (loss) from discontinued operations before income taxes in the second quarter 2010 Condensed Consolidated Statements of Income. A portion of this payment may be returned to Aon if checks are undeliverable or some class members do not cash their settlement payments. Subject to certain limitations, the return payment, if any, would be divided 50% to Aon and 50% to a fund to be used for charitable purposes. Additionally, the settlement agreement with Resource Life provides potential future benefits from Resource Life. At this time, the amount of future payments, if any, cannot be determined and Aon says it will record any amounts when they are determinable. The Georgia court set a hearing for final approval of the settlement for November 22, 2010. AQUA DOTS: Voluntary Refund Program Defeated Class Certification ---------------------------------------------------------------- According to James C. Martin, Esq., and Colin E. Wrabley, Esq., at Reed Smith, class action defense litigators, particularly those involved in putative product mislabeling or warranty class actions, should be aware of a recent federal district court decision that accepted a creative option for defeating class certification -- the defendant's implementation of a voluntary product refund and replacement program providing a comparable remedy to what the putative class might recover in court. In re Aqua Dots Prods. Liab. Litig., 2010 WL 3927611 (N.D. Ill. Oct. 4, 2010). In so doing, the decision in Aqua Dots is in keeping with a trend in class action jurisprudence concerning the scope of Federal Rule of Civil Procedure 23(b)(3)'s requirement that class litigation be "superior to other available methods for fair and efficient adjudication of the controversy." Despite Rule 23(b)(3)'s express reference to other "methods . . . of adjudication" (emphasis added), the court in Aqua Dots adopted the majority "policy" approach to construing the superiority requirement and concluded that the existence of superior "non- judicial methods" for resolving disputes-such as voluntary refund and replacement programs-can defeat certification. The 'Textual' And 'Policy' Approaches To Construing Rule 23's Superiority Requirement The debate over the effect of a "non-judicial" resolution mechanism on Rule 23(b)(3)'s superiority requirement can be traced to Berley v. Dreyfus & Co., 43 F.R.D. 397 (S.D.N.Y. 1967), a putative securities fraud class action. The Berley court denied certification because it found that defendant's offer to refund investors the purchase price of the security at issue was superior to a class action. The court acknowledged that the refund was "not quite 'another method for . . . adjudication'" under Rule 23(b)(3). But the court rejected a literal interpretation of that provision because, "read as a whole [Rule 23] reflects a broad policy of economy in the use of society's difference-settling machinery[,]" a policy that would be negated if class litigation were permitted in the face of "readily available" refunds. A majority of courts have adopted Berley and its "policy" approach to interpreting and applying the superiority requirement. See In re Con-Agra Peanut Butter Prods. Liab. Litig., 251 F.R.D. 689, 699-700 (N.D. Ga. 2008) (denying certification where defendants offered refunds to purchasers of potentially salmonella-tainted peanut butter that likely would exceed any judicial disgorgement remedy); In re Phenylpropanolamine (PPA) Prods. Liab. Litig., 214 F.R.D. 614, 622 (W.D. Wash. 2003) (denying certification based on defendants' refund to purchasers of PPA-containing products); Chin v. Chrysler Corp., 182 F.R.D. 448, 463 (D.N.J. 1998) (denying certification based on defendant's offer to reimburse repair costs for defective anti-lock brake systems); see also 7AA Wright, Miller & Kane, Federal Practice & Procedure Sec. 1779 ("The court need not confine itself to other available 'judicial' methods of handling the controversy in deciding the superiority of the class action" because a non-judicial alternative may obviate the need for court involvement at all). A few courts have refused to follow the "policy" approach, favoring instead a literal construction of Rule 23(b)(3) that limits the superiority analysis to whether a class action would be superior to judicial methods of resolution. See Amalgamated Workers Union of Virgin Islands v. Hess Oil Virgin Islands, 478 F.2d 540, 543 (3d Cir. 1973) ("We find no suggestion in the language of Rule 23, or in the committee notes, that the value of a class suit as a superior form of action was to be weighed against the advantages of an administrative remedy"); Turner v. Murphy Oil USA, Inc., 234 F.R.D. 597, 610 (E.D. La. 2006) (rejecting argument that private settlement program for oil spill damages was "superior" because the "argument confuses the superiority standard under Rule 23[, which considers] whether the class action format is superior to other methods of adjudication, not whether a class action is superior to an out-of-court, private settlement program"). Aqua Dots The district court in Aqua Dots expressly rejected the "textual" approach to interpreting Rule 23(b)(3)'s superiority requirement in favor of the "policy" approach. The distributor of Aqua Dots, a craft kit for children, issued recalls of the kits following reports that children had fallen comatose after swallowing beads in the kits tainted with the so-called "date rape" drug, GHB. The distributor offered widely publicized refund and replacement options for purchasers, and in fact provided hundreds of thousands of refunds to purchasers on request. Plaintiffs, who purchased Aqua Dots but declined to return them for the promised refund, sought to certify a putative non-personal injury class action. Defendants argued that class certification should be denied because a class action would not be superior to the distributor's refund and replacement program. The district court agreed with defendants and denied certification. The court first identified the "threshold legal question": "whether a defendant-administered refund program may be found superior to a class action within the meaning of Rule 23(b)(3). . . ." The court acknowledged that as a textual matter, "it makes little sense to describe an out-of-court remedy as an 'adjudication' of a claim[,]" but it nonetheless adopted the "policy" approach because, in its view, that approach best served the "animating purpose of the superiority requirement"-"to ensure that the court's resources are put to efficient use. . . ." The "policy" approach fostered this purpose because "when a defendant is already offering an effective remedy for putative class members through out-of-court channels, a class action threatens to consume substantial judicial resources to no good end." The court found that the "policy" approach also best protected the interests of class members, which often diverge from those of class counsel. "Where available refunds afford class members a comparable or even better remedy than they could hope to achieve in court, a class action would merely divert a substantial percentage of the refunds' aggregate value to the class lawyers." As a result, the court reasoned, "rational class members would not choose to litigate a multiyear class action just to procure refunds that are readily available here and now." Class counsel, however, have a conflicting view because they are interested in their fees. The "policy" approach protects class members because it "allows the court [to] ensure that a putative class action is grounded in the realistic prospect of a remedy that class members could not otherwise obtain." The "textual" approach, on the other hand, "permits (or even requires) the court to certify class actions that, at best, offer no advantage for the class members, and at worst, benefit class counsel at their expense." The court rejected plaintiffs' contention that the voluntary refund program was not superior because plaintiffs had sought punitive damages and injunctive and declaratory relief, remedies not available through any out-of-court program, including defendants'. If a request for injunctive or declaratory relief "automatically render[ed] a class action superior to an out-of- court refund program[,]" the court concluded, "a plaintiff could easily fashion a request for an injunction that would accomplish nothing more than the out-of-court remedy already in place, thereby turning the superiority requirement into a trivial pleading hurdle." See also PPA, 214 F.R.D. at 615 (rejecting same argument where plaintiffs sought injunction in the form of a notice to consumers still in possession of the recalled products); Chin, 182 F.R.D. at 451 (rejecting same argument where plaintiffs sought injunction ordering defendant to offer rescission of vehicle sales contract or to recall all allegedly defective brake systems). Nor would the "theoretical availability of punitive damages-which at best offers a remote possibility of a marginally greater recovery per class member-[be] enough to support a finding of superiority when a putative class action has nothing else to recommend it." Analysis Aqua Dots and the other courts that have adopted the "policy" approach signal that several features are important to designing a superiority-defeating voluntary refund program. First, the refund or replacement option presented to purchasers must be comparable, if not superior, to the remedy that could be recovered in court- illusory promises of private redress will not suffice. Second, the offered refund must be widely and readily available to purchasers-roadblocks to obtaining the refund will undermine its claim of superiority over a judicial remedy (though note that in PPA, the court was unmoved by plaintiffs' protest that a requirement that they produce proof of purchase was unduly burdensome because such a requirement was an "extraordinarily commonplace practice amongst retailers"). Third, the refund or replacement option must be widely publicized and clearly explained so that putative class member purchasers likely will become aware of the private remedy and easily understand how to obtain it (though note that the court in In re Con-Agra held that the standard for sufficient notice of a voluntary program was not that for notice of a class action suit.). And fourth, although not itself a feature of a refund program, proof that a significant number of refunds already have been paid out will increase the likelihood that a court will find the program superior to a class action because it will substantiate the effectiveness and publicity of the program. One could envision, for example, a voluntary refund program including these features that might defeat certification of a putative product mislabeling class. If the mislabeled products retain value to their purchasers despite the mislabeling, the defendant manufacturer might design a voluntary refund and replacement program that offers purchasers the option either to (a) complete a short refund form in exchange for 50 percent of what they paid for the product or (b) return the mislabeled product in exchange for the same, properly labeled product, or, if possible, a comparable but different product. The manufacturer would want to take steps to ensure the program is widely publicized by, for example, informing the public of the program on its company Web site, mobilizing its public relations resources to issue press releases and to convey the existence of the program to national print publications and major news outlets, and otherwise broadly advertising the program. The manufacturer also would want to be sure that the program is clearly explained to purchasers, easy to access (perhaps by creating a web-based intake system for claimants), and provides the promised refund or replacement through a streamlined procedure that reduces delay and minimizes the possibility that purchasers rightfully entitled to the refund or replacement are turned away. Indeed, it is possible to extend this reasoning and approach to any sort of product defect or consumer fraud lawsuit (including those related to financial, mortgage, or insurance products) where the class complaints generically relate to not having received fair value for what was purchased, or where a replacement product or service could provide a substitute for the consumer good, service or product that was purchased. Reed Smith represents many of the world's leading companies in complex litigation and other high-stakes disputes, cross-border and other strategic transactions, and crucial regulatory matters. ASTORIA FINANCIAL: January 25 Fairness Hearing Set -------------------------------------------------- If You Repaid A Residential (Not Commercial) Mortgage Loan, Cooperative Loan, Home Equity Loan Or Home Equity Line Of Credit To Astoria Federal Savings And Loan Association, Astoria Federal Mortgage Corporation Or Long Island Savings Bank, FSB, Anytime Between March 16, 1998 And July 30, 2010, Please Read This Notice Carefully, As It Describes A Class Action Settlement That May Affect Your Rights. A federal court authorized this Notice. This is not a solicitation from a lawyer. IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NEW YORK DAVID McANANEY, CAROLYN McANANEY, JOHN REILLY, CONSTANCE REILLY, PHILIP RUSSO, CYNTHIA RUSSO and GEOFFREY HORN, individually and on behalf of all others similarly situated, Plaintiffs, v. Civil Action No. CV-04-1101 ASTORIA FINANCIAL CORPORATION, ASTORIA Hon. Joseph F. Bianco, USDJ FEDERAL SAVINGS AND LOAN ASSOCIATION, Hon. William D. Wall, USMJ ASTORIA FEDERAL MORTGAGE CORPORATION, LONG ISLAND BANCORP, INC. and LONG ISLAND SAVINGS BANK, FSB, Defendants. What is the Lawsuit About? In this class action (the "Lawsuit"), Plaintiffs, individually and on behalf of the Class (as defined below) allege that Defendants improperly demanded and collected certain fees (the "Disputed Fees") from borrowers who repaid residential (but not commercial) mortgage loans, cooperative loans, home equity loans or home equity lines of credit, when the Disputed Fees were either prohibited by contract or state or federal laws. The Disputed Fees consist of the following fees listed on payoff letters or payoff statements sent by Defendants or on Defendants' behalf by their loan servicer, Dovenmuehle Mortgage, Inc. ("DMI"): 1) Atty Doc Prep Fee a/k/a Satisfaction Fee; 2) Facsimile Fee a/k/a Fax / Fed Ex Fee; 3) Recording Fee a/k/a County Clerk Fee; 4) UCC-3 Termination Fee; and 5) Legal Attendance Fee a/k/a Legal Fee paid directly to any of the Defendants. It is not alleged that borrowers were required by Defendants to pay each of the Disputed Fees. In 2006, the Court certified the Lawsuit as a class action. Defendants have denied and continue to deny any and all allegations of wrongdoing, liability or unlawful conduct whatsoever in the Third Amended Class Action Complaint filed in the Lawsuit. In 2009, defendants Astoria Financial Corporation ("AFC") and Long Island Bancorp, Inc. ("LIB") were dismissed by the Court from the Lawsuit. In 1998, defendant Long Island Savings Bank, FSB merged with and into defendant Astoria Federal Savings and Loan Association and thereafter ceased to separately exist. After more than six years of litigation, and before the Court ultimately decided this case in favor of Plaintiffs or Defendants, on July 30, 2010, Plaintiffs and Defendants agreed to a settlement (the "Settlement") to resolve this class action. The terms of the Settlement are contained in a Stipulation and Agreement of Class Action Settlement (the "Stipulation"), which is available for review at www.AstoriaFederalClassSettlement.com The Plaintiffs and Class Counsel think the Settlement is fair and reasonable for all Class members. Members of the Class that paid any Disputed Fee to any Defendant between March 16, 1998 and July 30, 2010 (the "Class Period"), and who do not request to be timely excluded from the Settlement, are entitled to submit a claim to be eligible to receive a cash payment as described herein. Who is Included in the Class? On September 19, 2006, the Court certified the Lawsuit as a class action and certified the following class (the "Class") of past and current residential borrowers of Defendants: All consumers or borrowers in the United States who had or currently have a mortgage or residential loan originated or purchased by any of the defendants and who wrongfully paid or will be demanded to pay closing fees, satisfaction fees, discharge fees, prepayment fees (or penalties), refinance fees (or penalties), attorney document preparation fees, facsimile fees, recording fees and any other fees, charges, false debts or finance charges in contravention of their mortgage or loan contracts or applicable laws. The Court's decision and order certified Plaintiffs as representatives for the Class and their counsel, Whalen & Tusa, P.C. and Law Offices of G. Oliver Koppell & Associates, as counsel for the Class ("Class Counsel"). What are the Terms of the Settlement? In exchange for the Settlement and dismissal of the Lawsuit, Defendants have agreed to pay and create a common settlement fund of $7,850,000.00 (the "Common Settlement Fund"), which will be used, after payment of settlement administration costs, court- approved incentive awards to the Plaintiffs, and payment of attorneys' fees and expenses to Class Counsel, to make payments to Class members who paid any Disputed Fees during the Class Period and who timely complete and submit a valid Proof of Claim and Release Form (the "Claim Form"). In addition, at various points during the course of the Lawsuit, Defendants or their servicing agent, DMI, stopped collecting some of the Disputed Fees and corrected a software error that caused the Atty Doc Prep Fee a/k/a Satisfaction Fee to be mistakenly imposed on certain Class members. To address allegations that Defendants collect Recording Fees a/k/a County Clerk Fees to file lien releases that are also collected by title insurers or their agents, Defendants have agreed to remind certain title insurers of Defendants' Recording Fee a/k/a County Clerk Fee collection policies. Unless you exclude yourself from this Settlement by January 11, 2011, you will remain a member of the Class and if the Settlement is finally approved by the Court you will release your claims in the Lawsuit against Defendants, which means you cannot sue, continue to sue, or be part of any lawsuit against the Defendants or the "Released Parties" about the "Released Claims," including "Unknown Claims" as those terms are defined in the Claim Form enclosed with this Notice and in the Stipulation. If you remain a member of the Class, all of the Court's orders will apply to you and legally bind you. The "Releases" are set forth in Paragraphs 29, 30, 38, 74 of the Stipulation, available for review at www.AstoriaFederalClassSettlement.com and in the accompanying Claim Form. Why Did I Receive This Notice? You received this Notice because Defendants reasonably believe based on their records and/or those of their loan servicer that you are a Class member who paid Disputed Fees during the Class Period. How Will Payments to Each Class Member from the Common Settlement Fund be Calculated? All Class member claims will be paid from the Common Settlement Fund based on the Total Disputed Fees Paid (as listed in the Claim Form) by all Class members who timely submit a valid Claim Form (after distributions from the Common Settlement Fund approved by the Court (the "Net Common Settlement Fund")). If sufficient funds remain in the Net Common Settlement Fund, Class members who timely submit a valid Claim Form will receive 100% of their Total Disputed Fees Paid. If insufficient funds remain in the Net Common Settlement Fund to pay 100% of Class member claims, all timely and valid Class member claims will be reduced in equal percentages until the total claims paid equals the Net Common Settlement Fund. The Court may, without further notice to the Class, modify the plan of allocation, which modification will not affect the validity or finality of the proposed Settlement. How Can a Class Member Make a Claim Under the Terms of the Settlement? To receive a payment under the Settlement, a Class member must make a claim to the Settlement Administrator in any of the following three ways: 1) by completing, certifying and mailing the Claim Form included with this Notice to the Settlement Administrator at Astoria Federal Class Settlement, c/o Rust Consulting, Inc., P.O. Box 2387, Faribault, MN 55021-9087; 2) by completing, certifying and sending by facsimile the Claim Form included with this Notice to the Settlement Administrator at (800) 441-7025; or 3) by completing, certifying and electronically submitting the Claim Form to the Web site maintained by the Settlement Administrator for this Settlement, www.AstoriaFederalClassSettlement.com Please submit only one Claim Form for each Loan Number. TO BE VALID, ALL CLAIMS MUST BE POSTMARKED OR SUBMITTED TO THE SETTLEMENT ADMINISTRATOR NO LATER THAN JANUARY 11, 2011. Can I Exclude Myself From the Settlement? Yes. If you are a member of the Class, you may request exclusion by mailing a letter requesting to be "excluded" from the Settlement to the Settlement Administrator at Astoria Federal Class Settlement, c/o Rust Consulting, Inc., P.O. Box 2387, Faribault, MN 55021-9087. If you exclude yourself, you will keep any right you may have to sue or continue to sue the Defendants and the other Released Parties about the Released Claims, and you will not be eligible to a refund or payment of any Disputed Fees under the Settlement. TO BE VALID, ALL EXCLUSION REQUESTS MUST BE POSTMARKED NO LATER THAN JANUARY 11, 2011. Can I Object to the Settlement or Class Counsel's Request for Attorneys' Fees and Expenses? Yes. If you are a member of the Class and do not request exclusion, you or your attorney on your behalf and at your own expense, may object to the Settlement or Class Counsel's request for attorneys' fees and expenses. Such objection must be in writing and shall contain a caption or title that identifies it as "Objection to Class Settlement in McAnaney v. Astoria Federal Savings and Loan Ass'n, EDNY Civil Action No. 04-cv-1101" and shall also contain information sufficient to identify the objecting Class member and their residential mortgage, cooperative, home equity or home equity line of credit loan number, as well as a clear and concise statement of the Class member's objection, the facts supporting the objection, and the legal grounds on which the objection is based. If an objecting party chooses to appear at the Fairness Hearing (as defined and discussed more fully below), then a notice of intention to appear, either in person or through an attorney, at the objector's own expense, must be filed with the Court and list the name, address and telephone number of the attorney, if any, who will appear. TO BE VALID, ALL OBJECTIONS AND NOTICES TO APPEAR AT THE FAIRNESS HEARING MUST BE POSTMARKED NO LATER THAN JANUARY 11, 2011 AND MAILED TO THE COURT AND THE FOLLOWING ATTORNEYS: To the Court: U.S. District Court for the Eastern District of New York To Class Counsel: To Defendants' Counsel: Clerk of Court Joseph S. Tusa Alfred W.J. Marks WHALEN & TUSA, P.C. 33 West 19th Street, 4th Floor 7 Times Square 100 Federal Plaza New York, NY 10011 DAY PITNEY LLP Times Square Tower Central Islip, NY 11722 New York, NY 10036 What if I Do Nothing? If you do nothing, you will not receive any payment from the Common Settlement Fund. If the Court finally approves the Settlement, you will be precluded from starting a lawsuit, continuing a lawsuit, or being part of any other lawsuit against the Defendants and the other Released Parties about the Released Claims, including the Unknown Claims, ever again. Who Represents the Class? Class Counsel represent Plaintiffs and were certified by the Court as counsel for the Class. Class members have the right to hire their own lawyers, at their own expense, although there is no obligation to do so, and Class Counsel will represent all members of the Class in the Lawsuit who do not object or retain their own lawyer. How Will Class Counsel Be Paid? Class Counsel have not been paid for representing Plaintiffs and the Class during the Lawsuit. Class Counsel will make an application to the Court for the payment of attorneys' fees not to exceed 30% of the value of the Settlement, which Class Counsel believes is valued in excess of twelve million dollars ($12,000,000.00), but in an amount not to exceed four million dollars ($4,000,000.00). Class Counsel will also request the reimbursement of unpaid expenses incurred during the Lawsuit. When will the Court Hold a Hearing to Consider the Settlement and Related Issues? The Honorable Joseph F. Bianco, a District Judge in the United States District Court for the Eastern District of New York (the "Court"), will hold a hearing (the "Fairness Hearing") at the federal courthouse located at 100 Federal Plaza, Central Islip, NY 11722 on January 25, 2011 to consider whether to approve the Settlement, Class Counsel's application for attorneys' fees and the reimbursement of expenses, the application for incentive awards to Plaintiffs, Class member objections, and other matters related to the Settlement. You or your lawyer, at your own expense, may appear at the Fairness Hearing but do not have to do so. If you filed a timely objection, the Court will consider it whether or not you attend the Fairness Hearing in person. Any changes to the date or time of the Fairness Hearing will be posted on the Settlement Web site, www.AstoriaFederalClassSettlement.com but will not be the subject of additional notice by mail. How Can a Class Member Obtain More Information? Class members can ask questions, complete a Claim Form and review documents concerning the Lawsuit at www.AstoriaFederalClassSettlement.com by calling the Settlement Administrator toll-free at (877) 895-9274, or by writing the Settlement Administrator at Astoria Federal Class Settlement, c/o Rust Consulting, Inc., P.O. Box 2387, Faribault, MN 55021-9087. PLEASE DO NOT CONTACT THE COURT OR CLERK'S OFFICE REGARDING THIS NOTICE. BY ORDER OF THE COURT AT&T MOBILITY: Justices Remand Class Action to Brooke County ------------------------------------------------------------ Steve Korris, writing for The West Virginia Record, reports West Virginia's Supreme Court of Appeals interrupted a class action against AT&T Mobility so Brooke Circuit Judge Ronald Wilson can think twice about his jurisdiction. On Oct. 28, all five Justices directed Judge Wilson to review AT&T's motion for enforcement of an arbitration clause in a contract former customer Charlene Shorts signed. Judge Wilson declared the clause unconscionable because it prohibited class actions, but the Justices found he failed to engage in meaningful analysis. "In reviewing the motion, the trial court is required to make specific findings on the issue of unconscionability," they wrote in an unsigned opinion. Ms. Shorts seeks to represent all West Virginians who signed contracts with Cingular or AT&T since 2002. She set up an account with AT&T in 2003, and failed to make timely payments. AT&T terminated the contract, added an early termination fee of $150, and sold the debt to Palisades Collection. Palisades filed a complaint against Ms. Shorts in Brooke County magistrate court in 2006, seeking to recover more than $1,000 in debt and interest. Ms. Shorts denied owing anything and asserted a counterclaim under the state Consumer Credit and Protection Law. Palisades removed the case to circuit court, where Ms. Shorts added AT&T as defendant and proposed a class action seeking damages, debt cancellation and attorney's fees. AT&T removed the case to Federal Court pursuant to the Class Action Fairness Act, which steers most new class actions to federal courts. District Judge Irene Keeley remanded it to Brooke County, and appeals judges of the U.S. Fourth Circuit in Richmond affirmed the decision. AT&T sought review at the U.S. Supreme Court, and the Court denied it. AT&T then asked Judge Wilson to compel arbitration, not under the contract Ms. Shorts and AT&T signed but under one she and Cingular signed in 2005. Last December, Judge Wilson declared prohibition of class actions unconscionable under Dunlap v. Berger, a Supreme Court decision from 2002. The Justices found he misinterpreted the decision. "Standing alone, the lack of class action relief does not render an arbitration agreement unenforceable on grounds of unconscionability under this Court's decision in Dunlap," they wrote. They wrote that according to Dunlap, every dispute must be examined on the basis of language in a particular contract in conjunction with specific facts. They told Judge Wilson to examine relative positions and bargaining power of the parties. They told him to specify unfair terms in the contract. They told him to inquire whether the contract prevents a claimant from vindicating rights and whether costs of arbitration are burdensome. They apparently answered the last question for him. "Ms. Shorts bears no costs with regard to an arbitration proceeding," they wrote. They wrote that the contract provides a minimum recovery of $10,000 for a customer whose arbitration award exceeds the company's last settlement offer. Jeffrey Wakefield, of Flaherty, Sensabaugh and Bonasso in Charleston, represented AT&T, along with Archis Parasharami and Evan Tager of Washington, D.C. Robert Bailey, William Wilmoth, and Michael McCarthy, all of Steptoe and Johnson in Charleston, represented Palisades Collections. Christopher Regan, James Bordas Jr., and Jason Causey, all of Bordas and Bordas in Wheeling, represented Ms. Shorts, along with Thomas McIntire of Wheeling. Chanler Langham, Jonathan Bridges, and William Merrill, all of Susman Godfrey in Dallas, Texas, also represented Ms. Shorts. AT&T MOBILITY: Argument in Consumer Arbitration Case Heard ---------------------------------------------------------- Lewis S. Wiener, Esq., Gail L. Westover, Esq., Brendan Ballard, Esq., Wilson G. Barmeyer, Esq., and Evan J. Taylor, Esq., at Sutherland Asbill & Brennan LLP, writing for the firm's Sutherland's Legal Alert, report that on November 9, 2010, the U.S. Supreme Court heard the much-anticipated oral argument in AT&T Mobility LLC v. Concepcion. The November 12, 2010 edition of the Class Action Reporter ran a story on the hearing. The Concepcions, who entered into a wireless service contract with AT&T, filed a class action against the company in 2006 alleging various violations of California's consumer protection statutes. AT&T moved to compel individual arbitration of the dispute pursuant to the contract's arbitration agreement, which contained a class action waiver. The U.S. District Court for the Southern District of California denied the motion, finding the agreement unconscionable under California law because it precluded class actions. The Ninth Circuit affirmed. Certiorari was granted to decide "[w]hether the Federal Arbitration Act ["FAA"] preempts States from conditioning the enforceability of an arbitration agreement on the availability of particular procedures -- here, class-wide arbitration -- when those procedures are not necessary to ensure that the parties to the arbitration agreement are able to vindicate their claims." Sutherland's Legal Alert on the grant of certiorari is available at http://is.gd/hwETX Counsel for AT&T focused the Court's attention on the FAA's "revocation savings clause." Section 2 of the FAA provides that an arbitration agreement may be held unenforceable only on such grounds as exist for the revocation of any contract. The company argued that a law that renders an arbitration agreement unconscionable if it precludes class proceedings does not apply to contracts generally and runs afoul of the FAA. The Court, however, questioned AT&T's interpretation of the "any contract" language. Justice Ginsburg noted that the FAA was enacted to ensure that courts would not favor the judicial forum over the arbitral forum and, consistent with that purpose, California's unconscionability analysis applies equally to judicial class action waivers and class arbitration waivers. AT&T maintained that the test for FAA preemption is not whether a law applies equally to arbitration and litigation. If that were the case a state could require full discovery, a judge, a jury, and application of the federal or state rules of evidence and procedure in every arbitration-requirements that, though equally applicable to court proceedings, would clearly discriminate against arbitration, in violation of the FAA. In response, counsel for Concepcion asserted that the class waiver at issue transforms the arbitration agreement from a forum selection clause into an exculpatory clause that effectively immunizes AT&T from large-scale liability for violations of state law. Justices Roberts and Alito expressed their skepticism, questioning whether an inability to represent the interests of third parties in arbitration could form the basis for a finding of unconscionability, particularly where the terms of the arbitration agreement allow individual rights to be vindicated in a bilateral proceeding. It was, however, Justice Ginsburg who posed a key question for many since the Court's April 27, 2010, decision in Stolt-Nielsen S.A. v. AnimalFeeds Int'l Corp.: "So why isn't Stolt-Nielsen dispositive in this case?" In Stolt-Nielsen, the Supreme Court held that a party to an arbitration agreement cannot be compelled to submit to class arbitration unless the party explicitly agrees to do so. (Sutherland's Legal Alert on the Stolt-Nielsen decision is available at http://is.gd/hwFd5)Counsel for Concepcion attempted to distinguish Stolt-Nielsen by arguing that its reach is limited to contract interpretation, not contract enforceability. Justice Ginsburg seemed unconvinced, emphasizing that "here you have an unwilling defendant who doesn't want class arbitration." Throughout the argument, the Court pushed the parties to define a generally applicable test that would enable it to distinguish contract law defenses that are preempted under the FAA from those that are not, particularly where a defense may appear on its face to be neutral. As Justice Sotomayor asked Concepcion's counsel, "How would you propose to distinguish between facially neutral contract law defenses that implicitly discriminate against arbitration and those that do not? What's the test you would use to tell the difference between the two?" That question has plagued courts confronted with challenges to the enforceability of arbitration agreements since enactment of the FAA, and neither side's responses appeared to satisfy the Justices. Because courts in many states have held that class action waivers may be found unconscionable under state contract unconscionability principles, the Supreme Court's decision has the potential to mark a significant shift in the arbitration arena. It is expected that the decision will be issued in the Spring of 2011. For more information on the possible implications of Concepcion and other recent Supreme Court decisions addressing arbitration and class action waivers, Sutherland's article "Supreme Court's 2009-2010 term sets up showdown over class-action waivers in arbitration agreements" is available at http://is.gd/hwFtS Sutherland Asbill & Brennan LLP is a law firm with global reach known for solving challenging business problems and resolving sophisticated legal issues for many of the world's largest companies. Founded in 1924, the firm handles matters throughout the United States and worldwide. Seven major practice areas -- corporate, financial services, energy and environmental, intellectual property, litigation, real estate, and tax -- provide the framework for an extensive range of focus areas, allowing Sutherland attorneys to serve a diverse client base that ranges from small and medium-sized start-up businesses to a significant number of Fortune 100 companies. AVX CORP: Continues to Defend Suit on Environmental Contamination ----------------------------------------------------------------- AVX Corporation remains a defendant in an action in South Carolina arising from alleged migration of certain pollutants to areas adjacent to the company's property, according to the company's November 4, 2010, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended September 30, 2010. In September 2007, the company received notice from Horry Land Company, the owner of property adjacent to the company's Myrtle Beach, South Carolina factory, that Horry Land Company's property value had been negatively impacted by alleged migration of certain pollutants from the company's property and demanding $5,400 in compensatory damages, exclusive of costs that have not been determined. The company investigated the allegations and determined that the demanded payment was not justified and that issues of liability, among other issues, exist under environmental laws. As a result, in October 2007, the company filed a declaratory judgment action in United States District Court for the District of South Carolina under the CERCLA and the Federal Declaratory Judgment Act, seeking a declaration that the company is not liable for the property damages claimed by Horry Land Company and for a determination and allocation of past and future environmental response costs. Horry Land Company has asserted its claims in this suit and it is now proceeding. In addition, two other suits have been filed against the company relating to the same contamination. One suit was filed in the South Carolina State Court on November 27, 2007 by certain individuals seeking certification as a class action which has not yet been determined. The other suit is a commercial suit filed on January 16, 2008 in South Carolina State Court by John H. Nance and JDS Development of Myrtle Beach, Inc. Both of these suits are pending in South Carolina state court. AVX has also sought to join the United States Air Force as a potentially responsible party. The company intends to defend vigorously the claims that have been asserted in the three related lawsuits. BAYER CORP: Supreme Court to Decide on Class Certification in 2011 ------------------------------------------------------------------ David M. Simon, Esq., at Wildman Harrold Allen & Dixon LLP, reports that in August 2001, George McCollins filed a putative class action in West Virginia state court against Bayer and other defendants. Mr. McCollins sought to represent a West Virginia class that alleged claims based on the sale of Baycol, a cholesterol lowering medication. After defendants removed the case to federal court, it was consolidated through multidistrict litigation with thousands of other Baycol cases in Minnesota. In September 2001, Kevin Smith and two others filed a similar action in West Virginia state court against Bayer and other defendants. Defendants could not remove Smith to federal court because two West Virginia citizens were defendants, destroying diversity jurisdiction. In August 2008, defendants in McCollins moved the federal court to deny certification of the proposed West Virginia class and to enter summary judgment. The federal court granted both motions. There was no appeal. In September 2008, the Smith plaintiffs asked the West Virginia state court to certify the West Virginia class they proposed to represent. Defendants responded by asking the federal court that had decided McCollins to enjoin the Smith plaintiffs from litigating their request for class certification. Defendants contended that the Smith plaintiffs were members of the proposed McCollins class, and the federal court's decision in McCollins barred members of the proposed McCollins class from re-litigating in state court whether the same class should be certified. The federal court held that it had personal jurisdiction over the Smith plaintiffs because they were members of the proposed McCollins class, and the "relitigation exception" of the Anti- Injunction Act permitted the federal court to issue the requested injunction pursuant to the All Writs Act. The federal court then issued the injunction, finding that the Smith plaintiffs were collaterally estopped from seeking to certify the same class that the federal court refused to certify in McCollins. The Eighth Circuit Court of Appeals affirmed the order granting the injunction. In re Baycol Products Litig., 593 F.3d 716 (8th Cir. 2010). The Smith plaintiffs then petitioned the United Sates Supreme Court for a writ of certiorari, asserting that the McCollins federal court could not exercise personal jurisdiction over them based on their membership in a class that was not certified, and the Anti-Injunction Act and the All Writs Act do not authorize the issuance of an injunction against their litigation of class certification issues in state court. On September 28, 2010, the Supreme Court granted the petition and decided to review the Eighth Circuit's ruling. A decision in Smith v. Bayer Corp., No. 09-1205 is likely in 2011. The decision is expected to determine whether a defendant that defeats the certification of a class in a federal court case may use that decision to preclude certification of the same class in a state court case. Wildman Harrold Allen & Dixon LLP is a 200-attorney national law firm. It was founded in 1967 by Max Wildman, Bernard Harrold, Thomas D. Allen, and Stewart S. Dixon. BAYER CORP: Court Dismisses OCSPA Class Action Allegations ---------------------------------------------------------- Michael R. Blankshain, Esq., at Wildman Harrold Allen & Dixon LLP reports that in McKinney v. Bayer Corp., 2010 WL 3834327 (N.D. Ohio, Sept. 30, 2010), plaintiff alleged that Bayer falsely advertised that its One-A-Day Men's Health and One-A-Day Men's 50+ Advantage vitamins promoted prostate health and could reduce the risk of prostate cancer. Alleging he purchased the vitamins in reliance on these false representations, plaintiff asserted claims for violations of Ohio's consumer fraud statutes and for breach of warranty. He sought to represent a class of all persons who purchased the vitamin products in Ohio. Bayer moved to dismiss the Ohio Consumer Sales Practices Act (OCSPA) class action claim, arguing that the OCSPA allows a consumer class action only if the defendant acted with prior notice that its conduct was deceptive or unconscionable. Ohio Rev. Code Sec. 1345.09(B). The requisite notice must be in the form of (1) a rule adopted by the Ohio Attorney General, or (2) a judicial decision involving substantially similar conduct. Id. Bayer moved to dismiss the class action claim because plaintiff had not alleged that Bayer's conduct had been previously declared deceptive or unlawful. Plaintiff countered that the Supreme Court's decision in Shady Grove Orthopedic Associates, P.A. v. Allstate Ins, Co., ___ S. Ct. ___, 2010 WL 1222272 U.S. (2010), precluded the court from applying the state's prohibition on class actions. In Shady Grove, a divided Supreme Court addressed a motion to dismiss a class action pursuant to a New York law, N.Y. Civ. Prac. Law Ann. Sec. 901(b), that prohibited class actions in suits seeking penalties or statutory minimum damages. In a 5-4 decision, the Supreme Court ruled that the New York provision did not preclude a federal district court sitting in diversity from entertaining a class action under Federal Rule of Civil Procedure 23. In an opinion by Justice Scalia, four justices found that Rule 23 was purely procedural and, as such, would prevail over any state law, whether substantive or procedural. Accordingly, the federal district court should apply Rule 23, not the New York law, and deny the motion to dismiss. Justice Stevens cast the deciding fifth vote that prevented application of the New York class action ban, but he did not agree with Justice Scalia's reasoning. According to Justice Stevens's formulation, even though it is procedural, Rule 23 cannot be applied to displace a state law that is nominally procedural "but is so intertwined with a state right or remedy that it functions to define the scope of the state- created right." 2010 WL 1222272 at *16. Because the New York rule before the Court was not such a state law, Justice Stevens agreed the case could proceed under Rule 23. Applying Shady Grove to the McKinney case, the court first determined Shady Grove's holding by using the Supreme Court's "narrowest grounds" rule: "When a fragmented Court decides a case and no single rationale explaining the result enjoys the assent of five Justices, the holding of the Court may be viewed as that position taken by those Members who concurred in the judgments on the narrowest grounds." Marks v. United States, 430 U.S. 188, 193, 97 S.Ct. 990, 51 L.Ed.2d 260 (1977). Under this "narrowest grounds" rule, Justice Stevens's opinion, and not the sweeping pronouncement of Justice Scalia, would control. Applying Justice Stevens's reasoning, the court concluded that the Ohio limitation on class actions was a substantive limitation on the right to recover for consumer fraud, a right created within the same statute that imposed the limitation. Applying Federal Rule 23 to allow a class action would alter the balance of substantive rights under Ohio law and would therefore exceed the power conferred by the Rules Enabling Act. The McKinney court relied on two recent district court opinions to support its conclusion. In re Whirlpool Corp. Front-Loading Washer Prods. Liab. Litig., 2010 U.S. Dist. LEXIS 69254, *6-8 (N.D. Ohio July 12, 2010) (dismissing the Ohio Consumer Sales Practices Act class action); Bearden v. Honeywell Int'l Inc., 2010 U.S. Dist. LEXIS 83996, *25-26 (M.D. Tenn. Aug. 16, 2010) (dismissing Tennessee Consumer Protection Act class action). McKinney is an important indicator of how the lower federal courts will interpret Shady Grove and suggests state imposed limitations on class actions will remain viable defenses to many putative federal class actions. Wildman Harrold Allen & Dixon LLP is a 200-attorney national law firm. It was founded in 1967 by Max Wildman, Bernard Harrold, Thomas D. Allen, and Stewart S. Dixon. BECKMAN COULTER: Faces Two Securities Suits in California --------------------------------------------------------- Beckman Coulter, Inc., is a defendant in two purported class actions in California against the company and certain of its officers, according to the company's November 4, 2010, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended September 30, 2010. On September 3, 2010 and September 7, 2010, City of Southfield Fire and Police Retirement System and Warren Pinchuck, respectively, filed in the U.S. District Court in the Central District of California separate purported class actions against the company, Scott Garrett, the Company's former Chairman of the Board, former President and former Chief Executive Officer, and Charles P. Slacik, the Company's Senior Vice President and Chief Financial Officer, alleging federal securities laws violations. The complaint includes two counts: (i) violation of Section 10(b) of the Exchange Act of 1934, as amended, and Rule 10b-5 thereunder against all defendants, and (ii) violation of Section 20(a) of the Exchange Act of 1934, as amended, against the individual defendants. The Purported Class Actions assert identical allegations, including that, between July 31, 2009 and July 22, 2010, the defendants allegedly issued materially false and misleading statements regarding the company's business and financial results, and allegedly failed to disclose issues related to the company's troponin test kits and quality issues. The Purported Class Actions seek unspecified damages, attorneys' fees and costs, and unspecified injunctive relief. The company intends to vigorously defend itself against these claims and any additional related lawsuits that may be filed. BRP US: Recalls 1,000 Ski-Doo (R) Snowmobiles --------------------------------------------- The U.S. Consumer Product Safety Commission, in cooperation with BRP US Inc., of Sturtevant, Wisconsin, announced a voluntary recall of about 1,000 Ski-Doo (R) Snowmobiles. Consumers should stop using recalled products immediately unless otherwise instructed. Electrostatic changes can accumulate and spark in the fuel tank when the engine is left idling, posing an explosion hazard that could result in serious injuries or death. The firm has received three reports of explosions, one involving minor burns to face and hands. This recall involves Ski-Doo (R) model names listed below. Model names are located on the side panel. Model Year Name Color --------- ---- ----- 2005 Expedition TUV 600 H.O. SDI Black or Seashore 2007 Skandic SWT V-800 Yellow 2008 Skandic SUV 600 HO SDI Black 2008 Skandic SWT V-800 Yellow and Black 2009 Skandic SWT V-800 Yellow and Black 2010 Skandic SWT V-800 Yellow and Black Pictures of the recalled products are available at: http://www.cpsc.gov/cpscpub/prerel/prhtml11/11709.html The recalled products were manufactured in Finland and sold through Ski-Doo dealers nationwide from March 2004 through March 2010 for between $9,000 and $10,000. Consumers should stop using these vehicles immediately and contact any Ski-Doo dealer to schedule an appointment for a free repair. Registered owners have been directly notified about this recall by mail. All models already repaired under previous recalls due to laceration hazard from projectiles, fire hazard, or explosion must be repaired again. For more information, contact BRP toll-free at (888) 638-5397 between 8:00 a.m. and 6:00 p.m., Eastern Time, Monday through Friday, or visit the firm's Web site at http://www.ski-doo.com/ BUCKEYE PARTNERS: Seeks Approval of Broadbased Suit Settlement -------------------------------------------------------------- Buckeye Partners, L.P., disclosed in a Form 8-K filed with the U.S. Securities and Exchange Commission on November 3, 2010, that it has entered into a proposed settlement of a consolidated class action titled Broadbased Equities v. Forrest E. Wylie, et al. The Partnership previously disclosed that on August 24, 2010, the District Court of Harris County, Texas, entered an order consolidating three previously filed putative class actions under the caption of Broadbased Equities v. Forrest E. Wylie, et al., and appointing interim co-lead class counsel and interim co- liaison counsel. The plaintiffs subsequently filed a consolidated amended class action and derivative complaint on September 1, 2010. The Complaint purports to be a putative class and derivative action alleging that MainLine Management LLC, and its directors breached their fiduciary duties to Buckeye GP Holdings L.P.'s public unitholders in connection with the merger of Buckeye GP Holdings and Grand Ohio, LLC, by, among other things, accepting insufficient consideration and failing to disclose all material facts in order that Holdings' unitholders may cast an informed vote on the Merger Agreement, and that the Partnership, Partnership GP, Holdings GP, MergerCo, BGH GP Holdings, LLC, ArcLight Capital Partners, LLC, and Kelso & Company, aided and abetted the breaches of fiduciary duty. On October 29, 2010, the parties to the litigation entered into a Memorandum of Understanding in connection with a proposed settlement of the class action and the Complaint. The MOU provides for dismissal with prejudice of the litigation and a release of the defendants from all present and future claims asserted in the litigation in exchange for, among other things, the agreement of the defendants to amend the Merger Agreement to reduce the termination fees payable by the Partnership upon termination of the Merger Agreement and to provide the Partnership's unitholders with supplemental disclosure to the Partnership and Holdings' joint proxy statement or prospectus, dated September 24, 2010. The supplemental disclosure is set forth in a joint proxy statement or prospectus supplement, dated October 29, 2010, that was filed with the Securities and Exchange Commission on November 1, 2010. In addition, the MOU provides that, in settlement of the plaintiffs' claims (including any claim against the defendants by the plaintiffs' counsel for attorneys' fees or expenses related to the litigation), the defendants (or their insurers) will pay a cash payment of $900,000, subject to final court approval of the settlement. The proposed settlement is subject to further definitive documentation and to a number of conditions, including, without limitation, completion of certain confirmatory discovery by the plaintiffs, the drafting and execution of a formal Stipulation of Settlement, the consummation of the Merger and court approval of the proposed settlement. There is no assurance that these conditions will be satisfied. CALAMOS ASSET MANAGEMENT: Parties Move Lawsuit to District Court ---------------------------------------------------------------- A class action lawsuit against Calamos Asset Management, Inc., was removed from the circuit court to the district court of Illinois, according to the company's November 4, 2010, Form 10-Q for the quarter ended September 30, 2010, filed with the Securities and Exchange Commission. The Company and Calamos Advisors, LLC, an indirect subsidiary, were named as defendants in a class action complaint filed on July 15, 2010 (Christopher Brown et al. v John P. Calamos, Sr. et al., No. 10-CV-04422 (N.D. Ill.)) by a putative common shareholder of the Calamos Convertible Opportunities and Income Fund (CHI). The action was voluntarily dismissed by plaintiff in the U.S. District Court and re-filed in the Circuit Court of Cook County, Illinois on September 13, 2010 (Christopher Brown et al. v John P. Calamos, Sr. et al., Civil Action No. 10CH39590). Other defendants include CHI and current and former trustees of CHI; namely John P. Calamos, Sr., Weston W. Marsh, John E. Neal, William R. Rybak, Stephen B. Timbers, David D. Tripple, Joe F. Hanauer and unspecified defendants John and Jane Does 1-100. The plaintiff alleges that the Company and Calamos Advisors aided and abetted the individual defendants' alleged breaches of fiduciary duty and were unjustly enriched in connection with the redemption of auction rate preferred securities of CHI. As to the Company and Calamos Advisors, the plaintiff is seeking: (i) declaratory judgments that the Company and Calamos Advisors aided and abetted the individual defendants' alleged breaches of fiduciary duty and were unjustly enriched; (ii) an injunction against the Company and Calamos Advisors serving as advisor or otherwise earning fees for services to CHI; (iii) an unspecified amount of monetary relief plus interest; (iv) an award of attorney's fees and expenses; and (v) such other and further relief, including punitive damages, as may be available to the plaintiff and the class that plaintiff seeks to represent. On October 13, 2010, the Company, Calamos Advisers, and the other defendants removed this action from the Circuit Court of Cook County, Illinois to the U.S. District Court for the Northern District of Illinois (Christopher Brown et al. v John P. Calamos, Sr. et al., No. 10-CV-06558 (N.D. Ill.)) CALAMOS ASSET MANAGEMENT: Plaintiff Refiles Suit in Circuit Court ----------------------------------------------------------------- Calamos Asset Management, Inc., shifts its defense of a lawsuit filed by shareholders from the district court to the circuit court, according to the company's November 4, 2010 Form 10-Q for the quarter ended September 30, 2010, filed with the Securities and Exchange Commission. The Company and Calamos Advisors LLC were named as defendants in a class action complaint filed on September 14, 2010 (Russell Bourrienne et al. v John P. Calamos, Sr. et al., No. 10-CV-10-5833 (N.D. Ill.)) by a putative common shareholder of the Calamos Convertible Opportunities and Income Fund (CHI). The action was voluntarily dismissed by plaintiff in the U.S. District Court and re-filed in Circuit Court of Cook County, Illinois on October 18, 2010 (Russell Bourrienne et al. v John P. Calamos, Sr. et al., No. 10CH345119 ). Other defendants include current and former trustees of CHI; namely John P. Calamos, Sr., Weston W. Marsh, John E. Neal, William R. Rybak, Stephen B. Timbers, David D. Tripple, Joe F. Hanauer and unspecified defendants John and Jane Does 1-100. The plaintiff alleges that the Company and Calamos Advisors aided and abetted the individual defendants' alleged breaches of fiduciary duty and were unjustly enriched in connection with the redemption of auction rate preferred securities of CHI. As to the Company and Calamos Advisors, the plaintiff is seeking: (i) declaratory judgments that the Company and Calamos Advisors aided and abetted the individual defendants' alleged breaches of fiduciary duty and were unjustly enriched; (ii) an injunction against serving as advisor or otherwise earning fees for services to CHI; (iii) an unspecified amount of monetary relief plus interest; (iv) an award of attorney's fees and expenses; and (v) such other and further relief, including punitive damages, as may be available to the plaintiff and the class that plaintiff seeks to represent. CARGILL MEAT: Class Action Over Wages Set for Trial Next Month -------------------------------------------------------------- The Associated Press reports a trial has been ordered for next month in a class-action lawsuit against Cargill Meat Solutions Corp. over wages at its Schuyler meatpacking plant. Former Cargill workers sued last year, saying hourly employees spend a substantial amount of time each day on work duties without getting paid. Those duties include dressing in protective gear, sanitizing tools, and walking to and from work stations. The former workers say federal law requires the company to pay for preparation and cleanup time. Cargill denies any wrongdoing and says the union contract specifically excludes that time from paid time. The trial is set to begin Dec. 13 in U.S. District Court in Lincoln. Similar lawsuits are pending against other Nebraska meatpackers. CASCADE BANCORP: Faces Firkins Class Suit in Idaho -------------------------------------------------- A class action lawsuit titled Russell Firkins & Rena Firkins v. Bank of the Cascades is in its initial stages, Cascade Bancorp said in a Form 10-Q for the quarter ended September 30, 2010, filed with the U.S. Securities and Exchange Commission on November 3, 2010. On August 18, 2010, the Bank was sued in an asserted class action lawsuit, Russell Firkins & Rena Firkins v. Bank of the Cascades, Case No. 1:10-cv-414-BLW in the United States District Court for the District of Idaho. The lawsuit alleges that, in 2004, the Bank's predecessor (Farmers and Merchants Bank), acting as trustee under three similar trust indentures, inappropriately disbursed the proceeds of three bond issuances, supposedly resulting years later in the bondholders' loss of their collective investment of approximately $23.5 million. Recovery is sought on theories of breach of the indentures, breach of fiduciary duty, and conversion. The lawsuit is in its initial stages and the class has not been certified. While the outcome of this proceeding cannot be predicted with certainty, based on management's review, management believes that the lawsuit is without merit and plans to vigorously pursue its defenses. Management also believes that if any liability were to result, it would not have a material adverse effect on the Company's consolidated liquidity, financial condition or results of operations. CBS CORP: Seeks Dismissal of Securities Suit in New York -------------------------------------------------------- CBS Corporation seeks the dismissal of an amended complaint filed by the City of Pontiac General Employees Retirement Systems, according to the company's November 4, 2010, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended September 30, 2010. On December 12, 2008, the City of Pontiac General Employees' Retirement System filed a self-styled class action complaint in the United States District Court for the Southern District of New York against the Company and its Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer, and Treasurer, alleging violations of federal securities law. The complaint, which was filed on behalf of a putative class of purchasers of the company's common stock between February 26, 2008 and October 10, 2008, alleges that, among other things, the company's failure to timely write down the value of certain assets caused the company's reported operating results during the Class Period to be materially inflated. The plaintiffs seek unspecified compensatory damages. On February 11, 2009, a motion was filed in the case on behalf of The City of Omaha, Nebraska Civilian Employees' Retirement System, and The City of Omaha Police and Fire Retirement System seeking to appoint the Omaha Funds as the lead plaintiffs in this case; on March 5, 2009, the court granted that motion. On May 4, 2009, the plaintiffs filed an Amended Complaint, which removes the Treasurer as a defendant and adds the Executive Chairman. On July 13, 2009, all defendants filed a motion to dismiss this action. On March 16, 2010, the court granted the Company's motion and dismissed this action as to the Company and all defendants. On April 30, 2010, the plaintiffs filed a motion for leave to serve an amended complaint. On September 23, 2010, the court issued an order granting leave to amend. On October 8, 2010, the Company was served with an Amended Complaint, which redefines the Class Period to be April 29, 2008 to October 10, 2008 and alleges that the impairment charge should have been taken during the first quarter of 2008. The company planned to file a motion to dismiss this Amended Complaint by November 19, 2010. The company believes that the plaintiffs' claims are without merit and intends to vigorously defend itself in the litigation. CELERA CORP: Continues to Defend Against "Washtenaw" Suit --------------------------------------------------------- Celera Corporation said in a Form 10-Q for the quarter ended September 25, 2010, filed with the U.S. Securities and Exchange Commission on November 4, 2010, that it continues to defend itself against a class action lawsuit in California. On June 14, 2010, a purported class action captioned Washtenaw County Employees' Retirement System v. Celera Corporation was filed in the United States District Court for the Northern District of California alleging that from April 24, 2008 through July 22, 2009, Celera and certain of its directors and current and former officers made false and misleading statements regarding the Company's business and financial results. The action seeks unspecified damages on behalf of an alleged class of purchasers of the Company's stock during this period, as well as an award to plaintiff of their costs and attorneys' fees. On September 23, 2010, the court appointed a lead plaintiff and renamed the action In re Celera Corp. Securities Litigation. An amended complaint was filed on October 15, 2010. Celera believes that the allegations are without merit and intends to vigorously defend the action. CELERA CORP: Has Indemnity Agreement With Life Technologies ----------------------------------------------------------- Celera Corporation said in a Form 10-Q for the quarter ended September 25, 2010, filed with the U.S. Securities and Exchange Commission on November 4, 2010, that it has agreed to indemnify Life Technologies for liabilities resulting from a class action lawsuit to the extent not covered by Life Technologies' insurance. On March 16, 2010, the parties to a class action lawsuit brought on behalf of purchasers of PE Corporation Celera Genomics Group tracking stock in a follow-on public offering conducted in February 2000 entered into a Stipulation and Agreement of Settlement. On July 15, 2010, a fairness hearing was held and the Settlement Agreement was approved by the U.S. District Court for the District of Connecticut. The Settlement Agreement provides for a settlement in the aggregate amount of $11.0 million, which amount was funded entirely by Life Technologies Corporation's (as successor to PE Corporation) insurance carrier. Under the terms of the company's separation agreement with Life Technologies, Celera agreed to indemnify Life Technologies for liabilities resulting from the class action lawsuit to the extent not covered by Life Technologies' insurance. CHARLES SCHWAB: Court to Rule on Class Settlement This Week ----------------------------------------------------------- John Sullivan, writing for Advisor One, reports a class action suit brought by plaintiffs' attorneys against Charles Schwab & Co. over the investment giant' YieldPlus Fund appears to be settled. The suit stems from investments contained within the YieldPlus portfolio, which included mortgage-backed securities and other credit instruments that declined significantly during the worldwide economic crisis beginning in late 2007. "Schwab met with the plaintiffs' attorneys and reached an agreement," said Schwab spokesperson Greg Gable. "We had a hearing Thursday and the judge said he will rule on the agreement sometime soon, which we believe might be early next week." The case has been marked by on-again, off-again agreements between the two parties. The most recent agreement was called off by Schwab on Nov. 8 when the company notified the court it was backing out. Schwab said it notified counsel for the plaintiffs that it was backing out of the agreement because plaintiff lawyers claimed the settlement was not all-encompassing, and they still had legal right to sue the company on behalf of other investors. According to Schwab, in the spring of 2010 it agreed to a settlement of $235 million to settle all claims in the YieldPlus class action proceedings, regardless of their merit. Schwab said it was fully prepared to contest the allegations at trial but "wanted to provide significant and speedy financial benefit to valued clients who purchased or held the fund during the period covered by the lawsuit and to put the matter behind us." Plaintiffs' lawyers at the time praised the settlement as one in which clients would receive "real money" and "a high percentage of recovery." The company argues that until the credit crisis, the YieldPlus Fund was consistently one of the best performing funds in its category for eight years and held a Morningstar 5-star rating from December 2004 through September 2007. Even in the face of the credit crisis, the company notes YieldPlus shareholders lost, on average, only 7.5% of their investment when dividends are counted. CIBC TRUST: Faces Class Action Over Trust Fund Embezzlement ----------------------------------------------------------- Sherri Zickefoose, writing for Calgary Herald, reports a class action lawsuit has been filed against the Piikani Nation's chief and council and CIBC Trust Corp. alleging the embezzlement of $40 million from a nearly decade-old trust fund. A statement of claim was filed in Alberta Court of Queen's Bench on Nov. 3, naming the defendants as Chief Reg Crowshoe, fellow members of the band's council, and CIBC Trust. The lawsuit, launched by former council member Brian Jackson, alleges the band council breached its fiduciary relationship in connection to money held in trust from compensation for the construction of the Oldman River Dam. Mr. Jackson negotiated the original settlement with the provincial and federal governments. While some of the settlement was distributed to band members, the remaining $45 million was deposited into a trust, which was intended to provide long-term benefits to all tribal members, said lawyer Bill Klym. "The whole purpose of the trust had at its base the improvement of life on the nation, which is troubled by all sorts of social problems," said Mr. Klym. "They were hopeful this $64 million would improve people's lives, provide employment for the youth, and deal with housing, which is disastrous." The statement of claim alleges CIBC wrongfully paid out $19 million from the trust, resulting in a further loss of about $13 million. None of the allegations have been proven in court. The southern Alberta Peigan Reserve sits along Highway 3 between Fort Macleod and Pincher Creek. Calls to Piikani administration were not returned. CLEARWIRE CORP: Awaits Ruling on Appeal in "Minnick" Suit --------------------------------------------------------- Clearwire Corporation is awaiting a ruling on an appeal from the dismissal of a class action lawsuit in Washington, according to the company's Form 10-Q for the quarter ended September 30, 2010, filed with the U.S. Securities and Exchange Commission on November 4, 2010. On April 22, 2009, a purported class action lawsuit was filed against Clearwire U.S. LLC in Superior Court in King County, Washington by a group of five plaintiffs from Hawaii, Minnesota, North Carolina and Washington (Chad Minnick, et al.). The lawsuit generally alleges that the Company disseminated false advertising about the quality and reliability of its services; imposed an unlawful early termination fee; and invoked unconscionable provisions of its Terms of Service to the detriment of customers. Among other things, the lawsuit seeks a determination that the alleged claims may be asserted on a class-wide basis; an order declaring certain provisions of the company's Terms of Service, including the early termination fee provision, void and unenforceable; an injunction prohibiting the Company from collecting early termination fees and further false advertising; restitution of any early termination fees paid by its subscribers; equitable relief; and an award of unspecified damages and attorneys' fees. On May 27, 2009, an amended complaint was filed and served, adding seven additional plaintiffs, including individuals from New Mexico, Virginia and Wisconsin. On June 2, 2009, plaintiffs served the amended complaint. The Company removed the action to the United States District Court for the Western District of Washington. On July 23, 2009, the Company filed a motion to dismiss the amended complaint. The Court stayed discovery pending its ruling on the motion. The Court granted the Company's motion to dismiss in its entirety on February 2, 2010. Plaintiffs filed a notice of appeal to the Ninth Circuit Court of Appeals. Plaintiffs filed their opening brief to the Ninth Circuit Court of Appeals on June 16, 2010. The Company filed an answering brief on July 30, 2010. Plaintiffs filed a reply brief on August 27, 2010. The Ninth Circuit Court of Appeals set oral argument for November 3, 2010. This case is in the early stages of litigation, and its outcome is unknown, the Company stated. CLEARWIRE CORP: Class Certification Briefing Set for This Quarter ----------------------------------------------------------------- Class certification briefing has been scheduled for the fourth quarter 2010 in the class action lawsuit filed by representative plaintiff Rosa Kwan against Clearwire Corporation, according to the company's Form 10-Q for the quarter ended September 30, 2010, filed with the U.S. Securities and Exchange Commission on Nov. 4, 2010. On September 1, 2009, the Company was served with a purported class action lawsuit filed in King County Superior Court, brought by representative plaintiff Rosa Kwan. The complaint alleges the Company placed unlawful telephone calls using automatic dialing and announcing devices and engaged in unlawful collection practices. It seeks declaratory, injunctive, and equitable relief and actual and statutory damages under federal and state law. On October 1, 2009, the Company removed the case to the United States District Court for the Western District of Washington. On October 22, 2009, the Court issued a stipulated order granting plaintiff until October 29, 2009, to file an Amended Complaint. The parties further stipulated to allow a Second Amended Complaint, which plaintiffs filed on December 23, 2009. The Company then filed a motion to dismiss that was fully briefed on January 15, 2010. On February 22, 2010, the Court granted the Company's motion to dismiss in part, dismissing certain claims with prejudice and granting plaintiff leave to amend the complaint. Plaintiff filed a Third Amended Complaint adding additional state law claims and joining Bureau of Recovery, a purported collection agency, as a co-defendant. On May 5, 2010, Clearwire filed an Answer to the Third Amended Complaint. The Company said it is currently engaged in discovery. The Court has scheduled class certification briefing for fourth quarter 2010. This case is in the early stages of litigation, and its outcome is unknown. COLLEGE NOTRE DAME: Two More Plaintiffs Join Class Action Suit -------------------------------------------------------------- The Montreal Gazette reports a request seeking permission to launch a class-action suit on behalf of victims of alleged sexual abuse at College Notre Dame in the 1970s and '80s by brothers of the Congregation of Holy Cross has been amended to include two more plaintiffs -- one of them from a second college run by the order. The new plaintiffs, identified only by their initials -- F.L. and L.R.A. -- now appear on the request, along with that of the family of the late Rene Cornellier Jr., who attended College Notre Dame in the 1970s for four years starting when he was 12. L.R.A. also attended College Notre Dame between 1967 and 1974 and alleges he was sexually assaulted by one of the brothers at the school. However, in the 1980s, F.L. was a student at College St. Cesaire, a school near Granby also run by the Congregation of Holy Cross. In the amended request, F.L. alleges he was sexually assaulted by a brother at College St. Cesaire during the year he attended the school. The congregation sold College St. Cesaire in 1991. It closed its doors in 1998. The allegations of abuse at College Notre Dame first came to light in an award-winning series of articles by reporter Sue Montgomery in The Gazette published two years ago. Other media followed the story, most recently the investigative news program Enquete. The Congregation of Holy Cross issued an apology following the broadcast, and Montreal police launched an investigation into allegations of abuse, inviting anyone who believed they had been victimized to contact them or their local police department. The hearing for the class-action suit, which includes all Quebec residents who attended College Notre Dame between 1960 and 2001 and College St. Cesaire between 1960 and 1991, is scheduled for Dec. 13. CONVERIUM HOLDING: Dutch Court Can Declare Settlement Binding ------------------------------------------------------------- Ruud Hermans, Esq., Robert Polak, Esq., Marnix Leijten, Esq., Ton Schutte, Esq., Ernest Meyer Swantee, Esq., and Geert Potjewijd, Esq., at De Brauw Blackstone Westbroek, writing for the firm's Legal Alert International Litigation, relate that on November 12, 2010, the Amsterdam Court of Appeal delivered an important decision regarding an international collective settlement of mass claims using the Shell decision as a precedent. The court assumed jurisdiction to declare an international collective settlement binding in a case where none of the potentially liable parties and only a limited number of the potential claimants were domiciled in the Netherlands. The decision is provisional, but if it becomes final, which is highly likely, it will have to be recognized in all European Members States, Switzerland, Iceland and Norway under the Brussels I Regulation and the Lugano Convention. The Netherlands is the only European country where a collective settlement of mass claims can be declared binding on an entire class on an "opt out" basis. This makes the Netherlands an attractive venue for settling international mass claims, irrespective of whether any (class action) litigation has taken place in the Netherlands. This is even more so since the U.S. Supreme Court in Morisson v. National Australia Bank and Hoffman- La Roche v. Empagran denied non-U.S. claimants in securities and anti-trust cases the right to bring their claims before U.S. courts. Background of the case Converium Holding AG is a Swiss reinsurance company (currently known as SCOR Holding AG). Converium was a wholly owned subsidiary of Zurich Financial Services Ltd until 2001, when ZFS sold all its Converium shares through an initial public offering. Converium shares were listed on the SWX Swiss Exchange and Converium ADSs were listed on the New York Stock Exchange. Converium's share price declined after the company announced increases to its loss reserves in the period from 2002 through 2004. These announcements led to securities class actions in the United States under U.S. securities laws against Converium and ZFS on behalf of a worldwide putative class of all purchasers of Converium securities during the relevant period. The United States District Court for the Southern District of New York certified a class consisting of all U.S. persons who had purchased Converium securities on any exchange, as well as all persons (regardless of their residence) who had purchased Converium securities on a U.S. exchange. However, the U.S. Court excluded from the class all non-U.S. persons who had purchased Converium securities on any non-U.S. exchange (the "Non-U.S. Purchasers"). The U.S. class action was settled and the settlement was approved by the U.S. Court. Converium and ZFS agreed to collectively settle the potential claims of all Non-U.S. Purchasers under Dutch law with a Dutch foundation established for that purpose that represented the Non-U.S. Purchasers. The Non-U.S. Purchasers were predominantly domiciled in Switzerland and the U.K. Only a few were domiciled in the Netherlands. De Brauw acts as legal counsel to ZFS in this settlement and in the proceedings before the Amsterdam Court of Appeal requesting this settlement be declared binding. Dutch Act on the Collective Settlement of Mass Claims The Dutch Act on the Collective Settlement of Mass Claims[i] (Wet collectieve afwikkeling massaschade, the "WCAM") entered into force on July 27, 2005. Pursuant to the WCAM, the parties to a settlement agreement may request the Amsterdam Court of Appeal (the "Court") to declare the settlement agreement binding on all persons to which it applies according to its terms (the "interested persons"). The settlement agreement must have been entered into between one or more potentially liable parties and one or more foundations or associations representing the interests of the interested persons. If the Court declares the settlement agreement binding, all interested persons are bound by its terms, unless an interested person timely submits an "opt out" notice. All other interested persons have a claim for settlement relief and are bound by the release in the settlement agreement. The Court will refuse to declare the settlement agreement binding if, among other things, the amount of settlement relief provided for in the settlement agreement is not reasonable or the petitioners jointly are not sufficiently representative regarding the interests of the interested persons. Since the entry into force of the WCAM in 2005, the Court has declared a settlement agreement binding in five cases. To date, the most eminent case has been the Shell settlement, approved by the Court on May 29, 2009. Although no case law on this issue exists at this point, the Shell decision implies that the binding declaration must be recognized by the courts in all EU Member States under the Brussels I Regulation, and also in Switzerland, Iceland and Norway under the Lugano Convention. Decision The Court followed substantially the same line of reasoning for its provisional ruling on jurisdiction as in the Shell decision. The most important difference is that the Converium settlement is of an even more international nature. The Shell settlement concerned a worldwide settlement between a Dutch and a British Shell entity and the worldwide group of Shell's shareholders, excluding all U.S. shareholders, who purchased their shares during the relevant period in relation to Shell's recategorization of certain of its oil and gas reserves in 2004. A substantial number of these shareholders were domiciled in the Netherlands. In the Converium settlement, however, none of the potentially liable parties and only a limited number of the interested persons were domiciled in the Netherlands. The Court furthermore emphasized the importance of the fact that a Dutch foundation represents the interested persons and is obliged under the settlement agreement to distribute the settlement relief, suggesting that even without any Netherlands domiciled interested persons the Court may have jurisdiction to declare the settlement binding. The ruling on jurisdiction is provisional until the interested persons have been notified and given the opportunity to submit a defense. However, it is highly unlikely that the ruling on jurisdiction will be reversed. The final hearing of the case will most likely take place during the summer of 2011. It should be noted that the Court is fully aware of the significance of its judgment in creating an alternative venue to declare international collective settlements in mass claims binding on all class members. The Court explicitly referred to the limitations for the U.S. courts to do so in securities and anti-trust cases as a result of the U.S. Supreme Court's decisions in Morrison v. National Australia Bank and Hoffman-La Roche v. Empagran. Implications The WCAM is the only European statute that provides for a procedure to declare a collective settlement in a mass litigation case binding on all class members on an "opt out" basis. Using the Shell decision as a precedent, the Converium decision confirms that the Amsterdam Court has not only jurisdiction to declare an international collective settlement binding on all class members, whether they are domiciled in Europe, the United States or elsewhere, but also an appetite to facilitate such settlements even if the parties to the settlement and the class members hardly have any connection to the Netherlands. The judgment of the Court must be recognized in all EU Member States, Switzerland, Iceland and Norway. Whether the judgment is able to be recognized in other countries depends on their respective laws. As the Ahold decision proves, the Netherlands is willing to recognize a court-approved U.S. class action settlement so that any class members who did not opt out are bound by the settlement. Whether that would be sufficient for U.S. courts to recognize a court-approved WCAM settlement remains to be seen. Because the Netherlands is the only European country in which a collective settlement in a mass litigation case can be declared binding on all class members on an "opt out" basis and such a decision has to be recognized in the rest of Europe, the Netherlands is Europe's most attractive venue to facilitate such settlements. It is irrelevant in this respect whether the settlement is the outcome of class action litigation or not and if so, in which country such litigation took place. De Brauw is a premium full-service international law firm. The firm's practice areas include: corporate law, mergers and acquisitions, private equity, banking, equity and debt capital markets, asset, project structured finance, insolvency, restructuring, investment management, tax, corporate and commercial litigation, arbitration, EU and competition law, intellectual property, information technology and communication, economic regulation, real estate, planning & zoning and employment law. DOMTAR CORP.: Faces Price-Fixing Lawsuits & Seeks Dismissal ----------------------------------------------------------- Domtar Corporation has been named as a defendant in several lawsuits for alleged price-fixing, according to the Company's November 4, 2010 Form 10-Q filed with the Securities and Exchange Commission for the quarter ended September 30, 2010. In September 2010, Kleen Products LLC filed a class action suit in the United States District Court for the Northern District of Illinois, Kleen Products LLC v. Packaging Corporation of America, et al, naming among others the Company, Norampac Inc. and Cascades Inc., as defendants. Kleen alleged that the defendants conspired to fix prices and reduce output of containerboard in the United States between August 2005 and October 2010. Four additional suits with essentially the same allegations have been filed in the same court since Kleen, the last of them not including Domtar as a defendant. In 1997, Domtar Inc., transferred all of its containerboard assets to Norampac, a corporation which was a joint venture with Cascades, and in which Domtar Inc. and Cascades were each 50- percent shareholders. Domtar Inc. sold its 50 percent share of Norampac to Cascades in December 2006. Since the Company and Domtar Inc. did not sell any containerboard in the United States during the Class Action Period, the Company intends to vigorously contest the allegations made against it on that basis and on other grounds, and the Company will seek a prompt dismissal from the litigation. DUCATI NORTH: Sued for Violations of Consumer Protection Laws ------------------------------------------------------------- Jonas Sugarman, on behalf of himself and others similarly situated v. Ducati North America, Inc., Case No. 10-cv-05246 (N.D. Calif. November 18, 2010), asserts violations of consumer protection laws. Mr. Sugarman, a resident of Florida and the owner of a 2009 Ducati 1198 motorcycle, accuses the American subsidiary of the Italian motorcycle manufacturer Ducati Motor Holding S.p.A. of selling Ducati motorcycles equipped with defective plastic fuel tanks, despite knowing that these plastic fuel tanks were incompatible with the motorcycles' fuel and would create a number of unsafe conditions as they degraded and deformed. Mr. Sugarman narrates that, among other things, as the plastic degrades and deforms, the fuel tanks interfere with the full range of steering, leak fuel onto the engine, and destabilize the motorcycle's weight distribution, such that the motorcycle cannot be safely operated after only a few thousand miles of use. The Plaintiff demands a trial by jury and is represented by: Eric H. Gibbs, Esq. Dylan Hughes, Esq. Geoffrey A. Munroe, Esq. GIRARD GIBBS LLP 601 California Street, 14th Floor San Francisco, CA 94104 Telephone: (415) 981-4800 E-mail: ehg@girardgibbs.com dsh@girardgibbs.com gam@girardgibbs.com EMERGENCY MEDICAL: AMR Awaits Court Approval of Suit Settlement --------------------------------------------------------------- On December 13, 2005, a lawsuit purporting to be a class action was commenced against American Medical Response, Inc., in Washington State Court, Spokane County. The complaint alleged that AMR billed patients and third party payors for transports it conducted between 1998 and 2005 at higher rates than contractually permitted. The court has certified a class in this case which is comprised of approximately 15,000 Spokane County residents. In September 2010, the Company and class representatives reached an agreement to resolve the claims for approximately $1.1 million, which amount includes all remaining refunds due to class members and attorney's fees for the plaintiffs' counsel. The settlement is expected to be approved and finalized by the court by the end of January 2011, according to the Company's November 4, 2010, Form 10-Q filed with the Securities and Exchange Commission for the quarter ended September 30, 2010. EMERGENCY MEDICAL: Four Wage & Hour Violations Suits Still Pending ------------------------------------------------------------------ Four different lawsuits purporting to be class actions continue to be pending against Emergency Medical Services Corp.'s subsidiary, American Medical Response, Inc., and certain subsidiaries in California alleging violations of California wage and hour laws, according to the company's November 4, 2010, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended September 30, 2010. The four lawsuits are: (1) commenced by Lori Bartoni in the Superior Court for the State of California, County of Alameda, on April 16, 2008; (2) filed by Vaughn Banta in the Superior Court of the State of California, County of Los Angeles, on July 8, 2008; (3) filed by Laura Karapetian in the Superior Court of the State of California, County of Los Angeles, on Jan. 22, 2009; and (4) filed by Melanie Aguilar in the Superior Court of the State of California, County of Los Angeles, on March 11, 2010. The Banta and Karapetian cases have been coordinated with the Bartoni case in the Superior Court for the State of California, County of Alameda. At the present time, the courts have not certified classes in any of these cases. Plaintiffs allege principally that the AMR entities failed to pay overtime charges pursuant to California law, and failed to provide required meal breaks or pay premium compensation for missed meal breaks. Plaintiffs are seeking to certify the classes and are seeking lost wages, punitive damages, attorneys' fees and other sanctions permitted under California law for violations of wage hour laws. FALCONSTOR SOFTWARE: Class Action Lead Plaintiff Deadline Nears --------------------------------------------------------------- The Rosen Law Firm reminds investors of the important November 30, 2010 lead plaintiff deadline in the class action lawsuit the firm filed on behalf of purchasers of FalconStor Software, Inc. common stock during the period beginning February 5, 2009 through September 29, 2010, seeking remedies under the federal securities laws. To join the class action against FalconStor, go to the Web site at http://www.rosenlegal.com/or call Laurence Rosen, Esq. or Phillip Kim, Esq. toll-free at 866-767-3653. You may also email lrosen@rosenlegal.com or pkim@rosenlegal.com for information on the class action. NO CLASS HAS YET BEEN CERTIFIED IN THE ABOVE ACTION. UNTIL A CLASS IS CERTIFIED, YOU ARE NOT REPRESENTED BY COUNSEL UNLESS YOU RETAIN ONE. YOU MAY CHOOSE TO DO NOTHING AT THIS POINT AND REMAIN AN ABSENT CLASS MEMBER. The Complaint alleges that FalconStor and certain of its officers and directors violated federal securities laws by issuing false and misleading statements about the Company's financial condition and prospects. The Complaint asserts that defendants failed to disclose that FalconStor was making improper payments to secure a contract with at least one of its customers; the Company was experiencing weak demand for its products and services; and consequently defendants lacked a reasonable basis for their statements about the Company's prospects. The Complaint asserts that when the truth was disclosed to the market on September 29, 2010, the price of FalconStor stock fell, damaging investors. If you wish to serve as lead plaintiff, you must move the Court no later than November 30, 2010. A lead plaintiff is a representative party that acts on behalf of other class members in directing and overseeing the litigation. If you wish to join the litigation, or to discuss your rights or interests regarding this class action, please contact Laurence Rosen, Esq. or Phillip Kim, Esq. of The Rosen Law Firm, toll-free, at 866-767-3653, or via e-mail at lrosen@rosenlegal.com or pkim@rosenlegal.com You may also visit the firm's Web site at http://www.rosenlegal.com/ The Rosen Law Firm represents investors throughout the globe, concentrating its practice in securities class actions and shareholder derivative litigation. FRANKLIN AMERICAN: Sued for Non-Payment of Overtime Wage -------------------------------------------------------- Gina McKeen-Chaplin, individually and on behalf of others similarly situated v. Franklin American Mortgage Company, et al., Case No. 10-cv-05243 (N.D. Calif. November 18, 2010), accuses the privately-held mortgage banking firm of failing to pay her and the Class members she represents overtime compensation as required by federal and state law. Ms. McKeen-Chaplin, a resident of Martinez, California, was employed by FAMC from February 2009 through late October 2010 as a mortgage underwriter in its Concord, California office. The Plaintiff alleges that FAMC classified its mortgage underwriters as exempt from the Fair Labor and Standards Act and state wage and hour protections until January 2010 when it reclassified its mortgage underwriters to "non-exempt." Ms. McKeen-Chaplin relates that prior to the reclassification, FAMC had uniformly misrepresented to Plaintiff and the other mortgage underwriters that they were ineligible to receive overtime pay, despite the fact that the work they did for the Defendant was "production work directly related to mortgage sales." The Plaintiff demands a trial by jury and is represented by: Matthew C. Helland, Esq. NICHOLS KASTER, LLP One Embarcadero Center, Suite 720 San Francisco, CA 94111 Telephone: (415) 277-7235 E-mail: Helland@nka.com FULL SPEED: Recalls 9,300 Full Speed Ahead Gossamer Crank Sets -------------------------------------------------------------- The U.S. Consumer Product Safety Commission, in cooperation with Full Speed Ahead, of Woodinville, Wash., announced a voluntary recall of about 9,300 full Speed Ahead BB30 Gossamer crank sets installed on numerous makers of bicycles. Consumers should stop using recalled products immediately unless otherwise instructed. If the fixing bolt is over-tightened on the non-drive crank arm, the bolt shoulder can crack or break. If this occurs, the non- drive arm can fall off the bicycle causing the rider to crash and suffer injuries. Full Speed Ahead has received 11 reports of incidents, including two cases where injuries have been reported. A crank set is the component of the bicycle that the chain and pedals attach to for pedaling. The recalled models are either painted black with "Gossamer" printed in white on the arm or white with "Gossamer" printed in black on the arm. There are two drive gears (referred to as "double") on the crank set. The recalled crank arms were assembled as original equipment on the following bicycle models: Bianchi 2010 Sempre Ultegra Cannondale 2010 CAAD9 5, CAAD9 5 Feminine 2010 Six Carbon 5 2010 Slice 4, Slice 4 Nytro, Slice 5 2010 Synapse Carbon 4, Carbon 4 Feminine, Carbon 5 2011 CAAD10 5 105, CAAD10 5 105 Feminine 2011 Slice 5, Slice 5 Womens 2011 SuperSix 5 105, SuperSix 5 105 Womens 2011 Synapse Carbon 4 Rival, Carbon 4 Rival Womens, Carbon 5 2011 CAAD8 5 105 2011 CAADX 105 Cyclocross Felt 2011 F75 2011 F75X Fuji 2010 ACR 1.0 2010 ACR 2.0 2010 ACR 3.0 Quintana Roo 2010 CD.0.1 Litespeed 2010 C3 Raleigh 2011 RX 1.0 2010 RX 1.0 Scattante 2010 CFR Comp Gossamer BB30 non-drive crank arms that are included in the recall have serial numbers beginning with 10B, 10C, and 10D. Serial numbers are located on the backside of the crank arm by pedal threads. Pictures of the recalled products are available at: http://www.cpsc.gov/cpscpub/prerel/prhtml11/11045.html Assembled as standard original equipment on the bicycles listed. Sold by independent bicycle retailers nationwide from February 2010 through October 2010. Consumers should immediately stop using bicycles that have the recalled crank arm sets and return bicycle to the dealer. The dealer will install the new non-drive crank arm free of charge. For additional information on obtaining a free replacement non- drive crank arm, contact Full Speed Ahead toll-free at (877) 743- 3372 between 9:00 a.m. and 5:00 p.m., Pacific Time, Monday through Friday, via email to recall@fullspeedahead.com, or visit the firm's Web site at http://www.fullspeedahead.com/ GREEN BANKSHARES: Glancy Binkow & Goldberg Files Class Action ------------------------------------------------------------- Notice is hereby given that Glancy Binkow & Goldberg LLP has filed a class action lawsuit in the United States District Court for the Eastern District of Tennessee on behalf of a class consisting of all persons or entities who purchased the securities of Green Bankshares, Inc., (Nasdaq:GRNB) between January 19, 2010, and November 9, 2010, inclusive. A copy of the Complaint is available from the court or from Glancy Binkow & Goldberg LLP. Please contact us by phone to discuss this action or to obtain a copy of the Complaint at (310) 201-9150 or Toll Free at (888) 773-9224, by email at shareholders@glancylaw.com/ or visit our Web site at http://www.glancylaw.com/ The Complaint charges the Company and certain of its executive officers with violations of federal securities laws. Green Bankshares operates as the bank holding company for GreenBank, which provides commercial banking services primarily in Tennessee. GreenBank offers a range of deposit products and it also provides a portfolio of loan products, including commercial real estate loans; residential real estate loans, such as one-to-four family, owner-occupied residential mortgage loans; commercial loans for various business purposes, including working capital, inventory and equipment, and capital expansion; and consumer loans for personal, family, or household purposes. The Complaint alleges that defendants knew or recklessly disregarded that their public statements concerning Green Bankshares' business, operations and prospects were materially false and misleading. Specifically, defendants made false and/or misleading statements and/or failed to disclose: (1) that the Company was overvaluing the collateral of certain loans; (2) that, as such, the Company was failing to timely take impairment charges to reduce the carrying values of certain loans to appropriate market values; (3) that the Company lacked adequate internal and financial controls; and (4) that, as a result, the Company's financial results were materially false and misleading at all relevant times. On October 20, 2010, Green Bankshares announced its financial results for the 2010 fiscal third quarter and disclosed that the Company's net charge-offs increased on a sequential basis to $36.5 million from $4.9 million in the prior quarter. Moreover, the Company indicated that it had engaged an independent third-party loan reviewer, which contributed to the asset quality-impact reflected in its third quarter results. On this news, shares of the Company declined $2.79 per share, more than 43%, to close on October 21, 2010, at $3.68 per share, on unusually heavy volume. Then, on November 9, 2010, after the market closed, the Company announced that in consultation with the Federal Reserve Bank of Atlanta, Green Bankshares had given notice to the U.S. Treasury Department that the Company was suspending the payment of regular quarterly cash dividends on the Company's Fixed Rate Cumulative Perpetual Preferred Stock, Series A, issued to the U.S. Treasury Department. Further, the Company disclosed that "two large relationships totaling approximately $31.4 million, after charge- offs of $20.7 million," had defaulted during the third quarter. According to the Company, "these borrowers had been paying interest only and were current but new appraisals ordered during the quarter showed collateral shortfalls that caused the Company to move these relationships to non-accrual and charge them down to the collateral values." As a result of this news, shares of the Company declined $1.08 per share, more than 29.5%, to close on November 10, 2010, at $2.57 per share, on unusually heavy volume. Plaintiff seeks to recover damages on behalf of class members and is represented by Glancy Binkow & Goldberg LLP, a law firm with significant experience in prosecuting class actions, and substantial expertise in actions involving corporate fraud. If you are a member of the class described above, you may move the Court, no later than 60 days from the date of this Notice, to serve as lead plaintiff, however, you must meet certain legal requirements. If you wish to discuss this action or have any questions concerning this Notice or your rights or interests with respect to these matters, please contact Michael Goldberg, Esquire, of Glancy Binkow & Goldberg LLP, 1801 Avenue of the Stars, Suite 311, Los Angeles, California 90067, by telephone at (310) 201-9150 or Toll Free at (888) 773-9224, by e-mail to shareholders@glancylaw.com/ or visit our Web site at http://www.glancylaw.com/ HANOVER INSURANCE: Continues to Defend "Durand" Litigation ---------------------------------------------------------- Hanover Insurance Group, Inc., remains a defendant in a lawsuit filed by a former employee regarding a miscalculation of lump sum pending in the United States District Court for the Western District of Kentucky, according to the company's November 4, 2010, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended September 30, 2010. On March 12, 2007, a putative class action suit captioned Jennifer A. Durand v. The Hanover Insurance Group, Inc., The Allmerica Financial Cash Balance Pension Plan was filed in the United States District Court for the Western District of Kentucky. The named plaintiff, a former employee who received a lump sum distribution from the Company's Cash Balance Plan at or about the time of her termination, claims that she and others similarly situated did not receive the appropriate lump sum distribution because in computing the lump sum, the Company understated the accrued benefit in the calculation. The Company filed a Motion to Dismiss on the basis that the Plaintiff failed to exhaust administrative remedies, which motion was granted without prejudice in a decision dated November 7, 2007. This decision was reversed by an order dated March 24, 2009 issued by the United States Court of Appeals for the Sixth Circuit, and the case was remanded to the district court. The Plaintiff filed an Amended Complaint on December 11, 2009. In response, the Company filed a Motion to Dismiss on January 30, 2010. In addition to the pending calculation of the lump sum distribution claim, the Amended Complaint includes: (a) a claim that the Plan failed to calculate participants' account balances properly because interest credits were based solely upon the performance of each participant's selection from among various hypothetical investment options (as the Plan provided) rather than crediting the greater of that performance or the 30 year Treasury rate; (b) a claim that the 2004 Plan amendment, which changed interest crediting for all participants from the performance of participant's investment selections to the 30 year Treasury rate, reduced benefits in violation of the Employee Retirement Income Security Act of 1974 for participants who had account balances as of the amendment date by not continuing to provide them performance-based interest crediting on those balances; and (c) claims for breach of fiduciary duty and ERISA notice requirements for not properly informing participants of the various interest crediting and lump sum distribution matters of which Plaintiffs complain. In the Company's judgment, the outcome is not expected to be material to its financial position, although it could have a material effect on the results of operations for a particular quarter or annual period and on the funding of the Plan. HANOVER INSURANCE: Appeal in "Hurricane Katrina" Suit Pending ------------------------------------------------------------- An appeal in the Hurricane Katrina Litigation remains pending in the Louisiana Supreme Court, according to Hanover Insurance Group, Inc.'s November 4, 2010, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended September 30, 2010. The Company has been named as a defendant in various litigation including putative class actions, relating to disputes arising from damages which occurred as a result of Hurricane Katrina in 2005. As of September 30, 2010, there were approximately 50 such cases. These cases have been filed in both Louisiana state courts and federal district courts. These cases generally involve, among other claims, disputes as to the amount of reimbursable claims in particular cases, as well as the scope of insurance coverage under homeowners and commercial property policies due to flooding, civil authority actions, loss of landscaping, business interruption and other matters. Certain of these cases claim a breach of duty of good faith or violations of Louisiana insurance claims handling laws or regulations and involve claims for punitive or exemplary damages. On August 23, 2007, the State of Louisiana (individually and on behalf of the State of Louisiana, Division of Administration, Office of Community Development) filed a putative class action in the Civil District Court for the Parish of Orleans, State of Louisiana, entitled State of Louisiana, individually and on behalf of State of Louisiana, Division of Administration, Office of Community Development ex rel The Honorable Charles C. Foti, Jr., The Attorney General For the State of Louisiana, individually and as a class action on behalf of all recipients of funds as well as all eligible and/or future recipients of funds through The Road Home Program v. AAA Insurance, et al., No. 07-8970. The Complaint named as defendants over 200 foreign and domestic insurance carriers, including the Company. Plaintiff seeks to represent a class of current and former Louisiana citizens who have applied for and received or will receive funds through Louisiana's "Road Home" program. On August 29, 2007, Plaintiff filed an Amended Petition in this case, asserting myriad claims, including claims for breach of: contract, the implied covenant of good faith and fair dealing, fiduciary duty and Louisiana's bad faith statutes. Plaintiff seeks relief in the form of, among other things, declarations that: (a) the efficient proximate cause of losses suffered by putative class members was windstorm, a covered peril under their policies; (b) the second efficient proximate cause of their losses was storm surge, which Plaintiff contends is not excluded under class members' policies; (c) the damage caused by water entering affected parishes of Louisiana does not fall within the definition of "flood"; (d) the damages caused by water entering Orleans Parish and the surrounding area was a result of a man-made occurrence and are properly covered under class members' policies; (e) many class members suffered total losses to their residences; and (f) many class members are entitled to recover the full value for their residences stated on their policies pursuant to the Louisiana Valued Policy Law. In accordance with these requested declarations, Plaintiff seeks to recover amounts that it alleges should have been paid to policyholders under their insurance agreements, as well as penalties, attorneys' fees, and costs. The case has been removed to the Federal District Court for the Eastern District of Louisiana. On March 5, 2009, the court issued an Order granting in part and denying in part a Motion to Dismiss filed by Defendants. The court dismissed all claims for bad faith and breach of fiduciary duty and all claims for flood damages under policies with flood exclusions or asserted under the Valued Policy Law, but rejected the insurers' arguments that the purported assignments from individual claimants to the state were barred by anti-assignment provisions in the insurers' policies. On April 16, 2009, the court denied a Motion for Reconsideration of its ruling regarding the anti-assignment provisions, but certified the issue as ripe for immediate appeal. On April 30, 2009, Defendants filed a Petition for Permission to Appeal to the United States Court of Appeals for the Fifth Circuit, which was granted. Defendants' appeal is currently pending. On July 28, 2010, the Fifth Circuit certified the issue to the Louisiana Supreme Court. The Company has established its loss and LAE reserves on the assumption that it will not have any liability under the "Road Home" or similar litigation, and that it will otherwise prevail in litigation as to the cause of certain large losses and not incur extra contractual or punitive damages. HARLAND CLARKE: Ill. Court Approves Settlement in "Kitson" Suit --------------------------------------------------------------- In June 2008, Kenneth Kitson, purportedly on behalf of himself and a class of other alleged similarly situated commercial borrowers from the Bank of Edwardsville, an Illinois-based community bank, filed in an Illinois state court an amended complaint that re-asserted previously filed claims against BOE and added claims against Harland Financial Solutions, Inc. The amended complaint alleged, among other things, that HFS's LaserPro software permitted BOE to generate loan documents that were deceptive and usurious in that they failed to disclose properly the effect of the "365/360" method of calculating interest. Following the removal of the action to the U.S. District Court for the Southern District of Illinois, the District Court entered an order granting with prejudice HFS's motion to dismiss Mr. Kitson's claims. In August 2009, Mr. Kitson, individually and as class representative, and BOE agreed to settle and dismiss with prejudice all remaining claims. Separately but concurrently, BOE's warranty claim against HFS was settled, in exchange for, among other things, payment by HFS of $200,000. The class settlement agreement was approved by the District Court in January 2010. No further updates were reported in Harland Clarke Holdings Corp.'s Nov. 4, 2010, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended September 30, 2010. HARMAN INTERNATIONAL: Awaits Ruling on Motion to Dismiss Suit ------------------------------------------------------------- Harman International Industries, Inc., is awaiting a ruling on its motion to dismiss a consolidated purported securities class action, according to the company's Form 10-Q for the quarter ended September 30, 2010, filed with the U.S. Securities and Exchange Commission on November 3, 2010. On October 1, 2007, a purported class action lawsuit was filed by Cheolan Kim against Harman and certain of the company's officers in the United States District Court for the District of Columbia seeking compensatory damages and costs on behalf of all persons who purchased the company's common stock between April 26, 2007 and September 24, 2007. The original complaint alleged claims for violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder. The complaint alleged that the defendants omitted to disclose material adverse facts about Harman's financial condition and business prospects. The complaint contended that had these facts not been concealed at the time the merger agreement with KKR and GSCP was entered into, there would not have been a merger agreement, or it would have been at a much lower price, and the price of the company's common stock therefore would not have been artificially inflated during the Class Period. The Kim Plaintiff alleged that, following the reports that the proposed merger was not going to be completed, the price of the company's common stock declined, causing the plaintiff class significant losses. On November 30, 2007, the Boca Raton General Employees' Pension Plan filed a purported class action lawsuit against Harman and certain of its officers in the Court seeking compensatory damages and costs on behalf of all persons who purchased the company's common stock between April 26, 2007 and September 24, 2007. The allegations in the Boca Raton complaint are essentially identical to the allegations in the original Kim complaint, and like the original Kim complaint, the Boca Raton complaint alleges claims for violations of Sections 10(b) and 20(a) of the 1934 Act and Rule 10b-5 promulgated thereunder. On January 16, 2008, the Kim Plaintiff filed an amended complaint. The amended complaint, which extended the Class Period through January 11, 2008, contended that, in addition to the violations alleged in the original complaint, Harman also violated Sections 10(b) and 20(a) of the 1934 Act and Rule 10b-5 promulgated thereunder by "knowingly failing to disclose 'significant problems' relating to its PND sales forecasts, production, pricing, and inventory" prior to January 14, 2008. The amended complaint claimed that when "Defendants revealed for the first time on January 14, 2008, that shifts in PND sales would adversely impact earnings per share by more than $1.00 per share in fiscal 2008," that led to a further decline in the company's share value and additional losses to the plaintiff class. On February 15, 2008, the Court ordered the consolidation of the Kim action with the Boca Raton action, the administrative closing of the Boca Raton action, and designated the short caption of the consolidated action as In re Harman International Industries, Inc. Securities Litigation, civil action no. 1:07-cv-01757 (RWR). That same day, the Court appointed Arkansas Public Retirement System as lead plaintiff and approved the law firm Cohen, Milstein, Hausfeld and Toll, P.L.L.C. to serve as lead counsel. On March 24, 2008, the Court ordered, for pretrial management purposes only, the consolidation of Patrick Russell v. Harman International Industries, Incorporated, et al., with In re Harman International Industries, Inc. Securities Litigation. On May 2, 2008, Lead Plaintiff filed a consolidated class action complaint. The Consolidated Complaint, which extends the Class Period through February 5, 2008, contends that Harman and certain of its officers and directors violated Sections 10(b) and 20(a) of the 1934 Act and Rule 10b-5 promulgated thereunder, by issuing false and misleading disclosures regarding the company's financial condition in fiscal year 2007 and fiscal year 2008. In particular, the Consolidated Complaint alleges that defendants knowingly or recklessly failed to disclose material adverse facts about MyGIG radios, PNDs and the company's capital expenditures. The Consolidated Complaint alleges that when Harman's true financial condition became known to the market, the price of the company's common stock declined significantly, causing losses to the plaintiff class. On July 3, 2008, defendants moved to dismiss the Consolidated Complaint in its entirety. Lead Plaintiff opposed the defendants' motion to dismiss on September 2, 2008, and defendants filed a reply in further support of their motion to dismiss on October 2, 2008. The motion is now fully briefed. HARMAN INTERNATIONAL: Awaits Ruling on Russell Suit Dismissal Plea ------------------------------------------------------------------ Harman International Industries, Inc., is awaiting a ruling on its motion to dismiss a purported class action filed by Patrick Russell, which has been fully briefed, according to the company's Form 10-Q for the quarter ended September 30, 2010, filed with the U.S. Securities and Exchange Commission on November 3, 2010. Patrick Russell filed a complaint on December 7, 2007, in the United States District Court for the District of Columbia and an amended purported putative class action complaint on June 2, 2008 against Harman and certain of its officers and directors alleging violations of the Employee Retirement Income Security Act of 1974 and seeking, on behalf of all participants in and beneficiaries of the Harman International Industries, Incorporated Retirement Savings Plan, compensatory damages for losses to the Plan as well as injunctive relief, imposition of a constructive trust, restitution, and other monetary relief. The amended complaint alleges that from April 26, 2007, to the present, defendants failed to prudently and loyally manage the Plan's assets, thereby breaching their fiduciary duties in violation of ERISA by causing the Plan to invest in the company's common stock notwithstanding that the stock allegedly was "no longer a prudent investment for the Participants' retirement savings." The amended complaint further claims that, during the Class Period, defendants failed to monitor the Plan fiduciaries, failed to provide the Plan fiduciaries with, and to disclose to Plan participants, adverse facts regarding Harman and the company's businesses and prospects. The Russell Plaintiff also contends that defendants breached their duties to avoid conflicts of interest and to serve the interests of participants in and beneficiaries of the Plan with undivided loyalty. As a result of these alleged fiduciary breaches, the amended complaint asserts that the Plan has "suffered substantial losses, resulting in the depletion of millions of dollars of the retirement savings and anticipated retirement income of the Plan's Participants." On March 24, 2008, the Court ordered, for pretrial management purposes only, the consolidation of Patrick Russell v. Harman International Industries, Incorporated, et al., with In re Harman International Industries, Inc. Securities Litigation. Defendants moved to dismiss the complaint in its entirety on August 5, 2008. The Russell Plaintiff opposed the defendants' motion to dismiss on September 19, 2008, and defendants filed a reply in further support of their motion to dismiss on October 20, 2008. The motion is now fully briefed. HEWLETT-PACKARD: Agrees to $5MM Inkjet Settlement in N.D. Calif. ---------------------------------------------------------------- Hewlett-Packard Company has agreed to a $5 million settlement in In re HP Inkjet Printer Litigation, Case No. 05-cv-03580 (N.D. Calif.), and, on Oct. 1, 2010, the Court gave preliminary approval to the settlement and certified a settlement class of purchasers and owners of certain inkjet printers. To be a class member, you must have purchased the printer for your own use or received it as a gift in the United States (and not for resale or distribution) between September 6, 2001 and September 1, 2010. A list of printers at issue in this settlement is available at: https://www.hpinkjetprintersettlement.com//Documents/AffectedModelsList.pdf Opt-out notices and any objections to the settlement pact must be filed Jan. 3, 2011. Claims for $5, $2, and $6 e-credits must be filed by Feb. 15, 2011. This lawsuit is a combination of three separate class action lawsuits filed against HP. The first lawsuit (Ciolino) claims that HP sold certain inkjet printers that provide "low on ink" messages with accompanying graphics that suggest to consumers that replacement of a cartridge is needed when the cartridge is not empty and is capable of additional printing, that the messages and graphics misled and confused customers into prematurely replacing their inkjet cartridges, and that HP's "SureSupply" program and related marketing materials were deceptive and misleading. This lawsuit claims that consumers were thus deprived of the ability to use all of the ink in their HP inkjet cartridges and that consumers did not get the full value of what they paid for and were promised. The second lawsuit (Rich) claims that HP failed to disclose to consumers that certain HP color inkjet printers may use color ink in addition to black ink when printing black text and images and without providing consumers with the option of printing black text and images using ink from the black inkjet cartridge only. This lawsuit further claims that HP published and made representations regarding the page yield specifications for its inkjet printers and cartridges but misrepresented and/or failed to disclose the actual page yield customers would receive for the products at issue, including the true basis for the page yield and cost per page information provided to consumers. This lawsuit further claims that HP failed to disclose its use of color ink when printing black in connection with stating its page yields for color inkjet printers and cartridges, thereby increasing the actual costs of printing black text and images. The third lawsuit (Blennis) claims that HP designed certain of its inkjet printers and cartridges to shut down on an undisclosed expiration date, at which point consumers are prevented from using the ink that remains in the expired cartridge and from using all of the printer's functions (including scanning or faxing documents) until the expired cartridge is replaced . The lawsuit also claimed that HP failed to disclose and/or actively concealed information regarding its use of expiration dates in certain of its inkjet printers and cartridges, and that HP interfered with the right of plaintiffs and the class members to possess and use all of the ink in the HP inkjet cartridges that they purchased. HP denies all these claims. The Settlement Administrator can be reached at: HP Inkjet Settlement Administrator P.O. Box 5270 Portland, OR 97208-5270 Facsimile: 877-341-4607 E-Mail: Info@HPInkjetPrinterSettlement.com Counsel for the Plaintiff Class is: Niall P. McCarthy, Esq. Justin T. Berger, Esq. COTCHETT, PITRE & McCARTHY San Francisco Airport Office Center 840 Malcolm Road, Suite 200 Burlingame, CA 94010 Telephone: (650) 697-6000 E-mail: jberger@cpmlegal.com - and - Brian S. Kabateck, Esq. Richard L. Kellner, Esq. Alfredo Torrijos, Esq. KABATECK BROWN KELLNER LLP 644 South Figueroa Street Los Angeles, CA 90017 Telephone: (213) 217-5000 E-mail: at@kbklawyers.com Counsel for HP is: Samuel G. Liversidge, Esq. Christopher Chorba, Esq. Dhananjay S. Manthripragada, Esq. GIBSON, DUNN & CRUTCHER LLP 333 South Grand Avenue Los Angeles, CA 90071 E-mail: DManthripragada@gibsondunn.com HUGHES COMMUNICATIONS: Defends Consolidated Complaint in Calif. --------------------------------------------------------------- Hughes Communications, Inc., continues to defend itself against a consolidated complaint pending in the U.S. District Court for the Northern District of California. On May 18, 2009, the company and its subsidiary, Hughes Network Systems, LLC, received notice of a complaint filed in the U.S. District Court for the Northern District of California by two California subscribers to the HughesNet service. The plaintiffs complained about the speed of the HughesNet service, the Fair Access Policy, early termination fees and certain terms and conditions of the HughesNet subscriber agreement. The plaintiffs seek to pursue their claims as a class action on behalf of other California subscribers. On June 4, 2009, the company and HNS received notice of a similar complaint filed by another HughesNet subscriber in the Superior Court of San Diego County, California. The plaintiff in this case also seeks to pursue his claims as a class action on behalf of other California subscribers. Both cases have been consolidated into a single case in the U.S. District Court for the Northern District of California. No further updates were reported in the company's Nov. 4, 2010, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended September 30, 2010. HUGHES COMMUNICATIONS: Defends Suit Over Early Termination Fees --------------------------------------------------------------- Hughes Communications, Inc., continues to defend itself against a complaint relating to its early termination fees under the subscriber agreement, according to the company's Nov. 4, 2010, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended September 30, 2010. On Dec. 18, 2009, the company and its subsidiary, Hughes Network Systems, LLC, received notice of a complaint filed in the Cook County, Illinois, Circuit Court by a former subscriber to the HughesNet service. The complaint seeks a declaration allowing the former subscriber to file a class arbitration challenging early termination fees under the subscriber agreement. HUNTSMAN CORP: Court Sets May 2012 Hearing for Antitrust Suits -------------------------------------------------------------- The U.S. District Court for the District of Kansas has scheduled a May 2012 trial for class action lawsuits against Huntsman Corporation and Huntsman International LLC alleging price-fixing, according to their joint November 4, 2010, Form 10-Q for Sept. 30, 2010, filed with the Securities and Exchange Commission. The Companies were named as defendants in civil class action antitrust suits alleging that between 1999 and 2004, they conspired with Bayer, BASF, Dow and Lyondell to fix the prices of MDI, TDI, polyether polyols, and related systems sold in the U.S. in violation of the federal Sherman Act. The cases are consolidated as the "Polyether Polyols" cases in multidistrict litigation known as In re Urethane Antitrust Litigation, MDL No. 1616, Civil No. 2:04-md-01616-JWL-DJW, pending in the U.S. District Court for the District of Kansas. HURON CONSULTING: Discovery in Consolidated Illinois Suit Ongoing ----------------------------------------------------------------- Discovery is currently ongoing in connection with the consolidated complaint filed against Huron Consulting Group Inc. in Illinois, according to the company's November 4, 2010, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended September 30, 2010. Seven purported shareholder class action complaints have been filed in connection with Huron Consulting's restatement in the United States District Court for the Northern District of Illinois: (1) a complaint in the matter of Jason Hughes v. Huron Consulting Group Inc., Gary E. Holdren and Gary L. Burge, filed on August 4, 2009; (2) a complaint in the matter of Dorothy DeAngelis v. Huron Consulting Group Inc., Gary E. Holdren, Gary L. Burge, Wayne Lipski and PricewaterhouseCoopers LLP, filed on August 5, 2009; (3) a complaint in the matter of Noel M. Parsons v. Huron Consulting Group Inc., Gary E. Holdren, Gary L. Burge, Wayne Lipski and PricewaterhouseCoopers LLP, filed on August 5, 2009; (4) a complaint in the matter of Adam Liebman v. Huron Consulting Group Inc., Gary E. Holdren, Gary L. Burge and Wayne Lipski, filed on August 5, 2009; (5) a complaint in the matter of Gerald Tobin v. Huron Consulting Group Inc., Gary E. Holdren, Gary L. Burge and PricewaterhouseCoopers LLP, filed on August 7, 2009, (6) a complaint in the matter of Gary Austin v. Huron Consulting Group Inc., Gary E. Holdren, Gary L. Burge and Wayne Lipski, filed on August 7, 2009 and (7) a complaint in the matter of Thomas Fisher v. Huron Consulting Group Inc., Gary E. Holdren, Gary L. Burge, Wayne Lipski and PricewaterhouseCoopers LLP, filed on September 3, 2009. On October 6, 2009, Plaintiff Thomas Fisher voluntarily dismissed his complaint. On November 16, 2009, the remaining suits were consolidated and the Public School Teachers' Pension & Retirement Fund of Chicago, the Arkansas Public Employees Retirement System, the City of Boston Retirement Board, the Cambridge Retirement System and the Bristol County Retirement System were appointed Lead Plaintiffs. Lead Plaintiffs filed a consolidated complaint on January 29, 2010. The consolidated complaint asserts claims under Section 10(b) of the Exchange Act and SEC Rule 10b-5 promulgated thereunder against Huron Consulting Group, Inc., Gary Holdren and Gary Burge and claims under Section 20(a) of the Exchange Act against Gary Holdren, Gary Burge and Wayne Lipski. The consolidated complaint contends that the Company and the individual defendants issued false and misleading statements regarding the Company's financial results and compliance with GAAP. Lead Plaintiffs request that the action be declared a class action, and seek unspecified damages, equitable and injunctive relief, and reimbursement for fees and expenses incurred in connection with the action, including attorneys' fees. On March 30, 2010, Huron, Gary Burge, Gary Holdren and Wayne Lipski jointly filed a motion to dismiss the consolidated complaint. On August 6, 2010, the Court denied the motion to dismiss. The Court entered a scheduling order in the matter on August 16, 2010, and the parties have commenced discovery. INSIGHT ENTERPRISES: Motion to Dismiss Pending in Arizona Suit -------------------------------------------------------------- The Court dismisses a consolidated securities derivative actions against Insight Enterprises, Inc., et al., pending in Arizona, according to the company's November 4, 2010, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended September 30, 2010. Starting in March 2009, three purported class action lawsuits were filed in the U.S. District Court for the District of Arizona against the Company and certain of its current and former directors and officers on behalf of purchasers of the Company's securities during the period April 22, 2004 to February 6, 2009. Two plaintiffs voluntarily dismissed their complaints, and the District Court appointed a lead plaintiff and lead counsel. The plaintiff in the remaining action filed an amended complaint in September 2009, seeking unspecified damages, and the District Court dismissed the amended complaint on April 30, 2010. On June 1, 2010, the plaintiff filed a second amended complaint, which asserts claims under the federal securities laws relating to the Company's February 9, 2009 announcement that it expected to restate its financial statements and also includes additional allegations regarding other purported accounting and revenue recognition issues during the class period. All defendants have filed motions to dismiss the second amended complaint, briefing on the motions to dismiss has been completed and oral argument on the motion to dismiss the second amended complaint will be heard in November 2010. INTEGRYS ENERGY: Final Settlement Hearing Set for November 30 ------------------------------------------------------------- Peoples Energy Corporation entered into a settlement with its customers regarding a lawsuit alleging violation of the Illinois Consumer Fraud and Deceptive Business Practices Act pending in Circuit Court, according to Integrys Energy Group, Inc.'s Nov. 4, 2010, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended September 30, 2010. In February 2004, a purported class action suit was filed in Cook County Circuit Court against Peoples Energy Corporation, The Peoples Gas Light and Coke Company, and North Shore Gas Company by customers of PGL and NSG, alleging among other things, violation of the Illinois Consumer Fraud and Deceptive Business Practices Act related to matters at issue in the utilities' fiscal year 2001 Gas Charge reconciliation proceedings. In the suit, Alport et al. v. Peoples Energy Corporation, the plaintiffs seek disgorgement and punitive damages. PGL and NSG have been dismissed as defendants and the only remaining counts of the suit allege violations of the Consumer Fraud and Deceptive Business Practices Act by PEC and that PEC acted in concert with others to commit a tortious act. On November 19, 2009, the court entered an order certifying a class composed of customers of PGL and NSG during the period April 26, 2000, through September 30, 2002. The case remained pending in Circuit court. The parties entered into a settlement agreement on September 23, 2010, that was preliminarily approved by the court on September 27, 2010. The hearing for final approval is scheduled for November 30, 2010. At September 30, 2010, Integrys Energy Group had an $8.8 million liability recorded related to the settlement agreement. KEYCORP: Faces Two Lawsuits Alleging ERISA Violations in Ohio ------------------------------------------------------------- KeyCorp faces two new lawsuits alleging ERISA violations in the United States District Court for the Northern District of Ohio styled Anthony Lobasso, et al,v. KeyCorp, et al., and Thomas J. Metyk, et al., v. KeyCorp, et al., according to the company's November 4, 2010, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended September 30, 2010. On August 11, 2008, a purported class action case was filed against KeyCorp, its directors and certain employees, captioned Taylor v. KeyCorp et al., in the United States District Court for the Northern District of Ohio. On September 16, 2008, a second and related case was filed in the same district court, captioned Wildes v. KeyCorp et al. The plaintiffs in these cases seek to represent a class of all participants in the Company's 401(k) Savings Plan and allege that the defendants in the lawsuit breached fiduciary duties owed to them under ERISA. On January 7, 2009, the Court consolidated the Taylor and Wildes lawsuits into a single action. Plaintiffs' consolidated complaint continues to name certain employees as defendants but no longer names any outside directors. Following briefing and argument on the Company's motion to dismiss for, among other things, failure to make a demand on the board of directors, the Court dismissed Taylor on August 12, 2010. On September 12, 2010, Plaintiffs filed a Notice of Appeal. The Company filed a notice of Cross-Appeal on September 23, 2010. Following the Court's dismissal of Taylor, two cases with similar allegations and causes of action were filed on September 21, 2010, in the same district court; these actions are styled Anthony Lobasso, et al, v. KeyCorp, et al., and Thomas J. Metyk, et al., v. KeyCorp, et al. The Company strongly disagrees with the allegations asserted against it in these actions, and intend to vigorously defend against them. KINDER MORGAN: Judge Approves $200MM Class Action Settlement ------------------------------------------------------------ Heather Hollingsworth, writing for The Associated Press, reports a class action lawsuit that accused gas pipeline company Kinder Morgan shortchanged shareholders when it was taken private has been settled for $200 million, according to a judge's ruling issued Friday. Judge David E. Bruns called it "fair, reasonable and adequate" when he signed off on the deal in a written ruling in Shawnee County District Court in Topeka, Kan. Both sides had previously agreed to the settlement. "I am very pleased by it," Randall Baron, one of two lead attorneys for shareholders, said in a phone interview. "I think it is a spectacular and groundbreaking response for shareholders." The suit accused managers of breaching their fiduciary duty by offering an "inadequate and unfair" price when they took the company private in a $13.4 billion deal in 2006. Kinder Morgan Chairman and Chief Executive Richard Kinder joined with private equity firms to offer shareholders $107.50 per share. That's a premium of 27 percent over the stock's closing price on the last trading day before the investor group's proposal to take the company private. Kinder Morgan denied allegations of wrongdoing in a written statement and pointed out that shareholders voted overwhelmingly to approve the merger. The company is headquartered in Houston, but the case was consolidated and heard in Kansas because the company was incorporated in the state. "We are pleased that the judge granted final approval of the settlement as fair and reasonable," company spokesman Larry Pierce said in the written statement. "While the company and the investor group believes that the acquisition of KMI's public shares was accomplished through a completely open and fair process and denies any and all allegations of wrongdoing, we believe that it is in the best interests of all parties to avoid the expense and uncertainly of continued litigation by resolving these claims," he said. KKR FINANCIAL: Motion to Dismiss Amended Complaint Still Pending ---------------------------------------------------------------- KKR Financial Holdings LLC is awaiting a ruling on its motion to dismiss an amended complaint filed in the U.S. District Court for the Southern District of New York, according to the company's Nov. 4, 2010, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended September 30, 2010. On Aug. 7, 2008, the members of the company's board of directors and certain of its current and former executive officers and the company were named in a putative class action complaint filed by Charter Township of Clinton Police and Fire Retirement System in the U.S. District Court for the Southern District of New York. On March 13, 2009, the lead plaintiff filed an amended complaint, which deleted as defendants the members of the company's board of directors and named as defendants only the company's former chief executive officer Saturnino S. Fanlo, former chief operating officer David A. Netjes, current chief financial officer Jeffrey B. Van Horn and the company. The amended complaint alleges that the company's April 2, 2007, registration statement and prospectus and the financial statements incorporated therein contained material omissions in violation of Section 11 of the Securities Act, regarding the risks and potential losses associated with the company's real estate-related assets, the company's ability to finance the company's real estate-related assets and the adequacy of the company's loss reserves for its real estate-related assets. The amended complaint further alleges that, pursuant to Section 15 of the Securities Act, Messrs. Fanlo, Netjes and Van Horn each have legal responsibility for the alleged Section 11 violation. On April 27, 2009, the defendants filed a motion to dismiss the amended complaint for failure to state a claim under the Securities Act. Oral argument on the defendants' motion to dismiss took place on October 5, 2010, and the parties are awaiting a decision from the Court. KOPPERS HOLDINGS: Continues to Defend Against Contamination Suit ---------------------------------------------------------------- Koppers Holdings, Inc., continues to defend itself in a lawsuit for allegedly contaminating a community in Florida, according to its November 4, 2010, Form 10-Q filed with the Securities and Exchange Commission for the quarter ended September 30, 2010. In April 2010, a class action complaint was filed in the United States District Court for the Northern District of Florida, by residents of Gainesville, Florida which named Koppers Inc. Beazer East and Cabot Corporation, Inc. as defendants. In October 2010, an amended class action complaint was filed which added the Company and Beazer Limited as defendants and dropped Cabot Corporation as a defendant. The plaintiffs purport to represent anyone who has owned property or lived within a two mile radius of the defendants' former utility pole treatment plant and an adjacent site owned by Cabot Corporation. The plaintiffs allege that their property has been contaminated by various toxic substances. Koppers Inc. operated a utility pole treatment plant in Gainesville from 1988 until its closure late in 2009. The property upon which the utility pole treatment plant was located was sold by Koppers Inc. to Beazer East, Inc. in the first quarter of 2010. Prior to 1988, Beazer East, Inc. conducted various wood treating operations at the utility pole treatment plant site. The plaintiffs allege that their property's value has been impacted and that they are at an increased risk of developing adverse health effects as a result of the alleged contamination. Plaintiffs seek, among other things, class certification, the creation and funding of comprehensive community property remediation and medical monitoring programs, compensatory and punitive damages in excess of the minimum jurisdictional limit of the Court and other equitable relief. No trial date has been set. LIVE NATION: Stay on Live Concert Antitrust Litigation Lifted ------------------------------------------------------------- Live Nation Entertainment, Inc., disclosed that the stay on 22 class action lawsuits has been lifted, according to the Company's November 4, 2010, Form 10-Q filed with the Securities and Exchange Commission for the quarter ended September 30, 2010. The Company was a defendant in a lawsuit filed by Malinda Heerwagen in June 2002 in U.S. District Court. The plaintiff, on behalf of a putative class consisting of certain concert ticket purchasers, alleged that anti-competitive practices for concert promotion services by the Company nationwide caused artificially high ticket prices. In August 2003, the District Court ruled in the Company's favor, denying the plaintiff's class certification motion. The plaintiff appealed to the U.S. Court of Appeals. In January 2006, the Court of Appeals affirmed, and the plaintiff then dismissed her action that same month. Subsequently, twenty-two putative class actions were filed by different named plaintiffs in various U.S. District Courts throughout the country, making claims substantially similar to those made in the Heerwagen action, except that the geographic markets alleged are regional, statewide or more local in nature, and the members of the putative classes are limited to individuals who purchased tickets to concerts in the relevant geographic markets alleged. The plaintiffs seek unspecified compensatory, punitive and treble damages, declaratory and injunctive relief and costs of suit, including attorneys' fees. The Company has filed its answers in some of these actions and has denied liability. In April 2006, granting the Company's motion, the Judicial Panel on Multidistrict Litigation transferred these actions to the U.S. District Court for the Central District of California for coordinated pre-trial proceedings. In June 2007, the District Court conducted a hearing on the plaintiffs' motion for class certification, and also that month the Court entered an order to stay all proceedings pending the Court's ruling on class certification. In October 2007, the Court granted the plaintiffs' motion and certified classes in the Chicago, New England, New York/New Jersey, Colorado and Southern California regional markets. In November 2007, the Court extended its stay of all proceedings pending further developments in the U.S. Court of Appeals for the Ninth Circuit. In February 2008, the Company filed with the District Court a Motion for Reconsideration of its October 2007 class certification order. In October 2010, the District Court denied the Company's Motion for Reconsideration and lifted the stay of all proceedings. The Company intends to vigorously defend all claims in all of the actions. LIVE NATION: Motion to Decertify UPS Consumer Class Suit Pending ---------------------------------------------------------------- A motion to decertify a UPS Consumer Class Action lawsuit is pending, according to Live Nation Entertainment, Inc.'s Nov. 4, 2010, Form 10-Q filed with the Securities and Exchange Commission for the quarter ended September 30, 2010. On January 25, 2010, Live Nation merged with Ticketmaster Entertainment LLC and changed its name from Live Nation, Inc., to Live Nation Entertainment, Inc. In October 2003, a purported representative action was filed in the Superior Court of California challenging Ticketmaster's charges to online customers for UPS ticket delivery and alleging that its failure to disclose on its Web site that the charges contain a profit component is unlawful. The complaint asserted a claim for violation of California's Unfair Competition Law and sought restitution or disgorgement of the difference between (i) the total UPS delivery fees charged by Ticketmaster in connection with online ticket sales during the applicable period, and (ii) the amount that Ticketmaster actually paid to UPS for delivery of those tickets. In August 2005, the plaintiff filed a first amended complaint, then pleading the case as a putative class action and adding the claim that Ticketmaster's website disclosures in respect of its ticket order-processing fees constitute false advertising in violation of California's False Advertising Law. On this new claim, the amended complaint seeks restitution or disgorgement of the entire amount of order-processing fees charged by Ticketmaster during the applicable period. In April 2009, the Court granted the plaintiff's motion for leave to file a second amended complaint adding new claims that (a) Ticketmaster's order processing fees are unconscionable under the UCL, and (b) Ticketmaster's alleged business practices further violate the California Consumer Legal Remedies Act. Plaintiff later filed a third amended complaint, to which Ticketmaster filed a demurrer in July 2009. The Court overruled Ticketmaster's demurrer in October 2009. The plaintiff filed a class certification motion in August 2009, which Ticketmaster opposed. In February 2010, the Court granted certification of a class on the first two causes of action, which allege that Ticketmaster misrepresents or omits the fact of a profit component in its UPS and order processing fees. The class would consist of California consumers who purchased tickets through Ticketmaster's Web site from 1999 to present. The Court denied certification of a class on the third and fourth causes of action, which allege that Ticketmaster's UPS and order processing fees are unconscionably high. In March 2010, Ticketmaster filed a Petition for Writ of Mandate with the California Court of Appeal, and plaintiffs also filed a motion for reconsideration of the Superior Court's class certification order. In April 2010, the Superior Court denied plaintiffs' Motion for Reconsideration of the Court's class certification order, and the Court of Appeal denied Ticketmaster's Petition for Writ of Mandate. In June 2010, the Court of Appeal granted the plaintiffs' Petition for Writ of Mandate and ordered the Superior Court to vacate its February 2010 order denying plaintiffs' motion to certify a national class and enter a new order granting plaintiffs' motion to certify a nationwide class on the first two claims. In September 2010, Ticketmaster filed its Motion for Summary Judgment on all causes of action in the Superior Court, and that same month plaintiffs filed their Motion for Summary Adjudication of various affirmative defenses asserted by Ticketmaster. In November 2010, Ticketmaster filed its Motion to Decertify Class. The Company intends to vigorously defend the action. LIVE NATION: Canadian Consumer Class Action Litigation Ongoing -------------------------------------------------------------- In February 2009, five putative consumer class action complaints were filed in various provinces of Canada against TicketsNow, Ticketmaster, Ticketmaster Canada Ltd. and Premium Inventory, Inc. All of the cases allege essentially the same set of facts and causes of action. Each plaintiff purports to represent a class consisting of all persons who purchased a ticket from Ticketmaster, Ticketmaster Canada Ltd. or TicketsNow from February 2007 to present and alleges that Ticketmaster conspired to divert a large number of tickets for resale through the TicketsNow Web site at prices higher than face value. The plaintiffs characterize these actions as being in violation of Ontario's Ticket Speculation Act, the Amusement Act of Manitoba, the Amusement Act of Alberta or the Quebec Consumer Protection Act. The Ontario case contains the additional allegation that Ticketmaster and TicketsNow's service fees run afoul of anti-scalping laws. Each lawsuit seeks compensatory and punitive damages on behalf of the class. The Company intends to vigorously defend all claims in all of the actions. No further updates were reported in Live Nation Entertainment, Inc.'s Nov. 4, 2010, Form 10-Q filed with the Securities and Exchange Commission for the quarter ended September 30, 2010. On January 25, 2010, Live Nation merged with Ticketmaster Entertainment LLC and changed its name from Live Nation, Inc., to Live Nation Entertainment, Inc. LIVE NATION: U.S. Consumer Class Action Litigation Ongoing -------------------------------------------------------------- From February through June 2009, eleven purported class action lawsuits asserting causes of action under various state consumer protection laws were filed against Ticketmaster and TicketsNow in U.S. District Courts in California, New Jersey, Minnesota, Pennsylvania and North Carolina. The lawsuits allege that Ticketmaster and TicketsNow unlawfully deceived consumers by, among other things, selling large quantities of tickets to TicketsNow's ticket brokers, either prior to or at the time that tickets for an event go on sale, thereby forcing consumers to purchase tickets at significantly marked-up prices on TicketsNow.com instead of Ticketmaster.com. The plaintiffs further claim violation of the consumer protection laws by Ticketmaster's alleged "redirecting" of consumers from Ticketmaster.com to Ticketsnow.com, thereby engaging in false advertising and an unfair business practice by deceiving consumers into inadvertently purchasing tickets from TicketsNow for amounts greater than face value. The plaintiffs claim that Ticketmaster has been unjustly enriched by this conduct and seek compensatory damages, a refund to every class member of the difference between tickets' face value and the amount paid to TicketsNow, an injunction preventing Ticketmaster from engaging in further unfair business practices with TicketsNow and attorney fees and costs. In July 2009, all of the cases were consolidated and transferred to the U.S. District Court for the Central District of California. The plaintiffs filed their consolidated class action complaint in September 2009, to which Ticketmaster filed its answer the following month. In July 2010, Ticketmaster filed its Motion for Summary Judgment. The Company intends to vigorously defend all claims in all of the actions. No further updates were reported in Live Nation Entertainment, Inc.'s Nov. 4, 2010, Form 10-Q filed with the Securities and Exchange Commission for the quarter ended September 30, 2010. On January 25, 2010, Live Nation merged with Ticketmaster Entertainment LLC and changed its name from Live Nation, Inc., to Live Nation Entertainment, Inc. LIZ CLAIBORNE: Seeks Dismissal of NY Securities Lawsuit ------------------------------------------------------- Liz Claiborne, Inc., has asked a New York court to dismiss a class action complaint captioned Angela Tyler (individually and on behalf of all others similarly situated) v. Liz Claiborne, Inc., Trudy F. Sullivan and William L. McComb, according to the Company's November 4, 2010, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended Oct. 2, 2010. The purported class action complaint was filed in the United States District Court in the Southern District of New York on April 28, 2009, against the Company, its chief executive officer, William L. McComb and Trudy Sullivan, a former president of the Company. The complaint alleges certain violations of the federal securities laws, claiming misstatements and omissions surrounding the Company's wholesale business. The Company believes that the allegations contained in the complaint are without merit, and the Company intends to defend this lawsuit vigorously. The Company moved to dismiss Plaintiffs' Second Amended Complaint on October 4, 2010. MCAFEE INC: Motion to Dismiss Data-Pass Class Action Denied ----------------------------------------------------------- Manatt Phelps & Phillips LLP reports that in the latest data-pass news, a federal judge denied a motion to dismiss several counts in a class action against security software company McAfee. The suit alleges that McAfee transferred consumers' credit card information immediately after they purchased software but before they downloaded it. Pop-up ads would appear from a third party with a "Try It Now" button that, when clicked by consumers, would enroll them in a monthly program. The plaintiffs claim they believed they needed to click on the button to download their software and that McAfee received a fee for each customer who subscribed to the services of Arpu, Inc. via the ad on McAfee's site. The complaint alleges that the plaintiffs only later learned they were enrolled in a monthly program with Arpu, costing $4.95 per month, and that McAfee transferred their confidential billing information without adequately disclosing what they were signing up for. U.S. District Court Judge Lucy H. Koh said the plaintiffs could sue under California's unfair business practices statute even though they could not claim any actual damages. Because the plaintiffs sought disgorgement of profits and restitution from McAfee based on the company's business practices, their claims satisfied the state law, she said. Discussing the plaintiffs' allegations, the judge said there were several facets of the pop-up ad that could deceive a "significant portion of the public" into believing that the ad was affiliated with McAfee. The sequential placement of the ad, the fact that Arpu's name appears nowhere on the pop-up, and the fact that the only reference to a third party appears in fine print makes it "difficult not to view the ad as an attempt to conceal [the] source and to pass off both the ad and the product as McAfee's own," the judge said. Judge Koh also noted differences that could have tipped consumers off, adding that the plaintiffs were "unable to allege with any precision McAfee's role in or responsibility for the content of the pop-up ad." Although the court allowed the plaintiffs' state law claims to continue, it dismissed claims under the Lanham Act, determining that the allegedly deceptive elements of the pop-up ad were not sufficient to establish a likelihood of injury by direct diversion of sales or a lessening of goodwill. A copy of the complaint in Ferrington v. McAfee is available at: http://is.gd/hwPdb A copy of the motion to dismiss in Ferrington v. McAfee is available at http://is.gd/hwPjl Why it matters: The suit is the most recent headline about data-pass marketing lately, following Senator Jay Rockefeller's (D-W.Va.) proposed legislation, the Restore Online Shoppers' Confidence Act, which would establish prohibitions and restrictions for all online post-transaction offers and limit the use of "negative option" sales. In addition, the three major post-transaction companies -- Affinion, Vertrue, and Webloyalty -- changed their practices earlier this year to require consumers to re-enter their credit card information to enroll in their discount clubs. The companies and their online retail partners have also faced scrutiny from state attorneys general; Webloyalty and Affinion and various partners both recently reached multi-million dollar settlements with the state of New York. Manatt, Phelps & Phillips, LLP is a law firm with service areas including: advertising; antitrust; banking; bankruptcy and financial restructuring; corporate finance and securities; environmental; government and regulatory; healthcare; insurance; intellectual property, including patent, trademark and copyright; internet and e-commerce; labor and employment; litigation and trial; mergers and acquisitions; motion picture and television; music; real estate and land use; tax, benefits and compensation; and venture capital. MEAD JOHNSON: Court Certifies Class in Enfamil FDUTPA Suit ---------------------------------------------------------- David M. Simon, Esq. at Wildman Harrold Allen & Dixon LLP reports that Allison Nelson filed a putative class action alleging that Mead Johnson violated the Florida Deceptive and Unfair Trade Practices Act by misrepresenting its Enfamil LIPIL infant formula as the only infant formula that contains DHA and ARA. Ms. Nelson moved to certify a class of "[a]ll Florida consumers who purchased Enfamil(R) LIPIL(R) within the applicable statute of limitations." In ruling on Ms. Nelson's class certification motion, the Florida federal court held that unlike a claim for common law fraud, a claim for violation of FDUTPA does not require a purchaser to prove actual reliance on a misrepresentation. FDUTPA, the court held, instead only requires a purchaser to prove that a "practice was likely to deceive a consumer acting reasonably in the same circumstances." The class members, the court thus further held, "need not submit individualized proof to establish causation." Common proof as to whether Mead's representations would deceive a reasonably-acting consumer could establish liability under FDUTPA as to all class members. Based on this interpretation of FDUTPA, the court ruled that plaintiff's class claims satisfy Fed. R. Civ. P. 23's commonality and typicality requirements and that, as also required by Rule 23, common issues predominate over individualized issues and a class action is the superior method of adjudicating the case. The court accordingly granted Ms. Nelson's motion and certified the class. Nelson v. Mead Johnson Nutrition Co., 2010 WL 4282106 (S.D. Fl. Nov. 1, 2010). Ms. Nelson's holding that FDUTPA does not require a purchaser to prove actual reliance and accordingly does not require individualized proof of causation highlights that statutory (or consumer) fraud claims often provide a basis for class certification under circumstances in which a common law fraud claim would not. Wildman Harrold Allen & Dixon LLP is a 200-attorney national law firm. It was founded in 1967 by Max Wildman, Bernard Harrold, Thomas D. Allen, and Stewart S. Dixon. NEWS CORP: Parties Agree to Settle California Consolidated Suit --------------------------------------------------------------- A settlement was reached in a consolidated class action lawsuit in connection with a transaction whereby Intermix Media, Inc., 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 Venture Partners; 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 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 a derivative action captioned LeBoyer v. Greenspan, et al., pending against various former Intermix directors and officers in the United States District Court for the Central District of California, 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 was set. On October 21, 2010, the parties agreed to a settlement of the action, which is subject to approval by the court. The terms of the settlement remain confidential pending submission of a formal stipulation of settlement to the court, according to the company's Nov. 4, 2010, Form 10-Q filing with the U.S. Securities and Exchange Commission for the fiscal year ended September 30, 2010. NIGHTHAWK RADIOLOGY: Shareholder Class Suit Still Pending in Idaho ------------------------------------------------------------------ NightHawk Radiology Holdings, Inc., continues to defend itself from an amended complaint, styled In re Nighthawk Radiology Holdings, Inc. Securities Litigation, filed in Idaho, according to the company's November 4, 2010, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended September 30, 2010. On December 17, 2009, a putative shareholder class action lawsuit was filed against the Company and certain of its former officers in the U.S. District Court for the District of Idaho. 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. On May 13, 2010, competing plaintiff Miramar Firefighters' Pension Fund filed an objection to the court's appointment of Plymouth as lead plaintiff and requested that the court instead appoint Miramar as lead plaintiff. The court has yet to rule on that motion. Pending the court's ruling on this objection, all deadlines have been taken off calendar, including defendants' deadline to respond to the complaint. NIGHTHAWK RADIOLOGY: Faces Seven vRad Merger-Related Suits ---------------------------------------------------------- NightHawk Radiology Holdings, Inc., continues to defend itself from seven class action lawsuits filed on behalf of the company's stockholders in Arizona and Delaware in connection with its merger with vRad, according to the company's November 4, 2010, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended September 30, 2010. In connection with the Company's announcement of its merger agreement with vRad, beginning on September 28, 2010, several putative class action lawsuits were filed purportedly on behalf of the Company's stockholders in the Superior Court of Maricopa County, Arizona, docketed as Israni v. NightHawk Radiology Holdings, Inc., et al., Case No. CV2010-025059; LaLone v. NightHawk Radiology Holdings, Inc., et al., Case No. CV2010- 028112; La Torre v. NightHawk Radiology Holdings, Inc., et al., Case No. CV2010-028176; Watts v. Engert, et al., Case No. CV2010- 028127; Newman v. Engert, et al., Case No. CV2010-028262; and Yu v. Engert, et al., Case No. CV2010-028403. On October 8, 2010, a purported class action lawsuit on behalf of the Company's stockholders was filed in Delaware Chancery Court, docketed as Scully v. NightHawk Radiology Holdings, Inc., et al., Case No. 5890-VCL. The complaints name the Company, each of the members of the Company's board of directors, and vRad as defendants. The lawsuits allege, among other things, that the Company's board of directors breached fiduciary duties owed to the Company's stockholders by failing to take steps to maximize stockholder value or to engage in a fair sale process when approving the proposed merger with vRad. The complaints also allege that the Company and vRad aided and abetted the members of the company's board of directors in the alleged breach of their fiduciary duties. In the Delaware action, the plaintiff also alleges that the Company's preliminary proxy statement contains certain material omissions, rendering some statements therein misleading. The plaintiffs in these various actions seek relief that includes, among other things, an injunction prohibiting the consummation of the proposed merger, a court order declaring that the board of directors breached their fiduciary duties in entering into the merger agreement, rescission -- to the extent the merger terms have already been implemented, and the payment of plaintiffs' attorneys' fees and costs. ORMAT TECHNOLOGIES: Motion to Dismiss Nevada Suit Still Pending --------------------------------------------------------------- Ormat Technologies Inc. is awaiting a decision on its motion to dismiss a consolidated amended class action complaint against the company, according to the company's November 4, 2010, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended September 30, 2010. 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 United States 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 of 1933. 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 February 23, 2010 or February 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 Exchange Act on behalf of a putative class of purchasers of Company stock between May 7, 2008, and February 24, 2010. The 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 February 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 complaint also alleges that certain of the Company's statements concerning the North Brawley project were false and misleading. The complaint seeks compensatory damages, expenses, and such further relief as the Court may deem proper. Defendants filed a motion to dismiss the complaint on August 13, 2010, which remains pending. PNM RESOURCES: Appeal on Dismissal of Navajo Suit Pending --------------------------------------------------------- PNM Resources, Inc., in a Form 10-Q for the quarter ended September 30, 2010, filed with the U.S. Securities and Exchange Commission on November 3, 2010, said an appeal on a district court's order dismissing a putative class action allegedly filed by members of the Navajo Nation. A putative class action was filed against PNM and other utilities on February 11, 2009, in the United States District Court in Albuquerque. Plaintiffs claim to be allottees, members of the Navajo Nation, who pursuant to the Dawes Act of 1887, were allotted ownership in land carved out of the Navajo Nation. Plaintiffs, including an allottee association, make broad, general assertions that defendants, including PNM, are rights-of-way grantees with rights-of-way across the allotted lands and are either in trespass or have paid insufficient fees for the grant of rights-of-way or both. The plaintiffs, who have sued the defendants for breach of fiduciary duty, seek a constructive trust. They have also included a breach of trust claim against the United States and its Secretary of the Interior. PNM and the other defendants filed motions to dismiss this action. On March 31, 2010, the court ordered that the entirety of the plaintiffs' case be dismissed. The court did not grant plaintiffs leave to amend their complaint, finding that they instead must pursue and exhaust their administrative remedies before seeking redress in federal court. On May 10, 2010, Plaintiffs filed a Notice of Appeal with the Bureau of Indian Affairs. PNM intends to participate in order to preserve its interests regarding any PNM-acquired rights-of-way implicated in the appeal. As the administrative appeal process is only in its initial stages, PNM cannot predict the outcome of the proceeding at this time. QWEST CORP: Parent Continues to Defend Suit Over Retirees Benefits ------------------------------------------------------------------ Qwest Communications International Inc., the ultimate parent company of Qwest Corporation, continues to defend a lawsuit filed against it in relation to the reduction of certain retiree benefits, according to Qwest Corp.'s November 4, 2010, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended September 30, 2010. A putative class action filed on March 30, 2007, on behalf of certain of QCII's retirees was brought against QCII, the Qwest Group Life Insurance Plan and other related entities in federal district court in Colorado in connection with QCII's decision to reduce the life insurance benefit for these retirees to a $10,000 benefit. The plaintiffs allege, among other things, that QCII and other defendants were obligated to continue their life insurance benefit at the levels in place before QCII decided to reduce them. The plaintiffs seek restoration of the life insurance benefit to previous levels and certain equitable relief. The district court ruled in QCII's favor on the central issue of whether QCII properly reserved its right to reduce the life insurance benefit under applicable law and plan documents. The plaintiffs subsequently amended their complaint to assert additional claims. In 2009, the court dismissed or granted summary judgment to QCII on all of the plaintiffs' claims. The plaintiffs have appealed the court's decision to the Tenth Circuit Court of Appeals. REACHLOCAL INC: Still Faces Class Action Suit in California ----------------------------------------------------------- A class action lawsuit filed against ReachLocal Inc. in California remains pending, according to the company's November 4, 2010, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended September 30, 2010. On March 1, 2010, a class action lawsuit was filed by two of the Company's former employees in California Superior Court in Los Angeles, California. The complaint alleges wage and hour violations in a Fair Labor Standards Act collective action and a California class action. The classes for each action have not been certified and potentially consist of approximately 1,000 persons for the federal collective action and approximately 250 persons for the California class action. The case is at an early stage and the Company has not yet determined the amount of liability, if any, that may result from the lawsuit. SAFEGUARD SCIENTIFICS: Accused of Breach of Fiduciary Duty ---------------------------------------------------------- Safeguard Scientifics, Inc., is sued by purported shareholders of Clarient Inc. in light of an acquisition of Clarient by a unit of General Electric Company, according to Safeguard's November 4, 2010, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended September 30, 2010. On October 22, 2010, Safeguard announced that Clarient had agreed to be acquired by GE Healthcare, a unit of GE via a public tender offer for all outstanding common and preferred shares of Clarient at a price of $5.00 per common share and $20.00 per preferred share, payable in cash, followed by a second step merger of Clarient with an indirect subsidiary of GE. The completion of the transactions is subject to certain conditions, and is expected to occur in late 2010 or early 2011. Since the announcement of the proposed acquisition, several lawsuits have been filed by purported shareholders of Clarient, seeking class action status. These actions are all substantially similar in that they allege that breaches of various fiduciary duties were committed in connection with the intended transactions. The actions make allegations against, and name as defendants, Clarient and the members of Clarient's board of directors, including the Safeguard executives who serve on Clarient's board of directors. One of the actions directly names Safeguard as a defendant. Safeguard is of the view that the claims made against it are without merit and it will vigorously defend against the allegations. SCANA CORP: Awaits Court Ruling on Rights-of-Way Suit Settlement ----------------------------------------------------------------- Scana Corporation continues to await a ruling from a Carolina court on its settlement of a class action litigation related to the use of electric transmission easements and rights of way, the company disclosed in a November 4, 2010, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended September 30, 2010. In May 2004, a purported class action lawsuit currently styled as Douglas E. Gressette and Mark Rudd, individually and on behalf of other persons similarly situated v. South Carolina Electric & Gas Company and SCANA Communications, Inc., was filed in South Carolina's Circuit Court of Common Pleas for the Ninth Judicial Circuit. The plaintiffs alleged that SCE&G made improper use of certain electric transmission easements and rights-of-way by allowing fiber optic communication lines and wireless communication equipment to transmit communications other than SCE&G's electricity-related internal communications and asserted causes of action for unjust enrichment, trespass, injunction and declaratory judgment but did not assert a specific dollar amount for the claims. SCE&G believes its actions are consistent with governing law and the applicable documents granting easements and rights-of-way. In June 2007, the Circuit Court issued a ruling that limits the plaintiffs' purported class to easement grantors situated in Charleston County, South Carolina. In February 2008, the Circuit Court issued an order to conditionally certify the class, which remains limited to easements in Charleston County. In July 2008, the plaintiffs' motion to add SCI to the lawsuit as an additional defendant was granted. This case, with Circuit Court approval in August 2010, has been tentatively settled as to all easements and rights-of-ways currently containing fiber optic communication lines in South Carolina, and the tentative settlement has been recognized. The parties are proceeding to identify class members and resolve other settlement related issues. While the settlement is subject to a fairness hearing before it is finally approved, SCE&G and SCI say they currently know of no reason why such approval will not be given. SCE&G CO: Settles "Right-of-Way" Lawsuit & Awaits Final Approval ---------------------------------------------------------------- South Carolina Electric and Gas Company has settled with plaintiffs Douglas E. Gressette and Mark Rudd regarding a lawsuit alleging improper use of electric transmission easements and rights-of-way, according to the company's November 4, 2010, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended September 30, 2010. In May 2004, a purported class action lawsuit currently styled as Douglas E. Gressette and Mark Rudd, individually and on behalf of other persons similarly situated v. South Carolina Electric & Gas Company and SCANA Communications, Inc., was filed in South Carolina's Circuit Court of Common Pleas for the Ninth Judicial Circuit. The plaintiffs alleged that SCE&G made improper use of certain electric transmission easements and rights-of-way by allowing fiber optic communication lines and wireless communication equipment to transmit communications other than SCE&G's electricity-related internal communications and asserted causes of action for unjust enrichment, trespass, injunction and declaratory judgment but did not assert a specific dollar amount for the claims. SCE&G believes its actions are consistent with governing law and the applicable documents granting easements and rights-of- way. In June 2007, the Circuit Court issued a ruling that limits the plaintiffs' purported class to easement grantors situated in Charleston County, South Carolina. In February 2008, the Circuit Court issued an order to conditionally certify the class, which remains limited to easements in Charleston County. In July 2008, the plaintiffs' motion to add SCI to the lawsuit as an additional defendant was granted. This case, with Circuit Court approval in August 2010, has been tentatively settled as to all easements and rights-of-ways currently containing fiber optic communication lines in South Carolina, and the tentative settlement has been recognized. The parties are proceeding to identify class members and resolve other settlement related issues. While this settlement is subject to a fairness hearing before it is finally approved, SCE&G and SCI currently know of no reason why such approval will not be given. This tentative settlement did not have a material adverse impact on Consolidated SCE&G's results of operations, cash flows or financial condition, the Company said in the filing. SEARS ROEBUCK: 7th Cir. Halts Repetitive Class Suits Over Dryers ---------------------------------------------------------------- Gary Long, Esq., Greg Fowler, Esq., and Simon Castley, Esq., at Shook Hardy & Bacon LLP, writing for the firm's Product Liability Litigation Report, dated November 11, 2010, report that the Seventh Circuit Court of Appeals has granted a Sears, Roebuck & Co. request to enjoin the filing of class actions involving its dryers with stainless steel drums and raising the same consumer fraud claims alleged in a putative class action that the Seventh Circuit refused to certify because individual issues predominated over common ones. Thorogood v. Sears, Roebuck & Co., No. 10-2407 (7th Cir., decided November 2, 2010). The November 15, 2010 edition of the Class Action Reporter ran a story on the ruling. The company sought relief under the All Writs Act after "a virtually identical class action" (Murray) was filed in a California federal court by the same attorney who had represented the plaintiff in Thorogood. The district court (sitting in Illinois), which had entered the order decertifying the Thorogood class, refused to enjoin the California action, saying that Sears could "obtain adequate relief against being harassed by repetitive litigation by pleading collateral estoppel" in subsequent litigation. The Seventh Circuit disagreed, noting that while such relief would ordinarily protect against harassment by repetitive litigation, "this case is unusual both because it involves class action litigation and because of the specific tactics employed by class counsel, which include, as we'll see, something close to settlement extortion." The California court refused to accept Sears' collateral estoppel defense because plaintiffs' counsel altered the pleadings "with just enough differences to confuse the district judge," according to the appeals court. The California court also allowed discovery to proceed against Sears. Because this ruling was unappealable, the Seventh Circuit ruled that the All Writs Act was the company's "only means, other than submitting to lawyer Boling's demands, of avoiding being drowned in the discovery bog." The court emphasized, "There is nothing new in [the California] complaint that would allow an escape from the bar of collateral estoppel. The critical issue was and is what consumers would understand by representations that the Kenmore dryer has a stainless steel drum. . . . These questions can't be answered on a class-wide basis, and so there would be no economies from allowing the suit to proceed as a class action." The court remanded the case for the district court to fashion an appropriate injunctive order, but indicated that it could not preclude individual lawsuits, could not involve lawsuits filed against other defendants and could not "forbid class action suits challenging representations materially different from those in Thorogood's and Murray's cases, or representation concerning a dryer that contains a different amount of stainless steel." The court also indicated that the order could preclude copycat litigation brought in state courts, but must be subject to whatever the U.S. Supreme Court decides in pending appeals asking whether "a district court that previously denied class certification nonetheless has personal jurisdiction over the absent putative class members such that it may enjoin them from seeking class certification in state court." Shook, Hardy & Bacon attorneys offer representation to clients targeted by class action and complex litigation. For additional information on SHB's Global Product Liability capabilities, please contact: Gary Long, Esq. Telephone: 816-474-6550 E-mail: glong@shb.com - and - Greg Fowler, Esq. Telephone: 816-474-6550 E-mail: gfowler@shb.com - and - Simon Castley, Esq. Telephone: 207-332-4500 E-mail: scastley@shb.com SEI INVESTMENTS: Unit Faces Lawsuits Over Leveraged Funds --------------------------------------------------------- One of SEI Investments Company's principal subsidiaries, SEI Investments Distribution Co., has been named as a defendant in certain putative class action complaints related to leveraged exchange traded funds advised by ProShares Advisors, LLC, according to SEI's November 4, 2010, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended September 30, 2010. As of November 4, 2010, the Complaints have been filed in the United States District Court for the Southern District of New York and in the United States District Court for the District of Maryland although the three complaints filed in the District of Maryland have been voluntarily dismissed by the plaintiffs. Two of them were subsequently re-filed in the Southern District of New York. Two of the complaints filed in the Southern District of New York have been voluntarily dismissed by plaintiffs. The first complaint was filed on August 5, 2009. The Complaints are purportedly made on behalf of all persons that purchased or otherwise acquired shares in various ProShares leveraged ETFs pursuant or traceable to allegedly false and misleading registration statements, prospectuses and statements of additional information. The Complaints name as defendants ProShares Advisors, LLC; ProShares Trust; ProShares Trust II, SIDCO, and various officers and trustees to ProShares Advisors, LLC; ProShares Trust and ProShares Trust II. The Complaints allege that SIDCO was the distributor and principal underwriter for the various ProShares leveraged ETFs that were distributed to authorized participants and ultimately shareholders. The complaints allege that the registration statements for the ProShares ETFs were materially false and misleading because they failed adequately to describe the nature and risks of the investments. The Complaints allege that SIDCO is liable for these purportedly material misstatements and omissions under Section 11 of the Securities Act of 1933. The Complaints seek unspecified compensatory and other damages, reasonable costs and other relief. The cases are in the early stage, and the court has not yet appointed lead plaintiffs. Defendants have moved to consolidate the complaints, which motion has been granted. While the outcome of this litigation is uncertain given its early phase, SEI believes that it has valid defenses to plaintiffs' claims and intends to defend the lawsuits vigorously. SEI INVESTMENTS: Securities Lawsuit Ongoing in East Baton Rouge --------------------------------------------------------------- A class action lawsuit filed against SEI Investments Company in Louisiana remains pending, according to the Company's November 4, 2010, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended September 30, 2010. SEI has been named in a lawsuit that was filed in August 2009 in the 19th Judicial District Court for the Parish of East Baton Rouge, State of Louisiana. The action purports to set forth claims on behalf of a class and also names SEI Private Trust Company (SPTC) as a defendant. The action names various defendants besides SEI, and the plaintiffs purport to bring a cause of action against SEI under the Louisiana Securities Act. The putative class action also includes a claim against SEI for an alleged violation of the Louisiana Unfair Trade Practices Act. SEI and SPTC filed exceptions in the putative class action that remains pending in East Baton Rouge, which the Court granted in part and dismissed the claims under the Louisiana Unfair Trade Practices Act and denied, in part, as to the other exceptions. There is a motion for class certification that is pending in the case. SMART BALANCE: Has Yet to Answer Complaint Involving Nucoa ---------------------------------------------------------- Smart Balance, Inc., has yet to answer a complaint involving its Nucoa(R) stick margarine product, according to the company's November 4, 2010, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended September 30, 2010. On Feb. 8, 2010, a lawsuit was filed against the company in the Federal District Court for the Central District in California in Santa Ana, California. The complaint alleges, among other things, violations of California's unfair competition law, false advertising, and consumer remedies act and seeks to identify all similarly situated plaintiffs and certify them in a class action. The company has not yet answered the complaint. SMART TECHNOLOGIES: May Face Securities Class Action Lawsuit ------------------------------------------------------------ Abraham, Fruchter & Twersky has commenced an investigation against Smart Technologies Inc. for possible violations of federal securities laws related to the Company's July 15, Initial Public Offering. SMT designs, develops, and sells interactive technology products and solutions worldwide, including interactive whiteboards and interactive touch-enabled display components. On November 9, after the market closed, SMT announced weaker-than- expected revenue for the 2010 second quarter. In a reaction to this news and a subsequent analyst downgrade, shares of SMT fell 31 percent on unusually high trading volume. "We are investigating whether the Company properly disclosed in their prior statements and prospectus on-going business risks and weakening financial results." Abraham, Fruchter & Twersky has extensive experience in securities class action cases, and the firm has been ranked among the leading class action law firms in terms of recoveries achieved by a survey of class action law firms conducted by Institutional Shareholder Services. SOMFY SYSTEMS: Recalls 4,600 Motorized Awnings ---------------------------------------------- The U.S. Consumer Product Safety Commission, in cooperation with Somfy Systems Inc., of Dayton, N.J., announced a voluntary recall of about 4,600 Motorized Awnings. Consumers should stop using recalled products immediately unless otherwise instructed. The awning motor's power cable can be severed while the awning is opened or closed manually, posing a risk of electrical shock to the user. No injuries or incidents have been reported. This recall involves recall involves the Sunea CMO RTS motor used to operate retractable awnings. The awning motor heads are silver and black-colored. "Somfy" is printed on the motor head. Motor heads that are entirely black in color are not included in this recall. The Sunea CMO RTS model numbers included in this recall are 525A2, 535A2 and 550R2. The model number is printed on a label on the motor tube. Pictures of the recalled products are available at: http://www.cpsc.gov/cpscpub/prerel/prhtml11/11043.html The recalled products were manufactured in France and sold through Awning dealers and retailers nationwide from December 2009 through September 2010. Consumers should immediately stop using recalled awning motors and the awning's manual crank and unplug and/or pull the circuit breaker to protect against anyone using the awning. Contact Somfy Systems to receive free installation of a replacement awning motor. For additional information, contact Somfy Systems at (800) 637-6639 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.somfysystems.com/ STRYKER CORP: Securities Class Action Lawsuit Still Pending ----------------------------------------------------------- In January 2010, a purported class action lawsuit against Stryker Corporation was filed in the United States District Court for the Southern District of New York on behalf of those who purchased the Company's common stock between January 25, 2007, and November 13, 2008, inclusive. The lawsuit seeks remedies under the Securities Exchange Act of 1934. In May 2010, the lawsuit was transferred to the United States District Court for the Western District of Michigan Southern Division. The Company is evaluating the scope of the claim and intends to defend itself vigorously. No further updates were provided in the Company's November 4, 2010, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended September 30, 2010. TIME WARNER: Files Motion to Dismiss Antitrust Lawsuits ------------------------------------------------------- Time Warner Cable, Inc., has filed a motion to dismiss lawsuits alleging violations of antitrust laws, according to the Company's November 4, 2010, Form 10-Q filed with the Securities and Exchange Commission for the quarter ended September 30, 2010. TWC is the defendant in In re: Set-Top Cable Television Box Antitrust Litigation, ten purported class actions filed in federal district courts throughout the United States. The actions are subject to a Multidistrict Litigation Order transferring the cases for pre-trial purposes to the U.S. District Court for the Southern District of New York. On May 10, 2010, the plaintiffs filed a second amended consolidated class action complaint, alleging that TWC violated Section 1 of the Sherman Antitrust Act, various state antitrust laws and state unfair/deceptive trade practices statutes by tying the sales of premium cable television services to the leasing of set-top converters boxes. The plaintiffs are seeking, among other things, unspecified treble monetary damages and an injunction to cease such alleged practices. TIME WARNER: Class Certification Hearing Set for February 14 ------------------------------------------------------------ A class certification hearing is scheduled for February 14 in a lawsuit against Time Warner Cable, Inc., for alleged violations of California consumer laws, according to the Company's November 4, 2010 Form 10-Q filed with the Securities and Exchange Commission for the quarter ended September 30, 2010. On November 14, 2008, the plaintiffs in Mark Swinegar, et al. v. Time Warner Cable Inc., filed a second amended complaint in the Los Angeles County Superior Court, as a purported class action, alleging that TWC provided to and charged plaintiffs for equipment that they had not affirmatively requested in violation of the proscription in the Cable Consumer Protection and Competition Act of 1992 against "negative option billing" and that the violation was an unlawful act or practice under California's Unfair Competition Law. Plaintiffs are seeking restitution under the UCL and attorneys' fees. On February 23, 2009, the court denied TWC's motion to dismiss the second amended complaint, and on July 29, 2010, the court denied the Company's motion for summary judgment. A class certification hearing is scheduled for February 14, 2011. On October 7, 2010, the Company filed a petition for a declaratory ruling with the Federal Communications Commission requesting that the FCC determine whether the Company's general ordering process complies with the Cable Act's "negative option billing" restriction. On October 20, 2010, the FCC requested public comment on the matter. TOYOTA MOTOR: Judge Gives Tentative Ruling on Acceleration Cases ---------------------------------------------------------------- Bill Callahan and Margaret Cronin Fisk, writing for Bloomberg News, report a federal judge tentatively ruled that he will reject most of Toyota Motor Corp.'s first major legal challenge to class- action lawsuits filed against the automaker by car owners over sudden acceleration. The car owners' lawyers provided sufficient evidence to allow their cases to go forward, U.S. District Judge James V. Selna in Santa Ana, California, said in a tentative ruling posted on his court's Web site. Judge Selna heard arguments Friday over Toyota's motion to dismiss class-action, or group, lawsuits claiming economic loss linked to sudden acceleration. "It is true that plaintiffs do not generally allege the precise dollar value of their losses, but that level of specificity is not required at this pleading stage," Judge Selna wrote in his 63-page ruling. "It is enough that they allege a tangible loss that can be proved or disproved upon discovery." Judge Selna said he would issue a final ruling by the U.S. Thanksgiving holiday on Nov. 25. The economic-loss lawsuits, combined for pretrial filings and rulings before Judge Selna, claim Toyota drove down the value of vehicles by failing to fix or disclose defects that triggered unintended acceleration. Federal suits claiming death or injury caused by such episodes are also combined in the Santa Ana court. Millions Recalled The company, based in Toyota City, Japan, has recalled more than 8 million vehicles for repairs related to sudden, unintended acceleration. In September 2009, the automaker announced a recall of 3.8 million Toyota and Lexus vehicles because of a defect that may cause floor mats to jam accelerator pedals. The company later recalled vehicles over defects involving the pedals themselves. Toyota asked Judge Selna to dismiss the car owners' claim that the company knew of a defect in the vehicles' electronic throttle control system and concealed it from consumers. The plaintiffs failed to identify an "actual defect," the company said in court papers. Judge Selna said would let this claim go forward. "Plaintiffs' fraudulent concealment claim pleads particular facts in support of the defect allegations, and that is all that is required at this stage," he wrote in the tentative ruling. "These rulings are only tentative and come at a stage of the legal proceedings in which the judge has to accept that what the plaintiffs allege are true," said Toyota attorney Lisa Gilford in an interview after the hearing. "We are confident that as the facts develop in this case they will show that there are no defects in these Toyota vehicles." 'No Such Proof' The burden "is now squarely on plaintiffs' counsel to prove their allegations, and Toyota is confident that no such proof exists," Celeste Migliore, a company spokeswoman, said in an e-mailed statement. The claim that Toyota's electronic throttle control system is defective is "wholly unsubstantiated," she said. "If the judge finalizes these tentative rulings they will be a substantial victory for the plaintiffs," consumer lawyer Steve W. Berman said after the hearing. Toyota had also said the consumers couldn't sue for losses on vehicles that hadn't experienced a sudden unintended acceleration defect, according to Judge Selna. "The court agrees with plaintiffs that experiencing an SUA defect is not required for standing," Judge Selna said in the ruling. "Consumers who bought Toyotas expected these cars to be safe," Mr. Berman said. "After thousands of crashes and the deaths of many people it is ludicrous for Toyota to argue that you could have a car that has a significant chance of running away from you but not have any legal rights until it actually runs away from you." 'Produced as Promised' Toyota disputed the claims of economic loss at Friday's hearing. The vehicles have "produced as promised," Cari Dawson, a Toyota lawyer, told Judge Selna. "These cars have not malfunctioned, their owners have not had to pay any money for repairs or retrofit, and they have not suffered any loss," she said. Ms. Dawson argued that economic loss can't be "speculative" based on losses that the owners may never suffer if they don't sell their cars or if market conditions change and the values of Toyotas don't drop. The cases are combined as In re Toyota Motor Corp. Unintended Acceleration Marketing, Sales Practices and Products Liability Litigation, 8:10-ml-02151, U.S. District Court, Central District of California (Santa Ana). UNITED STATES: Senate Approves Cobell Class Action Settlement ------------------------------------------------------------- Mary Clare Jalonick, writing for The Associated Press, reports the Senate has approved almost $4.6 billion to settle long-standing claims brought by American Indians and black farmers against the government. The money has been held up for months in the Senate as Democrats and Republicans squabbled over how to pay for it. The two class action lawsuits were filed over a decade ago. The settlements include almost $1.2 billion for black farmers who say they suffered discrimination at the hands of the Agriculture Department. Also, $3.4 billion would go to Indian landowners who claim they were swindled out of royalties by the Interior Department. The legislation was approved in the Senate by voice vote Friday and sent to the House. President Obama in a statement praised the Senate for passing the bill and urged the House to move forward on it. He said his administration is also working to resolve separate lawsuits filed against USDA by Hispanic and women farmers. "While these legislative achievements reflect important progress, they also serve to remind us that much work remains to be done," he said. Elouise Cobell, a member of the Blackfeet Tribe from Browning, Mont. and the lead plaintiff in the Indian case, said Friday that it took her breath away when she found out the Senate had passed the bill. She said was feeling despondent after the chamber had tried and failed to pass the legislation many times. Two people who would have been beneficiaries had died on her reservation this week. "It's 17 below and the Blackfeet nation is feeling warm," she said. "I don't know if people understand or believe the agony you go through when one of the beneficiaries passes away without justice." John Boyd, head of the National Black Farmers Association, said the passage of the black farmers' money is also long overdue. "Twenty-six years justice is in sight for our nation's black farmers," he said. Lawmakers from both parties have said they support resolving the long-standing claims of discrimination and mistreatment by federal agencies. But the funding has been caught up in a fight over spending and deficits. Republicans repeatedly objected to the settlements when they were added on to larger pieces of legislation. But Senate Majority Leader Harry Reid, D-Nev., satisfied conservative complaints by finding spending offsets to cover the cost. The legislation also includes a one-year extension of the Temporary Assistance for Needy Families program, which gives grants to states to provide cash assistance and other services to the poor, and several American Indian water rights settlements in Arizona, Montana and New Mexico sought by Sen. Jon Kyl, R-Ariz. In the Indian case, at least 300,000 Native Americans claim they were swindled out of royalties overseen by the Interior Department since 1887 for things like oil, gas, grazing and timber. The plaintiffs would share the settlement. The Cobell lawsuit has dragged on for almost 15 years, with one judge in 2008 comparing it to the Charles Dickens' "Bleak House," which chronicles a never-ending legal suit. Using passages from that novel, U.S. District Judge James Robertson noted that the "suit has, in course of time, become so complicated" that "no two lawyers can talk about it for five minutes without coming to a total disagreement as to all the premises." The Indian plaintiffs originally said they were owed $100 billion, but signaled they were willing to settle for less as the trial wore on. After more than 3,600 court filings and 80 court decisions, the two sides finally reached a settlement in December. "Personally I still think we're owed a hundred billion dollars, but how long do you drag this thing out?" Ms. Cobell said Friday. "Do you drag it out until every beneficiary is dead? You just can't do that." Ms. Cobell said she feels confident about passage in the House, where the two settlements already have passed twice as part of larger pieces of legislation. For the black farmers, it is the second round of funding from a class-action lawsuit originally settled in 1999 over allegations of widespread discrimination by local Agriculture Department offices in awarding loans and other aid. It is known as the Pigford case, named after Timothy Pigford, a black farmer from North Carolina who was an original plaintiff. The government already has paid out more than $1 billion to about 16,000 farmers, with most getting payments of about $50,000. The new money is intended for people -- some estimates say 70,000 or 80,000 -- who were denied earlier payments because they missed deadlines for filing. The amount of money each would get depends on how many claims are successfully filed. The bill passed Friday would be partially paid for by diverting dollars from a surplus in nutrition programs for women and children and by extending customs user fees. Interior Secretary Ken Salazar said with the passage of the Cobell settlement: "This is a day that will be etched in our memories and our history books." The Obama administration has aggressively moved to resolve the discrimination cases after most of them have lingered a decade or more in the courts. Last month, the Agriculture Department offered American Indian farmers who say they were denied farm loans a $680 million settlement. Agriculture Secretary Tom Vilsack said passage "marks a major milestone in USDA's efforts to turn the page on a sad chapter in our history." Department of Interior Press Release also reports Mr. Salazar on Friday lauded Senate approval of legislation to authorize implementation of the Cobell Settlement, a $3.4 billion agreement that will resolve the long-running and highly contentious class action lawsuit regarding the U.S. government's trust management and accounting of individual American Indian trust accounts. Mr. Salazar also commended the Senate for approving four major water rights settlements -- totaling more than $1 billion -- for American Indian tribes that will help deliver clean drinking water to Indian communities and provide certainty to water users across the West. The settlements were included in an omnibus package that cleared the Senate Friday. "With the Senate's approval of the Cobell settlement and the four Indian water rights settlements, this is a day that will be etched in our memories and our history books," said Secretary Salazar. "The Cobell settlement honorably and responsibly addresses long- standing injustices and is a major step forward in President Obama's agenda of reconciliation and empowerment for Indian nations. I am also deeply proud of the passage of the four water rights settlements that will deliver clean drinking water to Indian communities, end decades of controversy and contention among neighboring communities, and provide certainty to water users across the West. The progress we have made over the last two years in reaching critical Indian country settlements is unprecedented and I am hopeful that the House will soon act to pass these settlements as well." "The water settlements that passed [Fri]day are nothing short of historic for Indian nations," said Assistant Secretary for Indian Affairs Larry Echo Hawk. "The parties to these settlements are to be commended for their willingness to work together rather than stay locked in an endless cycle of litigation. These settlements will meet the needs of tribes as well as neighboring communities through provisions for sharing shortages and investing in critical infrastructure needs." Background on the Cobell Settlement Over the past 14 years, the class action litigation, filed by Ms. Cobell in 1996, included hundreds of motions, seven full trials, 22 motions and dozens of rulings and appeals. Under the negotiated agreement announced on Dec. 8, 2009, litigation would end regarding the federal government's performance of an historical accounting for trust accounts maintained by the United States on behalf of more than 300,000 individual Indians. A fund of $1.4 billion would be distributed to class members to compensate them for their historical accounting claims, and to resolve potential claims that prior U.S. officials mismanaged the administration of trust assets. In addition, to address the continued proliferation of thousands of new trust accounts caused by the "fractionation" of land interests through succeeding generations, the settlement establishes a $2 billion fund for the voluntary buy-back and consolidation of fractionated land interests. The land consolidation program will provide individual American Indians with an opportunity to obtain cash payments for divided land interests and free up the land for the benefit of tribal communities. Additional Information is available at http://www.cobellsettlement.com/ The Department of the Interior Web site: http://www.doi.gov/ The Office of the Special Trustee Web site: http://www.doi.gov/ost Background on the Four Indian Water Rights Settlements Federal law provides that Tribes have a right to water to meet the needs of their reservations. These rights can be quantified through either litigation or settlement. The Obama Administration has re-energized the federal government's commitment to addressing the water needs of Native American communities through Indian water rights settlements. Following negotiations involving States, Tribes, and other stakeholders, all four of the settlements approved Friday were supported in letters sent by the Administration. This level of Administration support for Indian water rights settlements in a single Congress is unprecedented. The four settlements contained in the legislation approved by Congress Friday include: White Mountain Apache Tribe in Arizona: The centerpiece of the settlement is the construction of the White Mountain Apache Tribe rural water system, which will greatly expand the current water delivery system to meet the very critical needs of the reservation. Crow Tribe in Montana: This settlement will ensure safe drinking water for the reservation as well as provide for the rehabilitation of the Crow Irrigation Project, which is in a dire state of disrepair. The existing drinking water system on the Crow reservation has significant deficiencies in capacity and water quality that have resulted in health problems. Aamodt in New Mexico: The Aamodt settlement ends one of the longest running water rights cases in the federal court system, with nearly 43 years of litigation yielding little in the way of results. The settlement provides for the construction of a regional water system to serve the Pueblos of Tesuque, Nambe, Pojoaque, and San Ildefonso as well as surrounding communities in northern New Mexico, with a non-federal cost share of 40 percent. Pueblo of Taos in New Mexico: The Taos settlement solidifies and makes permanent water-sharing arrangements between the Pueblo of Taos and neighboring communities. The settlement also protects and restores the Pueblo of Taos's Buffalo Pasture, a culturally sensitive and sacred wetland. Following action in the Senate, the House is expected to take up the omnibus package after the Thanksgiving recess. The Department of the Interior would begin implementation of settlements once they are signed into law by the President. WELLCARE HEALTH: Settles Suit; Estimates $200 Million Liability --------------------------------------------------------------- Wellcare Health Plans, Inc., entered into an agreement to settle an amended consolidated complaint against the company, according to its November 4, 2010, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended September 30, 2010. Putative class action complaints were filed in October 2007 and in November 2007. These putative class actions, entitled Eastwood Enterprises, L.L.C., v. Farha, et al.; and Hutton v. WellCare Health Plans, Inc., et al., respectively, were filed in Federal Court against the Company, Todd Farha, former chairman and chief executive officer, and Paul Behrens, former senior vice president and chief financial officer. Messrs. Farha and Behrens were also officers of various subsidiaries of the Company. The Eastwood Enterprises complaint alleges that the defendants materially misstated the Company's reported financial condition by, among other things, purportedly overstating revenue and understating expenses in amounts unspecified in the pleading in violation of the Securities Exchange Act of 1934, as amended. The Hutton complaint alleges that various public statements supposedly issued by the defendants were materially misleading because they failed to disclose that the Company was purportedly operating its business in a potentially illegal and improper manner in violation of applicable federal guidelines and regulations. The complaint asserts claims under the Exchange Act. Both complaints seek, among other things, certification as a class action and damages. The two actions were consolidated, and various parties and law firms filed motions seeking to be designated as Lead Plaintiff and Lead Counsel. In an Order issued in March 2008, the Federal Court appointed a group of five public pension funds from New Mexico, Louisiana and Chicago as Lead Plaintiffs. In October 2008, an amended consolidated complaint was filed in this class action asserting claims against the Company, Messrs. Farha and Behrens, and adding Thaddeus Bereday, former senior vice president and general counsel, as a defendant. In January 2009, the Company and certain other defendants filed a joint motion to dismiss the amended consolidated complaint, arguing, among other things, that the complaint failed to allege a material misstatement by defendants with respect to the Company's compliance with marketing and other health care regulations and failed to plead facts raising a strong inference of scienter with respect to all aspects of the purported fraud claim. The Federal Court denied the motion in September 2009 and the Company and the other defendants filed answer to the amended consolidated complaint in November 2009. In April 2010, the Lead Plaintiffs filed their motion for class certification. On June 18, 2010, the USAO filed motions seeking to intervene and for a temporary stay of discovery of this matter. In July 2010, the Federal Court granted the United States' motions and ordered that discovery be stayed through December 2010. On August 6, 2010, the Company reached agreement with the Lead Plaintiffs on the material terms of a settlement to resolve this matter. The terms of the settlement are being documented in a formal settlement agreement that will be subject to approval by the Federal Court following notice to all class members. The settlement provides that the Company will make cash payments to the class of $52,500,000 within thirty business days following the Federal Court's preliminary approval of the settlement and $35,000,000 by July 31, 2011. The settlement also provides that the Company will issue to the class tradable unsecured bonds having an aggregate face value of $112,500,000, with a fixed coupon of 6% and a maturity date of December 31, 2016. The bonds shall also provide that, if the Company incur debt obligations in excess of $425,000,000 that are senior to the bonds, the bonds shall accelerate as to payment and be redeemed. The settlement has two further contingencies. First, it provides that if, within three years following the date of the settlement agreement, the Company is acquired or otherwise experiences a change in control at a share price of $30.00 or more, the Company will pay to the class an additional $25,000,000. Second, the settlement provides that the Company will pay to the class 25% of any sums it recovers from Messrs. Farha, Behrens and Bereday as a result of claims arising from the same facts and circumstances that gave rise to this matter. The Company may terminate the settlement if a certain number or percentage of the class opt out of the settlement class. The settlement agreement will also provide that the settlement does not constitute an admission of liability by any party and such other terms as are customarily contained in settlement agreements of similar matters. As a result of this settlement having been reached, the company's current estimate for the resolution of this matter is $200,000,000. The company has discounted the $200,000,000 liability for the resolution of this matter and accrued this amount at its estimated fair value, which amounted to approximately $194,905,000 at September 30, 2010. Approximately $85,520,000 and $109,385,000 have been included in the current and long-term portions, respectively, of Amounts accrued related to investigation resolution in the company's Condensed Consolidated Balance Sheet as of September 30, 2010. There can be no assurance that the settlement will be finalized and approved and the actual outcome of this matter may differ materially from the terms of the settlement. * EBG Sees Significant Rise in Discrimination Class Actions ----------------------------------------------------------- Carmine A. Iannaccone, Esq., Barry Asen, Esq., and Michael S. Kun, Esq., at Epstein Becker & Green, P.C., report that two developments in employment law are merging in a way that prudent general counsel, labor counsel and human resources professionals should not miss. These two developments suggest that while employers will continue to be faced with wage-hour class actions and collective actions, they will also see a significant increase in the filing of discrimination class actions. First, the Equal Employment Opportunity Commission has announced its intention to focus on "systemic" claims of discrimination, rather than individual claims. With this in mind, the EEOC has launched 111 "systemic" class action lawsuits against American companies, dramatically increasing its prior class action efforts. It promises that many more will come. Second, the Ninth Circuit Court of Appeals' approval of class certification in the much-publicized Dukes v. Wal-Mart sex discrimination class action promises to have a significant impact upon the filing of private discrimination class actions. Approving the certification of a class with as many as 1.5 putative class members, the Ninth Circuit held that proceeding with such a large class would be manageable, a decision that plaintiffs' counsels are certain to cite when seeking to certify smaller classes. While the future of the Dukes decision may be uncertain given Wal-Mart's request for Supreme Court review, plaintiff-side class action attorneys everywhere rejoiced when a New York jury recently awarded $250 million in punitive damages to a class of female sales representatives in Velez v. Novartis Pharmaceuticals. One conclusion is inescapable: in these difficult economic times, juries -- which often consist of employees who are fearful of losing their jobs, as well as former employees whose fears have been realized -- often do not hesitate to freely spend employers' money. Under these circumstances, there is only one rational option for employers. Take steps now to minimize the risk of being the target of a discrimination class action lawsuit and to mitigate the potential exposure if one occurs. As we will discuss, prudent employers should promptly conduct internal audits of such areas as pay equity and promotions, doing so in a manner that should be privileged, and consider careful corrective action to remedy existing or potential problems. A. The EEOC Has Shifted Its Focus from Individual Discrimination Cases to Systemic Class Action Cases. The EEOC defines "systemic" cases as pattern or practice and/or class cases in which the alleged discrimination has a broad impact on an industry, profession, company, or geographic location. In its Fiscal Year 2010 Budget Justification to Congress, the EEOC announced that it intends to increase its efforts in pursuing this type of class action litigation: While past EEOC focus has primarily been on individual cases of discrimination, the agency has stated its bipartisan desire to shift emphasis to combating systemic discrimination. A strong systemic program is crucial to battling unlawful patterns or practices of discrimination which have a broad impact on an industry, profession, company, or geographic location. . . . Systemic lawsuits have been filed across the country under every statute enforced by the agency, involving a broad set of bases and issues and a wide variety of industries. The EEOC's focus on allegations of systemic discrimination has already produced impressive results. Not only have monetary settlements been substantial, but employers have agreed to EEOC oversight of the settlement for years to come. Some examples are particularly noteworthy: * The agency settled a gender discrimination class action against Outback Steakhouse for $19 million. The settlement proceeds will be paid to a class of female employees who were allegedly discriminated against, especially with regard to promotions. Outback further agreed to hire an outside consultant for at least two years to ensure compliance with a revised promotion system and to file written reports with the EEOC every six months on its efforts. * The EEOC obtained an $8.9 million settlement from Albertsons, a national grocery chain, in connection with claims of systemic race and national origin discrimination and harassment against black and Hispanic employees. Among other things, the EEOC claimed that Albertsons allowed graffiti to remain in employee restrooms, including racial and ethnic slurs, depictions of lynchings, and anti-immigrant statements. The settlement will be distributed among 168 current and former employees. Albertsons' equal employment opportunity actions will be subject to judicial monitoring for four years, and the company must initiate an extensive training program for management to ensure compliance with federal anti-discrimination laws. * Sears Roebuck resolved a disability discrimination class action brought by the EEOC by paying $6.2 million to former employees. Sears terminated these persons while they were on workers' compensation leave, rather than accommodating them with brief leave extensions that would have allowed them to remain as employees. As part of the settlement, Sears agreed to train employees regarding their rights under the Americans with Disabilities Act, provide written reports to the EEOC regarding future compliance, and post notices concerning the settlement at all Sears locations. * Allstate Insurance agreed to pay $4.5 million to 90 of its former sales agents to settle an age discrimination class action instituted by the EEOC. In addition, Allstate agreed that, for three years, it would provide discrimination training to its managers and submit reports to the EEOC concerning its anti- discrimination efforts. The EEOC has obtained these results by flexing its broad authority under the federal anti-discrimination statutes as never before. When an individual employee or former employee files a discrimination charge with the EEOC, the agency now often expands its investigation into the employer's related employment practices. The scope of the employee's initial charge with the EEOC has not limited the scope of the EEOC's subsequent class action suit against the employer. Any alleged statutory violations that the EEOC uncovers during the course of a reasonable investigation of an employee's initial charge can become the basis of a systemic class action suit. The courts have not been reluctant to support the EEOC in these efforts. In EEOC v. Yellow Transportation, the agency expanded an initial charge into a systemic class action and demanded that the employer provide it with the names, addresses and telephone numbers of all African-American employees who worked for the trucking company from 2004 to 2009. The federal court ordered the production of the requested information. Similarly, based on one employee's race discrimination charge in EEOC v. Patterson UTI Drilling, the EEOC served a subpoena on an employer demanding the names, races, positions and addresses of all of its employees who work on oil and natural gas rigs in 16 states and Canada. When the employer refused to comply, the EEOC sought enforcement of the subpoena in federal court. After the judge enforced the subpoena in its entirety, the EEOC cautioned other employers: "The EEOC takes its authority to issue subpoenas seriously . . . . Employers will not be permitted to refuse to comply with EEOC investigators' lawful and relevant requests for information." The conclusion compelled by these cases and the EEOC's increased emphasis on systemic claims of discrimination is plain: the EEOC can expand any charge filed by an employee or former employee into a systemic class action against the employer. The time, expense and monetary exposure involved in defending a class action brought by the EEOC can be enormous. Negative publicity can be damaging, too. B. The Stakes Have Grown in Privately-Initiated Class Actions. Dukes v. Wal-Mart is the largest and most publicized employment discrimination class action in history. Never before has a such a large discrimination class been certified; again, the class may approach 1.5 million members -- more than the active-duty members of the Army, Navy, Air Force, Marines and Coast Guard combined. By some estimates, the potential exposure in the case exceeds $4 billion. The Dukes action began in 2001 with six female employees alleging that they were paid less and received fewer promotions than their male counterparts. It mushroomed into a class action that was ultimately certified by a federal court in San Francisco. Among other things, the federal court concluded that a class with as many as 1.5 million members was not "unmanageable." The Ninth Circuit Court of Appeals affirmed the bulk of the decision. Unless and until the Supreme Court reverses that decision -- and, historically, it reverses more than 80% of the Ninth Circuit opinions it elects to hear -- plaintiffs' lawyers nationwide can be expected to cite Dukes in arguing that the smaller classes they seek to certify are also manageable. While nothing can match Dukes in sheer size, the one-quarter of a billion dollars ($250,000,000) in punitive damages that a New York jury recently awarded against Novartis Pharmaceuticals to a class of female sales reps for pay and promotion sex discrimination is breathtaking as well. Thus, not only may employers be faced with more and larger discrimination class actions, but they may also be faced with the long-feared runaway juries. The fear of runaway juries in this economic downturn, along with concerns about long-simmering pay and promotion statistical disparities, may well have led several major employers to enter into extremely large settlements in discrimination class actions. For instance: * Eastman Kodak agreed to pay a $21.4 million settlement to a class of current and former African-American employees who accused the company of maintaining a pattern and practice of race discrimination in compensation and promotion. * The U.S. subsidiary of a French drug company, Sanofi- Aventis, agreed to a $15.4 million settlement in a class action suit that alleged that the company engaged in systemic sex bias in hiring, compensation and promotion. * Dell, the well-known computer company, entered into a $9.1 million settlement with a class of female employees rather than leave the determination to a jury. Dell was accused of sex discrimination in compensation and promotion. These decisions and settlements have been noticed by the plaintiff-side employment law bar and are spurring more class action activity. In the last few months alone, six women have filed a class action against Citigroup, alleging that the bank runs a proverbial "boys club" where women are harassed and systematically discriminated against in terms of pay and promotion, and because of pregnancy, maternity leaves and child care obligations. A group of female employees at Goldman Sachs have also commenced a sex discrimination class action, claiming that the firm systematically undervalues the achievements of women, resulting in pay and promotion disparities. Statistics cited by the plaintiffs allegedly show that 71% of the firm's vice presidents are men, 83% of the firm's managing directors are men, and 86% of its partners are men. Even the U.S. government was recently sued in a class action against the Secretary of Commerce, which claims that more than 100,000 minority applicants were not hired for Census Bureau positions because of decades-old arrest and minor conviction records. There is every reason to believe that these actions signal the reemergence of privately-initiated discrimination class actions. C. What Can a Rational Employer Do? One basic truth about the American system of justice is that anyone can sue. The employee legitimately wronged and the employee treated lawfully may both proceed to court. The obstacles to an individual lawsuit are few. The same is true for a class action lawsuit. The Hon. Andrew Kleinfeld, one of the judges on the Ninth Circuit Court of Appeals who criticized the certification of the Dukes class, observed that the only real evidence of sex discrimination in the case was that about two- thirds of the Wal-Mart managers were male and about one-third female. But as he wryly added: "Not everybody wants to be a Wal- Mart manager." Knowing that virtually any current or former employee can file a discrimination class action, regardless of merit, what can a rational employer do to save itself from becoming a defendant in such an action? And what can it do to put itself in the best position possible to defend such an action should one be filed? Sound human resources policies are a start. Training programs designed to educate managers about equal employment opportunity compliance ("EEO") are helpful. Ensuring that employees have an effective means to voice their complaints internally may resolve many disputes and reduce the likelihood of a disgruntled employee filing a massive class action. Employing trained professionals, who know how to respond appropriately, is advantageous. Many rational employers already have these tools in place. They still may not be enough. The savvy employer's best defense is to conduct an internal audit designed to assess potential exposure to discrimination class actions and their attendant liability, and to take the necessary steps to ameliorate problematic policies and practices well in advance of any class action. Both steps need to be taken carefully, however. An internal audit that is not protected by the attorney-client privilege or the attorney work product doctrine might have to be turned over in discovery in subsequent litigation and could become the proverbial "Exhibit A" against the employer. And corrective action, if not taken carefully, can raise red flags that could lead to the filing of the very class action the employer is seeking to avoid. In the past, many employers argued that their audits fell within the "self-critical analysis" privilege. While that assertion met with some initial success, more courts recently have been rejecting it. The better route is to assert "attorney-client privilege" and/or "work product privilege." Although laws regarding these privileges vary from state to state, several conditions generally must be satisfied to claim these privileges, including: (1) the audit was conducted through outside counsel or an attorney in the company's legal department, and not through the human resources department; (2) the company's general counsel ordered the audit in writing, stating that the audit's goal was to receive legal advice regarding the company's compliance with EEO laws; (3) the general counsel authorized the involved attorneys to ask other company employees to assist in the audit, e.g., human resources professionals; (4) all audit reports were prepared by attorneys who discussed the audit's findings in relation to EEO principles and case law; (5) all communications concerning the audit were marked at the top either "Privileged and Confidential: Attorney-Client Privileged" or "Privileged and Confidential: Attorney Work Product;" and (6) all communications concerning the audit were shown to persons on a "need-to-know" basis and otherwise maintained as strictly confidential. As the above-discussed class action decisions, settlements and recent filings underscore, the first two areas that should be audited are compensation and promotion practices: * Compensation -- Analyze the compensation being paid to similarly-situated employees, including all management employees, comparing men to women, comparing members of different races and ethnic groups (Whites, Blacks, Hispanics, Asians), and comparing older and younger workers. If there are similarly-situated employees in protected statuses (gender, race, national origin, age) earning significantly different compensation that cannot be justified by written performance appraisals, prior experience or other legitimate factors, there is a potential class action problem that should be addressed. The passage of the Lilly Ledbetter Fair Pay Act, which virtually eliminates the statute of limitations for pay discrimination and substantially increases potential back pay liability awards, makes the necessity of an audit all the more pressing. * Promotion -- Analyze the number and frequency of promotions among similarly-situated employees, comparing men to women, comparing members of different races and ethnic groups, and comparing older and younger workers. If there are statistically significant disparities, review the promotion process itself to determine if there are internal practices that contribute to the disparity. All levels of management employees, including the senior executive level, should be included in this analysis in order to identify statistical disparities along gender, race, national origin, and age lines. Finally, when announcing its emphasis on "systemic" discrimination, the EEOC warned employers that they should take "a careful look at the practices they use to recruit, hire, promote, train and retain employees." This admonition should be taken seriously, and, thus, any audit should also examine recruitment, hiring, training opportunities, and terminations. Once the audit is completed, the key is to take careful corrective measures designed to eliminate problems and reduce the possibility of being embroiled in an employment discrimination class action. Epstein Becker & Green, P.C. provides clients with tailored solutions to their legal and business issues. Its areas of practice include: Health Care and Life Sciences, Labor and Employment, Litigation, Real Estate, Business Law, Employee Benefits and Immigration. The Firm is also provides service to clients in the health, hospitality, financial services and energy industries, among others, representing entities from Fortune 100 companies to startups. The Firm has approximately 325 lawyers practicing in 11 offices throughout the U.S. -- Atlanta, Boston, Chicago, Houston, Los Angeles, Miami, New York, Newark, San Francisco, Stamford, and Washington, DC -- and is a founding member of the International Lawyers Network (ILN), an association of over 90 select law firms with more than 5,000 lawyers worldwide. For more information about this article, please contact: Carmine Iannaccone, Esq. EPSTEIN BECKER & GREEN, P.C. One Gateway Center Newark, NJ 07102-5311 Telephone: 973/639-8271 E-mail: ciannaccone@ebglaw.com - and - Barry Asen, Esq. EPSTEIN BECKER & GREEN, P.C. 250 Park Avenue New York, NY 10177-1211 Telephone: 212/351-4847 E-mail: basen@ebglaw.com - and - Michael Kun, Esq. EPSTEIN BECKER & GREEN, P.C. 1925 Century Park East, Suite 500 Los Angeles, CA 90067-2506 Telephone: 310/557-9501 E-mail: mkun@ebglaw.com * Rule 23(b)(2) Class Suits Easier to Certify, Greenberg Says ------------------------------------------------------------- Robert J. Herrington, Esq., at Greenberg Traurig LLP reports that the Ninth Circuit has made it substantially easier to certify a class action that seeks injunctive and monetary relief under Rule 23(b)(2) of the Federal Rules of Civil Procedure, and courts are applying this new standard to certify class actions in consumer cases. Find out what you can do to protect against class actions brought under this new standard. The Rule By its terms, Rule 23(b)(2) permits a court to certify claims "for injunctive or corresponding declaratory relief." The rule traditionally has been used in civil rights and discrimination cases where the primary goal of the litigation is to end or modify a broadly applied policy or institutional practice. To certify a class under Rule 23(b)(2), the plaintiff does not have show "predominance" or "superiority" -- the elements defendants typically focus on to defeat class certification. A Rule 23(b)(2) class also does not require notice to class members. Although the text of the rule is limited to cases seeking injunctive or declaratory relief, some courts have relied on an Advisory Committee Note to hold that courts may rely on Rule 23(b)(2) to certify some classes seeking money. Until recently, courts generally limited this exception to cases seeking "incidental" damages, defined as monetary relief that flows directly from liability, to the class as a whole, on the claims forming the basis for injunctive or declaratory relief. See, e.g., Allison v. Citgo Petroleum Corp., 151 F.3d 402, 415 (5th Cir. 1998). The most frequent use of this exception has been in labor cases seeking back pay and other monetary relief flowing directly from the alleged violation. The Recent Cases In two recent decisions, the Ninth Circuit has developed a new, broader standard that applies not only to labor and employment cases, but also consumer class actions and products cases. In Dukes v. Walmart Stores, Inc., 603 F.3d 571 (9th Cir. 2010), the Ninth Circuit held that monetary claims can be certified under Rule 23(b)(2), provided the case does not seek monetary damages that are "superior in strength, influence or authority to injunctive and declaratory relief" being sought. Id. at 615. In other words, if the injunctive relief predominates or is at least of equal importance, the class may be certified under Rule 23(b)(2). To determine whether monetary damages predominate, Dukes instructs district courts to consider factors such as "whether the monetary relief sought determines the key procedures that will be used," whether it "introduces new and significant legal and factual issues" or whether its size and nature raise "due process and manageability concerns." Id. at 615-16. In Wang v. Chinese Daily News, -- F.3d --, 2010 WL 3733568 (9th Cir. Sept. 27, 2010), the Ninth Circuit underscored the point made in Dukes. The court reiterated that Rule 23(b)(2) only requires that "claims for monetary relief not predominate over claims for injunctive relief." Id. at *6. Because the plaintiffs were seeking to enjoin a set of longstanding employment practices and sought monetary relief for employees injured by those practices, the court held that the monetary claims did not predominate and certification under Rule 23(b)(2) was proper. Id. at **6-7. Using Rule 23(b)(2) to Certify Consumer Class Action A recent decision highlights the risk created by the new class certification standard set forth in Dukes and Wang. The case of In re Conseco Life Insurance Company Lifetrend Insurance Sales and Marketing Litigation, 2010 WL 3931096 (N.D. Cal. Oct. 6, 2010), is a classic consumer class action. Plaintiffs are challenging the defendant's administration of insurance policies, claiming that attempts to collect premiums under the terms of the policy constitute breach of contract and fraud. The court recently certified a nationwide class of policyholders, relying on the rule set forth in Dukes and Wang that a Rule 23(b)(2) class may be certified unless the monetary relief predominates over injunctive relief or declaratory relief. In a notably brief discussion, the court concluded that the request for damages was "minor" in comparison to the injunctive and declaratory relief sought, making certification under Rule 23(b)(2) proper. The court thus declined to address superiority and predominance arguments, as these requirements did not apply to a Rule 23(b)(2) certification. What You Can Do About It You can do at least two things to protect against class actions brought under this new standard. First, if faced with a request for certification under Rule 23(b)(2), seek a stay of the case or ask the court to defer the class certification motion. The Supreme Court is considering whether to grant certiorari in Dukes and may soon decide whether this new certification standard will stand. Second, although not always possible, consider whether you can reduce the value of the injunctive relief sought by making prospective changes to meet the demands of the lawsuit. This strategy may allow you to argue that the injunctive relief is moot and of no value. Greenberg Traurig LLP and Greenberg Traurig PA is an international law firm with approximately 1,800 attorneys and governmental professionals in 32 locations in the United States, Europe and Asia. Its founding office is in Miami, Florida with its largest office in New York City. ********* 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. 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. 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