/raid1/www/Hosts/bankrupt/CAR_Public/101202.mbx
C L A S S A C T I O N R E P O R T E R
Thursday, December 2, 2010, Vol. 12, No. 238
Headlines
BANK OF NEW YORK: "Securities Lending" Suits Remain Pending
BANK OF NEW YORK: Subsidiary Continues to Face "Madoff" Suits
BANK OF NEW YORK: Continues to Defend "Medical Capital" Suits
CARDINAL HEALTH: Feature Details Class Action Allegations
CAROLINA POWER: Plaintiffs Appeal Dismissal of Fla. Suit
CC MEDIA: Subsidiaries Continue to Defend "Sherman Act" Suits
CHARLES SCHWAB: Final Approval of "YieldPlus Fund" Pact Pending
CHARLES SCHWAB: Seeks Consolidation of Securities Suits in Calif.
COMMERCE BANCSHARES: Continues to Defend 2 Overdraft Fee Suits
COMMONWEALTH LAND: Sued for Breach of Fiduciary Duties
CORINTHIAN COLLEGES: Sued for Fraud & Deceptive Business Practices
EL PASO NATURAL: Remains a Defendant in "Bank of America" Suit
FIFTH THIRD: Remains a Defendant in NY Antitrust Suit
FIFTH THIRD: Continues to Defend Securities Suit in Ohio
FIFTH THIRD: March 16 Hearing Set for Class Action Settlement
FLORIDA: Sued for Selling Personal Driver's License Information
GERBER PRODUCTS: Sued in California for Deceptive Advertising
KELLOGG CO: CCAF Says Atty. Fees Disproportionate to Class Relief
LENDER PROCESSING: Continues to Defend "Foster" Suit
LENDER PROCESSING: Awaits Dismissal of Mississippi Class Action
LENDER PROCESSING: Continues to Face "Knippel" Suit in Nevada
MASSEY ENERGY: Motion to Consolidate Securities Suits Pending
MERCK & CO: Majority of Claimants Paid Thru Vioxx Settlement
MERCK & CO: Louisiana Appeals Suit Dismissal
MERCK & CO: Canadian Litigation Over Vioxx Still Ongoing
MERCK & CO: ERISA and Securities Suits Still Pending
MERCK & CO: Continues to Defend Fosamax MDL
NATIONAL AUSTRALIA: May Face Suit Over Eftpos Card Breakdown
NORTHEAST UTILITIES: To Defend Against 9 Suits in Massachusetts
PERDUE FARMS: Sued in New Jersey for False Advertising
PHI INC: Reconsideration Plea in "Superior Offshore" Suit Pending
PROGRESS ENERGY: Appeal in Nuclear Cost Recovery Suit Pending
RAE SYSTEMS: Board Sued Over Sale to Battery Ventures
REEBOK INTERNATIONAL: Suit Complains About "Toning Shoes"
SHELL OIL: Dec. 8 Hearing Set for Class Action Settlement
SPRINT NEXTEL: N.Y. Suit Complains About "Premium Data Add-On"
US BANCORP: Remains a Defendant in "Account Overdraft" Litigation
US COPYRIGHT GROUP: Faces Suit for Fraud, Extortion and Abuse
* Several Law Firms in Ontario May Face Class Actions
*********
BANK OF NEW YORK: "Securities Lending" Suits Remain Pending
-----------------------------------------------------------
The Bank of New York Mellon Corporation continues to be involved
in purported class action lawsuits against its asset servicing
arm, according to the company's November 8, 2010, Form 10-Q filing
with the U.S. Securities and Exchange Commission for the quarter
ended September 30, 2010.
A number of participants in the securities lending program, which
is associated with BNY Mellon's asset servicing business, have
filed or threatened lawsuits against BNY Mellon or its affiliates.
The lawsuits were filed on various dates from 2008 to 2010, and
are currently pending in federal courts in Oklahoma, New York,
Washington and California. The participants allege that they have
incurred losses, including losses related to investments in Sigma
Finance Inc. and Lehman Brothers Holdings, Inc., and seek damages
as to those losses.
Two such pending cases seek to proceed as a class action. The
participants assert contractual, statutory, and common law claims,
including claims for negligence and breach of fiduciary duty.
BANK OF NEW YORK: Subsidiary Continues to Face "Madoff" Suits
-------------------------------------------------------------
A subsidiary of The Bank of New York Mellon Corporation continues
to defend purported class actions arising from that subsidiary's
exposure to the "Madoff fraud", according to the company's
November 8, 2010, Form 10-Q filing with the U.S. Securities and
Exchange Commission for the quarter ended September 30, 2010.
Bernard L. Madoff has pleaded guilty to engaging in a massive
investment fraud through his company, Bernard L. Madoff Investment
Securities LLC. Ivy Asset Management LLC, a subsidiary of BNY
Mellon that primarily manages funds-of-hedge-funds and is in the
process of winding down, has not had any funds-of-funds
investments with Madoff since 2000. Several investment managers
contracted with Ivy as a sub-advisor and one pension fund
contracted with Ivy as investment manager; a portion of these
funds were invested with Madoff and likely suffered losses as a
result of the Madoff fraud.
The New York State Attorney General investigated these
relationships and commenced a civil lawsuit against Ivy and two of
its former officers on May 11, 2010, in New York state court. The
lawsuit alleges that the defendants purportedly did not disclose
certain material facts about Madoff and seeks to enjoin defendants
from engaging in similar conduct. The complaint also seeks an
accounting of compensation received from January 1997 to the
present by the defendants in connection with the conduct described
in the complaint, seeks restitution, disgorgement and damages,
together with costs and attorneys's fees.
Ivy or its affiliates have been named in a number of civil
lawsuits filed from 2008 to 2010 relating to certain investment
funds that invested with Madoff. Ivy acted as a sub-advisor to
the managers of some of those funds. Plaintiffs allege that the
funds suffered losses in connection with the Madoff investments.
Plaintiffs assert various causes of action including securities
and common-law fraud.
Certain of the cases seek to proceed as class actions and/or to
assert derivative claims on behalf of the funds. Most of the
cases have been consolidated in two actions in federal court in
New York. Cases also have been filed in New York state court.
BANK OF NEW YORK: Continues to Defend "Medical Capital" Suits
-------------------------------------------------------------
The Bank of New York Mellon Corporation remains a defendant in
putative class actions in connection with its role as indenture
trustee for Medical Capital Corporation's affiliates, according to
BNY Mellon's November 8, 2010, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended Sept. 30,
2010.
The company has been named as a defendant in a number of putative
class actions and non-class actions brought by numerous
plaintiffs, in connection with its role as indenture trustee for
debt issued by affiliates of Medical Capital Corporation. The
actions, filed in late 2009 and currently pending in federal court
in California, allege that the company breached its fiduciary and
contractual obligations to the holders of the underlying
securities, and seek unspecified damages.
In a separate action filed in the same court in July 2009, the SEC
has alleged that Medical Capital, along with certain of its
affiliates and principals, engaged in securities fraud. The court
ordered the appointment of a permanent receiver over Medical
Capital.
CARDINAL HEALTH: Feature Details Class Action Allegations
---------------------------------------------------------
Franchise Times, a national industry magazine, published a story
in its November/December issue detailing allegations of Cardinal
Health's heavy handed treatment of its franchisees. The feature
includes an examination of a class action lawsuit, supported by
more than 200 franchisees, against Cardinal Health as well as the
individual situations of two different franchisees that have faced
financial distress and yet were met with a relentless Cardinal
Health as they sought relief from their suffering businesses.
In the article, titled "Bad Medicine," author Jonathan Maze
includes interviews with former Medicine Shoppe CFO Don Schreiber,
lead attorney for the franchisees David Harris, and another
beleaguered Medicine Shoppe franchisee Pat Helm of Chickasha,
Oklahoma. A copyright approved link to the article is available
at http://www.franchiseesforfairvalue.com/
The members of the legal action have joined in a coalition called
Franchisees for Fair Value. Of their claims against Cardinal
Health, the concept of "lost future royalties" is at the
forefront. The Franchise Times article reports on a recent legal
decision in Missouri where the judge found no basis for Cardinal
Health to claim lost future royalties in the case of a financially
distressed franchisee. The article quotes highly regarded
franchise attorney Ron Gardner in saying that the Missouri
judgment may change the tide in case law to support franchisees
against threats of owing future royalties.
Independent franchisees continue to join the legal action and are
encouraged to do so by the Pharmacy Franchise Owners Association-
MS and MC, the trade associations for owners of both Medicine
Shoppe and Medicap pharmacies. Franchisees for Fair Value is the
group designation specifically for those owners who are supporting
the class action.
CAROLINA POWER: Plaintiffs Appeal Dismissal of Fla. Suit
---------------------------------------------------------
Plaintiffs in a lawsuit filed against a Florida affiliate of
Carolina Power & Light Company, doing business as Progress Energy
Carolinas, Inc., has appealed the dismissal of their complaint to
the Fifth District Court of Appeals, according to the company's
November 8, 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 Florida Power
Corporation doing business as Progress Energy Florida, Inc., an
affiliate of PEC, in state circuit court in Sumter County, Fla.,
alleging that the Florida nuclear cost-recovery statute violates
the Florida Constitution, and seeking a refund of all monies
collected by PEF pursuant to that statute with interest. The
complaint also requests that the court grant class action status
to the plaintiffs.
On April 6, 2010, PEF filed a motion to dismiss the complaint.
The trial judge issued an order on May 3, 2010, dismissing the
complaint.
The plaintiffs filed an amended complaint on June 1, 2010, and PEF
filed a motion to dismiss the amended complaint on July 12, 2010.
The trial court granted PEF's motion dismissing the plaintiffs'
case, with prejudice, on Aug. 31, 2010. The plaintiffs filed a
notice of appeal to the Fifth District Court of Appeals on
September 24, 2010.
CC MEDIA: Subsidiaries Continue to Defend "Sherman Act" Suits
-------------------------------------------------------------
Certain of CC Media Holdings, Inc.'s subsidiaries continue to face
class action lawsuits arising from their alleged attempt to
monopolize the market for live rock concerts, according to the
company's November 8, 2010, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended Sept. 30,
2010.
Certain of the company's subsidiaries are co-defendants with Live
Nation (which was spun off as an independent company in December
2005) in 22 putative class actions filed beginning in May 2006 by
different named plaintiffs in various district courts throughout
the country. These actions generally allege that the defendants
monopolized or attempted to monopolize the market for "live rock
concerts" in violation of Section 2 of the Sherman Act. Plaintiffs
claim that they paid higher ticket prices for defendants' "rock
concerts" as a result of defendants' conduct. They seek damages in
an undetermined amount.
On April 17, 2006, the Judicial Panel for Multidistrict Litigation
centralized these class action proceedings in the Central District
of California. On March 2, 2007, plaintiffs filed motions for
class certification in five "template" cases involving five
regional markets: Los Angeles, Boston, New York, Chicago and
Denver. Defendants opposed that motion and, on October 22, 2007,
the district court issued its decision certifying the class for
each regional market.
On February 20, 2008, defendants filed a Motion for
Reconsideration of the Class Certification Order, which is still
pending. Plaintiffs filed a Motion for Approval of the Class
Notice Plan on September 25, 2009, but the Court denied the Motion
as premature and ordered the entire case stayed until the 9th
Circuit issues its en banc opinion in Dukes v. Wal-Mart, 509 F.3d
1168 (9th Cir. 2007), a case that may change the standard for
granting class certification in the 9th Circuit.
On April 26, 2010, the 9th Circuit issued its opinion adopting a
new class certification standard which will require district
courts to resolve Rule 23 factual disputes that overlap with the
merits of the case. In response, the defendants asked the court to
set a hearing date for argument on the company's Motion for
Reconsideration of the Class Certification Order.
On July 30, 2010, Plaintiffs filed a motion to lift the stay of
proceedings in the case. On October 13, 2010 the district court
granted plaintiffs' request to lift the stay and denied
defendants' motion to reconsider the decision to grant class
certification. The court also ordered the parties to meet and
confer on a joint stipulation for proceeding with class
notification and discovery.
In the Master Separation and Distribution Agreement between one of
the company's subsidiaries and Live Nation that was entered into
in connection with the spin-off of Live Nation in December 2005,
Live Nation agreed, among other things, to assume responsibility
for legal actions existing at the time of, or initiated after, the
spin-off in which the company is a defendant if such actions
relate in any material respect to the business of Live Nation.
Pursuant to the Agreement, Live Nation also agreed to indemnify
the company with respect to all liabilities assumed by Live
Nation, including those pertaining to those claims.
CHARLES SCHWAB: Final Approval of "YieldPlus Fund" Pact Pending
---------------------------------------------------------------
The Charles Schwab Corporation seeks to terminate a $200 million
settlement of a lawsuit relating to the Schwab YieldPlus Fund
while plaintiffs continue to seek final approval of the deal,
according to the company's November 8, 2010, Form 10-Q filing with
the U.S. Securities and Exchange Commission for the quarter ended
September 30, 2010.
The Company has been responding to consolidated class action
litigation filed between March and May 2008, relating to the
Schwab YieldPlus Fund, an ultra-short bond fund. On April 23,
2010, the Company entered into a settlement agreement with
plaintiffs, and without admitting liability, agreed to a total of
$200 million to resolve plaintiffs' federal law claims.
On May 14, 2010, the Company entered into a settlement agreement
with plaintiffs, and without admitting liability, agreed to
resolve plaintiffs' state law claim for $35 million.
The settlement agreements were preliminarily approved by the court
on May 26, 2010, and remain subject to final court approval. On
October 14, 2010, the court issued an opinion interpreting the
proposed settlement terms and holding that federal securities law
class members resident outside of California would not be
precluded under the proposed settlement agreements from bringing
further claims under California law against the defendants.
On November 8, 2010, defendants notified plaintiffs that
defendants are invoking the termination provisions of the
settlement agreements in those actions. Defendants have also
filed with the court a notice of withdrawal from the original
motions filed jointly by plaintiffs and defendants for final
approval of the settlements.
At this time, plaintiffs continue to support the original motions
for final approval, which remain pending and subject to further
proceedings.
CHARLES SCHWAB: Seeks Consolidation of Securities Suits in Calif.
-----------------------------------------------------------------
Schwab Investments and Charles Schwab Investment Management, Inc.,
are asking the U.S. District Court for the Northern District of
California to consolidate two class actions filed against them,
according to The Charles Schwab Corporation's November 8, 2010,
Form 10-Q filing with the U.S. Securities and Exchange Commission
for the quarter ended September 30, 2010.
On Aug. 28, 2008, a class action lawsuit was filed in the U.S.
District Court for the Northern District of California on behalf
of investors in the Schwab Total Bond Market Fund(TM). The
lawsuit, which alleges violations of state law and federal
securities law in connection with the fund's investment policy,
names Schwab Investments (registrant and issuer of the fund's
shares) and Charles Schwab Investment Management, Inc. as
defendants. Allegations include that the fund improperly deviated
from its stated investment objectives by investing in
collateralized mortgage obligations (CMOs) and investing more than
25% of fund assets in CMOs and mortgage-backed securities without
obtaining a shareholder vote. Plaintiffs seek unspecified
compensatory and rescission damages, unspecified equitable and
injunctive relief, and costs and attorneys' fees.
On Feb. 19, 2009, the court denied defendants' motion to dismiss
plaintiffs' federal securities law claim, and dismissed certain
state law claims with leave to amend. On April 27, 2009, the
court issued a stay of proceedings while defendants appealed the
court's Feb. 19, 2009 decision refusing to dismiss plaintiffs'
federal securities law claim.
On Aug. 12, 2010, the Ninth Circuit Court of Appeals ruled in
favor of the defendants and dismissed plaintiffs' federal
securities law claim.
On Sept. 28, 2010, plaintiffs filed a second amended class action
complaint dropping the federal securities law claim and certain of
its state law claims. On Sept. 3, 2010, a second class action
lawsuit by a different law firm was filed in the U.S. District
Court for the Northern District of California on behalf of
investors in the fund. The new lawsuit, which also names Schwab
Investments and CSIM as defendants, alleges violations of state
law in connection with the fund's deviation from the performance
of its benchmark index and concentration in mortgage-backed
securities, and seeks restitution and disgorgement of management
or other fees.
On Oct. 11, 2010, defendants filed a motion to consolidate the two
class actions.
The SEC Wells notice received by the Company on Oct. 14, 2009,
concerning the Bond Fund, also provided notice of the SEC staff's
intention to recommend the inclusion of additional charges against
Schwab Investments and CSIM for possible violations of the
securities laws with respect to the Total Bond Market Fund. The
Company has responded to the SEC Wells notice to explain why the
proposed charges regarding the Total Bond Market Fund are
unwarranted, and has also addressed the proposed charges in the
discussions with SEC staff concerning the Bond Fund.
COMMERCE BANCSHARES: Continues to Defend 2 Overdraft Fee Suits
--------------------------------------------------------------
Commerce Bancshares, Inc., continues to defend against two
lawsuits filed in Missouri against its subsidiary, Commerce Bank,
N.A., alleging that overdraft fees relating to debit card
transactions have been unfairly assessed by Commerce Bank,
according to the company's November 8, 2010, Form 10-Q filing with
the U.S. Securities and Exchange Commission for the quarter ended
September 30, 2010.
On April 6, 2010 a suit was filed against Commerce Bank, N.A., in
the U.S. District Court for the Western District of Missouri by a
customer alleging that overdraft fees relating to debit card
transactions have been unfairly assessed by the Bank. The suit
seeks class-action status for Bank customers who may have been
similarly affected.
A second suit alleging the same facts and also seeking class-
action status was filed on June 4, 2010, in Missouri state court.
Since these cases are in a very early stage, a probable outcome is
presently not determinable. The Company believes the claims to be
without merit and intends to defend these actions vigorously.
COMMONWEALTH LAND: Sued for Breach of Fiduciary Duties
------------------------------------------------------
Vivian R. Hays, et al., on behalf of themselves and others
similarly situated v. Commonwealth Land Title Insurance Company
and Lawyers Title Insurance Company, Case No. 10-cv-05336 (N.D.
Calif. November 24, 2010), accuses Commonwealth and Lawyers Title
of assisting LandAmerica 1031 Exchange Services, Inc. in operating
a Ponzi scheme which resulted to their losing millions of dollars
which they had entrusted to LES to "hold" for the purpose of
facilitating their respective Internal Revenue Code Section 1031
exchanges. According to the Complaint, LES spent the Exchange
Funds to pay prior clients whose money was lost when LES
imprudently used their Exchange Funds to purchase Auction Rate
Securities which are now unmarketable. The Complaint says that
defendants had expected that this Ponzi scheme would go undetected
long enough for the ARS market to unfreeze, but the scheme failed.
The Plaintiffs allege that Commonwealth and Lawyers Title (i)
knowingly assisted LES in breaching fiduciary duties owed to
Plaintiffs; ii) knowingly assisted LES in converting trust funds
it held for the benefit of Plaintiffs; (iii) were negligent in
referring Plaintiffs to LES, (iv) knowingly breached fiduciary
duties owned to Plaintiffs; and (v) committed constructive fraud
on Plaintiffs.
Commonwealth and Lawyers Title at all relevant times alleged in
the Complaint were wholly-subsidiaries of Land America Financial
Group. These two subsidiaries provided escrow services and title
insurance. LES, also a LFG subsidiary, provided services as
Qualified Intermediary for Exchangers who want to participate in
an Internal Revenue Code Section 1031 tax deferred exchange.
As explained in the Complaint, Commonwealth and Lawyers Title,
acting in their capacity as escrow agents for Plaintiffs Hays and
Wood, and other members of the putative Commonwealth and Lawyers
Title subclasses, recommended to Plaintiffs Hays and Wood, and
other members of the putative Commonwealth and Lawyers title
Subclasses, that they utilize LES to act as a qualified
intermediary for purposes of their tax deferred exchanges. Based
upon this advice and recommendation, Plaintiffs entrusted their
Exchange Funds to LES.
Section 1031 of the IRC permits a seller of investment property to
defer the payment of capital gains taxes on the proceeds of the
sale by using these proceeds to purchase "like-kind" replacement
property. But Section 1031 also prohibits the seller from taking
possession of the proceeds of the sale of investment property,
although it does permit the seller to use a "safe harbor" to
preserve the tax benefit. One such safe harbor permits the seller
to use a "Qualified Intermediary," to receive and hold the
proceeds until the seller is ready to close on the replacement
property. LES and LFG filed for bankruptcy on November 26, 2008,
and subsequently sold Commonwealth and Lawyers Title.
The Plaintiffs are represented by:
Robert L. Brace, Esq.
Michael P. Denver, Esq.
HOLLISTER & BRACE
P.O. Box 630
Santa Barbara, CA 93102
Telephone: (805) 963-6711
E-mail: rlbrace@hbsb.com
mpdenver@hbsb.com
- and -
Thomas G. Foley, Jr., Esq.
FOLEY, BEZEK, BEHLE & CURTIS, LLP
15 W. Carrillo Street
Santa Barbara, CA 93101
Telephone: (805) 962-9495
E-mail: tfoley@foleybezek.com
CORINTHIAN COLLEGES: Sued for Fraud & Deceptive Business Practices
------------------------------------------------------------------
Alisha Montgomery, on behalf of herself and all others similarly
situated, et al. v. Corinthian Colleges, Inc., et al., Case No.
2010-CH-50281 (Ill. Cir. Ct., Cook Cty. November 23, 2010, accuses
Corinthian of: (i) making false and fraudulent material
misrepresentations about its Medical Assistant Program, the
Everest College-MP campus' accreditations," the job opportunities
available graduates of Everest College-MP's Medical Assistant
Program, the job placement rate of graduates from Everest College-
MP's Medical Assistant Program, and the starting salary of
graduates from Everest College-MP's Medical Assistant Program;
(ii) failing to provide the bargained for Medical Assistant
Program, education, and classes; and (iii) making
misrepresentations and omissions regarding the cost and fees of
the Medical Assistant Program and the financial aid, government
loans and government grants applied for and received by Defendants
on behalf of Plaintiffs and Class Members, in breach of their
contract to the Plaintiffs and Class Members, and in violation of
the Illinois Consumer Fraud and Deceptive Business Practices Act.
Plaintiffs are current and former students of Corinthian Colleges,
Inc.'s Medical Assistant Program at their Everest College
Merrionette Park campus.
The Plaintiffs are represented by:
Robert M. Foote, Esq.
Matthew J. Herman, Esq.
Michael D. Wong, Esq.
FOOTE, MEYERS, MIELKE & FLOWERS, LLC
3 North Second Street, Suite 300
St. Charles, IL 60174
Telephone: (630) 232-6333
- and -
Kathleen C. Chavez, Esq.
Chavez Law Firm, P.C.
3 North Second Street, Suite 300
St Charles, IL 60174
- and -
Peter L. Currie, Esq.
THE LAW FIRM OF PETER L. CURRIE, P.C.
536 Wing Lane
Saint Charles, IL 60174
Telephone: (630) 862-1130
- and -
Michael L. Maduff, Esq.
Aaron B. Maduff, Esq.
MADUFF & MADUFF, L.L.C.
205 N. Michigan Ave., Suite 2050
Chicago, IL 60601
Telephone: (312) 276-9000
EL PASO NATURAL: Remains a Defendant in "Bank of America" Suit
--------------------------------------------------------------
El Paso Natural Gas Company remains a defendant in a lawsuit filed
by Bank of America, et al., according to the company's November 8,
2010, Form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarter ended September 30, 2010.
The Company is a named defendant, along with Burlington Resources,
Inc., now a subsidiary of ConocoPhillips Company, in a class
action lawsuit styled Bank of America, et al. v. El Paso Natural
Gas and Burlington Resources Oil and Gas Company, L.P., filed in
October 2003 in the District Court of Kiowa County, Oklahoma
asserting royalty underpayment claims related to specified shallow
wells in Oklahoma, Texas and New Mexico.
The Plaintiffs assert that royalties were underpaid starting in
the 1980s when the purchase price of gas was lowered below the
Natural Gas Policy Act maximum lawful prices. The Plaintiffs
assert that royalties were further underpaid by Burlington as a
result of post-production cost deductions taken starting in the
late 1990s.
This action was transferred to Washita County District Court in
2004. A tentative settlement reached in November 2005 was
rejected by the court in June 2007. A class certification hearing
occurred in April 2009. The court certified a Texas and Oklahoma
class of royalty owners. The class certification has been
appealed to the Oklahoma Court of Appeals. The Company said its
costs and legal exposure related to this lawsuit are not currently
determinable.
FIFTH THIRD: Remains a Defendant in NY Antitrust Suit
-----------------------------------------------------
Fifth Third Bancorp continues to defend an antitrust suit pending
in New York, according to the company's November 8, 2010, Form
10-Q filing with the U.S. Securities and Exchange Commission for
the quarter ended September 30, 2010.
During April 2006, the Bancorp was added as a defendant in a
consolidated antitrust class action lawsuit originally filed
against Visa(R), MasterCard(R) and several other major financial
institutions in the United States District Court for the Eastern
District of New York. The plaintiffs, merchants operating
commercial businesses throughout the U.S. and trade associations,
claim that the interchange fees charged by card-issuing banks are
unreasonable and seek injunctive relief and unspecified damages.
In addition to being a named defendant, the Bancorp is also
subject to a possible indemnification obligation of Visa.
Accordingly, prior to the sale of Class B shares during 2009, the
Bancorp had recorded a litigation reserve of $243 million to
account for its potential exposure in this and related litigation.
Additionally, the Bancorp had also recorded its proportional share
of $199 million of the Visa escrow account funded with proceeds
from the Visa IPO along with several subsequent fundings. Upon
the Bancorp's sale of Visa, Inc. Class B shares during 2009, and
the recognition of the total return swap that transfers conversion
risk of the Class B shares back to the Bancorp, the Bancorp
reversed the remaining net litigation reserve related to the
Bancorp's exposure through Visa. Additionally, the Bancorp has
remaining reserves related to this litigation of $30 million and
$22 million as of September 30, 2010 and December 31, 2009,
respectively.
This antitrust litigation is still in the pre-trial phase.
FIFTH THIRD: Continues to Defend Securities Suit in Ohio
--------------------------------------------------------
Fifth Third Bancorp continues to defend itself against a purported
class securities complaint in Ohio, according to the company's
November 8, 2010, Form 10-Q filing with the U.S. Securities and
Exchange Commission for the quarter ended September 30, 2010.
For the year ended December 31, 2008, five putative securities
class action complaints were filed against the Bancorp and its
Chief Executive Officer, among other parties. The lawsuits allege
violations of federal securities laws related to disclosures made
by the Bancorp in press releases and filings with the SEC
regarding its quality and sufficiency of capital, credit losses
and related matters, and seek unquantified damages on behalf of
putative classes of persons who either purchased the Bancorp's
securities, or acquired the Bancorp's securities pursuant to the
acquisition of First Charter Corporation.
On August 10, 2010, the U.S. District Court for the Southern
District of Ohio granted in part and denied in part Fifth Third's
Motion to Dismiss the purported class's complaint. The impact of
the final disposition of this lawsuit cannot be assessed at this
time, the Company said.
FIFTH THIRD: March 16 Hearing Set for Class Action Settlement
-------------------------------------------------------------
A notification program began Monday, as ordered by the United
States District Court for the Northern District of Illinois, to
alert people who have or had a bank account with Fifth Third Bank
about a proposed class action settlement.
The lawsuit alleges that Fifth Third improperly assessed overdraft
fees for insufficient funds on debit card purchases and/or ATM
withdrawals by "re-sequencing" transactions in order to maximize
the number of overdraft fees. Fifth Third denies all of the
Plaintiffs' claims and says that it did nothing wrong.
The Settlement Class includes all persons in the United States who
hold or held a Fifth Third Account and who at any time from
October 21, 2004 through July 1, 2010, incurred at least one
Overdraft Fee associated with at least one Fifth Third Debit Card
Transaction.
The settlement will establish a Settlement Fund of $9.5 million
and provide payments of up to three times the Overdraft Fees that
Settlement Class Members paid in any continuous 45 day period
between October 21, 2004 and July 1, 2010. Settlement Class
Members may submit claims online at:
http://www.OverdraftSettlement.com/
or by completing and mailing a claim form.
Notices will be sent to Settlement Class Members, appear on Fifth
Third's Web site -- http://www.53.com-- and are scheduled to
appear in selected local newspapers leading up to a hearing on
March 16, 2011, when the Court will consider whether to grant
final approval to the settlement.
The Court has appointed Ben Barnow, Barnow and Associates, P.C.,
of Chicago, Illinois; Burton H. Finkelstein, Finkelstein Thompson
LLP, of Washington, D.C.; Hassan A. Zavareei, Tycko & Zavareei
LLP, of Washington, D.C.; and David J. Worley, Evangelista &
Associates, LLC, of Atlanta, Georgia, as Proposed Settlement Class
Counsel to represent the Settlement Class.
Those affected by this settlement can submit a claim for benefits
or they can ask to be excluded from, or object to, the settlement
and its terms. The deadline for exclusions and objections is
February 23, 2011. The claim deadline is May 2, 2011.
A toll-free number, 1-888-235-7491, has been established in the
case known as Schulte, et al. v. Fifth Third Bank, Case No. 1:09-
CV-06655, along with a Web site --
http://www.OverdraftSettlement.com/-- where the notice, claim
form and settlement agreement may be obtained. Those affected may
also write to Fifth Third Overdraft Settlement, PO Box 3266,
Portland, OR 97208-3266.
FLORIDA: Sued for Selling Personal Driver's License Information
---------------------------------------------------------------
Robert Nolin, Sun Sentinel, reports a lawsuit against the state of
Florida over the sale of personal driver's license information to
a private firm may proceed as a class action, a federal judge has
ruled.
The suit claims the state, specifically the Department of Highway
Safety and Motor Vehicles, improperly sold personal information
gleaned from about 31 million driver's license records to
Shadowsoft Inc., an Irving, Texas-based Internet marketer.
Shadowsoft then sold the information to other firms that target
consumers.
The records sales, which a lawyer in the case said brought in a
large yet unspecified amount of money to the state, took place
between 2005 through 2009.
Such sales, however, violate a federal statute banning the
disclosure of personal information from driver's licenses, said
Howard Bushman, an attorney with the Miami law firm representing
the affected drivers. The information released included
addresses, dates of birth and possibly Social Security numbers,
Mr. Bushman said.
Earlier this month in Tallahassee, U.S. Circuit Judge Robert
Hinkle allowed drivers whose privacy rights may have been violated
to become members of the suit.
The extent of any money award, and which drivers would be entitled
to it, won't be determined until after the case is settled or
tried successfully in the plaintiffs' favor.
"We're pushing forward with the case," Mr. Bushman said. "There's
a lot of work to be done."
GERBER PRODUCTS: Sued in California for Deceptive Advertising
-------------------------------------------------------------
Courthouse News Service reports that a federal class action claims
Gerber conceals the lead levels in its baby foods -- specifically,
in 3rd Foods NatureSelect Pears, 3rd Foods NatureSelect Peaches,
and 100% Juice Organic-Apple Juice.
A copy of the Complaint in Walton v. Gerber Products Company,
Case No. 10-cv-02430 (S.D. Calif.), is available at:
http://www.courthousenews.com/2010/11/29/BabyFood.pdf
The Plaintiff is represented by:
William A. Levin, Esq.
Timothy F. Pearce, Esq.
LEVIN SIMES KAISER GORNICK, LLP
44 Montgomery Street, 36th Floor
San Francisco, CA 94104
Telephone: (415) 646-7160
E-mail: wlevin@lskg-law.com
tpearce@lskg-law.com
- and -
Fletcher V. Trammell, Esq.
Justin C. Jenson, Esq.
BAILEY PERRIN BAILEY
The Lyric Centre
440 Louisiana Street, Suite 2100
Houston, TX 77002
Telephone: (713) 425-7100
E-mail: ftrammell@bpblaw.com
jjenson@bpblaw.com
- and -
W. Craft Hughes, Esq.
HUGHES ELLZEY, L.L.P.
Galleria Tower I
2700 Post Oak Blvd., Suite 1120
Houston, TX 77056
Telephone: (888) 350-3931
E-mail: craft@crafthugheslaw.com
KELLOGG CO: CCAF Says Atty. Fees Disproportionate to Class Relief
-----------------------------------------------------------------
According to an article posted at PointofLaw.com by Ted Frank at
Center for Class Action Fairness, in the Kellogg's Frosted Mini-
Wheats class action settlement, class members -- those who
purchased the cereal on certain dates in 2008 and 2009 -- who
submit claims will receive $5/box for up to three boxes of
purchased Frosted Mini-Wheats, with claims pro-rated if there are
more than $2.75 million in claims. If there is less than $2.75
million in claims, money goes to a charity that has yet to be
named. In addition, Kellogg's will donate "$5.5 million" in food
to charity (that also has yet to be named), though there is no
indication how that valuation will be determined. For this, six
law firms are requesting $2 million in fees. The article says:
* the amount of counsel fees is disproportionate to the class
relief;
* the settlement provides for cy pres relief even though there
might be more than $8.25 million in claims, demonstrating
that the attorneys put the interest of the third-party
charities ahead of their clients' interest; and
* the class notice is defective for failing to identify the
charitable recipients of the cy pres, giving the class no
opportunity to object to an improper recipient.
The November 25, 2010 edition of the Class Action Reporter ran a
story on the settlement.
Center for Class Action Fairness invites class members who are
"unhappy with attorneys improperly making millions in your name"
to contact CCAF.
CCAF represents consumers pro bono in class action settlement
fairness hearings and in motions to certify consumer class
actions.
LENDER PROCESSING: Continues to Defend "Foster" Suit
----------------------------------------------------
Lender Processing Services, Inc., remains a defendant in a
putative class action captioned as Elizabeth Foster, et al vs.
MERS, GMAC, Lender Processing Services, Inc., et al., according to
the company's November 8, 2010, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended Sept. 30,
2010.
The putative class action complaint was filed in the United States
District Court in the Western District of Kentucky, Louisville
Division on September 28, 2010. Although the company has not yet
received service of the complaint, plaintiffs challenge the
securitization of loans, the use of assignments of mortgage, and
the participation of MERS in the foreclosure process, and make
allegations concerning unlawful foreclosure, conspiracy and other
matters relating to the handling of the plaintiffs' loans and the
default process.
LENDER PROCESSING: Awaits Dismissal of Mississippi Class Action
---------------------------------------------------------------
Lender Processing Services, Inc., is awaiting a bankruptcy court's
ruling to its request to dismiss a putative class action adversary
proceeding in Mississippi, according to the company's November 8,
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 in the putative class action adversary
proceeding styled as Thorne vs. Prommis Solution Holding
Corporation, Lender Processing Services, Inc., et al., filed in
the United States Bankruptcy Court for the Northern District of
Mississippi on September 30, 2010.
The complaint has a single plaintiff and alleges that the
defendants engaged in unlawful fee splitting and the unauthorized
practice of law.
On October 28, 2010, the company filed a motion for summary
judgment seeking to dismiss the complaint.
LENDER PROCESSING: Continues to Face "Knippel" Suit in Nevada
-------------------------------------------------------------
Lender Processing Services, Inc., remains a defendant in a
putative class action styled as Knippel vs. Saxon Mortgage
Services, Lender Processing Services, Inc., et al., according to
the company's November 8, 2010, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended Sept. 30,
2010.
The company has been named in the putative class action complaint
filed in the United States District Court for the District of
Nevada on October 5, 2010. Although the company has not yet
received service of the complaint, the complaint was served on one
of its subsidiaries on October 18, 2010.
The complaint has a single plaintiff and alleges violations of the
Fair Debt Collection Practices Act, deceptive trade practices and
unlawful fee splitting.
MASSEY ENERGY: Motion to Consolidate Securities Suits Pending
-------------------------------------------------------------
A motion to consolidate lawsuits alleging violations of securities
laws is pending in Virginia, according to Massey Energy Company's
November 8, 2010, Form 10-Q filing with the U.S. Securities and
Exchange Commission for the quarter ended September 30, 2010.
There are presently two purported class actions brought in
connection with alleged violations of the federal securities laws
pending in the United States District Court for the Southern
District of West Virginia.
On April 29, 2010, Macomb County Employees' Retirement System
filed a purported class action, alleging violations of Section
10(b) of the Exchange Act by certain Massey officers and Section
20(a) of the Exchange Act by these same officers, as well as
certain current and former directors in connection with allegedly
false and misleading statements regarding Massey's safety record.
Macomb seeks (1) an award of damages to Macomb and the members of
the purported class and (2) an award to Macomb of reasonable costs
and attorneys' fees.
On May 28, 2010, the Firefighters' Retirement System of Louisiana
brought a purported class action, alleging substantially similar
violations as Macomb, against the same defendants, as well as
another director and officer. Firefighters Retirement System
seeks (1) an award of damages to Firefighters and the members of
the purported class and (2) an award to Firefighters of reasonable
costs and attorneys' fees.
On June 28, 2010, four purported class members (the Massachusetts
Pension Reserves Investment Trust, the MEE Investor Group (a group
of three individual stockholders), David Wagner and the Wayne
County Employees' Retirement System) filed separate motions
requesting that the court consolidate the Macomb and Firefighters
Actions, appoint each purported class member as lead plaintiff and
approve each purported class member's choice of lead counsel. The
MEE Investor Group subsequently withdrew its motion. The Wayne
County Employees' Retirement System subsequently filed notice
stating that it supported the Massachusetts Pension Reserves
Investment Trust's motion, and the court thereafter denied the
Wayne County Employees' Retirement System's motion as moot. David
Wagner's and the Massachusetts Pension Reserves Investment Trust's
Motions for Consolidation are pending before the court.
The Company and the Defendants have insurance coverage applicable
to these matters. The Company believes these matters will be
resolved without a material adverse impact on its cash flows,
results of operations or financial condition.
MERCK & CO: Majority of Claimants Paid Thru Vioxx Settlement
------------------------------------------------------------
As of Sept. 30, 2010, the processing of claims in the Vioxx
Settlement Program was completed and final payments were made to
majority of the claimants, according to Merck & Co., Inc.'s
November 8, 2010, Form 10-Q filing with the U.S. Securities and
Exchange Commission for the quarter ended September 30, 2010.
Individual and putative class actions have been filed against Old
Merck in state and federal courts alleging personal injury and
economic loss with respect to the purchase or use of Vioxx. All
such actions filed in federal court are coordinated in a
multidistrict litigation in the U.S. District Court for the
Eastern District of Louisiana before District Judge Eldon E.
Fallon. A number of such actions filed in state court are
coordinated in separate coordinated proceedings in state courts in
New Jersey, California and Texas, and the counties of
Philadelphia, Pennsylvania and Washoe and Clark Counties, Nevada.
Of the plaintiff groups in the Vioxx Product Liability Lawsuits,
the vast majority enrolled in the Vioxx Settlement Program.
As of Sept. 30, 2010, approximately 40 plaintiff groups who were
otherwise eligible for the Settlement Program did not participate
and their claims remain pending against Old Merck. In addition,
the claims of approximately 130 plaintiff groups who were not
eligible for the Settlement Program remain pending against Old
Merck.
A number of these 130 plaintiff groups are subject to various
motions to dismiss for failure to comply with court-ordered
deadlines. In addition, the claims of over 46,375 plaintiffs had
been dismissed as of Sept. 30, 2010, the vast majority of which
were dismissed as a result of the Vioxx settlement process.
Vioxx Settlement
On Nov. 9, 2007, Old Merck announced that it had entered into an
agreement with the law firms that comprise the executive committee
of the Plaintiffs' Steering Committee of the federal Vioxx MDL, as
well as representatives of plaintiffs' counsel in the Texas, New
Jersey and California state coordinated proceedings, to resolve
state and federal myocardial infarction and ischemic stroke claims
filed as of that date in the United States.
The Settlement Agreement applied only to U.S. legal residents and
those who alleged that their MI or IS occurred in the United
States. The Settlement Agreement provided for Old Merck to pay a
fixed aggregate amount of $4.85 billion into two funds ($4.0
billion for MI claims and $850 million for IS claims).
As of Sept. 30, 2010, the processing of all MI and IS claims in
the Settlement Program was completed and final payments were made
to more than 99% of all claimants. The majority of claimants not
yet paid are finalizing documents.
There was one U.S. Vioxx Product Liability Lawsuit trial held in
2010. There are four U.S. Vioxx Product Liability Lawsuits
currently scheduled for trial in 2011. Old Merck has previously
disclosed the outcomes of several Vioxx Product Liability Lawsuits
that were tried prior to 2010.
More Lawsuits
Of the cases that went to trial, there are two unresolved post-
trial appeals: Ernst v. Merck and Garza v. Merck.
There are still pending in various U.S. courts putative class
actions purportedly brought on behalf of individual purchasers or
users of Vioxx and seeking reimbursement of alleged economic loss.
In the MDL proceeding, approximately 30 such class actions remain.
On June 30, 2010, Old Merck moved to strike the class claims or
for judgment on the pleadings regarding the master complaint,
which includes the above referenced cases, and briefing on that
motion was completed on Sept. 23, 2010.
The MDL court heard oral argument on Old Merck's motion and took
it under advisement.
MERCK & CO: Louisiana Appeals Suit Dismissal
--------------------------------------------
The Attorney General of the state of Louisiana is appealing an
order dismissing its remaining claims against Old Merck, according
to Merck & Co., Inc.'s November 8, 2010, Form 10-Q filing with the
U.S. Securities and Exchange Commission for the quarter ended
September 30, 2010.
Old Merck has been named as a defendant in several lawsuits
brought by, or on behalf of, government entities. Twelve of these
suits are being brought by state Attorneys General, one on behalf
of a county, and one is being brought by a private citizen (as a
qui tam suit). All of these actions, except for a suit brought by
the Attorney General of Michigan, are in the MDL proceeding.
The Michigan Attorney General case has been remanded to state
court. These actions allege that Old Merck misrepresented the
safety of Vioxx. All but one of these suits seeks recovery for
expenditures on Vioxx by government-funded health care programs
such as Medicaid, along with other relief such as penalties and
attorneys' fees.
The action brought by the Attorney General of Kentucky seeks only
penalties for alleged consumer fraud violations. The lawsuit
brought by the county is a class action filed by Santa Clara
County, California, on behalf of all similarly situated California
counties.
On March 31, 2010, Judge Fallon partially granted and partially
denied Old Merck's motion for summary judgment in the Louisiana
Attorney General case.
A trial on the remaining claims before Judge Fallon began on
April 12, 2010, and was completed on April 21, 2010. Judge Fallon
found in favor of Old Merck on June 29, 2010, dismissing the
Attorney General's remaining claims with prejudice.
The Louisiana Attorney General is appealing that ruling.
MERCK & CO: Canadian Litigation Over Vioxx Still Ongoing
--------------------------------------------------------
Litigation relating to Vioxx in Canada remains in an early stage,
according to Merck & Co., Inc.'s November 8, 2010, Form 10-Q
filing with the U.S. Securities and Exchange Commission for the
quarter ended September 30, 2010.
Old Merck has been named as a defendant in litigation relating to
Vioxx in various countries in Europe, as well as Canada, Brazil,
Argentina, Australia, Turkey, Israel and the Philippines.
In November 2006, the Superior Court in Quebec authorized the
institution of a class action on behalf of all individuals who, in
Quebec, consumed Vioxx and suffered damages arising out of its
ingestion. On May 7, 2009, the plaintiffs served an introductory
motion for a class action based upon that authorization, and the
case remains in preliminary stages of litigation.
On May 30, 2008, the provincial court of Queen's Bench in
Saskatchewan, Canada, entered an order certifying a class of Vioxx
users in Canada, except those in Quebec. Old Merck appealed the
certification order and, on March 30, 2009, the Court of Appeal
granted Old Merck's appeal and quashed the certification order.
On Oct. 22, 2009, the Supreme Court of Canada dismissed
plaintiffs' appeal application and decided not to review the
judgment of the Saskatchewan Court of Appeal. On July 28, 2008,
the Superior Court in Ontario denied Old Merck's motion to stay
class proceedings in Ontario and decided to certify an overlapping
class of Vioxx users in Canada, except those in Quebec and
Saskatchewan, who allege negligence and an entitlement to elect to
waive the tort.
On Feb. 13, 2009, the Ontario Divisional Court dismissed the
appeal from the order denying the stay and, on May 15, 2009, the
Ontario Court of Appeal denied leave to appeal. On Oct. 22, 2009,
the Supreme Court of Canada dismissed Old Merck's application and
decided not to review the judgment of the Ontario Court of Appeal.
After the Court of Appeal for Saskatchewan quashed the multi-
jurisdictional certification order entered in that province, Old
Merck applied to the Ontario Court of Appeal for leave to appeal
from the Ontario certification order. Leave to appeal was
granted, the appeal was filed on May 20, 2009 and, in accordance
with the court's decision, Old Merck sought leave to appeal to the
Divisional Court, which was denied on December 7, 2009.
These procedural decisions in the Canadian litigation do not
address the merits of the plaintiffs' claims and litigation in
Canada remains in an early stage.
MERCK & CO: ERISA and Securities Suits Still Pending
----------------------------------------------------
ERISA and securities lawsuits against Old Merck and its officers
remain pending, according to Merck & Co., Inc.'s November 8, 2010,
Form 10-Q filing with the U.S. Securities and Exchange Commission
for the quarter ended September 30, 2010.
Various putative class actions and individual lawsuits under
federal and state securities laws have been filed against Old
Merck and various current and former officers and directors.
The Vioxx Securities Lawsuits have been transferred by the
Judicial Panel on Multidistrict Litigation to the U.S. District
Court for the District of New Jersey before District Judge Stanley
R. Chesler for inclusion in a nationwide MDL, and have been
consolidated for all purposes. On June 18, 2010, Old Merck moved
to dismiss the Fifth Amended Class Action Complaint in the
consolidated securities action. Plaintiffs filed their opposition
on Aug. 9, 2010, and Old Merck filed its reply on Sept. 17, 2010.
The motion is currently pending before the district court.
Several individual securities lawsuits filed by foreign
institutional investors also are consolidated with the Vioxx
Securities Lawsuits. By stipulation, defendants are not required
to respond to these complaints until the resolution of any motions
to dismiss in the consolidated securities class action.
In addition, various putative class actions have been filed in
federal court under the Employee Retirement Income Security Act
against Old Merck and certain current and former officers and
directors. Those cases were consolidated in the Shareholder MDL
before Judge Chesler. Fact discovery in the Vioxx ERISA Lawsuits
has been completed.
MERCK & CO: Continues to Defend Fosamax MDL
-------------------------------------------
Old Merck continues to defend against the numerous proceedings and
MDL litigation involving Fosamax, according to Merck & Co., Inc.'s
November 8, 2010, Form 10-Q filing with the U.S. Securities and
Exchange Commission for the quarter ended September 30, 2010.
Old Merck is a defendant in product liability lawsuits in the
United States involving Fosamax. As of Sept. 30, 2010,
approximately 1,180 cases, which include approximately 1,560
plaintiff groups, had been filed and were pending against Old
Merck in either federal or state court, including one case which
seeks class action certification, as well as damages and medical
monitoring. In these actions, plaintiffs allege, among other
things, that they have suffered osteonecrosis of the jaw,
generally subsequent to invasive dental procedures, such as tooth
extraction or dental implants and delayed healing, in association
with the use of Fosamax. In addition, plaintiffs in approximately
13% of these actions allege that they sustained stress and low
energy femoral fractures in association with the use of Fosamax.
On Aug. 16, 2006, the JPML ordered that certain Fosamax product
liability cases pending in federal courts nationwide should be
transferred and consolidated into one multidistrict litigation for
coordinated pre-trial proceedings. The Fosamax MDL has been
transferred to Judge John Keenan in the U.S. District Court for
the Southern District of New York.
As a result of the JPML order, approximately 850 of the cases are
before Judge Keenan. Judge Keenan issued a Case Management Order
(and various amendments thereto) setting forth a schedule
governing the proceedings which focused primarily upon resolving
the class action certification motions in 2007 and completing fact
discovery in an initial group of 25 cases by Oct. 1, 2008.
Briefing and argument on plaintiffs' motions for certification of
medical monitoring classes were completed in 2007 and Judge Keenan
issued an order denying the motions on Jan. 3, 2008. On Jan. 28,
2008, Judge Keenan issued a further order dismissing with
prejudice all class claims asserted in the first four class action
lawsuits filed against Old Merck that sought personal injury
damages and medical monitoring relief on a class wide basis.
Daubert motions were filed in May 2009 and Judge Keenan conducted
a Daubert hearing in July 2009. On July 27, 2009, Judge Keenan
issued his ruling on the parties' respective Daubert motions. The
ruling denied the Plaintiff Steering Committee's motion and
granted in part and denied in part Old Merck's motion.
The first MDL trial -- Boles v. Merck -- began on Aug. 11, 2009,
and ended on Sept. 2, 2009. On Sept. 11, 2009, the MDL court
declared a mistrial in Boles because the eight person jury could
not reach a unanimous verdict. The Boles case was retried in June
2010 and resulted in a verdict in favor of the plaintiff in the
amount of $8 million. Merck filed post-trial motions seeking
judgment as a matter of law or, in the alternative, a new trial.
On Oct. 4, 2010, the court denied Merck's post-trial motions but
sua sponte ordered a remittitur, reducing the verdict to $1.5
million. Plaintiff rejected the remittitur ordered by the court
and requested a new trial on damages. The Company has filed a
motion for interlocutory appeal.
In the next MDL case set for trial -- Maley v. Merck -- in April
2010, the jury returned a unanimous verdict in Merck's favor.
On Feb. 1, 2010, Judge Keenan selected a new bellwether case --
Judith Graves v. Merck -- to replace the Flemings bellwether case,
which the MDL court dismissed when it granted summary judgment in
favor of Old Merck. The Graves trial began on Nov. 1, 2010. A
trial in Alabama is expected to be held in Jan. 2011. A trial in
Florida was scheduled to begin on June 21, 2010, but on April 7,
2010, the Florida state court postponed the trial date until
sometime after January 1, 2011.
In addition, in July 2008, an application was made by the Atlantic
County Superior Court of New Jersey requesting that all of the
Fosamax cases pending in New Jersey be considered for mass tort
designation and centralized management before one judge in New
Jersey. On Oct. 6, 2008, the New Jersey Supreme Court ordered
that all pending and future actions filed in New Jersey arising
out of the use of Fosamax and seeking damages for existing dental
and jaw-related injuries, including osteonecrosis of the jaw, but
not solely seeking medical monitoring, be designated as a mass
tort for centralized management purposes before Judge Higbee in
Atlantic County Superior Court.
As of Sept. 30, 2010, approximately 300 cases were pending against
Old Merck in Atlantic County, New Jersey. On July 20, 2009, Judge
Higbee entered a Case Management Order (and various amendments
thereto) setting forth a schedule that contemplates completing
fact and expert discovery in an initial group of cases to be
worked up for trial. The first trial in the New Jersey
coordinated proceeding is currently set to be held beginning
January 17, 2011.
Discovery is ongoing in the Fosamax MDL litigation, the New Jersey
coordinated proceeding, and the remaining jurisdictions where
Fosamax cases are pending. The Company intends to defend against
these lawsuits.
NATIONAL AUSTRALIA: May Face Suit Over Eftpos Card Breakdown
------------------------------------------------------------
Courtney Trenwith, writing for Brisbane Times, reports National
Australia Bank customers were left in limbo after a breakdown
occurred November 24.
Retailers are considering a national class action against the
National Australia Bank over losses incurred during the
institution's five-day meltdown.
United Retailers Federation national president Scott Driscoll said
businesses had lost customers because they could not access their
money.
The chaos meant many were unable to get cash or use Eftpos linked
to NAB accounts.
Mr. Driscoll said the chaos had dealt traders a "body blow" during
the Christmas period.
"Once this is actually fixed I would then need to start looking at
the potential for a class action against a bank that has clearly
not held its duty of care to the consumer and also to broader
business," he said.
"Consumers have been pulling in their spending on the basis that
they're just not sure if they're able to access their own funds
because this bank has stuffed up.
"Others have been let down at the check-out by the bank [because
their Eftpos card does not work]."
Mr. Driscoll was unable to quantify how much damage the NAB
breakdown had caused traders.
"We need to wait and see what the end of all this will mean and
how much it will be worth," he said.
University of Queensland commercial law expert Paul O'Shea said
retailers with a NAB contract to provide Eftpos services could
have a legal case if their machines went down during the debacle.
However, claiming they had suffered loss of business because
consumers did not have access to money would be much harder to
prove.
"That's a highly indirect loss," Mr. O'Shea said.
"And while there are some remedies for consequential loss there
are limitations on how far down the train of consequence the law
will allow it to go when seeking relief."
Mr. O'Shea said any claim would need to be quantified, although
that would be "very difficult".
In a statement late Monday, NAB said the problem had been
identified and fixed and that it was working to rectify thousands
of transaction errors.
It apologized to customers in nation-wide newspapers
advertisements. However, customers continued to report problems
with their accounts.
NORTHEAST UTILITIES: To Defend Against 9 Suits in Massachusetts
---------------------------------------------------------------
Nine separate purported class action lawsuits were filed in
Massachusetts against NSTAR and the members of the NSTAR board of
trustees, and Northeast Utilities alleging breach of fiduciary
duties, according to Northeast Utilities' November 8, 2010, Form
10-Q filing with the U.S. Securities and Exchange Commission for
the quarter ended September 30, 2010.
In Oct. 2010, NSTAR and the members of the NSTAR board of trustees
and Northeast Utilities, along with NU Holding Energy 1 LLC and NU
Holding Energy 2 LLC, two wholly-owned subsidiaries of NU were
named defendants in nine separate purported class action lawsuits
filed in the Suffolk Superior Court (eight of the cases) and the
United States District Court for the District of Massachusetts
(one case).
The cases were brought on behalf of proposed classes consisting of
holders of NSTAR common shares, excluding the defendants and their
affiliates. The complaints allege, among other things, that the
individual NSTAR defendants breached their fiduciary duties by
failing to maximize the value to be received by NSTAR's public
shareholders, and that the NU defendants aided and abetted the
individual NSTAR defendants' breaches of fiduciary duties.
The complaints seek, among other things, (a) to enjoin defendants
from consummating the merger; (b) rescission of the merger, if
completed and (c) granting the class members any profits or
benefits allegedly improperly received by defendants in connection
with the merger.
NU believes the cases have no merit and will respond to these
actions in due course and intends to defend the actions
vigorously.
PERDUE FARMS: Sued in New Jersey for False Advertising
------------------------------------------------------
Timothy B. Wheeler, writing for The Baltimore Sun, reports the
Humane Society of the United States filed a class action lawsuit
Monday in New Jersey against Maryland-based Perdue Farms, accusing
the nation's third-largest poultry producer of falsely advertising
its chickens as "humanely raised."
The suit was brought on behalf of a New Jersey woman who bought
chicken at a BJ's Wholesale Club bearing the Harvestland label, a
trade name used by Perdue for birds raised in Kentucky and
marketed as "purely all-natural" and "humanely raised."
The suit alleges that the poultry producer's marketing violates
New Jersey's consumer fraud law. The complaint seeks unspecified
compensatory and punitive damages against Perdue, as well as an
injunction barring it from making claims that it treats its birds
humanely.
"Companies like Perdue are exploiting the dramatic growth of
consumer demand for improved animal welfare for their own profit,"
Jonathan Lovvorn, vice president and a chief counsel for the
Washington-based group, said in a statement. "Rather than
implementing humane reforms, Perdue has simply slapped 'humanely
raised' stickers on its factory farmed products, hoping consumers
won't know the difference."
Perdue follows animal welfare guidelines put out by the industry's
National Chicken Council, the suit claims, which allow for raising
birds in continuous dim light, depriving them of food and water
during transport to a processing plant and hanging them upside
down and shackled by their legs just before slaughter. The group
contends industry slaughtering techniques are inhumane, subjecting
birds to unnecessary pain before killing them.
Perdue issued a statement from its corporate headquarters in
Salisbury saying that its farmers' handling of their chickens
exceeds industry standards, and that the Humane Society's suit is
based on "narrow, arbitrary standards" of humane treatment.
"Our chickens are raised cage-free on family farms in temperature-
controlled housing with a continuous flow of fresh air, and they
remain free to move about with constant access to food and water,"
e-mailed Luis A. Luna, Perdue's vice president for corporate
communications.
Some poultry companies have shifted to killing or stunning their
animals with gas before slaughtering them, the Humane Society
points out. Jaindl Farms, a turkey producer in Pennsylvania's
Lehigh Valley, and Mary's Chickens, a free-range bird producer in
California, are among the poultry producers that have switched or
are in the process of switching to so-called "controlled
atmosphere" killing.
The chicken council contends the industry practice of stunning
birds electrically before slaughtering them is "effective and
humane." The trade group says studies have found no proof that
the birds are less traumatized by the gassing method that is
popular in Europe and among some producers in the United States.
"It is no surprise that HSUS finds fault with the [industry's]
program, since HSUS is dominated by animal rights advocates who
object to the use of animals for food," Richard L. Lobb, the
chicken council's communications director, said in an e-mail.
The Humane Society does encourage vegetarianism, but it also
supports consumption of meat raised in a manner that the group
believes reduces the animals' suffering.
Though the lawsuit would apply only to the marketing of Perdue
poultry products in New Jersey, the humane society vice president
said the group might seek to bring suit in other states with
similar consumer fraud laws. Maryland, though, might not offer
fertile legal ground for such a lawsuit. State law does protect
against false advertising, but the claims being challenged must be
provably wrong by some objective standard, according Raquel
Guillory, a spokeswoman for Attorney General Douglas F. Gansler.
PHI INC: Reconsideration Plea in "Superior Offshore" Suit Pending
-----------------------------------------------------------------
Motion for reconsideration and leave to amend a complaint filed by
Superior Offshore International Inc. is pending in Delaware,
according to PHI, Inc.'s November 8, 2010, Form 10-Q filing with
the U.S. Securities and Exchange Commission for the quarter ended
September 30, 2010.
The Company is named as defendant in a lawsuit styled Superior
Offshore International Inc. v. Bristow Group Inc., ERA
Helicopters, LLC, Seacor Holdings Inc., ERA Group Inc., ERA
Aviation, Inc., and PHI, Inc., Civil Action No. 1:09-cv-00438,
pending in the United States District Court for the District of
Delaware. This purported class action was filed on June 12, 2009,
on behalf of a class defined to include all direct purchasers of
offshore helicopter services in the Gulf of Mexico from the
defendants at any time from January 1, 2001 through December 31,
2005. The suit alleged that the defendants acted jointly to fix,
maintain, or stabilize prices for offshore helicopter services
during the time frame in violation of the federal antitrust laws.
The plaintiff sought unspecified treble damages, injunctive
relief, costs, and attorneys' fees.
On September 14, 2010, the Court granted defendants' motion to
dismiss (filed on September 4, 2009) and dismissed the complaint.
Plaintiff's motions for reconsideration and leave to amend its
complaint are pending.
PROGRESS ENERGY: Appeal in Nuclear Cost Recovery Suit Pending
-------------------------------------------------------------
An appeal from an order dismissing a Florida Nuclear Cost Recovery
lawsuit remains pending, according to Progress Energy, Inc.'s
November 8, 2010, Form 10-Q filing with the U.S. Securities and
Exchange Commission for the quarter ended September 30, 2010.
On February 8, 2010, a lawsuit was filed against Progress Energy
Florida, Inc., in state circuit court in Sumter County, Fla.,
alleging that the Florida nuclear cost-recovery statute (Section
366.93, Florida Statutes) violates the Florida Constitution, and
seeking a refund of all monies collected by PEF pursuant to that
statute with interest. The complaint also requests that the court
grant class action status to the plaintiffs.
On April 6, 2010, PEF filed a motion to dismiss the complaint.
The trial judge issued an order on May 3, 2010, dismissing the
complaint.
The plaintiffs filed an amended complaint on June 1, 2010, and PEF
filed a motion to dismiss the amended complaint on July 12, 2010.
The trial court granted PEF's motion dismissing the plaintiffs'
case, with prejudice, on August 31, 2010.
The plaintiffs filed a notice of appeal to the Fifth District
Court of Appeals on September 24, 2010. The Company said it
cannot predict the outcome of this matter.
RAE SYSTEMS: Board Sued Over Sale to Battery Ventures
-----------------------------------------------------
Gary Mabry, individually and on behalf of others similarly
situated v. Robert I. Chen, et al., Case No. 10-cv-05328 (N.D.
Calif. November 24, 2010), accuses the directors of RAE Systems
Inc. of breaching their fiduciary duties to the Company's public
shareholders in connection with their recommendation to sell the
Company to Battery Ventures VIII, L.P., and Battery Ventures VIII
Side Fund, L.P., for inadequate consideration and via an unfair
process. Pursuant to the Merger Agreement dated as of
September 19, 2010, Battery Ventures VIII, L.P., and Battery
Ventures VIII Side Fund, L.P., through its affiliates, Rudy
Acquisition Corp. and Rudy Merger Sub Corp., a wholly subsidiary
of Parent, have offered to purchase the Company for $1.60 per
share in cash without interest. Following completion of the
exchange offer, Merger Sub will merge into RAE and the RAE shares
not acquired in the exchange offer will convert into the right to
receive the same consideration as paid in the exchange offer.
RAE and its subsidiaries develop and manufacture multi-sensor
chemical and radiation detection monitors and networks for oil and
gas, hazardous material management, industrial safety, civil
defense, and environmental remediation applications. Battery
Ventures is a multi-stage investment firm focused on technology
and innovation worldwide.
The suit says the proposed acquisition as currently constituted is
unfair and grossly inadequate because, among other things: (a) the
intrinsic value of the stock of RAE is materially in excess of
$1.60 per share, in light of the Company's prospects for growth
and future earnings power; (b) the $1.60 price offers an
inadequate premium to the public shareholders of RAE; and (c) the
$1.60 per share price was fixed arbitrarily to "cap" the market
price of RAE, as part of a plan for Battery to obtain complete
ownership of RAE at the lowest possible price.
Mr. Mabry says that the defendants further breached their
fiduciary duties by agreeing to lock up the proposed acquisition
with deal protection devices that preclude other bidders
from making a successful competing offer, including: (i) a
no-solicitation provision; (ii) a matching rights provision; (iii)
a termination fee of $3.39 million plus reimbursement of
transaction expenses of up to $900,000 under specified
circumstances. Further, defendant Robert Chen, the Company's
Board Chairman, President and CEO, and defendant Peter Hsi, the
Company's Chief Technology Officer, who are contributing roughly
22.5% of the Company's outstanding common stock to Parent, will be
receiving in exchange 30% of the capital stock of Parent in
addition to the approximately $7.8 million they are receiving in
cash for their remaining 4,862,584 RAE shares being cashed out.
The Plaintiff is represented by:
Laurence D. King, Esq.
Linda M. Fong, Esq.
KAPLAN FOX & KILSHEIMER LLP
350 Sansome Street, Suite 400
San Francisco, CA 94104
Telephone: (415) 772-4700
E-mail: lking@kaplanfox.com
lfong@kaplanfox.com
- and -
Joshua M. Lifshitz, Esq.
Peter D. Bull, Esq.
BULL & LIFSHITZ, LLP
18 East 41st Street
New York, NY 10017
Telephone: (212) 213-6222
E-mail: counsel@nyclasslaw.com
REEBOK INTERNATIONAL: Suit Complains About "Toning Shoes"
---------------------------------------------------------
Courthouse News Service reports that Reebok International sold
more than $250 million of "toning shoes" this year with false
claims that they "tone up" the legs and butt by just walking
around in them, though Reebok knew that the $100 shoes may injure
wearers, a class action claims in Superior Court.
SHELL OIL: Dec. 8 Hearing Set for Class Action Settlement
---------------------------------------------------------
Jon Krenek and Nicole Leonhardt, writing for The Daily Journal,
report an $11 million payout to property owners in the class
action lawsuit settlement over the 1988 Shell Oil pipeline spill
in Limestone Township could have hit another snag.
Circuit Court Judge Gordon Lustfeldt ordered a hearing at 1:30
p.m. Dec. 8 at the Kankakee County courthouse to give area
charities and local governments eyeing a share of the money the
chance to make their case. The claims are being made under a law
allowing funds left over from class action settlements to be
dispersed to community organizations.
"These entities are wanting to get a piece of the pie," said
Joseph Yurgine, the attorney representing Limestone Township
property owners in the case. "The judge feels because of the way
this has been pending for so long, he wanted to give them the
opportunity."
SPRINT NEXTEL: N.Y. Suit Complains About "Premium Data Add-On"
--------------------------------------------------------------
Courthouse News Service reports that a federal class action claims
Sprint Nextel charged customers using the EVO 4G and EPIC 4G cell
phones an extra $10 a month for data, after selling them a package
that included unlimited data use.
A copy of the Complaint in Giglio v. Sprint Solutions, Inc., et
al., Case No. 10-cv-05467 (E.D.N.Y.) (Bianco, J.), is available
at:
http://www.courthousenews.com/2010/11/29/Sprint.pdf
The Plaintiff is represented by:
Patrick J. Perotti, Esq.
Nicole T. Fiorelli, Esq.
Grant J. Keating, Esq.
DWORKEN & BERNSTEIN CO., L.P.A.
60 South Park Place
Painesville, OH 44077
Telephone: (440) 352-3391
E-mail: pperotti@dworkenlaw.com
nfiorelli@dworkenlaw.com
gkeating@dworkenlaw.com
- and -
Noel C. Crowley, Esq.
CROWLEY & CROWLEY
20 North Park Place, Suite 206
Morristown, NJ 07960-7102
Telephone: (973) 829-0550
E-mail: cclawnj@aol.com
US BANCORP: Remains a Defendant in "Account Overdraft" Litigation
-----------------------------------------------------------------
U.S. Bancorp continues to defend itself in a Checking Account
Overdraft Fee Litigation, according to the company's November 8,
2010, Form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarter ended September 30, 2010.
The Company is a defendant in three separate cases primarily
challenging the Company's daily ordering of debit transactions
posted to customer checking accounts for the period from 2003 to
2010. The plaintiffs have requested class action treatment,
however, no class has been certified.
The court has denied a motion by the Company to dismiss these
cases. The Company believes it has meritorious defenses against
these matters, including class certification. As these cases are
in the early stages and no damages have been specified, no
specific loss or range of loss can be determined currently, the
Company said.
US COPYRIGHT GROUP: Faces Suit for Fraud, Extortion and Abuse
-------------------------------------------------------------
TorrentFreak reports the US Copyright Group thought it had found
the ideal scheme to turn piracy into profit when it started filing
lawsuits against tens of thousands of BitTorrent users this year.
But the defendants in the Far Cry lawsuits have now become the
plaintiffs in a class action filed against the anti-piracy lawyers
and their partners. Among other things, the lawyers are accused
of fraud, extortion and abuse.
Since the beginning of this year the United States Copyright Group
has sued tens of thousands of BitTorrent users who allegedly
shared films without the consent of copyright holders. One of the
copyright holders who teamed up with USCG are Achte/Neunte, the
makers of the movie Far Cry.
What first seemed to be a relatively effective and profitable way
to turn piracy into a healthy revenue stream, is rapidly turning
into a nightmare for the anti-piracy lawyers and their partners.
A class action lawsuit has now been filed by the alleged file-
sharers. The accusations put forward in the 96-page complaint are
not mild, and could potentially put an end to this and similar
cases in the United States.
The class action lawsuit is targeting all the parties involved in
the Far Cry pay-up-or-else scheme. It was filed on behalf of one
of those accused, Dmitriy Shirokov, but includes others who were
included in the Far Cry case.
"This is a class action brought by Plaintiff, on behalf of himself
and 4,576 other similarly-situated victims of settlement fraud and
extortion," the lengthy complaint starts. The tables are turned
this time with USCG, law firm Dunlap, Grub and Weaver and Far Cry
copyright holder Achte/Neunte in the defendant's seats.
The complaint goes on to describe the practices of the anti-piracy
lawyers as "lucrative trade in monetizing copyright infringement
allegations," and carefully dissects the operation and the
numerous offenses that were allegedly committed by the lawyers and
their partners.
In total, the alleged BitTorrent users are seeking relief based on
25 counts including extortion, fraudulent omissions, mail fraud,
wire fraud, computer fraud and abuse, racketeering, fraud upon the
court, abuse of process, fraud on the Copyright Office, copyright
misuse, unjust enrichment and consumer protection violations.
One of the most prominent allegations against the law firm is that
the copyright of Far Cry was registered at the Copyright Office
after the movie was published, and after many of the alleged
sharers were caught. It is claimed that the copyright
registration was "intentionally obtained under false pretenses"
and subsequently used to back up "baseless threats in the demand
letters."
"The Letters falsely claim that the law allows Achte to seek
extraordinary forms of relief, namely statutory damages and
attorney's fees, for infringing Achte's copyright for the motion
picture Far Cry, despite fatal defects in its copyright
registration and the express provisions of the Copyright Act," the
complaint reads.
This then leads to the following allegations of fraud, extortion
and related offenses.
"The Letters sent to the proposed Class are predicated on fraud --
upon Plaintiff and the proposed Class, and upon the ISPs, the
United States Copyright Office, and the United States District
Court for the District of Columbia."
"DGW and its fellow Defendants are directly involved in
perpetrating, conspiring to commit, and/or aiding and abetting
this massive scheme of fraud, extortion, abuse of
process, fraud upon the court, copyright misuse, and
misappropriation of funds."
Another key issue is that DGW threatened to sue each and every
individual they targeted, but that this would be practically
impossible to achieve with the small team of attorneys they have.
Also, they specifically stated to clients that cash settlement is
what they are after.
"DGW does not genuinely intend to pursue most, if any, of these
thousands of claims to trial. Operating through its alias USCG,
DGW advertises its copyright business model to prospective clients
in the film industry stating one overriding goal: to "obtain
settlement"-not judgments, which would require litigating and
proving its allegations," the complaint reads.
"With only thirteen attorneys on staff, DGW has issued a volume of
demand letters that far surpasses its ability to litigate this
volume of claims case by case. USCG tells prospective clients
that civil prosecution of copyright claims has not been
"practical," in light of the financial status of individual
infringers."
The complaint concludes that DGW's revenue model is not based on
upholding copyright law, but that it capitalizes on fear and aims
to intimidate. DGW extorted thousands of infringers by
perpetrating fraud on the U.S. Copyright Office, the complaint
alleges.
"Fraud has infected each stage of Defendants' actions since that
false registration, tainting their complaints, subpoenas, coercive
demand Letters and websites."
The conclusions lead to numerous allegations and eventually a long
list of 25 counts for relief. The plaintiffs demand a jury trial
and are seeking a wide range of damages as well as restitution and
reimbursement of the money plaintiffs have spent on the extortion
scheme thus far.
Among other things, the plaintiffs further seek dismissal of all
court actions brought on by the anti-piracy lawyers, an injunctive
relief to stop the scheme, and an injunctive relief to stop the
identities of the proposed plaintiffs being revealed.
The above is just a selection from a complaint that may very well
crush the future of USCG's pay-up-or-else scheme in the United
States. If anything, the lawyers and the other defendants have
some serious explaining to do.
In recent months, USCG's scheme has been copied by various other
law firms, protecting a wide variety of copyright holders. Just
last week the German based copyright profiteers Digiprotect
launched their first two cases in the United States, and many more
are likely to follow, unless a court speaks out against this type
of creative use of the legal system.
* Several Law Firms in Ontario May Face Class Actions
-----------------------------------------------------
Daryl-Lynn Carlson, writing for Law Times, reports while Ontario's
Class Proceedings Act has given more individuals access to
justice, several law firms have found themselves ensnared as
defendants in class action lawsuits as a result.
Newly merged law firms will be particularly vulnerable to
challenges over conflicts of interest, says Lorne Sossin. The
trend is prompting larger firms to revisit their conflict of
interest and risk policies to ensure they don't end up in court as
defendants.
"We're in an age where lawyers or accountants perform work on
behalf of an individual client where that work or that service can
impact hundreds of thousands of other people beyond the scope of
that direct relationship," says David Thompson, Esq., at Scarfone
Hawkins LLP in Hamilton, Ont.
He's acting for the plaintiff in the $50-million class action
lawsuit listed as Robinson v. Rochester Financial Ltd. that also
names Fraser Milner Casgrain LLP as a defendant.
The case has been certified by the Ontario Superior Court of
Justice. "I think the court recognized that the professionals are
in a position to perhaps influence what type of programs are able
to be sold and marketed and our allegation is, if not for the tax
opinion, the case never would have been launched," Mr. Thompson
says.
He expects more professionals to face lawsuits in class actions or
other types of litigation.
"The current legal landscape has moved towards holding
professionals generally more accountable for their actions," says
Mr. Thompson.
"I see that trend not in just the class action context, but
generally speaking, the courts seem to be more vigilant of
protecting the rights of individuals who rely on professionals
whether it's lawyers or accountants or financial advisers."
The law firm was named as a defendant because it allegedly
provided a tax opinion that prompted Rochester Financial to
proceed with a charitable gift program. None of the allegations
have been proven in court.
According to Mr. Thompson, the tax opinion by a major law firm
lent credibility to the program, an issue he believes all
professions should be aware of in the context of the rising number
of class actions.
"I think the class proceeding aspect is compelling in attracting
greater liability for professionals which include law firms
particularly because of the fact that professionals today are very
much relied upon, whether it's accountants or lawyers, for putting
together programs that are available to the general public," he
says.
"People can band together and aggregate their claims and pursue it
against the big law firm or accounting firm, whereas in the past
it would have been prohibitive to sue a big firm."
Mr. Thompson notes he's not thrilled about naming another law firm
as a defendant but says that after carefully reviewing the case,
there was an alleged extension of liability that he believes had
to be addressed.
Other law firms that have been named in class action lawsuits
include WeirFoulds LLP and Cassels Brock & Blackwell LLP.
Lorne Sossin, dean at Osgoode Hall Law School, has been keeping an
eye on the cases. He expects many law firms to revisit their risk
assessments as a result.
"The range of scenarios where a law firm can be involved as a
defendant or as a co-defendant is very broad, so larger law firms
will probably have to revisit their policies about conflict of
interest and liability," he says.
As well, he points out that two significant recent law firm
mergers -- one involving McMillan LLP and Lang Michener LLP and
the other joining Ogilvy Renault LLP with the Norton Rose Group --
could entail similar risk issues.
"The conflict issues really come to the fore when you get these
mergers of firms of significant size," Mr. Sossin says.
"Both of those raise the issue about how each firm will approach
any possible conflicts, especially when you have multiple domestic
offices. So if they want to take advantage of economies of scale,
this is going to have to be one of the major issues for them."
Mr. Sossin notes he wouldn't be surprised if there was a conflict
between client files that leads to a lawsuit or a class action as
a result of law firm mergers.
In terms of the Ogilvy Renault deal with the Norton Rose Group,
Mr. Sossin says the firms will have to be very careful about any
potential conflicts.
"It's highly unlikely it will prejudice any client but it's a
matter of perception in terms of the potential" for conflicts
between the firms, he points out.
"The best approach to avoid liability is to develop a rigorous
system of conflict checks and management and implement that in all
offices."
On the issue of class actions, Mr. Sossin says law firms are going
to be closely watching each case to see what the courts determine
with respect to their liability. "At the end of the day, it will
take a few judicial decisions to clarify the scope of a lawyer or
law firm's exposure.
It will be very interesting to see the outcome and what this will
mean for law firms and their policies in the future."
*********
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, Neil U. Lim, 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
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Information contained herein is obtained from sources believed to
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are $25 each. For subscription information, contact Christopher
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* * * End of Transmission * * *