/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/110125.mbx C L A S S A C T I O N R E P O R T E R Tuesday, January 25, 2011, Vol. 13, No. 17 Headlines APPLE INC: Appeal From Consumer Class Decertification Pending APPLE INC: ATTM Antitrust Litigation Remains Stayed APPLE INC: Awaits Final Court Approval of "Vogel" Suit Settlement ASCENTIVE LLC: Accused in Pa. Suit of Defrauding Consumers AURORA LOAN: May Face Class Action Over Foreclosures AUX SABLE: Recalls 700 Rail Cars BLOCKBUSTER INC: Bankr. Ct. Denies Video Renters' Class Claim CINMAR LLC: Recalls 38,000 Frontgate Closet Ladders CVS PHARMACIES: Class Action Notice Hearing Postponed to Jan. 26 IKEA HOME: Recalls 13,000 RUND Clear Glass Mugs METAL WARE: Recalls 4,800 NESCO American Harvest Food Dehydrator MGIC INVESTMENT: Defends RESPA Case in District of Columbia MGIC INVESTMENT: Appeal From Class Suit Dismissal Pending MISSION, B.C.: 74 Homeowners to Join Class Action Over Grow Ops NATIONAL AUSTRALIA: Faces Shareholder Class Action NEWBURG, NY: May Face Class Action Over Property Tax Increase PNC BANK: Can Settle Overdraft Fee Class Action, Judge Rules QUEENSLAND, AUSTRALIA: May Face Suit Over Dam Water Releases RANDOM HOUSE: Sued in Ill. Over Missing Bonus Material in Book ROYAL BANK: MBS Suit Denied Class-Action Certification SYNGENTA CROP: Court Won't Review Decision on Privilege Matter TARGET CORP: Wants to Change Attorneys in Airborne Class Action TENNESSEE VALLEY: Magistrate Wants Court to Junk Class Action TOYOTA MOTOR: To Settle Class Action Over Prius Headlights * U.S. Securities Class Actions Up 4.8% in 2010, Study Shows ********* APPLE INC: Appeal From Consumer Class Decertification Pending ------------------------------------------------------------- A court decision to decertify a consumer class of plaintiffs in Branning et al. v. Apple Computer, Inc., is currently on appeal with the U.S. Court of Appeals for the Ninth Circuit, according to the Company's Jan. 19, 2011 Form 10-Q filed with the U.S. Securities and Exchange Commission for the quarter ended December 25, 2010. Plaintiffs originally filed this purported class action against the Company on February 17, 2005, on behalf of putative classes of consumers and resellers in the Santa Clara Superior Court. In general, the consumer plaintiffs allege that the Company "shorted" the coverage provided under its warranties and AppleCare Protection Plan extended service contracts and sold plaintiffs used products that were represented to be new. In general, the reseller plaintiffs allege that the Company damaged their businesses by opening the Apple retail stores and making misrepresentations in connection with doing so. The complaint sought unspecified damages and other relief. On December 2, 2010, the plaintiff's motion to reconsider the decertification of a consumer class was denied, and on December 13, 2010, the plaintiff's motion to certify a class of Apple specialist resellers was denied. The matter is now on appeal at the Ninth Circuit. APPLE INC: ATTM Antitrust Litigation Remains Stayed --------------------------------------------------- A consolidated class action lawsuit filed against Apple, Inc., and AT&T Mobile remains stayed while the Supreme Court has yet to rule on the enforceability of an arbitration clause in the AT&T Mobility v. Conception case, according to Apple's Jan. 19, 2011 Form 10-Q filed with the U.S. Securities and Exchange Commission for the quarter ended December 25, 2010. The lawsuit is a purported class action filed against the Company and AT&T Mobility in the United States District Court for the Northern District of California. The Consolidated Complaint alleges that the Company and AT&T Mobility violated the federal antitrust laws by monopolizing and/or attempting to monopolize the "aftermarket for voice and data services" for the iPhone and that the Company monopolized and/or attempted to monopolize the "aftermarket for software applications for iPhones." On July 8, 2010, the Court granted in part plaintiffs' motion for class certification. The case is currently stayed until the Supreme Court rules on the enforceability of the AT&T Mobility arbitration clause in the AT&T Mobility v. Conception case. APPLE INC: Awaits Final Court Approval of "Vogel" Suit Settlement ----------------------------------------------------------------- Apple, Inc., is awaiting final court approval of its settlement of the class action lawsuit Vogel et al. v. Jobs et al., according to the Company's Jan. 19, 2011 Form 10-Q filed with the Securities and Exchange Commission for the quarter ended December 25, 2010. On August 24, 2006, plaintiffs filed a purported shareholder class action in the United States District Court for the Northern District of California against the Company and certain current and former officers and directors, alleging improper backdating of stock option grants to maximize certain defendants' profits, failing to properly account for those grants and issuing false financial statements. On June 27, 2008, plaintiffs filed another, similar purported shareholder class action in the United States District Court for the Northern District of California. The parties have reached a settlement and have obtained preliminary court approval. ASCENTIVE LLC: Accused in Pa. Suit of Defrauding Consumers ---------------------------------------------------------- Dan McCue at Courthouse News Service reports that a federal class action claims that Ascentive, a Philadelphia firm whose commercials advertise "finallyfast.com" software that allegedly speeds up slow computers, "has designed its software to defraud consumers by deceiving them into paying fees to fix fabricated and/or overstated computer problems." The class action comes just after the company agreed to pay Washington State $78,000 to settle allegations of misleading advertising and billing practices. "In essence, Ascentive falsely identifies computer problems and characterizes them as 'severe' in an attempt to scare consumers into purchasing its software," according to the Philadelphia class action. In the Washington settlement, Ascentive did not admit to wrongdoing, but agreed to ensure that its advertising and billing practices are clearer for consumers, the Seattle Post- Intelligencer reported on Jan. 4. In the new class action, plaintiff Douglas Ledet says Ascentive "engaged in a systematic pattern of fraud and deception through the design of its software products and its advertising practices." "In the simplest terms, Ascentive always claims that a user has PC errors, regardless of whether they exist of not," the class claims. Ascentive's most popular software package is PC SpeedScan Pro, which it markets through a variety of Web sites, including http://www.fastatlast.com, http://www.finallyfast.com, http://www.finallyfastpc.com, http://www.pcfinallyfast.com, http://www.scanyourpc.com, and http://www.escaneorapido.com Its other software products include ActiveDefender, ActivePrivacy, ActiveSpeed, PC ScanandSweep, RAMRocket, Spyware Striker Pro, and WINRocket. Ascentive claims on its Web sites that its software can instantly remove all computer errors and return a consumer's PC to its original high performance. But Mr. Ledet says "the motive behind Ascentive's SpeedScan Pro software is far more sinister." "Ascentive's modus operandi is to offer a 'free diagnosis' to anyone who owns a computer. Regardless of whether errors are actually present on a consumer's PC, Ascentive's software invariably indicates, in an extremely threatening manner, that dozens of 'Severe' errors exist. Ascentive then offers to remove these fabricated errors, in exchange for $29.95," the complaint states. Compounding the fraud, Mr. Ledet says, customers are made to inadvertently sign up for a yearly recurring subscription service. "Ascentive does not conspicuously disclose this information, and Ascentive stifles consumer attempts to reverse these undesired charges," the complaint states. Mr. Ledet says Ascentive also surreptitiously installs an additional application called the "'Ascentive Performance Center' onto the consumer's PC." "This application, installed without permission of the user, is designed to conduct ongoing 'scans' of the consumer's PC and recommend the purchase of additional software from Ascentive," the complaint states. "These recommendations are displayed in exasperating excess, usually in the form of ominous 'pop-ups.' These pop-up warnings supposedly alert the user about errors or nefarious spyware that is on the consumer's PC and requires immediate action by the consumer." Mr. Ledet says "the Ascentive Performance Center is little more than a marketing ploy by Ascentive to induce consumers to purchase its other products." In a particularly damning section of the complaint, Mr. Ledet says: "Through his attorneys, plaintiff has employed independent cyber security experts to investigate Ascentive's software. The results of these tests have further unmasked the fraud being perpetrated by Ascentive. "After a fresh installation of Windows 7 on a clean virtual PC, never connected to the Internet, SpeedScan Pro detected twenty-two (22) 'severe' errors on the pristine, unused PC. After purchasing the software and running the 'fix' for these errors, a subsequent scan revealed that zero (0) errors existed on the PC. However, and illustrative of the fraud being committed by Ascentive, after simply uninstalling and reinstalling SpeedScan Pro, Ascentive's software then indicated that ten (10) additional errors existed on the PC." Mr. Ledet seeks statutory and punitive damages, declaratory and injunctive relief for breach of contract, breach of express warranties, breach of implied covenant of good faith and fair dealing, unjust enrichment, and violations of the Pennsylvania Unfair Trade Practices and Consumer Protection Law. A copy of the Complaint in Ledet v Ascentive, LLC, Case No. 11-cv-_____ (E.D. Pa.), is available at: http://www.courthousenews.com/2011/01/20/Ascentive.pdf The Plaintiff is represented by: David S. Senoff, Esq. Richard C. DeFrancesco, Esq. CAROSELLI, BEACHLER, MCTIERNAN & CONBOY 1500 Walnut Street, Suite 507 Philadelphia, PA 19102 Telephone: (215) 609-1350 - and - Jay Edelson, Esq. William Gray, Esq. Ari J. Scharg, Esq. EDELSON MCGUIRE, LLC 350 N. LaSalle St., Suite 1300 Chicago, IL 60654 Telephone: (312) 589-6370 AURORA LOAN: May Face Class Action Over Foreclosures ---------------------------------------------------- Sabrina Rodriguez, writing Eyewitness News, reports the Seattle- based law firm Hagens Berman LLP is working on a class action lawsuit against Littleton, Colo.-based mortgage company Aurora Loan Services. In October 2009, Eyewitness News did an investigation on Aurora. At the time, Bakersfield homeowner Linda Harness said she had lost her home to foreclosure even though she was on a program for a home loan modification and followed the instructions she was given. Almost a year and a half later, it looks like Aurora has done it again; this time it's to childcare provider Mabel Burrell. Despite the business, Ms. Burrell fell on some hard times and went to her lender, Aurora, to get a home loan modification. "They put me in a 'workout program'," Ms. Burrell recalled, "And said if I paid what they wanted me to pay they would consider me for the modification." Like Ms. Harness, Ms. Burrell said she did everything Aurora asked. "I had the hope that everything was okay as long as I did what they asked. I had hope, but I guess not," said Ms. Burrell. "Made my last payment called them and they told me the house was sold the day before." The experience is almost exactly like Ms. Harness'. Since losing her home Ms. Harness didn't give up fighting, and actually sued Aurora for the payments she made during the modification. She went to small claims court on August 18, 2010 and won her case. However, Aurora still hasn't paid her. "I'm still angry they're getting away with it," said Ms. Harness. While it may be shocking the two homeowners have similar stories, they aren't alone. "Many, many people have suffered the same fate at the hands of Aurora," said attorney Tom Loeser, Esq. The law firm has been contacted by hundreds of people throughout the country who have lost their homes because of Aurora's actions. According to Mr. Loeser, the case claims Aurora offers a special agreement or forbearance or workout agreement to distressed borrowers. "In the case of our plaintiffs," said Mr. Loeser, "They keep paying until getting a notice to vacate, because it had been sold in foreclosure." The case is still in the beginning stages, and is not a class action lawsuit just yet. And they are still looking for more people to join. The case will take sometime to settle. Meanwhile, Ms. Burrell is focusing on moving, "Packing, find a place get settled." The entire situation hasn't been easy. "My stomach is burning, I don't sleep well. Doing a lot of praying right now for direction." Ms. Burrell has to be out of her home by January 28. Eyewitness News also called and left messages for Aurora for a comment about lawsuit, but have not heard back from them. AUX SABLE: Recalls 700 Rail Cars -------------------------------- The U.S. Consumer Product Safety Commission, in cooperation with Aux Sable Liquid Products, of Morris, Ill., announced a voluntary recall of about 700 rail cars. Consumers should stop using recalled products immediately unless otherwise instructed. Some of this propane does not have sufficient levels of the odorant that is added to propane to help alert consumers to a gas leak. Failure to detect leaking gas can present fire, explosion and thermal burn hazards to consumers. No injuries or incidents have been reported. This recall involves odorized propane gas delivered for storage tanks or sold in portable cylinders between February 25, 2010 and September 30, 2010. If the storage tank has been refilled or if the consumer has received additional propane since September 30, 2010, such propane is not included in this recall. Pictures of the recalled products are available at: http://www.cpsc.gov/cpscpub/prerel/prhtml11/11102.html The recalled products were manufactured in the United States and sold through Propane retailers in the following states: Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, Tennessee, Vermont and Virginia from February 25, 2010 through September 30, 2010. Consumers in the affected states whose most recent propane gas purchase or delivery was between February 25, 2010 and September 30, 2010 should immediately contact Aux Sable to arrange for a free inspection. If there is insufficient odorant, additional odorized propane or a replacement portable propane cylinder will be provided free of charge. For additional information, contact Aux Sable toll-free at (866) 473-7612 any time or visit the propane alert Web site at http://www.PropaneGasAlert.com/ BLOCKBUSTER INC: Bankr. Ct. Denies Video Renters' Class Claim ------------------------------------------------------------- Bankruptcy Judge Burton R. Lifland denied the motion of certain self-described "class representatives," Marc Cohen, Marc Perper and Uwe Stueckrad, on behalf of themselves, plaintiffs and putative class members in the action titled Cohen, et al v. Blockbuster Entertainment Inc., Case No. 99-CH-2561, (Ill. Cir. Ct., Cook Cty.), all others similarly situated, and the general public, for an order applying Federal Rule of Civil Procedure 23 to their proof of claim and certifying their proposed classes. Judge Lifland said the Rule 23 Motion seeks what is essentially the same relief previously sought and denied in the plaintiffs' State Court Action over the course of their unsuccessful 11-year litigation attempts. The plaintiffs have alleged in the State Court Action and in the Rule 23 Motion that they are part of two certifiable classes of customers of the Debtors who were unlawfully charged penalties when they breached oral rental agreements by retaining rented videos beyond their return due dates or failing to return the video inventory at all. On March 14, 2008, the Illinois Circuit Court rendered a decision in the State Court Action decertifying the plaintiffs' classes. On March 30, 2010, two years after the decertification, the plaintiffs filed an identical request before the Illinois Court, which was pending as of the commencement of the Debtors' chapter 11 cases. The plaintiffs filed their proposed class claim as a general unsecured claim of "at least $2,000,000." They additionally filed individual proofs of claim for "at least $150.00," "at least $340.00," and "at least $5.00" (Claim Nos. 1753, 1755, and 1756, respectively). The Debtors' schedules list the plaintiffs' claims as contingent, unliquidated, disputed and of an undetermined amount. Objections to the Motion were filed by the Debtors and the Creditors' Committee, who assert that the plaintiffs have failed to meet the requirements for certification. A copy of Judge Lifland's January 20, 2011 Bench Memorandum and Decision is available at http://is.gd/sr3wwcfrom Leagle.com. Cohen et al. is represented by: Heather D. McArn, Esq. JENNER & BLOCK LLP 919 Third Avenue New York, NY 10022-3908 Telephone: (212) 891-1613 Facsimile: (212) 909-0870 E-mail: hmcarn@jenner.com CINMAR LLC: Recalls 38,000 Frontgate Closet Ladders --------------------------------------------------- The U.S. Consumer Product Safety Commission, in cooperation with Cinmar LLC dba Frontgate of West Chester, Ohio, announced a voluntary recall of about 38,000 Frontgate Closet Ladders. Consumers should stop using recalled products immediately unless otherwise instructed. The ladders can unexpectedly break, posing a fall hazard to consumers. Cinmar has received about 860 reports of the ladders breaking, including 28 reports of injuries such as bruises and lacerations to the knees, shins, ankles and feet. This recall involves Frontgate foldaway closet two- and three-step ladders. The ladders are made of mahogany wood and designed for use in walk-in closets. Catalog item numbers included in the recall are 11998 for the two-step and 11675, 11975, 30269, 37935 and 40645 for the three-step ladder. Pictures of the recalled products are available at: http://www.cpsc.gov/cpscpub/prerel/prhtml11/11718.html The recalled products were manufactured in Indonesia and sold through Frontgate stores in Georgia, North Carolina and Ohio, in Frontgate and Sky Mall catalogs nationwide and on the Internet at http://Frontgate.com/and http://Skymall.com/from December 2005 through July 2010 for about between $90 and $150. CVS PHARMACIES: Class Action Notice Hearing Postponed to Jan. 26 ---------------------------------------------------------------- Amelia Flood, writing for The Madison St. Clair Record, reports a hearing in a St. Clair County class action case against CVS Pharmacies was postponed on Wednesday, Jan. 26. CVS attorney Robert Basset, Esq., told Circuit Judge Lloyd Cueto that class attorney Richard Burke, Esq., was unable to make it to court on a hearing over how immune supplement buyers should be notified. Mr. Basset then asked Judge Cueto to push back the hearing. Mr. Burke represents a class of Illinois customers who bought CVS's version of the immune system supplement Airborne. Lead plaintiff Iean Finley alleges he and other customers were deceived when they bought CVS's product and that it did not boost the immune system as claimed. The suit is one of several immune system class actions that Burke and his partners Paul Weiss and Kevin Hoerner filed in St. Clair County two years ago. Judge Cueto certified the Finley Illinois-only class in January 2010. CVS has objected to the class notice Mr. Finley supplied claiming it was too vague and that it sought to notify potential class members who were already compensated by a Federal Trade Commission settlement. Information on the next hearing date for the class notice issue is not yet available in the case file. The case is St. Clair case number 08-L-616. IKEA HOME: Recalls 13,000 RUND Clear Glass Mugs ----------------------------------------------- The U.S. Consumer Product Safety Commission, in cooperation with IKEA Home Furnishings, of Conshohocken, Pa., announced a voluntary recall of about 13,000 (an additional 115,000 were sold outside the U.S., including 3,000 in Canada) RUND clear glass mugs. Consumers should stop using recalled products immediately unless otherwise instructed. The inner walls of the double-walled glasses can break during use, posing a laceration hazard to consumers. IKEA has received one report of a laceration injury requiring medical attention. Eleven additional incidents have been reported outside of the U.S., resulting in four reports of injuries. This recall involves RUND clear glass mugs sold in sizes 4cl, 21cl and 40cl. The mug is handmade of double-walled glass. "Hand Made Quality" is printed on a small transparent sticker on the side of the mug. Article numbers and supplier numbers listed below are located on the package. All sizes were sold in 2-packs. Article and supplier numbers included in the recall are: Mug Size Article Number Supplier Number -------- -------------- --------------- 4cl 301-551-37 16790 21cl 301-496-79 40cl 501-496-78 Pictures of the recalled products are available at: http://www.cpsc.gov/cpscpub/prerel/prhtml11/11105.html The recalled products were manufactured in China and sold through IKEA stores nationwide from October 2009 through March 2010 for between $5 and $10. Consumers should immediately stop using the RUND mugs and bring them back to any IKEA store for a full refund. For additional information, contact IKEA toll-free at (888) 966-4532 anytime, or visit the firm's Web site at http://www.ikea-usa.com/ METAL WARE: Recalls 4,800 NESCO American Harvest Food Dehydrator ---------------------------------------------------------------- The U.S. Consumer Product Safety Commission, in cooperation with The Metal Ware Corporation, of Two Rivers, Wisc., announced a voluntary recall of about 4,800 NESCO American Harvest Gardenmaster Food Dehydrator. Consumers should stop using recalled products immediately unless otherwise instructed. A defective capacitor in the electronic control module can overheat, posing a smoke and fire hazard. NESCO received three reports of overheating resulting in smoke or fire. No injuries have been reported. The recalled product includes a base with stackable trays to place food. The top of the unit houses the electronic control module. Model number FD-1020 and production date codes: 09E 0610; 09E 0624; and 09E 0903 are molded into the underside of the dehydrator's electronic control module. Pictures of the recalled products are available at: http://www.cpsc.gov/cpscpub/prerel/prhtml11/11104.html The recalled products were manufactured in China and sold through National mass merchandisers and retailers and online at www.nesco.com and other websites from July 2009 to January 2011 for about $140. Consumers should immediately stop using the recalled product and contact NESCO for instructions on how to receive a free electronic control module. For more information, contact NESCO at (800) 726- 4457 between 8:00 a.m. and 5:00 p.m., Central Time, Monday through Friday or visit the firm's Web site at http://www.nesco.com/ MGIC INVESTMENT: Defends RESPA Case in District of Columbia ----------------------------------------------------------- MGIC Investment Corporation is defending itself against a class action lawsuit pending in the District of Columbia for violating the Real Estate Settlement Procedures Act, according to the Company's Jan. 19, 2011 Form 8-K filed with the U.S. Securities and Exchange Commission. Consumers are bringing a growing number of lawsuits against home mortgage lenders and settlement service providers. Seven mortgage insurers, including MGIC, have been involved in litigation alleging violations of the anti-referral fee provisions of the Real Estate Settlement Procedures Act, which is commonly known as RESPA, and the notice provisions of the Fair Credit Reporting Act, which is commonly known as FCRA. MGIC settled class action litigation against it under RESPA in October 2003. MGIC settled the named plaintiffs' claims in litigation against it under FCRA in December 2004 following denial of class certification in June 2004. Since December 2006, class action litigation has been brought against a number of large lenders alleging that their captive mortgage reinsurance arrangements violated RESPA. On November 29, 2010, six mortgage insurers (including MGIC) and a large mortgage lender (which was the plaintiffs' lender) were named as defendants in a complaint, alleged to be a class action, filed in Federal District Court for the District of Columbia. The complaint alleges various causes of action related to the captive mortgage reinsurance arrangements of this mortgage lender, including that the defendants violated RESPA by paying the lender's captive reinsurer excessive premiums in relation to the risk assumed by that captive. The named plaintiffs' loan was not insured by MGIC and it is the Company's understanding that it was not reinsured by this mortgage lender's captive reinsurance affiliates. The Company intends to defend MGIC against this complaint vigorously but it is unable to predict the outcome of the litigation or its effect on it. While the Company is only a defendant in this RESPA case, there can be no assurance that the Company will not be subject to future litigation under RESPA (or FCRA) or that the outcome of any such litigation would not have a material adverse effect on the Company. MGIC INVESTMENT: Appeal From Class Suit Dismissal Pending --------------------------------------------------------- An appeal from a court's decision dismissing a class action complaint against MGIC Investment Corporation is pending with the U.S. Court of Appeals for the Seventh Circuit, according to the Company's Jan. 19, 2011 Form 8-K filed with the U.S. Securities and Exchange Commission. Five previously-filed purported class action complaints filed against the Company and several of its executive officers were consolidated in March 2009 in the United States District Court for the Eastern District of Wisconsin and Fulton County Employees' Retirement System was appointed as the lead plaintiff. The lead plaintiff filed a Consolidated Class Action Complaint on June 22, 2009. Due in part to its length and structure, it is difficult to summarize briefly the allegations in the Complaint but it appears the allegations are that the Company and its officers named in the Complaint violated the federal securities laws by misrepresenting or failing to disclose material information about (i) loss development in the Company's insurance in force, and (ii) C-BASS, including its liquidity. The Company's motion to dismiss the Complaint was granted on February 18, 2010. On March 18, 2010, plaintiffs filed a motion for leave to file an amended complaint. Attached to this motion was a proposed Amended Complaint. The Amended Complaint alleged that the Company and two of its officers named in the Amended Complaint violated the federal securities laws by misrepresenting or failing to disclose material information about C-BASS, including its liquidity, and by failing to properly account for the Company's investment in C-BASS. The Amended Complaint also named two officers of C-BASS with respect to the Amended Complaint's allegations regarding C-BASS. The purported class period covered by the Amended Complaint began on February 6, 2007 and ended on August 13, 2007. The Amended Complaint sought damages based on purchases of the Company's stock during this time period at prices that were allegedly inflated as a result of the purported violations of federal securities laws. On April 12, 2010, the Company filed a motion in opposition to Plaintiff's motion for leave to amend its complaint. On December 8, 2010, the plaintiff's motion to file an amended complaint was denied and the Complaint was dismissed with prejudice. On January 6, 2011, the plaintiff appealed the February 18, 2010 and December 8, 2010 decisions to the United States Court of Appeals for the Seventh Circuit. The Company is unable to predict the outcome of these consolidated cases or estimate its associated expenses or possible losses. Other lawsuits alleging violations of the securities laws could be brought against the Company. MISSION, B.C.: 74 Homeowners to Join Class Action Over Grow Ops --------------------------------------------------------------- Sam Cooper, writing for Postmedia News, reports a controversial bylaw that gives authorities in Mission, B.C., the power to fine homeowners for the cost of searching their properties for marijuana grow ops -- even if police find nothing -- is under attack on two fronts. A Mission municipal councilor is seeking to rescind the bylaw, and 74 residents have reportedly joined to file a class-action lawsuit against the district. As the Vancouver Province reported recently, a number of Mission residents have complained that their homes were searched for pot grow ops and they were slapped with fees and repair orders costing upward of $10,000 -- all on questionable evidence. On Jan. 18, Coun. Jenny Stevens asked that a motion to rescind the bylaw be considered by Mission council on Monday, Jan. 24. "I've become increasingly concerned about the bylaw to the point I'm saying . . . are the negative consequences outweighing the benefits?" said Ms. Stevens. "If (dissent) is getting this vociferous, you need to look at the beginning of the problem, which is this bylaw." On Jan. 18, more than 100 bylaw critics attended an emotional meeting in Mission's library to air concerns, said Mission resident Stacy Gowanlock. Mr. Gowanlock -- who said his house was searched in 2009 and hit with thousands in fees and repair orders despite the fact that he'd never grown marijuana in his home -- said 74 citizens at the meeting signed onto the class-action lawsuit he is leading. In mid-December, B.C Civil Liberties Association's Micheal Vonn led a delegation to Mission's council, warning grounds for a class-action suit are strong, and searches are "putting innocent people under horrible duress." On Jan. 19, Ms. Vonn said the BCCLA intends to join the class- action suit -- a statement of claim is being drafted, and it is expected to be filed soon. "Our opinion is, fining people for imaginary grow ops does nothing to increase safety in Mission," she said. NATIONAL AUSTRALIA: Faces Shareholder Class Action -------------------------------------------------- AAP reports National Australia Bank will vigorously defend a shareholders' class action against it for allegedly failing to disclose early enough the full extent of losses during the global financial crisis, a NAB lawyer says. Some 250 institutional and retail investors are seeking about $450 million worth of losses as part of the action headed by legal firm Maurice Blackburn. The bank announced on May 9, 2008, a $181 million charge on collateralized debt obligations partly linked to risky US sub-prime mortgages. On July 25, 2008, the bank announced it had taken a further $830 million charge, taking the total to more than $1 billion and pushing the share price down 13.5%. Maurice Blackburn principal Andrew Watson told a directions hearing at the Victorian Supreme Court on Jan. 21 the bank should have revealed information to shareholders earlier. "As at January 1, 2008 there should have been an announcement to disclose significant writedowns," Mr. Watson said. "The CDO market was in freefall from 2007." Outside the court, the lawyer acting for NAB, Geoff Healy, said the bank was still waiting to see a statement of claim from Maurice Blackburn. "We will be vigorously defending the case," he told reporters. Justice Tony Pagone adjourned the matter for a further preliminary hearing on March 28. NEWBURG, NY: May Face Class Action Over Property Tax Increase ------------------------------------------------------------- Doyle Murphy, writing for Times Herald-Record, reports property tax increases in the city of Newburgh will force so many people from their homes that the taxes have become a violation of constitutional rights, a tax lawyer told Newburgh property owners. Attorney Ronald Cohen called this year's 71% tax increase "irrational." He predicted a federal judge would see it as a "disguised condemnation" by the government -- raising taxes so high people couldn't hope to pay them and then foreclosing on their properties for unpaid taxes. That's taking without just compensation, and it will lead to the death of cities throughout the Northeast, he said. "As bad as things are, they will get that much worse," he said. Mr. Cohen spoke on the invitation of a grass-roots group of taxpayers calling itself the Newburgh Citizen Coalition. About 125 people packed St. George's Church on Jan. 19, looking for ways to fight the tax hike that was passed as part of the 2011 budget. "We have to start from some point," said Hansel Tulloch, who organized the meeting. "We just have to start." Mr. Cohen outlined a plan for a class-action lawsuit against the city, Orange County, state and federal governments with a larger goal of spreading the costs of basic services equitably across all levels of government. He argued the costs of services have been unfairly passed from the top levels of government on down to the local level, where there are inadequate resources. The lawsuit would take two to three years, Mr. Cohen estimated. He said he would cap his fee at $50,000 -- a price, he said, that would be a fraction of the normal cost. The bill would be shared by those who agreed to join the suit. The plan received a mixed reaction from the homeowners in the audience, many of whom said they needed to figure out how to pay bills now. "Two to three years from now, those of us who are paying into this to fight, we may have lost the battles in our own homes," said resident Judy Kennedy. She recommended pursuing short-term strategies, as well as considering the long-term option proposed by Mr. Cohen. No decisions were made on Jan. 20. Audience members signed in and left their e-mail addresses with organizers to start building a network. "I, myself, am not willing to lay down on this," Ms. Kennedy said. PNC BANK: Can Settle Overdraft Fee Class Action, Judge Rules ------------------------------------------------------------ Cameron Langford at Courthouse News Service reports that PNC Bank may be able to settle a class action over unfair overdraft fees for $12 million, a federal judge in Washington, D.C., ruled. A customer who is suing the bank over the same fees in a separate class action that is part of a Florida multidistrict litigation case tried to unravel the proposed settlement, but the D.C. judge rejected his arguments. Clients of National City Bank, which merged into PNC in 2009, filed a class action for deceptive business practices in Washington on Feb. 17, 2010. They claimed the bank misled customers about their account balance, concealed its overdraft policies and "reorder[ed] electronic debit transactions from the highest dollar amount to lowest dollar amount so as to deplete the customer's available funds as quickly as possible while maximizing the number of overdraft fees collected," the latest order in the case states. A couple of months after filing, the Washington court was ordered to transfer the case to the ongoing multidistrict litigation in Florida's southern district. Instead, the Washington plaintiffs struck a settlement with the bank and the Florida court vacated the transfer order. Under the terms of the settlement, National City customers who held an account during the class period and "incurred at least one overdraft fee associated with at least one National City debit card transaction that was not previously reversed, refunded or returned" to them by the bank would be eligible for the class, U.S. District Judge John Bates wrote. Under the $12 million settlement, class members in Washington would receive $36 for each eligible overdraft charge incurred during any two calendar months, not necessarily consecutive, between July 1, 2004, and August 15, 2010. The bank would also provide $500,000 to publish notice of the settlement, and administer it. The plaintiffs say $12 million is 17% to 24% of the best possible recovery if the case went to trial. Robert Matos, a former National City Bank customer who is the named plaintiff in one of the overlapping class actions, objected to the proposed Washington settlement, arguing that it might affect the multidistrict litigation. Mr. Matos questioned the adequacy of a $12 million settlement in his objections, and Judge Bates agreed that, in light of a recent similar overdrafts case against Wells Fargo that resulted in a $203 million judgment against the bank, the parties should justify how they reached the figure before he grants final approval. Since the $12 million figure is "within the range of possible approval," however, Judge Bates found it was sufficient for the preliminary approval stage and overruled Mr. Matos' objection. Judge Bates also rejected Mr. Matos' challenges to discovery in the case and the allegedly arbitrary settlement allocation procedure. He noted that formal discovery was unnecessary and that the allocation proposal was perfectly fair. "Limiting the recovery period to two months also prevents chronic overdrafters, who had notice of National City Bank's overdraft policies yet continued incurring overdraft fees anyway, from being unfairly rewarded for their behavior," the ruling states. Judge Bates also rejected the charge that the proposed settlement employed an "unnecessary and unduly burdensome" claims process. Matos had argued that the bank should be able to calculate and reimburse customers for their individual share of damages without requiring them to file a claim. The judge also rejected allegations that the parties reached a hasty settlement to avoid transferring the case to Florida, and that the settlement will affect multidistrict litigation. "The parties have repeatedly assured the court that the settlement was deliberately drafted to prevent releasing the claims of PNC customers who opened PNC accounts directly with PNC (rather than through the merger of National City Bank into PNC)," Judge Bates wrote. Release of claims against PNC will only apply to claims based on accounts opened originally with National City and not affect the Florida litigation, Judge Bates wrote. The judge added that the proposed settlement is not ambiguous with regard to the agreement not to sue. That component of the settlement will not take effect until he grants final approval, the ruling states. Judge Bates granted approval of the settlement and class certification, but noted that he reserved the right to ultimately reject any part of the settlement. A copy of the Memorandum Opinion in Trombley, et al. v. National City Bank, Case No. 10-cv-00232 (D.D.C.), is available at: http://is.gd/Iwpc7Y QUEENSLAND, AUSTRALIA: May Face Suit Over Dam Water Releases ------------------------------------------------------------ Tuck Thompson and Mark Solomons, writing for The Courier-Mail, report state dam operators face huge class-action lawsuits if they were negligent in releasing water from Wivenhoe Dam and contributing to flooding. Legal experts on Jan. 20 said that the law allowed for insurance companies or groups of householders with or without insurance to sue Seqwater and its owner, the State Government. Taxpayers or water users would ultimately have to pick up the tab if payouts could not be covered by the dam's own insurers. "We're certainly looking at that," Slater & Gordon lawyer Damien Scattini told The Courier-Mail. "It's been a topic of discussion here. If it turns out that this could have been avoided . . . we would say we would investigate." Litigants were likely to wait for the outcome of the commission of inquiry into the floods and use the evidence it produced before launching any actions. One legal expert said law firms would be "licking their chops" waiting for the inquiry's findings. "It's going to get pretty messy. An inquiry is a very neat way to get evidence," he said, commenting that Premier Anna Bligh may have made a strategic error by greasing the wheels for legal action against her own Government. While bodies such as rural fire brigades and the ambulance service typically have statutory protections to limit liability, the expert was unaware of any such protections for state dam operators, who would likely have unlimited liability for claims made under common law. In August, the German city of Goerlitz launched a criminal prosecution against the operators of the Witka Dam in neighboring Poland after large quantities of water were sent downriver during flooding in which nine people died. Lawsuits were threatened in 2009 in the Philippines after dam operators released a wall of water at the last minute during a typhoon. And in Canada, dam managers were put on trial on criminal charges and their employer later forced to pay millions of dollars in compensation after a release of water drowned a woman and her child in a recreation area near Ottawa in 2002. Seqwater on Jan. 20 said that all the water releases had been carried out "by the book" to protect the integrity of the dam. It would not comment on whether it had sought legal advice in regard to its potential liabilities. A Suncorp spokesman said there was "obviously" a need for a flood inquiry and Suncorp would be a "willing participant." He said it was too early to identify the participants or whether negative inquiry findings would lead to legal action by Suncorp. Australian Insurance Law Association president David McKenna of Perth law firm Jarman McKenna said insurance companies and policy- holders had a "right of recovery" if there was legal justification. Insurance companies have been successful in claims against electrical providers whose negligence caused fires. "The right exists. It is up to the insurance companies whether they want to pursue it," he said. Even if they don't, flood victims can make claims for uninsured damages. Mr. McKenna rejected suggestions that insurance companies were not paying claims or delaying processing claims because they were waiting for the inquiry to absolve them of payouts. "The two are totally separate issues," he said. Insurance companies had a responsibility to pay if the claims met the conditions of the policy regardless of the ultimate blame, he said. Senior insurance industry sources on Jan. 20 indicated there were no immediate plans for a lawsuit. Seqwater is South East Queensland's bulk water supply provider. RANDOM HOUSE: Sued in Ill. Over Missing Bonus Material in Book -------------------------------------------------------------- Mario Aliano, individually, and on behalf of all others similarly situated v. Timothy Ferriss and Random House, Inc., Case No. 2011- CH-01939 (Ill. Cir. Ct., Cook Cty. January 14, 2011), asserts claims for breach of warranty, violations of the Illinois Consumer Fraud and Deceptive Business Practices Act and the Illinois Deceptive Trade Practices Act, and unjust enrichment, in connection with the sale of a book entitled "The 4-Hour Body: An Uncommon Guide to Rapid Fat-Loss, Incredible Sex, and Becoming Superhuman. Plaintiff Mariano Aliano purchased a copy of the book, and claims he was injured as a result. Mr. Aliano relates that in a Web site run by the book's author Timothy Ferriss -- http://www.fourhourbody.com/-- Mr. Ferriss represents to purchasers of the book that the book comprises not only the printed material on 50 motivational topics related to the prevention of fat gain, but also "Bonus Material" that can purportedly be accessed (using passwords hidden in the book), examples of which are: "Spot Reduction Revisited: Removing Stubborn Thigh Fat", "Becoming Brad Pitt: Uses and Abuses of DNA", and other entertaining material "that didn't make it in." Mr. Aliano says, however, that at the time the book was published, and continuing to date, no Bonus Material is available or accessible and that Defendants knew this at all times that they marketed, advertised, promoted, distributed and sold the book. Mr. Aliano adds that the Defendants also knew that they were unjustly retaining their customer's money, but continued to make the false representations nevertheless. Defendant Mr. Ferriss authored the book, and promotes, markets, distributes and offers the book for sale throughout the entire country, including in Illinois. Defendant Random House is the publisher of the book. A copy of the Complaint in Aliano v. Ferriss, et al., Case No. 11CH01939 (Ill. Cir. Ct., Cook Cty.), is available at: http://www.courthousenews.com/2011/01/20/RandomHouse.pdf The Plaintiff is represented by: Thomas A. Zimmerman, Jr., Esq. Adam M. Tamburelli, Esq. ZIMMERMAN LAW OFFICES, P.C. 77 West Washington Street, Suite 1220 Chicago, IL 60602 Telephone: (312) 440-0020 ROYAL BANK: MBS Suit Denied Class-Action Certification ------------------------------------------------------ Adam Tempkin, writing for Reuters, reports a Federal District Court judge in Manhattan on Jan. 18 denied class-action certification in a mortgage-backed securities action brought by investors against Royal Bank of Scotland. Legal specialists say that this is the first ruling on class certification among multiple MBS actions pending in venues around the country. The Plaintiffs in the case, titled New Jersey Carpenters Vacation Fund, et al. v. The Royal Bank of Scotland Group, Plc, et al., alleged that the investment bank made misleading statements and omissions about residential mortgage-loan origination practices in the offering documents for two MBS offerings from 2006 and 2007. The plaintiffs sought certification of a class comprising investors who purchased US$3.4 billion worth of securities via the two transactions, which were issued off of the Haborview Mortgage Loan Trust and Residential Accredit Loan Inc. trust. Judge Harold Baer Jr. of the U.S. District Court for the Southern District of New York denied class certification on two grounds. First, the Court upheld the defense's so-called "affirmative defense", which basically means that there was real evidence that some of the investors had previous knowledge of the underwriting guidelines and practices that were allegedly misstated in the offering documents. These investors bought the bonds anyway. The judge also says that certain investors in the class action had more information than others regarding the underwriting guidelines, based on when each investor bought the bonds. Secondly, the Court held that class-action treatment would not be a superior method for resolving investors' claims, where the proposed class consisted of large, institutional and sophisticated investors who could pursue their own claims on an individual basis. Moreover, some of those class members may actually have competing interests in prosecuting the action. While this is only a Federal District Court opinion, and will likely not be a controlling precedent, legal experts say that the judge's reasoning may influence class-certification motions for MBS lawsuits pending across the country. "The first decision out of the box often guides the thinking of future courts, especially where as here, I assume, most, if not all cases were brought in the Southern District of New York, and as a result all judges are in the same two buildings," said an attorney with experience in securities class actions. "In most securities class-action lawsuits, people assume a class will be certified," said another attorney who spoke on condition of anonymity. "This decision shows that there are real standards that have to be met in order for there to be a class-action litigation; it's not just assumed. Plaintiffs have the burden to show that all elements are met." Interestingly, legal experts say that Judge Baer said that the plaintiffs actually met four important requirements for forming a litigation class-action: commonality, typicality, adequacy, and numerosity. However, they were not able to prove so-called predominance and superiority, which caused the judge to deny certification of a litigation class. While the plaintiffs failed to prove these last two standards for the purposes of certifying a so-called "litigation class", there is a lower burden to proving these prongs for a "classwide settlement", which still may be possible despite the denial of a litigation class, legal experts say. "The standards that apply to certification of a settlement class are more lenient than the standards that apply to a litigation class," said the securities class-action attorney. Judge Baer agreed with the defendants' contention that different putative class members had different levels of knowledge regarding the underwriting guidelines and practices, based on their respective levels of sophistication and time of purchase. While most of the evidence is confidential, the judge states that several of the putative class members or their investment advisers "are sophisticated investors with significant experience in asset- backed securities." "Among them, JP Morgan is alleged to have had knowledge regarding originators' systematic disregard of underwriting guidelines in another lawsuit brought by Intervenor-Plaintiff Iowa Public Employees' Retirement System ("IPERS")," the opinion says. "For Plaintiffs to take the position in this litigation that JPMorgan had no such knowledge would, to say the least, present unique issues." The judge lists other sophisticated investment advisors to the plaintiff, including Western Asset Management Company, as well as other putative class members that would have had knowledge of deteriorating underwriting guidelines, including Blackrock Management, Ellington Management Group, and Fortress Investment Group. However, it is not clear from the Court's opinion whether the investment advisors who knew about the lowered standards actually advised their clients of what they knew. SYNGENTA CROP: Court Won't Review Decision on Privilege Matter -------------------------------------------------------------- Steve Korris, writing for The Madison St. Clair Record, reports appellate judges won't review a decision granting free speech privilege to groups whose documents Stephen Tillery of St. Louis demanded in his class action against Syngenta Crop Protection Services. On Jan. 13, Fifth District judges denied Mr. Tillery leave to appeal an order that Madison County Circuit Judge Barbara Crowder signed in September. Mr. Tillery, seeking damages for water contamination from weed killer atrazine, argued the groups should file a privilege log describing documents they refuse to produce. Judge Crowder disagreed, and the Fifth District ratified her decision without comment. "To require those who received subpoenas to disclose that information which they assert is protected by the First Amendment to the U.S. Constitution will not be required by this court." Judge Crowder wrote. "Membership in associations and advocacy for laws and regulations that affect the use of atrazine is a type of political and economic association that is generally protected by the First Amendment." Mr. Tillery filed six suits against makers and sellers of atrazine in 2004, proposing to certify Holiday Shores Sanitary District as leader of class action in all six. The cases languished for five years, but Mr. Tillery started moving them forward after the New York Times ran an article linking atrazine to water pollution. The U.S. government considers atrazine safe at three parts per billion, but Mr. Tillery seeks a court order declaring it unsafe at any concentration. Mr. Tillery added cities and private water suppliers as plaintiffs. In 2009, Crowder ordered Syngenta to show Mr. Tillery its memberships in industry groups and identify their lobbyists. Syngenta complied, and Mr. Tillery sent subpoenas to the groups for membership lists, communications with members, and names of contributors. The groups objected, and Judge Crowder partially sustained the objections last September. Judge Crowder ordered Illinois Fertilizer Chemical Association and Chemical Industries Council of Illinois to produce specific communications with Syngenta. She ordered Heartland Institute, a non profit educational group, to produce information on its relations with Syngenta, including donations and instructions. Syngenta consultant Don Coursey was ordered to produce information from the period before Syngenta retained him. Judge Crowder also ordered the Illinois Farm Bureau to produce information relating to Syngenta. But, she sustained Farm Bureau's objection to any request seeking the sources any of its reporters used in writing articles. In October, Judge Crowder certified questions to the Fifth District. She asked if the First Amendment bars discovery of communications or donations between a defendant and a trade association. She asked if it bars discovery of communications or donations between a defendant and a lobbying organization. She asked if it bars discovery of communications or donations between a defendant and a non profit educational organization. Mr. Tillery separately petitioned the Fifth District, arguing Judge Crowder should have required privilege logs, but he didn't prevail. Justices Bruce Stewart, Richard Goldenhersh and Melissa Chapman denied his petition. When the case returns to Madison County, Circuit Judge William Mudge will preside. Chief Judge Ann Callis assigned Judge Crowder almost exclusively to asbestos cases. As Tillery sues Syngenta in Madison County, he sues it in federal court as well. That suit, pending before District Judge Phil Gilbert of Benton, includes claims against Swiss holding company Syngenta AG. Syngenta AG moved last year to dismiss, challenging Judge Gilbert's jurisdiction. Mr. Tillery opposed the motion, filed 365 exhibits, and sealed his brief and his exhibits. On Jan. 18, he moved for oral argument on jurisdiction. Syngenta AG opposed oral argument, telling Judge Gilbert he had enough information to reach a decision. TARGET CORP: Wants to Change Attorneys in Airborne Class Action --------------------------------------------------------------- Amelia Flood, writing for The Madison St. Clair Record, reports Target Corporation is moving to change attorneys in a St. Clair County immune system supplement class action. Target filed its motion asking to change attorneys in the suit brought by lead plaintiff Brian Buehlhorn Dec. 10. While the retailer is currently represented by Robert Basset, Esq., of Williams, Venker, & Sanders LLC of St. Louis, the defendant is now asking that Robert Shultz, Esq., of Heyl, Royster, Voelker & Allen of Edwardsville and attorneys Sidley Austin LLP of Chicago take over the case. Mr. Buehlhorn claims that he and class members in several states including Target's home state of Minnesota were duped when they bought the store's version of the immune system booster Airborne. Mr. Buehlhorn claims that the product did not work as claimed. The suit is one of a number of immune system supplement class actions that were filed in St. Clair County two years ago by the team of Richard Burke, Paul Weiss and Kevin Hoerner. Basset, Target's current attorney, also represents CVS Pharmacies Inc. in a nearly identical immune supplement class action. The motion does not specify the reason for the substitution of counsel. The CVS class action in which Basset represents the defendant is St. Clair case number 08-L-616. In addition to Basset, attorneys Robert Phillips Jr., Esq., and David Smith, Esq., of Reed Smith LLP of San Francisco and Chicago would withdraw. Kara McCall, Esq., Nathan Huey, Esq., and Christina Coleman, Esq., of the Sidley firm would join Mr. Shultz as Target's new legal team. The case is St. Clair case number 08-L-667. TENNESSEE VALLEY: Magistrate Wants Court to Junk Class Action ------------------------------------------------------------- The Associated Press reports hundreds of people are suing the Tennessee Valley Authority for damages from the utility's huge coal ash spill in East Tennessee and a federal magistrate says the suits should remain separate. U.S. Magistrate Bruce Guyton has recommended that the court deny a plaintiff lawyer request for class action status. The federal court in Knoxville has previously ruled that TVA is not liable for punitive damages and that the suits will be decided from the bench, not by jurors, if they go to trial as now scheduled in September. TVA spokeswoman Barbara Martocci on Jan. 20 said that TVA is pleased with the magistrate's recommendation against granting class action status. Attorneys for some of the 457 plaintiffs in 50 lawsuits did not return telephone messages seeking comment on Jan. 20. TOYOTA MOTOR: To Settle Class Action Over Prius Headlights ---------------------------------------------------------- Ken Bensinger, writing for Los Angeles Times, reports Toyota Motor Corp. has agreed to settle a class action lawsuit over headlights in its 2006 to 2009 Prius hybrids that shut off without warning, triggering at least 2,500 complaints from motorists. Under the terms of the settlement, eligible Prius owners will be reimbursed for their costs to fix failing headlight systems. They will also get their warranties for headlight problems extended to five years or 50,000 miles, rather than the standard three years or 36,000 miles. Although there was no dollar figure connected to the settlement, attorneys for plaintiffs estimated that the toll could run into the tens of millions of dollars, based on the number of vehicles potentially affected by the headlight problem. Those attorneys said that as many as 320,000 owners of Priuses with optional high intensity discharge headlights may be covered by the agreement. "Conservatively, there are tens of thousands of lights that were replaced or repaired," said Eric Gibbs, Esq., a San Francisco attorney representing the class. In settling, the embattled Japanese automaker removes another challenge from its hefty legal docket, but also adds to the mounting costs of addressing its recent quality and safety issues. Toyota still faces hundreds of lawsuits for other issues, including sudden acceleration and rollover problems. Judge Manuel Real of U.S. District Court in Los Angeles earlier certified the class and gave preliminary approval of the settlement. Under its terms, eligible Prius owners will be notified by mail starting next month and have 90 days thereafter to register with the class. By settling, Toyota avoids the risk of having a jury determine that the headlight problem is in fact a defect, which could spur a recall to replace all such headlights -- a potentially far more costly solution. Under the settlement, the automaker did not admit any wrongdoing or liability. "Toyota worked in good faith to resolve this matter in the interest of customer satisfaction," spokesman Brian Lyons said in a statement. "We are pleased that all parties have reached an amicable agreement." To date, the automaker has not conceded that the 2006 to 2009 Prius hybrids have a defect in the lighting system, despite the numerous complaints to regulators that the HID headlamps tend to suddenly turn off, with both headlights going out simultaneously in some cases, a potentially hazardous condition. A small number of drivers have alleged that the condition caused accidents or minor injuries. National Highway Traffic Safety Administration data do not reveal any deaths blamed on the problem. According to Mr. Lyons, 216,000 Prius hybrids were outfitted with those headlights, out of a total of 620,000 sold in those model years. Because some vehicles were leased, and others sold secondhand, the number of potential class members exceeds the number of eligible vehicles. A review of the NHTSA database shows that 49% of all complaints about 2006 to 2009 Priuses were related to lighting, headlamps or visibility. That far outnumbers complaints of sudden acceleration or braking issues in the vehicles, both of which have led to recalls. A NHTSA probe launched in April 2009 determined that there were more than 2,250 complaints about failing headlamps lodged with the agency or Toyota, and that Toyota had completed almost 28,000 warranty repairs of the HID system. That investigation was dropped in August 2009 after Toyota said it would initiate a "consumer service campaign" to address the issue. Complaints of headlight failure have continued to come in, however, with dozens lodged to NHTSA in the last few months, and online forums brimming with discussions of the problem. Beyond the safety risks of the headlight problem, many consumers also complained that dealers refused to cover the costs of repair. Instead, they were forced to pay for new headlights, or in many cases a new onboard computer that controls the lighting system. The costs of repairs varied, but typically ran between $250 and $1,000, attorneys said. One NHTSA complaint, for example, cites a service manager charging $578 to replace both headlamps in a 2006 Prius, but notes the manager "wouldn't guarantee that would solve the problem." The settlement will allow consumers who have receipts for their repairs, either at a Toyota dealership or elsewhere, to file for reimbursement. "Anyone who had any bulb or computer failure will now be able to get their money back," attorney Mr. Gibbs said. "I think we reached a pretty good settlement." Mr. Gibbs said that during discovery in the case Toyota showed evidence suggesting that the problem lay in the headlamps themselves, rather than in the computer, or ECU, that controlled them. Toyota has since moved to a new bulb, which it claims does not fail as readily as the previous model. Toyota still faces hundreds of lawsuits for other issues, including sudden acceleration and rollover problems. Toyota has agreed to pay $10 million to settle one sudden acceleration suit, involving a Lexus ES that crashed outside of San Diego in 2009, killing four. If other acceleration cases are not settled, they could go to trial within the next year. Attorney Mike Arias, also representing plaintiffs in the Prius headlights class, said he was not convinced that the problem was entirely due to the bulbs. "I still think it's an ECU problem" Mr. Arias said. "We argued that the circuitry caused the headlamp failures." Toyota has repeatedly claimed that its vehicles have no electronic defects. Spokesman Mr. Lyons said the company no longer replaced ECUs for headlamp failures, and that the new bulb appeared to fail much less frequently. * U.S. Securities Class Actions Up 4.8% in 2010, Study Shows ------------------------------------------------------------ Margaret Cronin Fisk, writing for Bloomberg News, reports securities class-action lawsuits in the U.S. rose 4.8% last year, led by claims that companies violated disclosure rules in mergers and acquisitions, a study found. The lawsuits include M&A claims involving Novartis AG and Alcon Inc.; BHP Billiton Ltd. and Potash Corp. of Saskatchewan Inc.; Sanofi-Aventis SA and Genzyme Corp.; and buyouts involving J. Crew Group Inc. and Del Monte Foods Co., according to Cornerstone Research, which conducted the study with Stanford Law School's Securities Class Action Clearinghouse. Trends are cyclical and often driven by events, said John Gould, Cornerstone's senior vice president in Boston. This year, there were no new suits filed over Ponzi schemes or auction-rate securities, and lawsuits stemming from the credit crunch continued to slide, according to the study released today. "There's always something new," Mr. Gould said in an interview. Filings have been driven by the 2001 collapse of Enron Corp. and more recently by the credit crisis or options backdating, he said. "M&A was the big one this year." The number of investor lawsuits filed claiming securities law violations in mergers and acquisitions climbed to 40 in 2010 from 7 in 2009, according to the study. A 20% increase in M&A transactions is "insufficient" to explain the almost six-fold rise in cases, Stanford Law Professor Joseph Grundfest said in an interview. 'Sharp Increase' "The sharp increase in federal litigation alleging disclosure violations in M&A transactions suggests that plaintiffs' lawyers are scrambling for new business as traditional fraud cases seem to be on the decline," Mr. Grundfest, director of the Stanford, California-based Clearinghouse, said in a statement. "That was the only explanation we were able to come up with," he said in the interview. The merger cases pushed the total securities fraud cases filed in U.S. federal courts to 176 last year from 168 in 2009, according to the study. The 2010 level remains 9.7 percent below the annual average of 195 filings between 1997 and 2009, according to the study, which is based on an examination of federal court cases. Securities class actions are cases in which plaintiffs proceed on behalf of a group of similarly situated investors. Traditional securities cases, often spurred by accounting restatements or stock drops following bad news, continued to decline, falling to 135 in 2010, from 144 the year before, the researchers said. BP, Toyota Suits brought last year included claims against Toyota Motor Corp., Boston Scientific Corp., Motorola Inc., BP Plc, Pfizer Inc., Johnson & Johnson and Transocean Ltd., according to Cornerstone. "The core rate of these cases is pretty much at an all-time low," said Thomas A. Dubbs, Esq., an attorney at Labaton Sucharow LLP in New York who represents investors in securities suits. He attributed the trend to securities law and regulatory reform, including the Dodd-Frank Act, which revised laws governing the U.S. financial industry. Merger litigation has a "different function" from the typical securities fraud claim, Mr. Dubbs said. "The purpose of the traditional case is to get money back for a defrauded investor," he said. "The M&A case triggers a process to get a judge involved to ensure that management is acting in the best interest of the shareholders." Investors also filed more securities claims against Chinese companies in 2010, with these suits accounting for 43% of all filings against foreign issuers, according to the study. That reflects an "adjustment process," in part, as Chinese companies conform to the different regulatory framework in the U.S., Mr. Grundfest said. "In others, there is outright fraud." ********* 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 2011. All rights reserved. ISSN 1525-2272. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The CAR subscription rate is $575 for six months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *