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C L A S S A C T I O N R E P O R T E R
Wednesday, February 16, 2011, Vol. 13, No. 33
Headlines
ALLIANCEBERNSTEIN LP: Continues to Defend "Late Trading" Suit
ALTERNATE HOLDINGS: March 8 Lead Plaintiff Deadline Set
AUTHENTIDATE HOLDING: Final Settlement Hearing Set for July 20
BINGHAMTON UNIVERSITY: Faces Class Action Over Tuition Charges
BROADWIND ENERGY: Faces Shareholder Class Action
CHINA MEDIAEXPRESS: Faces Securities Class Action in New York
CLEVELAND, OH: Faces Class Action Over Traffic Camera Citations
COINSTAR INC: Redbox Continues to Defend Class Suit in Illinois
COINSTAR INC: Faces Securities Class Action Suits in Washington
COMMONWEALTH BANK: Class Action Lawyer Criticizes ASIC
CONSOL ENERGY: Continues to Defend Suits Related to Offer for CNX
CONSOL ENERGY: Sees End of "Comer" Suit
CONSOL ENERGY: CNX Gas Continues to Defend "Hale" Suit in Virginia
CONSOL ENERGY: CNX Continues to Defend "Addison" Suit in Virginia
CONSOL ENERGY: Defends "Hall" Suit in Pennsylvania
ENTENMANN'S SALES: FACTA Suit Fairness Hearing on May 13, 2011
EXELON CORP: Court Dismisses Claims in "Pension Plan" Lawsuit
EXELON CORP: Awaits Ruling on Appeal From ERISA Suit Dismissal
FLORIDA: Sued Over Unconstitutional Turnpike Toll Operations
GT SOLAR: Discovery in "Braun" Suit Still Ongoing
GT SOLAR: "Hamel" Suit Still Pending in New Hampshire
KABA SIMPLEX: Faces Class Action Over Faulty Locks
NATIONAL FOOTBALL LEAGUE: Offers Refunds to Super Bowl Fans
NATIONAL FOOTBALL LEAGUE: Super Bowl Class Action Expanded
NSTAR: Still Faces Merger-Related Class Action Lawsuits in Mass.
OCLARO INC: Appeals From Settlement of IPO Suit Still Pending
OVERHILL FARMS: Continues to Defend Consolidated Suit in Calif.
POWER BALANCE: Class Action.org Lawyers Ready to Review Claims
PRIDE INT'L: Being Sold to Enso for Too Little, Del. Suit Claims
PROCTER & GAMBLE: Faces Class Action Over Fixodent
SCHWARZ PHARMA: Attorneys Available to Review Reglan Claims
SEMGROUP LP: Agrees to Settle Investor Class Action
SHAW COMMUNICATIONS: Sued Over Non-Disclosure of Interest Rates
SILICON LABORATORIES: Appeals From Suit Settlement Still Pending
SMART TECHNOLOGIES: Siskinds Files IPO Class Action in Ontario
SOAPSTONE NETWORKS: Appeals From IPO Suit Settlement Still Pending
STORM FINANCIAL: Macquarie Accuses ASIC of Vexatious Litigation
TOYOTA MOTOR: Court Approves Calif. Suit Settlement
TOYOTA MOTOR: Continues to Defend "Sudden Acceleration" Lawsuits
TOYOTA MOTOR: Plaintiff Appeals Dismissal of Bondholder Suit
UNITEDHEALTH GROUP: Continues to Defend Consolidated Suit in Fla.
UNITEDHEALTH GROUP: COCSA Joins National ERISA Class Action
UNITED STATES: Mark Brown Demands Cut on Cobell Attorney Fees
WELLCARE HEALTH: Final Settlement Approval Hearing Set for May 4
WILLIAMS-SONOMA: Loses Class Action Over Customer Zip Codes
* Over 240,000 Customers to Join Suit v. Telcos Over Bank Fees
* US Supreme Court Set to Decide on Three Employee Class Actions
*********
ALLIANCEBERNSTEIN LP: Continues to Defend "Late Trading" Suit
-------------------------------------------------------------
AllianceBernstein L.P. continues to defend itself from a
consolidated class action lawsuit alleging "late trading",
according to the Company's Feb. 10, 2011, Form 10-K filing with
the U.S. Securities and Exchange Commission for the fiscal year
ended Dec. 31, 2010.
On October 2, 2003, a purported class action complaint entitled
Hindo, et al. v. AllianceBernstein Growth & Income Fund, et al.,
was filed against, among others, AllianceBernstein,
AllianceBernstein Corporation, and AllianceBernstein Holding L.P.
The Hindo Complaint alleges that certain defendants failed to
disclose that they improperly allowed certain hedge funds and
other unidentified parties to engage in "late trading" and "market
timing" of certain of the Company's U.S. mutual fund securities,
violating various securities laws.
Following October 2, 2003, additional lawsuits making factual
allegations generally similar to those in the Hindo Complaint were
filed in various federal and state courts against
AllianceBernstein and certain other defendants. On September 29,
2004, plaintiffs filed consolidated amended complaints with
respect to four claim types: mutual fund shareholder claims;
mutual fund derivative claims; derivative claims brought on behalf
of Holding; and claims brought under the Employee Retirement
Income Security Act of 1974, as amended, by participants in the
Profit Sharing Plan for Employees of AllianceBernstein.
On April 21, 2006, AllianceBernstein and attorneys for the
plaintiffs in the mutual fund shareholder claims, mutual fund
derivative claims and ERISA claims entered into a confidential
memorandum of understanding containing their agreement to settle
these claims. The agreement was documented by a stipulation of
settlement, which has been approved by the court. The settlement
amount ($30 million), which the Company previously expensed and
disclosed, has been disbursed. The derivative claims brought on
behalf of Holding, in which plaintiffs seek an unspecified amount
of damages, remain pending.
The Company intends to vigorously defend against the lawsuit
involving derivative claims brought on behalf of Holding. At the
present time, the Company is unable to predict the outcome or
estimate a possible loss or range of loss in respect of this
matter because of the inherent uncertainty regarding the outcome
of complex litigation, and the fact that the plaintiffs did not
specify an amount of damages sought in their complaint.
ALTERNATE HOLDINGS: March 8 Lead Plaintiff Deadline Set
-------------------------------------------------------
Robbins Umeda LLP reminds shareholders of Alternate Energy
Holdings, Inc. of the securities fraud class action lawsuit filed
against Alternate Energy and certain of its officers and
directors. The class action pending in the U.S. District Court,
District of Idaho is on behalf of all persons or entities that
purchased or otherwise acquired Alternate Energy securities during
the time period from September 20, 2006, and December 14, 2010.
The complaint alleges that Alternate Energy and certain of its
officers and directors issued false and misleading statements to
the public regarding the company's true financial condition and
business prospects and concealed secret profits reaped by Chief
Executive Officer Donald L. Gillispie and Senior Vice-President
Jennifer Ransom.
In particular, the complaint claims that Mr. Gillispie, with the
aid of Ransom, engaged in a scheme to manipulate and artificially
inflate the market price of Alternate Energy stock by (1) paying
stock promoters to create artificial demand in the marketplace
through end of day stock purchases; (2) misrepresenting that the
Company's officers and directors never sold any shares of the
Company's stock; and (3) misrepresenting the Company's true
financial condition and potential business prospects. On
December 14, 2010, the U.S. Securities and Exchange Commission
issued an order to temporarily suspend trading of the Company's
stock. Shortly thereafter, on December 16, 2010, the SEC
instituted a civil action against the Company and Mr. Gillispie
and Ransom, to prevent Alternative Energy and its executives from
raising additional funds from investors.
If you purchased Alternate Energy stock during the Class Period,
you have until March 8, 2011 to ask the court to appoint you as
lead plaintiff for the class. To discuss your rights as a
shareholder, please contact:
Gregory E. Del Gaizo, Esq.
ROBBINS UMEDA LLP
Telephone: 800-350-6003
E-mail: info@robbinsumeda.com
Those who inquire by e-mail are encouraged to include their
mailing address and telephone number.
Robbins Umeda LLP -- http://www.robbinsumeda.com/-- represents
individual and institutional shareholders in derivative, direct,
and class action lawsuits. The law firm's skilled litigation
teams include former federal prosecutors, former defense counsel
from top multinational corporate law firms, and career shareholder
rights lawyers.
AUTHENTIDATE HOLDING: Final Settlement Hearing Set for July 20
--------------------------------------------------------------
The final hearing to consider approval of a settlement
Authentidate Holding Corp. entered into to resolve a consolidated
class action lawsuit filed in New York is scheduled for July 20,
2011, according to the Company's Feb. 10, 2011, Form 10-Q filing
with the U.S. Securities and Exchange Commission for the quarter
ended December 31, 2010.
Between June and August 2005, six purported shareholder class
actions were filed in the United States District Court for the
Southern District of New York against the Company and certain of
its current and former directors and former officers. Plaintiffs
in those actions alleged that defendants violated Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934 and Sections 11
and 15 of the Securities Act of 1933. The securities law claims
were based on the allegations that the Company failed to disclose
that its August 2002 agreement with the USPS contained certain
performance metrics, and that the USPS could cancel the agreement
if the Company did not meet these metrics; that the Company did
not disclose complete and accurate information as to its
performance under, and efforts to renegotiate, the USPS agreement;
and that when the Company did disclose that the USPS might cancel
the agreement, the market price of the Company's stock declined.
On October 5, 2005 the Court consolidated the class actions under
the caption In re Authentidate Holding Corp. Securities
Litigation., C.A. No. 05 Civ. 5323 (LTS), and appointed the
Illinois State Board of Investment as lead plaintiff under the
Private Securities Litigation Reform Act. The plaintiff filed an
amended consolidated complaint on January 3, 2006, which asserted
the same claims as the prior complaints and also alleged that
Authentidate violated the federal securities laws by
misrepresenting that it possessed certain patentable technology.
On July 14, 2006, the District Court dismissed the amended
complaint in its entirety; certain claims were dismissed with
prejudice and plaintiff was given leave to replead those claims
which were not dismissed with prejudice. In August 2006,
plaintiff filed a second amended complaint, which did not assert
any claims relating to the Company's patents or under the
Securities Act of 1933, but which otherwise was substantially
similar to the prior complaint. The second amended complaint
sought unspecified monetary damages. The Company moved to dismiss
the second amended complaint on November 13, 2006. On March 26,
2009, the District Court dismissed, with prejudice, the second
amended complaint. The lead plaintiff filed an appeal and a
hearing in the case was held before the U.S. Court of Appeals for
the Second Circuit on February 3, 2010. On March 12, 2010, the
U.S. Court of Appeals for the Second Circuit issued an order
affirming in part and vacating and remanding in part the March 26,
2009 order of dismissal.
On December 23, 2010, the Company and certain of its current and
former directors and former officers entered into a settlement.
As set forth more fully in the Stipulation of Settlement, if the
settlement is given final approval by the District Court, among
other things: (i) all claims will be dismissed with prejudice and
released; and (ii) a payment of $1.9 million will be made for the
benefit of the settlement class, which will be funded by the
Company's insurance carrier. On February 2, 2011, the District
Court entered an order that preliminarily approved the Stipulation
of Settlement; preliminarily certified a settlement class of all
persons who purchased the Company's common stock between July 16,
2004 and May 27, 2005, inclusive; and scheduled a hearing for
July 20, 2011, to determine whether to grant final approval of the
settlement.
BINGHAMTON UNIVERSITY: Faces Class Action Over Tuition Charges
--------------------------------------------------------------
Robert Bellon, writing Pipe Dream, reports that Binghamton
University faces a class action over out-of-state tuition charges.
Even as a New Jersey resident, Yitzchak Haberman, a sophomore
majoring in accounting, pays in-state tuition because his last two
years of high school were spent in New York. Three alumni who
also fit this criteria were charged out-of-state tuition and have
filed a class-action lawsuit against BU and the SUNY system asking
for a refund for the difference.
Yitzchak Haberman has all the signs of a New York State resident.
He went to high school in New York, he is a student at Binghamton
University and, most of all, he pays in-state tuition.
Mr. Haberman, a sophomore majoring in accounting, meets all the
traditional criteria but one: he is not a New York resident.
But he is able to pay the in-state tuition rate due to a
relatively unknown segment of New York education law, which
applies to students who spent their final two years of high school
in a New York school and who apply to a SUNY school within five
years of graduation.
That segment of the law is at the center of a class-action lawsuit
that three BU alumnae have brought against the University and SUNY
in Broome County Supreme Court. The three women who filed the
suit -- Sara Strum '09, Lauren Beer '09 and Raquel Balsam '07 --
were all New Jersey residents who attended high school in New
York. All three paid out-of-state tuition during their time at
BU.
They discovered the segment after they had graduated and have
since invoked Article 8, Section 355(2)(h)(8), which states that
non-residents shall pay a rate no greater than that of the
in-state rate if, among other things, such a student "attended an
approved New York high school for two or more years, graduated
from an approved New York high school and applied for attendance
at an institution or educational unit of the state university
within five years of receiving a New York state high school
diploma."
Unlike the three petitioners in the case, Mr. Haberman said he
knew of the statute even while he was still in high school at SAR
High School, a yeshiva in Riverdale. He said he knew about it
through his grandmother, who worked in the New York City public
school system. He also said the law that mandated the lower rate
was a major factor in his decision to apply to BU.
Mr. Haberman said he completed his application forms accurately,
but as he began his first semester he discovered that he was
nevertheless charged the out-of-state tuition rate -- a difference
of nearly $4,000 per semester.
"It's a big deal. It's a lot of money," Mr. Haberman said.
He did resolve the discrepancy, but not without some effort.
"I was very persistent about it," he said.
Mr. Haberman said he made two or three trips to the Student
Accounts office to settle the issue, and he was ultimately issued
a refund and established his eligibility for the in-state tuition
rate. He sympathized with the plaintiffs, who now face a legal
battle over the difference in tuition.
"Thank God I'm not in their situation," he said of the alumnae.
Altogether, the plaintiffs paid about $116,000 in tuition, which
is about twice the estimated amount that they would have paid
under the in-state tuition rate.
Andrew L. Lee of ALL Counsel P.C. in New York City is representing
the alumnae. He countered the position of Laura Barnhill, the
assistant attorney general representing SUNY, who expressed in
court last year that "the students are . . . the most aware of
their circumstances," and thereby responsible for bringing their
status to the attention of the University.
"Who in their right mind . . . would think to start digging
through the layers of SUNY bureaucracy," Mr. Lee told Pipe Dream
on Feb. 10.
The suit further alleges that BU and SUNY "have engaged in a
persistent pattern of deceptive and misleading conduct designed to
obfuscate the ability of applicants to discover the rule requiring
SUNY to charge the resident tuition rate."
Because the case was filed as a class-action lawsuit, a court
victory for the plaintiffs could mean that all SUNY students who
face the same circumstances could receive a refund for any
overpaid tuition.
Mr. Lee said he was unsure of the percent of current or former
SUNY students that would fall into this category, but he said he
believes "there is a not insignificant number of students." He
also said he has asked for that information from SUNY officials,
but they have not yet determined an official number. BU
representatives also could not provide estimates of the number of
persons potentially involved in the suit.
University spokeswoman Gail Glover said the University maintains
it has the legal backing for its actions.
"We are aware of this class action lawsuit and while we recognize
their right to file legal action, we will mount a vigorous
defense," she said. "We followed both SUNY and campus policy and
our actions will be found to have been appropriate." Ms. Glover
would not provide any further information, citing the ongoing
lawsuit.
But following SUNY and campus policy alone may not be enough to
hold up in court. In a hearing of an earlier version of the case
involving one of the same plaintiffs last year, Judge Ferris
Lebous seemed to side with the plaintiff, saying that BU policy
does not override state statute.
"It says this is the rate that it will be paid at. It doesn't say
except if the University policy is contrary to this," Judge Lebous
said.
That case was dismissed, however, because Judge Lebous ruled that
the University had not yet formally denied requests for tuition
reimbursement. The requests have since been denied, and a new
case has since been brought forth.
A hearing is scheduled for April 15.
BROADWIND ENERGY: Faces Shareholder Class Action
------------------------------------------------
Jaime Adame, writing for Abilene Reporter-News, reports that a
a law firm announced on Feb. 11 that a shareholder class-action
lawsuit has been filed against wind company Broadwind Energy.
In a news release, Robbins Geller Rudman & Dowd states that
Broadwind allegedly "failed to disclose material adverse facts
about the company's true financial condition, business and
prospects."
Illinois-based Broadwind Energy operates a Tower Tech
manufacturing facility in Abilene. The company also has a local
Broadwind Services operation, at which wind-related maintenance
and repairs take place along with the refurbishing of wind turbine
gearboxes.
In 2010, there were 176 such lawsuits filed nationally, according
to the Securities Class Action Clearinghouse at Stanford Law
School.
Amar Gande, an assistant professor of finance at Southern
Methodist University, told the Reporter-News that roughly 30
percent of such lawsuits are dismissed.
Earlier in the week, an Atlanta-based law firm had issued a news
release saying it was investigating Broadwind.
The Friday news release states that purchasers of common stock
between March 17, 2009, and Aug. 9, 2010, may be part of the
lawsuit.
In the same release, the law firm alleges that during the class-
action time period, Broadwind "lacked a reasonable basis for their
positive statements about the company and its prospects."
In deciding when to pursue a case, "many times there's a big share
price drop," Gande told the Reporter-News. "Law firms look for
this."
Broadwind share prices have plunged from above $12 in July 2009 to
about $2 currently. The news release apparently did not concern
traders, as the stock closed Friday at $2.15 per share, up 5 cents
on the day.
CHINA MEDIAEXPRESS: Faces Securities Class Action in New York
-------------------------------------------------------------
Abraham, Fruchter & Twersky, LLP on Feb. 10 disclosed that a class
action lawsuit has been filed in the United States District Court
for the Southern District of New York on behalf of a class of
investors who purchased China MediaExpress Holdings, Inc. common
stock between the period of November 8, 2010 through February 3,
2011.
The Complaint alleges CCME and certain of its officers and
directors with violating the federal securities laws by failing to
disclose that: (i) the Company misrepresented the number of buses
in its advertising network; (ii) the Company misrepresented the
nature and extent of its business relationships; (iii) that as a
result, the Company's financial results were overstated during the
Class Period; and (iv) therefore, the Company's statements
concerning CCME's business, operations, and prospects were
materially false and misleading at all relevant times.
On January 31, 2011, an analyst report from Citron Research
disclosed that CCME misrepresented, among other things, the scope
of the Company's operations, its financial performance, and the
extent of the Company's claimed strategic partnership with a
government-affiliated entity. The Citron Research report
concluded that the Company "does not exist at the scale that they
are reporting to the investing public."
Another analyst report was published on February 3, 2011 by the
analyst firm Muddy Waters, confirming the same. Muddy Waters also
disclosed that the Company "significantly inflated its revenue and
earnings in order to pay management earn-outs and inflate the
stock price so insiders can sell."
In a reaction to this news, shares of CCME common stock fell $5.52
per share to close on February 3, 2011 at $11.09 per share,
representing a drop of more than 33%.
If you purchased CCME common stock between November 8, 2010
through February 3, 2011 and you wish to serve as lead plaintiff
in this action, you must move the Court no later than April 5,
2011. Any member of the proposed class may move the Court to
serve as lead plaintiff through counsel of their choice, or may
choose to do nothing and remain a member of the proposed class.
If you would like to discuss this action or if you have any
questions concerning this notice or your rights as a potential
class member or lead plaintiff, you may contact:
Jack G. Fruchter, Esq.
Arthur J. Chen, Esq.
ABRAHAM, FRUCHTER & TWERSKY, LLP
Toll Free: (800) 440-8986
E-mail: info@aftlaw.com
achen@aftlaw.com
Abraham, Fruchter & Twersky, LLP has extensive experience in
securities class action cases, and the firm has been ranked among
the leading class action law firms in terms of recoveries achieved
by a survey of class action law firms conducted by Institutional
Shareholder Services.
CLEVELAND, OH: Faces Class Action Over Traffic Camera Citations
---------------------------------------------------------------
Leila Atassi, writing for The Plain Dealer, reports that a class-
action lawsuit filed on Feb. 10 in the Ohio Supreme Court seeks to
force Cleveland to refund more than $40 million to drivers who
were snagged by the city's traffic enforcement cameras and to
block the city from collecting new fines.
The suit, filed by Beachwood attorney Paul Greenberger, argues
that the city violated Ohio law by usurping the municipal court's
jurisdiction and assigning a hearing examiner within the Parking
Violations Bureau to handle the camera citations.
According to state law, only municipal courts can handle
violations of city ordinances, including those that govern the
traffic camera program, the suit argues. Parking violations are
the only exceptions.
"Any ordinance means just that -- any, every, all,"
Mr. Greenberger said in an interview on Feb. 10. "So basically,
the cities have home-rule authority, except when it comes to
anything that rhymes with 'court.'"
Plaintiffs Anthony Christoff of Perrysburg and William Goldstein
of Gates Mills, are representing two groups of litigants in the
suit. Mr. Christoff, who has resisted paying for a ticket he
caught on Carnegie Avenue in July, represents drivers who have yet
to pay on their citations. And Mr. Goldstein, who already has
paid for several tickets, is standing up for those who want their
money back.
Maureen Harper, chief of communications for Mayor Frank Jackson,
said in a written statement that the city is unflustered by the
suit.
"This is yet another challenge to Cleveland's traffic camera
enforcement program, which has withstood all other legal
challenges to date," Ms. Harper said. "We fully expect to prevail
in this case."
An increasing number of cities in the state rely on the unmanned
cameras to catch red-light runners and speeders, using license
plate numbers captured on the photos to issue tickets by mail to
the vehicle's owner.
Cleveland's program, in place since late 2005, yields about
100,000 tickets a year and brings in about $9 million in fines.
In 2006, outgoing Gov. Bob Taft vetoed a bill that would have
sharply curtailed local use of the cameras by forbidding cities
from relying on photographs alone to identify drivers.
Since then, the controversial programs have been under attack from
those challenging their Constitutionality and the limits of home
rule.
Home rule is a provision of the Ohio Constitution that gives
municipalities the right to determine their governing systems and
laws, as long as they do not conflict with state or federal codes.
In 2007, Warner Mendenhall sued Akron in the Ohio Supreme Court,
arguing that treating speeding violations as civil infractions
decriminalizes the offenses and conflicts with state law.
But the high court unanimously disagreed, ruling that the traffic
camera program complements state laws, and Akron had not
overstepped its home-rule authority.
The Akron man then argued in federal court that citing the owner
of a vehicle rather than its driver is a Constitutional violation.
The federal court disagreed.
A class-action lawsuit filed in 2009 against Cleveland in Cuyahoga
County Common Pleas Court charged that the city had unlawfully
fined drivers of leased or rented vehicles even though the law
governing the camera program provided for fining only driver-owned
cars.
Judge Richard McMonagle ruled in favor of the city. But an
appellate court overturned that decision in December and said the
city enriched itself unjustly. The judges ordered the case
returned to Common Pleas Court, where it is still pending.
Meanwhile, the Cleveland Clerk of Courts Office is pursuing legal
action against dozens of motorists who owe thousands of dollars in
unpaid traffic camera and parking tickets. The fines fall in the
$2,000 to $3,000 range and date back to 2006, according to the
office.
COINSTAR INC: Redbox Continues to Defend Class Suit in Illinois
---------------------------------------------------------------
Redbox Automated Retail LLC, a subsidiary of Coinstar Inc.,
continues to defend itself from a putative class action complaint
filed against the Company for allegedly charging consumers illegal
fees, according to the Company's February 10, 2011, Form 10-K
filing with the U.S. Securities and Exchange Commission for the
fiscal year ended December 31, 2010.
In October 2009, an Illinois resident, Laurie Piechur,
individually and on behalf of all others similarly situated, filed
a putative class action complaint against Coinstar's Redbox
subsidiary in the Circuit Court for the Twentieth Judicial
Circuit, St. Clair County, Illinois. The plaintiff alleges that,
among other things, Redbox charges consumers illegal and excessive
late fees in violation of the Illinois Consumer Fraud and
Deceptive Business Practices Act and other state statutes and is
seeking monetary damages and other relief as appropriate.
In November 2009, Redbox removed the case to the U.S. District
Court for the Southern District of Illinois. In February 2010,
the court remanded the case to the Circuit Court for the Twentieth
Judicial Circuit, St. Clair County, Illinois. In May 2010, the
state court denied Redbox's motion to dismiss the plaintiff's
claims, and also denied the plaintiff's motion for partial summary
judgment.
The Company believes that the claims against it are without merit
and intends to defend itself vigorously in the matter. Currently,
no accrual had been established as it was not possible to estimate
the possible loss or range of loss because the matter had not
advanced to a stage where the Company could make any such
estimate.
COINSTAR INC: Faces Securities Class Action Suits in Washington
---------------------------------------------------------------
Coinstar Inc. is facing class action lawsuits filed by investors
who are accusing the Company of making false statements about its
financial status, according to the Company's February 10, 2011,
Form 10-K filing with the U.S. Securities and Exchange Commission
for the fiscal year ended December 31, 2010.
On January 24, 2011, a putative class action complaint was filed
in the U.S. District Court for the Western District of Washington
against Coinstar and certain of its officers. The complaint
asserts claims under Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934, as amended, and Rule 10b-5 promulgated
thereunder. Substantially similar complaints were filed in the
same court in February 2011. These cases purport to be brought on
behalf of a class of persons who purchased or otherwise acquired
Coinstar's stock during the period, depending on the complaint,
between as early as October 28, 2010 to as late as February 3,
2011.
Plaintiffs allege that the defendants violated the federal
securities laws during this period of time by, among other things,
issuing false and misleading statements about Coinstar's current
and prospective business and financial results. Plaintiffs claim
that, as a result of these alleged wrongs, Coinstar's stock price
was artificially inflated during the purported class period.
Plaintiffs are seeking unspecified compensatory damages, interest,
an award of attorneys' fees and costs and injunctive relief.
Coinstar believes that the claims against it are without merit and
intends to defend itself vigorously in this matter.
COMMONWEALTH BANK: Class Action Lawyer Criticizes ASIC
------------------------------------------------------
Leonie Lamont, writing for The Sydney Morning Herald, reports
lawyers who lodged a class action on behalf of clients of a
Commonwealth Bank subsidiary have criticized the corporate
regulator and also queried whether the addresses and telephone
numbers of investors have made their way to a cold-call financial
claims business.
Ben Slade, a principal with law firm Maurice Blackburn, said the
class action in the Federal Court had been prompted by both the
inferiority of the compensation arrangement overseen by Australian
Securities and Investments Commission, and its concern about what
it described as a "claims farmer" on the scene.
ASIC announced last November that Commonwealth Financial Planning
Ltd had agreed to compensate clients, following an ASIC
investigation into potential breaches of the Corporations Act by a
former CFPL financial adviser who provided "inappropriate
financial advice to a large number of clients".
Legal action had already started earlier last year, with four
investors claiming in the Supreme Court losses of $3.7 million,
alleging they had relied on defective investment advice from CFPL
adviser Don Nguyen.
"We are concerned that the compensation [regimen] set up and
supervised by ASIC is not working to the extent it should,"
Mr. Slade said. Independent accountants were only checking CFPL's
figures, and not assessing the merits of client claims.
He said the action would bring under court control actions of
businesses that cold-called investors. He produced a letter from
a firm called Financial Resolutions Australia Pty Ltd, which had
been sent to the home address of one of the investors.
While the letter said the recipient had been identified as a
person who "fit a profile of persons who may have used a financial
planner", attached was a Herald article, relating CFPL's woes.
A spokesman for the bank, Matthew Coleman, said it took quality of
advice provided by advisers seriously, and it intended to "resolve
this situation as quickly as possible".
"CFPL has engaged an independent professional services firm to
provide oversight and demonstrate that the review is fair and
unbiased. In addition, clients are being provided with a list of
independent legal advisers who can advise them." He said the bank
had not released any customer details.
The lead plaintiff in the case, Elizabeth Saunders, said she had
gone to the Chatswood branch of the Commonwealth Bank in 2007 to
obtain advice about investing her superannuation for her
retirement. It is alleged that instead of conservative and
defensive funds, which she requested, Mr. Nguyen put her money
into aggressive and growth funds -- losing $200,000.
CONSOL ENERGY: Continues to Defend Suits Related to Offer for CNX
-----------------------------------------------------------------
CONSOL Energy, Inc., continues to defend itself against class
action lawsuits related to its tender offer to purchase all shares
of CNX Gas common stock, according to the Company's Feb. 10, 2011,
Form 10-K filing with the U.S. Securities and Exchange Commission
for the fiscal year ended Dec. 31, 2010.
CONSOL Energy has been named as a defendant in five putative class
actions brought by alleged shareholders of CNX Gas challenging the
tender offer by CONSOL Energy to acquire all of the shares of CNX
Gas common stock that CONSOL Energy did not already own for $38.25
per share. The two cases filed in Pennsylvania Common Pleas Court
have been stayed and the three cases filed in the Delaware
Chancery Court have been consolidated under the caption In Re CNX
Gas Shareholders Litigation (C.A. No. 5377-VCL) with one
exception, these cases also name CNX Gas and certain officers and
directors of CONSOL Energy and CNX Gas as defendants. All five
actions generally allege that CONSOL Energy breached and/or aided
and abetted in the breach of fiduciary duties purportedly owed to
CNX Gas public shareholders, essentially alleging that the $38.25
price that CONSOL Energy paid to CNX Gas shareholders in the
tender offer and subsequent short-form merger was unfair. Among
other things, the actions seek a permanent injunction against or
rescission of the tender offer, damages, and attorneys' fees and
expenses. The Delaware Court of Chancery denied an injunction
against the tender offer and CONSOL Energy completed the
acquisition of the outstanding shares of CNX Gas on June 1, 2010.
The Delaware Court of Chancery certified to the Delaware Supreme
Court the question of what legal standard should be applied to the
tender offer, which would effectively determine whether the
shareholders can proceed with a damage claim. The Delaware
Supreme Court declined to accept the appeal pending a final
judgment. Therefore, the lawsuit will likely go to trial,
possibly later in 2011. CONSOL Energy believes that these actions
are without merit and intends to defend them vigorously.
On June 1, 2010, CONSOL Energy completed the acquisition of the
outstanding shares of CNX Gas common stock that it did not
previously own for a cash payment of approximately $967 million.
The transaction was effected by means of a cash tender offer for
CNX Gas shares at a price of $38.25 per share, followed by a
short-form merger at the same price, in which CNX Gas became a
wholly owned subsidiary of CONSOL Energy. CONSOL Energy previously
owned approximately 83.3% of the approximately 151 million shares
of CNX Gas common stock outstanding. An additional $24 million
cash payment was made to cancel previously vested CNX Gas stock
options. CONSOL Energy financed the acquisition of CNX Gas shares
by means of internally generated funds, borrowings under its
credit facilities and proceeds from its March 31, 2010 offering of
common stock.
CONSOL ENERGY: Sees End of "Comer" Suit
---------------------------------------
CONSOL Energy, Inc., believes litigation in the class action
lawsuit Comer v. CONSOL Energy, et. al., in Mississippi is over,
according to the Company's Feb. 10, 2011, Form 10-K filing with
the U.S. Securities and Exchange Commission for the fiscal year
ended Dec. 31, 2010.
A class action lawsuit was filed on April 21, 2006 in U.S.
District Court for the Southern District of Mississippi styled
Comer v. CONSOL Energy, et. al. The suit names numerous energy
producers, chemical manufacturers, and public utilities as
defendants. The action is a claim for alleged enhanced damages
suffered in Hurricane Katrina due to global warming allegedly due
to the defendants' contribution to greenhouse gases in the
environment. The trial court dismissed the case and plaintiffs
appealed. The appellate court reversed and the defendants sought
rehearing en banc. Rehearing en banc was granted, but a number of
judges recused themselves and there was no longer a quorum. As a
result, the trial court's dismissal was reinstated. The
plaintiffs sought a Writ of Mandamus from the U.S. Supreme Court,
which the Supreme Court denied. As a result, the Company said, it
is likely that this litigation is over.
CONSOL ENERGY: CNX Gas Continues to Defend "Hale" Suit in Virginia
------------------------------------------------------------------
CNX Gas Company LLC, a subsidiary of CONSOL Energy, Inc.,
continues to defend itself from a class action lawsuit related to
coalbed methane in Virginia, according to CONSOL's Feb. 10, 2011,
Form 10-K filing with the U.S. Securities and Exchange Commission
for the fiscal year ended Dec. 31, 2010.
A purported class action lawsuit was filed on September 23, 2010,
in U.S. District Court in Abingdon, Virginia styled Hale v. CNX
Gas Company LLC, et al. The lawsuit alleges that the plaintiff
class consists of oil and gas owners, that the Virginia Supreme
Court has decided that coalbed methane (CBM) belongs to the owner
of the oil and gas estate, that the Virginia Gas and Oil Act of
1990 unconstitutionally allows force pooling of CBM, that the Act
unconstitutionally provides only a 1/8 royalty to CBM owners for
gas produced under the force pooling orders, and that the Company
only relied upon control of the coal estate in force pooling the
CBM notwithstanding the Virginia Supreme Court decision holding
that if only the coal estate is controlled, the CBM is not thereby
controlled. The lawsuit seeks a judicial declaration of ownership
of the CBM and that the entire net proceeds of CBM production
(that is, the 1/8 royalty and the 7/8 of net revenues since
production began) be distributed to the class members. The
Magistrate Judge issued a Report and Recommendation in which she
recommends that the District Judge decide that the deemed lease
provision of the Gas and Oil Act is constitutional as is the 1/8
royalty, and that CNX Gas need not distribute the net proceeds to
class members. The Magistrate Judge recommended against the
dismissal of certain other claims, none of which are believed to
have any significance. CONSOL Energy believes that the case is
without merit and intends to defend it vigorously.
CONSOL ENERGY: CNX Continues to Defend "Addison" Suit in Virginia
-----------------------------------------------------------------
CNX Gas Company LLC, a subsidiary of CONSOL Energy, Inc.,
continues to defend itself from a class action lawsuit related
to coalbed methane royalties in Virginia, according to CONSOL's
Feb. 10, 2011, Form 10-K filing with the U.S. Securities and
Exchange Commission for the fiscal year ended Dec. 31, 2010.
A purported class action lawsuit was filed on April 28, 2010, in
Federal court in Virginia styled Addison v. CNX Gas Company LLC.
The case involves two primary claims: (i) the plaintiff and
similarly situated CNX Gas lessors identified as conflicting
claimants during the force pooling process before the Virginia Gas
and Oil Board are the owners of the CBM and, accordingly, the
owners of the escrowed royalty payments being held by the
Commonwealth of Virginia; and (ii) CNX Gas failed to either pay
royalties due these conflicting claimant lessors or paid less than
required because of the alleged practice of improper below market
sales and/or taking alleged improper post-production deductions.
Plaintiffs seek a declaratory judgment regarding ownership and
compensatory and punitive damages for breach of contract;
conversion; negligence (voluntary undertaking), for force pooling
coal owners after the Ratliff decision declared coal owners did
not own the CBM; negligent breach of duties as an operator; breach
of fiduciary duties; and unjust enrichment. CONSOL Energy
believes that the case is without merit and intends to defend it
vigorously.
CONSOL ENERGY: Defends "Hall" Suit in Pennsylvania
--------------------------------------------------
CONSOL Energy, Inc., is defending itself from a class action
lawsuit related to its acquisition of certain leases, according to
the Company's Feb. 10, 2011, Form 10-K filing with the U.S.
Securities and Exchange Commission for the fiscal year ended
Dec. 31, 2010.
A purported class action lawsuit was filed on December 23, 2010
styled Hall v. CONSOL Gas Company in Allegheny County Pennsylvania
Common Pleas Court. The named plaintiff is Earl D. Hall. The
purported class plaintiffs are all Pennsylvania oil and gas
lessors to Dominion Exploration and Production Company, whose
leases were acquired by CONSOL Energy. The complaint alleges more
than 1,000 similarly situated lessors. The lawsuit alleges that
CONSOL Energy incorrectly calculated royalties by (i) calculating
line loss on the basis of allocated volumes rather than on a well-
by-well basis, (ii) possibly calculating the royalty on the basis
of an incorrect price, (iii) possibly taking unreasonable
deductions for post-production costs and costs that were not arms-
length, and (iv) not paying royalties on oil production. The
complaint also alleges that royalty statements were false and
misleading. The complaint seeks damages, interest and an
accounting on a well-by-well basis. CONSOL Energy believes that
the case is without merit and intends to defend it vigorously.
ENTENMANN'S SALES: FACTA Suit Fairness Hearing on May 13, 2011
--------------------------------------------------------------
A settlement inked in Himber V. Entenmann's Sales Company, Inc.,
Case No. 09-cv-08819 (S.D.N.Y.) (Swain, J.), provides payments of
up to $24 to all persons who received electronically printed
receipts from an Entenmann's retail outlet locations at 669
Sunrise Highway in Lynbrook, N.Y.; 1960 Niagara Falls Boulevard in
Tonawanda, N.Y.; or 323 East Main Street in Elmsford, N.Y., which
receipt (a) was issued after December 4, 2006, and displays more
than the last five digits of the person's credit card number, or
(b) was issued after June 3, 2008 and displays the expiration date
of the person's credit card.
The settlement resolves a lawsuit alleging violations of certain
requirements imposed by the Fair and Accurate Credit Transactions
Act ("FACTA"). It avoids costs and risks of continuing the
lawsuit; entitles consumers like you to receive a payment of up to
$24; and releases Entenmann's from any alleged liability.
Lawyers for the settlement class will ask the Court for attorneys'
fees in the amount of $15,000.00 and up to $1,000 in costs to be
paid separately by Entenmann's.
The Plaintiff Class is represented by:
Daniel A. Edelman, Esq.
Edelman, Combs, Latturner & Goodwin, LLC
120 South LaSalle Street, 18th Floor
Chicago, IL 60603
Entenmann's is represented by:
Diane Green-Kelly, Esq.
Reed Smith LLP
10 S. Wacker Drive, 40th Floor
Chicago, IL 60606
Entenmann's has agreed to pay $17,000 into an escrow account which
will constitute the Settlement Fund. David Himber will ask for
approval of a payment of $1,500 for his individual claims and for
his incentive award for his services as Class Representative. If
final approval is given, the amount remaining of $15,500 will be
distributed in the form of checks in the amount of $8.00, unless
more than 1,937 claimants submit claims, in which case the
Settlement Fund shall be divided amongst all class members who
send in a valid claim form. To the extent that any amount remains
after the payment to the Class Representative and payments to
claimants who send in a valid claim form, Entenmann's shall make a
donation to Back On My Feet, a charity selected by Entenmann's.
The Settlement also imposes certain other requirements, which are
set forth in detail in the Settlement Agreement.
The Court will hold a hearing on May 13, 2011 at 11:00 a.m., to
decide whether to approve the settlement.
EXELON CORP: Court Dismisses Claims in "Pension Plan" Lawsuit
-------------------------------------------------------------
On July 11, 2006, a former employee of ComEd filed a purported
class action lawsuit against the Exelon Corporation Cash Balance
Pension Plan in the U.S. District Court for the Northern District
of Illinois. The complaint alleged that the Plan, which covers
certain management employees of Exelon's subsidiaries, calculated
lump sum distributions in a manner that does not comply with
ERISA. The plaintiff sought compensatory relief from the Plan on
behalf of participants who received lump sum distributions between
2001 and 2006 and injunctive relief with respect to future lump
sum distributions. The District Court dismissed the lawsuit but
allowed the plaintiff to file an administrative claim with the
Plan with respect to the calculation of the portion of his lump
sum benefit accrued under the Plan's prior traditional formula. On
July 2, 2009, the U.S. Court of Appeals for the Seventh Circuit
affirmed the District Court's ruling, and the plaintiff's
subsequent motion requesting rehearing of the case before the
entire Seventh Circuit Court of Appeals was denied. On
October 28, 2009, the plaintiff filed a petition requesting that
the U.S. Supreme Court hear an appeal of the Seventh Circuit's
decision. On February 22, 2010, the U.S. Supreme Court declined
to hear the appeal. In addition, on January 6, 2009, the
plaintiff filed a complaint in the District Court challenging the
Plan's denial of his administrative claim, and on November 12,
2010, the District Court granted the Plan's motion for summary
judgment and dismissed the plaintiff's remaining claims with
prejudice. The plaintiff did not appeal the dismissal of his
remaining claims, Exelon disclosed in its Feb. 10, 2011, Form 10-K
filing with the U.S. Securities and Exchange Commission for the
fiscal year ended Dec. 31, 2010.
EXELON CORP: Awaits Ruling on Appeal From ERISA Suit Dismissal
--------------------------------------------------------------
Exelon Corporation is awaiting a ruling on an appeal of the
dismissal of a class action lawsuit in Illinois, according to the
Company's Feb. 10, 2011, Form 10-K filing with the U.S. Securities
and Exchange Commission for the fiscal year ended Dec. 31, 2010.
On September 11, 2006, five individuals claiming to be
participants in the Exelon Corporation Employee Savings Plan, Plan
#003, filed a putative class action lawsuit in the U.S. District
Court for the Northern District of Illinois. The complaint names
as defendants Exelon, its Director of Employee Benefit Plans and
Programs, the Employee Savings Plan Investment Committee, the
Compensation and the Risk Oversight Committees of Exelon's Board
of Directors and members of those committees. The complaint
alleged that the defendants breached fiduciary duties under ERISA
by, among other things, permitting fees and expenses to be
incurred by the Savings Plan that allegedly were unreasonable and
for purposes other than to benefit the Savings Plan and
participants, and failing to disclose purported "revenue sharing"
arrangements among the Savings Plan's service providers. The
plaintiffs sought declaratory, equitable and monetary relief on
behalf of the Savings Plan and participants, including alleged
investment losses. On August 19, 2009, the plaintiffs in the
Exelon case filed an amended complaint in the District Court,
which again alleged that defendants breached fiduciary duties
under ERISA by, among other things, permitting the Savings Plan to
pay excessive fees and expenses for administrative services, but
eliminated the claim for investment losses and the allegations
regarding "revenue sharing." On December 9, 2009, the District
Court granted the defendants' motion to dismiss the amended
complaint and enter judgment in favor of the defendants. The
plaintiffs have appealed the District Court's dismissal of their
claims to the U.S. Court of Appeals for the Seventh Circuit, where
the matter remains pending. The ultimate outcome of the savings
plan claim is uncertain and may have a material impact on Exelon's
results of operations, cash flows or financial position.
FLORIDA: Sued Over Unconstitutional Turnpike Toll Operations
------------------------------------------------------------
Glynis Farrell at Courthouse News Service reports that a federal
class action claims Florida and a private contractor detain
drivers on the Florida Turnpike if they pay a toll with a $50 or
$100 bill, and won't let them go until they cough up personal
information. The class claims the detentions are dangerous and
unconstitutional, and that sometimes drivers and passengers are
detained and interrogated for paying tolls with bills as small as
$5.
The class action in Tampa also names collections company Faneuil
as a defendant. Florida hired Faneuil to provide toll collectors
and supervisors on its toll roads.
Lead plaintiff Joel Chandler claims the state and Faneuil violate
the Constitution by authorizing toll collectors, at their
discretion, to imprison motorists and their passengers and hold
them until they divulge personal information, some of which is
written up on "Bill Detection Reports."
According to the complaint, Milissa Burger, deputy director of
toll operations, for Florida's Turnpike Enterprise (FTE),
"directed implementation of bill detection procedures, the related
unlawful detentions of motorists and passengers, and the use of
Bill Detection Reports, including writing and receiving emails
regarding those efforts. She informed recipients of such email
correspondence specifically not to copy the legal department on
their response to her emails."
The class claims Florida and Faneuil have done the illegal stops
for 4 years: "For approximately four years, FDOT and Faneuil have
engaged in a practice of detaining motorists and their passengers
on the Turnpike System until such motorists provided certain
personal information in exchange for their release."
The class calls it an unconstitutional search and seizure, and
says Florida and Faneuil knew it was unconstitutional.
"Defendants had actual, constructive or imputed knowledge of the
FDOT policy, practice or custom whereby motorists and their
passengers were unlawfully detained on the Turnpike System and
forced to provide personal information in exchange for their
release," the complaint states.
"The personal information recorded by toll collectors includes,
but is not limited to the vehicle make, model, color, tag number
and state of issuance. Other information such as the vehicle
occupants' race, gender, and relative age has also been recorded."
The class adds: "Toll collectors have required motorists to
provide additional personal information, including drivers license
information in exchange for their release."
Toll collectors trapped motorists at toll booths by holding the
barrier down, even though the drivers had enough money to pay the
toll.
"Plaintiffs knew they were not free to leave the toll plaza.
Going forward was controlled and blocked by toll operators and
supervisors, going backward was illegal as well as blocked by
other vehicles, all other directions were blocked, leaving the
vehicle was unsafe, and would have meant abandoning valuable
property."
The toll collectors threatened to call police if drivers or
passengers resisted the "bill detection procedures" and the
demands for personal information.
The complaint adds: "The policy of detaining motorists without
their consent and without legal justification extended throughout
the Turnpike System and was so permanent and well settled that it
constituted custom, practice or policy which has the force of law
and rises to the level of deliberate indifference to plaintiff's
and class members' constitutional rights."
The class seeks damages for civil rights violations and false
imprisonment.
A copy of the Complaint in Chandler, et al. v. Kopelousos, et al.,
Case No. 11-cv-00262 (M.D. Fla.), is available at:
http://www.courthousenews.com/2011/02/11/Turnpike.pdf
The Plaintiffs are represented by:
James C. Valenti, Esq.
Hank B. Campbell, Esq.
William T. McKinley, Esq.
VALENTI CAMPBELL TROHN TAMAYO & ARANDA, P.A.
Post Office Box 2369
Lakeland, FL 33806-2369
Telephone: (863) 686-0043
GT SOLAR: Discovery in "Braun" Suit Still Ongoing
-------------------------------------------------
Discovery is ongoing in connection with an amended consolidated
complaint filed against GT Solar International Inc. in New
Hampshire, according to the Company's Feb. 10, 2011 Form 10-Q
filing with the U.S. Securities and Exchange Commission for the
quarter ended January 1, 2011.
Beginning on August 1, 2008, seven putative securities class
action lawsuits were commenced in the United States District Court
for the District of New Hampshire, or the Court, against the
Company, certain of the Company's officers and directors, certain
underwriters of the Company's July 24, 2008 initial public
offering and others, including certain of it investors, together
called the "federal class actions". On October 3, 2008, the Court
entered an order consolidating the federal class actions into a
single action captioned Braun et al. v. GT Solar International,
Inc., et al. The Court selected the lead plaintiff and lead
plaintiff's counsel in the consolidated matter on October 29,
2008. The lead plaintiff filed an amended consolidated complaint
on December 22, 2008. The lead plaintiff asserts claims under
various sections of the Securities Act of 1933, as amended. The
amended consolidated complaint alleges, among other things, that
the defendants made false and materially misleading statements and
failed to disclose material information in certain SEC filings,
including the registration statement and Prospectus for the
Company's July 24, 2008 initial public offering, and other public
statements, regarding its business relationship with LDK Solar,
Ltd., one of the Company's customers, JYT Corporation, one of its
competitors, and certain of its products, including the DSS
furnaces. Among other relief, the amended consolidated complaint
seeks class certification, unspecified compensatory damages,
rescission, interest, attorneys' fees, costs and such other relief
as the Court should deem just and proper.
The defendants moved to dismiss the amended consolidated complaint
on February 5, 2009. On September 22, 2009, the Court denied the
defendant's motion. Following the Court's denial of the motion,
the parties submitted a proposed joint case management order,
which the Court approved on November 6, 2009. The case management
order provides for discovery to close on May 25, 2011.
GT SOLAR: "Hamel" Suit Still Pending in New Hampshire
-----------------------------------------------------
GT Solar International Inc. continues to defend itself from a
putative securities class action under the caption Hamel v. GT
Solar International, Inc., et al., in New Hampshire state court,
according to the Company's Feb. 10, 2011 Form 10-Q filing with the
U.S. Securities and Exchange Commission for the quarter ended
January 1, 2011.
On September 18, 2008, a putative securities class action was
filed in New Hampshire state court in the Superior Court for
Hillsborough County, Southern District, or the "State Court",
under the caption Hamel v. GT Solar International, Inc., et al.,
against GT Solar International Inc., certain of its officers and
directors and certain underwriters of its July 24, 2008 initial
public offering, called the "state class action". The state class
action plaintiffs assert claims under various sections of the
Securities Act of 1933, as amended. The state class action
complaint alleges, among other things, that the defendants made
false and materially misleading statements and failed to disclose
material information in certain SEC filings, including the
registration statement for the Company's July 24, 2008 initial
public offering, and other public statements, regarding the status
of its business relationship with LDK Solar. Among other relief,
the state class action complaint seeks class certification,
unspecified compensatory damages, rescission, interest, attorneys'
fees, costs and such other relief as the State Court should deem
just and proper.
GT Solar removed the state class action to the United States
District Court for the District of New Hampshire on October 22,
2008. The state class action was consolidated with the federal
class action on November 25, 2008. On February 2, 2009, the
federal Court granted the plaintiff's motion to remand the state
class action to New Hampshire State Court. On May 4, 2009, the
parties agreed to a stay of the state class action, pending
resolution of the motion to dismiss in the consolidated federal
case. At a case structuring conference on June 3, 2009, the State
Court endorsed the proposed joint case management order filed by
the parties, which requires coordination of any discovery to be
taken in the state class action with that taken in the federal
class action. With the denial of the motion to dismiss the
federal action, the parties submitted a proposed joint case
management order to the State Court on November 6, 2009. On
January 12, 2010, the State Court granted a joint motion of the
parties to transfer the state class action to the State Court's
Business and Commercial Dispute Docket.
No updates were reported in the company's latest SEC filing.
KABA SIMPLEX: Faces Class Action Over Faulty Locks
--------------------------------------------------
Stan Shyshkin, writing for BrickHouse Security, reports that Kaba
Simplex lock's manufacturers are facing a class action.
The Kaba Simplex lock is known as one of the most secure locks in
the world, and is extremely popular due to the fact that it
doesn't require a physical key or electricity to operate.
Instead, there is a combination mechanism that only requires a
correct combination of button pushes to open. However, the lock's
manufacturers are now facing a serious class-action lawsuit as
security experts have found that the combination is also not
required and the lock can be opened by anyone with a simple earth
magnet.
Considering that this lock model is already used by millions of
people, including government agencies and entire residential
communities, this is a very serious issue.
Consider the Orthodox Jewish community, in which almost everyone
relies on the Simplex locks. The reason for the popularity is the
Sabbath, of which some religious laws prohibit them from carrying
items out of their home, such as keys, and activating electronic
devices on Saturdays. Since the Simplex lock is key-less and
doesn't use electricity, it is the perfect and obvious choice for
the community.
Now imagine that a thief finds out about the fact that the entire
community relies on a lock which can be opened by a simple earth
magnet in a matter of seconds. Not only does this jeopardize the
entire purpose of having the lock, it also makes people even more
vulnerable as they have a false perception of security.
So how did the lock's manufacturer, Kaba, respond to this? They
simply tried to smooth over the issue as much as possible so that
they didn't lose any credibility and reputation. And no, by
smooth over we don't mean they offered to replace or fix
everyone's locks or even warn their customers. Instead, they
simply chose to manufacture an updated version of the lock that
doesn't have the magnetic vulnerability; they then told customers
that this is a more secure version.
And when directly asked about the magnetic vulnerability the
company tried to deny its own mistake, using rationale such as
"all locks can be breached," and that "it never stated that the
lock was impossible to breach." While it is true that all locks
can be breached in one way or another with the right tools, a
regular person with no prior locksmith experience and a cheap
earth magnet (which can be bought for under $50) should not be
able to bypass the lock in a few minutes, especially in a way that
is silent, covert, and leaves no signs of tempering.
As for the class action lawsuit against Kaba, it is still in
progress, and hopefully a conclusion is reached where all the
people with the faulty locks either get their money back, get the
new version of the lock, or at the very least get a public apology
from the company.
NATIONAL FOOTBALL LEAGUE: Offers Refunds to Super Bowl Fans
-----------------------------------------------------------
Bill Brink, writing for Pittsburgh Post-Gazette, reports that the
deal keeps improving for those who experienced seating problems at
Super Bowl XLV.
The NFL on Feb. 10 offered the 2,000 Super Bowl ticket-holders in
temporary seating sections who were delayed in reaching their
seats the choice of a refund of $800 -- the ticket's face value --
or a free ticket to a future Super Bowl of their choice, the
league said in a statement.
Previously, the league only had offered that group a refund.
Last-minute construction on seats contributed to the delays, NFL
executive vice president Eric Grubman told ESPN 970's Joe Bendel
on Feb. 9.
"Literally, an hour before the game, we thought we were going to
have all the seats and we just didn't get it done," Mr. Grubman
said on the show.
Of the 13,000 temporary seats installed in Cowboys Stadium in
Arlington, Texas, for the game between Sunday the Steelers and the
Green Bay Packers, 11,740 were approved for use by the Arlington
fire marshal, leaving 1,260 unavailable. Eight hundred and sixty
fans were relocated. The league has contacted 260 of the 400 fans
who were not able to use their seats, the statement said. Those
fans can receive either a refund of three times the $800 face
value of the tickets and a ticket to the next Super Bowl, or
airfare, hotel and a ticket to a future Super Bowl of their
choosing. The NFL said in the statement that if a work stoppage
cancels Super Bowl XLVI in February 2012 in Indianapolis, the fans
would get a ticket to the following Super Bowl.
As NFL executives continue to contact the affected fans, a second
law firm filed a class action lawsuit late on Feb. 9 against the
league, the Dallas Cowboys and various companies associated with
Cowboys Stadium, this time in Dallas County district court,
seeking damages. Ken Laffin and David Wanta, Wisconsin residents
and Green Bay Packers fans, represent the class in the lawsuit,
filed by Dallas-based firm Goldfarb Branham. The complaint
accuses the NFL and the Cowboys of fraud, breach of contract and
negligent misrepresentation.
"Obviously the amount that they paid for the ticket is at issue,"
said Charles "Trey" Branham, a founding partner of the firm. "The
costs of transportation for getting to Dallas are at issue. Costs
of hotel and meals are at issue."
The complaint accuses the league and Cowboys of
"misrepresentations, omissions, and concealment of the cruel
truth, which was that [the ticket-holders] had been sold tickets
for seats that did not exist at the time and that were never to be
had."
It alleges the defendants should have known the seats would not be
ready but did not tell the ticket-holders in advance.
The court must certify the lawsuit as a class action suit, Branham
said, and mainly will look for commonality among the plaintiffs in
making that determination. The defendants have 20 days after the
lawsuit was filed to respond, and Branham said the certification
hearing likely will occur two or three months after the defendants
file their answer.
The lawsuit comes a day after the Los Angeles-based firm Eagan
Avenatti filed a similar class-action lawsuit against the Cowboys,
team owner Jerry Jones and the NFL in U.S. District Court late on
Feb. 8. That lawsuit will undergo a similar class action
certification process, but founding partner Michael Avenatti said
he doesn't expect the case to go to trial.
"I would hope that the NFL, the Cowboys and Jerry Jones would
approach us quickly and sit down with us so that we can work out a
settlement that makes sense for the fans so that the fans can
quickly be compensated," Mr. Avenatti said.
Were the league to do so, Mr. Avenatti said he hopes it would
compensate the fans for 100% of what they paid for the tickets,
their travel-related expenses and something for their
inconvenience, such as transferable tickets to a future Super
Bowl.
League spokesman Brian McCarthy said the NFL was aware of both
lawsuits but declined to comment. If a ticket-holder were to
accept either of the NFL's offers -- the refund and next year's
ticket, or the all-expenses-paid future trip -- he would forfeit
his right to sue the league, Mr. McCarthy said.
Class Action Lawyer's Response to League's Latest Offer
According to an article posted at by ProFootball Talk by Mike
Florio, on Feb. 10, the league expanded its effort to address
flaws in the Super Bowl XLV ticketing process by offering 2,000
more fans a refund of the face value of their seat or a ticket to
a future Super Bowl.
In response, Mr. Avenatti criticized the league's refusal to fully
and adequately compensate those who received a substandard
experience in Dallas.
"Remarkably, the NFL and Jerry Jones still refuse to do the right
thing," Mr. Avenatti said in a release sent via e-mail to PFT.
"As they know, most fans paid five to nine times the face value of
their ticket. And, in many cases, the NFL even made money on
these purchases through the NFL Ticket Exchange. The bottom line
is that the face value 'offers' do not adequately compensate most
fans for what they paid for their ticket.
"Resolving this is not complicated," Mr. Avenatti added. "The NFL
and Jones should immediately refund every affected fan the entire
price they paid for their ticket, plus all related expenses for
traveling to the Super Bowl. At a minimum, the fans should also
receive quality tickets to another Super Bowl of their choice.
"I invite the NFL and Jerry Jones to contact me as soon as
possible so that we may quickly resolve this dispute on terms fair
to the fans."
NATIONAL FOOTBALL LEAGUE: Super Bowl Class Action Expanded
----------------------------------------------------------
According to an article posted at ProFootballTalk by Mike Florio,
when the first lawsuit arising from the Super Bowl seating fiasco
was filed on Feb. 9, two distinct classes were identified: (1) the
400 fans who had tickets but ultimately not seats; and (2) a group
of Cowboys' season-ticket holders known as the "Founders," who
purchased $1,200 tickets and allegedly received substandard views
and/or seats.
The class has now expanded via the filing of an amended complaint,
a copy of which PFT has obtained.
In addition to Steve Simms, who represents the 400, and Mike
Dolabi, who represents the Cowboys' season-ticket holders,
Wes Lewis has joined the case as representative of the ticket-
holders who were "unreasonably delayed, relocated or completely
displaced from their seats at Super Bowl XLV as a result of the
incomplete installation of temporary seats, which were deemed
unsafe and unusable."
The case now consists of those who did not get into the game (the
"Displaced Class"), those who were moved to different seats and/or
significantly delayed in gaining pre-game access to the seats due
to problems with the installation of temporary seats (the
"Relocated/Delayed Class"), and the Cowboys' season-ticket holders
who allegedly received substandard accommodations (the "Founders
Class").
The lawsuit also has expanded the legal theories, adding an
allegation of "negligent misrepresentation" to the four prior
claims (breach of contract, breach of covenant of good faith and
fair dealing, fraud/deceit/concealment, and violation of the Texas
Deceptive Trade Practices Act). Under the "negligent
misrepresentation" claim, the plaintiffs contend that the league,
the Cowboys, and/or Jerry Jones failed to take reasonable steps to
communicate to the three classes of customers true information
about their assigned seats. In non-legalese, it means that the
league inadvertently, and carelessly, allowed a false impression
to be created about the quality of the accommodations.
The complaint filed by lawyer Michael Avenatti on behalf of the
class action now encompasses all customers who believe they didn't
get what they paid a lot of money for when arriving at Cowboys
Stadium for Super Bowl XLV.
NSTAR: Still Faces Merger-Related Class Action Lawsuits in Mass.
----------------------------------------------------------------
NSTAR continues to defend itself against several class action
lawsuits in connection with its proposed merger with Northeast
Utilities, according to the Company's Feb. 10, 2011, Form 10-K
filing with the U.S. Securities and Exchange Commission for the
fiscal year ended Dec. 31, 2010.
Following NSTAR and NU's announcement of the planned merger
transaction on October 18, 2010, several class action lawsuits
were filed against NSTAR, members of NSTAR's Board of Trustees,
and NU in the Superior Court of Suffolk County, Massachusetts, and
in the federal court in the District of Massachusetts. Thomas B.
Breene v. NSTAR, et al.; Max Glickman v. NSTAR, et al.; Ted Silver
v. Thomas May, et al.; William Fitzpatrick v. NSTAR, et al.;
Elaine Ferkauf v. NSTAR, et al.; Linda Alten-Mangels v. NSTAR, et
al.; Daniel Himmel v. NSTAR, et al.; Michael Orlando v. NSTAR, et
al.; and George Keuriam v. NSTAR, et al. The lawsuits purport to
represent a class of NSTAR shareholders opposed to the terms of
the Merger Agreement. The lawsuits make virtually identical
allegations that the consideration to be received by NSTAR's
shareholders in the merger is inadequate and that the members of
NSTAR's Board of Trustees breached their fiduciary duties, by
among other things, approving the merger. Each lawsuit seeks
injunctive relief declaring that the Merger Agreement was in
breach of NSTAR trustees' fiduciary duties, enjoining NSTAR and NU
from proceeding with the merger, directing NSTAR's Board of
Trustees to exercise its fiduciary duties in the best interest of
NSTAR's shareholders and rescinding the Merger Agreement. NSTAR
believes that these lawsuits are without merit and intends to
defend the lawsuits vigorously.
The several state class action lawsuits were consolidated into a
single action on November 8, 2010, and on December 10, 2010,
following the filing by NSTAR and NU of a joint registration
statement/proxy statement, the Plaintiffs filed a consolidated
Amended Complaint. The Amended Complaint added a claim of
"insufficient disclosure" to the initial allegations of the
lawsuits filed in October 2010. On January 6, 2011, NSTAR Filed a
Motion to Dismiss the Amended Complaint, stating that the lawsuit
fails to state a claim upon which relief can be granted and that
there has been no breach of fiduciary duty nor failure to
adequately disclose the merger transaction. The Plaintiffs
responded to the Motion to Dismiss by filing a Motion for
Expedited Proceedings, asking the Court to allow limited discovery
to take place. Hearings are expected to take place on the various
Motions in the month of February 2011. The Plaintiffs have taken
no action on the lawsuit filed in federal court.
OCLARO INC: Appeals From Settlement of IPO Suit Still Pending
-------------------------------------------------------------
New Focus, Inc., now known as Oclaro Photonics, Inc., is still
awaiting a ruling on an appeal from the order approving a global
settlement in a class action lawsuit, according to Oclaro, Inc.'s
Feb. 10, 2011, Form 10-Q filing with the U.S. Securities and
Exchange Commission for the quarter ended January 1, 2011.
On June 26, 2001, the first of a number of securities class
actions was filed in the United States District Court for the
Southern District of New York against New Focus, Inc., now known
as Oclaro Photonics, Inc., certain of its officers and directors,
and certain underwriters for New Focus' initial and secondary
public offerings. A consolidated amended class action complaint,
captioned In re New Focus, Inc. Initial Public Offering
Securities Litigation, No. 01 Civ. 5822, was filed on April 20,
2002. The complaint generally alleges that various underwriters
engaged in improper and undisclosed activities related to the
allocation of shares in New Focus' initial public offering and
seeks unspecified damages for claims under the Exchange Act on
behalf of a purported class of purchasers of common stock from
May 17, 2000 to December 6, 2000.
The lawsuit against New Focus is coordinated for pretrial
proceedings with a number of other pending litigations challenging
underwriter practices in over 300 cases, as In re Initial Public
Offering Securities Litigation, 21 MC 92 (SAS), including actions
against Bookham Technology plc, now known as Oclaro Technology
Ltd. and Avanex Corporation, now known as Oclaro (North America),
Inc.=, and certain of each entity's respective officers and
directors, and certain of the underwriters of their public
offerings. In October 2002, the claims against the directors and
officers of New Focus, Bookham Technology and Avanex were
dismissed, without prejudice, subject to the directors' and
officers' execution of tolling agreements.
The parties have reached a global settlement of the litigation. On
October 5, 2009, the Court entered an order certifying a
settlement class and granting final approval of the settlement.
Under the settlement, the insurers will pay the full amount of the
settlement share allocated to New Focus, Bookham Technology and
Avanex, and New Focus, Bookham Technology and Avanex will bear no
financial liability. New Focus, Bookham Technology and Avanex, as
well as the officer and director defendants who were previously
dismissed from the action pursuant to tolling agreements, will
receive complete dismissals from the case. Certain objectors have
appealed the Court's October 5, 2009 order to the Second Circuit
Court of Appeals. If for any reason the settlement does not
become effective, Oclaro, Inc., believes that Bookham Technology,
New Focus and Avanex have meritorious defenses to the claims and
therefore believe that such claims will not have a material effect
on the Company's financial position, results of operations or cash
flows.
On July 4, 2009, Oclaro, Inc., sold the net assets of its New
Focus business to Newport Corporation in exchange for the net
assets of Newport's high power laser diodes business and $3.0
million in cash proceeds.
OVERHILL FARMS: Continues to Defend Consolidated Suit in Calif.
---------------------------------------------------------------
Overhill Farms, Inc., continues to defend itself against a
consolidated lawsuit filed by its former employees in Los Angeles
for allegedly violating labor laws, according to the Company's
Feb. 10, 2011, Form 10-Q filing with the U.S. Securities and
Exchange Commission for the quarter ended December 31, 2010.
On July 1, 2009, Bohemia Agustiana, Isela Hernandez, and Ana Munoz
filed a purported "class action" against the Company in which they
asserted claims for failure to pay minimum wage, failure to
furnish wage and hour statements, waiting time penalties,
conversion and unfair business practices. The plaintiffs are
former employees who had been terminated one month earlier because
they had used invalid social security numbers in connection with
their employment with the Company. They filed the case in Los
Angeles County on behalf of themselves and a class which they say
includes all non-exempt production and quality control workers who
were employed in California during the four-year period prior to
filing their complaint. The plaintiffs seek unspecified damages,
restitution, injunctive relief, attorneys' fees and costs.
The Company filed a motion to dismiss the conversion claim, and
the motion was granted by the court on February 2, 2010.
On May 12, 2010, Alma Salinas filed a separate purported "class
action" in Los Angeles County Superior Court against the Company
in which she asserted claims on behalf of herself and all other
similarly situated current and former production workers for
failure to provide meal periods, failure to provide rest periods,
failure to pay minimum wage, failure to make payments within the
required time, unfair business practice in violation of Section
17200 of the California Business and Professions Code and Labor
Code Section 2698 (known as the Private Attorney General Act).
Salinas is a former employee who had been terminated because she
had used an invalid social security number in connection with her
employment with the Company. Salinas seeks allegedly unpaid
wages, waiting time penalties, PAGA penalties, interest and
attorneys' fees, the amounts of which are unspecified.
The Salinas action has been consolidated with the Agustiana
action.
The parties are engaged in the discovery phase of the case. The
Company believes it has valid defenses to the plaintiffs'
remaining claims and that the Company paid all wages due to these
employees.
POWER BALANCE: Class Action.org Lawyers Ready to Review Claims
--------------------------------------------------------------
The attorneys working with Class Action.org are available to
review claims from consumers who purchased the Power Balance
bracelets. The company recently admitted that there is no
credible scientific evidence backing their bracelets' claims, and
consumers who purchased the Power Balance wristbands may have
legal recourse as a result. If you bought the Power Balance
wristband, visit
http://www.classaction.org/power-balance-bracelets.htmlto learn
more about the Power Balance bracelet allegations and to receive a
free case review, which can help determine your eligibility for
financial compensation.
According to the Power Balance Web site, the wristband is based on
the idea of optimizing the body's natural energy flow. The Power
Balance bracelet is said to contain a hologram, which aims to
resonate and work with the body's natural energy filed. The Power
Bracelet's credibility has been strengthened by several
professional athletes. However, the Australian Competition and
Consumer Commission claims that the Power Balance wristbands may
be no more beneficial than a rubber band.
A Power Balance bracelet class action has already been filed in
Los Angeles, claiming that Power Balance mislead the public by
implying that there was a tangible benefit associated with the
wearing of the bracelets. If you have purchased a Power Balance
wristband, you may also have legal recourse. Visit Class
Action.org today to learn more about your eligibility for a Power
Balance lawsuit.
Class Action.org is dedicated to protecting consumers and
investors in class actions and complex litigation throughout the
United States. Class Action.org keeps consumers informed about
product alerts, recalls, and emerging litigation and helps them
take action against the manufacturers of defective products,
drugs, and medical devices. Information about consumer fraud
issues and environmental hazards is also available on the site.
Visit http://www.classaction.org today for a no cost, no
obligation case evaluation and information about your consumer
rights.
Contact: ClassAction.org
Tara Nagel
Telephone: 800-449-1970
E-mail: pressrelease@lawyercentral.com
PRIDE INT'L: Being Sold to Enso for Too Little, Del. Suit Claims
----------------------------------------------------------------
Courthouse News Service reports that shareholders claim Pride
International, an offshore driller, is selling itself too cheaply
to Ensco PLC, for $7.3 billion, or $41.60 a share.
A copy of the Complaint in Saratoga Advantage Trust v. Pride
International, Inc., et al., Case No. 6180 (Del. Ch. Ct.), is
available at:
http://www.courthousenews.com/2011/02/11/SCA.pdf
The Plaintiff is represented by:
Blake A. Bennett, Esq.
COOCH AND TAYLOR P.A.
The Brandywine Building
1000 West Street, 10th Floor
Wilmington, DE 19801
Telephone: (302) 984-3800
PROCTER & GAMBLE: Faces Class Action Over Fixodent
--------------------------------------------------
KCRA Sacramento reports that Sacramento Attorney Clayeo Arnold
filed a class action lawsuit with clients from across the country,
claiming zinc in denture adhesive has poisoned dozens of people,
ruining their nervous systems forever.
"Our clients are in walkers, they're in wheelchairs, places they
never thought they would be," said Mr. Arnold. "We have three
clients that have passed away since we started litigating."
Mr. Arnold says that until his lawsuit, Fixodent did not list zinc
as an ingredient and users did not know how much zinc they were
ingesting by using the denture adhesive.
Procter & Gamble would not comment, but a representative for
Fixodent sent the following statement via email.
"The amount of zinc an average denture adhesive user would ingest
from daily usage of Fixodent is less than the amount of zinc in
most daily multi-vitamins and comparable to 6 oz. ground beef,"
representative Tricia Gottlieb indicated.
In videotaped statements provided by Mr. Arnold's law firm,
plaintiffs said they have lost the use of their legs and suffered
irreparable damage to their nervous system.
"I thought I was going die because my body was shutting down,"
said Sandra Hankins, a plaintiff from Arkansas. Ms. Hankins said
she used Fixodent for her dentures.
Fixodent isn't the only denture adhesive Arnold has targeted in a
lawsuit. His firm also took the makers of SuperPoligrip,
GlaxoSmithKline to court for the same reason.
SuperPoligrip was the denture adhesive that Harlan Mueller, a
plaintiff from Minnesota, used for his dentures.
"It just really does irritate me they didn't stop this before,
they certainly had the resources," said Mueller.
Mr. Arnold hopes the lawsuit forces Procter & Gamble to stop using
zinc in Fixodent.
"This adhesive can be made with material that does not have zinc,
we know that," said Mr. Arnold.
SCHWARZ PHARMA: Attorneys Available to Review Reglan Claims
-----------------------------------------------------------
The Reglan litigation attorneys working with Class Action.org are
available to review claims from Reglan (metoclopramide) users who
have developed tardive dyskinesia, a disorder which causes
involuntary movements, particularly of the lower face. Tardive
dyskinesia is a rarely reversible neurological condition which has
been linked to chronic uses of metoclopramide, and patients who
have developed this Reglan side effect may have legal recourse.
If you or a loved one has developed tardive dyskinesia after
taking Reglan or the generic metoclopramide, visit
http://www.classaction.org/reglan.htmand complete the free case
evaluation form to find out if you can recover compensation for
medical bills and other damages resulting from your Reglan side
effects.
In February 2009, the FDA placed a black box warning on Reglan and
other metoclopramide-containing drugs, which are used to treat
gastrointestinal disorders. The Reglan black box warning was
added to highlight the risk of tardive dyskinesia with long-term
or high-dose use of metoclopramide, even after the drugs have been
stopped. Because the development of tardive dyskinesia is
directly related to the number of doses and length of treatment,
those at greatest risk for Reglan tardive dyskinesia include those
who have been taking the drug for a long time, as well as the
elderly.
A serious Reglan side effect, tardive dyskinesia is neurological
syndrome which is characterized by repetitive and involuntary
movements. Symptoms of tardive dyskinesia may include the
following: lip smacking; rapid eye blinking; grimacing; tongue
protrusion; involuntary finger movements; puckering; and pursing.
Rapid movements of the legs, arms and trunk may also develop.
Unfortunately, there is no standard treatment for this condition,
though symptoms of Reglan tardive dyskinesia may lessen or resolve
after metoclopramide treatment is stopped.
If you or a loved one has developed tardive dyskinesia after
taking Reglan, you may have legal recourse. To find out if you
can participate in a Reglan lawsuit, visit Class Action.org for a
free case review. The Reglan lawyers working with the site are
providing this online legal consultation at no cost and remain
committed to protecting the rights of patients who have developed
Reglan tardive dyskinesia.
Class Action.org is dedicated to protecting consumers and
investors in class actions and complex litigation throughout the
United States. Class Action.org keeps consumers informed about
product alerts, recalls, and emerging litigation and helps them
take action against the manufacturers of defective products,
drugs, and medical devices. Information about consumer fraud
issues and environmental hazards is also available on the site.
Visit http://www.classaction.org/today for a no cost, no
obligation case evaluation and information about your consumer
rights.
Contact Information: ClassAction.org
Tara Nagel
Telephone: 800-449-1970
SEMGROUP LP: Agrees to Settle Investor Class Action
---------------------------------------------------
Rod Walton, writing for Tulsa World, reports that SemGroup LP
co-founders Tom Kivisto, Gregory Wallace and Kevin Foxx and all
other defendants have agreed to settle a class-action lawsuit
brought by investors in the company's publicly traded subsidiary
who lost tens of millions when SemGroup collapsed in 2008,
attorneys said on Feb. 11.
No details of the settlement amount were released. But the deal,
if approved by plaintiffs in coming months, would end the case
against SemGroup's executives, financiers and other investment
groups in U.S. District Court in Tulsa.
The class-action lawsuit revolved around the lost value of stock
in SemGroup Energy Partners LP, or SGLP, which was formed by the
parent SemGroup in 2007.
"Anytime you can resolve a major class-action without trial, it's
to the advantage of all the parties," Kivisto attorney John Tucker
said. "That's true in this case, as well."
The preliminary settlement was hammered out over months and
revealed at a hearing on Feb. 8. U.S. District Judge Gregory
Frizzell will oversee the details of notifying all plaintiffs at a
hearing April 1.
The suit alleged that SGLP did not inform unitholders of the
parent company's financial problems. On July 17, 2008, the value
of SGLP units fell from $22 to $11 in one day amid rumors about
the parent SemGroup's collapse.
The Tulsa-based parent company filed for Chapter 11 bankruptcy
five days later.
SGLP attracted investors with promises of high cash flow from oil
and gas pipeline throughput and storage agreements with SemGroup,
which accounted for 80% of the spin-off company's more than $100
million in annual revenues. SemGroup's own cash flow, however,
was secretly depleted by close to $3 billion in margin losses on
wrong-direction oil futures positions.
Unitholder Craig Carson initially led the class-action lawsuit in
the summer of 2008. Harvest Fund Advisors later was named lead
plaintiff because it suffered the biggest losses, reportedly
around $7 million.
San Francisco attorney Ramzi Abadou, who represented the plaintiff
class for the settlement hearing, declined to offer details on the
amount offered in the settlement.
"We have no comment," Mr. Abadou said.
Once Frizzell has approved the notification to the classes,
individual plaintiffs have the option to accept or opt out,
attorneys said. All of the defendants have approved their part in
paying the settlement.
Messrs. Kivisto, Wallace and Foxx started SemGroup as a midstream
oil, gas and asphalt terminal and transport company in 2000. It
grew quickly, becoming one of the nation's largest private
companies as it took in billions in revenues by 2007.
Mr. Kivisto was SemGroup LP's CEO, while Mr. Wallace worked as
chief financial officer. Foxx was a board member and CEO of SGLP
when it was created in 2007.
Various lawsuits and investigation reports filed in the wake of
SemGroup's collapse accused the three men and others of misleading
investors, creditors and commodity trading partners about the
company's solvency. Other defendants include former SemGroup
officers Alex Stallings and Michael Brochetti, Bank of America,
accounting firm Pricewaterhouse Coopers and investor Thane
Ritchie.
Messrs. Kivisto, Wallace and Foxx, among others, previously
settled a lawsuit brought by SemGroup LP's creditors in U.S.
Bankruptcy Court in Wilmington, Del. The amount of that payment
was reported to be around $30 million.
Mr. Wallace's attorney, Clark Brewster, did not give specifics on
last week's settlement amount but denied any wrongdoing by his
client in the events leading to SemGroup's downfall.
"This was a company that was a true blessing to the city of
Tulsa," Mr. Brewster said.
He blamed the cash-flow crisis not on the overwhelming "short"
futures positions during a historic run-up in oil prices but on
the economic downturn, "not as a result of anything Mr. Wallace
did wrong; it was just the climate of the time. He is a wonderful
person."
None of the three co-founders remain involved with SemGroup.
Kivisto was replaced as CEO in 2008, Mr. Wallace never returned
after taking leave and Foxx departed from SGLP, now known as
Blueknight Energy Partners, in 2009.
Mr. Wallace remains in Tulsa and is working on other ventures,
Brewster said.
Mr. Kivisto is not actively involved in business and spends time
in Chicago, where one of his daughters runs an art gallery,
Mr. Tucker said.
Mr. Foxx lives in Houston and is involved in the energy terminal
sector, according to reports.
One other lawsuit is pending against Kivisto and others. Several
local investors filed suit in Tulsa County District Court against
several SemGroup officials and Pricewaterhouse Coopers last year.
SemGroup legal time line
July 17, 2008: Trading units of SemGroup Energy Partners (SGLP)
lose half their value in one day after reports about the parent
SemGroup's cash-flow problems. SGLP confirms the liquidity crisis
that evening.
July 22, 2008: SemGroup LP seeks Chapter 11 bankruptcy protection
in Delaware, citing between $2.4 billion and $3.2 billion in
margin losses on failed oil futures trades.
July 2008: Unitholders file lawsuit against SGLP and others,
saying the parent company's financial problems should have been
disclosed. Harvest Fund Advisors LLC joins the class-action and
eventually is named lead plaintiff because it had the biggest
losses.
October 2008: SemGroup CEO Tom Kivisto, previously placed on
administrative leave, is fired.
February 2009: Unsecured Creditors Committee in the SemGroup
bankruptcy case sues Mr. Kivisto, fellow co-founders Gregory
Wallace and Kevin Foxx, and other executives.
September 2009: Oil and gas producers who owed up to $1 billion
for oil and gas sold on credit to SemGroup settle after a
mediation session. The agreement is reportedly worth up to $337
million.
December 2009: SGLP, now controlled by Vitol Inc., changes its
name to Blueknight Energy Partners. Private SemGroup LP also
emerges from Chapter 11 bankruptcy as publicly traded SemGroup
Corp.
September 2010: Messrs. Kivisto, Wallace, Foxx and other former
officers settle the bankruptcy creditors' lawsuit, reportedly for
about $30 million.
Tuesday: Attorneys for Harvest Fund class-action lawsuit and
defendants meet in Tulsa federal court to reveal a preliminary
settlement. The deal could become final by spring.
SHAW COMMUNICATIONS: Sued Over Non-Disclosure of Interest Rates
---------------------------------------------------------------
CTV News reports that a North Vancouver law firm has filed a class
action suit against Shaw Communications, alleging that the telecom
giant hasn't adequately disclosed interest rates on unpaid
balances.
Shaw's bills say the company charges two-per-cent interest per
month compounded monthly, but federal laws require that annual
interest rates be disclosed. Shaw's annual rate is more than 26
per cent.
Lawyer Jim Poyner says that because of those disclosure
regulations, Shaw's interest rates are required to be rolled back
to 5% per year.
"It's very simple. These bills come out -- it stipulates two per
cent per month compounded, but it doesn't stipulate what the
annualized rate is, so we are seeking recovery of that difference
between five per cent and 26.8%," Mr. Poyner said.
Shaw does display the annual rate on its Web site, but the suit
alleges that the information should be explicitly displayed on
bills.
Shaw has yet to respond to a registered letter informing the
company of the suit. None of the allegations in the suit have
been proven in court.
As a class action, the suit only has the potential to benefit
customers who don't pay their full bills each month. Affected
consumers are automatically including unless they opt out.
SILICON LABORATORIES: Appeals From Suit Settlement Still Pending
----------------------------------------------------------------
Appeals from the approval of a settlement resolving a class action
lawsuit against Silicon Laboratories, Inc., remain pending,
according to the Company's Feb. 10, 2011, Form 10-K filing with
the U.S. Securities and Exchange Commission for the fiscal year
ended January 1, 2011.
On December 6, 2001, a class action complaint for violations of
U.S. federal securities laws was filed in the United States
District Court for the Southern District of New York against the
Company, four of its officers individually and the three
investment banking firms who served as representatives of the
underwriters in connection with its initial public offering of
common stock. The Consolidated Amended Complaint alleges that the
registration statement and prospectus for the Company's initial
public offering did not disclose that (1) the underwriters
solicited and received additional, excessive and undisclosed
commissions from certain investors, and (2) the underwriters had
agreed to allocate shares of the offering in exchange for a
commitment from the customers to purchase additional shares in the
aftermarket at pre-determined higher prices. The Complaint alleges
violations of the Securities Act of 1933 and the Securities
Exchange Act of 1934. The action seeks damages in an unspecified
amount and is being coordinated with approximately 300 other
nearly identical actions filed against other companies. A court
order dated October 9, 2002 dismissed without prejudice the
Company's four officers who had been named individually. On
December 5, 2006, the Second Circuit vacated a decision by the
District Court granting class certification in six of the
coordinated cases, which are intended to serve as test, or "focus"
cases. The plaintiffs selected these six cases, which do not
include us. On April 6, 2007, the Second Circuit denied a petition
for rehearing filed by the plaintiffs, but noted that the
plaintiffs could ask the District Court to certify more narrow
classes than those that were rejected.
The parties in the approximately 300 coordinated cases, including
the parties in the case against the Company, reached a settlement.
The insurers for the issuer defendants in the coordinated cases
will make the settlement payment on behalf of the issuers,
including us. On October 5, 2009, the Court granted final approval
of the settlement. Judgment was entered on January 10, 2010. Six
notices of appeal and one petition seeking permission to appeal
were filed before the United States Court of Appeals for the
Second Circuit. Two appeals are proceeding on behalf of objectors
to the settlement. Plaintiffs have moved to dismiss both appeals.
The motions are fully briefed. The remaining objectors withdrew
their appeals with prejudice.
As the litigation process is inherently uncertain, the Company is
unable to predict the outcome if the settlement does not survive
appeal. While the Company does maintain liability insurance, it
could incur losses that are not covered by its liability insurance
or that exceed the limits of its liability insurance. Such losses
could have a material impact on the Company's business and its
results of operations or financial position.
SMART TECHNOLOGIES: Siskinds Files IPO Class Action in Ontario
--------------------------------------------------------------
The law firm of Siskinds LLP Feb. 11 disclosed that it has
commenced a class proceeding in the Ontario Superior Court of
Justice on behalf of persons who acquired the shares of Smart
Technologies Inc. in its initial public offering conducted in
July 2010.
Persons who purchased shares of Smart Technologies through its
initial public offering are encouraged to contact:
Nicole Young, Esq.
SISKINDS LLP
Telephone: (800) 461-6166 (ext. 2380)
E-mail: nicole.young@siskinds.com
Investors resident in Quebec who purchased Smart Technologies
shares through its initial public offering are encouraged to
contact:
Simon Hebert, Esq.
SISKINDS, DESMEULES
Telephone: 418-694-2009
E-mail: simon.hebert@siskindsdesmeules.com
Siskinds, Desmeules is an affiliate of Siskinds LLP.
According to Canadian Press, the lawsuit claims the Calgary-based
maker of interactive whiteboards -- used to make classroom
presentations -- failed to disclose a significant decline in sales
growth and poor performance of a company it had acquired.
Lead plaintiffs Robert LeFever and Gail Runnells say they bought
shares in July at US$17 each, and claim the share value fell after
interim financial statements were released in November.
The shares are currently worth about $9.
The suit is filed against several defendants including Smart
Technologies, members of the company's board of directors, and
several major banks that acted as underwriters in the offering.
Shares in Smart Technologies were down one cent to $9.09 in midday
trading on the Toronto Stock Exchange.
SOAPSTONE NETWORKS: Appeals From IPO Suit Settlement Still Pending
------------------------------------------------------------------
Twelve purported securities class action lawsuits were filed
against Soapstone Networks, Inc., and one or more of the Company's
underwriters in its initial public offering, and certain officers
and directors of the Company. The lawsuits alleged violations of
the federal securities laws and were docketed in the U.S. District
Court for the Southern District of New York as: Felzen, et al. v.
Avici Systems, Inc., et al., C.A. No. 01-CV-3363; Lefkowitz, et
al. v. Avici Systems, Inc., et al., C.A. No. 01-CV-3541; Lewis, et
al. v. Avici Systems, Inc., et al., C.A. No. 01-CV-3698; Mandel,
et. al v. Avici Systems, Inc., et al., C.A. No. 01-CV-3713; Minai,
et al. v. Avici Systems, Inc., et al., C.A. No. 01-CV-3870;
Steinberg, et al. v. Avici Systems Inc., et al., C.A. No. 01-CV-
3983; Pelissier, et al. v. Avici Systems, Inc., et al., C.A. No.
01-CV-4204; Esther, et al. v. Avici Systems, Inc., et al., C.A.
No. 01-CV-4352; Zhous, et al. v. Avici Systems, Inc. et al., C.A.
No. 01-CV-4494; Mammen, et al. v. Avici Systems, Inc., et. al.,
C.A. No. 01-CV-5722; Lin, et al. v. Avici Systems, Inc., et al.,
C.A. No. 01-CV-5674; and Shives, et al. v. Banc of America
Securities, et al., C.A. No. 01-CV-4956. On April 19, 2002, a
consolidated amended class action complaint (the "Complaint"),
which superseded these twelve purported securities class action
lawsuits, was filed in the Court. The Complaint is captioned "In
re Avici Systems, Inc. Initial Public Offering Securities
Litigation" (21 MC 92, 01 Civ. 3363 (SAS)) and names as defendants
the Company, certain of the underwriters of the Company's initial
public offering, and certain of the Company's officers and
directors. The Complaint, which seeks unspecified damages, alleges
violations of the federal securities laws, including among other
things, that the underwriters of the Company's initial public
offering improperly required their customers to pay the
underwriters excessive commissions and to agree to buy additional
shares of stock in the aftermarket as conditions of receiving
shares in the Company's IPO. The Complaint further claims that
these supposed practices of the underwriters should have been
disclosed in the Company's IPO prospectus and registration
statement. In addition to the Complaint against the Company,
various other plaintiffs have filed other substantially similar
class action cases against approximately 300 other publicly traded
companies and their IPO underwriters in New York City, which along
with the case against the Company have all been transferred to a
single federal district judge for purposes of case management. The
Company and its officers and directors believe that the claims
against the Company lack merit, and have defended the litigation
vigorously. In that regard, on July 15, 2002, the Company,
together with the other issuers named as defendants in these
coordinated proceedings, filed a collective motion to dismiss the
consolidated amended complaints against them on various legal
grounds common to all or most of the issuer defendants.
On October 9, 2002, the Court dismissed without prejudice all
claims against the individual current and former officers and
directors who were named as defendants in the Company's
litigation, and they are no longer parties to the lawsuit. On
February 19, 2003, the Court issued its ruling on the motions to
dismiss filed by the issuer defendants and separate motions to
dismiss filed by the underwriter defendants. In that ruling, the
Court granted in part and denied in part those motions. As to the
claims brought against the Company under the antifraud provisions
of the securities laws, the Court dismissed all of these claims
with prejudice, and refused to allow the plaintiffs an opportunity
to re-plead these claims against the Company. As to the claims
brought under the registration provisions of the securities laws,
which do not require that intent to defraud be pleaded, the Court
denied the motion to dismiss these claims as to the Company and as
to substantially all of the other issuer defendants as well. The
Court also denied the underwriter defendants' motion to dismiss in
all respects.
In June 2003, the Company elected to participate in a proposed
settlement agreement with the plaintiffs in this litigation. If
the proposed settlement had been approved by the Court, it would
have resulted in the dismissal, with prejudice, of all claims in
the litigation against the Company and against any of the other
issuer defendants who elected to participate in the proposed
settlement, together with the current or former officers and
directors of participating issuers who were named as individual
defendants. This proposed settlement was conditioned on, among
other things, a ruling by the District Court that the claims
against the Company and against the other issuers who had agreed
to the settlement would be certified for class action treatment
for purposes of the proposed settlement, such that all investors
included in the proposed classes in these cases would be bound by
the terms of the settlement unless an investor opted to be
excluded from the settlement.
On December 5, 2006, the U.S. Court of Appeals for the Second
Circuit issued a decision that six purported class action lawsuits
containing allegations substantially similar to those asserted
against the Company may not be certified as class actions due, in
part, to the Appeals Court's determination that individual issues
of reliance and knowledge would predominate over issues common to
the proposed classes. On January 8, 2007, the plaintiffs filed a
petition seeking rehearing en banc of this ruling. On April 6,
2007 the Court of Appeals denied the plaintiffs' petition for
rehearing of the Court's December 5, 2006 ruling but noted that
the plaintiffs remained free to ask the District Court to certify
classes different from the ones originally proposed which might
meet the standards for class certification that the Court of
Appeals articulated in its December 5, 2006 decision.
In light of the Court of Appeals' December 5, 2006 decision
regarding certification of the plaintiffs' claims, the District
Court entered an order on June 25, 2007 terminating the proposed
settlement between the plaintiffs and the issuers, including the
Company. On August 14, 2007, the plaintiffs filed amended
complaints in the six focus cases. On November 13, 2007, the
issuer defendants and the underwriter defendants separately moved
to dismiss the claims against them in the amended complaints in
the six focus cases. On March 26, 2008, the District Court issued
an order in which it denied in substantial part the motions to
dismiss the amended complaints in the six focus cases.
On February 25, 2009, the parties advised the District Court that
they had reached an agreement-in-principle to settle the
litigation in its entirety. A stipulation of settlement was filed
with the District Court on April 2, 2009. On June 9, 2009, the
District Court preliminarily approved the proposed global
settlement. Notice was provided to the class, and a settlement
fairness hearing, at which members of the class had an opportunity
to object to the proposed settlement, was held on September 10,
2009. On October 6, 2009, the District Court issued an order
granting final approval to the settlement. Several objectors have
since appealed the order approving the settlement, and those
appeals remain pending. While the Company can make no promises or
guarantees as to the outcome of these proceedings, the Company
does not believe that a loss is probable.
No updates were reported in the Company's Feb. 10, 2011, Form 8-K
filling with the U.S. Securities and Exchange Commission, which
contains a report on its financial condition as of Dec. 31, 2010.
STORM FINANCIAL: Macquarie Accuses ASIC of Vexatious Litigation
---------------------------------------------------------------
Stuart Washington, writing for The Sydney Morning Herald, reports
Macquarie Bank has accused the corporate regulator of vexatious
litigation in pursuing damages from the collapse of Storm
Financial.
The bank's barrister, Justin Gleeson, SC, also said the Federal
Court should stay or strike out a separate Storm case brought by
the Australian Securities and Investments Commission because a
class action was already on foot.
Storm collapsed in 2008 with estimated losses of $3 billion as
investors borrowed money against their homes to use as margin
loans that were then invested in the sharemarket. On February 11,
in the Federal Court in Sydney represented some of the first shots
fired in legal skirmishing with three big banks after ASIC lodged
court cases on December 22.
The court cases, alleging the banks broke the law in their
dealings with Storm Financial's customers, followed ASIC's lengthy
yet unsuccessful negotiations with the banks.
ASIC launched court action on behalf of investors on two fronts.
In the Federal Court in Sydney, it alleged unconscionable conduct
on the part of Macquarie, Bank of Queensland and a BoQ franchisee.
In the Federal Court in Brisbane it launched a separate action
alleging Macquarie, BoQ and Commonwealth Bank had participated
with Storm Financial in an unregistered managed investment scheme
(MIS).
Mr. Gleeson foreshadowed arguments against the Sydney case being
accepted by the court, and outlined Macquarie's position that the
Brisbane case should be struck out.
He said two Storm Financial clients taking court action alongside
ASIC in Sydney, Barry and Deanna Doyle, were also represented in
the ASIC court action in Brisbane. It was vexatious to have to
defend court actions on the same issue, he said. Macquarie would
ask for ASIC to irrevocably remove the Doyles from any Brisbane
class actions. He questioned ASIC's role in taking the case.
Also, ASIC's Brisbane MIS action should be stayed or struck out
because a similar class action had been brought by Sydney firm
Levitt Robinson. Macquarie's arguments will be heard before
Judge Arthur Emmett on March 24.
TOYOTA MOTOR: Court Approves Calif. Suit Settlement
---------------------------------------------------
The Superior Court of California Stanislaus County approved the
settlement in class actions alleging that Toyota Motor Credit
Corporation's post-repossession notice failed to comply with
California law, according to the Company's February 10, 2011, Form
10-Q filing with the U.S. Securities and Exchange Commission for
the quarter ended December 31, 2010.
A cross-complaint alleging a class action in the Superior Court of
California Stanislaus County, Garcia v. Toyota Motor Credit
Corporation, filed in August 2007, claims that the Company's post-
repossession notice failed to comply with the Rees-Levering
Automobile Sales Finance Act of California. Three additional
putative class action complaints or cross-complaints were filed
making similar allegations.
The cases were coordinated in the California Superior Court,
Stanislaus County and a Second Amended Consolidated Cross-
Complaint and Complaint was subsequently filed in March 2009. The
Second Amended Consolidated Cross-Complaint and Complaint seeks
injunctive relief, restitution, disgorgement and other equitable
relief under California's Unfair Competition Law.
As a result of mediation in January 2010, the parties agreed to
settle all of the cases. A fourth case was recently filed which
has been included in the settlement.
On January 7, 2011, the Court entered an order granting final
approval of the settlement. Plaintiffs have until March 9, 2011,
to appeal the order.
TOYOTA MOTOR: Continues to Defend "Sudden Acceleration" Lawsuits
----------------------------------------------------------------
Toyota Motor Credit Corporation continues to defend itself from
class action lawsuits seeking damages as a result of alleged
sudden unintended acceleration in certain Toyota and Lexus
vehicles, according to the Company's February 10, 2011, Form 10-Q
filing with the U.S. Securities and Exchange Commission for the
quarter ended Dec. 31, 2010.
The Company and certain affiliates were named as defendants in the
consolidated multidistrict litigation, In Re: Toyota Motor Corp.
Unintended Acceleration, Marketing, Sales Practices and Products
Liability Litigation (United States District Court, Central
District of California) seeking damages and injunctive relief as a
result of alleged sudden unintended acceleration in certain Toyota
and Lexus vehicles. A parallel action was filed against the
Company and certain affiliates on March 12, 2010, by the Orange
County District Attorney. On August 2, 2010, the plaintiffs filed
a consolidated complaint in the multidistrict litigation that does
not name the Company as a defendant. On November 17, 2010, the
court ordered that all omitted claims and theories are deemed
dismissed without prejudice. In addition, the court has permitted
alleged classes of foreign plaintiffs to file complaints naming
the Company and related entities as defendants. The Company also
remains a defendant in the state court action filed by the Orange
County District Attorney.
The Company believes it has meritorious defenses to these claims
and intends to defend them vigorously. At this time, the Company
believes that the case will not be material to holders of any
notes of Toyota Auto Receivables 2010-A Owner Trust; Toyota Auto
Receivables 2010-B Owner Trust; and Toyota Auto Receivables 2010-C
Owner Trust.
TOYOTA MOTOR: Plaintiff Appeals Dismissal of Bondholder Suit
------------------------------------------------------------
Harel Pia Mutual Fund has appealed the order dismissing its
lawsuit against Toyota Motor Credit Corporation, et al., according
to the Company's February 10, 2011, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended Dec. 31,
2010.
The Company and certain affiliates had been named as defendants in
a putative bondholder class action, Harel Pia Mutual Fund v.
Toyota Motor Corp., et al., filed in the Central District of
California on April 8, 2010, alleging violations of federal
securities laws. The plaintiff filed a voluntary dismissal of the
lawsuit on July 20, 2010.
On July 22, 2010, the same plaintiff refiled the case in
California state court on behalf of purchasers of TMCC bonds
traded on foreign exchanges (Harel Pia Mutual Fund v. Toyota Motor
Corp., et al., Superior Court of California, County of Los
Angeles). The complaint alleged violations of California
securities laws, fraud, breach of fiduciary duty and other state
law claims. On September 15, 2010, the defendants removed the
state court action to the United States District Court for the
Central District of California pursuant to the Securities
Litigation Uniform Standards Act and the Class Action Fairness
Act. Defendants filed a motion to dismiss on October 15, 2010.
After a hearing on January 10, 2011, the court granted the
defendants' motion to dismiss with prejudice on January 11, 2011.
The plaintiff filed a notice of appeal on January 27, 2011.
At this time, the Company believes that the case will not be
material to holders of any notes of Toyota Auto Receivables 2010-A
Owner Trust; Toyota Auto Receivables 2010-B Owner Trust; and
Toyota Auto Receivables 2010-C Owner Trust.
UNITEDHEALTH GROUP: Continues to Defend Consolidated Suit in Fla.
-----------------------------------------------------------------
Unitedhealth Group Incorporated continues to defend itself against
remaining claims in the multi-district litigation pending in a
Florida district court, according to the Company's February 10,
2011, Form 10-K filing with the U.S. Securities and Exchange
Commission for the quarter ended December 31, 2010.
Beginning in 1999, a series of class action lawsuits were filed
against the Company by health care providers alleging various
claims relating to the Company's reimbursement practices,
including alleged violations of the Racketeer Influenced Corrupt
Organization Act (RICO) and state prompt payment laws and breach
of contract claims. Many of these lawsuits were consolidated in a
multi-district litigation in the United States District Court for
the Southern District Court of Florida (MDL). In the lead MDL
lawsuit, the court certified a class of health care providers for
certain of the RICO claims. In 2006, the trial court dismissed all
of the claims against the Company in the lead MDL lawsuit, and the
Eleventh Circuit Court of Appeals later affirmed that dismissal,
leaving eleven related lawsuits that had been stayed during the
litigation of the lead MDL lawsuit. In August 2008, the trial
court, applying its rulings in the lead MDL lawsuit, dismissed
seven of these lawsuits (the seven lawsuits). The trial court also
dismissed all but one claim in an eighth lawsuit, and ordered the
final claim to arbitration. In December 2008, at the plaintiffs'
request, the trial court dismissed without prejudice one of the
three remaining lawsuits. The court also denied the plaintiffs'
request to remand the remaining two lawsuits to state court and a
federal magistrate judge recommended dismissal of those suits. In
April 2009, the plaintiffs in these last two suits filed amended
class action complaints alleging breach of contract, but those
amended complaints were subsequently dismissed without prejudice.
In July 2010, the Eleventh Circuit reversed the trial court's
dismissal of the seven lawsuits and remanded those cases to the
trial court for further proceedings. In addition, the Company is
party to a number of arbitrations in various jurisdictions
involving claims similar to those alleged in the seven lawsuits.
The Company is vigorously defending against the remaining claims
in these cases.
UNITEDHEALTH GROUP: COCSA Joins National ERISA Class Action
-----------------------------------------------------------
The Congress of Chiropractic State Associations disclosed that on
Feb. 8, 2011, the COCSA's Board voted to join a national ERISA
Class Action, on behalf of its State Association members, against
UnitedHealth Group to challenge overpayment recoupment abuses.
The action was originally filed on Jan. 24, 2011 by Pomerantz
Haudek Grossman & Gross LLP, one of the nation's preeminent class
action law firms and a leader in combating the abuses of the
health insurance industry, on behalf of a group of chiropractors,
and the Ohio State Chiropractic Association (OSCA). Pomerantz
seeks to represent a nationwide class of all health care providers
who have been subjected to improper demands by UnitedHealth Group
to repay previously paid health care benefits for services
provided to UnitedHealth Group subscribers, only to have such
funds forcibly recouped by the withholding of future payments from
unrelated claims in alleged violation of the Employee Retirement
Income Security Act of 1974 ("ERISA"), the Federal law governing
private employee benefit plans. The latest Class Action against
UnitedHealth Group is the third national class action filed by
Pomerantz, following similar litigations brought against Aetna and
23 Blue Cross Blue Shield entities filed within the last two
years. Initial court rulings have been favorable to provider
plaintiffs.
By far, chiropractic plaintiffs have led all other healthcare
providers in seeking judicial guidance and legal victories against
abusive overpayment recoupment crisis faced by all healthcare
providers. COCSA is dedicated to supporting all provider class
actions that benefit chiropractors by seeking to stop such abusive
and discriminative insurance practices. Through this historic and
landmark decision to join the class action, COCSA will be
asserting its right, through representational standing, to obtain
appropriate equitable relief to address the abuses at issue on
behalf of its State Association members in all 50 states.
UnitedHealth Group, which acquired the health insurance business
of Health Net of the Northeast in December 2009, is the nation's
largest private health plan by revenue. The action alleges that
the post-payment audit and review process as applied by the
Defendants violates ERISA in that its repayment demands are
retroactive adverse benefit determinations that particular
services are not covered under the terms of the United and Health
Net health care plans, but without proper appeals or other
protections otherwise available under ERISA for both self-funded
and fully insured health care plans offered through private
employers.
"ERISA establishes the procedures that insurance companies must
follow when making benefit determinations -- whether prior to
payment or retroactively," says Plaintiffs' counsel, D. Brian
Hufford of Pomerantz. "The Defendants here, as is true for many
insurance companies, are violating their ERISA obligations in
order to recover funds that simply do not belong to them."
In the complaint, Plaintiffs allege that, as a means to maximize
their profits, United and Health Net used their post-payment audit
and review process to make retroactive adverse benefit
determinations whereby they demand that providers repay funds they
had previously received for providing services to United and
Health Net subscribers. Moreover, Defendants frequently withhold
new benefit payments for unrelated services to apply toward the
alleged overpayments, even where there has been no valid appeal
process or validation that any sums are in fact owed by the
providers, a practice called "offsetting." Plaintiffs' Co-
Counsel, Vincent Buttaci of Buttaci & Leardi, LLC, states that
"providers are placed in an untenable position as a result of
false fraud allegations made against them in an effort to coerce
and intimidate, and through our lawsuit they are now fighting
back."
A copy of the official Class Action Complaint against UnitedHealth
Group can be found at http://www.erisaclaim.com/UHC_Complaint.pdf
The court papers filed on Jan. 24, 2011, in United States District
Court, District Of New Jersey, Case 2:11-cv-00425-FSH-PS:
In the last year alone, the chiropractic profession has obtained
what may well be more significant reimbursement legal victories
than in its entire 105 year history. On Jan. 24, 2011, a Federal
district court in Chicago dismissed BCBS's state law counterclaims
against one of the plaintiff chiropractors in the largest ERISA
class action brought against 23 BCBS entities filed in 2009, after
the court upheld the ERISA claims on May 17, 2010, in denying
Defendants' motion to dismiss. On October 27, 2010, a Federal
district court ruled against BCBS of Rhode Island which was
seeking to pursue state law claims for more than $400,000 against
a chiropractic physician and an occupational therapist, finding
that ERISA "completely preempts," supersedes and limits BCBSRI
overpayment recoupment practices. The court reaffirmed this
decision on Jan. 19, 2011, in denying BCBSRI's motion to
reconsider its earlier ruling on federal subject matter
jurisdiction and denying its parallel motion to certify the
Court's interlocutory order for immediate appeal to the First
Circuit. A Preliminary Injunction against BCBSRI was issued by
the court on Nov. 11, 2010 to force it to halt its ongoing
recoupment of new benefit payments.
Pa. Chiropractic Assn. vs. BCBS Assn., et al., CASE #: 1:09-cv-
05619, United States District Court, Northern District of
Illinois.
BCBSRI v. Korsen et al, filed on 01/19/2011, Case#: 1:09-cv-00317-
L-LDA, UNITED STATES DISTRICT COURT FOR THE DISTRICT OF RHODE
ISLAND
"Although COCSA didn't lead to initiate these initial victories,
COCSA is certainly taking the lead to finish our fight for justice
and equality in the healthcare market, in advocating for
appropriate chiropractic care for all of our patients. While we
salute our colleagues whose legal wisdom guided our profession to
this great start, COCSA has positioned our profession to ensure
our victories from start to finish. Our COCSA decision [Tues]day
to join is the proof for this timely leadership," said Dr. Kate
C. Rufolo, DC, President of COCSA.
"ERISA is the federal law that protects patients and providers
from improper denials and delays. When all internal appeals fail
to resolve denials and/or payers fail to comply with ERISA, a
lawsuit is normally filed as an ERISA judicial appeal to a federal
court to resolve administrative grievances," said Dr. John
LaMonica, DC, COCSA Officer, whose New York Chiropractic Council
was the plaintiff for the class action against 23 BCBS entities,
and also a key driver for [Tues]day's COCSA decision.
The Congress of Chiropractic State Associations, COCSA, was formed
in the late 1960's and is a not-for-profit organization consisting
of state chiropractic associations in all 50 states. The mission
of the Congress is to provide an open, nonpartisan forum for the
promotion and advancement of the chiropractic profession through
service to member state associations. COCSA will lead the
profession in compliance with new healthcare reform law, PPACA and
existing federal law, ERISA, for proper reimbursement.
UNITED STATES: Mark Brown Demands Cut on Cobell Attorney Fees
-------------------------------------------------------------
Mike Scarcella, writing for The National Law Journal, reports that
a solo practitioner in Los Angeles is objecting to the legal fee
petition filed in a high-profile American Indian trust case in
Washington, D.C., saying the plaintiffs' attorneys cut him out of
the demand for compensation.
The lawyer, Mark Brown, filed a notice Jan. 31 announcing his plan
to object to the plaintiffs' fee petition pending in the U.S.
District Court for the District of Columbia. The petition says
class counsel should receive at least $223 million in compensation
for their work over 15 years of litigation.
The government in December 2009 announced a $3.4 billion
settlement to resolve claims the United States mismanaged Indian
trust accounts. The deal, which received congressional approval
last year, is pending before Senior Judge Thomas Hogan of
Washington's federal trial court.
Mr. Brown said in court papers he is "entitled to a share of any
attorney fee award for his work on this case since 2000 as counsel
for plaintiffs." Mr. Brown said a lawyer for lead plaintiff
Elouise Cobell, Washington solo Dennis Gingold, has "made it
clear" in the fee petition that he has not sought any money for
Brown.
Mr. Brown's notice to the court did not specify an amount he
claims he is owed. He was not immediately reached for comment on
Feb. 9.
In response to Mr. Brown's notice, Cobell's attorneys, including
Gingold and Kilpatrick Townsend & Stockton partner Keith Harper,
said in court papers filed on Feb. 7 that Mr. Brown "incorrectly
describes his limited role in these proceedings."
Mr. Brown, Cobell's lawyers said, has not provided class counsel
his time and charges. Mr. Brown would not have been singled out
in the fee petition because it seeks compensation collectively and
not for any single lawyer.
The settlement identifies class counsel as Gingold, Harper,
Thaddeus Holt and a team of Kilpatrick lawyers, including firm
chairman William Dorris and senior counsel Elliott Levitas.
WELLCARE HEALTH: Final Settlement Approval Hearing Set for May 4
----------------------------------------------------------------
On February 9, 2011, the United States District Court for the
Middle District of Florida entered an order preliminarily
approving the Stipulation and Agreement of Settlement entered into
on December 17, 2010, by WellCare Health Plans, Inc., and a group
of five public pension funds appointed by the Court to act as lead
plaintiffs in the consolidated securities class action Eastwood
Enterprises, L.L.C. v. Farha, et al., Case No. 8:07-cv-1940-VMC-
EAJ, according to a Feb. 10, 2011, Form 8-K filed by the Company
with the U.S. Securities and Exchange Commission.
The material terms of the Stipulation Agreement are substantively
the same as the terms of the settlement previously disclosed in
the Company's Quarterly Report on Form 10-Q for the quarter ending
June 30, 2010. The terms of the Stipulation Agreement include,
among other things, the requirement that the Company pay $52.5
million into an escrow account for the benefit of the class within
30 business days following the entry of the Preliminary Approval
Order (which would be March 24, 2011) or within three business
days of counsel for the lead plaintiffs providing the Company's
counsel with certain wiring information, whichever is later. The
Stipulation Agreement remains subject to final approval by the
Court at a hearing, after notice to all class members and other
legally-required procedural steps. The Court scheduled the final
approval hearing for May 4, 2011.
As previously reported by the Class Action Reporter, putative
class action complaints were filed in October 2007 and in
November 2007. These putative class actions, entitled Eastwood
Enterprises, L.L.C., v. Farha, et al.; and Hutton v. WellCare
Health Plans, Inc., et al., respectively, were filed in Federal
Court against the Company, Todd Farha, former chairman and chief
executive officer, and Paul Behrens, former senior vice president
and chief financial officer. Messrs. Farha and Behrens were also
officers of various subsidiaries of the Company.
The Eastwood Enterprises complaint alleges that the defendants
materially misstated the Company's reported financial condition
by, among other things, purportedly overstating revenue and
understating expenses in amounts unspecified in the pleading in
violation of the Securities Exchange Act of 1934, as amended. The
Hutton complaint alleges that various public statements supposedly
issued by the defendants were materially misleading because they
failed to disclose that the Company was purportedly operating its
business in a potentially illegal and improper manner in violation
of applicable federal guidelines and regulations. The complaint
asserts claims under the Exchange Act. Both complaints seek, among
other things, certification as a class action and damages. The
two actions were consolidated, and various parties and law firms
filed motions seeking to be designated as Lead Plaintiff and Lead
Counsel.
In an Order issued in March 2008, the Federal Court appointed a
group of five public pension funds from New Mexico, Louisiana and
Chicago as Lead Plaintiffs. In October 2008, an amended
consolidated complaint was filed in this class action asserting
claims against the Company, Messrs. Farha and Behrens, and adding
Thaddeus Bereday, former senior vice president and general
counsel, as a defendant. In January 2009, the Company and certain
other defendants filed a joint motion to dismiss the amended
consolidated complaint, arguing, among other things, that the
complaint failed to allege a material misstatement by defendants
with respect to the Company's compliance with marketing and other
health care regulations and failed to plead facts raising a strong
inference of scienter with respect to all aspects of the purported
fraud claim. The Federal Court denied the motion in September
2009 and the Company and the other defendants filed answer to the
amended consolidated complaint in November 2009.
In April 2010, the Lead Plaintiffs filed their motion for class
certification. On June 18, 2010, the USAO filed motions seeking
to intervene and for a temporary stay of discovery of this matter.
In July 2010, the Federal Court granted the United States' motions
and ordered that discovery be stayed through December 2010.
On August 6, 2010, the Company reached agreement with the Lead
Plaintiffs on the material terms of a settlement to resolve this
matter. The terms of the settlement are being documented in a
formal settlement agreement that will be subject to approval by
the Federal Court following notice to all class members. The
settlement provides that the Company will make cash payments to
the class of $52,500,000 within thirty business days following the
Federal Court's preliminary approval of the settlement and
$35,000,000 by July 31, 2011. The settlement also provides that
the Company will issue to the class tradable unsecured bonds
having an aggregate face value of $112,500,000, with a fixed
coupon of 6% and a maturity date of December 31, 2016. The bonds
shall also provide that, if the Company incur debt obligations in
excess of $425,000,000 that are senior to the bonds, the bonds
shall accelerate as to payment and be redeemed. The settlement
has two further contingencies. First, it provides that if, within
three years following the date of the settlement agreement, the
Company is acquired or otherwise experiences a change in control
at a share price of $30.00 or more, the Company will pay to the
class an additional $25,000,000. Second, the settlement provides
that the Company will pay to the class 25% of any sums it recovers
from Messrs. Farha, Behrens and Bereday as a result of claims
arising from the same facts and circumstances that gave rise to
this matter. The Company may terminate the settlement if a
certain number or percentage of the class opt out of the
settlement class. The settlement agreement will also provide that
the settlement does not constitute an admission of liability by
any party and such other terms as are customarily contained in
settlement agreements of similar matters.
As a result of this settlement having been reached, the company's
current estimate for the resolution of this matter is
$200,000,000. The company has discounted the $200,000,000
liability for the resolution of this matter and accrued this
amount at its estimated fair value, which amounted to
approximately $194,905,000 at September 30, 2010. Approximately
$85,520,000 and $109,385,000 have been included in the current and
long-term portions, respectively, of Amounts accrued related to
investigation resolution in the company's Condensed Consolidated
Balance Sheet as of September 30, 2010. There can be no assurance
that the settlement will be finalized and approved and the actual
outcome of this matter may differ materially from the terms of the
settlement.
WILLIAMS-SONOMA: Loses Class Action Over Customer Zip Codes
-----------------------------------------------------------
Terry Baynes, writing for Reuters Legal, reports that retail
stores may not ask a customer to provide a zip code in the course
of a credit card transaction, the California Supreme Court ruled
on Feb. 10.
The decision, which has implications for all retailers doing
business in California, arose in a class action suit against
Williams-Sonoma. Plaintiff Jessica Pineda alleged that the
housewares company used customer zip codes to obtain the home
addresses of "hundreds of thousands, if not millions" of customers
and then used the data for marketing or sold the information to
other businesses.
Ms. Pineda said the practice breached her right to privacy under
the California Constitution and violated the Song-Beverly Credit
Card Act of 1971, which prohibits retailers from recording a
customer's "personal identification information" in a credit card
transaction. Each violation carries a civil penalty of up to
$1,000.
In its 15-page, unanimous decision, the California Supreme Court
ruled that the act was designed to promote consumer protection and
that personal identification information includes a cardholder's
zip code. Any other result, the court wrote, would be an "end
run" around the statute's clear purpose. The ruling reversed two
lower courts and rejected an argument by Williams-Sonoma that the
statute was unconstitutionally vague. The ruling also allowed the
decision to be applied retroactively to past customer
transactions.
"People don't understand they're giving information on their
addresses," said Gene Stonebarger, a lawyer for Pineda who
presented oral arguments before the Supreme Court in January.
"They believe they need to provide the zip code to process the
transaction, similar to what they do at a gas station." Gas
stations, however, do not store zip codes after a transaction has
been approved.
SIMILAR LAWSUITS
Williams-Sonoma had argued that the law was never intended as
sweeping privacy legislation to prevent a retailer from using
legal means to send catalogues to its customers. Even without zip
codes, a business could still use other ways to track down
customer addresses, such as a phone book or electronic database,
the company said.
Craig Cardon, who represented Williams-Sonoma, declined to comment
on the court's decision.
Retailers doing business in California, including Polo Ralph
Lauren and Pottery Barn, a unit of Williams-Sonoma, have faced a
number of similar lawsuits. Most recently, in a 2008 case against
Party City, the California 4th District Court of Appeals ruled
that zip codes were too general to fall under the law's ban.
Donna Wilson, an attorney who has defended multiple retailers in
these cases, said the Williams-Sonoma decision was "about as broad
a decision as could have been issued" and raises the question of
how retailers can maintain contact with their customers without
risking a violation of the law. Applying it retroactively, she
said, exposes retailers to liability even though they relied on
lower court opinions that blessed the practice of zip-code
gathering.
David Faustman, who represented Party City in the previous case,
said this kind of litigation has caused retailers to reconsider
doing business in California.
It was not immediately clear whether the ruling would have an
impact beyond California. The Song-Beverly act was modeled after
a similar statute in New York, and other states including
Delaware, Kansas, Maryland, Massachusetts, Nevada and Rhode Island
have similar laws. None of those states prohibit the collection
of zip codes, Williams-Sonoma argued in its brief.
* Over 240,000 Customers to Join Suit v. Telcos Over Bank Fees
--------------------------------------------------------------
Ben Grubb, writing for The Sydney Morning Herald, reports that one
of the men behind the largest class action lawsuit in the country
is now taking on excessive mobile phone bills.
James Middleweek is the boss of Perth firm Financial Redress,
which offers a service that specializes in recovering unfair bank
and credit-card charges. According to its Web site, over 240,000
consumers have registered their interest in the lawsuit he is
involved with targeting bank fees.
But now Mr. Middleweek plans to take on the telcos, launching a
service to help consumers recover excessive call costs above their
monthly mobile phone "cap".
"We think people have been misled in the marketing of [plans with
caps]," he told this Web site.
The service, launched this month, has so far had a 100 per cent
success rate in "getting back a very good chunk" of any bill with
excessive charges, Mr. Middleweek said. It has had over 100 sign
up so far.
In a nutshell, Financial Redress acts on behalf of consumers to
get a credit on their account for any excessive charges they may
have incurred as a result of going over their plan's cap. One can
go over their cap by using more data or voice than allocated.
The company works with your telco and the Telecommunications
Industry Ombudsman and requires you to sign a form letting it
represent you.
"We're not saying that everyone is entitled to compensation,"
Mr. Middleweek said. But if a customer didn't get notified via
text or some other method then there was a good chance a credit
could be sought, he said.
Of the seven claims Financial Redress has processed so far, it has
managed to get between $500 and $2,000 credited to a customer's
account, Mr. Middleweek said.
But it's not a free service: Mr. Middleweek charges, but only if
successful. "We charge 25% plus GST," he said.
Christopher Zinn, spokesman for the consumer group Choice,
welcomed the initiative.
"If the threat of any action leads to the careful scrutiny of
[telco marketing] terms, which suggest more in consumers' minds
than they actually deliver -- 'timeless', 'infinite', 'uncapped',
'freedom' -- then that could be a good thing because the problem
is that people look at the word 'capped' thinking it won't go
above that when in fact it can go above that," he said.
"Unlimited is a term which we all love the idea of from when we
were knee high to grasshoppers but unfortunately the telcos'
definition of unlimited can be a bit different from ours and
that's where the problem is."
Director of policy and campaigns at the Australian Communications
Consumer Action Network, Elissa Freeman, said she thought the
initiative was "great".
"People in the community are clearly concerned about the prices
they're paying for their telco service," she said. She added that
the telco industry was "rife with misleading advertising".
"I have to say I prefer that we didn't need [to use] these
services."
The word "cap" was a "fundamentally misleading" way to market
mobile phone plans, according to Freeman, and for those who were
"time poor" to go to their telco or the Telecommunications
Industry Ombudsman to dispute their bills, a service like
Mr. Middleweek's was a good idea.
The Australian Mobile Telecommunications Association, which
represents the telco industry in the mobile space, said that if
customers believed they had been charged incorrectly "they should
contact their service provider".
If that fails, it said they could go to the Telecommunications
Industry Ombudsman.
"The industry believes that this is a better and more effective
process for customers instead of giving access to their personal
mobile phone account records to a commercial third party that
charges them a 25% fee."
It also mentioned the many tools customers have to monitor their
data usage and spending.
"AMTA believes this is a proactive and preventative approach to
empower consumers to actively be involved in controlling and
monitoring their spending," it said.
Regulators have recently cracked down on telcos using terms like
"unlimited" and Optus took Vodafone to court over its "infinite"
ads recently. Vodafone's ads remain on TV but it signed an
undertaking to update the ones shown in print.
A separate class action is brewing against Vodafone, spearheaded
by law firm PiperAlderman.
* US Supreme Court Set to Decide on Three Employee Class Actions
-----------------------------------------------------------------
The US Supreme Court is set to issue opinions in three cases with
important implications for future employment class action suits
this year. Depending on how the Court rules in these cases,
employees seeking to enforce their workplace rights as a class may
find it easier to do so.
Class action lawsuits provide a vital means for employees to
protect their rights to fair wages, overtime compensation,
discrimination-free workplaces and other important rights.
Without the availability of the option of joining a class,
employees would have to bring individual claims against their
employers.
While class actions have been most widely used in wage and hour
claims, over the past several years they have become more common
vehicles to bring other types of employment law claims, including
discrimination suits. For example, last year a jury awarded more
than 5600 female employees $250 million in punitive damages in a
sex discrimination suit against Novartis (Velez v. Novartis
Corp.). The jury verdict was the largest one to date in an
employment class action suit.
The three cases before the Supreme Court this term will help
define how class actions suits can be brought in the employment
law arena and other areas of the law.
AT&T Mobility v. Concepcion (No. 09-893)
In this case, the Supreme Court has been asked to decide whether
the Federal Arbitration Act (FAA) pre-empts a state law ruling
finding a portion of a mandatory arbitration clause
unconscionable. In its consumer contracts, AT&T Mobility has a
clause prohibiting its customers from participating in class
action lawsuits and class arbitration. Instead, similarly
situated customers who want to bring a legal claim against the
company must each file a separate claim or participate in a
separate arbitration proceeding.
The California Superior Court ruled in favor of the customers,
finding that the language in the mandatory arbitration clause
prohibiting class action lawsuits or class arbitrations was
unconscionable. The federal district court and Ninth Circuit
Court of Appeals upheld the state court's ruling. AT&T then filed
a petition for cert with the Supreme Court, which granted it.
Oral arguments were heard in November 2010 and a decision is
expected later in 2011.
The US Supreme Court's decision in this case has the potential to
have major repercussions on the future of employment class
actions. Should the Court decide in favor of AT&T Mobility,
employers may be able to include similar anti-class clauses in
their employment contracts, effectively killing most types of
employment class actions. However, if the Court upholds the Ninth
Circuit's decision, then the ruling could preserve employees'
rights to bring class action claims against their employers.
Dukes v. Wal-Mart (No.10-277)
The Dukes case involves the biggest employment discrimination
class action ever filed in the US. With up to 1.5 million
potential class members, Dukes tests the bounds of what
similarities must be shared by class members in order to certify a
class -- although it is unclear if the Supreme Court will rule on
this question.
The lawsuit alleges that Wal-Mart discriminated against its female
employees in its promotion and pay practices. Class members
represent every level of employee in the company, from hourly
store clerks to salaried managers, as well as employees from more
than 3400 stores across the country. Wal-Mart challenged the
certification of the class, claiming among other things that the
class size is unmanageable and coercive -- unmanageable because it
would be virtually impossible for the company to defend itself
against that many claims and coercive because a class that big
forces the company into settling the claims rather than spend the
money to litigate the action.
The Ninth Circuit Court of Appeals ruled en banc to uphold the
certification of the class. The US Supreme Court granted cert in
December and oral arguments are expected in March 2011. The Court,
however, granted cert on a narrow procedural question concerning
whether the class was properly certified under Rule 23 of the
Federal Rules of Civil Procedure. Legal commentators speculate
that the Court will use the Dukes case to clarify the standards
for certifying class actions, which may include a discussion of
the requisite commonality required among the class members.
Should the Court uphold the class certification in Dukes, it could
signal a new era in class action litigation, particularly for
large, national employers who have violated employee rights on a
wide scale.
Smith v. Bayer (No. 09-1205)
The broader issue in the Smith case is whether a federal court has
the authority to stop a state court from certifying a class
action. In Smith, a group of consumers who had been harmed by a
drug manufactured by the pharmaceutical company sought
certification as a class from a federal court. The federal court
ruled in favor of Bayer and denied certification, holding that the
plaintiffs each had to prove how they had been injured by the
drug.
Other consumers who had been harmed by the drug, but who were not
involved in the first attempt to have the class certified, then
filed a class certification request in a West Virginia state
court. Once the certification request was filed in state court,
Bayer sought an injunction from the federal court to prevent the
state action from proceeding. The federal court granted the
injunction on the grounds that the class seeking certification
from the state court was identical to the class in the case the
federal court had already ruled on. The Eighth Circuit Court of
Appeals upheld the federal district court's ruling.
Oral arguments before the US Supreme Court in Smith were held in
January 2011. The Court is expected to announce its decision
later in the year. During oral arguments, Chief Justice Roberts
and Justice Scalia questioned the fairness of precluding a new
party from bringing a class action based on another party's
unsuccessful attempt to do so. While much of the Court's ultimate
decision will likely be based on the principles of federalism and
separation of powers, a ruling in favor of allowing the state
court to certify the class would be a big win for employee class
action suits.
Conclusion
Either way the Supreme Court decides these cases, 2011 has the
potential to be a year of great significance in defining the
future direction and shape of employment class action lawsuits.
*********
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
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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.
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