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C L A S S A C T I O N R E P O R T E R
Thursday, May 12, 2011, Vol. 13, No. 93
Headlines
ABBOTT LABORATORIES: Faces Further Class Actions Over Depakote
ADVANCED TECHNOLOGIES: FX Direct Faces Class Suit Over Trading
AFFINION GROUP: Appeals Denial of Arbitration Motion
AFFINION GROUP: Briefing in New York Suit to Conclude June 8
AFFINION GROUP: California Court Dismisses Claims Vs. Webloyalty
AFFINION GROUP: Plea to Dismiss Suit Vs. Webloyalty Still Pending
AFFINION GROUP: Plaintiff in Virginia Suit Settles Claim
ALLIANCEBERNSTEIN LP: Awaits Court Okay of Derivative Claim Deal
AMERICA SERVICE: Faces Class Action Suit Over Valitas Merger
AMERICAN SUPERCONDUCTOR: June 6 Lead Plaintiff Deadline Set
ATHENAHEALTH INC: Awaits Ruling on Plea to Dismiss "Casula" Suit
AXIS CAPITAL: Settles Class Suit Against U.S. Insurance Units
BRF-BRASIL FOODS: New York Class Suit Against Unit Still Pending
CADENCE DESIGN: $38-Mil. Securities Suit Deal Awaits Approval
CALIX INC: Continues to Defend Merger-Related Class Suits
CARTER'S INC: Plaintiffs Have Until May 16 to Amend Complaint
CHINA INTELLIGENT: May 31 Lead Plaintiff Deadline Set
CHINA SUNERGY: Court to Consider New York Suit Deal on May 12
COCA-COLA ENTERPRISES: Georgia Court to Consider Deal on June 8
COMMUNITY HEALTH: Continues to Defend Class Suit in New Mexico
COMMUNITY HEALTH: Labaton Sucharow Files Securities Class Action
CONSTELLATION ENERGY: Faces Class Action Over Exelon Merger
DENDREON CORPORATION: Consolidated Suit in Washington Dismissed
DENNY'S RESTAURANTS: Fined for Firing Temporary Foreign Worker
EBAY INC: Appeal From Class Certification Denial Still Pending
EBAY INC: Faces Class Suits Over Acquisition of GSI Commerce
EBAY INC: Unit Appeals Summary Judgment in North Carolina
EDISON MISSION: Awaits Ruling on Motion to Dismiss Pa. Class Suit
ENDO PHARMACEUTICALS: Continues to Defend Redux-Related Suits
EQUINIX INC: Has Not Yet Responded to Cement Masons' Claims
EQUINIX INC: Awaits Ruling on Motion to Dismiss IPO Suit Appeals
GREG MORTENSON: Faces Class Action Over "Three Cups of Tea" Book
HARMAN INTERNATIONAL: Awaits Ruling on Motion to Dismiss Suit
HARMAN INTERNATIONAL: Motion to Dismiss "Russell" Suit Pending
HARTFORD FINANCIAL: Still Awaits Court OK of ERISA Suit Settlement
HARTFORD FINANCIAL: Awaits OK of Bid to Dismiss Securities Suit
HORIZON LINES: Continues to Defend "Roseville" Class Suit
HORIZON LINES: Gets Preliminary OK of Puerto Rico Settlement
HORIZON LINES: Puerto Rico Plaintiffs OK Staggered Deal Payment
INVESTORS TITLE: "Price-Fixing Conspiracy" Lawsuit Remains Pending
ISRAEL: Airports Authority May Face Class Action
JIMMY CARTER: Class Action Over Palestine Book Withdrawn
KINDRED HEALTHCARE: Faces Class Suits Over RehabCare Merger
MAHINDRA SATYAM: Indian Investors May Not Get Compensation
NORFOLK SOUTHERN: Continues to Defend Consolidated Antitrust Suit
NORTHERN TRUST: Continues to Defend ERISA Class Suit in Illinois
NORTHERN TRUST: Continues to Defend Ill. Securities Class Action
RED HAT: Appeals From IPO Suit Settlement Remain Pending
REHABCARE GROUP: Defends Class Action Suits Over Kindred Merger
REPUBLIC SERVICES: Oral Argument on Appeal Set for August 2011
REPUBLIC SERVICES: Plaintiff May Seek Class Status Until Nov. 10
REYNOLDS AMERICAN: Awaits Ruling on Appeal From Suit Dismissal
REYNOLDS AMERICAN: Awaits Decision in ERISA-Violation Suit
REYNOLDS AMERICAN: Continues to Defend "Scott" Class Suit
REYNOLDS AMERICAN: Continues to Defend Engle Progeny Cases
REYNOLDS AMERICAN: Trial in Suits vs. Units Did Not Proceed
REYNOLDS AMERICAN: Unit Continues to Defend "Thompson" Suit
REYNOLDS AMERICAN: Unit Remains a Defendant in "Howard" Suit
REYNOLDS AMERICAN: Unit Remains a Defendant in "Turner" Suit
REYNOLDS AMERICAN: Units Await Ruling in "Smith" Suit
SAIA INC: Labor Laws-Violation Suit Remains Pending in California
SOLID GROUND: Sued Over Illegal "Debt Adjustment" Services
SOUTHERN STAR: Price Litigations I and II Remain Pending
STANDARD PACIFIC: 77 Join Class Suit Over "Chinese Drywall"
VALE SA: Appeals Ruling in Class Action Over Nickel Pollution
VERIZON WIRELESS: Faces Class Action in N.J. Over "Cramming"
VIM RECYCLING: 7th Cir. Revives Class Action Over Toxic Fumes
VOLCOM INC: PPR Acquisition Investigated; Class Action Likely
WADDELL & REED: Continues to Defend FLSA Violation Suit
YRC WORLDWIDE: Investor Class Action Gets Class Certification
*********
ABBOTT LABORATORIES: Faces Further Class Actions Over Depakote
--------------------------------------------------------------
The Consumer Justice Foundation, a free online resource for those
who are struggling with legal or personal injury issues in
relation to insurance companies and/or large corporations,
announced that class action lawsuits have been filed by plaintiffs
in St. Clair County, Illinois against the manufacturer of
Depakote, Abbott Laboratories. These Depakote lawsuits, which
carry the case numbers of St. Clair County Circuit Court Case No.
10-L-651 and St. Clair County Circuit Court Case No. 11-L-143,
respectively, seek damages for the classes of plaintiffs that
would be used to compensate them for medical expenses incurred and
future costs that will be incurred in caring for those who have
been harmed as a result of using Depakote.
The Depakote class action lawsuits involve claims regarding
pregnant mothers who used Depakote while pregnant. Depakote is
generally used by people in order to help them treat the symptoms
of seizure disorders that include migraine headaches, epilepsy and
the manic episodes associated with bipolar disorder.
Unfortunately, parents around the United States have claimed that
using Depakote while pregnant can lead to the possibility of
children of mothers who used this medication while pregnant being
born with severe birth defects. Examples of these alleged
Depakote birth defects have included spina bifida, neural tube
malformations, heart defects and brain defects.
The lawsuits that have been filed against Abbott Laboratories
claim that the company knew of the risks of the use of one
specific active ingredient, known as valproic acid and its
tendency to raise the risk of birth defects developing in children
of mothers who ingested this substance during the early stages of
a pregnancy.
These Depakote class action lawsuits further claim that Abbott
Laboratories misled doctors and the public in general by
downplaying these known risks, and that this downplaying of these
potential risks led to the harm suffered by the children who were
born with these birth defects. Plaintiffs in these Depakote class
action lawsuits are seeking compensation for medical expenses and
future costs of care.
Parents of children who were born with what they believe could be
Depakote-caused birth defects still have an opportunity to have
their situations carefully reviewed before deciding whether or not
to file a Depakote lawsuit as well. Those parents can have their
situations reviewed free of charge by contacting a Depakote lawyer
through the Consumer Justice Foundation.
About the Consumer Justice Foundation
The Consumer Justice Foundation is a consumer watchdog agency that
seeks to inform the American public about various defective drug
and product information, as well as to provide legal resources for
victims battling large corporations. The Consumer Justice
Foundation family of birth defects Web sites provides birth injury
information about Depakote, Dilantin, Topamax and various other
anticonvulsant and antidepressant drugs that may be linked to
birth defects when taken during pregnancy.
ADVANCED TECHNOLOGIES: FX Direct Faces Class Suit Over Trading
--------------------------------------------------------------
Advanced Technologies Group, Ltd., disclosed in its May 2, 2011,
Form 10-K filing with the U.S. Securities and Exchange Commission
for the fiscal year ended January 31, 2011, that on February 14,
2011, a civil class action was filed against FX Direct Dealer,
LLC, in the United States District Court for the Southern District
of New York. The plaintiff brought fraud, civil RICO, and certain
state and common law claims on his own behalf and on behalf of a
putative class of others similarly situated. These claims are
based on allegations of fraudulent and deceptive acts concerning
FX Direct's foreign currency trading platforms. Although the
complaint alleges that ATG, along with numerous others, is a
member of an "FX Direct Fraud Enterprise," ATG has not been named
as a defendant in this action.
In March 2002, the Company transferred its FX3000 software program
to FX Direct Dealer, LLC, a joint venture company that markets the
FX3000 software program. The Company received a 25% interest in
the joint venture in return for the transfer. On January 26,
2009, the Company entered into a purchase and sale agreement,
pursuant to which the Company agreed to sell its approximate 25%
membership interest in FX Direct to FX Direct. The Agreement
provided that it was effective as of December 31, 2008, as a
result of which the Company was not entitled to receive any
allocations of profit, loss or distributions from
FX on account of its Membership Interest after such date. On
March 17, 2009, the Company completed the Sale of the Membership
Interest to FX Direct.
AFFINION GROUP: Appeals Denial of Arbitration Motion
----------------------------------------------------
Affinion Group, Inc., is appealing the United States District
Court for the District of Connecticut's denial of its motion to
compel arbitration in a class action lawsuit, according to the
Company's April 29, 2011, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended March 31,
2011.
On June 17, 2010, a class action complaint was filed against the
Company and its subsidiary, Trilegiant Corporation, in the United
States District Court for the District of Connecticut. The
complaint asserts various causes of action on behalf of a putative
nationwide class and a California-only subclass in connection with
the sale by Trilegiant of its membership programs, including
claims under the Electronic Communications Privacy Act,
Connecticut Unfair Trade Practices Act, California Consumers
Legal Remedies Act, and California False Advertising Law. On
September 29, 2010, the Company filed a motion to compel
arbitration of all of the claims asserted in this lawsuit. On
February 24, 2011, the court denied the Company's motion. On
March 28, 2011, the Company and Trilegiant filed a notice of
appeal in the United States Court for the Second Circuit,
appealing the district court's denial of their motion to compel
arbitration.
The Company says it does not know when the appeal will be decided.
Notwithstanding the appeal, the case is currently proceeding in
the district court. There has been limited discovery and motion
practice to date.
AFFINION GROUP: Briefing in New York Suit to Conclude June 8
------------------------------------------------------------
The United States District Court for the Eastern District of New
York scheduled the briefing on Affinion Group, Inc.'s and other
defendants' motions to compel individual arbitration in a class
action lawsuit to conclude June 8, 2011, according to the
Company's April 29, 2011, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended March 31,
2011.
On November 10, 2010, a class action complaint was filed against
the Company, Trilegiant Corporation, 1-800-Flowers.com, and Chase
Bank USA, N.A. in the United States District Court for the Eastern
District of New York. The complaint asserts various causes of
action on behalf of several putative nationwide classes that
largely overlap with one another. The claims asserted are in
connection with the sale by Trilegiant of its membership programs,
including claims under the Electronic Communications Privacy Act,
Connecticut Unfair Trade Practices Act, and New York's General
Business Law.
On April 6, 2011, the Company and Trilegiant filed a motion to
compel individual (non-class) arbitration of the plaintiff's
claims. The Company's co-defendant, 1-800-Flowers.com, joined in
the motion to compel arbitration, and co-defendant Chase Bank
filed a motion to stay the case against it pending arbitration, or
alternatively to dismiss. Under the schedule set by the court,
briefing on the motions will conclude on June 8, 2011. The
Company says it does not know when the court will issue a ruling
on these motions.
AFFINION GROUP: California Court Dismisses Claims Vs. Webloyalty
----------------------------------------------------------------
The United States District Court for the Southern District of
California dismissed all claims against Affinion Group, Inc.'s
subsidiary, Webloyalty Holdings Inc., and one of Webloyalty's
clients in a class action lawsuit alleging violations of the
Electronic Fund Transfer Act and Electronic Communications Privacy
Act, according to the Company's April 29, 2011, Form 10-Q filing
with the U.S. Securities and Exchange Commission for the quarter
ended March 31, 2011.
On June 25, 2010, a class action lawsuit was filed against
Webloyalty Holdings Inc. and one of its clients in the United
States District Court for the Southern District of California
alleging, among other things, violations of the Electronic Fund
Transfer Act and Electronic Communications Privacy Act, unjust
enrichment, fraud, civil theft, negligent misrepresentation,
fraud, California Consumers Legal Remedies Act violations, false
advertising and California Consumer Business Practice violations.
This lawsuit relates to Webloyalty's alleged conduct occurring on
and after October 1, 2008. On February 17, 2011, Webloyalty filed
a motion to dismiss the amended complaint in this lawsuit. On
April 12, 2011, the Court granted Webloyalty's motion and
dismissed all claims against the defendants. The plaintiff has
thirty days in which to seek an appeal of the Court's dismissal of
this case.
AFFINION GROUP: Plea to Dismiss Suit Vs. Webloyalty Still Pending
-----------------------------------------------------------------
The United States District Court for the District of Connecticut
has not yet ruled on a motion to dismiss a class action lawsuit
filed against Affinion Group, Inc.'s subsidiary, Webloyalty
Holdings Inc., according to the Company's April 29, 2011, Form
10-Q filing with the U.S. Securities and Exchange Commission for
the quarter ended March 31, 2011.
On August 27, 2010, a class action lawsuit was filed against
Webloyalty, one of its former clients and one of the credit card
associations in the United States District Court for the District
of Connecticut alleging, among other things, violations of the
Electronic Fund Transfer Act, Electronic Communications Privacy
Act, unjust enrichment, civil theft, negligent misrepresentation,
fraud and Connecticut Unfair Trade Practices Act violations. This
lawsuit relates to Webloyalty's alleged conduct occurring on and
after October 1, 2008. On December 23, 2010, Webloyalty filed a
motion to dismiss this lawsuit. The court has not yet scheduled a
hearing or ruled on Webloyalty's motion.
AFFINION GROUP: Plaintiff in Virginia Suit Settles Claim
--------------------------------------------------------
Parties of a class action lawsuit filed against Affinion Group,
Inc.'s subsidiary, Webloyalty Holdings Inc., filed a stipulation
to dismiss the case after the plaintiff agreed to settle her case
on an individual basis for a nominal amount, according to the
Company's April 29, 2011, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended March 31,
2011.
On February 18, 2011, a class action complaint was filed against
Webloyalty Holdings Inc. and one of its clients in the District
Court for the Western District of Virginia. The complaint asserts
various causes of action on behalf of a putative nationwide class,
including unfair and deceptive acts and practices, unjust
enrichment, invasion of privacy, money had and received, larceny,
obtaining money by false pretense, trover, conversion, detinue,
trespass, fraud, misrepresentation and computer fraud and
violations under the Electronic Communications Privacy Act in
connection with the sale by Webloyalty of its membership programs.
The complaint was served on the Company on March 3, 2011.
Following the April 12, 2011, decision dismissing the
substantially similar class action lawsuit commenced in United
States District Court for the Southern District of California,
plaintiff in the Virginia class action lawsuit agreed to settle
her case on an individual basis for a nominal amount. The parties
filed a stipulation of dismissal with the court on April 21, 2011.
ALLIANCEBERNSTEIN LP: Awaits Court Okay of Derivative Claim Deal
----------------------------------------------------------------
AllianceBernstein L.P. is awaiting court approval of its
settlement of a derivative claim stemming from a consolidated
class action complaint, according to the Company's May 2, 2011,
Form 10-Q filing with the U.S. Securities and Exchange Commission
for the quarterly period ended March 31, 2011.
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, Holding and
the General Partner. 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 ("ERISA") 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 claim, which was brought by Holding unitholders
against the officers and directors of AllianceBernstein and in
which plaintiffs sought an unspecified amount of damages, has been
resolved pursuant to a stipulation of settlement with plaintiffs
and the recovery of insurance proceeds totaling $23 million from
relevant carriers. The stipulation of settlement has been
submitted to the court for preliminary approval and, if approved
by the court, will result in the settlement proceeds, after
payment of plaintiffs' legal fees, being disbursed to
AllianceBernstein.
AMERICA SERVICE: Faces Class Action Suit Over Valitas Merger
------------------------------------------------------------
America Service Group, Inc., is facing a class action lawsuit over
its proposed merger with Valitas Health Services Inc., according
to the Company's May 2, 2011, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarterly period ended
March 31, 2011.
On March 4, 2011, a purported class action lawsuit was filed on
behalf of the Company's stockholders in the Chancery Court for
Davidson County, Tennessee, docketed as Colleen Witmer,
individually and on behalf of all others similarly situated, v.
America Service Group Inc., Valitas Health Services, Inc., Whiskey
Acquisition Corp., Burton C. Einspruch, William M. Fenimore, Jr.,
John W. Gildea, Richard Hallworth, John C. McCauley, Michael W.
Taylor, and Richard D. Wright, Case No. 11-0300-IV. The lawsuit
alleges, among other things, that the Company's Board of Directors
breached fiduciary duties owed to the Company's stockholders by
failing to take steps to maximize stockholder value or to engage
in a fair sale process when approving the Merger. The complaint
also alleges that the Company, Valitas and Merger Sub aided and
abetted the members of the Board in the alleged breach of their
fiduciary duties. The complaint seeks an order enjoining or
rescinding the Merger, together with other relief.
Pursuant to the terms of the Merger Agreement, it is a condition
to the completion of the Merger that there does not exist any law
or governmental order prohibiting or making illegal the completion
of the Merger. However, the Company believes the lawsuit is
wholly without merit.
AMERICAN SUPERCONDUCTOR: June 6 Lead Plaintiff Deadline Set
-----------------------------------------------------------
The Rosen Law Firm, P.A. reminds investors of the important
June 6, 2011 lead plaintiff deadline in the securities class
action filed by the firm. If you purchased the common stock of
American Superconductor Corp. during the period from July 29,
2010, through April 5, 2011, you should contact the Rosen Law Firm
for more information about the importance of serving as lead
plaintiff. The lawsuit is seeking to recover damages for
investors from violations of federal securities laws.
To join the American Superconductor class action or to review the
Complaint, visit the Rosen Law Firm's Web site at
http://rosenlegal.comor call Timothy Brown, Esq. toll-free, at
866-767-3653; you may also e-mail him at tbrown@rosenlegal.com for
information on the class action. The case is pending in the U.S.
District Court for the District of Massachusetts.
If you wish to serve as lead plaintiff, you must move the Court no
later than June 6, 2011. A lead plaintiff is a representative
party acting on behalf of other class members in directing the
litigation. If you wish to join the litigation, or to discuss
your rights or interests regarding this class action, please
contact:
Timothy Brown, Esq.
The Rosen Law Firm, P.A.
275 Madison Avenue 34th Floor
New York, NY 10016
Telephone: (212) 686-1060
Weekends Tel: (917) 797-4425
Toll Free: 1-866-767-3653
E-mail: lrosen@rosenlegal.com
tbrown@rosenlegal.com
Web site: http://www.rosenlegal.com
The Rosen Law Firm represents investors throughout the globe,
concentrating its practice in securities class actions and
shareholder derivative litigation.
ATHENAHEALTH INC: Awaits Ruling on Plea to Dismiss "Casula" Suit
----------------------------------------------------------------
athenahealth, Inc., is awaiting a ruling on its motion to dismiss
an amended complaint in a putative shareholder class action
lawsuit filed against it and certain of its current and former
officers, according to the Company's April 29, 2011, Form 10-Q
filing with the U.S. Securities and Exchange Commission for the
quarter ended March 31, 2011.
On March 19, 2010, a putative shareholder class action complaint
was filed in the United States District Court for the District of
Massachusetts against the Company and certain of its current and
former officers entitled Casula v. athenahealth, Inc. et al, Civil
Action No. 1:10-cv-10477. On June 3, 2010, the court appointed
Waterford Township General Employees Retirement System as the lead
plaintiff. On August 2, 2010, the lead plaintiff filed an amended
complaint. The amended complaint alleges that the defendants
violated the federal securities laws by disseminating false and
misleading statements through press releases, statements by senior
management, and SEC filings. The alleged false and misleading
statements concern, among other things, the amortization period
for deferred implementation revenues. The amended complaint seeks
unspecified damages, costs, and expenses. The defendants filed a
motion to dismiss the amended complaint on October 1, 2010, and a
reply brief in further support of the motion to dismiss the
amended complaint on December 30, 2010.
The Company believes that it has meritorious defenses to the
amended complaint and will contest the claims vigorously.
AXIS CAPITAL: Settles Class Suit Against U.S. Insurance Units
-------------------------------------------------------------
Axis Capital Holdings Limited reached an agreement in principle
with plaintiffs of a putative class action lawsuit filed against
its U.S. insurance subsidiaries to settle all claims and causes of
action in this matter for an immaterial amount, according to the
Company's April 29, 2011, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended March 31,
2011.
In 2005, a putative class action lawsuit was filed against the
Company's U.S. insurance subsidiaries. In re Insurance Brokerage
Antitrust Litigation was filed on August 15, 2005, in the United
States District Court for the District of New Jersey and includes
as defendants numerous insurance brokers and insurance companies.
The lawsuit alleges antitrust and Racketeer Influenced and Corrupt
Organizations Act violations in connection with the payment of
contingent commissions and manipulation of insurance bids and
seeks damages in an unspecified amount. On October 3, 2006, the
District Court granted, in part, motions to dismiss filed by the
defendants, and ordered plaintiffs to file supplemental pleadings
setting forth sufficient facts to allege their antitrust and RICO
claims. After plaintiffs filed their supplemental pleadings,
defendants renewed their motions to dismiss. On April 15, 2007,
the District Court dismissed without prejudice plaintiffs'
complaint, as amended, and granted plaintiffs thirty (30) days to
file another amended complaint and/or revised RICO Statement and
Statements of Particularity. In May 2007, plaintiffs filed (i) a
Second Consolidated Amended Commercial Class Action complaint,
(ii) a Revised Particularized Statement Describing the Horizontal
Conspiracies Alleged in the Second Consolidated Amended Commercial
Class Action Complaint, and (iii) a Third Amended Commercial
Insurance Plaintiffs' RICO Case Statement Pursuant to Local Rule
16.1(B)(4). On June 21, 2007, the defendants filed renewed
motions to dismiss. On September 28, 2007, the District Court
dismissed with prejudice plaintiffs' antitrust and RICO claims and
declined to exercise supplemental jurisdiction over plaintiffs'
remaining state law claims.
On October 10, 2007, plaintiffs filed a notice of appeal of all
adverse orders and decisions to the United States Court of Appeals
for the Third Circuit, and a hearing was held in April 2009. On
August 16, 2010, the Third Circuit Court of Appeals affirmed the
District Court's dismissal of the antitrust and RICO claims
arising from the contingent commission arrangements and remanded
the case to the District Court with respect to the manipulation of
insurance bids allegations.
The Company continued to believe that the lawsuit was completely
without merit and on that basis vigorously defended the filed
action. However, for the sole purpose of avoiding additional
litigation costs, the Company reached an agreement in principle
with plaintiffs during the first quarter of 2011 to settle all
claims and causes of action in this matter for an immaterial
amount. The settlement is contingent upon the negotiation,
agreement and execution of a definitive settlement agreement and
District Court approval of the final terms and conditions of the
settlement.
BRF-BRASIL FOODS: New York Class Suit Against Unit Still Pending
----------------------------------------------------------------
The consolidated class action lawsuit against BRF-Brasil Foods
S.A.'s subsidiary, Sadia S.A., remains pending in New York,
according to the Company's April 29, 2011, Form 20-F filing with
the U.S. Securities and Exchange Commission for the year ended
December 31, 2010.
The subsidiary Sadia S.A. and some of its current and former
executives were named as defendant in five class actions suits
arising from investors of American Depositary Receipts issued by
Sadia and acquired between April 30, 2008 and September 26, 2008
(Class Period). These claims were filed in the Southern District
of New York federal court in the United States of America, seeking
remediation in accordance with U.S. Securities Exchange Act of
1934 arising from losses on foreign exchange derivative contracts.
By order of the U.S. court, the five class actions suits were
consolidated into a single case (class action) on behalf of the
Sadia's investors group.
Considering the current stage of the action, the Company says it
is not possible to determine the probability of loss and the
related amount and, therefore, no provision was recorded. The
Company's management has not disclosed additional information
related to this suit because doing so would impair its defense in
the court.
CADENCE DESIGN: $38-Mil. Securities Suit Deal Awaits Approval
-------------------------------------------------------------
During fiscal 2008, three complaints were filed in the United
States District Court for the Northern District of California, or
District Court, all alleging violations of Sections 10(b) and
20(a) of the Exchange Act, and Rule 10b-5 promulgated thereunder,
on behalf of a purported class of purchasers of Cadence Design
Systems, Inc.'s common stock. The first such complaint was filed
on October 29, 2008, captioned Hu v. Cadence Design Systems, Inc.,
Michael J. Fister, William Porter and Kevin S. Palatnik; the
second such complaint was filed on November 4, 2008, captioned
Vyas v. Cadence Design Systems, Inc., Michael J. Fister and Kevin
S. Palatnik; and the third such complaint was filed on November
21, 2008, captioned Collins v. Cadence Design Systems, Inc.,
Michael J. Fister, John B. Shoven, Kevin S. Palatnik and William
Porter. On March 4, 2009, the District Court entered an order
consolidating these three complaints and captioning the
consolidated case "In re Cadence Design Systems, Inc. Securities
Litigation." The District Court also named a lead plaintiff and
lead counsel for the consolidated litigation. The lead plaintiff
filed its consolidated amended complaint on April 24, 2009, naming
Cadence, Michael J. Fister, Kevin S. Palatnik, William Porter and
Kevin Bushby as defendants, and alleging violations of Sections
10(b) and 20(a) of the Exchange Act, and Rule 10b-5 promulgated
thereunder, on behalf of a purported class of purchasers of
Cadence's common stock who traded Cadence's common stock between
April 23, 2008, and December 10, 2008, or the Alleged Class
Period. The amended complaint alleged that Cadence and the
individual defendants made statements during the Alleged Class
Period regarding Cadence's financial results that were false and
misleading because Cadence had recognized revenue that should have
been recognized in subsequent periods. The amended complaint
requested certification of the action as a class action,
unspecified damages, interest and costs, and unspecified equitable
relief. On June 8, 2009, Cadence and the other defendants filed a
motion to dismiss the amended complaint. On September 11, 2009,
the District Court held that the plaintiffs had failed to allege a
valid claim under the relevant legal standards and granted the
defendants' motion to dismiss the amended complaint. The District
Court gave the plaintiffs leave to file another amended complaint,
and the plaintiffs did so on October 13, 2009. The amended
complaint filed on October 13, 2009, names the same defendants,
asserts the same causes of action, and seeks the same relief as
the earlier amended complaint. Cadence moved to dismiss the
October 13, 2009, amended complaint. The District Court denied
the motion to dismiss on March 2, 2010. On July 7, 2010, the
parties agreed, and the District Court ordered, that the
litigation be stayed in order to facilitate mediation. On
February 11, 2011, the parties to the litigation agreed to settle
the litigation for consideration of $38.0 million, of which
approximately $22.2 million will be paid by Cadence's insurers,
with the balance to be paid by Cadence. Cadence agreed to this
settlement without admitting any wrongdoing on the part of the
company or any of its current or former directors or executive
officers, and the settlement is subject to completion of final
settlement documentation by the parties and approval by the
District Court.
No further updates were provided in the Company's April 29, 2011,
Form 10-Q filing with the U.S. Securities and Exchange Commission
for the quarter ended April 2, 2011.
CALIX INC: Continues to Defend Merger-Related Class Suits
---------------------------------------------------------
Calix, Inc., continues to defend itself from class action lawsuits
filed against it in connection with its merger with Occam Networks
Inc., according to the Company's April 29, 2011, Form 10-Q filing
with the U.S. Securities and Exchange Commission for the quarter
ended March 26, 2011.
On September 16, 2010, the Company, Occam Networks Inc., Ocean Sub
I, Inc., a Delaware corporation and a direct, former wholly-owned
subsidiary of Calix, and Ocean Sub II, LLC, a Delaware limited
liability company and a direct, wholly-owned subsidiary of Calix,
entered into an Agreement and Plan of Merger and Reorganization.
In response to the announcement of the Merger Agreement, on
September 17, 2010, September 20, 2010 and September 21, 2010,
three purported class action complaints were filed by three
purported stockholders of Occam in the California Superior Court
for Santa Barbara County: Kardosh v. Occam Networks, Inc., et al.
(Case No. 1371748), or the Kardosh complaint; Kennedy v. Occam
Networks, Inc., et al. (Case No. 1371762), or the Kennedy
complaint; and Moghaddam v. Occam Networks, Inc., et al. (Case No.
1371802), or the Moghaddam complaint, respectively. The Kardosh,
Kennedy and Moghaddam complaints, which are referred to
collectively as the California class action complaints, are
substantially similar. Each of the California class action
complaints names Occam, the pre-acquisition members of the Occam
board of directors and the Company as defendants. The Kennedy
complaint also names each of Ocean Sub I and Ocean Sub II, as
defendants.
The California class action complaints generally allege that the
former members of the Occam board breached their fiduciary duties
in connection with the acquisition of Occam by the Company, by,
among other things, engaging in an allegedly unfair process and
agreeing to an allegedly unfair price for the proposed merger
transaction. The California class action complaints further
allege that Occam and the other entity defendants aided and
abetted the alleged breaches of fiduciary duty. The plaintiffs in
the California class action complaints seek injunctive relief
rescinding the merger transaction and awarding damages in an
unspecified amount, as well as plaintiffs' costs, attorney's fees,
and other relief. On November 2, 2010, the three California class
action complaints were consolidated into a single action, with the
Kardosh action becoming the lead action, and on November 19, 2010,
the California Superior Court issued an order staying the
California class actions in favor of a substantively identical
stockholder class action pending in the Delaware Court of
Chancery. The California class actions remain stayed under that
order.
On October 6, 2010, a purported class action complaint was filed
by purported stockholders of Occam in the Delaware Court of
Chancery: Steinhardt v. Howard-Anderson, et al. (Case No. 5878-
VCL). On November 24, 2010, these purported stockholders filed an
amended complaint, or the amended Steinhardt complaint. The
amended Steinhardt complaint names Occam and the former members of
the Occam board of directors as defendants. The amended
Steinhardt complaint does not name Calix as a defendant.
Like the California class action complaints, the amended
Steinhardt complaint generally alleges that the former members of
the Occam board breached their fiduciary duties in connection with
the acquisition of Occam by the company, by, among other things,
engaging in an allegedly unfair process and agreeing to an
allegedly unfair price for the merger transaction. The amended
Steinhardt complaint also alleges that Occam and the former
members of the Occam board breached their fiduciary duties by
failing to disclose certain allegedly material facts about the
merger transaction in the preliminary proxy statement and
prospectus included in the Registration Statement on Form S-4 that
the Company filed with the SEC on November 2, 2010. The amended
Steinhardt complaint sought injunctive relief rescinding the
merger transaction, and an award of damages in an unspecified
amount, as well as plaintiffs' costs, attorney's fees, and other
relief.
On November 12, 2010, a complaint was filed by two purported
stockholders of Occam in the U.S. District Court for the Central
District of California: Kennedy and Moghaddam v. Occam Networks,
Inc., et al. (Case No. CV10-8665), or the Federal complaint. The
Federal complaint named Occam, the former members of the Occam
board of directors, Calix, Ocean Sub I, and Ocean Sub II as
defendants. The Federal complaint generally alleged that the
defendants violated sections 14(a) and 20(a) of the Securities
Exchange Act of 1934 in connection with the acquisition of Occam
by the Company, by, among other things, making material
misstatements and omissions about the merger transaction in the
preliminary proxy statement and prospectus included in the
Registration Statement on Form S-4 that the Company filed with the
SEC on November 2, 2010, and/or aiding and abetting the issuance
of the allegedly misleading registration statement. The
plaintiffs in the Federal complaint sought injunctive relief
enjoining the merger transaction, as well as plaintiffs' costs,
attorney's fees, and other relief. On March 9, 2011, the
plaintiffs voluntarily dismissed the Federal complaint without
prejudice.
On January 24, 2011, the Delaware Court of Chancery held a hearing
on the motion by the plaintiffs to preliminarily enjoin the
stockholder vote to adopt the Merger Agreement. Following the
hearing, the Court of Chancery enjoined the stockholder vote until
at least 10 calendar days after Occam filed certain supplemental
disclosures to the definitive proxy statement on Schedule 14A that
Occam filed with the SEC on December 15, 2010. Such supplemental
disclosures were filed by Occam with the SEC on February 7, 2011.
The Court of Chancery subsequently shortened the term of the
injunction and, upon expiration of the abbreviated injunction
period, the stockholders of Occam adopted the Merger Agreement,
and the merger transaction was completed, on February 22, 2011.
The Delaware plaintiffs continue to seek an award of damages in an
unspecified amount.
The Company believes that the allegations in the California
actions and the Delaware action relating to the amended Steinhardt
complaint are without merit and intends to continue to vigorously
contest the actions. However, there can be no assurance that the
Company will be successful in defending these ongoing actions. In
addition, the Company has obligations, under certain
circumstances, to hold harmless and indemnify each of the
defendant former Occam directors against judgments, fines,
settlements and expenses related to claims against such directors
and otherwise to the fullest extent permitted under Delaware law
and Occam's bylaws and certificate of incorporation. Such
obligations may apply to these lawsuits.
CARTER'S INC: Plaintiffs Have Until May 16 to Amend Complaint
-------------------------------------------------------------
Plaintiffs in a consolidated class action lawsuit against
Carter's, Inc. have until May 16, 2011, to file an amended
complaint, according to the Company's April 29, 2011, Form 10-Q
filing with the U.S. Securities and Exchange Commission for the
quarter ended April 2, 2011.
A shareholder class action lawsuit was filed on September 19,
2008, in the United States District Court for the Northern
District of Georgia entitled Plymouth County Retirement System v.
Carter's, Inc., No. 1:08-CV-02940-JOF. The Amended Complaint
filed on May 12, 2009 in the Plymouth Action asserted claims under
Sections 10(b), 20(a), and 20A of the 1934 Securities Exchange
Act, and alleged that between February 1, 2006 and July 24, 2007,
the Company and certain current and former executives made
material misrepresentations to investors regarding the successful
integration of OshKosh into the Company's business, and that the
share price of the Company's stock later fell when the market
learned that the integration had not been as successful as
represented. Defendants in the Plymouth Action filed a motion to
dismiss the Amended Complaint for failure to state a claim under
the federal securities laws on July 17, 2009, and briefing of that
motion was complete on October 22, 2009.
A separate shareholder class action lawsuit was filed on
November 17, 2009, in the United States District Court for the
Northern District of Georgia entitled Mylroie v. Carter's, Inc.,
No. 1:09-CV-3196-JOF. The initial Complaint in the Mylroie Action
asserted claims under Sections 10(b) and 20(a) of the 1934
Securities Exchange Act, and alleged that between April 27, 2004
and November 10, 2009, the Company and certain current and former
executives made material misstatements to investors regarding the
Company's accounting for discounts offered to some wholesale
customers.
The Court consolidated the Plymouth Action and the Mylroie Action
on November 24, 2009. On March 15, 2010, the plaintiffs in the
Consolidated Action filed their amended and consolidated
complaint. The Company filed a motion to dismiss on April 30,
2010, and briefing of the motion was complete on July 23, 2010.
On March 16, 2011, the United States District Court for the
Northern District of Georgia granted without prejudice the
Company's motion to dismiss all of the claims in the amended and
consolidated complaint in the Consolidated Action for failure to
state a claim under the federal securities laws. The Court set a
deadline of May 16, 2011, for the plaintiffs to file any amended
complaint.
The Company says it intends to vigorously defend against any claim
or claims the plaintiffs assert in any amended complaint filed in
the Consolidated Action.
CHINA INTELLIGENT: May 31 Lead Plaintiff Deadline Set
-----------------------------------------------------
The Rosen Law Firm, P.A. reminds investors of the important
May 31, 2011 lead plaintiff deadline in the securities class
action filed by the firm. If you purchased the securities of
China Intelligent Lighting and Electronics, Inc. during the period
from June 18, 2010 through March 29, 2011, you should contact the
Rosen Law Firm for more information about the importance of
serving as lead plaintiff. The lawsuit is seeking to recover
damages for investors from violations of federal securities laws.
To join the China Intelligent class action or to review the
Complaint, visit the firm's website at http://rosenlegal.comor
call Laurence Rosen, Esq., or Phillip Kim, Esq., toll-free, at
866-767-3653; you may also email lrosen@rosenlegal.com or
pkim@rosenlegal.com for information on the class action. The
Rosen Law Firm filed the first class action and it is pending in
the U.S. District Court for the Central District of California.
No class has yet been certified in the above action. Until a
class is certified, you are not represented by counsel unless you
retain one. You may choose to do nothing at this point and remain
an absent class member.
If you wish to serve as lead plaintiff, you must move the Court no
later than May 31, 2011. A lead plaintiff is a representative
party acting on behalf of other class members in directing the
litigation. If you wish to join the litigation, or to discuss
your rights or interests regarding this class action, please
contact:
Laurence Rosen, Esq.
Phillip Kim, Esq.
THE ROSEN LAW FIRM P.A.
275 Madison Avenue, 34th Floor
New York, NY 10016
Telephone: (212) 686-1060
Weekends Tel: (917) 797-4425
Toll Free: 1-866-767-3653
E-mail: lrosen@rosenlegal.com
pkim@rosenlegal.com
Web site: www.rosenlegal.com
The Rosen Law Firm represents investors throughout the globe,
concentrating its practice in securities class actions and
shareholder derivative litigation.
CHINA SUNERGY: Court to Consider New York Suit Deal on May 12
-------------------------------------------------------------
The United States District Court for the Southern District of New
York will convene a hearing on May 12, 2011, to consider final
approval of China Sunergy Co., Ltd.'s agreement to settle the
consolidated class action lawsuit against it, according to the
Company's April 29, 2011, Form 20-F filing with the U.S.
Securities and Exchange Commission for the year ended December 31,
2010.
The Company is a named defendant in three purported class actions
currently pending in the United States District Court for the
Southern District of New York -- Brown v. China Sunergy Co., Ltd.
et al., Case No. 07-CV-07895 (DAB), Sheshtawy v. China Sunergy
Co., Ltd. et al., Case No. 07-CV-08656 (DAB), and Giombetti v.
China Sunergy Co., Ltd. et al., Case No. 07-CV-09689 (DAB). On
September 29, 2008, the District Court appointed a lead plaintiff
and consolidated the three cases. The lead plaintiff filed a
consolidated amended complaint on December 8, 2008.
The consolidated amended complaint purports to state class action
claims against the Company in connection with its initial public
offering and seeks unspecified damages. Specifically, the lead
plaintiff alleges that the Company made false and misleading
statements in its initial public offering registration statement
and prospectus regarding, among other things, the procurement of
polysilicon.
Several of the Company's directors and officers, along with the
investment banks that underwrote the Company's initial public
offering, are also named defendants in the cases. On January 26,
2009, the defendants filed a motion to dismiss the consolidated
amended complaint. Briefing on the motion was completed on May 1,
2009. Defendants' motion remained outstanding when, on July 14,
2009, the parties reached an agreement in principle to settle the
dispute in its entirety with an amount of $1.1 million. The
parties are currently awaiting the hearing for final approval of
the settlement, set by the Court for May 12, 2011.
COCA-COLA ENTERPRISES: Georgia Court to Consider Deal on June 8
---------------------------------------------------------------
The Superior Court of Georgia will hold a hearing on June 8, 2011,
to consider final approval of Coca-Cola Enterprises Inc.'s
settlement of a consolidated class action lawsuit challenging its
merger with The Coca-Cola Company, according to the Company's
April 29, 2011, Form 10-Q filing with the U.S. Securities and
Exchange Commission for the quarter ended April 1, 2011.
On October 2, 2010, The Coca-Cola Company (TCCC) acquired Coca-
Cola Enterprises Inc. (Legacy CCE) through a merger of a newly
created TCCC subsidiary with and into Legacy CCE, with Legacy CCE
continuing as the surviving corporation and a wholly owned
subsidiary of TCCC.
In connection with the Merger with The Coca-Cola Company, three
putative class action lawsuits were filed in the Superior Court of
Fulton County, Georgia, and five putative class action lawsuits
were filed in Delaware Chancery Court. The lawsuits are similar
and assert claims on behalf of Legacy CCE's shareowners for
various breaches of fiduciary duty in connection with the Merger.
The lawsuits name Legacy CCE, the Legacy CCE Board of Directors,
and TCCC as defendants; the Company assumed these lawsuits upon
consummation of the Merger. Plaintiffs in each case sought to
enjoin the transaction, to declare the deal void and rescind the
transaction, to require disgorgement of all profits the defendants
receive from the transaction, and to recover damages, attorneys'
fees, and litigation expenses. The Georgia cases were
consolidated by orders entered March 25, 2010, and April 9, 2010,
and the Delaware cases were consolidated on March 16, 2010.
On September 3, 2010, the parties to the consolidated Georgia
action executed a Memorandum of Understanding containing the terms
for the parties' agreement in principle to resolve the Delaware
and Georgia actions. The MOU called for certain amendments to the
transaction agreements as well as certain revisions to the
disclosures relating to the transaction. The MOU also
contemplates that plaintiffs will seek an award of attorneys' fees
in an amount not to exceed $7.5 million. Pursuant to the Merger
Agreement, the liability for these attorney fees would be shared
equally between the Company and TCCC. In accordance with the MOU,
the parties requested approval of the settlement from the Georgia
court. On March 9, 2011, the Georgia court granted preliminary
approval of the settlement and class certification and ordered
that notice of the settlement be given to the Company's
shareowners. The Georgia court will hold a final settlement
approval hearing on June 8, 2011. If the Georgia court approves
the settlement, then the litigation in both Georgia and Delaware
will be dismissed.
COMMUNITY HEALTH: Continues to Defend Class Suit in New Mexico
--------------------------------------------------------------
Community Health Systems, Inc., is awaiting a court's
determination on the sufficiency of the methodology used to
determine class damages in the putative class action alleging
breach of contract, according to the Company's April 29, 2011,
Form 10-Q filing with the U.S. Securities and Exchange Commission
for the quarter ended March 31, 2011.
On April 19, 2009, the Company was served in Roswell, New Mexico,
with an answer and counterclaim in the case of Roswell Hospital
Corporation d/b/a Eastern New Mexico Medical Center vs. Patrick
Sisneros and Tammie McClain (sued as Jane Doe Sisneros). The case
was originally filed as a collection matter. The counterclaim was
filed as a putative class action and alleged theories of breach of
contract, unjust enrichment, misrepresentation, prima facie tort,
Fair Trade Practices Act and violation of the New Mexico RICO
statute. On May 7, 2009, the hospital filed a notice of removal
to federal court. On July 27, 2009, the case was remanded to
state court for lack of a federal question. A motion to dismiss
and a motion to dismiss misjoined counterclaim plaintiffs were
filed on October 20, 2009. These motions were denied. Extensive
discovery has been conducted. A motion for class certification
for all uninsured patients was heard on March 3 through March 5,
2010 and on April 13, 2010, the state district court judge
certified the case as a class action. Discovery is ongoing.
A hearing was conducted on March 1, 2011, to assess the
sufficiency of the methodology used to determine class damages and
the court has the matter under advisement. The Company says it is
vigorously defending this action.
COMMUNITY HEALTH: Labaton Sucharow Files Securities Class Action
----------------------------------------------------------------
Labaton Sucharow LLP filed a class action lawsuit on May 9, 2011,
in the U.S. District Court for the Middle District of Tennessee.
The lawsuit was filed on behalf of purchasers of Community Health
Systems, Inc., securities between July 27, 2006, and April 8,
2011, inclusive.
The action charges CHS and certain of its officers and directors
with violations of Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The
Complaint alleges that, throughout the Class Period, the Company's
financial results were artificially inflated by virtue of the fact
that CHS was systematically overcharging Medicare, one of its
principal sources of revenue.
If you are a member of this class you can view a copy of the
complaint and join this class action online at
http://www.labaton.com/en/cases/Newly-Filed-Cases.cfm
If you purchased CHS securities during the Class Period, you may
move to serve as Lead Plaintiff. Lead Plaintiff motion papers
must be filed with the U.S. District Court for the Middle District
of Tennessee no later than July 8, 2011. A lead plaintiff is a
court-appointed representative for absent Class members. You do
not need to seek appointment as lead plaintiff to share in any
Class recovery in this action. If you are a Class member and
there is a recovery for the Class, you can share in that recovery
as an absent Class member. You may retain counsel of your choice
to represent you in this action.
If you would like to consider serving as lead plaintiff or have
any questions about the lawsuit, you may contact:
Rachel A. Avan, Esq.
LABATON SUCHAROW LLP
Telephone: (888) 753-2796
(212) 907-0709
E-mail: ravan@labaton.com
Labaton Sucharow LLP -- http://www.labaton.com-- represents
institutional investors in class action and complex securities
litigation, as well as consumers and businesses in class actions
seeking to recover damages for anticompetitive practices. The law
firm has offices in New York, New York and Wilmington, Delaware.
CONSTELLATION ENERGY: Faces Class Action Over Exelon Merger
-----------------------------------------------------------
Hanah Cho, writing for The Baltimore Sun, reports that
Constellation Energy Group shareholders have filed six lawsuits in
Baltimore City Circuit Court since the power company announced in
late April that it had agreed to sell itself to Chicago-based
Exelon Corp. for $7.9 billion in an all-stock deal.
In a filing on May 9 with the Securities and Exchange Commission,
Constellation said the class-action lawsuits allege the company's
directors breached their fiduciary duties because the deal does
not maximize shareholder value.
Within a day of the deal's announcement, law firms were seeking
plaintiffs in filing class-action lawsuits challenging the
proposed union, which would create the largest U.S. competitive
energy provider and one of the largest utility systems in the
country.
Constellation's regulated utility is Baltimore Gas & Electric,
while Exelon has two regulated utilities, one in Chicago and
another in Philadelphia.
Constellation said in the filing that it was unable to offer an
estimate of possible losses related to the proceedings or to
determine the ultimate outcome of the lawsuits.
DENDREON CORPORATION: Consolidated Suit in Washington Dismissed
---------------------------------------------------------------
Dendreon Corporation obtained the dismissal of a consolidated
securities class action lawsuit following court approval of its
settlement, according to the Company's May 2, 2011, Form 10-Q
filing with the U.S. Securities and Exchange Commission for the
quarterly period ended March 31, 2011.
On October 4, 2007, the United States District Court for the
Western District of Washington consolidated four proposed
securities class actions under the caption McGuire v. Dendreon
Corporation, et al., Case No. C07-800-MJP, and designated a lead
plaintiff. This action was purportedly brought on behalf of a
class of persons and entities who purchased Dendreon common stock
between March 1, 2007, and May 8, 2007, inclusive. Lead plaintiff
filed an amended complaint on June 2, 2008, a second amended
complaint on January 5, 2009, and a third amended complaint on
June 8, 2009. The third amended complaint named Dendreon, Chief
Executive Officer Mitchell Gold, and Senior Vice President and
Chief Scientific Officer David Urdal as defendants, and alleged
that defendants made false or misleading statements. It also
included a claim for insider trading against Dr. Gold.
On September 16, 2010, the parties agreed to settle McGuire v.
Dendreon for a payment of $16.5 million to the class, with no
admission of wrongdoing on the part of defendants. A ruling on
defendants' motion for partial summary judgment was pending at the
time the parties notified the Court that they had arrived at a
settlement. On October 25, 2010, lead plaintiff filed a motion
for preliminary approval of the settlement, and a settlement
hearing was held on December 17, 2010. On December 20, 2010, the
Court filed orders granting lead plaintiff's motions for approval
of the settlement and for approval of attorneys' fees and
expenses. On February 17, 2011, the Court entered final judgment
and dismissed the class action with prejudice.
On January 7, 2011, a complaint was filed in the United States
District Court for the Western District of Washington by a party
that had opted out of the settlement made on behalf of the class
in McGuire v. Dendreon. The complaint is captioned ORG Lluch
Salvado, S.A. v. Dendreon Corporation, et al., and names the
Company, Dr. Urdal, and Dr. Gold as defendants. Plaintiff is a
Spanish company that purportedly purchased shares of Dendreon
common stock between March 29, 2007, and May 8, 2007. The
complaint makes similar factual and legal contentions as the third
amended complaint in McGuire v. Dendreon. Defendants have not yet
answered this complaint and no briefing schedule has been set.
DENNY'S RESTAURANTS: Fined for Firing Temporary Foreign Worker
--------------------------------------------------------------
QMI Agency reports that Denny's Restaurants has been fined for
firing a temporary foreign worker who was part of a C$10-million
class action lawsuit against the chain.
The employee, Alfredo Sales, complained about how the Company
treatment him to B.C.'s Employment Standards Branch, and was fired
a few days later.
Denny's has been ordered to pay an undisclosed financial penalty
and damages.
A C$10-million class action lawsuit was filed against Denny's
Restaurants in January 2011, on behalf of approximately 50 foreign
workers, alleging that their employment contracts have been
violated, including the failure to pay airfare and overtime, as
well as the payment of recruitment fees.
Most of the workers are cooks and servers, lawyers Fiorillo Glavin
Gordon said in a statement dated May 6.
Mr. Sales came from the Philippines under the temporary foreign
worker program to work for Denny's Restaurants in Vancouver.
He asked for overtime pay, plus reimbursement for $6,000, which he
had to pay to an employment agency to get the job. He also asked
for return airfare home.
When the company didn't pay him, Mr. Sales filed a complaint on
Aug. 3. On Aug. 9, he was called into a meeting with Deborah
Gagnon, Denny's vice president, and fired, the lawyers said.
Denny's claimed the termination was due to performance issues.
But the B.C. director of employment standards found the decision
to fire Mr. Sales was motivated, at least in part, by the fact he
had been in contact with authorities and said he may want to
pursue a complaint.
"He had a contract which clearly provided that Denny's was
required to pay his airfare both from and to the Philippines.
When he complained that they were not providing that, as well as
paying for overtime and raising the issue of agency fees to get
the job at Denny's, he was terminated," lawyer Charles Gordon,
Esq., at Fiorillo Glavin Gordon said.
Mr. Sales has been forced to return to the Philippines, as his
work visa required that he continue working for Denny's in order
to remain in Canada.
"This further illustrates the vulnerability of workers under the
temporary foreign worker program," said Mr. Gordon.
Denny's did not immediately respond to requests for comment.
EBAY INC: Appeal From Class Certification Denial Still Pending
--------------------------------------------------------------
Plaintiffs' appeal from a court order granting eBay Inc.'s motion
for summary judgment and denying plaintiffs' motion for class
certification as moot remains pending in the Ninth Circuit Court
of Appeals, according to the Company's April 29, 2011, Form 10-Q
filing with the U.S. Securities and Exchange Commission for the
quarter ended March 31, 2011.
In March 2007, a plaintiff filed a purported antitrust class
action lawsuit against eBay in the Western District of Texas
alleging that eBay and its wholly owned subsidiary PayPal
"monopolized" markets through various anticompetitive acts and
tying arrangements. The plaintiff alleged claims under Sections 1
and 2 of the Sherman Act, as well as related state law claims. In
April 2007, the plaintiff re-filed the complaint in the U.S.
District Court for the Northern District of California (No. 07-CV-
01882-RS), and dismissed the Texas action. The complaint seeks
treble damages and an injunction. In 2007, the case was
consolidated with other similar lawsuits (No. 07-CV-01882JF). In
June 2007, the Company filed a motion to dismiss the complaint.
In March 2008, the court granted the motion to dismiss the tying
claims with leave to amend and denied the motion with respect to
the monopolization claims. Plaintiffs subsequently decided not to
refile the tying claims. The plaintiffs' motion on class
certification and the Company's motion for summary judgment were
heard by the court in December 2009.
In March 2010, the District Court granted the Company's motion for
summary judgment, denied plaintiffs' motion for class
certification as moot, and entered judgment in the Company's
favor. Plaintiffs have appealed the District Court's decision,
the matter is fully briefed and oral argument was presented in
April 2011 before the Ninth Circuit Court of Appeals. The Company
says it intends to continue to vigorously oppose plaintiffs'
appeal.
EBAY INC: Faces Class Suits Over Acquisition of GSI Commerce
------------------------------------------------------------
eBay Inc. is facing several putative stockholder class action
complaints challenging its agreement to acquire GSI Commerce,
Inc., according to the Company's April 29, 2011, Form 10-Q filing
with the U.S. Securities and Exchange Commission for the quarter
ended March 31, 2011.
On March 28, 2011, the Company announced that it signed an
agreement to acquire GSI Commerce, Inc., which provides ecommerce
and interactive marketing services. The Company also announced
that as part of the transaction, it would divest 100% of GSI's
licensed sports merchandise business and 70% of GSI's Rue La La
and ShopRunner businesses.
If the acquisition of GSI is completed, the Company will be
subject to additional risks specific to GSI's business, in
addition to the general risks related to acquisitions.
Since the announcement of the proposed merger, five putative
stockholder class action complaints challenging the transaction
(one of which also purports to be brought derivatively on behalf
of GSI) have been filed in the Court of Chancery of the State of
Delaware against various combinations of, among others, GSI, the
members of GSI's Board of Directors, certain of GSI's non-director
officers, eBay and NRG Commerce LLC, an entity wholly-owned by Mr.
Michael G. Rubin, the Chairman, President and Chief Executive
Officer of GSI. The complaints generally allege, among other
things, that the members of GSI's Board of Directors breached
their fiduciary duties owed to GSI's stockholders by entering into
the merger agreement, approving the proposed merger, and failing
to take steps to maximize value for GSI's public stockholders;
that Mr. Rubin breached his fiduciary duties owed to GSI's public
stockholders by engaging in a transaction pursuant to which eBay
agreed to sell all or a portion of certain subsidiaries of GSI to
NRG after the completion of the merger; and that various
combinations of parties, including eBay, NRG, and GSI, aided and
abetted such breaches of fiduciary duties. In addition, the
complaints allege that the transaction improperly favors eBay and
Mr. Rubin; unjustly enriches certain of the defendants; and that
certain provisions of the merger agreement unduly restrict GSI's
ability to negotiate with other potential bidders. As noted, the
plaintiff in one of these actions also purports to bring
derivative claims on behalf of GSI, alleging that the individual
members of GSI's Board of Directors and certain of its non-
director officers are wasting corporate assets, unjustly enriching
themselves, and breaching their fiduciary duties, and that eBay
and one of its subsidiaries are aiding and abetting such breaches
of fiduciary duties. The complaints generally seek, among other
things, declaratory and injunctive relief concerning the alleged
fiduciary breaches, injunctive relief prohibiting the defendants
from consummating the proposed merger, and other forms of
equitable relief.
On April 20, 2011 and April 21, 2011, plaintiffs in two of the
actions filed amended complaints which added breach of fiduciary
duty claims against the GSI Board of Directors for allegedly
inadequate and/or misleading disclosure in GSI's preliminary proxy
statement. The amended complaints also added as defendants
certain additional GSI officers. From April 5, 2011 through
April 21, 2011, plaintiffs in four of the actions filed motions
for expedited treatment of the litigation in anticipation of a
motion for preliminary injunction, and plaintiffs in three of the
actions have filed competing motions to consolidate the actions
and for appointment as lead plaintiff in the consolidated matter.
Those motions are currently pending before the Court of Chancery.
On April 21, 2011, a purported GSI stockholder filed a putative
class action challenging the transaction in the Court of Common
Pleas of Montgomery County, Pennsylvania against, among others,
GSI, the members of GSI's Board of Directors, certain of GSI's
non-director officers, eBay and NRG. The complaint asserts claims
for breach of fiduciary duties against GSI's Board of Directors
and Mr. Rubin and for aiding and abetting such breaches of
fiduciary duty against eBay, GSI and NRG. The allegations in the
Pennsylvania complaint mirror those in the complaints filed in the
Delaware actions.
The Company believes the claims asserted in these suits are
without merit and intends to defend against them vigorously.
EBAY INC: Unit Appeals Summary Judgment in North Carolina
---------------------------------------------------------
eBay Inc.'s subsidiary, StubHub, has appealed a trial court's
order granting plaintiffs' motion for summary judgment in a
purported class action lawsuit in North Carolina Superior Court,
according to the Company's April 29, 2011, Form 10-Q filing with
the U.S. Securities and Exchange Commission for the quarter ended
March 31, 2011.
In October 2007, two plaintiffs filed a purported class action
lawsuit in North Carolina Superior Court alleging that StubHub
sold (and facilitated and participated in the sale) of concert
tickets to plaintiffs with the knowledge that the tickets were
resold in violation of North Carolina's maximum ticket resale
price law (which has been subsequently amended). In February
2011, the trial court granted plaintiffs' motion for summary
judgment, concluding that immunity under the Communications
Decency Act did not apply. The trial court further held that
StubHub violated the North Carolina unfair and deceptive trade
practices statute as it pertains to the two named plaintiffs, and
certified its decision for immediate appeal to the North Carolina
Court of Appeals. StubHub has appealed this decision.
EDISON MISSION: Awaits Ruling on Motion to Dismiss Pa. Class Suit
----------------------------------------------------------------
Edison Mission Energy is awaiting a court ruling on a motion to
dismiss a purported class action lawsuit in Pennsylvania,
according to the Company's May 2, 2011 Form 10-Q filing with the
U.S. Securities and Exchange Commission for the quarter ended
March 31, 2011.
In January 2011, the US Environmental Protection Agency filed a
complaint in the Western District of Pennsylvania against EME
Homer City Generation L.P., the sale-leaseback owner participants
of the Homer City plant, and two prior owners of the Homer City
plant. The complaint alleges violations of the PSD and Title V
provisions of the CAA and its implementing regulations, including
requirements contained in the Pennsylvania State Implementation
Plan, as a result of projects in the 1990s performed by prior
owners without PSD permits and the subsequent failure to
incorporate emissions limitations that meet BACT into the
station's Title V operating permit. In addition to seeking
penalties ranging from $32,500 to $37,500 per violation, per day,
the complaint calls for an injunction ordering Homer City to
install controls sufficient to meet BACT emissions rates at all
units subject to the complaint; to obtain new PSD or New Source
Review permits for those units; to amend its applications under
Title V of the CAA; to conduct audits of its operations to
determine whether any additional modifications have occurred; and
to offset and mitigate the harm to public health and the
environment caused by the alleged CAA violations. Pennsylvania
Department of Environmental Protection, the state of New York and
the state of New Jersey have intervened in the lawsuit.
Also in January 2011, two residents filed a complaint in the
Western District of Pennsylvania, on behalf of themselves and all
others similarly situated, against Homer City, the sale-leaseback
owner participants of the Homer City plant, two prior owners of
the Homer City plant, EME, and Edison International, claiming that
emissions from the Homer City plant had adversely affected their
health and property values. The plaintiffs seek to have their
suit certified as a class action and request injunctive relief,
the funding of a health assessment study and medical monitoring,
compensatory and punitive damages.
In April 2011, Homer City filed motions to dismiss both
complaints. An adverse decision could involve penalties, remedial
actions and damages that could have a material adverse impact on
the financial condition and results of operations of Homer City
and EME. EME cannot predict the outcome of these matters or
estimate the impact on the Homer City plant, or its and Homer
City's results of operations, financial position or cash flows.
Edison Mission Energy -- http://www.edison.com/-- is engaged in
the business of developing, acquiring, owning or leasing,
operating and selling energy and capacity from independent power
production facilities. EME also conducts hedging and energy
trading activities in power markets open to competition. EME is
an indirect subsidiary of Edison International. Edison
International also owns Southern California Edison Company (SCE),
an electric utility in the United States. As of December 31,
2008, EME's subsidiaries and affiliates owned or leased interests
in 37 operating projects with an aggregate net physical capacity
of 11,019 megawatts (MW) of which EME's capacity pro rata share
was 9,849 MW. EME's operating projects primarily consist of coal-
fired generating facilities, natural gas-fired facilities and
wind farms. At December 31, 2008, three wind projects totaling
223 MW of generating capacity were under construction.
ENDO PHARMACEUTICALS: Continues to Defend Redux-Related Suits
-------------------------------------------------------------
Endo Pharmaceuticals Holdings Inc. remains a defendant in numerous
class action lawsuits relating to the anti-obesity medication
Redux, according to the Company's April 29, 2011, Form 10-Q filing
with the U.S. Securities and Exchange Commission for the quarter
ended March 31, 2011.
In September 1997, Indevus Pharmaceuticals Inc., which the Company
acquired in February 2009, announced a market withdrawal of its
first commercial prescription product, the anti-obesity medication
Redux (dexfenfluramine hydrochloride capsules C-IV), which had
been launched in June 1996 by its licensee, American Home Products
Corporation, which became Wyeth, and was later acquired by Pfizer.
The withdrawal of Redux was based on a preliminary analysis by the
FDA of potential abnormal echocardiogram findings associated with
certain patients taking Redux or the combination of fenfluramine
with phentermine. Following the withdrawal of Redux, Indevus was
named, together with other pharmaceutical companies, as a
defendant in several thousand product liability legal actions in
federal and state courts relating to the use of Redux and other
weight loss drugs. Fewer than 50 cases are still pending against
Indevus and/or the Company. In May 2001, Indevus entered into the
AHP Indemnity and Release Agreement with Wyeth pursuant to which
Wyeth agreed to indemnify Indevus against certain classes of
product liability cases filed against Indevus related to Redux and
Indevus agreed to dismiss Redux related claims against Wyeth.
Under the terms of the AHP Indemnity and Release Agreement, Wyeth
has agreed to indemnify Indevus for claims brought by plaintiffs
who initially opted out of Wyeth's national class action
settlement of diet drug claims and claimants alleging primary
pulmonary hypertension. In addition, Wyeth has agreed to fund all
future legal costs of Indevus related to the defense of Redux-
related product liability cases. Also, pursuant to the AHP
Indemnity and Release Agreement, Wyeth agreed to fund through May
30, 2012, additional insurance coverage to supplement Indevus'
existing product liability insurance.
The Company believes the total insurance coverage, including the
additional insurance coverage funded by Wyeth, is sufficient to
address the potential remaining Redux product liability exposure.
However, there can be no assurance Redux claims will not exceed
the amount of insurance coverage available to the Company and
Wyeth's indemnification obligations under the AHP Indemnity and
Release Agreement. If such insurance coverage and Wyeth
indemnification is not sufficient to satisfy Redux-related claims,
the payment of amounts to satisfy such claims may have an adverse
effect on the Company's business, results of operations, financial
condition or cash flows. Prior to the effectiveness of the AHP
Indemnity and Release Agreement, Redux-related defense costs of
Indevus were paid by, or subject to reimbursement from, Indevus'
product liability insurers. To date, there have been no Redux-
related product liability settlements or judgments paid by
Indevus, the Company or their insurers.
If Indevus incurs additional product liability defense and other
costs subject to claims on the Reliance product liability policy
up to the $5.0 million limit of the policy, Indevus will have to
pay such costs without expectation of reimbursement and will incur
charges to operations for all or a portion of such payments.
EQUINIX INC: Has Not Yet Responded to Cement Masons' Claims
-----------------------------------------------------------
Equinix Inc. says in an April 29, 2011, Form 10-Q filing with the
U.S. Securities and Exchange Commission for the quarter ended
March 31, 2011, that it and two of its officers have not yet
responded to the claims in the class action filed against them by
Cement Masons & Plasterers Joint Pension Trust.
On March 4, 2011, an alleged class action entitled Cement Masons &
Plasterers Joint Pension Trust v. Equinix, Inc., et al., No. CV-
11-1016-SC, was filed in the United States District Court for the
Northern District of California, against Equinix and two of its
officers. The suit asserts purported claims under Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934 for allegedly
misleading statements regarding the Company's business and
financial results. The suit is purportedly brought on behalf of
purchasers of the Company's common stock between July 29, 2010 and
October 5, 2010, and seeks compensatory damages, fees and costs.
Defendants have not yet responded to the claims in this action.
EQUINIX INC: Awaits Ruling on Motion to Dismiss IPO Suit Appeals
----------------------------------------------------------------
Plaintiffs in a coordinated lawsuit relating to Equinix, Inc.'s
initial public offering are awaiting a ruling on their motion to
dismiss appeals from the final approval of the lawsuit's
settlement, according to the Company's April 29, 2011, Form 10-Q
filing with the U.S. Securities and Exchange Commission for the
quarter ended March 31, 2011.
On July 30, 2001 and August 8, 2001, putative shareholder class
action lawsuits were filed against the Company, certain of its
officers and directors, and several investment banks that were
underwriters of the Company's initial public offering. The cases
were filed in the United States District Court for the Southern
District of New York. Similar lawsuits were filed against
approximately 300 other issuers and related parties. These
lawsuits have been coordinated before a single judge. The
purported class action alleges violations of Sections 11 and 15 of
the Securities Act of 1933 and Sections 10(b), Rule 10b-5 and
20(a) of the Securities Exchange Act of 1934 against the Company
and the Individual Defendants. The plaintiffs have since
dismissed the Individual Defendants without prejudice. The suits
allege that the Underwriter Defendants agreed to allocate stock in
the Company's initial public offering to certain investors in
exchange for excessive and undisclosed commissions and agreements
by those investors to make additional purchases in the aftermarket
at pre-determined prices. The plaintiffs allege that the
prospectus for the Company's initial public offering was false and
misleading and in violation of the securities laws because it did
not disclose these arrangements. The action seeks damages in an
unspecified amount. On February 19, 2003, the court dismissed the
Section 10(b) claim against the Company, but denied the motion to
dismiss the Section 11 claim.
The parties in the approximately 300 coordinated cases, including
the parties in the Equinix case, reached a settlement. It
provides for releases of existing claims and claims that could
have been asserted relating to the conduct alleged to be wrongful
from the class of investors participating in the settlement. The
insurers for the issuer defendants in the coordinated cases will
make the settlement payment on behalf of the issuers, including
Equinix. On October 6, 2009, the Court granted final approval to
the settlement. Two appeals are proceeding before the United
States Court of Appeals for the Second Circuit. Plaintiffs have
moved to dismiss both appeals.
Due to the inherent uncertainties of litigation, the Company says
it cannot accurately predict the ultimate outcome of the matter.
The Company adds that it is unable at this time to determine
whether the outcome of the litigation would have a material impact
on its results of operations, financial condition or cash flows.
GREG MORTENSON: Faces Class Action Over "Three Cups of Tea" Book
----------------------------------------------------------------
David Sherman, writing for KXLH.com, reports that attorneys
Alexander Blewett III, Esq., and Anders Blewett, Esq., of Great
Falls have filed a class action lawsuit in Federal District Court
in Missoula, Montana, against Bozeman author Greg Mortenson and
his corporation, the Central Asia Institute.
Mr. Mortenson is the best-selling author of "Three Cups of Tea,"
which documented his failed attempt in 1993 to climb the world's
second-highest peak, K2. On the way down, Mr. Mortenson says, he
got lost and stumbled into a remote mountain village in Pakistan
named Korphe.
According to the book's narrative, the villagers cared for him and
he promised to return to build a school there. Mr. Mortenson
subsequently created the charitable Central Asia Institute to
raise money to build schools in the region.
The CBS program "60 Minutes" aired a segment in April which
reveals that Mr. Mortenson's charity, Central Asia Institute, has
spent more money in the U.S. talking about education in Pakistan
and Afghanistan than actually building and supporting schools
there, according to an analysis of the organization's last
financial report.
The plaintiffs in the case are Michele Reinhart of Missoula and
Jean Price of Great Falls, who each purchased one of
Mr. Mortenson's books and subsequently made donations to the
Central Asia Institute.
Both are Democratic lawmakers. Mr. Reinhart represents House
District 97, and Mr. Price represents House District 21.
A press release states:
"The Blewett's class action suit alleges that Mr. Mortenson was
untruthful about a vast amount of his story which he used to
convince millions of people to purchase his books and thousands of
people to donate millions of dollars to his Central Asia
Institute.
"The class action lawsuit raises claims for fraud, deceit and
unjust enrichment and seeks to establish a constructive trust with
another charitable institution which will control the funds and
construct the schools for girls in Pakistan and Afghanistan which
Mortenson claims were built and never were."
Mr. Blewett states in his press release, "It is apparent that the
only way the children in Afghanistan and Pakistan are going to
receive the schools promised to them is through this class action.
Otherwise Mortenson and his organization will get away with this
sham. We welcome the opportunity for Greg Mortenson to testify
under oath as to the veracity of what he has said."
Days after the "60 Minutes" feature aired, Montana Attorney
General Steve Bullock announced the launch of an inquiry into the
charity run by Mr. Mortenson.
On the Central Asia Institute's Web site, a message from Mr.
Mortenson posted after the "60 Minutes" says, "I stand by the
information conveyed in my book, and by the value of CAI's work in
empowering local communities to build and operate schools that
have educated more than 60,000 students."
Some of the most inspiring and dramatic stories in Mr. Mortenson's
book are not true, multiple sources tell "60 Minutes" as part of
an investigation by correspondent Steve Kroft.
The stories in "Three Cups of Tea" have become the source of
inspirational speeches Mr. Mortenson is paid to make and the
partial basis for donations of nearly $60 million to the charity
he founded.
A charity watchdog group expresses concern that money donors have
given to build schools in Pakistan and Afghanistan is actually
being used to promote Mr. Mortenson's books.
In a remote village in Pakistan, "60 Minutes" found
Mr. Mortenson's porters on his alleged failed expedition. They
said Mr. Mortenson didn't get lost and stumble into Korphe on his
way down from K2. He visited the village a year later.
That's what famous author and mountaineer Jon Krakauer, a former
donor to Mr. Mortenson's charity, says he found out, too. "It's a
beautiful story. And it's a lie," says Mr. Krakauer. "I have
spoken to one of his [Mortenson's] companions, a close friend, who
hiked out from K2 with him and this companion said, 'Greg never
heard of Korphe until a year later,'" Mr. Krakauer tells Mr.
Kroft.
Mr. Mortenson did eventually build a school in Korphe, Krakauer
says, "But if you read the first few chapters of that book, you
realize, 'I am being taken for a ride here.'"
In "Three Cups of Tea," Mr. Mortenson writes of being kidnapped in
the Waziristan region of Pakistan in 1996. In his second book,
"Stones into Schools," Mr. Mortenson publishes a photograph of his
alleged captors. In T.V. appearances, he has said he was
kidnapped for eight days by the Taliban.
"60 Minutes" located three of the men in the photo, all of whom
denied that they were Taliban and denied that they had kidnapped
Mr. Mortenson. One of the men in the photo is the research
director of a respected think tank in Islamabad, Mansur Khan
Mahsud.
He tells Steve Kroft that he and the others in the photo were
Mr. Mortenson's protectors, not his kidnappers. "We treated him
as a guest and took care of him," says Mr. Mahsud. "This is
totally false and he is lying."
Asked why Mr. Mortenson would lie about the trip, Mr. Mahsud
replies, "To sell his book."
Mr. Kroft also interviewed Daniel Borochoff, president of the
American Institute of Philanthropy, who raises serious questions
about the financial management of the Central Asia Institute. In
its fiscal 2009 financial report, CAI said it spent $1.7 million
"on book-related expenses," which is more than it spent on all of
its schools in Pakistan that year.
"You would hope that they would be spending a lot more on the
schools in Pakistan than they would on book-related costs," says
Mr. Borochoff. "Why doesn't Mr. Mortenson spend his own money on
the book-related costs? He's the one getting the revenues,"
Mr. Borochoff tells Mr. Kroft.
"60 Minutes" also checked on schools that CAI claims to have built
in Pakistan and Afghanistan and found that some of them were
empty, built by somebody else, or simply didn't exist at all. The
principals of a number of schools said they had not received any
money from CAI in years.
Mr. Krakauer says a former board member of CAI told him he should
stop giving money to Mr. Mortenson's charity years ago. "In 2002,
[Mortenson's] board treasurer quit, resigned, along with the board
president and two other board members . . . he said, in so many
words, that Greg uses Central Asia Institute as his private ATM
machine. That there's no accounting. He has no receipts," says
Mr. Krakauer.
"60 Minutes" asked Mr. Mortenson several times for an interview,
but he has not responded. CAI's two other board members also did
not respond to phone calls and e-mails requesting comment.
CAI has publicly released only one audited financial statement in
its 14 years of existence. Says Mr. Borochoff, "It's amazing that
they could get away with that."
HARMAN INTERNATIONAL: Awaits Ruling on Motion to Dismiss Suit
-------------------------------------------------------------
Harman International Industries, Inc., is still awaiting a ruling
on its motion to dismiss a consolidated securities class action
lawsuit pending in the District of Columbia, according to the
Company's April 29, 2011, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended March 31,
2011.
On October 1, 2007, a purported class action lawsuit was filed by
Cheolan Kim against Harman and certain of the Company's officers
in the United States District Court for the District of Columbia
seeking compensatory damages and costs on behalf of all persons
who purchased the Company's common stock between April 26, 2007,
and September 24, 2007. The original complaint alleged claims for
violations of Sections 10(b) and 20(a) of the Securities Exchange
Act of 1934, as amended, and Rule 10b-5 promulgated thereunder.
The complaint alleged that the defendants omitted to disclose
material adverse facts about Harman's financial condition and
business prospects. The complaint contended that had these facts
not been concealed at the time the merger agreement with Kohlberg
Kravis Roberts & Co. and Goldman Sachs Capital Partners was
entered into, there would not have been a merger agreement, or it
would have been at a much lower price, and the price of the
Company's common stock, therefore, would not have been
artificially inflated during the Class Period. The Kim Plaintiff
alleged that, following the reports that the proposed merger was
not going to be completed, the price of the Company's common stock
declined, causing the plaintiff class significant losses.
On November 30, 2007, the Boca Raton General Employees' Pension
Plan filed a purported class action lawsuit against Harman and
certain of the Company's officers in the Court seeking
compensatory damages and costs on behalf of all persons who
purchased the Company's common stock between April 26, 2007, and
September 24, 2007. The allegations in the Boca Raton complaint
are essentially identical to the allegations in the original Kim
complaint, and like the original Kim complaint, the Boca Raton
complaint alleges claims for violations of Sections 10(b) and
20(a) of the 1934 Act and Rule 10b-5 promulgated thereunder.
On January 16, 2008, the Kim Plaintiff filed an amended complaint.
The amended complaint, which extended the Class Period through
January 11, 2008, contended that, in addition to the violations
alleged in the original complaint, Harman also violated Sections
10(b) and 20(a) of the 1934 Act and Rule 10b-5 promulgated
thereunder by "knowingly failing to disclose "significant
problems" relating to its PND sales forecasts, production,
pricing, and inventory" prior to January 14, 2008. The amended
complaint claimed that when "Defendants revealed for the first
time on January 14, 2008 that shifts in PND sales would adversely
impact earnings per share by more than $1.00 per share in fiscal
2008," that led to a further decline in the Company's share value
and additional losses to the plaintiff class.
On February 15, 2008, the Court ordered the consolidation of the
Kim action with the Boca Raton action, the administrative closing
of the Boca Raton action, and designated the short caption of the
consolidated action as In re Harman International Industries, Inc.
Securities Litigation, civil action no. 1:07-cv-01757 (RWR). That
same day, the Court appointed Arkansas Public Retirement System as
lead plaintiff and approved the law firm Cohen, Milstein, Hausfeld
and Toll, P.L.L.C. to serve as lead counsel.
On March 24, 2008, the Court ordered, for pretrial management
purposes only, the consolidation of Patrick Russell v. Harman
International Industries, Incorporated, et al. with In re Harman
International Industries, Inc. Securities Litigation.
On May 2, 2008, Lead Plaintiff filed a consolidated class action
complaint. The Consolidated Complaint, which extends the Class
Period through February 5, 2008, contends that Harman and certain
of the Company's officers and directors violated Sections 10(b)
and 20(a) of the 1934 Act and Rule 10b-5 promulgated thereunder,
by issuing false and misleading disclosures regarding the
Company's financial condition in fiscal year 2007 and fiscal year
2008. In particular, the Consolidated Complaint alleges that
defendants knowingly or recklessly failed to disclose material
adverse facts about MyGIG radios, PNDs and the Company's capital
expenditures. The Consolidated Complaint alleges that when
Harman's true financial condition became known to the market, the
price of the Company's common stock declined significantly,
causing losses to the plaintiff class.
On July 3, 2008, defendants moved to dismiss the Consolidated
Complaint in its entirety. Lead Plaintiff opposed the defendants'
motion to dismiss on September 2, 2008, and defendants filed a
reply in further support of their motion to dismiss on October 2,
2008. The motion is now fully briefed.
Harman International Industries, Inc. -- http://www.harman.com/--
designs, manufactures and markets a wide range of audio and
infotainment solutions for the automotive, consumer and
professional markets -- supported by 15 leading brands including
AKG(R), Harman Kardon(R), Infinity(R), JBL(R), Lexicon(R) and Mark
Levinson(R). The company is admired by audiophiles across
multiple generations and supports leading professional
entertainers and the venues where they perform. More than 20
million automobiles on the road today are equipped with HARMAN
audio and infotainment systems. HARMAN has a workforce of about
11,000 people across the Americas, Europe and Asia, and reported
sales of $3.4 billion for the fiscal year ended June 30, 2010.
HARMAN INTERNATIONAL: Motion to Dismiss "Russell" Suit Pending
--------------------------------------------------------------
Harman International Industries, Inc.'s motion to dismiss a
purported class action filed by Patrick Russell, which has been
fully briefed, is still pending, according to the Company's April
29, 2011, Form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarter ended March 31, 2011.
Patrick Russell filed a complaint on December 7, 2007, in the
United States District Court for the District of Columbia and an
amended purported putative class action complaint on June 2, 2008,
against Harman and certain of the Company's officers and directors
alleging violations of the Employee Retirement Income Security Act
of 1974 and seeking, on behalf of all participants in and
beneficiaries of the Harman International Industries, Incorporated
Retirement Savings Plan, compensatory damages for losses to the
Plan as well as injunctive relief, imposition of a constructive
trust, restitution, and other monetary relief. The amended
complaint alleges that from April 26, 2007, to the present,
defendants failed to prudently and loyally manage the Plan's
assets, thereby breaching their fiduciary duties in violation of
ERISA by causing the Plan to invest in the Company's common stock
notwithstanding that the stock allegedly was "no longer a prudent
investment for the Participants' retirement savings." The amended
complaint further claims that, during the Class Period, defendants
failed to monitor the Plan fiduciaries, failed to provide the Plan
fiduciaries with, and to disclose to Plan participants, adverse
facts regarding Harman and the Company's businesses and prospects.
The Russell Plaintiff also contends that defendants breached their
duties to avoid conflicts-of-interest and to serve the interests
of participants in, and beneficiaries of, the Plan with undivided
loyalty. As a result of these alleged fiduciary breaches, the
amended complaint asserts that the Plan has "suffered substantial
losses, resulting in the depletion of millions of dollars of the
retirement savings and anticipated retirement income of the Plan's
Participants."
On March 24, 2008, the Court ordered, for pretrial management
purposes only, the consolidation of Patrick Russell v. Harman
International Industries, Incorporated, et al. with In re Harman
International Industries, Inc. Securities Litigation.
Defendants moved to dismiss the complaint in its entirety on
August 5, 2008. The Russell Plaintiff opposed the defendants'
motion to dismiss on September 19, 2008, and defendants filed a
reply in further support of their motion to dismiss on October 20,
2008. The motion is now fully briefed.
Harman International Industries, Inc. -- http://www.harman.com/--
designs, manufactures and markets a wide range of audio and
infotainment solutions for the automotive, consumer and
professional markets -- supported by 15 leading brands including
AKG(R), Harman Kardon(R), Infinity(R), JBL(R), Lexicon(R) and Mark
Levinson(R). The company is admired by audiophiles across
multiple generations and supports leading professional
entertainers and the venues where they perform. More than 20
million automobiles on the road today are equipped with HARMAN
audio and infotainment systems. HARMAN has a workforce of about
11,000 people across the Americas, Europe and Asia, and reported
sales of $3.4 billion for the fiscal year ended June 30, 2010.
HARTFORD FINANCIAL: Still Awaits Court OK of ERISA Suit Settlement
------------------------------------------------------------------
The Hartford Financial Services Group, Inc., is still awaiting
Court approval of an agreement in principle to settle on a class
basis, lawsuits filed on behalf of participants in the Company's
Investment and Savings Plan, according to the Company's May 2,
2011, Form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarterly period ended March 31, 2011.
In November and December 2008, following a decline in the share
price of the Company's common stock, seven putative class action
lawsuits were filed in the United States District Court for the
District of Connecticut on behalf of certain participants in the
Company's Investment and Savings Plan, which offers the Company's
common stock as one of many investment options. These lawsuits
have been consolidated, and a consolidated amended class-action
complaint was filed on March 23, 2009, alleging that the Company
and certain of its officers and employees violated ERISA by
allowing the Plan's participants to invest in the Company's common
stock and by failing to disclose to the Plan's participants
information about the Company's financial condition. The lawsuit
seeks restitution or damages for losses arising from the
investment of the Plan's assets in the Company's common stock
during the period from December 10, 2007 to the present. In
January 2010, the district court denied the Company's motion to
dismiss the consolidated amended complaint. In February 2011, the
parties reached an agreement in principle to settle on a class
basis for an immaterial amount. The settlement is contingent upon
the execution of a final settlement agreement and preliminary and
final court approval.
HARTFORD FINANCIAL: Awaits OK of Bid to Dismiss Securities Suit
---------------------------------------------------------------
The Hartford Financial Services Group, Inc., is awaiting court
approval of its motion to dismiss a putative securities class
action lawsuit filed in New York, according to the Company's May
2, 2011, Form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarterly period ended March 31, 2011.
The Company and certain of its present or former officers are
defendants in a putative securities class action lawsuit filed in
the United States District Court for the Southern District of New
York in March 2010. The operative complaint, filed in October
2010, is brought on behalf of persons who acquired Hartford common
stock during the period of July 28, 2008 through February 5, 2009,
and alleges that the defendants violated Section 10(b) of the
Securities Exchange Act of 1934 and Rule 10b-5, by making false or
misleading statements during the alleged class period about the
Company's valuation of certain asset-backed securities and its
effect on the Company's capital position. The Company disputes
the allegations and has moved to dismiss the complaint.
HORIZON LINES: Continues to Defend "Roseville" Class Suit
---------------------------------------------------------
Horizon Lines, Inc., continues to defend itself from a securities
class action lawsuit filed by the City of Roseville Employees'
Retirement System, according to the Company's April 29, 2011, Form
10-Q filing with the U.S. Securities and Exchange Commission for
the quarter ended March 27, 2011.
On December 31, 2008, a securities class action lawsuit was filed
against the Company by the City of Roseville Employees' Retirement
System in the United States District Court for the District of
Delaware. The complaint purported to be on behalf of purchasers
of the Company's common stock. The complaint alleged, among other
things, that the Company made material misstatements and omissions
in connection with alleged price-fixing in the Company's shipping
business in Puerto Rico in violation of antitrust laws. The
Company filed a motion to dismiss, and the Court granted the
motion to dismiss on November 13, 2009 with leave to file an
amended complaint. The plaintiff filed an amended complaint on
December 23, 2009, and the Company filed a motion to dismiss the
amended complaint on February 12, 2010. The Company's motion to
dismiss the amended complaint was granted with prejudice on
May 18, 2010. On June 15, 2010, the plaintiff appealed the
Court's decision to dismiss the amended complaint. The Company
filed its opposition brief with the Court of Appeals on
December 22, 2010 and the plaintiffs filed their reply brief
on February 2, 2011.
HORIZON LINES: Gets Preliminary OK of Puerto Rico Settlement
------------------------------------------------------------
A court granted preliminary approval of Horizon Lines, Inc.'s
settlement agreement with the Commonwealth of Puerto Rico in the
lawsuit alleging that the Company violated the Puerto Rico
Monopolies and Restraint of Trade Act, according to the Company's
April 29, 2011, Form 10-Q filing with the U.S. Securities and
Exchange Commission for the quarter ended March 27, 2011.
In February 2011, the Commonwealth of Puerto Rico filed a lawsuit
against the Company seeking monetary damages in its own right and
on behalf of a class of persons who allegedly paid inflated prices
for goods imported to Puerto Rico as a result of alleged price-
fixing by the defendants in violation of the Puerto Rico
Monopolies and Restraint of Trade Act. In addition, two lawsuits
have been filed against the Company as putative class-action
lawsuits on behalf of indirect purchasers, one of which is pending
in the Court of First Instance for the Commonwealth of Puerto Rico
and the other is pending in the United States District Court for
the District of Puerto Rico.
On March 31, 2011, the Company entered into a settlement agreement
with the Commonwealth of Puerto Rico and the named plaintiffs,
individually and representing the indirect purchasers, to resolve
claims relating to the Puerto Rico trade. The settlement
agreement was entered into by the parties pursuant to a Memorandum
of Understanding, dated February 22, 2011.
Under the settlement agreement, the plaintiffs and the
Commonwealth of Puerto Rico agreed to settle claims alleged in the
three lawsuits filed against the Company and the other defendants.
Pursuant to the Settlement Agreement, each of the defendants will
pay a one-third share of the total settlement amount of $5.3
million. Accordingly, the Company has agreed to pay $1.8 million
as its share of the settlement amount.
If the settlement agreement is finally approved, the settling
defendants will receive a full release from the named plaintiffs,
from the members of the settlement class, and from the
Commonwealth of Puerto Rico in its own right and as parens
patriae. The court granted preliminary approval of the settlement
agreement on April 26, 2011. The Company says there can be no
assurance that the court will grant final approval of the
settlement agreement.
HORIZON LINES: Puerto Rico Plaintiffs OK Staggered Deal Payment
---------------------------------------------------------------
Counsel for plaintiffs in a multidistrict litigation against
Horizon Lines, Inc., alleging antitrust violations in the Puerto
Rico tradelane has advised the Company that they would not object
to the Company paying the remainder of the $10 million due under
the parties' settlement agreement in one payment of $5 million
within 30 days after final approval of the settlement and a second
payment of $5 million within 60 days after final approval,
according to the Company's April 29, 2011, Form 10-Q filing with
the U.S. Securities and Exchange Commission for the quarter ended
March 27, 2011.
On April 17, 2008, the Company received a grand jury subpoena and
search warrant from the United States District Court for the
Middle District of Florida seeking information regarding an
investigation by the Antitrust Division of the DOJ into possible
antitrust violations in the domestic ocean shipping business. On
February 23, 2011, the Company entered into a plea agreement with
the DOJ, and on March 22, 2011, the Court entered judgment
accepting the Company's plea agreement and imposed a fine of $45.0
million over five years without interest. On April 28, 2011, the
Court reduced the fine from $45.0 million to $15.0 million payable
over five years without interest. The first $1.0 million of the
fine was paid on April 25, 2011 and the Company must make payments
of $1.0 million on or before the first anniversary thereof, $2.0
million on or before the second anniversary, $3.0 million on or
before the third anniversary and $4.0 million on or before each of
the fourth and fifth anniversary. The plea agreement provides
that the Company will not face additional charges relating to the
Puerto Rico tradelane. In addition, the plea agreement provides
that the Company will not face any additional charges in
connection with the Alaska trade, and the DOJ has indicated that
the Company is not a target or subject of the Hawaii and Guam
investigation.
As part of the court's judgment, the Company was placed on
probation for five years. The terms of the probation include that
the Company: 1) file annual audited financial reports, 2) not
commit a criminal act during the probation period, 3) report any
material adverse legal or financial event, and 4) annually certify
that it has an antitrust compliance program in place that
satisfies the sentencing guidelines requirements, including
antitrust education to key personnel.
Subsequent to the commencement of the DOJ investigation, fifty-
eight purported class action lawsuits were filed against the
Company and other domestic shipping carriers. Each of the Class
Action Lawsuits purports to be on behalf of a class of individuals
and entities who purchased domestic ocean shipping services
directly from the various domestic ocean carriers. These
complaints allege price-fixing in violation of the Sherman Act and
seek treble monetary damages, costs, attorneys' fees, and an
injunction against the allegedly unlawful conduct. The Class
Action Lawsuits were filed in the following federal district
courts: eight in the Southern District of Florida, five in the
Middle District of Florida, nineteen in the District of Puerto
Rico, twelve in the Northern District of California, three in the
Central District of California, one in the District of Oregon,
eight in the Western District of Washington, one in the District
of Hawaii, and one in the District of Alaska.
Thirty-two of the Class Action Lawsuits relate to ocean shipping
services in the Puerto Rico tradelane and were consolidated into a
single multidistrict litigation proceeding in the District of
Puerto Rico. On June 11, 2009, the Company entered into a
settlement agreement with the named plaintiff class
representatives in the Puerto Rico MDL. Under the settlement
agreement, the Company has agreed to pay $20.0 million and to
provide a base-rate freeze as described below to resolve claims
for alleged antitrust violations in the Puerto Rico tradelane.
The base-rate freeze component of the settlement agreement
provides that class members who have contracts in the Puerto Rico
trade with the Company as of the effective date of the settlement
would have the option, in lieu of receiving cash, to have their
"base rates" frozen for a period of two years. The base-rate
freeze would run for two years from the expiration of the contract
in effect on the effective date of the settlement. All class
members would be eligible to share in the $20.0 million cash
component, but only the Company's contract customers would be
eligible to elect the base-rate freeze in lieu of receiving cash.
On July 8, 2009, the plaintiffs filed a motion for preliminary
approval of the settlement in the Puerto Rico MDL, and the Court
granted preliminary approval of the settlement on July 12, 2010.
The settlement is subject to final approval by the Court. The
Company has paid $10.0 million into an escrow account and the
settlement agreement provides that the Company is required to pay
the remaining $10.0 million within five business days after final
approval of the settlement agreement by the Court.
On April 26, 2011, the plaintiffs advised the Company that they
would not object to the Company paying the remainder of the $10
million due under the settlement agreement in one payment of $5.0
million within 30 days after final approval of the settlement
agreement and a second payment of $5.0 million within 60 days
after final approval of the settlement agreement.
Some class members have elected to opt-out of the settlement, and
the customers that have elected to opt-out of the settlement and
customers not part of the settlement class may file lawsuits
containing allegations similar to those made in the Puerto Rico
MDL and seek the same type of damages under the Sherman Act as
sought in the Puerto Rico MDL. The Company says it is not able to
determine whether or not any actions will be brought against it or
whether or not a negative outcome would be probable if brought
against the Company, or a reasonable range for any such outcome,
and has made no provisions for any potential proceedings in the
accompanying financial statements. Given the volume of commerce
involved in the Puerto Rico shipping business, an adverse ruling
in a potential civil antitrust proceeding could subject the
Company to substantial civil damages given the treble damages
provisions of the Sherman Act.
In addition, the Company has actively engaged in discussions with
a number of its customers in the Puerto Rico trade that have opted
out of the MDL settlement. The Company has reached commercial
agreements or is seeking to reach commercial agreements with
certain of its major customers, with the condition that the
customer relinquishes any existing antitrust claims. In some
cases, the Company has agreed to, or is seeking to agree to,
future discounts which will be charged against operating revenue
if and when the discount is earned and certain other conditions
are met.
Twenty-five of the fifty-eight Class Action Lawsuits relate to
ocean shipping services in the Hawaii and Guam tradelanes and were
consolidated into a MDL proceeding in the Western District of
Washington. On March 20, 2009, the Company filed a motion to
dismiss the claims in the Hawaii and Guam MDL. On August 18,
2009, the United States District Court for the Western District of
Washington entered an order dismissing, without prejudice, the
Hawaii and Guam MDL. In dismissing the complaint, however, the
plaintiffs were granted thirty days to amend their complaint.
After several extensions, the plaintiffs filed an amended
consolidated class action complaint on May 28, 2010. On July 12,
2010, the Company filed a motion to dismiss the plaintiffs'
amended complaint. The motion to dismiss the amended complaint
was granted with prejudice on December 1, 2010. The plaintiffs
appealed the Court's decision to dismiss the amended complaint
with the United States Court of Appeals for the Ninth Circuit and
the appeal is being briefed by the parties. The Company intends
to vigorously defend against this purported class action lawsuit.
One district court case remains in the District of Alaska,
relating to the Alaska tradelane. The Company and the plaintiffs
have agreed to stay the Alaska litigation, and the Company intends
to vigorously defend against the purported class action lawsuit in
Alaska.
INVESTORS TITLE: "Price-Fixing Conspiracy" Lawsuit Remains Pending
------------------------------------------------------------------
Investors Title Company continues to defend itself against a class
action lawsuit alleging price-fixing.
A class action lawsuit is pending in the United States District
Court for the Southern District of West Virginia against several
title insurance companies, including Investors Title Insurance
Company, entitled Backel v. Fidelity National Title Insurance et
al. (6:2008- CV-00181). The plaintiff in this case contends a
lack of meaningful oversight by agencies with which title
insurance rates are filed and approved. There are further
allegations that the title insurance companies have conspired to
fix title insurance rates. The plaintiffs seek monetary damages,
including treble damages, as well as injunctive relief. Similar
suits have been filed in other jurisdictions, several of which
have already been dismissed. In West Virginia, the case has been
placed on the inactive list pending the resolution of the
bankruptcy of LandAmerica Financial Group, Inc. The Company
believes that this case is without merit, and intends to
vigorously defend against the allegations. At this stage in the
litigation, the Company does not have the ability to make a
reasonable range of estimates in regards to potential loss
amounts, if any.
No updates were reported in the Company's April 29, 2011, Form 10-
Q filing with the U.S. Securities and Exchange Commission for the
quarter ended March 31, 2011.
ISRAEL: Airports Authority May Face Class Action
------------------------------------------------
Ron Stein, writing for Globes, reports that the contaminated jet
fuel at Ben Gurion Airport and other Israeli airports could cost
airlines, fuel suppliers, and the Israel Airports Authority
millions of dollars. The extent of claims on Israel's insurance
companies is not yet known.
Insurance industry sources say that no preparations are underway
to deal with special large claims, but that there are several
possible scenarios. The biggest questions are whether airline
passengers affected by delayed or cancelled flights will ask for
class-action lawsuits, and what will be their results. Such
requests have become commonplace in the Israeli business scene.
Even before a possible class-action lawsuit, passengers can sue
the airlines for delayed or cancelled flights. Airlines will
probably compensate affected passengers in one way or another.
Airlines have insurance covering such scenarios.
The sources said that the airlines will probably sue the Airports
Authority for damages. The Airports Authority reportedly has
extensive coverage from foreign, not Israeli, insurance companies.
The jet fuel suppliers, which will likely be found to bear some
responsibility for the contaminated fuel, also have insurance
covering product liability and other damages.
JIMMY CARTER: Class Action Over Palestine Book Withdrawn
--------------------------------------------------------
Ryan Abbott at Courthouse News Service reports that a group of
five on May 5 voluntarily dismissed their $5 million lawsuit
against former President Jimmy Carter and his publisher, Simon &
Schuster, for profiting off of Carter's "well known bias against
Israel" with his book, "Palestine: Peace Not Apartheid."
The February lawsuit, filed by Alabama attorney David Schoen,
Esq., claimed that Carter's nonfiction book was falsely marketed
as absolute truth. It accuses Carter, a Nobel Peace Prize winner,
of misrepresenting the history of conflict in the Middle East, and
of reaping millions from "Israel's sworn enemies."
In a statement, Simon & Schuster spokesman Adam Rothberg called
the decision to withdraw the suit "wise."
"In the face of a powerful argument for the rights of free speech
for authors and publishers, the plaintiffs wisely withdrew their
action," Mr. Rothberg said. "We hope that they will consider this
the end of the matter."
Jerusalem bureau chief of The New York Times, Ethan Bronner,
called Carter's 2006 book "a narrative that is largely
unsympathetic to Israel."
A copy of the Notice of Voluntary Dismissal in Unterberg, et al.
v. Carter, et al., Case No. 11-cv-00720 (S.D.N.Y.), is available
at:
http://www.courthousenews.com/2011/05/06/carter.pdf
The Plaintiffs were represented by:
David I. Schoen, Esq.
2800 Zelda Road, Suite 100-6
Montgomery, AL 36106
Telephone: (334) 395-6611
E-mail: dschoen593@aol.com
- and -
Nitsana Darshan-Leitner, Esq.
NITSANA DARSHAN-LEITNER & CO.
10 Hata'as Street
Ramat Gan, 52512 Israel
Email: nitsanad@zahav.net.il
KINDRED HEALTHCARE: Faces Class Suits Over RehabCare Merger
-----------------------------------------------------------
Kindred Healthcare, Inc., is facing several class action lawsuits
arising from its proposed merger with RehabCare Group, Inc,
according to the Company's April 29, 2011, Form 10-Q filing with
the U.S. Securities and Exchange Commission for the quarter ended
March 31, 2011.
On February 10, 2011, Arthur I. Murphy, Jr., a purported
stockholder of RehabCare, filed a purported class action lawsuit
in the Circuit Court of St. Louis County, Missouri against
RehabCare, RehabCare's directors and Kindred (styled Arthur I.
Murphy, Jr., IRA, v. RehabCare Group, Inc., et al., No. I.I.S.L.
CC00566); on February 15, 2011, the Norfolk County Retirement
System, a purported stockholder of RehabCare, filed a purported
class action lawsuit in the Court of Chancery of the State of
Delaware against RehabCare, RehabCare's directors and Kindred
(styled Norfolk County Retirement System v. Harry E. Rich, et al.,
C.A. No. 6197-VCL); on February 28, 2011, City of Pontiac General
Employees' Retirement System, a purported stockholder of
RehabCare, filed a purported class action lawsuit in the Court of
Chancery of the State of Delaware against RehabCare, RehabCare's
directors and Kindred (styled City of Pontiac General Employees'
Retirement System v. Harry E. Rich, et al., C.A. No. 6232-VCL); on
March 2, 2011, Alfred T. Kowalewski, a purported stockholder of
RehabCare, filed a purported class action lawsuit in Circuit Court
of St. Louis County, Missouri against RehabCare, RehabCare's
directors and Kindred (styled Alfred T. Kowalewski v. Harry E.
Rich, et al. (No. I.I.S.L. - CC08840) and on March 4, 2011,
Plumbers & Pipefitters National Pension Fund, a purported
stockholder of RehabCare, filed a purported class action lawsuit
in the Court of Chancery of the State of Delaware against
RehabCare, RehabCare's directors and Kindred (styled Plumbers &
Pipefitters National Pension Fund v. Harry E. Rich, et al., C.A.
No. 6245-VCL).
On March 9, 2011 the three purported class action lawsuits in
Delaware were consolidated under the caption In re RehabCare
Group, Inc. Shareholders Litigation, C.A. No. 6197-VCL (DE Court
of Chancery). On April 8, 2011, the Circuit Court of St. Louis
County, Missouri, consolidated the Missouri litigation. The
complaints contain similar allegations, including among other
things, that RehabCare's directors breached their fiduciary duties
to the RehabCare stockholders, including their duties of loyalty,
due care, independence, good faith and fair dealing, by entering
into a Merger Agreement which provides for inadequate
consideration to RehabCare stockholders, and that RehabCare and
Kindred aided and abetted RehabCare's directors alleged breaches
of their fiduciary duties. The plaintiffs seek injunctive relief
preventing the defendants from consummating the transactions
contemplated by the Merger Agreement, or in the event the
defendants consummate the transactions contemplated by the Merger
Agreement, rescission of such transactions and attorneys' fees and
expenses.
The Company believes that these complaints are without merit and
intends to defend them vigorously. On April 25, 2011, the Circuit
Court of St. Louis County, Missouri, granted defendants' motion to
stay the consolidated Missouri litigation pending the outcome of
the Delaware litigation.
MAHINDRA SATYAM: Indian Investors May Not Get Compensation
----------------------------------------------------------
Sandeep Singh, writing for Hindustan Times, reports that last
month, foreign investors of Mahindra Satyam (formerly known as
Satyam Computer Services) received an aggregate of $25.5 million
(INR114 crore) as compensation from PricewaterhouseCoopers (PwC),
the company's auditor. In a scam that happened in India, domestic
investors have got, and will get, nothing.
The company's share price had crashed in one month to INR20 per
share on January 15, 2009, from INR226 on December 16, 2008,
following revelations of India's biggest-ever accounting fraud by
Satyam's then chairman B Ramalinga Raju.
Legal experts say that in the absence of a provision for class
action suits, there is nothing that investors can do but wait for
the Securities and Exchange Board of India (Sebi) case pending in
Bombay High Court, or hope that a consent order is passed by Sebi
in agreement with the company. Others say the agreement in the
U.S. lays ground for similar action in India.
In 2009, Midas Touch Investors Association filed a case with the
Consumer Court and Supreme Court but it was not admitted, as the
petition was ambiguous.
"The problem is that for the same company and the same case,
investors in US have got the compensation but Indian investors
won't get (anything) for the lack of a provision in our laws,"
said Virendra Jain, chairman MTIA. According to him, even the
case filed by Sebi will not offer compensation; at best, it can
take penal action on the company and impose a fine.
Others disagree. "With PwC agreeing to compensate US investors,
it lays the ground for Indian investors too and all hope is not
lost," said Pradeep S Mehta, secretary general, Consumer Unity and
Trust Society.
"Since financial services are covered by the Consumer Protection
Act, they can approach that," Mehta said. "Investors can also
take action under Tort in the civil court. Alternatively, they
can approach the High Court for Writ Jurisdiction under Article
226 (similar to the Uphaar Theatre Case in Delhi)."
The Companies Bill 2009 seeks to provide some powers at the hands
of investors. "Shareholder associations or group of shareholders
to be enabled to take legal action in case of any fraudulent
action on the part of a company, and to take part in investor
protection activities and 'Class Action Suits'," says one
provision.
The U.S. Securities and Exchange Commission in (equivalent of SEBI
in India) established in its April 5, 2011 order that
institutional investors in the U.S. suffered losses of over $450
million as Satyam has 65 million American Depository Shares (ADS)
representing 11% of the company's equity shares.
The SEC accused PwC of "failing to comply with some of the most
elementary auditing standards and procedures."
"We are in a silent period," a Mahindra Satyam spokesperson said.
Despite repeated attempts, PwC did not respond.
NORFOLK SOUTHERN: Continues to Defend Consolidated Antitrust Suit
-----------------------------------------------------------------
Norfolk Southern Corp. continues to defend itself in a
consolidated antitrust class action lawsuit pending in the
District of Columbia, according to the Company's April 29, 2011
Form 10-Q filing with the U.S. Securities and Exchange Commission
for the quarter ended March 31, 2011.
On November 6, 2007, various antitrust class actions filed against
NS and other Class 1 railroads in various Federal district courts
regarding fuel surcharges were consolidated in the District of
Columbia by the Judicial Panel on Multidistrict Litigation. NS
believes the allegations in the complaints are without merit and
intends to vigorously defend the cases. NS does not believe that
the outcome of these proceedings will have a material effect on
its financial position, results of operations, or liquidity. A
lawsuit containing similar allegations against NS and four other
major railroads that was filed on March 25, 2008, in the U.S.
District Court for the District of Minnesota was voluntarily
dismissed by the plaintiff subject to a tolling agreement entered
into in August 2008.
Norfolk Southern Corp. -- http://www.nscorp.com/-- controls a
freight railroad, Norfolk Southern Railway Co. Norfolk Southern
Railway Co. is primarily engaged in the rail transportation of raw
materials, intermediate products and finished goods primarily in
the southeast, east and Midwest and, via interchange with rail
carriers, to and from the rest of the U.S. and parts of Canada.
NORTHERN TRUST: Continues to Defend ERISA Class Suit in Illinois
----------------------------------------------------------------
Northern Trust Corp. continues to face an amended complaint in a
purported class-action lawsuit in Illinois alleging violations of
the Employee Retirement Income Security Act.
On January 16, 2009, an amended complaint was filed in a putative
class action lawsuit currently pending in the United States
District Court for the Northern District of Illinois against the
Corporation and others. The defendants named in the amended
complaint are the Corporation, The Northern Trust Company, the
Northern Trust Employee Benefits Administrative Committee and its
members, the Northern Trust Employee Benefits Investment Committee
and its members, and certain other officers, including the present
and former chief executive officers of the Corporation,
purportedly on behalf of participants in and beneficiaries of The
Northern Trust Company Thrift-Incentive Plan whose individual
accounts held shares of Corporation common stock at any time from
October 19, 2007, to January 14, 2009. The complaint purports to
allege breaches of fiduciary duty in violation of ERISA related to
the Corporation's stock being offered as an investment alternative
for participants in the Plan and seeks monetary damages in an
unspecified amount. At this stage of the suit, it is not possible
for management to assess the probability of a material adverse
outcome or reasonably estimate the amount of any potential loss.
No updates were reported in the Company's April 29, 2011, Form
10-Q filing with the U.S. Securities and Exchange Commission for
the quarter ended March 31, 2011.
Northern Trust Corporation operates as the holding company for The
Northern Trust Company that provides a range of banking and
financial services to large and mid-sized corporations and
financial institutions in the United States and internationally.
Northern Trust Corporation was founded in 1889 and is
headquartered in Chicago, Illinois.
NORTHERN TRUST: Continues to Defend Ill. Securities Class Action
----------------------------------------------------------------
Northern Trust Corp. continues to defend itself in a securities
class action lawsuit pending in Illinois.
On August 24, 2010, a lawsuit was filed in federal court in the
Northern District of Illinois against the Corporation and three of
its present or former officers, including the present and former
chief executive officers of the Corporation, on behalf of a
purported class of purchasers of Corporation stock during the
period from October 17, 2007, to October 20, 2009. The amended
complaint alleges that during the purported class period the
defendants violated Sections 10(b) and 20(a) of the Exchange Act
by allegedly taking insufficient provisions for credit losses with
respect to the Corporation's residential real estate loan
portfolio and failing to make sufficient disclosures regarding its
securities lending business. Plaintiff seeks compensatory damages
in an unspecified amount. At this stage of the suit, it is not
possible for management to assess the probability of a material
adverse outcome or reasonably estimate the amount of any potential
loss.
No updates were reported in the Company's April 29, 2011, Form
10-Q filing with the U.S. Securities and Exchange Commission for
the quarter ended March 31, 2011.
Northern Trust Corporation operates as the holding company for The
Northern Trust Company that provides a range of banking and
financial services to large and mid-sized corporations and
financial institutions in the United States and internationally.
Northern Trust Corporation was founded in 1889 and is
headquartered in Chicago, Illinois.
RED HAT: Appeals From IPO Suit Settlement Remain Pending
--------------------------------------------------------
Commencing on or about March 2001, Red Hat, Inc., and certain of
its officers and directors were named as defendants in a series of
purported class action suits arising out of the Company's initial
public offering and secondary offering. Approximately 310 other
IPO issuers were named as defendants in similar class action
complaints (together, the "IPO Allocation Actions"). On August 8,
2001, Chief Judge Michael Mukasey of the U.S. District Court for
the Southern District of New York issued an order that transferred
all of the IPO Allocation Actions, including the complaints
involving the Company, to one judge for coordinated pre-trial
proceedings (Case No. 21 MC 92). The plaintiffs contend that the
defendants violated federal securities laws by issuing
registration statements and prospectuses that contained materially
false and misleading information and failed to disclose material
information. Plaintiffs also challenge certain IPO allocation
practices by underwriters and the lack of disclosure thereof in
initial public offering documents. On April 19, 2002, plaintiffs
filed amended complaints in each of the 310 consolidated actions,
including the Red Hat action. The relief sought consists of
unspecified damages, attorneys' and expert fees and other
unspecified costs. In October of 2002, the individual director
and officer defendants of the Company were dismissed from the case
without prejudice. In October of 2004, the District Court
certified a class in six of the 310 actions (the "focus cases")
and noted that the decision is intended to provide strong guidance
to all parties regarding class certification in the remaining
cases. The Company's action is not one of the focus cases.
On December 5, 2006, the U.S. Court of Appeals for the Second
Circuit vacated the District Court's class certification with
respect to the focus cases and remanded the matter for further
consideration. In September 2007, discovery moved forward in the
focus cases and plaintiff filed and amended complaints against the
focus case issuer and underwriter defendants. Defendants in the
focus cases filed motions to dismiss the second amended complaints
in November 2007 and filed their oppositions to plaintiffs' motion
for class certification in December 2007. The motions to dismiss
in the focus cases were granted in part. On April 2, 2009, the
plaintiffs' executive committee on behalf of the proposed class
filed a motion for preliminary approval of a settlement agreement
to resolve the lawsuit, to which the Company has consented and for
which payments called for by the settlement agreement are to be
paid by the defendant insurers. The trial court heard arguments
on September 10, 2009 on the fairness of the settlement. In an
opinion and order filed October 5, 2009, the trial court approved
the class, granted plaintiffs' motion for approval of the
settlement and directed the clerk of the court to close the
action. Appeals have been filed and briefed before the Court of
Appeals for the Second Circuit.
No further updates were reported in the Company's April 29, 2011,
Form 10-K filing with the U.S. Securities and Exchange Commission
for the year ended February 28, 2011.
REHABCARE GROUP: Defends Class Action Suits Over Kindred Merger
---------------------------------------------------------------
Rehabcare Group, Inc., is defending itself against class action
lawsuits filed by its stockholders over the Company's merger with
Kindred Healthcare, Inc., according to the Company's April 29,
2011, Form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarter ended March 31, 2011.
RehabCare is aware of five purported class actions -- of which
three filed in the Court of Chancery have been consolidated into
one purported class action -- filed by purported stockholders of
RehabCare relating to the proposed merger of RehabCare into
Kindred and against RehabCare, RehabCare's directors and Kindred.
The complaints allege, among other things, that RehabCare's
directors breached their fiduciary duties to the RehabCare
stockholders, and that RehabCare and Kindred aided and abetted
RehabCare's directors in such alledge breaches of their fiduciary
duties. The plaintiffs seek injunctive relief preventing the
defendants from consummating the transactions contemplated by the
Merger Agreement, rescission of such transactions and attorneys'
fees and expenses. RehabCare, Kindred and the other defendants
believe that the lawsuits are without merit and intend to defend
against them.
REPUBLIC SERVICES: Oral Argument on Appeal Set for August 2011
--------------------------------------------------------------
Oral argument is scheduled for August 2011 on Republic Services,
Inc.'s appeal from an order granting class certification relating
to a lawsuit alleging nuisance from the activities of a hazardous
waste facility in Louisiana, according to the Company's April 29,
2011, Form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarter ended March 31, 2011.
On October 13, 2009, the Twenty-First Judicial District Court,
Parish of Livingston, State of Louisiana, issued its Post Class
Certification Findings of Fact and Conclusions of Law in a lawsuit
alleging nuisance from the activities of the CECOS hazardous waste
facility located in Livingston Parish, Louisiana. The court
granted class certification for all those living within a six mile
radius of the CECOS site between the years 1977 and 1990. The
Company has filed a notice of appeal with respect to the class
certification order and oral argument is scheduled for August
2011. The parties have held one mediation session and expect to
hold additional sessions. If the mediation is not successful, the
Company says it intends to continue to defend this lawsuit
vigorously.
REPUBLIC SERVICES: Plaintiff May Seek Class Status Until Nov. 10
----------------------------------------------------------------
Plaintiff's deadline for seeking class certification in the
lawsuit filed against BFI Waste Services, LLC, is on November 10,
2011, according to Republic Services, Inc.'s April 29, 2011, Form
10-Q filing with the U.S. Securities and Exchange Commission for
the quarter ended March 31, 2011.
On November 20, 2009, Klingler's European Bake Shop & Deli, Inc.,
filed a complaint against BFI Waste Services, LLC, in the Circuit
Court of Jefferson County, Alabama, in which plaintiff complains
about fuel recovery fees and administrative fees charged. The
complaint purports to be filed on behalf of a class of similarly
situated plaintiffs in Alabama. This complaint asserts various
legal and equitable theories of recovery and alleges in essence
that the fees were not properly disclosed, were unfair, and were
contrary to contract. Class-certification-related discovery is
underway. Plaintiff's deadline for moving for class certification
is November 10, 2011. Plaintiff has not specified the amount of
damages sought.
Although the range of reasonably possible loss cannot be
estimated, the Company does not believe that this matter will have
a material impact on its consolidated financial positions, results
of operations or cash flows. The Company says it will continue to
vigorously defend the claims in this lawsuit.
REYNOLDS AMERICAN: Awaits Ruling on Appeal From Suit Dismissal
--------------------------------------------------------------
Parties to a lawsuit against major U.S. cigarette manufacturers,
including Reynolds American Inc.'s subsidiaries, are awaiting a
decision on the plaintiffs' appeal from the Court's refusal to
reconsider its order dismissing the plaintiffs' fourth amended
complaint, according to the Company's April 29, 2011, Form 10-Q
filing with the U.S. Securities and Exchange Commission for the
quarter ended March 31, 2011.
In Cleary v. Philip Morris, Inc., a case filed in June 1998, and
pending in Circuit Court, Cook County, Illinois, the plaintiffs
filed their motion for class certification in December 2001, in an
action brought against the major U.S. cigarette manufacturers,
including R. J. Reynolds Tobacco Company and Brown & Williamson
Holdings, Inc. The case was brought on behalf of persons who have
allegedly been injured by (1) the defendants' purported conspiracy
pursuant to which defendants concealed material facts regarding
the addictive nature of nicotine, (2) the defendants' alleged acts
of targeting their advertising and marketing to minors, and (3)
the defendants' claimed breach of the public right to defendants'
compliance with the laws prohibiting the distribution of
cigarettes to minors. The plaintiffs requested that the
defendants be required to disgorge all profits unjustly received
through their sale of cigarettes to plaintiffs and the class,
which in no event will be greater than $75,000 per each class
member, inclusive of punitive damages, interest and costs. In
March 2006, the court dismissed count V, public nuisance, and
count VI, unjust enrichment. The plaintiffs filed an amended
complaint in March 2009, to add a claim of unjust enrichment and,
to include in the class, individuals who smoked "light"
cigarettes. RJR Tobacco and B&W answered the amended complaint in
March 2009. In July 2009, the plaintiffs filed an additional
motion for class certification. In September 2009, the court
granted the defendants' motion for summary judgment on the
pleadings concerning the "lights" claims as to all defendants
other than Philip Morris.
In February 2010, the court denied the plaintiffs' motion for
class certification of all three putative classes. However, the
court ruled that the plaintiffs may reinstate the class dealing
with the conspiracy to conceal the addictive nature of nicotine if
they identify a new class representative. In April 2010, the
court granted the plaintiffs' motion to file a fourth amended
complaint and withdraw the motion to reinstate count I by
identifying a new plaintiff. The defendants filed a motion to
dismiss the plaintiffs' fourth amended complaint, which was
granted in June 2010. The court denied the plaintiffs' motion to
reconsider, and in August 2010, the plaintiffs filed a notice of
appeal in the U.S. Court of Appeals for the Seventh Circuit. Oral
argument occurred on April 7, 2011. A decision is pending.
REYNOLDS AMERICAN: Awaits Decision in ERISA-Violation Suit
----------------------------------------------------------
Reynolds American Inc. and other parties to a North Carolina class
action lawsuit alleging violation of the Employee Retirement
Income Security Act of 1974 are awaiting a decision after the
parties filed their findings of fact and conclusions of law in
February, according to the Company's April 29, 2011, Form 10-Q
filing with the U.S. Securities and Exchange Commission for the
quarter ended March 31, 2011.
In May 2002, in Tatum v. The R.J.R. Pension Investment Committee
of the R. J. Reynolds Tobacco Company Capital Investment Plan, an
employee of RJR Tobacco filed a class-action suit in the U.S.
District Court for the Middle District of North Carolina, alleging
that the defendants, RJR, RJR Tobacco, the RJR Employee Benefits
Committee and the RJR Pension Investment Committee, violated the
Employee Retirement Income Security Act of 1974, referred to as
ERISA. The actions about which the plaintiff complains stem from
a decision made in 1999 by RJR Nabisco Holdings Corp.,
subsequently renamed Nabisco Group Holdings Corp., referred to as
NGH, to spin off RJR, thereby separating NGH's tobacco business
and food business. As part of the spin-off, the 401(k) plan for
the previously related entities had to be divided into two
separate plans for the now separate tobacco and food businesses.
The plaintiff contends that the defendants violated ERISA by not
overriding an amendment to RJR's 401(k) plan requiring that, prior
to February 1, 2000, the stock funds of the companies involved in
the food business, NGH and Nabisco Holdings Corp., referred to as
Nabisco, be eliminated as investment options from RJR's 401(k)
plan. In his complaint, the plaintiff requests, among other
things, that the court require the defendants to pay as damages to
the RJR 401(k) plan an amount equal to the subsequent appreciation
that was purportedly lost as a result of the liquidation of the
NGH and Nabisco funds.
In July 2002, the defendants filed a motion to dismiss, which the
court granted in December 2003. In December 2004, the U.S. Court
of Appeals for the Fourth Circuit reversed the dismissal of the
complaint and remanded the case for further proceedings. The
court granted the plaintiff leave to file an amended complaint and
denied all pending motions as moot. In April 2007, the defendants
moved to dismiss the amended complaint. The court granted the
motion in part and denied it in part, dismissing all claims
against the RJR Employee Benefits Committee and the RJR Pension
Investment Committee. The remaining defendants, RJR and RJR
Tobacco, filed their answer and affirmative defenses in June 2007.
The plaintiff filed a motion for class certification, which the
court granted in September 2008. The district court ordered
mediation, but no resolution of the case was reached. In
September 2008, each of the plaintiffs and the defendants filed
motions for summary judgment, and in January 2009, the defendants
filed a motion to decertify the class. A second mediation
occurred in June 2009, but again no resolution of the case was
reached. The district court overruled the motions for summary
judgment and the motion to decertify the class. The non-jury
trial began on January 12, 2010, and closing arguments ended on
February 9, 2010. The parties filed their findings of fact and
conclusions of law on February 4, 2011. A decision is pending.
REYNOLDS AMERICAN: Continues to Defend "Scott" Class Suit
---------------------------------------------------------
On November 5, 1998, in Scott v. American Tobacco Co., a case
filed in District Court, Orleans Parish, Louisiana, the trial
court certified a medical monitoring or smoking cessation class of
Louisiana residents who were smokers on or before May 24, 1996, in
an action brought against the major U.S. cigarette manufacturers,
including R. J. Reynolds Tobacco Company and Brown & Williamson
Holdings, Inc., seeking to recover an unspecified amount of
compensatory and punitive damages. In July 2003, the jury
returned a verdict in favor of the defendants on the plaintiffs'
claim for medical monitoring and found that cigarettes were not
defectively designed. However, the jury also made certain
findings against the defendants on claims relating to fraud,
conspiracy, marketing to minors and smoking cessation.
Notwithstanding these findings, this portion of the trial did not
determine liability as to any class member or class
representative. What primarily remained in the case was a class-
wide claim that the defendants pay for a program to help people
stop smoking.
In May 2004, the jury returned a verdict in the amount of $591
million on the class's claim for a smoking cessation program. In
September 2004, the defendants posted a $50 million bond, pursuant
to legislation that limits the amount of the bond to $50 million
collectively for MSA signatories, and noticed their appeal. RJR
Tobacco posted $25 million (the portions for RJR Tobacco and B&W)
towards the bond. In February 2007, the Louisiana Court of
Appeals upheld the class certification and found the defendants
responsible for funding smoking cessation for eligible class
members. The appellate court also ruled, however, that the
defendants were not liable for any post-1988 claims, rejected the
award of prejudgment interest, struck eight of the 12 components
of the smoking cessation program and remanded the case for further
proceedings. In particular, the appellate court ruled that no
class member, who began smoking after September 1, 1988, could
receive any relief, and that only those smokers, whose claims
accrued on or before September 1, 1988, would be eligible for the
smoking cessation program. The plaintiffs have expressly
represented to the trial court that none of their claims accrued
before 1988 and that the class claims did not accrue until around
1996, when the case was filed. The defendants' application for
writ of certiorari with the Louisiana Supreme Court was denied in
January 2008. The defendants' petition for writ of certiorari
with the U.S. Supreme Court was denied in June 2008. In July
2008, the trial court entered an amended judgment in the case,
finding that the defendants are jointly and severally liable for
funding the cost of a court-supervised smoking cessation program
and ordered the defendants to deposit approximately $263 million
together with interest from June 30, 2004, into a trust for the
funding of the program. The court also stated that it would
favorably consider a motion to return to defendants a portion of
unused funds at the close of each program year in the event the
monies allocated for the preceding program year were not fully
expended because of a reduction in class size or underutilization
by the remaining plaintiffs.
In April 2010, the Louisiana Fourth Circuit Court of Appeal
amended the final judgment, and as amended, affirmed the judgment.
Pursuant to the judgment, the defendants were required to deposit
with the court $242 million with judicial interest from July 21,
2008, until paid. In September 2010, the defendants' application
for writ of certiorari with the Louisiana Supreme Court and
emergency motion to stay execution of judgment in the Supreme
Court of Louisiana were denied. The U.S. Supreme Court also
granted the application to stay the judgment pending applicants'
timely filing, and the Court's disposition, of a petition for writ
of certiorari. The defendants filed a petition for writ of
certiorari in the U.S. Supreme Court in December 2010, and the
plaintiffs' response was filed in February 2011.
No further updates were reported in the Company's April 29, 2011,
Form 10-Q filing with the U.S. Securities and Exchange Commission
for the quarter ended March 31, 2011.
REYNOLDS AMERICAN: Continues to Defend Engle Progeny Cases
----------------------------------------------------------
Reynolds American Inc.'s subsidiary, R. J. Reynolds Tobacco
Company, continues to defend itself against Engle Progeny Cases,
according to the Company's April 29, 2011, Form 10-Q filing with
the U.S. Securities and Exchange Commission for the quarter ended
March 31, 2011.
In 2000, a jury in Engle v. R. J. Reynolds Tobacco Co., rendered a
punitive damages verdict in favor of the "Florida class" of
approximately $145 billion against all defendants. In July 2006,
the Florida Supreme Court, among other things, affirmed an
appellate court's reversal of the punitive damages award,
decertified the class going forward, preserved several class-wide
findings from the trial, including that nicotine is addictive and
cigarettes are defectively designed, and authorized class members
to avail themselves of these findings in individual lawsuits under
certain conditions. After subsequent motions were resolved, the
Florida Supreme Court issued its mandate on January 11, 2007, thus
beginning a one-year period in which former class members were
permitted to file individual lawsuits. In October 2007, the U.S.
Supreme Court denied the defendants' petition for writ of
certiorari. As of March 31, 2011, RJR Tobacco had been served in
7,267 Engle Progeny cases in both state and federal courts in
Florida. These cases include approximately 8,622 plaintiffs. The
number of cases will likely change due to individual plaintiffs
being severed from multi-plaintiff cases. In addition, as of
March 31, 2011, RJR Tobacco was aware of 27 additional cases that
had been filed but not served (with 299 plaintiffs). A number of
the Engle Progeny cases are scheduled for trial or are in trial.
REYNOLDS AMERICAN: Trial in Suits vs. Units Did Not Proceed
-----------------------------------------------------------
A nominal trial date set for January 10, 2011, in two Missouri
lawsuits against Reynolds American Inc.'s subsidiaries did not
proceed at that time, according to the Company's April 29, 2011,
Form 10-Q filing with the U.S. Securities and Exchange Commission
for the quarter ended March 31, 2011.
A "lights" class-action case is pending against each of R. J.
Reynolds Tobacco Company and Brown & Williamson Holdings, Inc. in
Missouri. In Collora v. R. J. Reynolds Tobacco Co., a case filed
in May 2000 in Circuit Court, St. Louis County, Missouri, a judge
in St. Louis certified a class in December 2003. In April 2007,
the court granted the plaintiffs' motion to reassign Collora and
the following cases to a single general division: Craft v. Philip
Morris Companies, Inc. and Black v. Brown & Williamson Tobacco
Corp. In April 2008, the court stayed the case pending U.S.
Supreme Court review in Good v. Altria Group, Inc. A nominal trial
date of January 10, 2011, was scheduled, but it did not proceed at
that time. There is currently no activity in the case.
In Black v. Brown & Williamson Tobacco Corp., a case filed in
November 2000 in Circuit Court, City of St. Louis, Missouri, B&W
removed the case to the U.S. District Court for the Eastern
District of Missouri. The plaintiffs filed a motion to remand,
which was granted in March 2006. In April 2008, the court stayed
the case pending U.S. Supreme Court review in Good v. Altria
Group, Inc. A nominal trial date of January 10, 2011, was
scheduled, but it did not proceed at that time. There is
currently no activity in the case.
REYNOLDS AMERICAN: Unit Continues to Defend "Thompson" Suit
-----------------------------------------------------------
In Thompson v. R. J. Reynolds Tobacco Co., a case filed in
February 2005 in District Court, Hennepin County, Minnesota, RJR
Tobacco removed the case to the U.S. District Court for the
District of Minnesota. In October 2007, the U.S. District Court
remanded the case to state district court. In May 2009, the court
entered an agreed scheduling order that bifurcates merits and
class certification discovery. The parties are engaged in class
certification discovery, and this case is likely to remain active
through 2011. In July 2009, the plaintiffs in this case and in
Dahl v. R. J. Reynolds Tobacco Co. filed a motion to consolidate
for discovery and trial. In October 2009, the court companioned
the two cases and reserved its ruling on the motion to
consolidate, which it said will be reevaluated as discovery
progresses. In February 2010, a stipulation and order was entered
to stay proceedings in this case, and in Thompson until completion
of all appellate review in Curtis v. Altria Group, Inc. There is
currently no activity in the case.
No further updates were reported in Reynolds American Inc.'s
April 29, 2011, Form 10-Q filing with the U.S. Securities and
Exchange Commission for the quarter ended March 31, 2011.
REYNOLDS AMERICAN: Unit Remains a Defendant in "Howard" Suit
------------------------------------------------------------
In Howard v. Brown & Williamson Tobacco Corp., another case filed
in February 2000 in Circuit Court, Madison County, Illinois, a
judge certified a class in December 2001. In June 2003, the trial
judge issued an order staying all proceedings pending resolution
of the Price v. Philip Morris, Inc. case. The plaintiffs appealed
this stay order to the Illinois Fifth District Court of Appeals,
which affirmed the Circuit Court's stay order in August 2005.
There is currently no activity in the case.
No further updates were reported in Reynolds American Inc.'s
April 29, 2011, Form 10-Q filing with the U.S. Securities and
Exchange Commission for the quarter ended March 31, 2011.
REYNOLDS AMERICAN: Unit Remains a Defendant in "Turner" Suit
------------------------------------------------------------
In Turner v. R. J. Reynolds Tobacco Co., a case filed in February
2000 in Circuit Court, Madison County, Illinois, a judge certified
a class in November 2001. In June 2003, RJR Tobacco filed a
motion to stay the case pending Philip Morris's appeal of the
Price v. Philip Morris Inc. case, which the judge denied in July
2003. In October 2003, the Illinois Fifth District Court of
Appeals denied RJR Tobacco's emergency stay/supremacy order
request. In November 2003, the Illinois Supreme Court granted RJR
Tobacco's motion for a stay pending the court's final appeal
decision in Price. On October 11, 2007, the Illinois Fifth
District Court of Appeals dismissed RJR Tobacco's appeal of the
court's denial of its emergency stay/supremacy order request and
remanded the case to the circuit court. There is currently no
activity in the case.
No further updates were reported in Reynolds American Inc.'s
April 29, 2011, Form 10-Q filing with the U.S. Securities and
Exchange Commission for the quarter ended March 31, 2011.
REYNOLDS AMERICAN: Units Await Ruling in "Smith" Suit
-----------------------------------------------------
Reynolds American Inc.'s subsidiaries are waiting for a decision
on their motion for summary judgment in a lawsuit currently
pending in Kansas, according to the Company's April 29, 2011, Form
10-Q filing with the U.S. Securities and Exchange Commission for
the quarter ended March 31, 2011.
In Smith v. Philip Morris Cos., Inc., a case filed in February
2000, and pending in District Court, Seward County, Kansas, the
court granted class certification in November 2001, in an action
brought against the major U.S. cigarette manufacturers, including
R. J. Reynolds Tobacco Company and Brown & Williamson Holdings,
Inc., and the parent companies of the major U.S. cigarette
manufacturers, including RJR, seeking to recover an unspecified
amount in actual and punitive damages. The plaintiffs allege that
the defendants participated in a conspiracy to fix or maintain the
price of cigarettes sold in the United States. The parties are
currently engaged in discovery. In November 2010, RJR Tobacco and
B&W filed a motion for summary judgment. A decision is pending.
SAIA INC: Labor Laws-Violation Suit Remains Pending in California
-----------------------------------------------------------------
The class action lawsuit against Saia, Inc., alleging various
violations of state labor laws remains pending in California,
according to the Company's April 29, 2011, Form 10-Q filing with
the U.S. Securities and Exchange Commission for the quarter ended
March 31, 2011.
The Company is a defendant in a lawsuit filed on September 21,
2010, in the Superior Court of the State of California, County of
Bernardino. The lawsuit was brought by a former line driver
seeking to represent himself and similarly-situated putative class
members in connection with his claims alleging various violations
of state labor laws. The claims include the alleged failure of
the Company to provide rest and meal breaks and the alleged
failure to compensate for all time worked. The plaintiff also
seeks to recover civil penalties on behalf of California in
connection with alleged California Labor Code violations pursuant
to the Private Attorney General Statute and is seeking class
action certification.
The Company has denied any liability and intends to vigorously
defend itself in opposing the liability claims and class action
certification. Given the nature and status of the claims, the
Company says it cannot yet determine the amount or a reasonable
range of potential loss, if any.
SOLID GROUND: Sued Over Illegal "Debt Adjustment" Services
----------------------------------------------------------
Courthouse News Service reports that a class action claims Solid
Ground Financial and JIO Reserves charge upfront fees for unfair
and illegal "debt adjustment" services.
A copy of the Complaint in Bomsta v. Solid Ground Financial, LLC,
et al., Case No. 11-2-16754-2 (Wash. Super. Ct., King Cty.), is
available at:
http://www.courthousenews.com/2011/05/09/Debt.pdf
The Plaintiff is represented by:
Darrell W. Scott, Esq.
Matthew J. Zuchetto, Esq.
THE SCOTT LAW GROUP, P.S.
926 W. Sprague Avenue, Suite 680
Spokane, WA 99201
Telephone: (509) 455-3966
E-mail: scottgroup@me.com
SOUTHERN STAR: Price Litigations I and II Remain Pending
--------------------------------------------------------
In the putative class action, Will Price, et al. v. El Paso
Natural Gas Co., et al., Case No. 99 C 30, District Court, Stevens
County, Kansas, or Price Litigation I, filed May 28, 1999, the
named plaintiffs, or Plaintiffs, have sued over 50 defendants,
including Southern Star Central Corp. Asserting theories of civil
conspiracy, aiding and abetting, accounting and unjust enrichment,
their Fourth Amended Class Action Petition alleges that the
defendants have under measured the volume of, and therefore have
underpaid for, the natural gas they have obtained from or measured
for Plaintiffs. Plaintiffs seek unspecified actual damages,
attorney fees, pre- and post-judgment interest, and reserved the
right to plead for punitive damages. On August 22, 2003, an
answer to that pleading was filed on behalf of Central. Despite a
denial by the Court on April 10, 2003 of their original motion for
class certification, the Plaintiffs continued to seek the
certification of a class. The Plaintiffs' motion seeking class
certification for a second time was fully briefed and the Court
heard oral argument on the motion on April 1, 2005. On
September 18, 2009, the Court denied the Plaintiffs' most recent
motion for class certification. The Plaintiffs filed a motion to
reconsider that ruling on October 2, 2009. The defendants,
including Central, filed a response in opposition to the
Plaintiffs' motion for reconsideration on January 18, 2010. The
Plaintiffs filed a reply, and oral argument, which was presented
before a different judge, was heard on February 10, 2010. By
order dated March 31, 2010, the Court denied the Plaintiffs'
October 2, 2009 motion to reconsider the earlier denial of class
certification. The Plaintiffs did not file for interlocutory
review of the March 31, 2010 order; however, it is unknown at this
time whether the Plaintiffs intend to proceed with the merits of
their claims, absent class certification or plan to move to
dismiss the lawsuit.
In the putative class action, Will Price, et al. v. El Paso
Natural Gas Co., et al., Case No. 03 C 23, District Court, Stevens
County, Kansas, or Price Litigation II, filed May 12, 2003, the
named Plaintiffs from Case No. 99 C 30 have sued the same
defendants, including Southern Star Central Corp. Asserting
substantially identical legal and/or equitable theories, as in
Price Litigation I, this petition alleges that the defendants have
under measured the British thermal units, or Btu, content of, and
therefore have underpaid for, the natural gas they have obtained
from or measured for Plaintiffs. Plaintiffs seek unspecified
actual damages, attorney fees, pre- and post-judgment interest,
and reserved the right to plead for punitive damages. On
November 10, 2003, an answer to that pleading was filed on behalf
of Central. The Plaintiffs' motion seeking class certification,
along with Plaintiffs' second class certification motion in Price
Litigation I, was fully briefed and the Court heard oral argument
on this motion on April 1, 2005. On September 18, 2009, the Court
denied the Plaintiffs' motion for class certification. The
Plaintiffs filed a motion to reconsider that ruling on October 2,
2009. The defendants, including Central, filed a response in
opposition to the Plaintiffs' motion for reconsideration on
January 18, 2010. The Plaintiffs filed a reply, and oral
argument, which was presented before a different judge, was heard
on February 10, 2010. By order dated March 31, 2010, the Court
denied the Plaintiffs' October 2, 2009 motion to reconsider the
earlier denial of class certification. The Plaintiffs did not
file for interlocutory review of the March 31, 2010, order;
however, it is unknown at this time whether the Plaintiffs intend
to proceed with the merits of their claims, absent class
certification or plan to move to dismiss the lawsuit.
No further updates were reported in the Company's April 29, 2011,
Form 10-Q filing with the U.S. Securities and Exchange Commission
for the quarter ended March 31, 2011.
STANDARD PACIFIC: 77 Join Class Suit Over "Chinese Drywall"
-----------------------------------------------------------
Customers of Standard Pacific Corp. who had Chinese drywall
installed by the Company are joining a federal class action
lawsuit, the Company disclosed in its April 29, 2011, Form 10-Q
filing with the U.S. Securities and Exchange Commission for the
quarter ended March 31, 2011.
Like many other homebuilders, the Company has determined that some
of its subcontractors installed drywall manufactured in China in
the Company's homes. Reports have indicated that certain Chinese
drywall, thought to be delivered to the United States primarily
during 2005 and 2006, may emit various sulfur-based gases that,
among other things, have the potential to corrode non-ferrous
metals (copper, silver, etc.). The Company has conducted an
internal review in an attempt to determine how many of the homes
that the Company constructed may be impacted. To date, it appears
that a subset of homes with drywall dating from February 2006,
through February 2007, in five of its Florida communities, contain
some high-sulfur Chinese drywall. The Company has inspected all
but one of the homes that it believes are likely to be impacted in
these communities based on their location and drywall installation
dates. Approximately 172 have been confirmed to have been
constructed with high-sulfur drywall (including 14 Company owned
homes), and the Company is still seeking access to the one
remaining home to complete its investigation. The Company has
also received complaints from two other homeowners outside of
these five communities who have, thus, far refused to let the
Company inspect their homes. If the Company is to locate high
sulfur drywall outside of these communities or drywall
installation dates, it would broaden the scope of its
investigation. The Company has notified homeowners of the results
of its inspections, and has offered to make comprehensive repairs,
including removing and replacing all drywall and wiring. The
Company has entered into approximately 142 settlement agreements
to repair homes that it sold, and have commenced the repair
process on all of these homes, including those owned by the
Company. The Company intends to continue to negotiate additional
settlements as it makes repairs and will work through the group as
quickly and efficiently as possible. Although the Company is
encouraging homeowners to allow it to make repairs rather than
engaging in litigation, approximately 77 homeowners have joined a
federal class action lawsuit or filed suit in state court, seeking
property and, in some cases, bodily injury damages. Over 50 of
these already have agreed to allow the Company to make repairs.
The Company says it plans to vigorously defend litigation
involving Chinese drywall, while seeking to make repairs wherever
possible.
VALE SA: Appeals Ruling in Class Action Over Nickel Pollution
-------------------------------------------------------------
Jeff Gray, writing for Globe and Mail, reports that lawyers for
Vale SA were set to appear in a Toronto courtroom on May 9 to
appeal a groundbreaking class-action ruling that ordered the
company to pay homeowners in Port Colborne, Ont., C$36 million in
compensation for decades of pollution from an Inco nickel
refinery.
The Brazilian mining giant, which took over Inco in 2006, is
challenging a decision by Mr. Justice Joseph Henderson of the
Ontario Superior Court that would see affected homeowners in the
city of 18,000 compensated for the effect of the nickel pollution
on their property values.
A three-judge panel of the Ontario Court of Appeal will hear the
case, which is scheduled to last four days.
Judge Henderson's ruling, issued last July, raised eyebrows. Some
legal observers said it could mean more U.S.-style "toxic tort"
class-action lawsuits against polluters, the kind of confrontation
dramatized a decade ago in the Hollywood movie Erin Brockovich,
starring Julia Roberts.
Some critics said the judgment should be "terrifying" to any
industry with a smokestack, as it could expose even companies that
follow all environmental rules to massive liabilities.
Inco was not found to have been negligent or to have broken any
laws. And the company's lawyers argue in their appeal that the
nickel residue has not damaged people's health or their
properties.
While the health effects of the nickel fumes that came out of its
smokestacks have been hotly debated among people in Port Colborne,
the plaintiffs dropped their health claims in this class action.
The company disputes Judge Henderson's use of an 1868 decision by
Britain's House of Lords called Rylands v. Fletcher to find Inco
liable for the nickel residue that ended up in the soil of many of
the town's gardens and backyards.
In the Rylands case, a landowner was found liable after a water
reservoir, deemed a "non-natural" use of land, flooded a
neighbor's mine. Vale argues that legally operating a nickel
refinery should be considered a "natural" activity.
The company also criticizes the calculations the court used to
compare property values in Port Colborne with those in a nearby
town.
And Vale disagrees with the judge's decision to stretch the
standard time-limitation period for a lawsuit like this one.
Normally, plaintiffs would have six years after the pollution
ceased to make their claims. Inco stopped refining nickel at its
Port Colborne plant in 1984, but the lawsuit wasn't filed until
2001.
Judge Henderson ruled that the limitation period should start
around 2000, when concerns about nickel pollution became widely
known after new government testing, potentially creating a
precedent for other pollution cases. But Vale's lawyers argue the
town's residents knew full well what was coming out of Inco's 150-
metre smokestack for decades.
In written arguments, a lawyer for the plaintiffs says Vale's
appeal should be tossed out: "This was a fact-driven case and the
facts drove the result. The trial judge's decision should be
sustained and the appeal should be dismissed."
VERIZON WIRELESS: Faces Class Action in N.J. Over "Cramming"
------------------------------------------------------------
Charles Toutant, writing for New Jersey Law Journal, reports that
Verizon Wireless is charged in a putative class-action suit in
federal court in New Jersey with "cramming," the practice of
allowing unauthorized charges from third-party companies to be
added to its customers' phone bills without verification of their
authenticity.
The thrust of the suit, Considine v. Verizon Wireless, 2:11-cv-
02461, is that the company lets outside vendors sell horoscopes,
sports scores and other content to its subscribers on their mobile
phones but has no way of knowing whether the purchases were
authorized.
Mobile content providers are able to "piggyback" on consumers'
phone bills with the help of middle men known as "aggregators,"
the suit says. The consumer pays the wireless company, which then
makes payment to the aggregator, which in turn remits funds to the
content provider.
"[A] substantial part of mobile content 'sales' are effected
through websites using misleading, oblique, or inadequately
explained 'consent' procedures," the suit says. "Defendants'
continued conduct in billing telephone subscribers for premium
content, combined with their failure to implement a billing system
that would ensure consumers who did, in fact, authorize charges
for such services were billed for them," is a deliberate strategy
by defendants to unlawfully collect small sums of money from a
large number of consumers."
Originally filed in Bergen County Superior Court by named
plaintiff John Considine of Rutherford, the case was removed to
federal court in Newark April 29 based on the Class Action
Fairness Act (CAFA) and federal question jurisdiction. The
company identified itself in its removal notice as Cellco
Partnership d/b/a Verizon Wireless.
The CAFA, enacted in 2005, grants district courts original
jurisdiction over putative class actions in which the amount in
controversy exceeds $5 million and any member of the putative
class of plaintiffs is a citizen of a state different from any
defendant. Verizon has certified that both of those conditions
are satisfied in the present case.
Besides Verizon, the complaint names as defendants three mobile
content providers alleged to have placed charges on
Mr. Considine's Verizon Wireless phone bill for services he did
not order. The complaint says Verizon refused his requests to
take the charges off his bill.
The providers include SendMe, Inc., of San Francisco, identified
in the complaint as the operator of WT411.com, a Web site that
features news about celebrities. The site costs $9.99 a month,
billed to the user's mobile phone, for the privilege of leaving
comments and entering monthly contests.
Also named are Funmobile Games, Inc., of Hong Kong, which sells
ring tones, video games and wallpaper for downloading on mobile
phones, and another Web site, hot-hot-news.com.
Mr. Considine's lawyer, David DiSabato, Esq., of DiSabato &
Bouckenooghe in Mendham, says the charges were listed on
Mr. Considine's phone bill with indecipherable notations.
Mr. DiSabato says that to a mobile content provider, obtaining
someone's wireless phone number is tantamount to having their
credit card number, allowing that person to be billed for products
and services whether or not the consumer agreed to make the
purchases. The identity of the aggregator in Mr. Considine's case
is unknown, he adds.
The suit alleges violations of the Consumer Fraud Act, N.J.S.A.
56:8-1 et seq., and the Truth in Consumer Contract, Warranty and
Notice Act, N.J.S.A. 56:12-14 et seq., along with common-law
unjust enrichment.
Verizon Wireless is represented by Philip Sellinger, Esq., and
Todd Schleifstein, Esq., of Greenberg Traurig in Florham Park.
Mr. Schleifstein declined to comment and Mr. Sellinger did not
return a call.
A Verizon Wireless spokesman, David Samberg, said he was not
familiar with the Considine case but that Verizon is committed to
stamping out fraudulent cramming. He cites Cellco Partnership v.
Hope, 2:11-cv-00432, a suit the company filed in federal court in
Arizona on March 7 against three sellers of mobile content.
Mr. Samberg adds that the company has established a Web site,
http://www.premiumsmsrefunds.comto assist customers whose bills
contain unauthorized charges.
A spokeswoman for SendMe, Meg O'Leary, says the company considers
the lawsuit meritless. SendMe investigated Mr. Considine's case
and concluded that its one-time, $9.99 charge was indeed
authorized, according to Ms. O'Leary.
Funmobile did not respond to a reporter's e-mailed request for
comment on the suit, and the operator of hot-hot-news.com could
not be located.
Plaintiff's lawyer, Mr. DiSabato, says Verizon has notified him
that it intends to compel arbitration of the case, pursuant to a
clause in its service agreements with customers. Mr. DiSabato
says he plans to oppose arbitration but a recent Supreme Court
ruling stands in his way. On April 27, in AT&T Mobility, LLC, v.
Concepcion, No. 09-893, the Court ruled 5-4 that a California rule
that deems class-action waivers in arbitration agreements
unenforceable is pre-empted by the Federal Arbitration Act.
The Plaintiff's lawyer may reached at:
David J. DiSabato
DiSABATO & BOUCKENOOGHE LLC
8 Mansfield Court
Mendham, NJ 07945
Telephone: 973-813-2525
E-mail: ddisabato@disabatolaw.com
Verizon's lawyer may be reached at:
Philip Sellinger, Esq.
GREENBERG TRAURIG, LLP
200 Park Avenue, PO Box 677
Florham Park, NJ 07932
Telephone: 973-360-7910
E-mail: sellingerp@gtlaw.com
VIM RECYCLING: 7th Cir. Revives Class Action Over Toxic Fumes
-------------------------------------------------------------
Joe Celentino at Courthouse News Service reports that the United
States Court of Appeals for the 7th Circuit ruled that a federal
judge should not have used procedural grounds to dismiss Indiana
residents' class action against a wood-recycling plant.
VIM Recycling grinds wood waste into animal bedding and mulch at
the Elkhart, Ind., plant. A group of residents from the community
filed suit, claiming that fumes, dust and plant emissions threaten
their health and are contaminating the area.
The dispute started after the Indiana Department of Environmental
Management discovered VIM illegally dumping wood waste on company
grounds in 2008. When VIM failed to comply with a settlement, the
department filed suit in Indiana state court.
A class of Elkhart residents then intervened to block all waste-
disposal operations at the site and remediate the property to its
original condition. The plaintiffs also sought damages, claiming
that the plant releases harmful vapors and dust that cause
respiratory ailments, skin rashes, severe itching and sinus
irritation.
After an Indiana federal judge narrowed the interveners' claims,
however, the plaintiffs voluntarily withdrew from the dispute and
filed a federal complaint under the Resource Conservation and
Recovery Act's citizen-suit provision.
As the 50-page 7th Circuit ruling explains: "The plaintiffs took
care to differentiate their federal claims from the claims the
state asserted in the first . . . lawsuit."
Meanwhile, ongoing violations by VIM culminated in a second
lawsuit by the state's environmental department in 2009.
With three cases pending, VIM moved to dismiss the federal class
action, arguing that it was precluded by state-enforcement
litigation.
U.S. District Judge Philip Simon agreed, but a three-judge panel
for the 7th Circuit reversed on May 3.
"Based on a close examination of the lawsuits, including the state
court's rejection of the plaintiffs' efforts to pursue their
claims by intervening in the first IDEM suit, we conclude that
RCRA allows plaintiffs to pursue their claims that are beyond the
scope of the first IDEM suit," Judge Hamilton wrote, using the
acronyms for the state environmental department and the Resource
and Conservation and Recovery Act.
The statutory bar against citizen suits under RCRA is not
jurisdictional, the court ruled.
"The district court may certainly coordinate its efforts with the
state courts . . . but it must allow these plaintiffs to proceed
with their case in the forum they have chosen and that Congress
has authorized," the decision states.
Judge Kenneth Ripple partly concurred and dissented from the
panel, saying his colleagues have eliminated the discretion to
stay federal RCRA proceedings while state claims are litigated.
Rather than dismissing the suit, the District Court should have
stayed the proceedings, the 11-page opinion states.
"I view the position taken by my colleagues to be an overly rigid
one, which under the circumstances of this case, produces a result
contrary to the overall intent of RCRA and a procedural
straightjacket for district courts in future cases," Judge Ripple
wrote.
A copy of the decision in Adkins, et al. v. VIM Recycling, Inc.,
et al., No. 10-2237 (7th Cir.), is available at:
http://www.ca7.uscourts.gov/tmp/7N0OQWM4.pdf
VOLCOM INC: PPR Acquisition Investigated; Class Action Likely
-------------------------------------------------------------
Kepley DePalma, writing for Transworld Business, reports that the
recent acquisition of Volcom, Inc., by PPR SA, a deal that was
valued at approximately $516.1 million, has prompted an
investigation on behalf of investors of Volcom, Inc., in regards
to possible breaches of fiduciary duties.
The investigation will verify whether or not the Volcom Board of
Directors conducted a thorough and fair sales process or whether
they failed to sufficiently shop the company and consider all
shareholders before completing the merger transaction.
On May 2, 2011, Volcom announced that PPR, the French company who
owns Gucci and Puma, agreed to pay $24.50 per share for each
outstanding share of Volcom. The offer is reported to be a 24%
premium over the trading price of Volcom stock.
However, the proposed transaction offers no change of control
premium over the trading price of Volcom at various times over the
past year. The investigation concerns the Volcom board of
directors' process for consideration of the proposed transaction.
A potential class action lawsuit would aim to increase the amount
of money and information Volcom shareholders would receive in a
buyout.
WADDELL & REED: Continues to Defend FLSA Violation Suit
-------------------------------------------------------
Waddell & Reed Financial, Inc., continues to defend itself against
a class action lawsuit filed by former advisors, according to the
Company's April 29, 2011, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended March 31,
2011.
In the action Michael E. Taylor, Kenneth B. Young, individuals, on
behalf of themselves individually and on behalf of others
similarly situated v. Waddell & Reed, Inc., a Delaware
Corporation; Waddell & Reed Financial, Inc., a Delaware
Corporation; Waddell & Reed Development, Inc., a Delaware
Corporation; Waddell & Reed Financial Advisors, a fictitious
business name; and DOES 1 through 10 inclusive; Case No. 09-CV-
2909 DMS WVG; in the United States District Court for the Southern
District of California, filed December 28, 2009, the Company,
along with various of its affiliates, were sued in an individual
action, class action and Fair Labor Standards Act nationwide
collective action by two former advisors asserting
misclassification of financial advisors as independent contractors
instead of employees. Plaintiffs assert claims under the FLSA for
minimum wages and overtime wages, and under California Labor Code
Statutes for timely pay wages, minimum wages, overtime
compensation, meal periods, reimbursement of losses and business
expenses and itemized wage statements and a claim for Unfair
Business Practices under Section 17200 of the California Business
& Professions Code. Plaintiffs seek declaratory and injunctive
relief and monetary damages.
The Company says it intends to vigorously contest plaintiffs'
claims.
YRC WORLDWIDE: Investor Class Action Gets Class Certification
-------------------------------------------------------------
Rebecca Moore, writing for planadviser, reports that a U.S.
district court has certified a class action suit against YRC
Worldwide that claims the company offered YRC stock as a 401(k)
investment option when it was no longer prudent.
In granting the motion to certify the class, U.S. District Judge
John W. Lungstrum of the U.S. District Court for the District of
Kansas rejected the defendants' argument that the class did not
satisfy the typicality requirement for certification because there
was no claim of misleading statements or failure to disclose
information, so prudence depends on the individual investment
choices, strategies, and decisions of each participant in the
plan. Defendants also contended that their assertion of a defense
under the Employee Retirement Income Security Act (ERISA) Sec.
404(c) requires an individualized analysis of causation with
respect to each plan participant such that the claims of the named
plaintiffs are not typical of the claims of the class members.
Judge Lungstrum said he joins "what appears to be every other
court" in holding that the assertion of a Sec. 404(c) defense does
not defeat typicality (or otherwise bar certification), in large
part because the defense is not unique to the claims of certain
plaintiffs or class members but presumably would apply to all plan
participants.
As to the defendants' first argument, Judge Lungstrum said it
doesn't address the "common background" against which plan
participants operate from the outset -- the investment options
available to plan participants. In light of this common
background, "there might be plan losses in a defined-contribution
setting, and at least some of those losses might be of the type
that do not vary from participant to participant," the opinion
said.
In addition, according to Judge Lungstrum, losses that allegedly
stem from a defendant's failure to satisfy its fiduciary
obligations in its offering of investment options are losses that
would "operate across the plan." Those losses, then, do not
necessarily turn on whether the defendant, in connection with its
offering of investment options, has made material
misrepresentations or failed to disclose material facts about
those options.
The class is defined as all persons, excluding defendants and
their immediate family members, who were participants in or
beneficiaries of the plan, at any time between October 25, 2007,
and the present, and whose plan accounts included investments in
YRCW common stock directly or through shares in the YRCW Company
Stock Fund.
Judge Lungstrum previously denied the plaintiffs' request for a
jury trial in the case.
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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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Copyright 2011. All rights reserved. ISSN 1525-2272.
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