/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/110623.mbx C L A S S A C T I O N R E P O R T E R Thursday, June 23, 2011, Vol. 13, No. 123 Headlines ADAMS GOLF: Gets Judgment Against Zurich Over Insurance Coverage ALESSI & KOENIG: Faces Class Action Over HOA Debt Collection CLARCOR INC: MDL Proceeding vs. Unit Remains Stayed DAVID LERNER: Faces Two Class Actions Over Apple REITs DOLLAR TREE: Faces Class Action in Ill. Over Unpaid Overtime FLORIDA: Teachers' Union File Class Action Over Retirement Plan GIANT INTERACTIVE: Still in Negotiations to Settle New York Suit GREG MORTENSON: Former Teacher Files Class Action Over Book MAGNETIC SLIMMING: Faces Class Action Over False Advertising MAYER BROWN: Supreme Court Junks PIMCO Class Action MERRILL LYNCH: To Face Class Action Over Mortgage Securities MIDLAND NATIONAL: Settles Class Action Over Deferred Annuities NEW ORLEANS, LA: Dec. 21 Class Action Settlement Hearing Set PHILADELPHIA SCHOOL DISTRICT: Sued Over Autism Transfer Policy RURAL/METRO CORP: Enters Agreement to Settle Delaware Suit SMITHFIELD FOODS: Unit Continues to Defend "Herrold" Suit TRANSATLANTIC HOLDINGS: Being Sold for Too Little, Suit Claims UNITED STATES: Judge Okays $3.4BB Cobell Class Action Settlement VISA INC: June 24 Hearing Set for Class Action VODAFONE GROUP: Unit Continues to Defend Product Liability Suits WAL-MART: Discrimination Suit Won't Proceed as Class Action WALTER ENERGY: Hearing in Western Coal Suit Set for Oct. 2011 WARNER MUSIC: Class Actions Over Proposed Access Sale Settled WILLIAM FRY: Taps Willkie Far to Defend Against Class Action ********* ADAMS GOLF: Gets Judgment Against Zurich Over Insurance Coverage ---------------------------------------------------------------- An Illinois court granted Adams Golf, Inc.'s motion for partial summary judgment against Zurich American Insurance Company finding that Zurich had breached its contract with the Company in connection with Zurich's refusal to cover payments in the consolidated securities class action against Adams Golf, according to the Company's June 17, 2011, Form 8-K filing with the U.S. Securities and Exchange Commission. On June 13, 2011, the Circuit Court of Cook County, Illinois, among other things: (i) granted a Motion for Partial Summary Judgment filed by Adams Golf, Inc., a Delaware corporation, against its former insurance carrier, Zurich American Insurance Company, finding that Zurich had breached its contract with Adams Golf; (ii) denied Zurich's motion for summary judgment on Adams Golf's claim for violations of the Texas Prompt Payment of Claims statute; and (iii) dismissed Adams Golf's claims for misrepresentation and unfair claims settlement practices under Chapter 541 of the Texas Insurance Code. These rulings are interlocutory, which means the State Court is free to alter or vacate the rulings. If the rulings stand, Adams Golf would be entitled to recover from Zurich the sum of: (i) $5 million, (ii) 18% interest on that amount from the date of loss through the entry of final judgment and (iii) reasonable attorneys' fees. Adams Golf is also seeking consequential damages. The amount of consequential damages, if any, and attorneys' fees remain to be resolved at the time of trial. Given the preliminary nature of the State Court's rulings, the amount, if any, that Adams Golf actually recovers from Zurich or its former insurance broker, Thilman & Filipini, LLC, may vary materially from those disclosed amounts that Adams Golf is entitled to receive. Any final judgment would also be subject to an appeal, and any ultimate recovery in the case would be subject to payment of the first $1.25 million of any sums collected, net of fees and costs of lawsuit, to the class action plaintiffs. The case is currently set for trial in August 2011. At this point in the legal proceedings, Adams Golf says it cannot predict the outcome of the matter with any certainty. Zurich Lawsuit Adams Golf's pursuit of Zurich in the State Court is a result of a consolidated securities class action filed in June 1999 in the United States District Court of the District of Delaware. In the Federal Court action, the Federal Court approved a final class action settlement and entered an order dismissing with prejudice all claims against all defendants in the litigation. The settlement provided for a total payment to the class of $16.5 million in cash and a payment of the first $1.25 million, after attorneys' fees and costs, actually received (if any) by Adams Golf in connection with its litigation against T&F and Zurich. Of the $16.5 million cash settlement amount, $5.0 million was paid by Adams Golf, which it accrued as a liability during the quarter ended September 30, 2009, and paid to the settlement fund in March 2010. As part of the settlement, the underwriters for the IPO released Adams Golf from any indemnification obligation. On July 19, 2010, the appeals period for the final order of dismissal expired and the litigation was fully and finally resolved. Adams Golf maintains directors' and officers' and corporate liability insurance to cover certain risks associated with these securities claims filed against Adams Golf or its directors and officers. During the period covering the class action lawsuit, Adams Golf maintained insurance from multiple carriers, each insuring a different layer of exposure, up to a total of $50 million. In addition, Adams Golf met the financial deductible of its directors' and officers' insurance policy for the period covering the time the class action lawsuit was filed. On March 30, 2006, Zurich, which provided insurance coverage totaling $5.0 million for the layer of exposure between $15 million and $20 million, notified Adams Golf that it was denying coverage due to the fact that it was allegedly not timely notified of the class action lawsuit. On October 11, 2007, Adams Golf filed a lawsuit in the State Court against T&F, asserting various causes of action arising out of T&F's alleged failure to notify Zurich of the class action lawsuit. T&F moved to dismiss Adams Golf's lawsuit on the basis that the lawsuit was premature in that Adams Golf had not been damaged because it had not paid any sums in satisfaction of a judgment or settlement of the class action securities litigation. That motion was denied pursuant to a Memorandum Opinion and Order dated September 26, 2008. On November 16, 2009, Adams Golf filed a Second Amended Complaint reasserting its causes of action against T&F and adding Zurich as a defendant to the lawsuit, asserting various causes of action against it arising out of its denial of coverage for the class action lawsuit. Zurich has answered and filed a counterclaim against Adams Golf seeking a declaration that Adams Golf is not entitled to coverage for the class action lawsuit. ALESSI & KOENIG: Faces Class Action Over HOA Debt Collection ------------------------------------------------------------ Steve Green, writing for Vegas Inc., reports that another class- action lawsuit was filed on June 20 over Nevada homeowner association debt-collection practices. The latest target is Alessi & Koenig LLC, which says it is a law firm with offices in Las Vegas, Reno and in California. An attorney for the Estates at Seven Hills homeowner Stacy Calvert filed suit in U.S. District Court alleging violations of the federal Fair Debt Collection Practices Act. The suit, seeking class-action status on behalf of similarly- situated homeowners, says Alessi & Koenig sent Ms. Calvert a "pre- notice of default" letter in December seeking payment of $3,870 in delinquent HOA assessments and threatening to foreclose on her home. The suit says this letter violated the federal law by failing to disclose to Ms. Calvert it was a letter to collect a debt and that any information obtained would be used for that purpose. The suit also alleges "consumer fraud" based on Nevada's Deceptive Trade Practices Act. This is based on assertions Alessi & Koenig is not licensed or registered as a debt collector with the Nevada Division of Financial Institutions. The suit seeks unspecified damages. A message for comment was left with an attorney who represents Alessi & Koenig in other litigation. The suit is just the latest in a flurry of litigation that has erupted in Nevada during the past few years as the recession boosted both foreclosures and HOA assessment delinquencies. Besides being sued by homeowners, HOAs and their collection agencies have been sued by investors in foreclosed homes and a Bank of America subsidiary. Those suits challenge what the investors and Bank of America call inflated and unauthorized fees and liens filed against foreclosed homes -- liens that have to be cleared before new owners take title. The homeowner associations and collection agencies say they're in compliance with the law and that it's important past-due assessments be collected so HOA budgets can be balanced. CLARCOR INC: MDL Proceeding vs. Unit Remains Stayed --------------------------------------------------- A multidistrict litigation involving a CLARCOR Inc. subsidiary remains stayed in connection with the U.S. Department of Justice's investigation on the claims made in the proceeding, according to the Company's June 17, 2011, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended May 28, 2011. On March 31, 2008, S&E Quick Lube, a filter distributor, filed a lawsuit in U.S. District Court for the District of Connecticut alleging that virtually every major North American engine filter manufacturer, including the Company's subsidiary, Baldwin Filters, Inc., engaged in a conspiracy to fix prices, rig bids and allocate U.S. customers for aftermarket filters. This lawsuit is a purported class action on behalf of direct purchasers of filters from the Defendant Group. Parallel purported class actions, including on behalf of indirect purchasers of filters, have been filed by other plaintiffs against the Defendant Group in a variety of jurisdictions in the United States and Canada. In addition, the Attorney General of the State of Florida and the County of Suffolk, New York have filed complaints against the Defendant Group based on these same allegations, and the Attorney General of the State of Washington requested various documents, information and cooperation, which the Company has agreed to provide. In late 2010, William Burch, a former employee of two other defendants in the Defendant Group, brought an action under the United States False Claims Act and similar state statutes on behalf of the governments of the United States and approximately twenty individual states against the Defendant Group, based on these same allegations (the "Qui Tam Action"). On March 1, 2011, Mr. Burch voluntarily dismissed Baldwin Filters, Inc. from this action, without prejudice, based on certain representations by Baldwin. As such, Baldwin Filters, Inc. is no longer a defendant in the Qui Tam Action. Finally, the Company understands that the Antitrust Division of the Department of Justice was investigating the allegations raised in these lawsuits and issued subpoenas in connection with that investigation. The Company was not contacted by the DOJ in connection with the DOJ investigation and was not the subject of any subpoena. Public reports indicate that the DOJ officially closed its investigation in January 2010, and took no action against any filter manufacturer. All of the U.S cases, including the actions brought by and on behalf of governmental entities, have been consolidated into a single multi-district litigation in the Northern District of Illinois. The Company believes all of these lawsuits and the claims made therein to be without merit and is vigorously defending them. In response to a request by the DOJ, the District Court issued an order on April 14, 2011, staying the proceedings for 90 days, during which time the Company understands the DOJ is investigating potential wrongdoing by persons unaffiliated with the Company or any member of the Defendant Group. DAVID LERNER: Faces Two Class Actions Over Apple REITs ------------------------------------------------------ Suzanne Barlyn, writing for Dow Jones Newswires, reports that two class action suits have been filed against brokerage David Lerner & Associates over its sales of Apple REITs, a family of real estate-based securities that has been questioned by regulators. A suit filed on June 20 in a New Jersey federal court says the Syosset, N.Y.-based firm is "engaged in an ongoing scheme to sell more than $6 billion of shares" of the securities to many elderly, retired and unsophisticated investors. The lead plaintiffs are Stanley and Debra Kronberg of Mahwah, N.J., who invested in a series of Apple REIT offerings that are now closed to investors, known as Apple REIT Six through Apple REIT Nine. Now being offered by Lerner is Apple REIT Ten. The Financial Industry Regulatory Authority, Wall Street's self- watchdog, filed a regulatory complaint against Lerner on May 31, saying the firm is misleading some customers about Apple REIT Ten. The regulator also suggested that Apple REIT Ten shares may be overpriced at $11 each. Lerner has denied the allegations, saying it is a scapegoat for regulators' failures to detect investor fraud by Bernard Madoff. Lerner has been the sole underwriter of Apple REITs since 1992, according to Finra, selling nearly $6.8 billion of the securities into some 122,600 customer accounts. The Kronbergs, in their federal court suit, allege that offering documents from Lerner misstated the REITs' basic business model, omitting important details about how they operate and failing to disclose some risks. It says Lerner also misrepresented the value of Apple REIT shares and investors' returns, and asks for financial compensation, among other things. Specifically, the lawsuit alleges that Lerner negligently failed to disclose that Apple REITs were being sold at artificially high prices of $11 per share, and that the 7-8% returns paid to investors were being paid from new investor money or borrowing, rather than from income or funds from operations. The complaint also alleges that the true value of the Apple REITs had deteriorated far below the artificial $11 values on investors' account statements. "Without knowing the true nature of the Apple REITs being sold, investors were deprived of the opportunity to make a meaningful decision about the investments they were making," said Jonathan Levine, a lawyer who represents the plaintiffs. The class action lawsuit, captioned Kronberg et al. v. David Lerner Associates Inc., et al., 2:33-av-00001, is pending in the United States District Court for the District of New Jersey. Girard Gibbs LLP filed the class action lawsuit. Girard Gibbs represents individual and institutional investors in securities fraud class actions and litigation. Girard Gibbs filed the lawsuit along with: David P. Meyer, Esq. Matthew Wilson, Esq. DAVID P. MEYER & ASSOCIATES, LPA 1320 Dublin Road, Suite 100 Columbus, OH 43215 Telephone: (614) 224-6000 E-mail: dmeyer@dmlaws.com mwilson@dmlaws.com - and - Jacob Zamansky, Esq. Edward H. Glenn, Jr., Esq. Kevin D. Galbraith, Esq. Daniel Fried, Esq. ZAMANSKY & ASSOCIATES 50 Broadway, 32nd Floor New York, NY 10004 Telephone: (212) 742-1414 - and - James E. Cecchi, Esq. Lindsey H. Taylor, Esq. CARELLA, BYRNE, CECCHI, OLSTEIN, BRODY & AGNELLO, P.C. 5 Becker Farm Rd. Roseland, NJ 07068 Telephone: (973) 994-1700 - and - Jonathan K. Levine, Esq. GIRARD GIBBS LLP Telephone: (866) 981-4800 711 Third Avenue, 20th Floor New York, NY 10017 Telephone: (415) 981-4800 E-mail: jkl@girardgibbs.com - and - Daniel C. Girard, Esq. GIRARD GIBBS LLP 601 California Street, 14th Floor San Francisco, CA 94611 Telephone: (415) 981-4800 E-mail: dcg@girardgibbs.com Another class action suit, filed in a Manhattan federal court on June 17, focus on Apple REITs Nine and Ten. The lead plaintiff, Nancy Kowalski of Palm Beach, Fla., bought 1,818 shares in Apple REIT Nine, according to the complaint. Ms. Kowalski is seeking monetary damages and has asked the court to rescind the purchase of her REIT, among other things. The suit alleges that the REIT's profits don't cover its 8% annual distribution, which is funded "in the manner of a Ponzi scheme" by returning some investor capital and by borrowing. This tactic has "seriously impaired the value" of the REITs, the suit says. Also, investors "were never informed about the dismal financial performance of and significant loss of value" of earlier Apple REITs, the complaint says. Both cases list numerous defendants in addition to David Lerner & Associates, including Glade Knight, chairman and chief executive of the Richmond, Va.-based Apple REIT Companies, Inc. and other Apple REIT management. A lawyer for David Lerner & Associates called the class action suits "frivolous." "The allegations are baseless and rife with falsehoods, distortions, and misleading statements and we look forward to the opportunity to be vindicated in a court of law," said Joseph C. Pickard, the brokerage firm's senior vice president and general counsel, in a statement. A spokeswoman for the Apple REIT Companies, Inc. didn't immediately return a call requesting comment. David Lerner & Associates, a New York corporation, is a privately held broker dealer that operates a total of six branches and purports to specialize in fixed income, government bonds, and municipal bonds and conservative investments for individual investors and retirees. The Individual DLA Defendants are the senior officers, executives and principals of DLA. For the past seven years, DLA has served as the exclusive selling agent for offerings of shares in certain REITs created and managed by Glade M. Knight and related entities he owned or controlled, including the Apple REITs. If you invested in Apple REITs Six, Seven, Eight, Nine or Ten and wish to discuss the Apple REIT lawsuit, or have any questions concerning your rights, Girard Gibbs LLP may be reached at http://www.GirardGibbs.com/Apple-Reit-Lawsuit.asp or call 866-981-4800. DOLLAR TREE: Faces Class Action in Ill. Over Unpaid Overtime ------------------------------------------------------------ Courthouse News Service reports that a federal class action claims Dollar Tree Stores, also dba Deals, makes employees work off the clock and cheats them of overtime. A copy of the Complaint in LaFleur, et al. v. Dollar Tree Stores, Inc., et al., Case No. 11-cv-_____ (N.D. Ill.), is available at: http://www.courthousenews.com/2011/06/20/Employ.pdf The Plaintiffs are represented by: Robert M. Foote, Esq. Matthew J. Herman, Esq. FOOTE, MEYERS, MIELKE & FLOWERS, LLC 3 North Second Street, Suite 300 Saint Charles, IL 60174 Telephone: (630) 232-6333 E-mail: rmf@foote-meyers.com mherman@foote-meyers.com - and - Cathleen A. Potter, Esq. THE LAW OFFICE OF CATHLEEN POTTER 387 Colonial Circle Geneva, IL 60134 Telephone: (630) 232-8449 - and - Kathleen C. Chavez, Esq. CHAVEZ LAW FIRM, P.C. 3 North Second Street, Suite 300 Saint Charles, IL 60174 Telephone: (630) 232-4480 E-mail: gkeg4@aol.com - and - Peter L. Currie, Esq. THE LAW FIRM OF PETER L. CURRIE, P.C. 22 West Washington Street, Suite 1500 Chicago, IL 60602 Telephone: (630) 862-1130 E-mail: plclaw05@aol.com FLORIDA: Teachers' Union File Class Action Over Retirement Plan --------------------------------------------------------------- Mary Ellen Klas, writing for The Miami Herald, reports that The Florida Education Associate on June 20 disclosed it has filed a class action lawsuit against Gov. Rick Scott and other trustees of the state retirement plan for unconstitutionally imposing a 3% pay cut on teachers to balance the budget. The lawsuit was filed in Leon County Circuit Court on behalf of 11 workers from across the state, including two nurses and a social worker in Miami Dade County, a custodian in Madison County, and a social studies teacher in Hillsborough County. The Police Benevolent Association, the largest union of law enforcement in the state, also joined the lawsuit. The workers are asking the court to sequester the more than $1 billion the state saves from reducing teacher pay 3% and ending the cost of living increase on their retirement benefits while the case moves through the judicial system. "This pay cut was used by legislative leadership to make up a budget shortfall on the backs of teachers, law-enforcement officers, firefighters and other state workers," said FEA President Andy Ford. "It is essentially an income tax levied only on workers belonging to the Florida Retirement System. It's unfair -- and it breaks promises made to these employees when they chose to work to improve our state." The lawsuit alleges that the state violated its contractual obligation to state workers when it shifted money from worker pay to replace some of the state's obligation to pay into the Florida Retirement System. The union says that state law expressly provides that the FRS is one in which employees do not have to contribute part of their salaries and the shift impairs those contractual rights. Gov. Rick Scott and state legislators argued the change was needed to bring state retirement accounts in line with the private sector, which require workers to contribute into their retirement accounts but the money was not used to enhance employee benefits but to relieve the budget deficit. Florida was the only state that still had not negotiated a employee contribution as part of its retirement plan. The Broward Teachers Union, which joined the lawsuit, called the legislature's labeling the pay cut a retirement contribution "a false premise." "Florida's leaders talk ad nauseam about the need to cut taxes for businesses and the state's wealthiest residents and yet, when it comes to our police officers, firefighters and teachers, they didn't even blink an eye when imposing this income tax increase," said BTU President Pat Santeramo. The FRS collects retirement money for more than 655,000 active employees throughout the state and provides benefits to 219,000 retirees. Workers have not paid into the plan since 1974. GIANT INTERACTIVE: Still in Negotiations to Settle New York Suit ---------------------------------------------------------------- Giant Interactive Group Inc. is currently in negotiations to reach a settlement in the consolidated securities class action lawsuit pending in New York, according to the Company's June 17, 2011, Form 20-F filing with the U.S. Securities and Exchange Commission for the year ended December 31, 2010. Two securities class actions have been filed against the Company. The first was filed on November 26, 2007, entitled Pyramid Holdings, Inc. V. Giant Interactive Group, Inc. (United States District court, Southern District of New York (07cv10588); and the second was filed on December 20, 2007, entitled Brooks v Giant Interactive Group, Inc. (United States District court, Southern District of New York (07cv11423). The actions assert similar allegations and seek similar damages, both alleging claims pursuant to Section 11 and Section 12(a)(2) of the Securities Exchange Act of 1933, on behalf of all persons who purchased Company's American depositary shares pursuant to or traceable to the Company's initial public offering from November 1, 2007, though November 10, 2007. The Company, Merrill Lynch & Co. and UBS Investment Bank are named as defendants. Plaintiffs also request that the action be maintained as class action and request relief in the form of class damages plus interest, attorneys' fees, experts' fee and other costs, and a rescinding of the initial public offering. Specifically, plaintiffs allege that the Company's Registration Statement and prospectus contained untrue statement of material facts, omitted to state other facts necessary to make the statement made not misleading and were not prepared in accordance with the applicable rules and regulations. Plaintiffs were allegedly harmed when the Company's stock price declined on November 19, 2007, when the Company announced its third quarter financial results and disclosed that during third quarter 2007, the Company's average concurrent users and peak concurrent users decreased from the second quarter following a rule change made to ZT Online. Plaintiffs claim that the Company did not explain or describe the rule change in the Registration Statement or Prospectus, did not explain or highlight the alleged negative trend in ACU and PCU and did not disclose the supposed negative impact that rule change was having at the time of the initial public offering. The actions were consolidated by stipulation on January 31, 2008, into Giant Interactive Group, Inc. Securities Litigation. On August 5, 2008, the United States District court, Southern District of New York appointed a Lead Plaintiff and its Counsel in the consolidated action. The Lead Plaintiff filed a Consolidated Amended Complaint on October 6, 2008. The Company, Merrill Lynch & Co. and UBS Investment Bank filed motions to dismiss the Consolidated Amended Complaints on November 21, 2008. This motion has been fully briefed and was deemed submitted to the Court for decision as of February 25, 2009. On August 5, 2009, the Court denied the Company's motion to dismiss the Complaint, because the Court required more facts and evidence prior to making the ruling. Following document and deposition discovery, the parties participated in a mediation in March 2011. The Company is currently in negotiations to reach a settlement. As negotiations are still in its early stages, the Company's management has been advised by its legal counsel that it is unable to assess or conclude on the likelihood of an unfavorable outcome or any possible loss to the Company. In the event that the Company reaches a settlement with the counterparty and obtains relevant approval from the Court, the settlement payment will be made solely by the Company's insurers to the counterparty directly and the Company does not expect to record any loss related to this settlement. GREG MORTENSON: Former Teacher Files Class Action Over Book ----------------------------------------------------------- The Associated Press reports that efforts to start a class-action lawsuit against "Three Cups of Tea" author Greg Mortenson in Montana now include Illinois. Former teacher Deborah Netter of Lake County filed suit this month in Illinois federal court seeking damages and class action status. She is suing Mr. Mortenson, his coauthor and his publisher, claiming they violated the Illinois Consumer Fraud and Deceptive Business Practices Act. Last month, two Montana lawmakers filed a claim in Missoula federal court saying they were duped into buying Mr. Mortenson's best-selling book and donating to his charity based on lies they thought were true. The lawsuits cite media reports alleging Mr. Mortenson lied in the book about how he became involved in building schools in Pakistan and Afghanistan. An e-mail seeking comment from a Mortenson representative wasn't immediately returned. MAGNETIC SLIMMING: Faces Class Action Over False Advertising ------------------------------------------------------------ Milt Policzer at Courthouse News Service reports that a proposed class action has been filed in Los Angeles over alleged false advertising of Magnetic Slimming Panties. Apparently, magnets in your panties don't help you lose weight. MAYER BROWN: Supreme Court Junks PIMCO Class Action --------------------------------------------------- Hazel Bradford, writing for Pensions & Investments, reports that the U.S. Supreme Court on June 20 refused without comment to hear a class-action lawsuit filed by Pacific Investment Management Co. and other investors against law firm Mayer Brown, adviser to former commodities broker Refco Inc. PIMCO was joint lead plaintiff in the case along with investment management firm RH Capital Associates. Refco, a financial services company specializing in commodities, collapsed two months after an August 2005 IPO when it revealed that Phillip R. Bennett, CEO and chairman, had hidden $430 million in bad debts from auditors and investors. Later that year, PIMCO, RH Capital and other investors filed a class-action lawsuit in U.S. District Court in New York against Refco and numerous advisers involved in the IPO, arguing that they participated in securities fraud. The court found against the class action. "Mayer Brown is very pleased that the Supreme Court let stand" that decision, the firm said in a statement. Salvatore Graziano, a partner with the law firm Bernstein Litowitz Berger & Grossmann and attorney for the lead plaintiffs, said in an interview that while $400 million has been recovered and distributed to Refco investors, the investors felt that Refco's legal advisers should also be forced to contribute to civil damages, particularly since former Mayer Brown partner and Refco counsel, Joseph P. Collins, had been convicted on criminal charges in the case, along with Mr. Bennett. On June 13, the Supreme Court rebuffed efforts by shareholders seeking class-action relief from Janus Capital Group and its subsidiaries for alleged false statements that misled the investing public into thinking that JCG and its Janus Capital Management subsidiary would implement measures to curb market timing in the Janus mutual funds. Writing for the court's 5-4 majority, Associate Justice Clarence Thomas wrote that even though JCM "was significantly involved in preparing the prospectuses" that led to inflated stock prices, "JCM itself did not 'make' those statements." "The bigger issue was, you've got somebody who was criminally convicted. Why couldn't there be civil charges?" Mr. Graziano said in the interview. Mr. Graziano said that while the plaintiffs were rebuffed by U.S. district and appeals courts in New York, the appeals court "seemed to leave open some room for us. Now, that space is getting smaller," particularly after the 5-4 ruling June 13 in the Janus case. "It's very frustrating," said Glen DeValerio, senior partner with securities litigation firm Berman DeValerio, which represents institutional investors, in an interview. "It's a continuing narrowing of who can be held liable for fraud." MERRILL LYNCH: To Face Class Action Over Mortgage Securities ------------------------------------------------------------ Bob Van Voris and Thom Weidlich, writing for Bloomberg News, report that Bank of America Corp.'s Merrill Lynch unit must face a class-action suit on behalf of at least 1,800 investors over mortgage-backed securities, a federal judge ruled. U.S. District Judge Jed S. Rakoff in Manhattan certified a class, or group, of all investors in the securities, which were sold from February 2006 through September 2007. Judge Rakoff also granted the investors' request to appoint New York-based Bernstein Litowitz Berger & Grossmann LLP as lead lawyers for the class. "After careful consideration, and for reasons that will be stated in a forthcoming written opinion, the court hereby grants both motions," Judge Rakoff wrote in an order released June 16. In the litigation, filed in 2008, the investors claim Merrill misled them in the offering documents for $16.5 billion of certificates. The investors claim the bank falsely claimed that the underlying mortgages complied with the stated underwriting guidelines. The class certification allows the investors to combine their claims into a single suit rather than being forced to make them individually. Bill Halldin, a spokesman for Charlotte, North Carolina-based Bank of America, declined to comment. Named Plaintiffs The named plaintiffs in the case include the Mississippi Public Employees' Retirement System, the Los Angeles County Employees Retirement Association, the Wyoming state treasurer, the Connecticut Carpenters Pension Fund and the Connecticut Carpenters Annuity Fund. In a separate case, U.S. District Judge William Pauley in Manhattan consolidated three cases claiming Bank of America concealed the risks of its mortgage-backed securities and that it failed to use appropriate controls in processing foreclosures. Pauley also named the Pennsylvania Public School Employees' Retirement System as lead plaintiff. The cases are Public Employees' Retirement System of Mississippi v. Merrill Lynch & Co., 08-CV-10841; Pipefitters Local No. 636 Defined Benefit Plan, 11-CV-733, U.S. District Court, Southern District of New York (Manhattan). MIDLAND NATIONAL: Settles Class Action Over Deferred Annuities -------------------------------------------------------------- Courthouse News Service reports that a Los Angeles Superior Court class action claims Midland National Life Insurance settled a class action for failing to disclose costly surrender penalties and shifting the cost of high sales commissions to purchasers of deferred annuities older than 65, but did the same thing, without redress, to customers younger than 65. NEW ORLEANS, LA: Dec. 21 Class Action Settlement Hearing Set ------------------------------------------------------------ A notification program began on June 20 as ordered by the Civil District Court in and for the Parish of Orleans, Louisiana to alert people who lived, stayed, or visited at public housing in New Orleans before February 17, 2001, about proposed settlements in a long-running class action about children exposed to lead. Insurance companies for defendants in the case agreed to pay $65,520,174.19 to settle claims that HANO public housing developments were contaminated with lead and injured as many as 10,000 or more children. The settlements provide payments to those who qualify and pay the lawyers' fees and expenses and other settlement costs. The lawsuit, known as Billieson v. City of New Orleans, et al, No. 94-19231, claimed that HANO's public housing developments contained lead, and that many children who were exposed to the lead developed learning, reading, growth, hearing, physical, cognitive, and behavioral problems, as well as permanent brain damage, and some possibly died. The defendants deny that they did anything wrong, and the settlements do not mean that they did. The lawsuit includes a Class or group of people who, before February 17, 2001, were damaged by lead present in the Iberville, Florida, Lafitte, B.W. Cooper, St. Bernard, Desire, Guste, Fischer, St. Thomas, or C.J. Peete/Magnolia public housing units and either: (a) filed a lawsuit against HANO and/or C.J. Brown Property Management, Inc., C.J. Brown Public Housing, Inc. and/or Ventana Property Management, Inc., Ventana Public Housing Management, Inc. and/or the City of New Orleans saying that they were hurt from exposure to lead at one of the HANO public housing developments; or (b) have or can get medical documents or other evidence showing they were lead poisoned, specifically a document that shows they had an elevated blood lead level of 10 micrograms per deciliter of whole blood, or higher, when they were six years old or younger and they were born on or after December 12, 1987. Notices informing Class Members of their legal rights will be mailed, and are scheduled to appear in newspapers, and on television and radio in New Orleans, leading up to a Court hearing on December 21, 2011, when the Court will consider whether to approve the settlements, as well as the lawyers' requests for fees and expenses. Those affected by the settlements must register to receive future notices and a Claim Form. Class Members may also object to the settlements and ask to speak at the Court hearing. The deadline is October 20, 2011, to register, object, or to ask to speak at the hearing. A toll-free number, 1-888-768-2043, has been established along with a Web site -- http://www.HanoLeadSettlements.com-- where answers to common questions, a Registration Form, the Settlement Agreements, plus other information to help Class Members determine whether they are included and qualify. Written requests for more information may be sent to Billieson Notice Administrator, c/o Analytics, Inc., PO Box 2010, Chanhassen, MN 55317-2010. PHILADELPHIA SCHOOL DISTRICT: Sued Over Autism Transfer Policy -------------------------------------------------------------- Kristen A. Graham, writing for Philly.com, reports that four parents have filed a class-action lawsuit on behalf of their autistic children, alleging that the Philadelphia School District is illegally moving the children from school to school based solely on their disability. At issue is the district's Automatic Autism Transfer Policy, which mandates that students with autism move to another school at the end of third and fifth grades. Non-autistic students do not have to move. The four plaintiff parents, whose suit was filed on June 20 in federal court, claim the district is violating state and federal law by transferring students simply because they are autistic. Autism-support classes are located in various schools throughout the city, requiring most students to be transferred every three years. Most schools that have an autism-support class have a K-2, 3-5, or 6-8 class, but not all three, according to Sonja Kerr, an attorney for the plaintiffs. Sharon Vargas, one of the plaintiffs, said she is worried for her son, a second grader. "They don't really prepare the kids for a transition, and that's really hard for autistic kids," she said. "It's so frustrating." Though the suit was filed by four parents, the policy affects at least 3,000 students district-wide, said Ms. Kerr, director of disability rights at the Public Interest Law Center of Philadelphia. "We think it's a widespread problem," said Ms. Kerr. "We think it's a long-standing problem." Transitions are especially difficult for people with autism, and the automatic-transfer policy has been criticized by the Philadelphia Right to Education Local Task Force, a local authority charged with monitoring school districts' compliance on special-education issues. Two of the plaintiff parents won due-process hearings this year that found that the district had violated the Individuals With Disabilities Education Act by keeping their children out of their neighborhood schools and by allowing the children's autism-support classrooms to become overcrowded. The hearing officer said then that he did not have the authority to address the automatic-transfer policy. In his finding, which was included in the lawsuit, Officer Brian Jason Ford wrote, "The district is encouraged to alter its procedures on a broader scope, if only to avoid a plethora of identical claims from similarly situated students." Two of the students are 9-year-olds finishing third grade at Richmond Elementary in Port Richmond; two are 8-year-olds finishing second grade at Richmond. The parents seek to have the transfer policy overturned so their children can attend support classes in their current school. Ms. Kerr, the parents who filed the suit, and their children were set to hold a news conference on June 21 to draw attention to the case. Ms. Kerr said she believed many parents of special- education students did not know their rights. A School District spokeswoman said she had not yet seen the suit and so could not comment. RURAL/METRO CORP: Enters Agreement to Settle Delaware Suit ---------------------------------------------------------- Rural/Metro Corporation entered into an agreement in principle to settle a consolidated class action lawsuit in Delaware challenging its proposed merger with WP Rocket Holdings LLC, according to the Company's June 17, 2011, Form 8-K filing with the U.S. Securities and Exchange Commission. On March 28, 2011, Rural/Metro Corporation entered into an Agreement and Plan of Merger with WP Rocket Holdings LLC ("Parent") and WP Rocket Merger Sub, Inc., a wholly owned subsidiary of Parent. The Merger Agreement provides for the merger of Merger Sub with and into the Company, with the Company surviving the Merger as a wholly owned subsidiary of Parent. On May 26, 2011, the Company filed a definitive proxy statement describing the Merger with the SEC. Merger Sub and Parent are affiliates of Warburg Pincus LLC formed by Warburg Pincus to acquire the Company. As disclosed in the Company's definitive proxy statement, the Company, each member of the Board of Directors of the Company, Warburg Pincus, Parent and Merger Sub were named as defendants in purported class action lawsuits brought by alleged stockholders of the Company challenging the Merger. The stockholder actions were filed in the Court of Chancery of the State of Delaware (Llorens v. Rural/Metro Corporation, et al., filed April 6, 2011, and amended April 21, 2011, and Joanna Jervis v. Rural/Metro Corporation, et al., filed May 16, 2011,) and in the Superior Court of the State of Arizona, County of Maricopa (Joanna Jervis v. Rural/Metro Corporation, et al., filed April 6, 2011, and amended April 14, 2011). On May 16, 2011, Joanna Jervis, the stockholder in the Jervis Arizona action, filed a complaint in the Court of Chancery of the State of Delaware. On May 23, 2011, after plaintiff filed a complaint in Delaware, the parties filed a stipulation of dismissal and proposed order dismissing the Jervis Arizona action, which the court so-ordered on May 24, 2011. On May 27, 2011, the Court of Chancery of the State of Delaware entered an Order of Consolidation and Appointment of Lead Counsel designating Plaintiff Llorens as Lead Plaintiff and Faruqi & Faruqi, LLP as Lead Counsel under the caption In re Rural Metro Corporation Consolidated Shareholders Litigation, C.A. No. 6350- VCS. A Second Scheduling Order was entered on June 10, 2011, updating the Stipulated Scheduling Order entered on May 3, 2011. Depositions were completed on June 10, 2011. On June 16, 2011, the Company, each member of the Board of Directors, Warburg Pincus, Parent, Merger Sub and the Lead Plaintiff in the Consolidated Delaware Action reached an agreement in principle, subject to the Court's approval, providing for the settlement and dismissal, with prejudice, of the Consolidated Delaware Action filed in connection with the Merger. Pursuant to such agreement in principle, on June 16, 2011, the Company agreed to make certain supplemental disclosures regarding the Merger and filed a supplement to the Company's definitive proxy statement. The settlement will not affect the merger consideration to be paid to stockholders of the Company in connection with the proposed merger or the timing of the special meeting of stockholders of the Company scheduled for June 27, 2011, at 10:00 a.m., local time, at the Company's corporate headquarters at 9221 East Via de Ventura, in Scottsdale, Arizona 85258, to consider and to vote upon a proposal to adopt the merger agreement, among other things. SMITHFIELD FOODS: Unit Continues to Defend "Herrold" Suit --------------------------------------------------------- Smithfield Foods, Inc.'s subsidiary continues to defend itself against a putative class action lawsuit filed by Daniel Herrold, according to the Company's June 17, 2011, Form 10-K filing with the U.S. Securities and Exchange Commission for the year ended May 1, 2011. In May 2004, the same lead lawyer who previously filed other lawsuits against the Company's subsidiaries filed a putative class action lawsuit entitled Daniel Herrold, et al. and Others Similarly Situated v. ContiGroup Companies, Inc., Standard Farm, Inc., and PSF Group Holdings, Inc. in the Circuit Court of Jackson County, Missouri. PSF is a Company subsidiary. This action originally sought to create a class of plaintiffs living within ten miles of PSF's farms in northern Missouri, including contract grower farms, who were alleged to have suffered interference with their right to use and enjoy their respective properties. On January 22, 2007, plaintiffs in the Herrold case filed a Second Amended Petition in which they abandoned all class action allegations and efforts to certify the action as a class action and added an additional 193 named plaintiffs to join the seven prior class representatives to pursue a one count claim to recover monetary damages, both actual and punitive, for temporary nuisance. On June 28, 2007, the court entered an order granting defendants' motion to transfer venue to the northern Missouri counties in which the alleged injuries occurred. As a result of those rulings, the claims of all but seven of the plaintiffs have been transferred to the appropriate venues in northern Missouri. No further updates were reported in the Company's latest SEC filing. The Company believes that it has good defenses to the action and intends to defend vigorously the lawsuit. TRANSATLANTIC HOLDINGS: Being Sold for Too Little, Suit Claims -------------------------------------------------------------- Courthouse News Service reports that shareholders say Transatlantic Holdings is selling itself too cheaply to Allied World Assurance Co. Holdings, in an all-stock deal valued at $3.2 billion (0.88 shares of Allied for each share of Transatlantic, valued at $51.10 a share). A copy of the Complaint in Ivers v. Transatlantic Holdings, Inc., et al., Case No. 6574 (Del. Ch. Ct.), is available at: http://www.courthousenews.com/2011/06/20/SCA.pdf The Plaintiff is represented by: Carmella P. Keener, Esq. ROSENTHAL, MONHAIT & GODDESS, P.A. 919 N. Market Street, Suite 1401 P.O. Box 1070 Wilmington, DE 19899 Telephone: (302) 656-4433 Email: CKeener@rmgglaw.com - and - Samuel H. Rudman, Esq. David A. Rosenfeld, Esq. Mark S. Reich, Esq. Joseph Russello, Esq. Carolina C. Fitzgerald, Esq. ROBBINS GELLER RUDMAN & DOWD LLP 58 South Service Road, Suite 200 Melville, NY 11747 Telephone: (631) 367-7100 E-mail: SRudman@rgrdlaw.com DRosenfeld@rgrdlaw.com mreich@rgrdlaw.com jrussello@rgrdlaw.com - and - Hamilton Lindley, Esq. GOLDFARB BRANHAM LLP Saint Ann Court 2501 N. Harwood St., Suite 1801 Dallas, TX 75201 Telephone: (214) 583-2233 E-mail: hlindley@goldfarbbranham.com UNITED STATES: Judge Okays $3.4BB Cobell Class Action Settlement ---------------------------------------------------------------- According to an article in The Blog of Legal Times posted by Mike Scarcella, a federal judge in Washington on June 20 approved a landmark $3.4 billion settlement in a Native American class action that stands to compensate hundreds of thousands of American Indians. Senior Judge Thomas Hogan's approval of the deal, reached in late 2009 in Washington federal district court, caps more than 15 years of hostile litigation that featured numerous appeals, trials and failed negotiations. Judge Hogan called the deal "truly historic." The case, named after lead plaintiff Elouise Cobell, sought a historical accounting of trust accounts the government mismanaged for more than a century. Class members will receive a minimum payment of $1,000, Judge Hogan on June 20 said at the end of a hearing that lasted more than seven hours. "The judge's finding that the settlement is fair and reasonable is a major milestone in the Administration's effort to reach a resolution of litigation that has cast a cloud over the government's relationship with American Indians," Associate Attorney General Thomas Perrelli, who twice testified before Congress on the settlement, said in a prepared statement. About a dozen people objected to the settlement on June 20 in court, arguing, among other things, that the plaintiffs' lawyers demand for compensation -- $224 million -- was excessive. Justice Department attorneys said the bulk of the objection to the settlement was over fees. There were 92 objections in all. More than 1,000 people have opted out of the settlement. The plaintiffs' team, led by Washington solo practitioner Dennis Gingold and a group of Kilpatrick Townsend & Stockton lawyers, said they received an overall favorable response to the settlement during dozens of meetings in recent months in Indian Country. Kilpatrick chairman William Dorris, who participated in the case, said in court on June 20 he expected the settlement to provide a "beacon of hope" for American Indians. At the end of the hearing, Judge Hogan awarded $99 million in legal fees for the plaintiffs' lawyers. The settlement set compensation between $50 million and $99.9 million. But the deal gave the judge the final say on a reasonable amount in accordance with controlling law. The Justice Department had urged Judge Hogan to award no more than $50 million in compensation. Mr. Gingold in court on June 20 asked Judge Hogan to award more than $99.9 million. Ms. Cobell's lawyers argued in recent court papers that there was never a cap on fees. The attorneys argued for a higher amount in order to compensate for the outcome and complexity of the case. The settlement includes $1.9 billion for a land consolidation program. The Interior Department has begun scheduling consultation meetings with tribal leaders to begin discussion of that part of the agreement. "Judge Hogan's decision is another milestone in empowerment and reconciliation for the American Indians," Interior Secretary Ken Salazar said in a statement on June 20. Mr. Salazar said the agreement "turns the page on an unfortunate chapter" in the department's history. President Barack Obama issued a statement on June 20 praising Judge Hogan's approval of the settlement. "After fifteen years of litigation, [Mon]day's decision marks another important step forward in the relationship between the federal government and Indian Country," Pres. Obama said. "Resolving this dispute was a priority for my Administration, and we will engage in government-to-government consultations with tribal nations regarding the land consolidation component of the settlement to ensure that this moves ahead at an appropriate pace and in an appropriate manner." VISA INC: June 24 Hearing Set for Class Action ---------------------------------------------- Amelia Flood, writing for The Madison St. Clair Record, reports that Madison County Circuit Judge William Mudge is set to hear motions Friday, June 24, in a 2010 class action originally filed against Visa, Inc. and a Bethalto credit union. Judge Mudge will hear the motions in the case filed by proposed lead plaintiffs Gene and Karen Rhodes at 9:00 a.m. The Rhodeses claim that Visa GiftCards they purchased through 1st MidAmerica Credit Union, formerly known as Olin Community Credit Union, already had diminished values due to monthly administrative fees that were deducted from the cards by Visa before the cards were purchased. Karen Rhodes claims that when she bought such a card for her father-in-law, Gene Rhodes in November 2007, the $50 card was literally only worth $35 in actual cash value due to the prior, undisclosed deductions. The class, if certified, would include all holders of Visa GiftCards issued by Services or Olin Community Credit Unions which lost value prior to the expiration of their "Valid Thru" date and a sub-class of holders of cards issued by either credit union that were pre-activated and had less than the value of the purchase price due to the pre-sale deductions. The class action complaint claims the amount in controversy is more than $5 million. The plaintiffs are suing on claims of violations of the Illinois Consumer Fraud and Deceptive Business Practices Act and unjust enrichment. An amended complaint added Services Credit Union and dropped Visa Inc. from the defendants' side of the aisle. Services Credit Union filed to dismiss the first amended complaint May 31. In that motion, the defendant claims the plaintiffs are "factually incorrect," in their claims that the monthly administrative fees at issue in the case were applied before the cards were sold. Services also claims that the consumer fraud claims are barred by the statute of limitations and can't apply to the gift card bought by Karen Rhodes. It also points to the back of the gift card which informs customers that $3 monthly fees will start to be deducted from the cards seven months after activation. 1st MidAmerica also cites the statute of limitations and asks the court to dismiss the suit on the grounds that DuPage County Circuit Court or the United States District Court for the Northern District of Illinois are the proper venues for the dispute as part of its affirmative defenses. Mark Goldenberg, Esq., represents the plaintiffs and proposed class. Mark Bauman., Esq., represents Services Credit Union. Mitten Nelson, Esq., represents 1st MidAmerica. The case is Madison case number 10-L-1155. VODAFONE GROUP: Unit Continues to Defend Product Liability Suits ---------------------------------------------------------------- Vodafone Group Public Limited Company's subsidiary, Cellco Partnership, continues to defend lawsuits relating to product liability and patent infringement, among other claims, according to the Company's June 17, 2011, Form 20-F filing with the U.S. Securities and Exchange Commission for the year ended March 31, 2011. Cellco Partnership, a Delaware general partnership doing business as Verizon Wireless, is subject to lawsuits and other claims, including class actions and claims relating to product liability, patent infringement, intellectual property, antitrust, partnership disputes, and relations with resellers and agents. Verizon Communications owns 55% and Vodafone owns 45% of the Partnership. The Partnership is also defending lawsuits filed against it and other participants in the wireless industry alleging adverse health effects as a result of wireless phone usage. Various consumer class action lawsuits allege that the Partnership violated certain state consumer protection laws and other statutes and defrauded customers through misleading billing practices or statements. These matters may involve indemnification obligations by third parties and/or affiliated parties covering all or part of any potential damage awards against the Partnership and/or insurance coverage. The Company says all of these matters are subject to many uncertainties, and outcomes are not predictable with assurance. Consequently, the ultimate liability with respect to these matters as of Dec. 31, 2010, cannot be ascertained. The potential effect, if any, on the consolidated financial statements of the Partnership, in the period in which these matters are resolved, may be material. WAL-MART: Discrimination Suit Won't Proceed as Class Action ----------------------------------------------------------- Barbara Leonard at Courthouse News Service reports that Wal-Mart will not have to face a sexual discrimination class action that would have sought billions in damages on behalf of about 1.5 million women who have worked for the world's largest private employer, the Supreme Court ruled on June 20. Several women sued the Bentonville, Ark.-based company in a San Francisco-based District Court in 2001, claiming they received less pay and fewer promotions than men in comparable positions. A federal judge ruled that the class should encompass "all women employed by Wal-Mart at any time after Dec. 26, 1998," across the company's 3,400 stores. Wal-Mart argued that the proposed class -- an estimated 1.5 million women -- was too big to fight, and that employees should file individual lawsuits. The full 9th Circuit ruled 6-5 in April 2010 to send the case to trial, ultimately narrowing the original seven plaintiffs to just three as representatives of the certified class. In December, the Supreme Court said it would intervene to decide whether class action is an appropriate forum for individual employees' claims. In disbanding the class on June 20, the justices said that the women failed to prove commonality. "Commonality requires the plaintiff to demonstrate that the class members 'have suffered the same injury,'" Justice Antonin Scalia wrote for the lead opinion, quoting the court's 1982 decision in General Telephone Co. of Southwest v. Falcon. "This does not mean merely that they have all suffered a violation of the same provision of law. Title VII, for example, can be violated in many ways -- by intentional discrimination, or by hiring and promotion criteria that result in disparate impact, and by the use of these practices on the part of many different superiors in a single company. Quite obviously, the mere claim by employees of the same company that they have suffered a Title VII injury, or even a disparate impact Title VII injury, gives no cause to believe that all their claims can productively be litigated at once. Their claims must depend upon a common contention -- for example, the assertion of discriminatory bias on the part of the same supervisor. That common contention, moreover, must be of such a nature that it is capable of classwide resolution -- which means that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke." Justice Scalia pointed out that the plaintiffs failed to identify a real discriminatory corporate policy, and rather cited "Wal- Mart's 'policy' of allowing discretion by local supervisors over employment matters." "On its face, of course, that is just the opposite of a uniform employment practice that would provide the commonality needed for a class action; it is a policy against having uniform employment practices," Justice Scalia wrote. "It is also a very common and presumptively reasonable way of doing business." The justices noted as well that the plaintiffs' anecdotal evidence is similarly unavailing. "Here, by contrast, respondents filed some 120 affidavits reporting experiences of discrimination -- about 1 for every 12,500 class members -- relating to only some 235 out of Wal- Mart's 3,400 stores," Justice Scalia wrote. "More than half of these reports are concentrated in only six States (Alabama, California, Florida, Missouri, Texas, and Wisconsin); half of all States have only one or two anecdotes; and 14 States have no anecdotes about Wal-Mart's operations at all. Even if every single one of these accounts is true, that would not demonstrate that the entire company 'operate[s] under a general policy of discrimination,' which is what respondents must show to certify a companywide class." Though the plaintiffs defended class certification of their claims for back pay, the justices decided that monetary claims may not be certified where such relief is not incidental to the desired injunctive or declaratory relief. In a partial dissent on behalf of the court's four left-leaning justices, Justice Ruth Bader Ginsburg took issue with the majority's conclusions about commonality. Though she agreed with the majority's findings about the back-pay certification, Justice Ginsburg said she would have left it for the lower court to determine if "common class questions 'predominate' over issues affecting individuals." "The plaintiffs' evidence, including class members' tales of their own experiences, suggests that gender bias suffused Wal-Mart's company culture," Justice Ginsburg wrote in an 11-page opinion signed by Justices Stephen Breyer, Sonio Sotomayor and Elena Kagan. "The District Court's identification of a common question, whether Wal-Mart's pay and promotions policies gave rise to unlawful discrimination, was hardly infirm," she added. "The practice of delegating to supervisors large discretion to make personnel decisions, uncontrolled by formal standards, has long been known to have the potential to produce disparate effects. Managers, like all humankind, may be prey to biases of which they are unaware. The risk of discrimination is heightened when those managers are predominantly of one sex, and are steeped in a corporate culture that perpetuates gender stereotypes." WALTER ENERGY: Hearing in Western Coal Suit Set for Oct. 2011 ------------------------------------------------------------- Plaintiff's motions for leave to proceed with a securities class action lawsuit against Western Coal Corp. are scheduled to be heard on October 3 to 7, 2011, according to Walter Energy, Inc.'s June 17, 2011, Form 8-K/A filing with the U.S. Securities and Exchange Commission. On December 2, 2010, Western Coal and Walter Energy entered into an arrangement agreement for Walter Energy to acquire all of the outstanding common shares of Western Coal for C$11.50 per share in cash or 0.114 of a Walter Energy share, or for a combination thereof, all subject to pro-ration. This proposed acquisition was subject to various closing conditions, including court approval, a favourable vote of at least two-thirds of the votes cast by Western Coal's shareholders and a simple majority of the votes cast by Western Coal's minority shareholders, at Western Coal's special meeting of shareholders scheduled for March 8, 2011, and certain regulatory approvals. Approval by Walter Energy shareholders was not required to complete the transaction. On April 6, 2011, Walter Energy filed a Current Report on Form 8-K with the SEC stating that it had completed the acquisition of all of the outstanding common shares of Western Coal and that the financial statements and pro forma financial information required under Item 9.01 of the Form 8-K would be filed as soon as practicable. On June 17, 2011, Walter Energy filed the Form 8-K/A to include the financial information required under Item 9.01. According to the Financial Information, in November 2009, Western Coal was named as a defendant in a statement of claim issued by a plaintiff who seeks leave of the Ontario Courts to proceed with a securities class action. The claim alleges that those persons who acquired or disposed of Western Coal shares between November 14, 2007, and December 10, 2007, should be entitled to recover C$200 million for general damages and C$20 million in punitive damages. Two current directors and one former director and officer were also named as defendants (the individual defendants). The plaintiff alleges that Western Coal's consolidated financial statements for the second quarter of fiscal 2008 and the accompanying news release issued on November 14, 2007, misrepresented Western Coal's financial condition and that it failed to make full, plain and true disclosure of all material facts and changes. The action also claims that the named individual defendants purchased shares during the proposed class period while in possession of material undisclosed information. No damages are sought in respect of these share purchases. The Board of Directors established a Special Committee to oversee Western Coal's defense of the action and to instruct Western Coal's defense counsel on how to proceed. The Special Committee has two members. Neither of the Special Committee members are named as individual defendants and each of them joined Western Coal after the events that are the subject of the action occurred. The plaintiff was to have delivered its materials in support of motions for leave to proceed with the securities class action and for certification of the action as a class proceeding on or before May 14, 2010. The plaintiff, however, sought and obtained permission of the Court to deliver an amended claim before May 28, 2010. On May 28, 2010, the plaintiff delivered a proposed Fresh As Amended Statement of Claim. That claim indicated the plaintiff intended to introduce new allegations that Western Coal, some of its current and former directors (including the originally named individual defendants) and other parties caused Western Coal to enter transactions between April 26, 2007, and July 13, 2009, that were oppressive because they had a dilutive effect on the interests of shareholders. The defendants did not oppose the amendments but have reserved all rights to challenge the Amended Statement of Claim. On July 16, 2010, the plaintiff delivered his materials supporting motions for leave to proceed with a securities class action for misrepresentation under the Ontario Securities Act and also for certification of the securities' class action and of the oppression claims. After considering the plaintiff's materials and investigating those allegations, Western Coal decided it should answer the plaintiff's motion materials, oppose the motions and vigorously defend the securities and oppression claims. The Report said Western Coal and the other defendants intended to deliver their materials on or before February 28, 2011. Dates have not been set for the plaintiff to deliver reply materials or for any examinations or cross-examinations. The plaintiff's motions, however, are scheduled to be heard October 3 to 7 and on October 13 and 14, 2011, if necessary. Western Coal continues to maintain that there is no merit to any of the claims being made and that the damages are without foundation and excessive and, accordingly, has made no provision for this claim in its consolidated financial statements. WARNER MUSIC: Class Actions Over Proposed Access Sale Settled ------------------------------------------------------------- Christopher Morris, writing for Variety, reports that plaintiffs in a pair of suits seeking to block the pending sale of Warner Music Group to Access Industries have agreed to settle, according to information buried in last week's WMG proxy statement. Settlement was undertaken "primarily to avoid the substantial burden, expense, inconvenience and distraction of continued litigation and to fully and finally resolve all of the claims and allegations in those actions," according to the June 13 WMG SEC filing. A vote on approval of Access' $3.3 billion purchase is set for a special meeting of WMG shareholders in New York on July 6. Preliminary agreement, which must be court approved, covers a May 12 class action filed in Delaware Chancery Court by shareholder Barbara A. Varipapa and a May 19 class action lodged in New York Supreme Court by stockholder Derek Cournoyer. Both suits alleged that the per-share price offered by Access was insufficient, and that the WMG board breached their fiduciary duty by failing to accept a higher bid for the company. Mr. Cournoyer's suit additionally noted that Access principal Len Blavatnik had a long history on the WMG board, and that the board had lowered the vesting price on restricted shares granted to WMG chairman/CEO Edgar Bronfman, Jr., during the sale process, setting up a $13.6 million stock windfall for Bronfman. Under the terms of a memo of understanding executed June 8 by attorneys for Ms. Varipapa and Mr. Cournoyer, a full stipulation of settlement will be finalized no later than July 19. It will apply to all members of the shareholder class, and will release WMG from all claims. Ms. Varipapa's counsel will file a voluntary notice of dismissal upon final court order of the settlement. WMG's proxy statement refers to a third class action filed June 3 in New York Superior Court by shareholder Vikas Dahivadkar, who recapitulated most of Mr. Cournoyer's allegations. Document says that Dahivadkar's attorneys "have indicated that they do not object to the (memo of understanding)," but says nothing further about disposition of that suit. WMG denies all liability with respect to the allegations of all three actions in the proxy document. WILLIAM FRY: Taps Willkie Far to Defend Against Class Action ------------------------------------------------------------ Joanne Harris, writing for The Lawyer, reports that Irish firm William Fry has turned to Willkie Farr & Gallagher's joint litigation head Mitchell Auslander to defend it against a $700 million (GBP434.2 million) negligence claim over advice relating to Bernard Madoff. The firm is named among a number of defendants in the class action complaint brought by shareholders in the Thema Fund, a feeder fund for the Ponzi scheme operated by Madoff. The complaint alleges that William Fry is jointly and severably liable for net losses of up to $700 million sustained by the fund. The firm,?along?with?other defendants,?including PricewaterhouseCoopers and JPMorgan, is expected to file a motion to dismiss the claim by June 29. Also?named?in?the complaint is William Fry partner Daniel Morrissey, who heads the firm's asset management department. The instruction of litigation big-hitter Auslander indicates the seriousness with which William Fry is treating the claim. The litigation, in the Southern District of New York, alleges that William Fry's and the other defendants' "wrongful conduct permitted Madoff to perpetuate the Ponzi scheme". It claims the firm specifically failed to disclose Madoff's agreements with Thema when it drafted prospectuses and agreements. The claimants, represented by New York's Chaplin Fitzgerald Sullivan & Bottini, recently settled a claim for $62.5 million with HSBC. ********* S U B S C R I P T I O N I N F O R M A T I O N Class Action Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. Leah Felisilda, Noemi Irene A. Adala, Joy A. Agravante, Julie Anne Lopez, Christopher Patalinghug, Frauline Abangan and Peter A. Chapman, Editors. Copyright 2011. All rights reserved. ISSN 1525-2272. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The CAR subscription rate is $575 for six months delivered via e-mail. 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