/raid1/www/Hosts/bankrupt/CAR_Public/111011.mbx
C L A S S A C T I O N R E P O R T E R
Tuesday, October 11, 2011, Vol. 13, No. 201
Headlines
AMERICAN FAMILY: Wants to End Long-Running Class Action
DEL MONTE: Signs Deal to Resolve Delaware Shareholder Suit
DYNEX CAPITAL: Settles Teamsters Pension Fund Class Action
ENCORE ENERGY: Faces Shareholder Class Action in Delaware
ENDEMOL USA: Settles Class Actions Over Premium Text Charge Games
ENER1 INC: Class Action Lead Plaintiff Deadline Nears
FACEBOOK: Faces Class Action in Kansas Over Tracking Cookie
IKEA NORTH: Recalls 58T BUSA Folding Tents Due to Laceration Risk
JAMAICA PUBLIC SERVICE: November 24 Class Action Hearing Set
JAMES HARDIE: Class Action.org Reviews Siding Issues
LOFTON & LOFTON: Accused of Manipulating Ex-Employees' Hours
NORDICA USA: Agrees to $214,000 Civil Penalty Over Defective Skis
ROCK-TENN CO: Settles Smurfit-Stone Shareholder Class Action
RED HAT: Appeal From Claims Rejection in IPO-Related Suit Pending
SABA SOFTWARE: Objector Appeals Decision in IPO Litigation
SABA SOFTWARE: Objector Appeals Ruling in IPO Suit vs. Unit
STATE OF IOWA: Disputes Discrimination Class Action
TRAVELERS: Class Action Over Medical Insurance Payments Fail
U.S. LAW SCHOOLS: Class Action Over Misleading Job Stats Mulled
UNITED STATES: Plaintiffs' Bond Request in Cobell Suit Tossed
*********
AMERICAN FAMILY: Wants to End Long-Running Class Action
-------------------------------------------------------
Steve Korris, writing for The Madison St. Clair Record, reports
that after 11 years on the losing end of a Madison County class
action stronger than death, American Family Mutual Insurance
pleads to put it to rest.
On Sept. 30, the insurer resisted a bid by Brad Lakin of Wood
River to amend for the 10th time a complaint alleging improper
reduction of medical payments.
"There are proper procedures and improper procedures; plaintiffs
are attempting the latter," Anthony Martin of St. Louis wrote.
"American Family has identified and emphasized numerous pleading
problems in multiple complaints for more than 11 years," he wrote.
"Indeed, Illinois courts have a significant history of denying
motions for leave to file an amended complaints when, as in this
case, the length of time between the original complaint and the
amended complaint is considerable," he wrote.
He wrote that Mr. Lakin would change the definition of a class
that former circuit judge Daniel Stack certified, by adding an
"issues only" class alleging breach of contract.
"Never before September 9, 2011 did class counsel suggest to the
court or defendant that it intended to pursue an 'issues only'
class," he wrote.
"The present attempt to change the nature and composition of the
certified class through the amendment of a complaint is an obvious
attempt to avoid filing the appropriate motion addressing class
certification," he wrote.
"Certainly they cannot be allowed to do so without a class
certification hearing specifically dealing with this issue," he
wrote.
He also claimed Mr. Lakin can't sustain the suit in light of Bemis
v. Safeco, a Fifth District appellate court opinion that the
Illinois Supreme Court chose not to review.
He also claimed the statute of limitations ran out.
Circuit Judge William Mudge plans a hearing on Oct. 14.
Mr. Lakin's original plaintiff, Manuel Hernandez, died in 2004.
Judge Stack had certified him in 2002, to represent a class
challenging payments in 17 states, back to 1990.
Mr. Lakin didn't report the death to Judge Stack, who held
hearings and signed orders in the case.
In 2005, as circuit judge, Judge Stack eliminated five states from
the action.
In 2006, American Family informed Judge Stack that Mr. Hernandez
died.
American Family moved to dismiss, arguing the action died with him
because Mr. Lakin hadn't sent notice to the class.
Judge Stack disagreed in 2007, and waited for Mr. Lakin to find
substitutes.
Mr. Lakin found them in 2009, amending his complaint on behalf of
chiropractors Matthew Chenault and Anthony Wolf, East Washington
Chiropractic, Greenville Rehab and Pain Clinic, and Kruse and
Manley Clinic of Chiropractic.
Judge Stack retired last year, and Judge Mudge took the case.
This June, American Family sealed and filed a motion to decertify
the class.
In August, American Family claimed Mr. Lakin failed to tell
Judge Mudge that chiropractor Mark Kruse led a conflicting class
action in Iowa.
Mr. Martin wrote that the Iowa action was replete with accusations
against doctors Mr. Kruse represents in the Madison County action.
Mr. Lakin didn't respond directly, preferring to scrap the
complaint.
Jonathan Piper of LakinChapman moved for leave to amend on
Sept. 9, writing that the new version would narrow the class
claims.
"There is no prejudice or surprise to defendant by making changes
for clarification and proper procedure," he wrote.
Mr. Martin's reply expressed weariness, not surprise.
"Now in September 2011, during the 22nd year of the class period,
during the 12th year of this case, nearly 12 years after the
initial billing issue arose, more than 11 years after the filing
of the original complaint, and nearly eight years after
Mr. Hernandez's death, there is before the court a motion for
leave to file yet another amended complaint," he wrote.
DEL MONTE: Signs Deal to Resolve Delaware Shareholder Suit
----------------------------------------------------------
Del Monte Corporation entered into a stipulation to resolve a
putative class action lawsuit relating to the acquisition of Del
Monte Foods Company by an investor group led by funds affiliated
with Kohlberg Kravis Roberts & Co. L.P. ("KKR"), Vestar Capital
Partners ("Vestar") and Centerview Capital L.P. ("Centerview"),
according to the Company's October 6, 2011, Form 8-K filing with
the U.S. Securities and Exchange Commission.
Del Monte Corporation is currently party to a putative class
action in the Delaware Court of Chancery relating to the
acquisition of Del Monte Foods Company on March 8, 2011, by an
investor group led by funds affiliated KKR, Vestar and Centerview.
The defendants in this putative class action, In re Del Monte
Foods Company Shareholders Litigation (the "Delaware Shareholder
Case"), include: each of the now-former directors of Del Monte
Foods Company (the "Director Defendants"); Del Monte Foods
Company's former Chief Executive Officer in his capacity as such;
Barclays Capital, Inc.; KKR, Vestar, and Centerview (named as
Centerview Partners); Blue Acquisition Group, Inc.; Blue Merger
Sub, Inc.; and Del Monte Corporation, which was joined as a
defendant in the litigation as successor in interest to Del Monte
Foods Company (together, the "Defendants").
On October 6, 2011, the lead plaintiff and the Defendants
submitted a Stipulation and Agreement of Compromise and Settlement
to the Delaware Court of Chancery (the "Proposed Settlement")
which, if approved, would settle the Delaware Shareholder Case.
The total settlement amount under the Proposed Settlement is $89.4
million, including any additional fees and expenses awarded to
plaintiffs' counsel by the Court and costs of notifying the
settlement class and administering claims. In connection with the
Proposed Settlement, if approved, Del Monte Corporation expects to
pay $65.7 million into an escrow account, consisting of 1) its
financial contribution to the settlement and 2) the payment of
previously unpaid merger-related fees being contributed to the
settlement. In its financial statements for the quarter ended
July 31, 2011, Del Monte Corporation had accrued all but $2.2
million of such amount.
Del Monte says it has entered into the Proposed Settlement to
eliminate the uncertainties, burden, and expense of further
litigation. In the Proposed Settlement, the Defendants deny all
allegations of wrongdoing; Barclays and the Director Defendants
deny that they acted contrary to the best interests of Del Monte
Foods Company and its stockholders; and the Defendants state their
belief that the sale process leading up to the acquisition of Del
Monte Foods Company achieved the best price reasonably available
for stockholders of Del Monte Foods Company.
The Proposed Settlement is subject to customary conditions,
including certification of a mandatory, non-opt out class for
settlement purposes; Court approval of the settlement following
notice to settlement class members and a hearing; and entry of a
judgment identical in all material respects to the judgment
proposed by the parties in the Proposed Settlement. Under the
terms of a proposed scheduling order to be submitted to the Court
in connection with the Proposed Settlement, members of the
settlement class will be given notice of the Proposed Settlement
and an opportunity to file written objections to the settlement.
The Court will then conduct a hearing on the Proposed Settlement
and determine whether or not to approve it. The parties have the
right to terminate the Proposed Settlement if the Court declines
to enter the proposed judgment in any material respect or if the
judgment is modified or reversed in any material respect on
appeal. There can be no guarantee that the Proposed Settlement
will be approved or, if approved, that it will not be modified or
reversed upon appeal.
DYNEX CAPITAL: Settles Teamsters Pension Fund Class Action
----------------------------------------------------------
Cohen Milstein Sellers & Toll PLLC on Oct. 6 disclosed that the
real estate trust Dynex Capital Inc. has agreed to pay $7.5
million to settle a New York class action lawsuit over securities
fraud in the sale of bonds backed by thousands of loans on
manufactured homes.
In March 2011, U.S. District Judge Harold Baer issued one of the
few decisions to ever have certified a class of investors pursuing
federal fraud claims in connection with the sale of asset-backed
bonds. The case is an important one for investors because it
provides a road map for prosecuting fraud claims involving other
asset backed bonds on a class-wide basis, according to Plaintiff's
attorney Joel Laitman, of Cohen Milstein Sellers & Toll PLLC of
New York City.
"We're pleased because the settlement represents a real recovery
in terms of the percentage of maximum recoverable damages had
Plaintiff prevailed on all aspects of liability and damages at
trial and on appeal," said Mr. Laitman.
The lawsuit was filed in 2005 by Teamsters Local 445 Freight
Division Pension Fund and Dynex lost multiple attempts to have the
case thrown out of Court. The settlement still must be approved
by Judge Baer of the U.S. District Court, Southern District of New
York.
The Plaintiff charged that Dynex, its subsidiary Merit Securities
Corp., and senior executives at both companies lied about the
quality of mobile home loans that were collateral for bonds sold
as Merit Series 12-1 and Merit Series 13 from Feb. 7, 2000 to
May 13, 2004.
According to the lawsuit, Dynex and its representatives made
misleading statements that artificially inflated the value of the
bonds, understated the amount of delinquencies and repossessions
affecting the bonds and violated its own publicly stated
underwriting guidelines in making poor-quality loans. Defendants
also made false statements about the deteriorating performance of
the downgraded bonds because the company was scrambling to protect
itself in the midst of a dramatic financial collapse, the lawsuit
charged.
The class is represented by Joel P. Laitman, Michael B.
Eisenkraft, Christopher Lometti, Daniel B. Rehns, Kenneth M. Rehns
and Richard A. Speirs of Cohen Milstein Sellers & Toll PLLC.
For more information about the case, Teamsters Local 445 Freight
Division Pension Fund et. al. v. Dynex Capital Inc. et. al, U.S.
District Court case number 2011-CV-260, visit
http://www.cohenmilstein.com/cases/234/dynex-capital
ENCORE ENERGY: Faces Shareholder Class Action in Delaware
---------------------------------------------------------
Faruqi & Faruqi, LLP disclosed that a class action lawsuit is
pending in the United States District Court for the District of
Delaware on behalf of Donald A. Hysong individually and on behalf
of all other shareholders of Encore Energy Partners LP who held
securities on or before July 11, 2011, and continue holding the
shares. The Class Action Complaint alleges that Encore and
certain of its officers and/or directors have violated sections
14(a) and 20(a) of the Securities Exchange Act of 1934 and
includes a claim for equitable assessment of attorneys' fees.
A copy of the Class Action Complaint filed in this action can be
viewed on the firm's Web site at http://www.faruqilaw.com/ENP
On July 11, 2011, Encore and Vanguard Natural Resources, LLC
announced that they had entered into a definitive merger agreement
pursuant to which Encore would become a wholly-owned subsidiary of
Vanguard's operating company, Vanguard Natural Gas, LLC, through a
unit-for-unit exchange and on September 30, 2011, Encore and
Vanguard jointly issued a Registration Statement on Form S-4 to
solicit Encore shareholders' vote at the special meeting to be
held on November 14, 2011. The Class Action Complaint alleges
that, unbeknownst to Encore's shareholders, the Registration
Statement failed to disclose material information rendering
plaintiff and other public shareholders of Encore unable to cast
an informed vote on the Merger Agreement at the upcoming
shareholder meeting.
Plaintiff is represented by Faruqi & Faruqi, LLP, a law firm with
extensive experience in prosecuting class actions, and in
particular actions involving corporate fraud and wrongdoing.
Faruqi & Faruqi, LLP, was founded in 1995 and the firm maintains
offices in New York City, Delaware, California, Florida and
Pennsylvania.
You can request additional information concerning this action by
visiting the firm's Web site: http://www.faruqilaw.com/ENP
If you purchased Encore securities during the Class Period, you
may, no later than 60 days from October 6, 2011, move the court to
serve as lead plaintiff of the putative class, if you so choose.
In order to serve as lead plaintiff, however, you must meet
certain legal requirements. If you wish to discuss this action,
or have any questions concerning this notice or your rights or
interests, please contact:
Faruqi & Faruqi, LLP
369 Lexington Avenue, 10th Floor
New York, NY 10017
Attn: Juan E. Monteverde, Esq.
E-mail: jmonteverde@faruqilaw.com
Toll Free: (877) 247-4292
Phone: (212) 983-9330
ENDEMOL USA: Settles Class Actions Over Premium Text Charge Games
-----------------------------------------------------------------
Milberg LLP and William A. Pannell, P.C. on Oct. 5 disclosed that
two class actions alleging that games offered to viewers of two
network television programs were illegal lotteries under
California law -- "Lucky Case Game" on "Deal or No Deal," and
"American Idol Challenge" on "American Idol" -- have been settled
by the parties, and the settlements have received the court's
preliminary approval. The lawsuits are Herbert, et al. v. Endemol
USA, Inc., et al., Case No. 2:07-cv-03537-JHN-VBKx, and Couch v.
Telescope Inc., et al., Case No. 2:07-cv-03916-JHN-VBKx, pending
in the United States District Court for the Central District of
California.
The settlements provide that any person who paid premium text
message charges to play the games and did not win a prize is a
class member and may submit a claim for a full refund of the
charges. Claims can be filed on-line (or through other means) if
the settlements receive final court approval. The Defendants
settled without admitting liability.
The Court will hold a Fairness Hearing to decide whether the
proposed settlements are fair, reasonable, and adequate, and to
consider the application of class counsel for attorneys' fees and
expenses. The Fairness Hearing is currently scheduled for
December 19, 2011 at 2:00 p.m. at the U.S. District Court, Central
District of California, Western Division, Courtroom 790, located
at 255 East Temple Street, Los Angeles, CA 90012, before Judge
Jacqueline H. Nguyen.
If you paid premium text message charges to play the "Lucky Case
Game" or the "American Idol Challenge" and did not win a prize,
you are a Class Member in one or both of these lawsuits and you
have the following legal rights and options. If the settlements
are finally approved following the Fairness Hearing, you may file
a claim for payment. If you wish to object or exclude yourself
from the Settlement, you must file an objection or exclusion by no
later than November 21, 2011. You may ask to speak at the
Fairness Hearing about the fairness of either settlement by filing
a "Notice of Intent to Appear" by no later than November 21, 2011.
Please note that text message votes for "American Idol"
contestants are not covered by the "American Idol Challenge"
settlement. You are only a Class Member in that settlement if you
paid a premium text message charge to play the "American Idol
Challenge" and did not win a prize.
Lead class counsel are Milberg LLP and William A. Pannell, P.C.
This Notice only summarizes the proposed settlements. More
details are in the Settlement Agreement. Copies of the Settlement
Agreement and the pleadings and other documents relating to the
cases are on file at the United States District Court for the
Central District of California, Western Division, and may be
examined and copied at any time during regular office hours at the
Office of the Clerk, 255 East Temple Street, Los Angeles, CA
90012. Full information can be found at
http://www.LuckyCaseGameSettlement.comand
http://www.AmericanIdolChallengeSettlement.com
ENER1 INC: Class Action Lead Plaintiff Deadline Nears
-----------------------------------------------------
The law firm of Lieff Cabraser Heimann & Bernstein, LLP reminds
investors of the upcoming October 17, 2011 deadline to move for
appointment as lead plaintiff in the securities class action
lawsuits against Ener1, Inc. The actions are brought on behalf of
purchasers of Ener1 securities between January 10, 2011, and
August 15, 2011, inclusive.
If you purchased Ener1 securities during the Class Period, you may
move the Court for appointment as lead plaintiff by no later than
October 17, 2011. A lead plaintiff is a representative party who
acts on behalf of other class members in directing the litigation.
Your share of any recovery in the action will not be affected by
your decision of whether to seek appointment as lead plaintiff.
You may retain Lieff Cabraser, or other attorneys, as your counsel
in the action.
Ener1 shareholders who wish to learn more about the action and how
to seek appointment as lead plaintiff should click here or contact
Sharon Lee of Lieff Cabraser toll free at (800) 541-7358.
The actions allege that throughout the Class Period, defendants
made materially false and misleading statements regarding Ener1's
financial condition and prospects. On June 22, 2011, Ener1
disclosed that a material charge was required in connection with
the loans receivable of Think Holdings and accounts receivable of
Think Global, companies in which Ener1 had invested, on the basis
of Think Global's announcement that it will file for bankruptcy.
On August 15, 2011, Ener1 disclosed that its financial statements
for 2010 and the first quarter of 2011 should be restated and no
longer be relied upon. On this news, shares of Ener1 fell another
$0.33 per share, or 42.31%, to close on August 16, 2011 at $0.45
per share.
About Lieff Cabraser
Lieff Cabraser Heimann & Bernstein, LLP --
http://www.lieffcabraser.com/-- is a nationally recognized law
firm committed to advancing the rights of investors and promoting
corporate responsibility. The firm has offices in San Francisco,
New York and Nashville,
Since 2003, the National Law Journal has selected Lieff Cabraser
as one of the top plaintiffs' law firms in the nation. Lieff
Cabraser is one of only two plaintiffs' law firms in the United
States to receive this honor for the nine consecutive years.
FACEBOOK: Faces Class Action in Kansas Over Tracking Cookie
-----------------------------------------------------------
Sherilynn Macale, writing for The Next Web, reports that Facebook
user John Graham, a 42-year-old Leawood lawyer from Kansas, is
suing the leading social network in representation of the 150
million Facebook users in the United States. According to
Mr. Graham, Facebook is in violation of wiretap laws as it uses a
tracking cookie to record web browsing history after users have
already logged off of Facebook.
Both Facebook and Mr. Graham are currently declining to comment.
In the past, courts have dismissed similar cases filed under
wiretap law against Facebook, claiming that computer cookies do
not equal wiretaps. In these previous filings, plaintiffs were
unable to prove how Facebook has harmed users. In response to
similar cases, Facebook issued this official statement:
"Three of these cookies on some users' computers inadvertently
included unique identifiers when the user had logged out of
Facebook. However, we did not store these identifiers for logged
out users. Therefore, we could not have used this information for
tracking or any other purpose."
Facebook is under a lot of heat.
This Kansas lawsuit refers to several state law claims in
violation of the Kansas Consumer Protection Act. This is added to
the heap of cases in the past where Facebook has been sued over
its supposed failure to follow the federal Wiretap Act, a law that
prohibits the interception of wire, oral or electronic
communications.
The Electronic Privacy Information Center and the American Civil
Liberties Union along with eight other privacy groups have
collaborated on a letter sent just last week to the Federal Trade
Commission. In this letter, these groups urge the FTC to
investigate how Facebook is currently collecting information on
the online activity of its users, most especially in time with
Facebook's recent changes.
If Mr. Graham's lawsuit succeeds, Facebook might have to cough up
statutory damages of $100 per day for each of the class members,
or $10,000 per violation, punitive damages and attorney fees with
court costs. Additionally, Mr. Graham seeks a preliminary and
temporary injunction to halt Facebook from storing the mentioned
data on its servers.
IKEA NORTH: Recalls 58T BUSA Folding Tents Due to Laceration Risk
-----------------------------------------------------------------
The U.S. Consumer Product Safety Commission and Health Canada, in
cooperation with IKEA North America Service, of Conshohocken,
Pennsylvania, announced a voluntary recall of about 51,000 BUSA
children's folding tents in the United States of America and 7,000
in Canada. Consumers should stop using recalled products
immediately unless otherwise instructed. It is illegal to resell
or attempt to resell a recalled consumer product.
The steel wire frame of the tent can break, producing sharp wire
ends that can protrude through the tent fabric, posing a
laceration or puncture hazard.
Three incidents were reported, including one injury.
This recall involves a cube-shaped children's folding tent with
model number 90192009. The brand name BUSA and IKEA and the model
number are printed on a sewn-in label attached to an interior seam
in the tent. The tent frame is made of flat steel wire and the
tent material is pale green polyester fabric with turquoise, pink
and white trim. The tent's dimensions are: L 28 1/4, W 28 1/4, H
28 1/4.
Picture of the recalled products is available at:
http://www.cpsc.gov/cpscpub/prerel/prhtml12/12005.html
The recalled products were manufactured in Vietnam and sold
exclusively at IKEA stores nationwide from August 2011 through
September 2011 for about $8.
Consumers should immediately take it away from children and return
it to their nearest IKEA store for a full refund. For additional
information, contact IKEA toll-free at (888) 966-4532 anytime, or
visit the firm's Web site at http://www.ikea-usa.com/
JAMAICA PUBLIC SERVICE: November 24 Class Action Hearing Set
------------------------------------------------------------
Go-Jamaica reports that the Supreme Court is set to begin hearings
into a class action suit, filed against the Jamaica Public Service
Company (JPS), on November 24.
The suit was filed on September 9 by a group of disgruntled JPS
customers.
The customers have formed a group called Citizens United to Reduce
Electricity (CURE).
CURE is challenging the constitutionality of the license held by
the JPS.
The group's attorney, Hugh Wildman, said the utility company's
license became unconstitutional with the passage of the Charter of
Rights Bill earlier this year.
Mr. Wildman said sections of the Charter of Rights stipulate that
every Jamaican has the right to equality under the law, and the
right to equitable and humane treatment by any public authority in
the exercise of any function.
There have been mounting calls for the Government to end the JPS
monopoly on electricity distribution, amid increasing electricity
bills and complaints about poor customer service.
JAMES HARDIE: Class Action.org Reviews Siding Issues
----------------------------------------------------
Claims of James Hardie siding issues from homeowners who
experienced problems with this fiber cement exterior siding are
being reviewed by the attorneys working with Class Action.org.
According to a lawsuit regarding James Hardie siding issues, the
product was defectively designed and manufactured, such that it
fails earlier than expected, damaging underlying structures by
allowing moisture from rain, snow and other sources, to penetrate
the structure. If you experienced James Hardie siding issues with
the company's fiber cement exterior siding, you may be able to
seek compensation for repair and replacement costs in light of
these allegations. To find out if you have legal recourse for
your James Hardie siding issues, visit
http://www.classaction.org/james-hardie-fiber-cement-siding.html
to receive a free, no obligation review of your claim.
A lawsuit for James Hardie siding issues claims that while the
company advertises that its fiber cement exterior siding carries a
50-year warranty, the anticipated life of the product is far less
than this. Allegedly, the siding fails prematurely due to
moisture invasion, allowing water to penetrate the structure.
Flaking, cracking, warping, discoloration and product shrinkage,
which can result in the siding being pulled from its fasteners,
are among the signs which reportedly indicate deterioration and
deformation of the siding. In the more extreme cases of reported
James Hardie siding problems, homeowners have alleged that the
siding breaks and falls off the structure.
Because the James Hardie fiber cement exterior siding allegedly
does not perform in accordance with reasonable consumer
expectations, property owners who noticed cracking, shrinking,
warping or other issues may have legal recourse. Potentially,
these individuals may be able to participate in a James Hardie
siding lawsuit to seek compensation for repair and replacement
costs associated with their siding issues. To find out if you
have legal recourse, visit Class Action.org today for a no
obligation, no cost review of your James Hardie siding issues.
The lawyers working with the Web site are providing this online
consultation at no cost and with no obligation to all property
owners who have noticed James Hardie siding problems.
About Class Action.org
Class Action.org is dedicated to protecting consumers and
investors in class actions and complex litigation throughout the
United States. Class Action.org keeps consumers informed about
product alerts, recalls, and emerging litigation and helps them
take action against the manufacturers of defective products,
drugs, and medical devices. Information about consumer fraud
issues and environmental hazards is also available on the site.
Visit http://www.classaction.orgtoday for a no cost, no
obligation case evaluation and information about your consumer
rights.
LOFTON & LOFTON: Accused of Manipulating Ex-Employees' Hours
------------------------------------------------------------
Helen Sykes and Shakeata Sykes, on behalf of themselves and a
class v. Lofton & Lofton Management, Inc., d/b/a McDonald's and
Ronnie Lofton, Sr., Case No. 2011-CH-34724 (Ill. Cir. Ct., Cook
Cty., October 6, 2011) is brought to secure redress for the
Defendants' violations of the Illinois Wage Payment and Collection
Act.
The Plaintiffs complain that the Defendants manipulated the number
of hours the Plaintiffs worked and unlawfully withheld wages, in
violation of the Illinois law. The Plaintiffs allege that almost
every day that they worked the manager on duty clocked them out
for breaks, even though they did not take a break on every day for
which that time was deducted.
The Plaintiffs are residents of Chicago, Illinois. Plaintiff
Helen Sykes was employed by the Defendants from April 2010 until
August 10, 2011. Shakeata Sykes was employed by the Defendants
from May 2011 until August 17, 2011.
Lofton & Lofton is a corporation chartered under Illinois law.
Mr. Lofton is the president of Lofton & Lofton, and is a resident
of Plainfield, Illinois.
The Plaintiffs are represented by:
Daniel A. Edelman, Esq.
Cathleen M. Combs, Esq.
James O. Latturner, Esq.
Catherine A. Ceko, Esq.
EDELMAN, COMBS, LATTURNER & GOODWIN, LLC
120 S. LaSalle Street, 18th Floor
Chicago, IL 60603
Telephone: (312) 739-4200
Facsimile: (312) 419-0379
E-mail: courtecl@edcombs.com
ccombs@edcombs.com
jlatturner@edcombs.com
NORDICA USA: Agrees to $214,000 Civil Penalty Over Defective Skis
-----------------------------------------------------------------
The U.S. Consumer Product Safety Commission (CPSC) announced that
Nordica USA, of West Lebanon, New Hampshire, has agreed to pay a
civil penalty of $214,000. The penalty agreement
[http://www.cpsc.gov/cpscpub/prerel/prhtml12/12004.pdf]has been
provisionally accepted by the Commission (5-0).
The settlement resolves CPSC staff's allegations that Nordica USA
knowingly failed to report immediately to CPSC the safety defect
and hazard with the "XBi ALU Skis" binding plates, as required by
federal law.
In Fall 2008, Nordica USA discovered that it had about 200 reports
of warranty claims related to the XBi ALU Skis' binding plates
cracking and breaking.
CPSC staff alleges that Nordica USA knew that XBi ALU Skis'
binding plates were defective and could cause harm, but failed to
report this information immediately to CPSC. The binding plates
could crack or break, causing skiers to lose control or fall and
suffer injuries.
In February 2009, Nordica USA and CPSC announced the recall
[http://www.cpsc.gov/cpscpub/prerel/prhtml09/09127.html]of about
4,500 pairs of skis. Neither Nordica USA nor CPSC is aware of any
injuries. Nationwide ski retailers sold the XBi ALU Skis between
August 2006 and December 2008, for between $800 and $1,000.
Nordica USA denies CPSC staff allegations that it knowingly
violated the law.
Federal law requires manufacturers, distributors and retailers to
report to CPSC immediately (within 24 hours) after obtaining
information reasonably supporting the conclusion that a product
contains a defect which could create a substantial product hazard,
creates an unreasonable risk of serious injury or death, or fails
to comply with any consumer product safety rule or any other rule,
regulation, standard or ban enforced by CPSC.
ROCK-TENN CO: Settles Smurfit-Stone Shareholder Class Action
------------------------------------------------------------
Rock-Tenn Company on Oct. 5 announced that it has reached an
agreement to settle the pending Smurfit-Stone shareholder class
action lawsuit.
As previously disclosed, there is a class action lawsuit against
Rock-Tenn Company, RockTenn CP, LLC (a wholly owned subsidiary of
RockTenn that is the successor to Smurfit-Stone Container
Corporation), and former directors of Smurfit-Stone pending in the
Delaware Court of Chancery, challenging the recent acquisition by
RockTenn of Smurfit-Stone.
Under the terms of the proposed settlement, the class will release
all claims against RockTenn, RockTenn CP, LLC and former directors
of Smurfit-Stone that arise out of the class members' ownership of
Smurfit-Stone shares between the dates on which the merger was
agreed and consummated and that are based on the merger agreement
or the acquisition, disclosures or statements concerning the
merger agreement or the acquisition, or any of the matters alleged
in the lawsuit. In exchange for these releases, RockTenn will
grant the former Smurfit-Stone shareholders (other than those who
have already asserted their appraisal rights) the right to bring
and participate in a future "quasi-appraisal" proceeding in which
the Court will assess the value of a share of Smurfit-Stone common
stock on a stand-alone basis as of the closing of the transaction.
The ability of former Smurfit-Stone shareholders to bring and
participate in the future quasi-appraisal proceeding will be
subject to a number of conditions, including returning to RockTenn
an amount of cash equal to $41.26 per Smurfit-Stone share if the
former shareholder voted in favor of the merger (representing
approximately 73% of Smurfit-Stone shares outstanding as of the
record date) or $6.26 per Smurfit-Stone share if the former
shareholder either voted against the merger (representing
approximately 7% of the Smurfit-Stone shares outstanding as of the
record date) or abstained or did not vote with respect to the
merger. The proposed settlement is subject to a number of
conditions, including final court approval following completion of
a settlement hearing.
In addition, RockTenn has also settled an appraisal demand
regarding substantially all the Smurfit-Stone shares for which
appraisal rights were asserted. The shareholder that made this
appraisal demand will receive an amount of cash per Smurfit-Stone
share for which its appraisal rights were asserted equal to the
per-share value of the merger consideration on the date of the
merger and will not bring or participate in the future quasi-
appraisal proceeding.
RockTenn says it intends to vigorously defend any quasi-appraisal
claims that may be commenced. RockTenn cannot currently estimate
the losses, if any, that will result from these claims. No
assurance can be given that the final resolution of these claims
will not be material to RockTenn.
About RockTenn
RockTenn (NYSE:RKT) -- http://www.rocktenn.com/-- is one of North
America's leading integrated manufacturers of corrugated and
consumer packaging and recycling solutions, with net sales of $10
billion. RockTenn's 26,000 employees are committed to exceeding
their customers' expectations -- every time. The Company operates
locations in the United States, Canada, Mexico, Chile, Argentina
and China.
RED HAT: Appeal From Claims Rejection in IPO-Related Suit Pending
-----------------------------------------------------------------
An appeal from a court decision rejecting claims in a consolidated
lawsuit over Red Hat, Inc.'s initial public offering is pending,
according to the Company's October 6, 2011, Form 10-Q filing with
the U.S. Securities and Exchange Commission for the quarter ended
August 31, 2011.
Commencing in March 2001, the Company and certain of its officers
and directors were named as defendants in a series of purported
class action lawsuits 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.
On May 17, 2011, the Second Circuit issued a ruling on the two
pending appeals, granting the motion to dismiss one of the
appeals, and remanding the other appeal back to the District Court
to determine procedural issues relating to the standing of the
remaining objector-appellant. On August 25, 2011, the Court
rejected the claims of that remaining objector-appellant. A
notice of appeal of this decision was filed on September 26, 2011.
SABA SOFTWARE: Objector Appeals Decision in IPO Litigation
----------------------------------------------------------
An objector to the settlement resolving the consolidated lawsuit
relating to Saba Software, Inc.'s initial public offering has
appealed a court decision which states that the objector had no
standing to appeal, according to the Company's October 6, 2011,
Form 10-Q filing with the U.S. Securities and Exchange Commission
for the quarter ended August 31, 2011.
In November 2001, a complaint was filed in the United States
District Court for the Southern District of New York (the
"District Court") against the Company, certain of its officers and
directors, and certain underwriters of the Company's initial
public offering. The complaint was purportedly filed on behalf of
a class of certain persons who purchased the Company's common
stock between April 6, 2000, and December 6, 2000. The complaint
alleges violations by the Company and its officers and directors
of Section 11 of the Securities Act of 1933, as amended (the
"Securities Act"), Section 10(b) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and other related
provisions in connection with certain alleged compensation
arrangements entered into by the underwriters in connection with
the initial public offering. An amended complaint was filed in
April 2002. Similar complaints have been filed against hundreds
of other issuers that have had initial public offerings since
1998. The complaints allege that the prospectus and the
registration statement for the initial public offering failed to
disclose that the underwriters allegedly solicited and received
"excessive" commissions from investors and that some investors in
the initial public offering agreed with the underwriters to buy
additional shares in the aftermarket in order to inflate the price
of the Company's stock. The complaints were later consolidated
into a single action. The complaint seeks unspecified damages,
attorney and expert fees, and other unspecified litigation costs.
On July 1, 2002, the underwriter defendants in the consolidated
actions moved to dismiss all of the actions, including the action
involving the Company. On July 15, 2002, the Company, along with
other non-underwriter defendants in the coordinated cases, moved
to dismiss the litigation. On February 19, 2003, the District
Court ruled on the motions. The District Court granted the
Company's motion to dismiss the claims against the Company under
Rule 10b-5, due to the insufficiency of the allegations against
the Company. The District Court also granted the motion of the
individual defendants, Bobby Yazdani and Terry Carlitz, the
Company's Chief Executive Officer and Chairman of the Board and
former Chief Financial Officer and a member of the Company's Board
of Directors, to dismiss the claims against them under Rule 10b-5
and Section 20 of the Exchange Act. The motions to dismiss the
claims under Section 11 of the Securities Act were denied as to
virtually all of the defendants in the consolidated cases,
including the Company.
In June 2003, a proposed collective partial settlement of this
litigation was structured between the plaintiffs, the issuer
defendants in the consolidated actions, the issuer officers and
directors named as defendants, and the issuers' insurance
companies. In June 2004, an agreement of partial settlement was
submitted to the District Court for preliminary approval. The
District Court granted the preliminary approval motion on
February 15, 2005, subject to certain modifications. On
August 31, 2005, the District Court issued a preliminary order
further approving the modifications to the settlement and
certifying the settlement classes. The District Court also
appointed the notice administrator for the settlement and ordered
that notice of the settlement be distributed to all settlement
class members by January 15, 2006. The settlement fairness
hearing occurred on April 24, 2006, and the court reserved
decision at that time.
While the partial settlement was pending approval, the plaintiffs
continued to litigate against the underwriter defendants. The
District Court directed that the litigation proceed within a
number of "focus cases" rather than in all of the 310 cases that
have been consolidated. The Company's case is not one of these
focus cases. On October 13, 2004, the District Court certified
the focus cases as class actions. The underwriter defendants
appealed that ruling, and on December 5, 2006, the Court of
Appeals for the Second Circuit reversed the District Court's class
certification decision. On April 6, 2007, the Second Circuit
denied plaintiffs' petition for rehearing. In light of the Second
Circuit opinion, counsel for the issuer defendants informed the
District Court that this settlement could not be approved because
the defined settlement class, like the litigation class, could not
be certified. On June 25, 2007, the District Court entered an
order terminating the settlement agreement. On August 14, 2007,
the plaintiffs filed their second consolidated amended class
action complaints against the focus cases and on September 27,
2007, again moved for class certification. On November 12, 2007,
certain of the defendants in the focus cases moved to dismiss the
second consolidated amended class action complaints. On March 26,
2008, the District Court denied the motions to dismiss except as
to Section 11 claims raised by those plaintiffs who sold their
securities for a price in excess of the initial offering price and
those who purchased outside the previously certified class period.
Briefing on the class certification motion was completed in May
2008. That motion was withdrawn without prejudice on October 10,
2008.
On April 2, 2009, a stipulation and agreement of settlement among
the plaintiffs, issuer defendants and underwriter defendants was
submitted to the Court for preliminary approval. The Court
granted the plaintiffs' motion for preliminary approval and
preliminarily certified the settlement classes on June 10, 2009.
The settlement fairness hearing was held on September 10, 2009.
On October 5, 2009, the Court entered an opinion granting final
approval to the settlement and directing that the Clerk of the
Court close these actions. Appeals of the opinion granting final
approval were filed, all of which were disposed of except the
appeals filed by one objector were remanded to the district court
to determine standing to appeal. On August 25, 2011, the district
court issued an order holding that the final objector had no
standing to appeal. The objector has appealed that decision.
The Company says it intends to dispute these claims and defend the
lawsuit vigorously. However, due to the inherent uncertainties of
litigation and because the district court's August 25, 2011 order
remains subject to appeal, the ultimate outcome of the litigation
is uncertain. An unfavorable outcome in litigation could
materially and adversely affect the Company's business, financial
condition and results of operations.
SABA SOFTWARE: Objector Appeals Ruling in IPO Suit vs. Unit
------------------------------------------------------------
The final objector in the consolidated proceeding involving a
subsidiary of Saba Software, Inc. has appealed a decision stating
that the objector had no standing to appeal, according to the
Company's October 6, 2011, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended
August 31, 2011.
Centra Software, Inc., certain of its former officers and
directors and the managing underwriters of its initial public
offering were named as defendants in an action filed in the United
States District Court for the Southern District of New York. The
plaintiffs filed an initial complaint on December 6, 2001, and
purported to serve the Centra defendants on or about March 18,
2002. The original complaint has been superseded by an amended
complaint filed in April 2002. The action, captioned in re Centra
Software, Inc. Initial Public Offering Securities Litigation, No.
01 CV 10988, is purportedly brought on behalf of the class of
persons who purchased Centra's common stock between February 3,
2000, and December 6, 2000. The complaint asserts claims under
Sections 11 and 15 of the Securities Act and Sections 10(b) and
20(a) of the Exchange Act. The complaint alleges that, in
connection with Centra's initial public offering in February 2000,
the underwriters received undisclosed commissions from certain
investors in exchange for allocating shares to them and also
agreed to allocate shares to certain customers in exchange for the
agreement of those customers to purchase additional shares in the
aftermarket at pre-determined prices. The complaint asserts that
Centra's registration statement and prospectus for the offering
were materially false and misleading due to their failure to
disclose these alleged arrangements. The complaint seeks damages
in an unspecified amount against Centra and the named individuals.
Similar complaints have been filed against hundreds of other
issuers that have had initial public offerings since 1998; the
complaints have been consolidated into an action captioned in re
Initial Public Offering Securities Litigation, No. 21 MC 92.
On July 1, 2002, the underwriter defendants in the consolidated
actions moved to dismiss all the actions, including the action
involving Centra. On July 15, 2002, Centra, along with other non-
underwriter defendants in the coordinated cases, moved to dismiss
the litigation. On October 9, 2002, pursuant to agreements
tolling the statute of limitations for claims related to the
litigation, the plaintiffs dismissed, without prejudice, the
claims against the named Centra officers and directors in the
action. Subsequent addenda to the agreements extended the tolling
period through August 27, 2010. On February 19, 2003, the
District Court issued an order denying the motion to dismiss the
claims against Centra under Rule 10b-5. The motions to dismiss
the claims under Section 11 of the Securities Act were denied as
to virtually all of the defendants in the consolidated cases,
including Centra.
In June 2003, a proposed collective partial settlement of this
litigation was structured between the plaintiffs, the issuer
defendants in the consolidated actions, the issuer officers and
directors named as defendants, and the issuers' insurance
companies. In June 2004, an agreement of settlement was submitted
to the District Court for preliminary approval. The District
Court granted the preliminary approval motion on February 15,
2005, subject to certain modifications. On August 31, 2005, the
District Court issued a preliminary order further approving the
modifications to the settlement and certifying the settlement
classes. The District Court also appointed the notice
administrator for the settlement and ordered that notice of the
settlement be distributed to all settlement class members by
January 15, 2006. The settlement fairness hearing occurred on
April 24, 2006, and the court reserved decision at that time.
While the partial settlement was pending approval, the plaintiffs
continued to litigate against the underwriter defendants. The
District Court directed that the litigation proceed within a
number of "focus cases" rather than in all of the 310 cases that
have been consolidated. The Company's case is not one of these
focus cases. On October 13, 2004, the District Court certified
the focus cases as class actions. The underwriter defendants
appealed that ruling, and on December 5, 2006, the Court of
Appeals for the Second Circuit reversed the District Court's class
certification decision. On April 6, 2007, the Second Circuit
denied plaintiffs' petition for rehearing. In light of the Second
Circuit opinion, counsel for the issuer defendants informed the
District Court that this settlement could not be approved because
the defined settlement class, like the litigation class, could not
be certified. On June 25, 2007, the District Court entered an
order terminating the settlement agreement. On August 14, 2007,
the plaintiffs filed their second consolidated amended class
action complaints against the focus cases and on September 27,
2007, again moved for class certification. On November 12, 2007,
certain of the defendants in the focus cases moved to dismiss the
second consolidated amended class action complaints. On March 26,
2008, the District Court denied the motions to dismiss except as
to Section 11 claims raised by those plaintiffs who sold their
securities for a price in excess of the initial offering price and
those who purchased outside the previously certified class period.
Briefing on the class certification motion was completed in May
2008. That motion was withdrawn without prejudice on October 10,
2008.
On April 2, 2009, a stipulation and agreement of settlement among
the plaintiffs, issuer defendants and underwriter defendants was
submitted to the Court for preliminary approval. The Court
granted the plaintiffs' motion for preliminary approval and
preliminarily certified the settlement classes on June 10, 2009.
The settlement fairness hearing was held on September 10, 2009.
On October 5, 2009, the Court entered an opinion granting final
approval to the settlement and directing that the Clerk of the
Court close these actions. On August 26, 2010, based on the
expiration of the tolling period stated in the agreements between
the plaintiffs and the named Centra officers and directors, the
plaintiffs filed a notice to terminate the tolling agreement and
recommence litigation against the named Centra officers and
directors. The plaintiffs stated to the Court that they do not
intend to take any further action against the named Centra
officers and directors at this time. Appeals of the opinion
granting final approval were filed, all of which were disposed of
except the appeals filed by one objector were remanded to the
district court to determine standing to appeal. On August 25,
2011, the district court issued an order holding that the final
objector had no standing to appeal. The objector has appealed
that decision.
The Company says, on behalf of Centra, that it intends to dispute
these claims and defend the lawsuit vigorously. However, due to
the inherent uncertainties of litigation and because the district
court's August 25, 2011 order remains subject to appeal, the
ultimate outcome of the litigation is uncertain. An unfavorable
outcome in litigation could materially and adversely affect the
Company's business, financial condition and results of operations.
STATE OF IOWA: Disputes Discrimination Class Action
---------------------------------------------------
Jeff Eckhoff, writing for Des Moines Register, reports that a
multimillion-dollar, class-action challenge to Iowa's allegedly
discriminatory hiring process shifted gears on Oct. 4 as
plaintiffs' lawyers rested and state attorneys began their more
formal attack on "the amorphous nature of this particular case."
Plaintiffs' attorneys rested their case halfway through the 17th
day of testimony in Pippen vs. State of Iowa following questions
to Joe Ellis, who was state government's chief affirmative action
officer before he retired in 2009.
Mr. Ellis also was the first witness for state lawyers, who until
on Oct. 4 had largely restrained their questioning.
The Pippen lawsuit, filed in 2007, accuses Iowa officials of
letting racial bias run unchecked within the state's hiring
bureaucracy by abdicating the state's duty to monitor things such
as resume screening and pre-employment testing in agencies and
departments. Court papers estimate that the case, if successful,
could be worth as much as $70 million for up to 6,000 blacks who
were denied jobs or promotions with the state going back to July
2003.
Witnesses over the past 3 1/2 weeks have testified that qualified
blacks repeatedly have been denied job interviews and promotions
in Iowa government, but state officials contend the statistics
fall well short of proving racial discrimination under the law.
Court papers filed on Oct. 4 as part of two new state motions to
get the lawsuit thrown out cite a plaintiff-paid statistician's
report as failing to identify "what has, or what has not, caused
the bottom line disparity" between the hiring of blacks and
whites.
"In this way, it is impossible to know whether any of defendant's
actions (let alone which ones) contributed in any way to the
disparity, or whether other factors (such as demographics, the
private employment market, applicant behavior, etc.) explain the
differences," the motion says.
"This case amounts to a challenge to literally any discrete
decision made by any decision-maker at any step in the state
hiring practice," Deputy Iowa Attorney General Jeffrey Thompson
said in a brief opening statement before Judge Robert Blink.
"If plaintiffs are to be taken at their word, your honor, what
they are asking you to do is take over the state hiring system in
its entirety, to explain why a particular applicant didn't get a
five instead of a three in customer service," Mr. Thompson said.
Previous witnesses also have attacked Iowa's practice of lumping
all minorities together in setting diversity goals for
"underutilized" jobs -- positions where Iowa has fewer minorities
on the payroll than it demographically should.
University of Washington psychologist Cheryl Kaiser testified last
month that the combined numbers, which include women, Latinos and
Asians, mask a disproportionately bad situation for blacks.
Mr. Ellis on Oct. 4 said the practice was born out of court cases
requiring that affirmative action hiring goals have a statistical
significance behind them. State officials became concerned,
Mr. Ellis said, that Iowa's small nonwhite populations would lead
to percentages too small to justify a push for more diverse
hiring. "We wanted to set more goals," he said.
TRAVELERS: Class Action Over Medical Insurance Payments Fail
------------------------------------------------------------
Steve Korris, writing for The Madison St. Clair Record, reports
that class actions that the former Lakin Law Firm started against
insurers Travelers and Safeco on the same day ended in failure on
the same day.
On Sept. 28, the Illinois Supreme Court denied petitions to review
appellate court opinions that shut down Madison County class
actions against the insurers.
In March, Fifth District appellate judges reversed Circuit Judge
Barbara Crowder in the Safeco action and former circuit judge
Daniel Stack in the Travelers action.
Lakin lawyers sued Travelers and Safeco on Feb. 11, 2005, in a
rush of class complaints as the effective date of the national
Class Action Fairness Act approached.
The act steered most new class actions to federal courts.
Chiropractors Richard Coy and Frank Bemis led the action against
Travelers, alleging it improperly reduced medical payments though
a preferred provider organization.
Chiropractor Ryan Bemis led the action against Safeco, alleging it
improperly reduced payments through computer review.
Judge Stack certified a class action in 2008, Judge Crowder in
2009.
Travelers and Safeco petitioned the Fifth District for leave to
appeal, and Fifth District judges denied both petitions.
The insurers turned the tide at the Supreme Court, winning
supervisory orders that obligated Fifth District judges to accept
the appeals.
This March, both class actions fell flat.
Justices Stephen Spomer, Bruce Stewart and James Wexstten found
they couldn't affirm Judge Stack's order on Travelers without
nullifying language in a contract.
"The plaintiff has provided no authority, and this court is aware
of none, that would permit such a rewriting of the contracts,"
Justice Spomer wrote.
He wrote that to the extent plaintiffs alleged that payor
agreements violated insurance regulations, the Department of
Insurance must determine whether they did.
He wrote that to the extent they alleged that Travelers failed to
steer patients to them, they simply realleged breach of contract
as consumer fraud.
He wrote that to the extent a quasi contract arose for the price
of their services, it arose between them and injured workers or
their employers.
He wrote that Travelers had a legal basis for taking discounts.
In the Safeco action, Justice Spomer, Justice Stewart, and Justice
James Donovan found individual issues predominated over common
issues.
"The theory Bemis advances, which is that all the bills submitted
by a medical provider are presumed to reflect usual and customary
charges for reasonable and necessary medical services under the
terms of the insurance contract, is contrary to Illinois law,"
Justice Spomer wrote.
"Evidence would be required, on an individual basis, in order to
determine whether Safeco breached its contract to pay the usual
and customary charge for reasonable and necessary services for
each class member," he wrote.
"More importantly, Safeco has the right to rebut that evidence on
an individual basis and show that any charges it failed to pay
were not usual and customary charges for reasonable and necessary
medical services," he wrote.
Mr. Donovan concurred on grounds that a bill isn't proof of a
reasonable charge, but he would have allowed an expert to evaluate
reasonableness and necessity.
LakinChapman lawyers Robert Schmieder, Jonathan Piper, and Andrew
Kuhlmnann litigated against Safeco, along with Timothy Campbell of
Godfrey.
Tom Keefe of Belleville defended Safeco, along with Randal
Mullendore, Robyn Buck, and Mairi Lough, all of Husch Blackwell in
Clayton, Missouri.
Mr. Schmieder and Mr. Campbell litigated against Travelers.
Troy Bozarth, of Hepler Broom in Edwardsville, defended Travelers
along with Robert Johnson and Lisa Lilly of Chicago.
U.S. LAW SCHOOLS: Class Action Over Misleading Job Stats Mulled
---------------------------------------------------------------
Karen Sloan, writing for The National Law Journal, reports that
the attorneys behind class actions against New York Law School and
Thomas M. Cooley Law School announced plans on Oct. 5 to sue 15
additional law schools for publishing what they described as
misleading postgraduate job statistics.
They have yet to secure enough name plaintiffs for those suits,
however. They won't file until three alumni from each of the
targeted schools sign on, they said during a conference call with
reporters. The announcement was intended in part to drum up
plaintiff interest, they acknowledged.
The attorneys, David Anziska and Jesse Strauss, detailed what they
said was convincing evidence that law schools have offered a
skewed picture of postgraduate employment rates and salaries for
years, not just since the latest recession.
"The problem isn't going away, and the legal academy isn't owning
up to it," Mr. Strauss said. "We strongly believe that by the end
of 2012, almost every school in the nation will be sued, if not by
plaintiffs who are represented by us, then by plaintiffs
represented by other law firms."
Messrs. Strauss and Anziska said they are targeting the 15 schools
either because alumni or students approached them with concerns,
or because the postgraduate job data they have reported to the
American Bar Association were "implausible."
"The lawsuits against New York Law School and Thomas M. Cooley Law
School are prompting many recent law school graduates with high
debt loads and disappointing job prospects to question the
employment rates reported by their schools," Mr. Anziska said.
"The numbers reported by schools just don't comport with the
reality of the legal job market. We hope that litigation,
combined with pressure from regulators, applicants, students and
alumni, changes the way legal education is marketed and provides
compensation to those who have been misled in the past."
A number of the schools under threat of litigation did not respond
to calls for comment. California Western School of Law
Communications Director Pam Hardy said the school has not deceived
students.
"We stand behind the work our career services office has done and
their efforts to collect accurate statistics on graduate
employment," she said, noting that school administrators hope that
reforms proposed by the ABA will improve job data at all schools.
Villanova University School of Law, another targeted school,
recently completed an independent audit of its jobs data. The ABA
censured the school this year for inflating the median grade-point
averages and LSAT scores of its incoming classes.
"The third-party firm found no material errors in the data
reported [on graduate jobs] for the past three years," said
Director of Media Relations Jonathan Gust.
Messrs. Anziska and Strauss represent alumni of both New York Law
School and Thomas M. Cooley in class actions filed in August.
Those suits seek tuition refunds and other remedies, including
independent auditing of law school jobs data. They followed on
the heels of another class action filed in May by Anna Alaburda,
an alumna of San Diego's Thomas Jefferson School of Law. Her
complaint, which is being pressed by Los Angeles firm Miller
Barondess, accused the school of committing fraud by
misrepresenting employment statistics.
Law School Transparency, the Tennessee-based nonprofit founded in
2010 with a goal of improving the consumer data available to
prospective law students, was not involved in the litigation
against individual schools but has expressed support.
"It is our hope that these complaints, along with future claims
made against other law schools, will help bring about broad social
change by altering how law schools operate and by pressuring the
ABA Section of Legal Education to fulfill its regulatory duties,"
the group said on its Web site.
According to Messrs. Strauss and Anziska, the average debt load
for graduates of the 15 additional targeted schools was more than
$108,000, and all but two have reported job placement rates of 90%
or higher.
The schools being newly targeted for litigation are:
* Albany Law School of Union University
* University of Baltimore School of Law
* Brooklyn Law School
* California Western School of Law
* Chicago-Kent College of Law
* DePaul University College of Law
* Florida Coastal School of Law
* The John Marshall Law School (Chicago)
* Maurice A. Deane School of Law at Hofstra University
* Pace Law School
* University of San Francisco School of Law
* St. John's University School of Law
* Southwestern Law School
* Villanova University School of Law
* Widener University School of Law
UNITED STATES: Plaintiffs' Bond Request in Cobell Suit Tossed
-------------------------------------------------------------
According to an article posted at The Blog of Legal Times by
Mike Scarcella, a federal judge in Washington will not require
opponents of the $3.4 billion settlement in an Indian trust class
action to front any money while they pursue their challenge in an
appeals court.
Senior Judge Thomas Hogan of U.S. District Court for the District
of Columbia rejected the lead plaintiffs' request that the
opponents of the settlement be required to post a bond or other
surety worth millions of dollars.
The attorneys for lead plaintiff Elouise Cobell, including Dennis
Gingold and a group of Kilpatrick Townsend & Stockton attorneys
said the appeal bond would ensure prompt payment of the cost to
defend the settlement.
Judge Hogan wasn't persuaded. The judge chided the plaintiffs'
attorneys for making sweeping, unsupported statements in court
papers in recent weeks in support of an appeal bond.
"The Court recognizes that sometimes a litigant's resort to
persuasive writing versus objective writing leads to unwitting
overzealousness in the presentation of arguments, but the
plaintiffs' motion and reply brief go beyond fair advocacy and
border on misrepresentation," Judge Hogan said in his ruling.
In court papers filed on Aug. 23, Ms. Cobell's lawyers said
Kimberly Craven, a critic of the $3.4 billion settlement, should
be required to post a bond worth more than $8.3 million in order
to continue the challenge in the U.S. Court of Appeals for the
D.C. Circuit. Ms. Cobell's attorneys said more than $2.5 million
of the amount was for legal fees.
No opponent of the settlement, Ms. Cobell's lawyers said, "is
entitled to a free pass at delaying justice" for the hundreds of
thousands of Native Americans who make up the class. The suit,
filed in 1996, sought an accounting of the government's handling
of individual Indian trust accounts flowing from the use of land
for timber, natural gas and minerals.
"The delay caused by Craven's appeal means that more elderly and
more infirm class members will pass on without obtaining justice
that they deserve," Ms. Cobell's lawyers said in the court filing.
"The human cost of Craven's appeal can never be quantified, and as
this Court has found, many of the class members depend on their
trust funds for the most basic staples of life."
Ms. Craven's attorney, Theodore Frank of the Center for Class
Action Fairness, said in response that the appeal is not frivolous
and that Ms. Cobell's lawyers are exaggerating their costs.
Mr. Frank alleged Ms. Cobell's request for an appeal bond was
brought in bad faith and urged Judge Hogan to sanction the
plaintiffs' lawyers.
In his ruling on Oct. 5, Judge Hogan didn't hold back on the
plaintiffs' team. Judge Hogan indicated he believed the requested
appeal bond amount was excessive.
The judge said he is sympathetic to the plaintiffs' concern that
the appeals will delay the settlement, "that does not translate
into a willingness by this court to quietly overlook the
misleading case citations and unsupported legal argument
throughout the plaintiffs' motions and reply brief."
For instance, Judge Hogan criticized the plaintiffs' lawyers for
contending that there are established practices in the D.C.
Circuit for appeal bonds. Ms. Cobell's lawyers, in one instance,
pointed to a case in which a federal trial judge declined to order
a bond.
Judge Hogan said "it goes without saying" that a published
decision denying an appeal bond "cannot credibly be cited as
establishing a 'practice.'" The judge said he was "surprised"
Ms. Cobell's lawyers cited to cases that don't help their cause
much.
"It is unclear to the Court whether the unsupported arguments and
representations in the plaintiffs' briefs were intentional, the
result of carelessness and haste, or otherwise can be reasonably
explained," Judge Hogan said.
Sanctions, the judge said, are not warranted. But he said he
ordered Ms. Cobell's lawyers to file a declaration that addresses
the concerns he raised.
Gingold and Kilpatrick partner Keith Harper were not immediately
reached for comment on Oct. 6.
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