/raid1/www/Hosts/bankrupt/CAR_Public/111027.mbx
C L A S S A C T I O N R E P O R T E R
Thursday, October 27, 2011, Vol. 13, No. 213
Headlines
AGFEED INDUSTRIES: Rosen Law Firm Files Securities Class Action
APPLE INC: Settles iTunes Gift Card Class Action
BANK OF AMERICA: Sued in Penn. Over Illegal Foreclosure Fees
BP: Motion for Interlocutory Appeal in Oil Spill Suit Denied
CABILDO SERVICES: Faces Class Action Over Unpaid Overtime
CALIX INC: Occam Merger-Related Class Suits Remain Pending
CHIPOTLE MEXICAN: Appeal in Employees' Suit Remains Pending
CHIPOTLE MEXICAN: Still Defends ADA Violations Suits in Calif.
COMCAST CORP: Failed to Reimburse Employees' Expenses, Suit Says
CSU: Faces Class Action Over Additional University Fees
E1 ASSET: Accused of Retaliating Against Employees in New York
EBAY INC: Appeal in Suit vs. StubHub Remains Pending in N.C.
EBAY INC: Class Suits Over PayPal Business Remain Pending
ENERGY TRANSFER: Faces Southern Union Acquisition-Related Suits
FLORIDA: Class Action Over New Welfare Drug Test Law Ongoing
GADDEL ENTERPRISES: Judge Okays Partial Class Action Settlement
GENERAL MILLS: Fiber One Bar Labeling Class Action Dismissed
GNC HOLDINGS: MDL Panel Consolidates Hydroxycut Class Suits
GOLDMAN SACHS: Sued Over Proposed Kinder and El Paso Merger
HALLIBURTON CO: Court Refuses to Add Fraud Claim in Macondo MDL
HALLIBURTON CO: Fifth Cir. Returns Securities Suit to Lower Court
HONEYWELL INT'L: Awaits Court Approval of Deal in "Allen" Suit
HONEYWELL INT'L: Continues to Defend Quick Lube MDL in Illinois
ICE: Faces Class Action Over Sexual Abuse of Immigrant Detainees
ITT EDUCATIONAL: Securities Class Suit Remains Pending in N.Y.
JOSEPH BRANT: C. Difficile Class Action Wins Certification
KOSS CORPORATION: Settles Shareholder Class Action
MACCABEE HEALTH: Faces Class Action Over Omega-3 Products
MGIC INVESTMENT: Awaits Ruling in Consolidated Securities Suit
MGIC INVESTMENT: Continues to Defend Housing Discrimination Suits
PAYPAL: May Face Class Action Over Funding Issues
VIRGINIA HARBOR: January 19 Settlement Fairness Hearing Set
VISA: Hagens Berman Files Antitrust Class Action
* Rise of Class Actions in Canada Blamed on Rule Changes
* State Attorney Generals Rake Millions From Plaintiff Lawyers
*********
AGFEED INDUSTRIES: Rosen Law Firm Files Securities Class Action
---------------------------------------------------------------
The Rosen Law Firm, P.A. on Oct. 24 disclosed that it has filed
class action lawsuit on behalf of investors who purchased the
common stock of AgFeed Industries, Inc. during the period between
March 16, 2009 and August 2, 2011, inclusive, and is seeking to
recover investors' damages from violations of federal securities
laws.
To join the AgFeed class action, visit the Rosen Law Firm's
Web site at http://www.rosenlegal.comor call Phillip Kim, Esq.,
toll-free, at 866-767-3653; you may also e-mail or
pkim@rosenlegal.com for information on the class action.
The action filed by the firm is pending in the U.S. District Court
for the District of Colorado.
NO CLASS HAS YET BEEN CERTIFIED IN THE ABOVE ACTION. UNTIL A
CLASS IS CERTIFIED, YOU ARE NOT REPRESENTED BY COUNSEL UNLESS YOU
RETAIN ONE. YOU MAY CHOOSE TO DO NOTHING AT THIS POINT AND REMAIN
AN ABSENT CLASS MEMBER.
The Complaint asserts violations of the federal securities laws
against AgFeed and its officers and directors for issuing false
and misleading information to investors about the Company's true
financial and business condition. Namely, the Complaint alleges
that (1) AgFeed avoided correctly reporting the Company's bad debt
levels by relying on a flawed analysis; (2) the Company's
allowances for doubtful accounts were highly undervalued; and (3)
AgFeed's accounts receivable were overvalued and its bad debts
were undervalued, causing reported asset values to be overstated
and expenses to be understated.
On August 2, 2011, AgFeed announced disappointing preliminary
second quarter financial results, including an anticipated loss of
$17 million and $5 million in allowances for bad debt expenses. A
week later, AgFeed disclosed in its Form 10-Q filed with the SEC
that the Company had only $13.2 million in accounts receivables,
net of a $7 million allowance for doubtful accounts as of June 30,
2011. This is in stark contrast to the $28.6 million in accounts
receivable, net of a $1.9 million allowance for doubtful accounts,
for the prior quarter. On September 29, 2011, AgFeed's Board
established a special committee to investigate the Company's
accounting practices in relation to its Chinese operations.
The Complaint alleges that when this adverse information entered
the market, the price of AgFeed stock declined, damaging
investors.
If you wish to serve as lead plaintiff, you must move the Court no
later than December 19, 2011. A lead plaintiff is a
representative party acting on behalf of other class members in
directing the litigation. If you wish to join the litigation, or
to discuss your rights or interests regarding this class action,
please contact:
Laurence Rosen, Esq.
Phillip Kim, Esq.
The Rosen Law Firm P.A.
275 Madison Avenue 34th Floor
New York, NY 10016
Telephone: 212-686-1060
Weekends Telephone: 917-797-4425
E-mail: lrosen@rosenlegal.com
pkim@rosenlegal.com
Web site: http://www.rosenlegal.com
The Rosen Law Firm -- http://www.rosenlegal.com-- represents
investors throughout the globe, concentrating its practice in
securities class actions and shareholder derivative litigation.
APPLE INC: Settles iTunes Gift Card Class Action
------------------------------------------------
The Mac Observer reports that Kurtzman Carson Consultants
announced on Oct. 24 that a settlement has been reached in the
class action suit of Johnson v. Apple Inc. The suit involved
iTunes customers who purchased songs from the iTunes Music Store
for $1.29 using gift cards whose labels or packaging contained
language promising songs for $0.99.
iTunes Gift Card Verbiage
Starting April 1, 2009, Apple introduced a three-tier pricing
structure for the iTunes Music Store, continuing to sell some
tracks at the traditional price of $0.99 while also introducing a
$0.69 price point for catalogue tracks and a $1.29 price point for
new or popular tracks. Prices are determined by the publishers.
During the transition to this new pricing model, Apple continued
to sell iTunes Gift Cards that advertised $0.99 songs on their
packaging. This caused plaintiff Gabriel Johnson to file suit in
July 2009, a suit that then became a class action.
The suit has been settled out of court, and eligible class members
are set to receive $3.25 in iTunes Store credit. As is typical of
class action suits, attorneys fees dwarf the class award to
individuals and have been set at $2,117,500.
If you are eligible for the settlement you can find instructions
on filing a claim at Kurtzman Carson Consultants Web site.
BANK OF AMERICA: Sued in Penn. Over Illegal Foreclosure Fees
------------------------------------------------------------
Courthouse News Service reports that a federal class action
accuses Bank of America of charging illegal fees in illegal
foreclosures.
A copy of the Complaint in Benner v. Bank of America, N.A., et
al., Case No. 11-cv-06574 (E.D. Pa.) (Baylson, J.), is available
at:
http://www.courthousenews.com/2011/10/24/BofA.pdf
The Plaintiff is represented by:
Noah Axler, Esq.
Michael D. Donovan, Esq.
DONOVAN AXLER, LLC
1845 Walnut Street, Suite 1100
Philadelphia, PA 19103
Telephone: (215) 732-6067
E-mail: naxler@donovanaxler.com
mdonovan@donovanaxler.com
- and -
Irv Ackelsberg, Esq.
LANGER GROGAN & DIVER, PC
1717 Arch Street, Suite 4130
Philadelphia, PA 19103
Telephone: (215) 320-5701
E-mail: iackelsberg@langergrogan.com
BP: Motion for Interlocutory Appeal in Oil Spill Suit Denied
------------------------------------------------------------
Sabrina Canfield at Courthouse News Service reports that U.S.
District Judge Carl Barbier denied BP's motion for interlocutory
appeal of a ruling that could affect hundreds of thousands of
claims for economic damages.
"I have given this a lot of thought," Judge Barbier said as he
denied BP's motion. Judge Barbier is overseeing the litigation
stemming from the Deepwater Horizon oil spill catastrophe.
BP attorney Andrew Langan said BP appealed because it believed
Judge Barbier's August order on Bundle B1 was incorrect. By
appealing that order, BP believed it could avoid at least some of
the litigation, Mr. Langan said.
Judge Barbier in August issued a 39-page ruling granting in part
and denying in part requests made related to Bundle B1 -- and
ruled that claimants can sue for punitive damages.
The B1 pleading bundle includes all claims for private or
"nongovernmental economic loss and property damages." It includes
claims for economic damages filed by fishermen, seafood processors
and distributors, recreational and commercial businesses, plant
and dock workers and those who worked for BP's Vessels of
Opportunity program.
In its Oct. 13 motion for interlocutory appeal, BP said, "an
immediate appeal from the order may materially advance the
ultimate termination of the litigation."
Mr. Langan told Judge Barbier on Oct. 21: "We still have the GCCF
[Gulf Coast Claims Facility] in place. If these claims are all
eliminated from litigation, litigants will have no option but to
go through the GCCF."
But Judge Barbier recalled that during the June hearing on the B1
bundle, Mr. Langan said that BP had no intention of dismissing the
whole lot of economic damage complaints, and said BP would allow
the trial to go forward no matter what decision the judge made on
that bundle.
Judge Barbier indicated that granting the appeal now would be
impractical, because even if it were granted, the same trial, the
same witnesses and the same evidence will still be presented.
But, "This is not a typical commercial dispute," Mr. Langan told
the judge. "This is a case with thousands of thousands of
thousands of claimants. . . . What we're seeking will resolve the
claims of those thousands; what we're seeking will help them. It
will materially advance the determination of thousands of claims."
Arguing against the motion for appeal, plaintiffs' attorney
Elizabeth Cabraser said, "The law, like time, does not flow
backwards."
Ms. Cabraser cited Supreme Court rulings on pre-emption and
general maritime law, and said that when the Supreme Court ruled
in 2008 on economic damages from the 1989 Exxon Valdez oil spill
off the coast of Alaska, the case had been pending for 20 years.
Judge Barbier asked Ms. Cabraser if she could respond to
statements by attorneys for Alabama, who said that if states are
not allowed to seek punitive damages, tens of thousands of claims
will be kicked out of the litigation.
"Everything we know from the Supreme Court is there will be
punitive damages no matter what," Ms. Cabraser said.
After the status conference, Ms. Cabraser told Courthouse News:
"Judge Barbier's decision is the right decision. It is the
practical decision. It is the fair decision and the expected
decision."
Ms. Cabraser said the policy of the court is to have trial go
forward to judgment and to allow appeals after judgment has been
made.
"An appeal can take several years. It is not fair to either side
to hold the trial up for several years," she said, adding that it
would also be unfair to the public to do so.
"Judge Barbier has been doing a tremendous job of managing the
case so far," Ms. Cabraser said.
Earlier in the status conference, BP attorney Don Haycraft said
that parties in the oil spill litigation have produced more than
40 million pages of documents so far.
As of Oct. 21, Mr. Haycraft said, 226 depositions had been taken.
Judge Barbier called the report on depositions taken so far
"really remarkable."
Mr. Haycraft said depositions have been scheduled into December,
and discovery will enter phase two before long.
Plaintiffs' attorney Steve Herman told the court that 1,600
plaintiff-profile forms have been filled out related to BP's
Vessels of Opportunity program, set up during the oil spill to
hire out-of-work fishermen to clean up oil.
Of the thousands of contract complaints filed by fishermen who say
they haven't been fully paid by BP, the court has selected six
test plaintiffs for a pilot mediation program.
The mediation program and other issues for litigation related to
the Vessels of Opportunity program will be discussed after the
next status conference, which has been set for 9:30 a.m. on
Nov. 18.
CABILDO SERVICES: Faces Class Action Over Unpaid Overtime
---------------------------------------------------------
Michelle Keahey, writing for The Louisiana Record, reports that a
Louisiana staffing company is being sued for allegedly violating
federal labor regulations by paying its hourly employees only
straight time for hours worked in excess of 40 per week.
Jerry Guidry, on behalf of himself and others similarly situated,
filed a proposed class action against Cabildo Services and Cabildo
Staffing on Oct. 12 in federal court in New Orleans.
Cabildo is a professional staffing company that provides skilled
labor and management employees to the construction, energy,
petrochemical, civil engineering and shipbuilding industries.
Mr. Guidry was employed as an hourly employee and worked in excess
of 40 hours in a work week. He states he was paid at the same
hourly rate for all hours he worked including those in excess of
40 per week.
The defendant is accused of violating the Fair Labor Standards Act
by not properly paying Guidry and other hourly workers for their
overtime.
The plaintiff is asking the court for an award of unpaid overtime,
attorney's fees, court costs and interest.
Mr. Guidry is represented by Derrick Earles of Brian Caubarreaux &
Associates in Marksville and David I. Moulton of Bruckner Burch in
Houston. A jury trial is requested.
U.S. District Judge Kurt D. Engelhardt is assigned to the case.
Case No. 2:11-cv-02578
CALIX INC: Occam Merger-Related Class Suits Remain Pending
----------------------------------------------------------
On September 16, 2010, Calix, Inc. and its two direct, wholly
owned subsidiaries, entered into an Agreement and Plan of Merger
and Reorganization with Occam Networks, Inc. (the "Merger
Agreement"). In response to the announcement of the Merger
Agreement, on September 17, 2010, September 20, 2010, and
September 21, 2010, three purported class action complaints were
filed by three purported stockholders of Occam Networks, Inc., in
the California Superior Court for Santa Barbara County: Kardosh v.
Occam Networks, Inc., et al. (Case No. 1371748), or the Kardosh
complaint; Kennedy v. Occam Networks, Inc., et al. (Case No.
1371762), or the Kennedy complaint; and Moghaddam v. Occam
Networks, Inc., et al. (Case No. 1371802), or the Moghaddam
complaint, respectively. The Kardosh, Kennedy and Moghaddam
complaints, which are referred to collectively as the California
class action complaints, are substantially similar. Each of the
California class action complaints names Occam, the pre-
acquisition members of the Occam board of directors and the
Company as defendants.
The California class action complaints generally allege that the
former members of the Occam board breached their fiduciary duties
in connection with the acquisition of Occam by the Company, by,
among other things, engaging in an allegedly unfair process and
agreeing to an allegedly unfair price for the proposed merger
transaction. The California class action complaints further
allege that Occam and the other entity defendants aided and
abetted the alleged breaches of fiduciary duty. The plaintiffs in
the California class action complaints sought injunctive relief
rescinding the merger transaction and damages in an unspecified
amount, as well as costs, attorney's fees, and other relief. On
November 2, 2010, the three California class action complaints
were consolidated into a single action, with the Kardosh action
becoming the lead action, and on November 19, 2010, the California
Superior Court issued an order staying the California class
actions in favor of a substantively identical stockholder class
action pending in the Delaware Court of Chancery. The California
class actions remain stayed under that order.
Delaware Action
On October 6, 2010, a purported class action complaint was filed
by stockholders of Occam in the Delaware Court of Chancery:
Steinhardt v. Howard-Anderson, et al. (Case No. 5878-VCL). On
November 24, 2010, these stockholders filed an amended complaint,
or the amended Steinhardt complaint. The amended Steinhardt
complaint names Occam and the former members of the Occam board of
directors as defendants. The amended Steinhardt complaint does
not name Calix as a defendant.
Like the California class action complaints, the amended
Steinhardt complaint generally alleges that the former members of
the Occam board breached their fiduciary duties in connection with
the acquisition of Occam by the Company, by, among other things,
engaging in an allegedly unfair process and agreeing to an
allegedly unfair price for the merger transaction. The amended
Steinhardt complaint also alleges that Occam and the former
members of the Occam board breached their fiduciary duties by
failing to disclose certain allegedly material facts about the
merger transaction in the preliminary proxy statement and
prospectus included in the Registration Statement on Form S-4 that
the Company filed with the SEC on November 2, 2010. The amended
Steinhardt complaint sought injunctive relief rescinding the
merger transaction, and an award of damages in an unspecified
amount, as well as plaintiffs' costs, attorney's fees, and other
relief.
The merger transaction was completed on February 22, 2011. The
Delaware plaintiffs continue to seek an award of damages in an
unspecified amount.
The Company believes that the allegations in the California
actions and the Delaware action relating to the amended Steinhardt
complaint are without merit and intend to continue to vigorously
contest the actions. However, there can be no assurance that the
Company will be successful in defending these ongoing actions. In
addition, the Company has obligations, under certain
circumstances, to hold harmless and indemnify each of the former
Occam directors against judgments, fines, settlements and expenses
related to claims against such directors and otherwise to the
fullest extent permitted under Delaware law and Occam's bylaws and
certificate of incorporation. Such obligations may apply to these
lawsuits.
The Company says it is not currently a party to any other legal
proceedings which, if determined adversely to it, would
individually or in the aggregate have a material adverse effect on
its business, operating results or financial condition.
No further updates were reported in the Company's October 21,
2011, Form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarter ended September 24, 2011.
CHIPOTLE MEXICAN: Appeal in Employees' Suit Remains Pending
-----------------------------------------------------------
A lawsuit has been filed against Chipotle Mexican Grill, Inc., in
California alleging violations of state laws regarding employee
record-keeping, meal and rest breaks, payment of overtime and
related practices with respect to its employees. The case
originally sought damages, penalties and attorney's fees on behalf
of a purported class of the Company's present and former
employees. The court denied the plaintiff's motion to certify the
purported class, and as a result the action can proceed, if at
all, as an action by a single plaintiff. The plaintiff has
appealed the court's denial of class certification, and the appeal
remains pending. Although the Company has various defenses, it is
not possible at this time to reasonably estimate the outcome of or
any potential liability from this case.
No further updates were reported in the Company's October 21,
2011, Form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarter ended September 30, 2011.
CHIPOTLE MEXICAN: Still Defends ADA Violations Suits in Calif.
--------------------------------------------------------------
Chipotle Mexican Grill, Inc. continues to defend lawsuits
commenced by Maurizio Antoninetti alleging violations of the
Americans with Disabilities Act, according to the Company's
October 21, 2011, Form 10-Q filing with the U.S. Securities and
Exchange Commission for the quarter ended September 30, 2011.
In 2006, Maurizio Antoninetti filed a lawsuit against the Company
in the U.S. District Court for the Southern District of
California, primarily claiming that the height of the serving line
wall in the Company's restaurants violated the Americans with
Disabilities Act, or ADA, as well as California disability laws.
On December 6, 2006, Mr. Antoninetti filed an additional lawsuit
in the same court making the same allegations on a class action
basis, on behalf of himself and a purported class of disabled
individuals, and a similar class action was filed by James Perkins
in U.S. District Court for the Central District of California on
May 7, 2008.
In the individual Antoninetti action, the district court entered a
ruling in which it found that although the Company's counter
height violated the ADA, the Company provided the plaintiff with
an equivalent facilitation, and awarded attorney's fees and
minimal damages to the plaintiff which the Company has accrued.
The Company and the plaintiff appealed the district court's ruling
to the U.S. Court of Appeals for the Ninth Circuit, and on
July 26, 2010, the appeals court entered a ruling finding that the
Company violated the ADA and did not provide the plaintiff with an
equivalent facilitation, and remanded the case to the district
court. The district court will now determine the damages and
injunctive relief and final award of attorneys fees to which
Mr. Antoninetti is entitled based on the court of appeals ruling.
The Company lowered the height of its serving line walls
throughout California some time ago, which makes injunctive relief
in both the individual and class actions moot, and has the lower
serving lines in a significant majority of its restaurants outside
of California as well. The Company will vigorously defend the
class action cases, including by contesting certification of a
plaintiff class. It is not possible at this time to reasonably
estimate the outcome of, or any additional potential liability
from, these cases.
COMCAST CORP: Failed to Reimburse Employees' Expenses, Suit Says
----------------------------------------------------------------
Lynn Hall, individually and on behalf of others similarly situated
v. Comcast Corporation, Comcast of
California/Colorado/Texas/Washington, Inc., Comcast of
California/Colorado/Washington I, Inc., and Does 1 to 50, Case No.
RG11595543 (Calif. Super. Ct., Alameda Cty., September 16, 2011)
alleges that Comcast failed to reimburse Ms. Hall and the putative
class members for business expenses in violation of the California
Labor Code and the California Business and Professions Code.
The Plaintiff alleges that putative class members are required to
incur approximately $1,200 in mileage expenses per month, but are
reimbursed only up to $600 per month. Because there are over 150
class members, Plaintiff seeks compensatory damages of at least
$4,320,000 just for under-reimbursement of mileage expenses. The
Plaintiff is also seeking damages for cell-phone and home-office
expenses.
Ms. Hall is a resident of the County of Alameda, in California,
and is a former employee of Comcast.
Comcast is the nation's leading cable provider. The identities of
the Doe Defendants are currently unknown to the Plaintiff.
The Company removed the lawsuit on October 21, 2011, from the
Superior Court of the state of California, County of Alameda, to
the United States District Court for the Northern District of
California. The Company argues that the removal is proper because
the Plaintiff and Defendant are citizens of different states. The
District Court Clerk assigned Case No. 4:11-cv-05174 to the
proceeding.
The Plaintiff is represented by:
Todd M. Schneider, Esq.
Carolyn H. Cottrell, Esq.
Lee B. Szor, Esq.
SCHNEIDER WALLACE COTTRELL BRAYTON KONECKY LLP
180 Montgomery Street, Suite 2000
San Francisco, CA 94104
Telephone: (415) 421-7100
Facsimile: (415) 421-7105
E-mail: tschneider@schneiderwallace.com
ccottrell@schneiderwallace.com
lszor@schneiderwallace.com
The Defendants are represented by:
Gary T. Lafayette, Esq.
Rebecca K. Kimura, Esq.
Paul J. Katz, Esq.
LAFAYETTE & KUMAGAI LLP
100 Spear Street, Suite 600
San Francisco, CA 94105
Telephone: (415) 357-4600
Facsimile: (415) 357-4605
E-mail: glafayette@lkclaw.com
rkimura@lkclaw.com
pkatz@lkclaw.com
CSU: Faces Class Action Over Additional University Fees
-------------------------------------------------------
Camyron Lee at The Daily Titan reports that last week, an e-mail
was sent to Cal State Fullerton students informing them that their
legal rights may be affected by a pending class action lawsuit.
The lawsuit is being filed on behalf of CSU students against the
CSU Board of Trustees, in Keller v. the Board of Trustees of CSU.
Students at 19 CSU campuses, including CSUF, are being represented
by the lawsuit, as well as students who were in one of the
graduate business programs at any CSU campus in fall 2009.
According to the class action notice, CSU students were allegedly
charged state university fees or nonresidential fees for fall
2009, and then charged additional fees after registration.
Similarly, business students were charged a graduate business
professional fee in addition to fall registration fees.
The lawsuit is alleging that the board breached its contracts with
students about the student fee costs required for the fall 2009
term, violating the covenant of good faith and fair dealing.
The plaintiffs seek a refund for the increased state university
fee or non-resident tuition and the graduate business professional
fee for the fall 2009 term.
E1 ASSET: Accused of Retaliating Against Employees in New York
--------------------------------------------------------------
Daniel LaSalle on behalf of himself and all others similarly
situated v. E1 Asset Management, Inc., Ron Yehuda Itin and Ahsan
R. Shaikh, Case No. 652897/2011 (N.Y. Sup. Ct., October 20, 2011)
accuses the Defendants of subjecting the Plaintiff and the class
members to retaliation in response to their participation in
lawsuits against E1 Asset.
Ms. Lasalle alleges that the Defendants filed a claim with the
Financial Industry Regulatory Authority, in which they alleged
that he violated a non-compete clause in his employment agreement,
because of his ongoing participation in a class action for unpaid
wages against them. He disclosed that since July 2011, the
Defendants have filed the same type of claim against at least 30
putative class members.
Mr. LaSalle is a resident of New York and has worked for the
Defendants as a stockbroker from March 2003 until March 2010.
E1 Asset is a New York corporation and the Plaintiff's employer
under New York state law. The Individual Defendants are owners
and officers of E1 Asset. The Defendants have operated as full-
service independent broker-dealers offering a comprehensive range
of financial and wealth management services for retail investors.
The Plaintiff is represented by:
Matthew Kadushin, Esq.
Michael D. Palmer, Esq.
Charles Joseph, Esq.
D. Maimon Kirschenbaum, Esq.
JOSEPH, HERZFELD, HESTER & KIRSCHENBAUM LLP
233 Broadway, 5th Floor
New York, NY 10279
Telephone: (212) 688-5640
Facsimile: (212) 688-2548
E-mail: matthew@jhllp.com
mpalmer@jhllp.com
charles@jhllp.com
maimon@jhllp.com
EBAY INC: Appeal in Suit vs. StubHub Remains Pending in N.C.
------------------------------------------------------------
In October 2007, two plaintiffs filed a purported class action
lawsuit in North Carolina Superior Court alleging that eBay Inc.'s
StubHub business sold (and facilitated and participated in the
sale) of concert tickets to plaintiffs with the knowledge that the
tickets were resold in violation of North Carolina's maximum
ticket resale price law (which has been subsequently amended). In
February 2011, the trial court granted plaintiffs' motion for
summary judgment, concluding that immunity under the
Communications Decency Act did not apply. The trial court further
held that StubHub violated the North Carolina unfair and deceptive
trade practices statute as it pertains to the two named
plaintiffs, and certified its decision for immediate appeal to the
North Carolina Court of Appeals. StubHub has appealed this
decision.
Some event organizers and professional sports teams have expressed
concern about the resale of their event tickets on the Company's
sites. Lawsuits alleging a variety of causes of actions have in
the past, and may in the future, be filed against StubHub and eBay
by venue owners, competitors, ticket buyers and unsuccessful
ticket buyers. Such litigation could result in damage awards,
could require the Company to change its business practices in ways
that may be harmful to its business, or could otherwise negatively
affect its tickets business.
No further updates were reported in the Company's October 21,
2011, Form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarter ended September 30, 2011.
EBAY INC: Class Suits Over PayPal Business Remain Pending
---------------------------------------------------------
eBay Inc. and its subsidiary, PayPal Inc., continues to defend
class action lawsuits alleging violations of the Electronic Fund
Transfer Act, according to the Company's October 21, 2011, Form
10-Q filing with the U.S. Securities and Exchange Commission for
the quarter ended September 30, 2011.
In the second quarter of 2010, two putative class-action lawsuits
(Devinda Fernando and Vadim Tsigel v. eBay Inc. and PayPal, Inc.;
and Moises Zepeda v. PayPal, Inc.) were filed in the U.S. District
Court in the Northern District of California. These lawsuits
contain allegations related to violations of aspects of the
Electronic Fund Transfer Act and Regulation E and violations of a
previous settlement agreement related to Regulation E, and/or
allege that PayPal improperly held users' funds or otherwise
improperly limited user's accounts. These lawsuits seek damages
as well as changes to PayPal's practices among other remedies.
The Company says a determination that there have been violations
of the Electronic Fund Transfer Act, Regulation E or violations of
other laws relating to PayPal's practices could expose PayPal to
significant liability. Changes to PayPal's practices that may
result from these lawsuits could require PayPal to incur
significant costs and to expend product resources, which could
cause delay to other planned product improvements, which would
further harm the Company's business.
If PayPal is unable to provide quality customer support operations
in a cost-effective manner, PayPal's users may have negative
experiences, PayPal may receive additional negative publicity, its
ability to attract new customers may be damaged, and it could
become subject to additional litigation. As a result, current and
future revenues could suffer, losses could be incurred, and its
operating margins may decrease.
In addition, negative publicity about, or negative experiences
with, customer support for any of the Company's businesses could
cause the Company's reputation to suffer or affect consumer
confidence in its brands individually or as a whole.
ENERGY TRANSFER: Faces Southern Union Acquisition-Related Suits
---------------------------------------------------------------
Energy Transfer Equity, L.P., is facing several class action
lawsuits in connection with its proposed acquisition of Southern
Union Company, according to the Company's October 21, 2011, Form
8-K filing with the U.S. Securities and Exchange Commission.
On July 19, 2011, Energy Transfer Equity, L.P. ("ETE") entered
into a Second Amended and Restated Agreement and Plan of Merger
(the "Second Amended Merger Agreement") with Sigma Acquisition
Corporation, a wholly owned subsidiary of ETE ("Merger Sub"), and
Southern Union Company ("Southern Union"). Under the terms of the
Second Amended Merger Agreement, Merger Sub will merge with and
into Southern Union, with Southern Union continuing as the
surviving entity and becoming a wholly owned subsidiary of ETE
(the "Merger").
On June 21, 2011, a putative class action lawsuit captioned
Jaroslawicz v. Southern Union Company, et al., Cause No. 2011-
37091, was filed in the 333rd Judicial District Court of Harris
County, Texas. The petition names as defendants the members of
the Southern Union Board, as well as Southern Union Company
("Southern Union") and Energy Transfer Equity, L.P. ("ETE"). The
plaintiff alleges that the defendants breached their fiduciary
duties to Southern Union's stockholders or aided and abetted
breaches of fiduciary duties in connection with the merger. The
petition alleges that the merger involves an unfair price and an
inadequate sales process and that defendants entered into the
transaction to benefit themselves personally. The petition seeks
injunctive relief, including to enjoin the merger, attorneys' and
other fees and costs, indemnification and other relief.
Also on June 21, 2011, another putative class action lawsuit
captioned Magda v. Southern Union Company, et al., Cause No. 2011-
37134, was filed in the 11th Judicial District Court of Harris
County, Texas. The petition named as defendants the members of
the Southern Union Board, Southern Union and ETE. The plaintiff
alleges that the Southern Union directors breached their fiduciary
duties to Southern Union's stockholders in connection with the
merger and that Southern Union and ETE aided and abetted those
alleged breaches. The petition alleges that the merger involves
an unfair price and an inadequate sales process, that Southern
Union's directors entered into the merger to benefit themselves
personally, and that defendants have failed to disclose all
material information related to the merger to Southern Union
stockholders. The petition seeks injunctive relief, including to
enjoin the merger, and an award of attorneys' and other fees and
costs, in addition to other relief. On June 28, 2011, an amended
petition was filed, naming the same defendants and alleging that
the Southern Union directors breached their fiduciary duties to
Southern Union's stockholders in connection with the merger and
that Southern Union and ETE aided and abetted those alleged
breaches of fiduciary duty. The amended petition alleges that the
merger involves an unfair price and an inadequate sales process,
that Southern Union's directors entered into the merger to benefit
themselves personally, including through consulting and noncompete
agreements, and that defendants have failed to disclose all
material information related to the merger to Southern Union
stockholders. The amended petition seeks injunctive relief,
including to enjoin the merger, and an award of attorneys' and
other fees and costs, in addition to other relief.
On June 27, 2011, a putative class action lawsuit captioned
Southeastern Pennsylvania Transportation Authority, et al. v.
Southern Union Company, et al., C.A. No. 6615-CS, was filed in the
Delaware Court of Chancery. The complaint names as defendants the
members of the Southern Union Board, Southern Union and ETE. The
plaintiffs allege that the Southern Union directors breached their
fiduciary duties to Southern Union's stockholders in connection
with the merger, and further claim that ETE aided and abetted
those alleged breaches. The complaint alleges that the merger
involves an unfair price and an inadequate sales process, that
Southern Union's directors entered into the merger to benefit
themselves personally, including through consulting and noncompete
agreements, and that the directors should deem the Williams
proposal to be superior (On June 23, 2011, the Southern Union
Board received an unsolicited proposal from The Williams
Companies, Inc. to acquire all of the issued and outstanding
shares of common stock of Southern Union for $39 per share in
cash.) The complaint seeks compensatory damages, injunctive
relief, including to enjoin the merger, and an award of attorneys'
and other fees and costs, in addition to other relief.
On June 29 and 30, 2011, putative class action lawsuits captioned
KBC Asset Management NV v. Southern Union Company, et al., C.A.
No. 6622-CS, and LBBW Asset Management Investment GmbH v. Southern
Union Company, et al., C.A. No. 6627-CS, respectively, were filed
in the Delaware Court of Chancery. The complaints name as
defendants the members of the Southern Union Board, Southern
Union, ETE and Sigma Acquisition Corporation ("Merger Sub"). The
plaintiffs allege that the Southern Union directors breached their
fiduciary duties to Southern Union's stockholders in connection
with the merger and that ETE aided and abetted those alleged
breaches. The complaints allege that the merger involves an
unfair price and an inadequate sales process, that Southern
Union's directors entered into the merger to benefit themselves
personally, including through consulting and noncompete
agreements, and that the directors must give full consideration to
the Williams proposal. The complaint seeks compensatory damages,
injunctive relief, including to enjoin the merger, and an award of
attorneys' and other fees and costs, in addition to other relief.
On July 6, 2011, a putative class action lawsuit captioned Memo v.
Southern Union Company, et al., C.A. No. 6639-CS, was filed in the
Delaware Court of Chancery. The complaint names as defendants the
members of the Southern Union Board, Southern Union, ETE and
Merger Sub. The plaintiffs allege that the Southern Union
directors breached their fiduciary duties to Southern Union's
stockholders in connection with the amended merger agreement and
that Southern Union, ETE and Merger Sub aided and abetted those
alleged breaches. The complaint alleges that the merger involves
an unfair price and an inadequate sales process, that Southern
Union's directors entered into the merger to benefit themselves
personally, and that the terms of the amended merger agreement are
preclusive. The complaint seeks injunctive relief, including to
enjoin the merger, and an award of attorneys' and other fees and
costs, in addition to other relief.
The defendants believe the allegations of all the actions lack
merit and intend to contest them vigorously.
FLORIDA: Class Action Over New Welfare Drug Test Law Ongoing
------------------------------------------------------------
Samantha Stainburn at Global Post, citing the Orlando Sentinal,
reports that a federal judge has temporarily blocked Florida's new
law requiring drug tests for welfare recipients until a class-
action lawsuit challenging the constitutionality of the law is
resolved.
The new law, promised by Gov. Rick Scott when he ran for office,
requires Florida welfare applicants to pay for a drug test in
order to qualify for benefits and then to take additional drug
tests periodically to remain eligible, Reuters reports.
Floridians who test positive for drugs can't receive benefits for
a year. Recipients who fail two tests are cut off for three
years.
The American Civil Liberties Union of Florida has filed a suit
against the law on behalf of Luis Lebron, a 35-year-old Navy
veteran, father and University of Central Florida student who
refused to take a drug test when he applied for Temporary
Assistance to Needy Families this summer, the Orlando Sentinal
reports. Mr. Lebron, who claims he has never used illegal drugs,
said the drug-testing requirement violated his civil rights.
United States District Judge Mary S. Scriven argued that the state
hasn't demonstrated a substantial, special need to justify the
"wholesale, suspicionless drug testifying of all applicants" for
welfare benefits, the Orlando Sentinal reports. She noted a 1999
study of welfare applicants' drug use that found applicants for
the Temporary Assistance for Needy Families program weren't any
more likely to use drugs than non-applicants.
According to The Associated Press:
The judge said there was a good chance plaintiff Luis Lebron would
succeed in his challenge to the law based on the Fourth Amendment
protection against unreasonable searches. The drug test can
reveal a host of private medical facts about the individual,
Scriven wrote, adding that she found it "troubling" that the drug
tests are not kept confidential like medical records.
"I'm delighted for our client and delighted to have confirmation
that all of us remain protected from unreasonable, suspicionless
government searches and seizures," ACLU's lead attorney,
Maria Kayanan said in a prepared news statement, the Orlando
Sentinal reports.
"Drug testing welfare recipients is just a common-sense way to
ensure that welfare dollars are used to help children and get
parents back to work," Jackie Schutz, a spokeswoman for Scott,
told the AP. "The governor obviously disagrees with the decision
and he will evaluate his options regarding when to appeal."
GADDEL ENTERPRISES: Judge Okays Partial Class Action Settlement
---------------------------------------------------------------
Courthouse News Service reports that a federal judge gave final
approval to a partial settlement that calls for a $739,000 payout
to resolve class claims over a $7.8 million Ponzi scheme
orchestrated by Lizette Morice and her company, Gaddel
Enterprises.
A copy of the Memorandum in Carroll, et al. v. Stettler, et al.,
Case No. 10-cv-02262 (E.D. Pa.), is available at:
http://is.gd/QaiIhE
GENERAL MILLS: Fiber One Bar Labeling Class Action Dismissed
------------------------------------------------------------
Sue Reisinger, writing for Corporate Counsel, reports that Rick
Palmore, general counsel of cereal-maker General Mills, Inc., got
his Kix this week when a class action suit related to labeling on
the company's Fiber One breakfast bar was dismissed. And the case
stands as a victory for most food companies as well.
Calling it a "very important decision," Mr. Palmore explained that
it "provides clarity around what food manufacturers are required
to do on consumer product labeling . . . that we are not required
to do things inconsistent with federal requirements."
The case began when a consumer sued General Mills and its main
rival, Kellogg Company, in federal court in Chicago, claiming that
labels on their fiber bars didn't disclose that the bars contained
a form of processed fiber that is inferior to natural fiber. The
suit also alleged that the labels didn't disclose that the bars
could cause certain health problems, which the companies denied.
The district court dismissed the suit without hearing the merits,
but the consumer appealed. On October 17, the U.S. Court of
Appeals for the Seventh Circuit, also in Chicago, dismissed the
suit after considering the merits.
Ani Gulati, assistant GC and litigation chief at Minneapolis-based
General Mills, said the decision was especially significant
because "it is the first known federal appellate court decision to
interpret the application of pre-emption language" in the federal
Nutrition Labeling and Education Act.
Judge Richard Posner's opinion held that the information required
under the federal law doesn't include disclosing that the fiber in
the bars produces fewer health benefits than a product that
contains only "natural" fiber. And Illinois had never obtained an
exemption from the federal law to impose any stricter standard.
The three-judge panel also found no evidence supporting
allegations of health problems related to eating the bars.
"It is easy to see why Congress would not want to allow states to
impose disclosure requirements of their own on packaged food
products, most of which are sold nationwide," Judge Posner wrote.
"Manufacturers might have to print 50 different labels, driving
consumers who buy food products in more than one state crazy."
Outside counsel David Biderman, who represented the company in the
case, said the decision set an excellent precedent in making clear
that manufacturers can provide nutritional information that will
be consistent in all 50 states. "It protects manufacturers from
being subject to a patchwork quilt of regulations," said
Mr. Biderman, a partner in Perkins Coie's Los Angeles office.
Kellogg, based in Battle Creek, Michigan, was represented by
Jenner & Block.
GNC HOLDINGS: MDL Panel Consolidates Hydroxycut Class Suits
-----------------------------------------------------------
On May 1, 2009, the Food and Drug Administration issued a warning
on several Hydroxycut-branded products manufactured by Iovate
Health Sciences U.S.A., Inc. ("Iovate"). The FDA warning was
based on 23 reports of liver injuries from consumers who claimed
to have used the products between 2002 and 2009. As a result,
Iovate voluntarily recalled 14 Hydroxycut-branded products.
Following the recall, GNC Holdings, Inc., was named, among other
defendants, in approximately 85 lawsuits related to Hydroxycut-
branded products in 14 states. Iovate previously accepted the
Company's tender request for defense and indemnification under its
purchasing agreement with the Company and, as such, Iovate has
accepted the Company's request for defense and indemnification in
the Hydroxycut matters. The Company's ability to obtain full
recovery in respect of any claims against the Company in
connection with products manufactured by Iovate under the
indemnity is dependent on Iovate's insurance coverage, the
creditworthiness of its insurer, and the absence of significant
defenses by such insurer. To the extent the Company is not fully
compensated by Iovate's insurer, it can seek recovery directly
from Iovate. The Company's ability to fully recover such amounts
may be limited by the creditworthiness of Iovate.
As of September 30, 2011, there were 76 pending lawsuits related
to Hydroxycut in which the Company had been named: 70 individual,
largely personal injury claims and six putative class action
cases, generally inclusive of claims of consumer fraud,
misrepresentation, strict liability and breach of warranty. As
any liabilities that may arise from these matters are not probable
or reasonably estimable at this time, no liability has been
accrued in the accompanying financial statements.
By court order dated October 6, 2009, the United States Judicial
Panel on Multidistrict Litigation consolidated pretrial
proceedings of many of the pending actions in the Southern
District of California (In re: Hydroxycut Marketing and Sales
Practices Litigation, MDL No. 2087).
No further updates were reported in the Company's October 21,
2011, Form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarter ended September 30, 2011.
GOLDMAN SACHS: Sued Over Proposed Kinder and El Paso Merger
-----------------------------------------------------------
Louisiana Municipal Police Employees' Retirement System, on behalf
of itself and all others similarly situated shareholders of El
Paso Corporation v. Juan Carlos Braniff, David W. Crane, Douglas
L. Foshee, Robert W. Goldman, Anthony W. Hall, Jr., Thomas R. Hix,
Ferrell P. McClean, Timothy J. Probert, Steven J. Shapiro, J.
Michael Talbert, Robert F. Vagt, John L. Whitmire, Kinder Morgan,
Inc., and The Goldman Sachs Group, Inc., Case No. 6960 (Del.
Chancery Ct., October 20, 2011) is brought against the members of
the board of directors of El Paso for breaching their fiduciary
duties, and against Kinder Morgan and Goldman Sachs for aiding and
abetting that breach.
According to the lawsuit, El Paso and Kinder Morgan have announced
that they entered into an agreement and plan of merger, whereby
Kinder Morgan would acquire El Paso for a mix of cash and Kinder
Morgan stock worth approximately $26.87 per share. The Plaintiff
alleges that the El Paso Board neglected to negotiate for a collar
around the stock portion of the consideration, thus, subjecting El
Paso's shareholders to potential adverse movements in Kinder
Morgan's stock price. The Plaintiff adds that the consideration
to be paid to El Paso's shareholders in the Proposed Transaction
is inadequate in light of, among other things, the surge in demand
for pipelines and the pricing power Kinder Morgan will garner as a
result of the Proposed Transaction.
LMPERS is a shareholder of El Paso, an energy company that
operates in the natural gas transmission and exploration and
production sectors of the energy industry.
The Individual Defendants are members of the El Paso Board.
Kinder Morgan is a leading pipeline transportation and energy
storage company in North America. Goldman Sachs is a global
investment banking, securities and investment management company
providing a range of financial services.
The Plaintiff is represented by:
Mark Lebovitch, Esq.
Jeremy Friedman, Esq.
BERNSTEIN LITOWITZ BERGER & GROSSMANN LLP
1285 Avenue of the Americas
New York, NY 10019
Telephone: (212) 554-1400
Facsimile: (212) 554-1444
E-mail: markl@blbglaw.com
JeremyF@blbglaw.com
- and -
Stuart M. Grant, Esq.
Megan D. McIntyre, Esq.
GRANT & EISENHOFER P.A.
1201 N. Market Street
Wilmington, DE 19801
Telephone: (302) 622-7000
Facsimile: (302) 622-7100
E-mail: sgrant@gelaw.com
mmcintyre@gelaw.com
- and -
Marc I. Gross, Esq.
Jason S. Cowart, Esq.
Gustavo F. Bruckner, Esq.
POMERANTZ HAUDEK GROSSMAN & GROSS LLP
100 Park Avenue
New York, NY 10017
Telephone: (212) 661-1100
Facsimile: (212) 661-8665
E-mail: migross@pomlaw.com
jscowart@pomlaw.com
gfbruckner@pomlaw.com
HALLIBURTON CO: Court Refuses to Add Fraud Claim in Macondo MDL
---------------------------------------------------------------
The U.S. District Court for the Eastern District of Louisiana
denied Halliburton Company's motion to add a fraud claim against
the BP Defendants in the multidistrict litigation over the Macondo
well incident, according to the Company's October 21, 2011, Form
10-Q filing with the U.S. Securities and Exchange Commission for
the quarter ended September 30, 2011.
The semisubmersible drilling rig, Deepwater Horizon, sank on
April 22, 2010, after an explosion and fire onboard the rig that
began on April 20, 2010. The Deepwater Horizon was owned by
Transocean Ltd. and had been drilling the Macondo exploration well
in Mississippi Canyon Block 252 in the Gulf of Mexico for BP
Exploration & Production, Inc. (BP Exploration), the lease
operator and indirect wholly owned subsidiary of BP p.l.c. (BP
p.l.c., BP Exploration, and their affiliates, collectively, BP).
There were eleven fatalities and a number of injuries as a result
of the Macondo well incident. Crude oil escaping from the Macondo
well site spread across thousands of square miles of the Gulf of
Mexico and reached the United States Gulf Coast. The Company
performed a variety of services for BP Exploration, including
cementing, mud logging, directional drilling, measurement-while-
drilling, and rig data acquisition services.
Since April 21, 2010, plaintiffs have been filing lawsuits
relating to the Macondo well incident. Generally, those lawsuits
allege either (1) damages arising from the oil spill pollution and
contamination (e.g., diminution of property value, lost tax
revenue, lost business revenue, lost tourist dollars, inability to
engage in recreational or commercial activities) or (2) wrongful
death or personal injuries. To date, the Company has been named
along with other unaffiliated defendants in more than 400
complaints, most of which are alleged class actions, involving
pollution damage claims and at least 40 personal injury lawsuits
involving seven decedents and at least 59 allegedly injured
persons who were on the drilling rig at the time of the incident.
Another six lawsuits naming the Company and others relate to
alleged personal injuries sustained by those responding to the
explosion and oil spill. Plaintiffs originally filed the lawsuits
in federal and state courts throughout the United States,
including Alabama, Delaware, Florida, Georgia, Kentucky,
Louisiana, Mississippi, South Carolina, Tennessee, Texas, and
Virginia. Except for certain lawsuits not yet consolidated
(including one lawsuit that is proceeding in Louisiana state
court, three lawsuits that are proceeding in Texas state court,
and three lawsuits that are proceeding in Florida federal court),
the Judicial Panel on Multi-District Litigation ordered all of the
lawsuits against the Company consolidated in a multi-district
litigation (MDL) proceeding before Judge Carl Barbier in the U.S.
Eastern District of Louisiana. The pollution complaints generally
allege, among other things, negligence and gross negligence,
property damages, taking of protected species, and potential
economic losses as a result of environmental pollution and
generally seek awards of unspecified economic, compensatory, and
punitive damages, as well as injunctive relief. Plaintiffs in
these pollution cases have brought a lawsuit under various legal
provisions, including The Oil Pollution Act of 1990 (OPA), The
Clean Water Act (CWA), The Migratory Bird Treaty Act of 1918
(MBTA), and the Endangered Species Act of 1973 (ESA), the Outer
Continental Shelf Lands Act, the Longshoremen and Harbor Workers
Compensation Act, general maritime law, state common law, and
various state environmental and products liability statutes.
Furthermore, the pollution complaints include lawsuits brought
against the Company by governmental entities, including the State
of Alabama, the State of Louisiana, Plaquemines Parish, the City
of Greenville, and three Mexican states. The wrongful death and
other personal injury complaints generally allege negligence and
gross negligence and seek awards of compensatory damages,
including unspecified economic damages and punitive damages. The
Company has retained counsel and is investigating and evaluating
the claims, the theories of recovery, damages asserted, and the
Company's respective defenses to all of these claims.
Judge Barbier is also presiding over a separate proceeding filed
by Transocean under the Limitation of Liability Act (Limitation
Action). In the Limitation Action, Transocean seeks to limit its
liability for claims arising out of the Macondo well incident to
the value of the rig and its freight. Although the Limitation
Action is not consolidated in the MDL, to this point the judge is
effectively treating the two proceedings as associated cases. On
February 18, 2011, Transocean tendered the Company, along with all
other defendants, into the Limitation Action. As a result of the
tender, the Company and all other defendants will be treated as
direct defendants to the plaintiffs' claims as if the plaintiffs
had sued each of the Company and the other defendants directly.
In the Limitation Action, the judge intends to determine the
allocation of liability among all defendants in the hundreds of
lawsuits associated with the Macondo well incident, including
those in the MDL proceeding, that are pending in his court.
Specifically, the judge will determine the liability, limitation,
exoneration and fault allocation with regard to all of the
defendants in a trial, which may occur in several phases, that is
set to begin in the first quarter 2012. The Company does not
believe, however, that a single apportionment of liability in the
Limitation Action is properly applied to the hundreds of lawsuits
pending in the MDL proceeding. Damages for the cases tried in the
first quarter 2012, including punitive damages, are currently
scheduled to be tried in a later phase of the Limitation Action.
Under ordinary MDL procedures, such cases would, unless waived by
the respective parties, be tried in the courts from which they
were transferred into the MDL. It remains unclear, however, what
impact the overlay of the Limitation Action will have on where
these matters are tried. Document discovery and depositions among
the parties to the MDL are underway.
In April and May 2011, certain defendants in the proceedings filed
numerous cross claims and third party claims against certain other
defendants. BP Exploration and BP America Production Company
filed claims against the Company seeking subrogation and
contribution, including with respect to liabilities under the OPA,
and alleging negligence, gross negligence, fraudulent conduct, and
fraudulent concealment. Transocean filed claims against the
Company seeking indemnification, and subrogation and contribution,
including with respect to liabilities under the OPA and for the
total loss of the Deepwater Horizon, and alleging comparative
fault and breach of warranty of workmanlike performance. Anadarko
Petroleum Corporation and Anadarko E&P Company LP (together,
Anadarko) filed claims against the Company seeking tort indemnity
and contribution, and alleging negligence, gross negligence and
willful misconduct, and MOEX Offshore 2007 LLC (MOEX), who has an
approximate 10% interest in the Macondo well, filed a claim
against the Company alleging negligence. Cameron International
Corporation (Cameron) (the manufacturer and designer of the
blowout preventer), M-I Swaco (provider of drilling fluids and
services, among other things), Weatherford U.S. L.P. and
Weatherford International, Inc. (together, Weatherford) (providers
of casing components, including float equipment and centralizers,
and services), and Dril-Quip, Inc. (Dril-Quip) (provider of
wellhead systems), each filed claims against the Company seeking
indemnification and contribution, including with respect to
liabilities under the OPA in the case of Cameron, and alleging
negligence. Additional civil lawsuits may be filed against the
Company. In addition to the claims against the Company, generally
the defendants in the Macondo-related proceedings, filed claims,
including for liabilities under the OPA and other claims, against
the other defendants. BP has since announced that it has settled
those claims between it and each of MOEX, Weatherford, and
Anadarko.
In April 2011, the Company filed claims against BP Exploration, BP
p.l.c. and BP America Production Company (BP Defendants), M-I
Swaco, Cameron, Anadarko, MOEX, Weatherford, Dril-Quip, and
numerous entities involved in the post-blowout remediation and
response efforts, in each case seeking contribution and
indemnification and alleging negligence. The Company's claims
also alleged gross negligence and willful misconduct on the part
of the BP Defendants, Anadarko, and Weatherford. The Company also
filed claims against M-I Swaco and Weatherford for contractual
indemnification, and against Cameron, Weatherford and Dril-Quip
for strict products liability. The Company filed its answer to
Transocean's Limitation petition denying Transocean's right to
limit its liability, denying all claims and responsibility for the
incident, seeking contribution and indemnification, and alleging
negligence and gross negligence.
In September 2011, the Company filed claims in Harris County,
Texas against the BP Defendants seeking damages, including lost
profits and exemplary damages, and alleging negligence, grossly
negligent misrepresentation, defamation, common law libel, slander
and business disparagement. The Company's claims allege that the
BP Defendants knew or should have known about an additional
hydrocarbon zone in the well that the BP Defendants failed to
disclose to the Company prior to the Company's designing the
cement program for the Macondo well. The location of the
hydrocarbon zones is critical information required prior to
performing cementing services and is necessary to achieve desired
cement placement. The Company believes that had BP disclosed the
hydrocarbon zone to it, the Company would not have executed the
cement program unless and until changes were made to the cement
program, changes that likely would have required a redesign of the
production casing. In addition, the Company believes that BP
withheld this information from the BP Report and from the various
investigations. In connection with the foregoing, the Company
also moved to amend its claims against the BP Defendants in the
MDL proceeding to include fraud. The BP Defendants have denied
all of the allegations relating to the additional hydrocarbon zone
and filed a motion to prevent the Company from adding the
Company's fraud claim in the MDL. In October 2011, the Company's
motion to add the fraud claim against the BP Defendants in the MDL
proceeding was denied. The court's ruling does not, however,
prevent the Company from using the underlying evidence in the
Company's pending claims against the BP Defendants.
The Company says it intends to vigorously defend any litigation,
fines, and/or penalties relating to the Macondo well incident and
to vigorously pursue any damages, remedies, or other rights
available to the Company as a result of the Macondo well incident.
The Company has incurred and expects to continue to incur
significant legal fees and costs, some of which the Company
expects to be covered by indemnity or insurance, as a result of
the numerous investigations and lawsuits relating to the incident.
HALLIBURTON CO: Fifth Cir. Returns Securities Suit to Lower Court
-----------------------------------------------------------------
The U.S. Court of Appeals for the Fifth Circuit returned a
consolidated securities lawsuit to the district court for further
action, according to Halliburton Company's October 21, 2011, Form
10-Q filing with the U.S. Securities and Exchange Commission for
the quarter ended September 30, 2011.
In June 2002, a class action lawsuit was filed against the Company
in federal court alleging violations of the federal securities
laws after the Securities and Exchange Commission (SEC) initiated
an investigation in connection with the Company's change in
accounting for revenue on long-term construction projects and
related disclosures. In the weeks that followed, approximately
twenty similar class actions were filed against the Company.
Several of those lawsuits also named as defendants several of the
Company's present or former officers and directors. The class
action cases were later consolidated, and the amended consolidated
class action complaint, styled Richard Moore, et al. v.
Halliburton Company, et al., was filed and served upon the Company
in April 2003. As a result of a substitution of lead plaintiffs,
the case was styled Archdiocese of Milwaukee Supporting Fund
(AMSF) v. Halliburton Company, et al. AMSF has changed its name to
Erica P. John Fund, Inc. (Erica P. John Fund). The Company
settled with the SEC in the second quarter of 2004.
In June 2003, the lead plaintiffs filed a motion for leave to file
a second amended consolidated complaint, which was granted by the
court. In addition to restating the original accounting and
disclosure claims, the second amended consolidated complaint
included claims arising out of the Company's 1998 acquisition of
Dresser Industries, Inc., including that the Company failed to
timely disclose the resulting asbestos liability exposure.
In April 2005, the court appointed new co-lead counsel and named
Erica P. John Fund the new lead plaintiff, directing that it file
a third consolidated amended complaint and that the Company file
its motion to dismiss. The court held oral arguments on that
motion in August 2005. In March 2006, the court entered an order
in which it granted the motion to dismiss with respect to claims
arising prior to June 1999 and granted the motion with respect to
certain other claims while permitting Erica P. John Fund to re-
plead some of those claims to correct deficiencies in its earlier
complaint. In April 2006, Erica P. John Fund filed its fourth
amended consolidated complaint. The Company filed a motion to
dismiss those portions of the complaint that had been re-pled. A
hearing was held on that motion in July 2006, and in March 2007
the court ordered dismissal of the claims against all individual
defendants other than the Company's Chief Executive Officer (CEO).
The court ordered that the case proceed against the Company's CEO
and the Company.
In September 2007, Erica P. John Fund filed a motion for class
certification, and the Company's response was filed in November
2007. The court held a hearing in March 2008, and issued an order
November 3, 2008 denying Erica P. John Fund's motion for class
certification. Erica P. John Fund appealed the district court's
order to the Fifth Circuit Court of Appeals. The Fifth Circuit
affirmed the district court's order denying class certification.
On May 13, 2010, Erica P. John Fund filed a writ of certiorari in
the United States Supreme Court. In early January 2011, the
Supreme Court granted Erica P. John Fund's writ of certiorari and
accepted the appeal. The Court heard oral arguments in April 2011
and issued its decision in June 2011, reversing the Fifth Circuit
ruling that Erica P. John Fund needed to prove loss causation in
order to obtain class certification. The Court's ruling was
limited to the Fifth Circuit's loss causation requirement, and the
case was returned to the Fifth Circuit for further consideration
of the Company's other arguments for denying class certification.
The Fifth Circuit returned the case to the District Court for
further action.
As of September 30, 2011, the Company says it had not accrued any
amounts related to this matter because it does not believe that a
loss is probable. Further, an estimate of possible loss or range
of loss related to this matter cannot be made.
HONEYWELL INT'L: Awaits Court Approval of Deal in "Allen" Suit
--------------------------------------------------------------
Honeywell International Inc. is awaiting court approval of its
settlement resolving the class action lawsuit filed by Allen, et
al., according to the Company's October 21, 2011, Form 10-Q filing
with the U.S. Securities and Exchange Commission for the quarter
ended September 30, 2011.
Pursuant to a settlement approved by the U.S. District Court for
the District of Arizona in February 2008, 18 of 21 claims alleged
by plaintiffs in the class action lawsuit captioned Allen, et al.
v. Honeywell Retirement Earnings Plan were dismissed with
prejudice in exchange for approximately $35 million (paid from the
Company's pension plan) and the maximum aggregate liability for
the remaining three claims (alleging that Honeywell impermissibly
reduced the pension benefits of certain employees of a predecessor
entity when the plan was amended in 1983 and failed to calculate
benefits in accordance with the terms of the plan) was capped at
$500 million. In October 2009, the Court granted summary judgment
in favor of the Honeywell Retirement Earnings Plan with respect to
the claim regarding the calculation of benefits. In May 2011, the
parties engaged in mediation and reached an agreement in principle
to settle the three remaining claims for $23.8 million (also to be
paid from the Company's pension plan). Settlement documents have
been submitted to the court for classwide approval and the Company
anticipates a fairness hearing on the settlement in the fourth
quarter of 2011 or the first quarter of 2012. Upon court approval
of the settlement, the Company says all claims in this matter will
be fully resolved.
HONEYWELL INT'L: Continues to Defend Quick Lube MDL in Illinois
---------------------------------------------------------------
Honeywell International Inc. continues to defend a multidistrict
litigation filed by S&E Quick Lube against filter manufacturers,
according to the Company's October 21, 2011, Form 10-Q filing with
the U.S. Securities and Exchange Commission for the quarter ended
September 30, 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 twelve filter manufacturers, including Honeywell,
engaged in a conspiracy to fix prices, rig bids and allocate U.S.
customers for aftermarket automotive filters. This lawsuit is a
purported class action on behalf of direct purchasers of filters
from the defendants. Parallel purported class actions, including
on behalf of indirect purchasers of filters, have been filed by
other plaintiffs in a variety of jurisdictions in the United
States and Canada. The U.S cases have been consolidated into a
single multi-district litigation in the Northern District of
Illinois. In April 2011, the multi-district litigation was stayed
pending an investigation by the U.S. Attorney for the Eastern
District of Pennsylvania relating to plaintiff's principal witness
for possible violations of federal law.
In June 2011, plaintiff's principal witness pled guilty to a
felony count of having made false statements to federal
investigators. The Company believes the claims against Honeywell
are without merit and it will vigorously defend against the claims
raised in these actions. As previously reported, the Antitrust
Division of the Department of Justice notified Honeywell in
January 2010 that it had officially closed its investigation into
possible collusion in the replacement auto filters industry.
ICE: Faces Class Action Over Sexual Abuse of Immigrant Detainees
----------------------------------------------------------------
Iulia Filip at Courthouse News Service reports that sexual abuse
of detainees is rampant at the immigration jail the Corrections
Corporation of America runs for the federal government in Taylor,
Texas, three women say in a federal class action. Their attorneys
say it's part of a pattern that has produced nearly 200 reports of
sexual abuse inside immigration jails nationwide.
The three Doe plaintiffs say their sexual assaults inside the T.
Don Hutto detention center in Taylor are "consistent with a
pattern of deliberate indifference toward sexual assault in
immigration detention and denying victims access to immigration
relief and civil redress."
They sued officials at Immigration and Customs Enforcement (ICE);
Corrections Corporation of America -- the nation's largest private
prison company; and Williamson County, Texas. Citing widespread
reports of sexual abuse inside immigration prisons, and ICE's
failure to police itself or its private contractors, the ACLU and
others in June 2010 urged the Department of Homeland Security to
establish external oversight of ICE's detention system.
In the present class action, ACLU attorneys say that documents
obtained through FOIA requests show nearly 200 allegations of
sexual abuse of immigration detainees across the country since
2007.
The three lead plaintiffs tell similar stories of sexual assault
at the hands of defendant Donald Dunn, an escort officer and
resident supervisor at Hutto.
The women sued on their own behalf and for all female immigrants
who were detained at Hutto between October 2009 and October this
year, were transported from Hutto by the defendants and were
sexually assaulted or abused by male officers.
Corrections Corporation of America (CCA) operates the Hutto
immigration jail on contract with ICE. Hutto became an all-women
detention center in late 2009, after detained families were
transferred to other facilities, due to growing concerns about
treatment of children at Hutto.
The government pays CCA almost $3 million a month to house a
minimum of 461 detainees per day, according to the complaint.
The complaint states: "Dunn sexually assaulted each of these women
and is known to have assaulted at least six other female
immigrants between Oct. 19, 2009, and May 7, 2010, when he
transported them from the Hutto facility to either the Austin-
Bergstrom International Airport (the 'airport') or the Greyhound
bus station after they were released from detention. Defendant
Dunn had the opportunity to assault these women because, contrary
to the contracts governing the administration and management of
Hutto and relevant ICE policies and standards, he alone was
transporting them to their respective destinations without any
other attending officer, much less one of the same gender as the
transported detainee.
"Indeed, under its Intergovernmental Service Contract (the 'IGSA')
with Williamson County, the Texas county in which Hutto is
located, ICE expressly required that '[d]uring all transportation
activities, at least one (1) transportation officer shall be of
the same sex as the resident being transported.' The contract
between Williamson County and the Corrections Corporation of
America ('CCA'), the private corporation in charge of managing the
Hutto facility, expressly incorporated the terms of the IGSA.
Nevertheless, defendants repeatedly violated this requirement by
allowing male officers, such as Dunn, to transport female
detainees without the presence of another officer, much less a
female officer. Dunn took advantage of these repeated violations
by sexually assaulting numerous female detainees under his control
during the course of transport. The long history of rampant
sexual abuse at ICE detention centers, coupled with the
availability of the same opportunity Dunn exploited in the form of
at least 22 documented failures of other male officers to comply
with the same policy, supports a reasonable inference that other
male escort officers at Hutto engaged in similar abuse.
"The victimized women, all of whom had fled their home countries
to escape extreme violence, and who were agonized and vulnerable
from their journeys and from the disgusting conditions they
experienced in holding cells and detention centers in the United
States, were of necessity severely traumatized by these assaults."
Plaintiffs Sarah Doe, Kimberly Doe and Raquel Doe all say Mr. Dunn
sexually assaulted them between March and May 2010, while he drove
them to the Austin airport at night, without another officer
present.
In similar accounts, the women say Mr. Dunn pulled over to the
side of a dimly lit road, asked them under the guise of a
"search," to lift their arms and spread their legs, then groped
them for an extended period of time, touched their breasts, crotch
area and buttocks, and fondled himself.
Raquel Doe, 34, says Mr. Dunn followed her to the back of the van
and "began pulling off his clothes, unzipping his pants and
exposing his genitalia. He demanded that she remove her own
clothing, but she refused. With his genitals in his hand, he
began pulling off her pants himself. She cried and resisted. He
became fiercely angry, but ultimately put his own clothes back in
place and went back to the front of the van to resume the trip.
Throughout the entire incident, Raquel believed that Dunn would
rape and kill her."
The women say Mr. Dunn's abuse added to the trauma they suffered
as victims of violent crimes in their home countries.
Sarah Doe, 24, says she fled Eritrea to escape abuse by a military
commander who beat and raped her during mandatory military
service. She traveled through seven countries until she finally
crossed the border between Mexico and the United States in
February 2010, seeking asylum.
Kimberly Doe and Raquel Doe, immigrants from Central and South
America, endured similar abuse in their native countries and
sought refuge in the United States.
After they faced degrading conditions in holding cells in Texas,
the women say, immigration officials determined that they all had
a credible fear of persecution if they returned to their home
countries, and released them.
Ironically, the women say the release process exposed them to more
abuse and trauma.
The complaint states: "The defendants, both individually and
collectively, were directly responsible for the assaults and the
resulting trauma in that they failed to implement and enforce the
contracts, policies, and standards clearly and obviously designed
to protect these women and others like them."
The ACLU says the defendants' deviation from the transportation
policy is not ICE's first breach of standards. ICE has "a well-
documented history of failing to protect detainees in its custody
from sexual assault," which has resulted in several lawsuits,
internal investigations and Department of Justice investigations.
"ICE has long possessed information that the detainees in its
custody are subject to high risk of sexual assault," the complaint
states. "As early of 1998, ICE's predecessor, the Immigration and
Naturalization Services ('INS'), was defending lawsuits brought by
immigration detention center residents alleging rampant sexual
abuse . . . and was involved in investigations of employees
accused of such abuse . . ."
The complaint cites a Department of Justice investigation from
2000, which revealed that 10 percent of female detainees at an INS
jail in Miami, Fla. had reported sexual misconduct by INS
officers.
In July 2006, the United Nations Committee Against Torture
expressed concern about the U.S. government's failure to prevent
and investigate sexual abuse in immigration jails.
The complaint cites a May 2007 incident at Hutto, in which a guard
was accused of sexually assaulting a woman while her son slept in
a crib inside the cell.
The ACLU adds: "Not only did ICE have information about rampant
occurrences of sexual assault by officers and employees on
detainees at immigration detention centers in general, therefore,
but ICE had information about such abuse at Hutto itself."
After the numerous lawsuits and reports of sexual abuse, ICE
promised to implement reforms to prevent abuse in immigration
prisons, especially those housing women, and to incorporate the
Prison Rape Elimination Act of 2003, which was enacted to protect
detainees against sexual assault.
But the ACLU says ICE failed to act on its promise.
"Despite this long history of rampant sexual abuse and perennial
admonitions as to the necessity of change, there were at least 185
allegations of sexual abuse noted in ICE, DHS Office of Inspector
General, and DHS Office of Civil Rights and Civil Liberties
documents for one recent four-year period," according to the
complaint. "Of these, at least 56 reports concerned detainees in
Texas."
The complaint adds: "Notwithstanding the chronic reports of sexual
assault against detainees in ICE custody by staff at ICE
immigration detention centers, the ever-increasing visibility of
and publicity surrounding such assaults, and ICE promises to
enforce contract terms aggressively, defendants failed to ensure
compliance with the terms of the IGSA governing transports and
sexual assault prevention at Hutto."
The class claims that the defendants repeatedly violated ICE
policies by allowing single male officers to transport female
detainees.
"In sum, during the class period, at least 22 distinct male
officers were involved in at least 77 transports in which a single
male officer escorted female detainees without a female escorting
officer present," according to the complaint.
What's more, the ACLU says, "escort officers were in such complete
control of all aspects of the transport that they unquestionably
had every opportunity to 'express aggression and seek to dominate
others through violent sexual behavior' in the manner warned of in
the applicable ICE standards referenced above."
The ACLU says the plaintiffs and other victims who were dropped
off at an airport or the bus station had "unique difficulties in
reporting their assaults or seeking remedies," including fear of
deportation, language barriers and the fact that they were leaving
the area and were unable to assist in any investigations.
The ACLU says Raquel Doe did report Mr. Dunn's abuse to local
police, which arrested Mr. Dunn in August 2010 and charged him
with three counts of official oppression and two counts of
unlawful restraint for attacks he had committed in Williamson
County. Mr. Dunn pleaded guilty and was sentenced to 1 year in
jail, followed by probation.
The federal government also charged Mr. Dunn with four counts of
deprivation of civil rights, based on the attacks against Raquel
Doe and three other women. Mr. Dunn pleaded guilty to two of the
four federal charges and awaits sentencing, according to the
complaint.
But even after Mr. Dunn's abuse resurfaced, the ACLU says, "ICE
officials shrugged off their responsibilities to the sexual
assault victims."
ICE failed to notify Mr. Dunn's victims that he had been arrested,
improperly disclosed the victims' names during a press conference,
and failed to tell them they had the right to apply for a U visa,
which offers protection for victims of certain crimes. In several
instances, the ICE administratively closed the plaintiffs' and
other class members' cases or moved forward with deportation
proceedings, according to the complaint.
More than a year after Mr. Dunn's assaults on the plaintiffs, only
one of the three named plaintiffs -- Kimberly Doe -- has obtained
a U visa, the ACLU says.
It claims the defendants never advised the other victims of the
availability of a U visa and failed to help them recover from
sexual assault and find immigration counsel.
"ICE's deliberate refusal to provide information about direct
referral to immigration providers who offered their assistance to
unrepresented Hutto victims such as Raquel, coupled with its
failure to notify Hutto victims of the availability of U visas and
its resistance to providing the necessary certification to
represented Hutto victims even upon repeated request, is
consistent with a pattern of deliberate indifference toward sexual
assault in immigration detention and denying victims access to
immigration relief and civil redress," the complaint states.
The ACLU says Evelyn Hernandez, the CCA manager at Hutto, was put
on administrative leave in May 2010 and eventually fired over
transportation issues at Hutto. But the ACLU claims ICE never
terminated its contract with CCA because of the sexual assaults,
and that CCA failed to discipline any of the officers who violated
ICE transportation policies.
The plaintiffs seek class certification and compensatory and
punitive damages for constitutional violations, gross negligence,
negligent supervision, cruel, inhuman and degrading treatment,
sexual assault and false imprisonment.
Named as defendants are ICE officials Jerald Neveleff, George
Robertson and Jorge Rosado, Williamson County, Williamson County
monitor John Foster, Corrections Corporation of America, former
CCA facility administrator Evelyn Hernandez and Donald Dunn.
A copy of the Complaint in Doe, et al. v. Neveleff, et al.,
Case No. 11-cv-00907 (W.D. Tex.), is available at:
http://www.courthousenews.com/2011/10/24/ICESex.pdf
The Plaintiffs are represented by:
Lisa Graybill, Esq.
Mark Whitburn, Esq.
AMERICAN CIVIL LIBERTIES UNION FOUNDATION OF TEXAS
P.O. Box 12905
Austin, TX 78711
ITT EDUCATIONAL: Securities Class Suit Remains Pending in N.Y.
--------------------------------------------------------------
On November 3, 2010, a complaint in a securities class action
lawsuit was filed against ITT Educational Services, Inc., and two
of its current executive officers in the United States District
Court for the Southern District of New York under the following
caption: Operating Engineers Construction Industry and
Miscellaneous Pension Fund, Individually and On Behalf of All
Others Similarly Situated v. ITT Educational Services, Inc., et
al. (the "Securities Litigation"). On January 21, 2011, the court
named the Wyoming Retirement System as the lead plaintiff in the
Securities Litigation. On April 1, 2011, an amended complaint was
filed in the Securities Litigation under the following caption: In
re ITT Educational Services, Inc. Securities and Shareholder
Derivative Litigation. The amended complaint alleges, among other
things, that:
* the defendants violated Section 10(b) and 20(a) of the
Exchange Act and Rule 10b-5 promulgated thereunder by
creating and implementing a systemically predatory business
model that operated as a fraud or deceit on purchasers of
the Company's common stock during the class period by
misrepresenting its financials and future business
prospects;
* the defendants' misrepresentations and material omissions
caused the Company's common stock to trade at artificially
inflated prices throughout the class period; and
* the market's expectations were ultimately corrected on
August 13, 2010, when the ED published the loan repayment
rate of the Company's students under a formula contained in
proposed regulations published by the ED on July 26, 2010.
The putative class period in this action is from October 23, 2008,
through August 13, 2010. The plaintiff seeks, among other things,
the designation of this action as a class action, and an award of
unspecified compensatory damages, interest, costs, expenses,
attorneys' fees and expert fees. All of the defendants intend to
defend themselves vigorously against the allegations made in the
complaint. There can be no assurance, however, that the ultimate
outcome of this or other actions (including other actions under
federal or state securities laws) will not have a material adverse
effect on the Company's financial condition, results of operations
or cash flows.
The officers named in one or more of the securities class action
and shareholder derivative lawsuits include: Jeffrey R. Cooper,
Clark D. Elwood, Nina F. Esbin, Eugene W. Feichtner, Daniel M.
Fitzpatrick, Kevin M. Modany and Martin Van Buren.
The Company says certain of the Company's officers and Directors
are or may become a party in certain of the actions. The
Company's By-laws and Restated Certificate of Incorporation
obligate the Company to indemnify its officers and Directors to
the fullest extent permitted by Delaware law, provided that their
conduct complied with certain requirements. The Company is
obligated to advance defense costs to its officers and Directors,
subject to the individual's obligation to repay such amount if it
is ultimately determined that the individual was not entitled to
indemnification. In addition, the Company's indemnity obligation
can, under certain circumstances, include indemnifiable judgments,
penalties, fines and amounts paid in settlement in connection with
those actions.
No further updates were reported in the Company's October 21,
2011, Form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarter ended September 30, 2011.
JOSEPH BRANT: C. Difficile Class Action Wins Certification
----------------------------------------------------------
Joan Walters, writing for TheSpec.com, reports that a C$50-million
class action lawsuit launched by patients and families after a
deadly outbreak of C. difficile at Joseph Brant Memorial Hospital
has been certified three years after the Burlington hospital
disclosed the deaths of 91 infected patients.
About 225 patients caught C. diff in a hospital-wide outbreak that
saw some people who had been admitted for routine surgery succumb
to complications. The highly contagious intestinal bacteria
produces toxic diarrhea, nausea, vomiting, fever and in severe
cases, can cause perforation of the bowel and death.
Pat O'Sullivan, one of the lawsuit's representative plaintiffs,
became the face of C. diff when her story of checking herself out
of Joseph Brant to save her life after knee surgery galvanized
public attention.
The certification by the Ontario Superior Court of Justice means
everyone seeking damages from the hospital can proceed as one
"class," in one lawsuit, instead of having so many individual
actions before the courts.
"That's a positive step in the process," said Hamilton lawyer
Stanley M. Tick, who represents the claimants with Windsor lawyer
Harvey Strosberg. "It satisfies access to justice and judicial
economy."
The lawsuit alleges that Joseph Brant Memorial Hospital was not
properly cleaned, maintained and disinfected. None of the
allegations have been proved in court. In the years since the
outbreak, the hospital has significantly changed procedures and
cleaning protocols, invested heavily in infection control, and
made other changes recommended by experts.
It was Ontario's worst outbreak to date of the C. diff superbug,
which overran the hospital from May 2006 to December 2007. But
the full extent of the infection was not known, or made public,
until the spring of 2008, after a review by expert outsiders.
Joseph Brant's announcement that 91 infected patients had died,
and that the outbreak was longer and deadlier than originally
thought, triggered a public uproar over patient safety.
Dorothy Elliott, another claimant, alleges her husband Jack died
after becoming infected with C. diff during surgery. Ms. Elliott
and her daughter went public with his story, travelling to the
Ontario legislature to hand then-health minister George Smitherman
Jack's picture.
Since then, Ontario has instituted mandatory public reporting of
hospital infections, including C. diff, brought in new patient
safety initiatives that include special infection control teams
available to hospitals and more funding for infection
practitioners.
No date has been set for the next stage of the suit.
KOSS CORPORATION: Settles Shareholder Class Action
--------------------------------------------------
Koss Corporation, the U.S. based high-fidelity stereo headphone
company, and its Chief Executive Officer, Michael J. Koss, agreed
to a settlement with the Securities and Exchange Commission
without admitting or denying the Commission's charges in an action
that stems from the previously reported embezzlement by the
Company's former Vice President of Finance, Sujata Sachdeva.
Ms. Sachdeva is currently serving an eleven year prison sentence
for her crimes. The Company also announced that a settlement in
principle has been reached subject to Court approval involving the
claims that were brought against the Company and Michael Koss in a
pending shareholder class action (see David A. Puskala v. Koss
Corporation, et al., United States District Court, Eastern
District of Wisconsin, Case No. 2:2010cv00041).
"The restated financial statements that we filed with the
Commission back in June 2010 describe in detail the theft that
occurred within our Company and the ways that the embezzlement was
concealed from members of the Board and, in particular, from
Michael Koss," said David D. Smith, Executive Vice President and
Chief Financial Officer. Mr. Smith observed that, "Although as a
smaller reporting Company, Koss was not required to have its
internal controls attested to by the Company's auditors, it was
clear that the auditors reviewed the Company's internal controls
each year as part of planning their substantive testing, and the
Company's financial statements were audited each year." Those
audits failed to detect the embezzlement and underlying accounting
fraud that was committed against the Company.
Immediately upon discovering the embezzlements in December 2009,
the Company disclosed the occurrence to its shareholders, the
securities markets, securities regulators and federal law
enforcement authorities. Moreover, the Commission publicly
acknowledged that the Company and Michael Koss cooperated
throughout the course of its investigation.
"The Company and I entered into these settlements," said Mr. Koss,
"in order to close an unfortunate chapter in our Company's
history. The settlement with the Commission imposes no financial
penalty on the Company and requires us to comply with the law,
which is exactly what we've always sought to do."
On a personal level, Mr. Koss pointed out that he previously and
voluntarily reimbursed the Company for excess bonuses that he
received from the Company that were based on profits that were
eliminated in the restatements. His agreement in the settlement
to further reimburse the Company for the full amount of those
bonuses reflects a decision not to enter into a debate over the
SEC staff's interpretation of Section 304 of the Sarbanes-Oxley
Act and related provisions contained in the Dodd-Frank Act, and to
put this matter behind himself and the Company. "Regardless of
the differing interpretations of Section 304, I believe that
reimbursing this additional amount is just the right thing to do
given the circumstances," he said.
In a separate matter, the Company announced that it had reached a
settlement in principle of the shareholder class action that
involves a total payment of $1 million to the shareholders
included within the class. This amount will be funded by the
Company's insurance company, with any fee awarded to plaintiffs'
counsel to be paid out of the $1 million settlement.
These two settlements along with the previously announced
settlement from this past summer of the shareholder derivative
lawsuit filed in Milwaukee County Circuit Court conclude the major
actions that the Company was defending as a result of
Ms. Sachdeva's embezzlement. The Company still has pending
certain actions that it filed against its former auditor, former
bank, and former credit card company.
Koss Corporation markets a complete line of high-fidelity stereo
headphones, speaker-phones, computer headsets, telecommunications
headsets, active noise canceling stereophones, wireless
stereophones, and compact disc recordings of American Symphony
Orchestras on the Koss Classics label.
MACCABEE HEALTH: Faces Class Action Over Omega-3 Products
---------------------------------------------------------
Arutz Sheva reports that a Petach Tikvah court has been asked to
certify a NIS1.97 billion class-action lawsuit against 16
companies that sell products containing Omega-3 fatty acids. The
companies include some of the largest health firms in Israel,
including Maccabee Health Services, the Superpharm chain, Altman
Products, Solgar, and others. According to the suit, the
companies sold the products with full knowledge of the presence of
PCBs and heavy metals in the Omega-3 -- but did not warn consumers
of the problem. The suit contends that the companies engaged in
attempting to mislead consumers, violating laws that require full
disclosure of all components of products sold to the public.
The Israeli lawsuit follows several in the U.S. on the same
matter. The court said it would respond to the request within
several weeks.
MGIC INVESTMENT: Awaits Ruling in Consolidated Securities Suit
--------------------------------------------------------------
MGIC Investment Corporation is awaiting a court decision on a
plaintiff's motion for relief from a judgment dismissing a
consolidated securities complaint, according to the Company's
October 21, 2011, Form 8-K filing with the U.S. Securities and
Exchange Commission.
A Consolidated Class Action Complaint (the "Complaint") was filed
against the Company on June 22, 2009, in which it appears the
allegations are that the Company and its officers named in the
Complaint violated the federal securities laws by misrepresenting
or failing to disclose material information about (i) loss
development in the Company's insurance in force, and (ii) C-BASS,
including its liquidity. On December 8, 2010, the Complaint was
dismissed with prejudice and the plaintiff appealed the dismissal
to an appellate court. On June 6, 2011, the plaintiff filed a
motion for relief from the judgment of dismissal with the court
that entered that judgment on the ground of newly discovered
evidence consisting of transcripts the plaintiff obtained of
testimony taken by the Securities and Exchange Commission in its
now-terminated investigation regarding C-BASS. The Company is
opposing this motion and the matter is awaiting decision by that
court.
The Company says it is unable to predict the outcome of these
consolidated cases or estimate its associated expenses or possible
losses. Other lawsuits alleging violations of the securities laws
could be brought against the Company.
MGIC INVESTMENT: Continues to Defend Housing Discrimination Suits
-----------------------------------------------------------------
MGIC Investment Corporation continues to defend a housing
discrimination lawsuit in Pennsylvania, according to the Company's
October 21, 2011, Form 8-K filing with the U.S. Securities and
Exchange Commission.
In September 2010, a housing discrimination complaint was filed
against MGIC with the U.S. Department of Housing and Urban
Development ("HUD") alleging that MGIC violated the Fair Housing
Act and discriminated against the complainant on the basis of her
sex and familial status when MGIC underwrote her loan for mortgage
insurance. In May 2011, HUD commenced an administrative action
against MGIC and two of its employees, seeking, among other
relief, aggregate fines of $48,000. The HUD complainant elected
to have charges in the administrative action proceed in federal
court and on July 5, 2011, the U.S. Department of Justice ("DOJ")
filed a civil complaint in the U.S. District Court for the Western
District of Pennsylvania against MGIC and these employees on
behalf of the complainant. The complaint seeks redress for the
alleged housing discrimination, including compensatory and
punitive damages for the alleged victims and a civil penalty
payable to the United States. MGIC denies that any unlawful
discrimination occurred and disputes many of the allegations in
the complaint.
In October 2010, a separate purported class action lawsuit was
filed against MGIC by HUD complainant in the same District Court
in which the DOJ action is pending alleging that MGIC
discriminated against her on the basis of her sex and familial
status when MGIC underwrote her loan for mortgage insurance. In
May 2011, the District Court granted MGIC's motion to dismiss with
respect to all claims except certain Fair Housing Act claims.
MGIC says it intends to vigorously defend itself against the
allegations in both the class action lawsuit and the DOJ lawsuit.
Based on the facts known at this time, the Company does not
foresee the ultimate resolution of these legal proceedings having
a material adverse effect on it.
PAYPAL: May Face Class Action Over Funding Issues
-------------------------------------------------
Ina Steiner, writing for EcommerceBytes.com, reports that a law
firm in West Virginia is investigating how its client ended up
paying his bank tens of dollars in fees for a single eBay purchase
using PayPal. Charles Rusty Webb of The Webb Law Firm said his
client is a longtime buyer on eBay who set up his PayPal account
with two funding sources so he could buy things easily online.
But when the client's primary source of funding was insufficient
one month, PayPal failed to collect the funds from his secondary
source, according to Mr. Webb. When his client opened up his bank
statement the following month, he got an unpleasant surprise when
he saw the fees his bank charged him.
PayPal had continued to ping the bank account that was associated
with the client's account each day instead of using his credit
card, which was set up as a secondary funding source, according to
Mr. Webb, who said the bank charged his client fees for having
insufficient funds each time PayPal pinged his bank account
looking for the funds.
Mr. Webb believes his client may not be alone in his experience
and has been collecting stories from other PayPal users through a
form on his Web site at RustyWebb.com.
He's conducting the investigation for a possible class action
lawsuit against the company. Questions on the survey include:
"Were you charged bank overdraft fees because Paypal did not use
your back up funding source," "How many times did Paypal attempt
to use your primary funding source even though your back up funds
were sufficient," and "What was the total amount of bank fees
incurred as a result of Paypal's reluctance to use your back up
funding source."
Mr. Webb quickly discovered that PayPal users have a host of
complaints about the service, and he said he was open to exploring
other issues as well. "It seems like everyone has an issue with
PayPal," he said, including the issue of PayPal's practice of
freezing users' accounts.
EcommerceBytes is awaiting a response from PayPal regarding its
policies on funding sources.
VIRGINIA HARBOR: January 19 Settlement Fairness Hearing Set
-----------------------------------------------------------
Labaton Sucharow announces Settlement in Ace Marine Rigging &
Supply, Inc. V. Virginia Harbor Services, Inc., et al.
UNITED STATES DISTRICT COURT
FOR THE CENTRAL DISTRICT OF CALIFORNIA
ACE MARINE RIGGING & SUPPLY, INC., Plaintiff, v. VIRGINIA HARBOR
SERVICES, INC., ET AL., Defendants.
Case No. SACV11-00436-GW (FFMx)
SUMMARY NOTICE OF PROPOSED SETTLEMENTS OF CLASS ACTION WITH (1)
VIRGINIA HARBOR SERVICES, INC., FENTEK MARINE SYSTEMS GMBH, ROBERT
B. TAYLOR, AND DONALD MURRAY; (2) MARINE FENDERS INTERNATIONAL AND
GERALD THERMOS; (3) WATERMAN SUPPLY CO., INC. AND SEYMOUR
WATERMAN; AND (4) MARITIME INTERNATIONAL, INC. AND JOHN DEATS AND
HEARING ON SETTLEMENT APPROVAL
TO: ALL INDIVIDUALS OR ENTITIES WHO PURCHASED FOAM-FILLED FENDERS
AND/OR BUOYS IN THE UNITED STATES DIRECTLY FROM ONE OF THE
DEFENDANTS OR NAMED CO-CONSPIRATORS LISTED BELOW AT ANY TIME
DURING THE PERIOD FROM AND INCLUDING JUNE 1, 2000 TO AND INCLUDING
DECEMBER 31, 2005.
PLEASE READ THIS ENTIRE NOTICE CAREFULLY. YOUR LEGAL RIGHTS MAY
BE AFFECTED BY A LAWSUIT NOW PENDING IN THIS COURT.
YOU ARE HEREBY NOTIFIED, pursuant to an order of the United States
District Court for the Central District of California (the
"Court"), that proposed settlements (the "Foam-Filled Fenders
and/or Buoys Settlements") have been reached with the following
Defendants (collectively referred to as the "Settling
Defendants"): (1) Virginia Harbor Services, Inc. ("VHS"), Fentek
Marine Systems GmbH ("Fentek"), Robert B. Taylor ("Taylor"), and
Donald Murray ("Murray") (collectively, "VHS Defendants") in the
amount of $3.1 million; (2) Marine Fenders International ("MFI")
and Gerald Thermos ("Thermos") (together, "MFI Defendants") for
cooperation; (3) Waterman Supply Co., Inc. ("WSC") and Seymour
Waterman ("Waterman") (together, "Waterman Defendants") for
$40,000; and (4) Maritime International, Inc. ("Maritime") and
John Deats ("Deats") (together, "Maritime Defendants") for
$50,000. All Settling Defendants have also agreed to cooperate
with Plaintiff in the prosecution of the claims against the
remaining Defendants on behalf of the Settlement Classes.
The Court will hold a final fairness hearing on January 19, 2012,
at 8:30 a.m., at the United States Courthouse, 312 North Spring
Street, Los Angeles, CA 90012, Courtroom 10, to determine the
fairness, reasonableness, and adequacy of the proposed Foam-Filled
Fenders and/or Buoys Settlements and to consider Settlement Class
Counsel's application for attorneys' fees and reimbursement of
expenses. The hearing may be continued without further notice.
"Foam-Filled Fenders," for the purposes of the Foam-Filled Fenders
and/or Buoys Settlements, means structural protection marine
fenders fabricated from an elastomer shell filled with closed-cell
polyethelene foam, and related ancillary products, which are
typically used as a cushion between ships and either fixed
structures such as docks or piers, or floating structures such as
other ships. "Foam-Filled Buoys," for purposes of the Foam-Filled
Fenders and/or Buoys Settlements, means buoys fabricated from an
elastomer shell and filled with closed-cell polyethelene foam, and
related ancillary products, which are used in a variety of
applications, including as channel markers and navigational aids.
"Foam-Filled Fenders and/or Buoys" means Foam-Filled Fenders
and/or Foam-Filled Buoys. If you purchased Foam-Filled Fenders
and/or Buoys in the United States during the Settlement Class
Period from and including June 1, 2000 to and including
December 31, 2005 directly from any of the Defendants or Named Co-
Conspirator sellers of Foam-Filled Fenders and/or Buoys listed
below, you are a member of the Settlement Classes and have the
rights summarized below.
The Defendant sellers of Foam-Filled Fenders and/or Buoys named in
Ace Marine Rigging & Supply, Inc. v. Virginia Harbor Services,
Inc., et al., Civil Case No. 11-00436 are (1) Virginia Harbor
Services, Inc. d/b/a Seaward; (2) SHI, Inc. (f/k/a Seaward
Holdings, Inc. and d/b/a Seaward); (3) SII, Inc. (f/k/a Seaward
International, Inc. and d/b/a Seaward); (4) Fentek Marine Systems
GmbH; (5) Urethane Products Corporation; (6) Marine Fenders
International; (7) Waterman Supply Company, Inc.; and (8) Maritime
International, Inc.
The Named Co-Conspirator sellers of Foam-Filled Fenders and/or
Buoys named in Ace Marine Rigging & Supply, Inc. v. Virginia
Harbor Services, Inc., et al., Civil Case No. 11-00436 are (1)
NextWave Marine LLC and (2) ProMar LLC.
Plaintiff alleges that Defendants conspired to fix prices, rig
bids, and/or allocate markets or customers of Foam-Filled Fenders
and Buoys sold in the United States in violation of the antitrust
laws of the United States. Defendants deny Plaintiff's
allegations and are contesting Plaintiff's claims. The Court has
not ruled on the merits of Plaintiff's claims or Defendants'
defenses. This summary notice informs you of the proposed Foam-
Filled Fenders and/or Buoys Settlements in the litigation between
the Settlement Classes and the Settling Defendants and should not
be interpreted as an expression of any opinion by the Court on the
merits of the case. These are settlements with the Settling
Defendants only, and the litigation is continuing against the
remaining Defendants.
A printed Notice of Proposed Settlements of Class Action was
mailed to potential Settlement Class Members on or about
October 14, 2011. That notice explains the litigation in detail,
describes the options available to Settlement Class Members with
respect to the Foam-Filled Fenders and/or Buoys Settlements and
Settlement Class Counsel's application for attorneys' fees and
expenses, and includes a Claim Form that Settlement Class Members
must complete and submit in order to be eligible to share in the
distribution of the Settlement Fund. If you have not received the
notice and Claim Form, you may obtain them by writing to
Settlement Class Counsel listed below or online at
abdataclassaction.com/cases.php.
If you are a member of the Settlement Classes as defined above,
you will automatically remain a Settlement Class Member and be
eligible to submit a Claim Form unless you elect to be excluded.
If you wish to exclude yourself from the Settlement Classes, you
must send a request for exclusion, in writing, via Certified Mail,
Return Receipt requested, postmarked no later than December 20,
2011, to any of Settlement Class Counsel as follows:
Gregory S. Asciolla, Esq.
Labaton Sucharow LLP
140 Broadway
New York, NY 10005
William V. Reiss, Esq.
Labaton Sucharow LLP
140 Broadway
New York, NY 10005
Your request for exclusion should contain the full name and
address of the purchaser, including any predecessor or successor
entities, the amount and approximate date of your purchases of
Foam-Filled Fenders and/or Buoys during the Settlement Class
Period, and the identity of the sellers of Foam-Filled Fenders
and/or Buoys to you. If you exclude yourself from the Settlement
Classes, you will not be bound by any decision concerning the
Foam-Filled Fenders and/or Buoys Settlements and will have no
right to participate in the VHS Defendants, MFI Defendants,
Waterman Defendants, and Maritime Defendants settlements if they
are approved by the Court. You also may enter an appearance in
the litigation through your own counsel at your own expense.
Any Settlement Class Member wishing to object to the Foam-Filled
Fenders and/or Buoys Settlements or Settlement Class Counsel's
application for attorneys' fees and expenses must do so in writing
by December 20, 2011. The objection must include the caption of
this litigation; must be signed; and must be filed no later than
December 20, 2011, with the Clerk of Court, United States District
Court for the Central District of California, 312 North Spring
Street, Room G-8, Los Angeles, CA 90012, and mailed to:
Gregory S. Asciolla, Esq.
Hollis L. Salzman, Esq.
William V. Reiss, Esq.
LABATON SUCHAROW LLP
140 Broadway
New York, NY 10005
Settlement Class Counsel
Roxann E. Henry, Esq.
DEWEY & LEBOEUF LLP
1101 New York Avenue, NW
Washington, DC 20005
Counsel for Virginia Harbor Services, Inc.
and Fentek Marine Systems GmbH
James R. Wade, Esq.
HAYNES AND BOONE, LLP
1615 L Street, NW, Suite 800
Washington, DC 20036
Counsel for Donald Murray
Phillip C. Zane, Esq.
BAKER, DONELSON, BEARMAN, CALDWELL & BERKOWITZ, PC
920 Massachusetts Avenue, NW, Suite 900
Washington, DC 20001
Counsel for Robert B. Taylor
Nathan D. Meyer, Esq.
RUSS AUGUST & KABAT
12424 Wilshire Boulevard, 12th Floor
Los Angeles, CA 90025
Counsel for Marine Fenders International,
Gerald Thermos, Waterman Supply Co., Inc., and
Seymour Waterman
William Monts III, Esq.
HOGAN LOVELLS US LLP
Columbia Square
555 Thirteenth Street, NW
Washington, DC 20004
Counsel for Maritime International, Inc. and John Deats
If you have questions concerning this litigation, you may contact
Settlement Class Counsel identified above. Do not contact the
Clerk of the Court or the Judge.
DATED: October 24, 2011
/s/
The Clerk of the United States District Court for the
Central District of California
VISA: Hagens Berman Files Antitrust Class Action
------------------------------------------------
CSP Daily News reports that Hagens Berman has filed a class-action
lawsuit alleging that Visa and MasterCard violated antitrust laws
by establishing uniform agreements with U.S. banks that issue ATM
cards, preventing ATM operators from setting transaction fees
below those of Visa and MasterCard. This agreement allegedly
eliminates competition in the marketplace for ATM network
services, causing ATM fees to be higher than they should be, it
said.
It is the second lawsuit in recent weeks targeting Visa and
MasterCard. Earlier this month, the National ATM Council and
several independent operators of ATMs filed a proposed national
class-action lawsuit claiming that the card issuers' rules fix the
price of ATM access fees, a restraint of trade the suit claims
violates the antitrust laws.
Filed in the U.S. District Court for the District of Columbia on
October 17, 2011, the lawsuit claims that the agreements between
Visa and MasterCard and the nation's banks require that ATMs
charge fees equal to or greater than Visa or MasterCard's
transaction fees, even if the transaction occurs over an
alternative network.
The complaint alleges that the agreements with the banks
effectively strip ATM owners and operators of the power to make
decisions on ATM fee pricing, preventing them from offering
discounts to consumers or making any other decisions that would
otherwise exist in a competitive market. As a result, those who
have been charged a fee at an ATM may, according to the lawsuit,
have paid a higher fee than would exist in a market free from the
alleged illegal agreements.
"Visa and MasterCard's tactics have put a competitive
straightjacket on ATM operators," said Steve Berman, managing
partner of Hagens Berman. "Without the ability to set fees,
consumers are left with only two options: pay these ATM fees which
are higher than they should be, or don't use ATMs at all."
In 2007, U.S. cardholders used Visa's platform to access $395
billion in cash, according to the complaint. During that same
year, consumers used MasterCard-branded cards to access $202
billion in cash.
The lawsuit asks the court to issue an injunction, preventing Visa
and MasterCard from enforcing fee restrictions on ATMs. The suit
also seeks damages for the allegedly higher prices consumers were
forced to pay to use ATMs across the country.
This is not the first time Hagens Berman has filed an antitrust
lawsuit against Visa and MasterCard. Previously, it said, the
Seattle-based firm acted as co-lead counsel in a case that alleged
both companies engaged in anticompetitive activities relating to
debit cards and negotiated a $3.05 billion settlement, with
injunctive relief valued at more than $20 billion.
* Rise of Class Actions in Canada Blamed on Rule Changes
--------------------------------------------------------
Barbara Shecter, writing for Financial Post, reports that some
market participants suspect the rising tide of class action
lawsuits in Canada and a strong backlash from lawyers who defend
Bay Street players has pushed the Ontario Securities Commission to
propose the new policy allowing people and corporations to enter
settlement agreements without an admission of guilt.
"I'm sure that is a big part of Bay Street's motivation for
wanting the change, now that you have a robust secondary market
class action regime," said Dimitri Lascaris, a partner in the
class actions department at law firm Siskinds LLP in London
Ontario. "Because that can be very costly to defendants."
Canadian regulators have been on the record opposing U.S.-style
"no contest" settlements for more than a decade, notes
Mr. Lascaris. But in an about-face on Oct. 21, Canada's largest
capital markets regulator proposed sweeping policy changes
including offering immunity to wrongdoers who come forward.
Contrary to no-contest settlements popular with regulators such as
the U.S. Securities and Exchange Commission, settlements at the
OSC and other Canadian regulators have traditionally included
agreed statements of fact, which provide a road map for other
regulators and civil litigants such as those pursuing class action
lawsuits.
"We shouldn't have any bones about that. The OSC's investigative
powers are much broader than those of private litigants," said
Mr. Lascaris, adding that removing these facts from the record
with no-contest settlements would mean "forcing private litigants
to re-invent the wheel and prove it all over again."
The lawyer noted that class-action lawsuits are the only real
avenue for compensation when securities laws are broken because
Canada's capital markets regulators do not have a tradition of
returning fines and disgorged ill-gotten gains directly to those
harmed.
OSC officials say they are proposing the changes to settlements
now to speed up the enforcement process. OSC chairman
Howard Wetston made that a priority when he took over last year.
But opposition to the no-contest approach dates back to at least
September of 2000, when The Lawyers Weekly published statements
from top enforcement officials at the OSC, the British Columbia
Securities Commission, the Toronto Stock Exchange and the
Investment Dealers Association (IDA) on the subject.
With the exception of a single case before the IDA, none of the
agencies supported settlements without an admission or finding of
facts and culpability. Among the reasons they cited was the need
for a powerful deterrent to financial malfeasance and an
opportunity to educate market participants.
"Where there has been no admission as to what occurred, achieving
these objectives is significantly impaired," Michael Watson, who
was director of enforcement at the OSC at the time, was quoted as
saying.
Mr. Lascaris said the about-face is particularly surprising given
that senior officials in the United States are beginning to
question the value of such settlements in the post-crisis era when
those accused of "egregious" acts can settle without admitting or
denying wrongdoing.
Recent critics of the longstanding practice include a U.S. Federal
District Court judge, an SEC commissioner, and the Justice
Department, according to an article in the New York Times last
week. In a speech, SEC commissioner Luis A. Aguilar said he
worried that press releases issued after such settlements amounted
to "revisionist history" and could prompt a review of the
commission's practice, the newspaper said.
But Jacob Frenkel, chair of securities enforcement at law firm
Shulman Rogers in Maryland, said changing the practice would be
impractical and unnecessary.
"It will create an unmanageable backlog for the SEC and SEC
cases," he said, adding that the regulator has its own objectives
and "should not be pre-occupied or concerned about private
litigation."
The Ontario Securities Commission will be taking feedback on its
proposed policy change until Dec. 20. While many expect the
consultations could lead to minor tweaks, such as placing some
limitations on the use of no-contest settlements, Mr. Lascaris is
looking for a more radical outcome.
"Hopefully they will think hard and have a change of heart about
it," the lawyer said.
* State Attorney Generals Rake Millions From Plaintiff Lawyers
--------------------------------------------------------------
Bill McMorris, writing for Statehouse News, reports that trial
lawyers have turned campaign contributions to attorneys general
into lucrative contracts through class action lawsuits and no-bid
contracts, according to a new report.
For more than 10 years, attorneys general in all 50 states have
raked in millions in campaign donations from plaintiff lawyers.
Some of those officials have awarded contracts to donors to
represent government entities in multibillion dollar lawsuits,
according to a new report from the Manhattan Institute, a
conservative advocacy group based in New York.
States have turned to civil courts to punish polluters, investment
firms and pharmaceutical companies to recover taxpayer money. The
most notable class action involving state governments came in 1998
when cigarette manufacturers agreed to send more than $200 billion
to states during a 25-year period to compensate for medical costs
associated with smoking. Plaintiff attorneys took home more than
$30 billion in that case.
In many cases, attorneys general contract out similar class action
lawsuits to private trial lawyers, who earn a percentage of money
won in civil trial or settlement. The legal community has opened
up its wallets for the attorneys general, who control the purse
strings on contracts.
In 2007, lawyers provided Mississippi Attorney General Jim Hood, a
Democrat, with 45% of his campaign's $1.8 million warchest,
according to the report. Among his many donors was the Texas law
firm Bailey Perrin Bailey, which contributed $75,000. When
Mississippi sued drug maker Eli Lilly for failing to disclose the
link between its anti-psychotic drug Zyprexa and diabetes,
Mr. Hood's office awarded the firm with the contract. The firm
earned a lucrative payday after reaching an $18.5 million
settlement for the state.
"Of course we cannot prove that this contract was awarded based
solely on a campaign donation -- I cannot emphasize that enough --
but it certainly raises eyebrows and creates an appearance of
impropriety at minimum," James Copeland, director of the
institute's Center for Legal Policy, said on a teleconference on
Oct. 24.
Neither Mr. Hood nor representatives for Bailey returned calls for
comment.
Some public policy groups are looking to bring transparency to
state legal contracting. The American Legislative Exchange
Council, or ALEC, a free market think tank based in Washington,
D.C., that provides model legislation for government, has been
working with state lawmakers to crack down on no-bid contracting
for more than a decade.
"There may be times when an outside attorney may have the
expertise needed for a case and a contract is necessary," said
Amy Kjose, director of ALEC's Civil Justice Task Force. "But
these contracts are generally written without any public scrutiny,
legislative oversight or disclosure."
ALEC bundled its reform ideas into model legislation, known as the
Private Attorney Retention Sunshine Act. The proposal calls for a
competitive bidding process to prevent politically motivated
contracts; establish legislative oversight; and set fee caps to
limit economic incentives. Eleven states have adopted elements of
the bill.
"I expect that more states will continue to look at it next year,"
Ms. Kjose said.
Former Attorney General Ed Meese joined Copeland in supporting
such measures.
"The opportunities for actual corruption and improper
relationships are extremely great," Mr. Meese said. "It's a
situation in which state legislators really ought to be paying
attention."
*********
S U B S C R I P T I O N I N F O R M A T I O N
Class Action Reporter is a daily newsletter, co-published by
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USA, and Beard Group, Inc., Frederick, Maryland USA. Leah
Felisilda, 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
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