/raid1/www/Hosts/bankrupt/CAR_Public/111101.mbx
C L A S S A C T I O N R E P O R T E R
Tuesday, November 1, 2011, Vol. 13, No. 216
Headlines
ALLIANCEBERNSTEIN LP: Gets $17.2-Mil. in Net Settlement Proceeds
APPLE INC: Awaits Ruling on Motion to Decertify Antitrust Suit
APPLE INC: iPods and iTunes Antitrust Cases Ongoing in Calif.
ASBURY AUTOMOTIVE: Awaits Final OK of Arkansas Suit Settlement
ATR INT: Sued Over Illegal Pherlure Pheromone Cologne Marketing
BOEING CO: Awaits Reconsideration Bid Decision in Fraud Case
BOEING CO: Awaits Order on Class Certification Plea in VIP Suit
BOEING CO: Dispositive Motions in 2nd Kansas Suit Due in 4Q 2011
C.R. BARD: St. Francis May Seek Supr. Ct. Review of Suit Dismissal
C.R. BARD: Continues to Defend Product Liability Suits
CALIPER LIFE: Agrees to Settle Consolidated Merger-Related Suit
CASH AMERICA: Awaits Ruling on "Alfeche" Plaintiffs' Motion
CASH AMERICA: Awaits Summary Judgment Bid Ruling in "Strong" Suit
CASH AMERICA: "Wilson" Class Suit Stayed in Texas Court
CASH AMERICA: "Yulon" Suit vs. Unit Stayed in Pennsylvania
CELANESE CORP: Deal in Canadian Plumbing Suits Remains Pending
DR PEPPER: "Jones" Suit vs. Unit Still Pending in California
ENCORE CAPITAL: Appeals in "Brent" Suit vs. Units Remain Pending
ENCORE CAPITAL: MDL Panel Allows Transfer of Two Suits to Calif.
EXELON CORP: Awaits Ruling on Motion to Dismiss Illinois Suit
EXELON CORP: Plaintiffs Have Until Dec. to Petition Supreme Ct.
HOSPIRA INC: Awaits Decision in ERISA-Violation Suit Appeal
HARPER TRUCKS: Recalls 292,000 Hand Trucks Due to Injury Hazard
J.C. PENNEY: Faces Class Action Over Bogus Membership Programs
JUST FABULOUS: Faces Class Action Over Undisclosed Fees
LAKE MACQUARIE: Jeff McCloy Mulls Climate Change Class Action
LOCAL GOV'TS: RPWB Seeks Prelim. Approval of $82-Mil. Settlement
MATTEL INC: Appeals $310-Mil. Judgment in Bratz-Related Suit
MEDCO HEALTH: Antitrust Suit in Pennsylvania Still Pending
MEDCO HEALTH: Continues to Defend "Alameda" Suit in California
MEDCO HEALTH: Faces 22 Suits Over Proposed Express Scripts Merger
MEDCO HEALTH: Settles Last Two of "Gruer" Series of Suits
MERS INC: Cleveland County Commissioners File Class Action
MYLAN INC: Unit Continues to Defend Suits Over False Claims
NORTHROP GRUMMAN: Appeal From Pension Plan Suit Ruling Pending
NORTHROP GRUMMAN: Awaits Ruling on Cross Motions in ERISA Suit
OXY BEVERAGES: Sued Over False Claims on "Oxygizer" Water
PRAXAIR INC: Continues to Defend Medical Monitoring Class Suits
RESEARCH IN MOTION: Faces Blackberry Outage Suit in California
RIGHTNOW TECHNOLOGIES: Being Sold for Too Little, Suit Claims
RYDER SYSTEM: Continues to Defend Wage and Hour Class Suits
S1 CORP: Settles Consolidated Shareholder Suit in Delaware
SPIN MASTER: Agrees to $1.3 Million Civil Penalty
SYNGENTA CROP: Document Access Appeals in Atrazine Suit Tossed
TREK BICYCLE: Recalls 27,000 Bicycles Due to Fall Hazard
U-46: Ex-Superintendent Testifies in Bilingual Education Suit
UNITED STATES: Black Farmers' $1.25BB Settlement Gets Final Okay
VERTRO INC: Being Sold to Inuvo for Too Little, Suit Claims
WAL-MART STORES: Female Workers Narrow Gender Bias Class Action
WELLPOINT INC: Appeal in OON Reimbursement MDL Remains Pending
WELLPOINT INC: Appeal in OON-Related "ADA" Suit Remains Pending
WELLPOINT INC: Continues to Defend Wrongful Rescission Suits
WELLPOINT INC: Continues to Defend AIC Demutualization Suits
WELLS FARGO: Homeowners File Foreclosure Fraud Class Action
*********
ALLIANCEBERNSTEIN LP: Gets $17.2-Mil. in Net Settlement Proceeds
----------------------------------------------------------------
The $17.2 million net settlement proceeds in connection with a
derivative lawsuit were disbursed to AllianceBernstein L.P.
following the approval of a stipulation in August 2011, according
to the Company's October 26, 2011, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended
September 30, 2011.
On October 2, 2003, a purported class action complaint entitled
Hindo, et al. v. AllianceBernstein Growth & Income Fund, et al.
("Hindo Complaint") was filed against, among others,
AllianceBernstein Holding L.P. ("Holding"), AllianceBernstein L.P.
("AllianceBernstein") and AllianceBernstein Corporation ("General
Partner"). The Hindo Complaint alleges that certain defendants
failed to disclose that they improperly allowed certain hedge
funds and other unidentified parties to engage in "late trading"
and "market timing" of certain of AllianceBernstein's U.S. mutual
fund securities, violating various securities laws.
Following October 2, 2003, additional lawsuits making factual
allegations generally similar to those in the Hindo Complaint were
filed in various federal and state courts against
AllianceBernstein and certain other defendants. On September 29,
2004, plaintiffs filed consolidated amended complaints with
respect to four claim types: mutual fund shareholder claims;
mutual fund derivative claims; derivative claims brought on behalf
of Holding; and claims brought under the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") by participants
in the Profit Sharing Plan for Employees of AllianceBernstein.
On April 21, 2006, AllianceBernstein and attorneys for the
plaintiffs in the mutual fund shareholder claims, mutual fund
derivative claims and ERISA claims entered into a confidential
memorandum of understanding containing their agreement to settle
these claims. The agreement was documented by a stipulation of
settlement, which has been approved by the court. The settlement
amount ($30 million), which AllianceBernstein previously expensed
and disclosed, has been disbursed.
The derivative claim, which was brought by Holding unitholders
against the officers and directors of AllianceBernstein and in
which plaintiffs sought an unspecified amount of damages, has been
resolved pursuant to a stipulation of settlement with plaintiffs
and the recovery of insurance proceeds totaling $23 million from
relevant carriers. On August 10, 2011, the stipulation of
settlement was approved by the court and, based on the court's
approval, the net settlement proceeds of approximately $17.2
million, after payment of plaintiffs' legal fees of approximately
$5.8 million, were disbursed to AllianceBernstein. As a result,
AllianceBernstein collected a $6.5 million receivable and recorded
the remaining settlement proceeds as income in the consolidated
statement of income.
The Company is involved in various other matters, including
regulatory inquiries, administrative proceedings and litigation,
some of which allege significant damages. While any inquiry,
proceeding or litigation has the element of uncertainty,
management believes that the outcome of any one of the other
regulatory inquiries, administrative proceedings, lawsuits or
claims that is pending or threatened, or all of them combined,
will not have a material adverse effect on the Company's results
of operations or financial condition.
APPLE INC: Awaits Ruling on Motion to Decertify Antitrust Suit
--------------------------------------------------------------
In re Apple & ATTM Antitrust Litigation (brought on behalf of
named plaintiffs Kliegerman, Holman, Rivello, Smith, Lee,
Macasaddu, Morikawa, Scotti and Sesso) is a purported class action
filed against Apple Inc. and AT&T Mobility in the United States
District Court for the Northern District of California. The
Consolidated Complaint alleges that the Company and AT&T Mobility
violated the federal antitrust laws by monopolizing and/or
attempting to monopolize the "aftermarket for voice and data
services" for the iPhone and that the Company monopolized and/or
attempted to monopolize the "aftermarket for software applications
for iPhones." Plaintiffs are seeking unspecified compensatory and
punitive damages for the class, treble damages, injunctive relief
and attorneys fees. On July 8, 2010, the Court granted in part
plaintiffs' motion for class certification. Following a favorable
Supreme Court ruling for AT&T Mobility in its case against
Conception, defendants have filed Motions to Compel Arbitration
and to Decertify the Class.
No further updates were reported in the Company's October 26,
2011, Form 10-K filing with the U.S. Securities and Exchange
Commission for the year ended September 24, 2011.
APPLE INC: iPods and iTunes Antitrust Cases Ongoing in Calif.
-------------------------------------------------------------
The antitrust lawsuits over Apple Inc.'s iPods and iTunes remain
pending in California, according to the Company's October 26,
2011, Form 10-K filing with the U.S. Securities and Exchange
Commission for the year ended September 24, 2011.
The related cases captioned the Apple iPod iTunes Antitrust
Litigation (formerly Charoensak v. Apple Computer, Inc. and Tucker
v. Apple Computer, Inc.); and Somers v. Apple Inc. have been filed
on January 3, 2005, July 21, 2006, and December 31, 2007, in the
United States District Court for the Northern District of
California on behalf of a purported class of direct and indirect
purchasers of iPods and iTunes Store content, alleging various
claims including alleged unlawful tying of music and video
purchased on the iTunes Store with the purchase of iPods and
unlawful acquisition or maintenance of monopoly market power and
unlawful acquisition or maintenance of monopoly market power under
Sections 1 and 2 of the Sherman Act, the Cartwright Act,
California Business & Professions Code Section 17200 (unfair
competition), the California Consumer Legal Remedies Act and
California monopolization law. Plaintiffs are seeking unspecified
compensatory and punitive damages for the class, treble damages,
injunctive relief, disgorgement of revenues and/or profits and
attorneys fees. Plaintiffs are also seeking digital rights
management ("DRM") free versions of any songs downloaded from
iTunes or an order requiring the Company to license its DRM to all
competing music players. The cases are currently pending.
ASBURY AUTOMOTIVE: Awaits Final OK of Arkansas Suit Settlement
--------------------------------------------------------------
Asbury Automotive Group, Inc., is awaiting final approval of its
settlement resolving a class action lawsuit pending in Arkansas,
according to the Company's October 26, 2011, Form 10-Q filing with
the U.S. Securities and Exchange Commission for the quarter ended
September 30, 2011.
The Company and certain of its subsidiaries are named defendants
in a class action lawsuit filed in December 2002 in the Pulaski
County circuit court in Arkansas. The lawsuit relates to the
Company's Arkansas dealerships' charging certain document
preparation fees and receiving certain interest rate participation
amounts from lenders related to customer arranged financing from
November 2000 through November 2006. After various motions and
judgments, in October 2008, the circuit court ruled in favor of
the Company and its subsidiaries on all class action claims and
found the Company and its subsidiaries had no liability. On
March 11, 2010, the plaintiff appealed the circuit court's
decisions.
On April 14, 2011, the Supreme Court of Arkansas ruled that the
class may proceed with claims with respect to certain document
preparation fees collected by the Company's subsidiaries from
November 2000 to November 2006 and also reversed the circuit
court's decision not to certify a subclass relating to the
dealerships' interest rate participation. The Supreme Court
remanded the case to the Pulaski County circuit court for further
proceedings. On August 23, 2011, the circuit court granted
preliminary approval to a proposed Class Action Settlement (the
"Settlement") agreed to by the parties. The Settlement is
contingent upon final approval by the circuit court. If, for any
reason, the settlement is not approved, the Company expects that
it will continue to defend the case vigorously.
ATR INT: Sued Over Illegal Pherlure Pheromone Cologne Marketing
---------------------------------------------------------------
Brett Vollmar, individually and on behalf of all others similarly
situated v. ATR INT Inc., a Florida corporation; Alexander
Yakubov, an individual; Atlast Holdings, Inc., a Colorado
corporation; and Does 1-100, Case No. 2011-CH-37432 (Ill. Cir.
Ct., Cook Cty., October 27, 2011) accuses the Defendants of
perpetrating illegal practices relating to the national marketing
and sale of Pherlure Pheromone Cologne.
Mr. Vollmar alleges that the Defendants represent that Pherlure
Pheromone Cologne (i) contains pheromones, which it does not, and
(ii) has been scientifically studied and the purported benefits
validated, which it has not, thereby violating Illinois law.
Mr. Vollmar brings the lawsuit as a class action to enjoin the
Defendants' deceptive behavior, and to recover damages, attorneys'
fees and costs related to their flagrant violations of the
Illinois' Consumer Fraud and Deceptive Business Practices Act and
common law.
Mr. Vollmar is a resident of Chicago, Illinois. He purchased one
bottle of Pherlure Pheromone Cologne from the Defendants.
ANR is a Florida corporation and does business throughout the
state of Illinois. ANR, as well as the other Defendants,
participated in the marketing, sale, and distribution of Pherlure
Pheromone Cologne to Illinois.
The Plaintiff is represented by:
Michael P. Kelley, Esq.
GARDINER KOCH WEISBERG & WRONA
53 W. Jackson Blvd., Suite 950
Chicago, IL 60604
Telephone: (312) 362-0000
Facsimile: (312) 362-0440
E-mail: mkelley@gkwwlaw.com
- and -
Richard M. Golomb, Esq.
Ruben Honik, Esq.
Kenneth Grunfeld, Esq.
GOLOMB & HONIK, P.C.
1515 Market Street, Suite 1100
Philadelphia, PA 19102
Telephone: (215) 985-9177
Facsimile: (215) 985-4169
E-mail: rgolomb@golombhonik.com
rhonik@golombhonik.com
kgrunfeld@golombhonik.com
- and -
M. Ryan Casey, Esq.
KU & MUSSMAN, P.A.
12250 Biscayne Blvd., Suite 406
Miami, FL 33181
Telephone: (305) 891-1322
Facsimile: (305) 891-4512
E-mail: ryan@kumussman.com
BOEING CO: Awaits Reconsideration Bid Decision in Fraud Case
------------------------------------------------------------
On November 13, 2009, plaintiff shareholders filed a putative
securities fraud class action against The Boeing Company and two
of the Company's senior executives in federal district court in
Chicago. This lawsuit arose from the Company's June 2009
announcement that the first flight of the 787 Dreamliner would be
postponed due to a need to reinforce an area within the side-of-
body section of the aircraft. Plaintiffs contended that the
Company was aware before June 2009 that the first flight could not
take place as scheduled due to issues with the side-of-body
section of the aircraft, and that the Company's determination not
to announce this delay earlier resulted in an artificial inflation
of the Company's stock price for a multi-week period in May and
June 2009. On March 7, 2011, the Court dismissed the complaint
with prejudice. On April 4, 2011, plaintiffs filed a motion for
reconsideration.
In addition, plaintiff shareholders have filed three similar
shareholder derivative lawsuits concerning the flight schedule for
the 787 Dreamliner that closely track the allegations in the
putative class action lawsuit. Two of the lawsuits were filed in
Illinois state court and have been consolidated. The remaining
derivative lawsuit was filed in federal district court in Chicago.
No briefing or discovery has yet taken place in any of these
lawsuits. The Company believes the allegations in all of these
cases are without merit, and it intends to contest the cases
vigorously.
No further updates were reported in the Company's October 26,
2011, Form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarter ended September 30, 2011.
BOEING CO: Awaits Order on Class Certification Plea in VIP Suit
---------------------------------------------------------------
The Boeing Company is awaiting a court decision on plaintiffs'
motion for class action certification in the lawsuit filed on
behalf of participants and beneficiaries of The Boeing Company
Voluntary Investment Plan (the VIP), according to the Company's
October 26, 2011, Form 10-Q filing with the U.S. Securities and
Exchange Commission for the quarter ended September 30, 2011.
On October 13, 2006, the Company was named as a defendant in a
lawsuit filed in the U.S. District Court for the Southern District
of Illinois. Plaintiffs, seeking to represent a class of
similarly situated participants and beneficiaries of the VIP,
alleged that fees and expenses incurred by the VIP were and are
unreasonable and excessive, not incurred solely for the benefit of
the VIP and its participants, and were undisclosed to
participants. The plaintiffs further alleged that defendants
breached their fiduciary duties in violation of Section 502(a)(2)
of the Employee Retirement Income Security Act of 1974 (ERISA),
and sought injunctive and equitable relief pursuant to Section
502(a)(3) of the ERISA. During the first quarter of 2010, the
Seventh Circuit Court of Appeals granted a stay of trial
proceedings in the district court pending resolution of an appeal
made by Boeing in 2008 to the case's class certification order.
On January 21, 2011, the Seventh Circuit reversed the district
court's class certification order and decertified the class.
The Seventh Circuit remanded the case to the district court for
further proceedings. On March 2, 2011, plaintiffs filed an
amended motion for class certification and a supplemental motion
on August 7, 2011. Boeing's opposition to class certification was
filed on September 6, 2011. Plaintiffs' reply brief in support of
class certification was filed on September 27, 2011.
BOEING CO: Dispositive Motions in 2nd Kansas Suit Due in 4Q 2011
----------------------------------------------------------------
The filing dates for dispositive motions in the second class
action lawsuit pending against The Boeing Company in Kansas are
scheduled for the fourth quarter of 2011 and first quarter of
2012, according to the Company's October 26, 2011, Form 10-Q
filing with the U.S. Securities and Exchange Commission for the
quarter ended September 30, 2011.
The Company has been named as a defendant in two pending class
action lawsuits filed in the U.S. District Court for the District
of Kansas, each related to the 2005 sale of the Company's former
Wichita facility to Spirit AeroSystems, Inc. (Spirit). The first
action involves allegations that Spirit's hiring decisions
following the sale were tainted by age discrimination, violated
the Employee Retirement Income Security Act (ERISA), violated the
Company's collective bargaining agreements, and constituted
retaliation. The case was brought in 2006 as a class action on
behalf of individuals not hired by Spirit. During the second
quarter of 2010, the court granted summary judgment in favor of
Boeing and Spirit on all class action claims. Following certain
procedural motions, plaintiffs filed a notice of appeal to the
Tenth Circuit Court of Appeals on August 10, 2011, and are seeking
to stay all remaining individual claims in the district court
pending resolution of the appeal.
The second action, initiated in 2007, alleges collective
bargaining agreement breaches and ERISA violations in connection
with alleged failures to provide benefits to certain former
employees of the Wichita facility. Discovery in the case is
ongoing. Spirit has agreed to indemnify Boeing for any and all
losses in the first action, with the exception of claims arising
from employment actions prior to January 1, 2005. While Spirit
has acknowledged a limited indemnification obligation in the
second action, the Company believes that Spirit is obligated to
indemnify Boeing for any and all losses in the second action.
Written discovery closed by joint stipulation of the parties on
June 6, 2011. Depositions concluded on August 18, 2011. The
filing dates for dispositive motions are scheduled for the fourth
quarter of 2011 and first quarter of 2012.
C.R. BARD: St. Francis May Seek Supr. Ct. Review of Suit Dismissal
-----------------------------------------------------------------
C. R. Bard, Inc. is awaiting St. Francis Medical Center's decision
on whether or not it will seek a review by the U.S. Supreme Court
of the dismissal of its lawsuit, according to the Company's
October 26, 2011, Form 10-Q filing with the U.S. Securities and
Exchange Commission for the quarter ended September 30, 2011.
On February 21, 2007, Southeast Missouri Hospital ("Southeast")
filed a putative class action complaint on behalf of itself and
all others similarly situated against the Company and another
manufacturer, Tyco International, Inc., which was subsequently
dismissed from the action. The complaint was later amended to add
St. Francis Medical Center ("St. Francis") as an additional named
plaintiff. The action was re-named as St. Francis Medical Center,
et al. v. C. R. Bard, Inc., et al. (Civil Action No. 1:07-cv-
00031, United States District Court, Eastern District of Missouri,
Southeastern District) when the court denied Southeast's motion to
serve as a class representative and dismissed Southeast from the
lawsuit. In September 2008, the court granted St. Francis's
motion for class certification and determined the measurement
period for any potential damages. St. Francis alleges that the
Company conspired to exclude competitors from the urological
catheter market and that the Company sought to maintain market
share by engaging in conduct in violation of state and federal
antitrust laws. St. Francis seeks injunctive relief and presented
an expert report that calculates damages of up to approximately
$320 million, a figure that the Company believes is unsupported by
the facts. The Company's expert report establishes that, even
assuming a determination adverse to the Company, the plaintiffs
suffered no damages. In September 2009, the District Court
granted the Company's summary judgment motion and dismissed with
prejudice all counts in this action. St. Francis appealed the
Court's decision to the Eighth Circuit Court of Appeals ("Court of
Appeals"). In August 2010, the Court of Appeals affirmed the
decision of the District Court. In October 2010, the Court of
Appeals granted St. Francis's request for a re-hearing of its
appeal.
In June 2011, the Court of Appeals again affirmed the decision of
the District Court. St. Francis filed another request for a re-
hearing of its appeal to the Court of Appeals, which was denied in
August 2011. St. Francis may request a review of the decision by
the U.S. Supreme Court. If St. Francis continues to pursue this
case, the Company says it intends to defend this matter
vigorously. If St. Francis is ultimately successful, any damages
awarded under the federal antitrust laws will be subject to
statutory trebling and St. Francis's attorneys would be entitled
to an award of reasonable fees and costs. At this time, the
Company says it is not possible to assess the likelihood of an
adverse outcome or determine an estimate, or a range of estimates,
of potential damages. The Company cannot give any assurances that
this matter will not have a material adverse effect on its
business, results of operations, financial condition and/or
liquidity.
C.R. BARD: Continues to Defend Product Liability Suits
------------------------------------------------------
C. R. Bard, Inc. continues to defend product liability lawsuits,
and its insurance coverage with respect to "Hernia Product Claims"
has been depleted, according to the Company's October 26, 2011,
Form 10-Q filing with the U.S. Securities and Exchange Commission
for the quarter ended September 30, 2011.
As of October 20, 2011, approximately 1,910 federal and 1,720
state lawsuits involving individual claims by approximately 3,770
plaintiffs, as well as two putative class actions in the United
States and four putative class actions in various Canadian
provinces, have been filed or asserted against the Company with
respect to its Composix(R) Kugel(R) and certain other hernia
repair implant products (collectively, the "Hernia Product
Claims"). One of the U.S. class action lawsuits consolidates ten
previously-filed U.S. class action lawsuits. The putative class
actions, none of which has been certified, seek (i) medical
monitoring, (ii) compensatory damages, (iii) punitive damages,
(iv) a judicial finding of defect and causation and/or (v)
attorneys' fees. Approximately 1,695 of the state lawsuits,
involving individual claims by a substantially equivalent number
of plaintiffs, are pending in the Superior Court of the State of
Rhode Island, with the remainder in various other jurisdictions.
The Hernia Product Claims also generally seek damages for personal
injury resulting from use of the products. The Company
voluntarily recalled certain sizes and lots of the Composix(R)
Kugel(R) products beginning in December 2005.
In June 2007, the Judicial Panel on Multidistrict Litigation
("JPML") transferred Composix(R) Kugel(R) lawsuits pending in
federal courts nationwide into one Multidistrict Litigation
("MDL") for coordinated pre-trial proceedings in the United States
District Court for the District of Rhode Island. The MDL court
subsequently determined to include other hernia repair products of
the Company in the MDL proceeding. The first MDL trial was
completed in April 2010 and resulted in a judgment for the Company
based on the jury's finding that the Company was not liable for
the plaintiff's damages. The second MDL trial was completed in
August 2010 and resulted in a judgment for the plaintiff of $1.5
million. On June 30, 2011, the Company announced that it had
reached agreements in principle with various plaintiffs' law firms
to settle the majority of its existing Hernia Product Claims.
Each agreement is subject to certain conditions, including
requirements for participation in the proposed settlements by a
certain minimum number of plaintiffs. In addition, the Company is
engaging in discussions with other plaintiffs' law firms regarding
potential resolution of unsettled Hernia Product Claims, and
intends to vigorously defend Hernia Product Claims that do not
settle, including through litigation. Based on these events, the
Company recorded to other (income) expense, net, a charge of
$184.3 million ($180.6 million after tax) in the second quarter of
2011, which recognized the estimated costs of settling all Hernia
Product Claims, including asserted and unasserted claims, and
costs to administer the settlements. The charge excludes any
costs associated with pending putative class action lawsuits. The
Company cannot give any assurances that the actual costs incurred
with respect to the Hernia Product Claims will not exceed the
amount of the charge together with amounts previously accrued.
The Company cannot give any assurances that the resolution of the
Hernia Product Claims that have not settled, including asserted
and unasserted claims and the putative class action lawsuits, will
not have a material adverse effect on the Company's business,
results of operations, financial condition and/or liquidity.
As of October 20, 2011, product liability lawsuits involving
individual claims by approximately 280 plaintiffs have been filed
or asserted against the Company in various federal and state
jurisdictions alleging personal injuries associated with the use
of certain of the Company's surgical continence products for
women, principally its Avaulta(R) line of products (collectively,
the "Women's Health Product Claims"). The Women's Health Product
Claims generally seek damages for personal injury resulting from
use of the products. With respect to certain of these claims, the
Company believes that one of its suppliers has an obligation to
defend and indemnify the Company. In October 2010, the JPML
transferred the Women's Health Product Claims involving solely
Avaulta(R) products pending in federal courts nationwide into an
MDL for coordinated pre-trial proceedings in the United States
District Court for the Southern District of West Virginia. In
October 2011, the JPML ordered that 35 lawsuits involving other
women's surgical continence products of the Company be transferred
to the pending MDL in West Virginia. In total, approximately 150
of the Women's Health Product Claims are pending in federal courts
and have been or will be transferred to the MDL in West Virginia,
with the remainder of the Women's Health Product Claims in other
jurisdictions. While the Company intends to vigorously defend the
Women's Health Product Claims, it cannot give any assurances that
the resolution of these claims will not have a material adverse
effect on the Company's business, results of operations, financial
condition and/or liquidity.
As of October 20, 2011, product liability lawsuits involving
individual claims by approximately 40 plaintiffs have been filed
or asserted against the Company in various federal and state
jurisdictions alleging personal injuries associated with the use
of the Company's vena cava filter products. In addition, a
putative class action lawsuit has been filed against the Company
in California state court on behalf of plaintiffs who are alleged
to have no present injury (all lawsuits, collectively, the "Filter
Product Claims"). The putative class action, which has not been
certified, seeks: (i) medical monitoring; (ii) punitive damages;
(iii) a judicial finding of defect and causation; and/or (iv)
attorneys' fees. While the Company intends to vigorously defend
the Filter Product Claims, it cannot give any assurances that the
resolution of these claims will not have a material adverse effect
on the Company's business, results of operations, financial
condition and/or liquidity.
In most product liability litigations of this nature, including
the Hernia Product Claims, the Women's Health Product Claims and
the Filter Product Claims, plaintiffs allege a wide variety of
claims, ranging from allegations of serious injury caused by the
products to efforts to obtain compensation notwithstanding the
absence of any injury. In many of these cases, the Company has
not yet received and reviewed complete information regarding the
plaintiffs and their medical conditions, and consequently, is
unable to fully evaluate the claims. The Company expects that it
will receive and review additional information regarding the
unsettled Hernia Product Claims, the Women's Health Product
Claims, the Filter Product Claims and related matters as these
cases progress.
The Company believes that many settlements and judgments, as well
as legal defense costs, relating to product liability matters are
or may be covered in whole or in part under its product liability
insurance policies with a limited number of insurance carriers.
In certain circumstances, insurance carriers reserve their rights
with respect to coverage, or contest or deny coverage, as has
occurred with respect to certain claims. When this occurs, the
Company intends to vigorously contest disputes with respect to its
insurance coverage and to enforce its rights under the terms of
its insurance policies, and accordingly, may record receivables
with respect to amounts due under these policies. Amounts
recovered under the Company's product liability insurance policies
may be less than the stated coverage limits and may not be
adequate to cover damages and/or costs relating to claims. In
addition, there is no guarantee that insurers will pay claims or
that coverage will otherwise be available.
In connection with the Hernia Product Claims, the Company is in
dispute with one of its excess insurance carriers relating to an
aggregate of $25 million of insurance coverage. Regardless of the
outcome of this dispute, the Company's insurance coverage with
respect to the Hernia Product Claims has been depleted.
CALIPER LIFE: Agrees to Settle Consolidated Merger-Related Suit
---------------------------------------------------------------
Caliper Life Sciences, Inc. has reached an agreement in principle
to settle a consolidated class action lawsuit arising from its
proposed merger with a subsidiary of PerkinElmer, Inc., according
to the Company's October 26, 2011, Form 8-K filing with the U.S.
Securities and Exchange Commission.
On September 7, 2011, Caliper Life Sciences, Inc. ("Caliper"),
entered into an Agreement and Plan of Merger (the "Merger
Agreement") with PerkinElmer, Inc. ("PerkinElmer") and
PerkinElmer's wholly owned subsidiary, PerkinElmer Hopkinton Co.
("Merger Sub"), providing for the merger of Merger Sub with and
into Caliper (the "Merger").
In connection with the proposed merger, two putative stockholder
class action lawsuits were filed in the Court of Chancery of the
State of Delaware. A third putative stockholder class action
lawsuit was filed in relation to the Merger in the Court of
Chancery of the State of Delaware on October 5, 2011 (the three
lawsuits being collectively referred to herein as the "Stockholder
Actions"). The Stockholder Actions were collectively filed
against Caliper, the board of directors of Caliper, PerkinElmer
and Merger Sub, and generally alleged that each of the defendants
violated applicable law by directly breaching and/or aiding
breaches of fiduciary duties owed to the plaintiff and other
public stockholders of Caliper. On October 7, 2011, the Court
consolidated the cases.
Caliper believes that plaintiffs' claims in the Stockholder
Actions, including that certain of the disclosures about the
Merger are deficient, are without merit. Caliper believes that
the information plaintiffs allege it should have disclosed (i) is
not required to be disclosed under the U.S. federal securities
laws or under state securities and other laws and (ii) is not
material as a matter of law or in the context of the matters to be
considered in connection with the Merger.
Nevertheless, on October 25, 2011, the parties to the Stockholder
Actions, without the defendants admitting any wrongdoing or
liability of any kind, reached an agreement in principle providing
for the withdrawal of the plaintiffs' pending motion for a
preliminary injunction and to resolve all claims asserted in the
Stockholder Actions.
Caliper has agreed, pursuant to the terms of the proposed
settlement, to make certain supplemental disclosures related to
the proposed Merger. The agreement in principle contemplates that
the parties will enter into a stipulation of settlement. The
stipulation of settlement will be subject to customary conditions,
including court approval following notice to Caliper's
stockholders. In the event that the parties enter into a
stipulation of settlement, a hearing will be scheduled at which
the Court of Chancery of the State of Delaware will consider the
fairness, reasonableness, and adequacy of the settlement. If the
settlement is finally approved by the Court, it will resolve and
release all claims in all actions that were or could have been
brought challenging any aspect of the proposed Merger, the Merger
Agreement, and any disclosure made in connection therewith (but
excluding claims for appraisal under Section 262 of the Delaware
General Corporation Law). In addition, in connection with the
settlement, the parties contemplate that plaintiffs' counsel will
file a petition in the Court of Chancery of the State of Delaware
for an award of attorneys' fees and expenses to be paid by Caliper
or its successor, which the defendants may oppose. Caliper or its
successor will pay or cause to be paid any attorneys' fees and
expenses awarded by the Court of Chancery of the State of
Delaware. The Company says there can be no assurance that the
parties will ultimately enter into a stipulation of settlement or
that the Court of Chancery of the State of Delaware will approve
the settlement even if the parties were to enter into such
stipulation. In such event, the proposed settlement as
contemplated by the agreement in principle may be terminated.
CASH AMERICA: Awaits Ruling on "Alfeche" Plaintiffs' Motion
-----------------------------------------------------------
Cash America International, Inc. is awaiting a court decision on
plaintiffs' motion for certification for interlocutory appeal in
the purported class action lawsuit filed by Peter Alfeche,
according to the Company's October 26, 2011, Form 10-Q filing with
the U.S. Securities and Exchange Commission for the quarter ended
September 30, 2011.
On March 5, 2009, Peter Alfeche and Kim Saunders, on behalf of
themselves and others similarly situated, filed a purported class
action lawsuit in the United States District Court for the Eastern
District of Pennsylvania against Cash America International, Inc.,
Cash America Net of Nevada, LLC ("CashNet Nevada"), Cash America
Net of Pennsylvania, LLC and Cash America of PA, LLC, d/b/a
CashNetUSA.com (collectively, "CashNetUSA"). The lawsuit alleges,
among other things, that CashNetUSA's online consumer loan
activities in Pennsylvania were illegal and in violation of
various Pennsylvania laws, including the Loan Interest Protection
Law, the Pennsylvania Consumer Discount Company Act (the "CDCA")
and the Unfair Trade Practices and Consumer Protection Laws. The
lawsuit also seeks declaratory judgment that several of
CashNetUSA's contractual provisions, including the class action
waiver and the choice of law and arbitration provisions, are not
enforceable under Pennsylvania law and that CashNet USA's loan
contracts are void and unenforceable. The complaint seeks
compensatory damages (including the trebling of certain damages),
punitive damages and attorney's fees. CashNetUSA filed a motion
to enforce the arbitration provision, including the class action
waiver, located in the agreements governing the lending
activities.
In August 2011, the U.S. District Court ruled that the arbitration
provisions, which include the class action waiver, were valid and
enforceable and granted CashNetUSA's motion to enforce the
arbitration provision and stayed the litigation. Following this
ruling, in August 2011 the plaintiffs filed a motion for
reconsideration, which the court denied. In September 2011,
plaintiffs filed a motion for certification for interlocutory
appeal and the court has not yet ruled on this motion.
The Company says the Alfeche litigation is still at an early
stage, and neither the likelihood of an unfavorable outcome nor
the ultimate liability, if any, with respect to this litigation
can be determined at this time. CashNetUSA believes that the
Plaintiffs' claims in this lawsuit are without merit and will
vigorously defend this lawsuit.
CASH AMERICA: Awaits Summary Judgment Bid Ruling in "Strong" Suit
-----------------------------------------------------------------
Cash America International, Inc. is awaiting a court decision on
its motion for summary judgment in the class action lawsuit
commenced by James E. Strong, according to the Company's
October 26, 2011, Form 10-Q filing with the U.S. Securities and
Exchange Commission for the quarter ended September 30, 2011.
On August 6, 2004, James E. Strong filed a purported class action
lawsuit in the State Court of Cobb County, Georgia against Georgia
Cash America, Inc., Cash America International, Inc. (together
with Georgia Cash America, Inc., "Cash America"), Daniel R.
Feehan, and several unnamed officers, directors, owners and
"stakeholders" of Cash America. The lawsuit alleges many
different causes of action, among the most significant of which is
that Cash America made illegal short-term loans in Georgia in
violation of Georgia's usury law, the Georgia Industrial Loan Act
and Georgia's Racketeer Influenced and Corrupt Organizations Act.
Community State Bank ("CSB") for some time made loans to Georgia
residents through Cash America's Georgia operating locations. The
complaint in this lawsuit claims that Cash America was the true
lender with respect to the loans made to Georgia borrowers and
that CSB's involvement in the process is "a mere subterfuge."
Based on this claim, the lawsuit alleges that Cash America was the
"de facto" lender and was illegally operating in Georgia. The
complaint seeks unspecified compensatory damages, attorney's fees,
punitive damages and the trebling of any compensatory damages. In
November 2009, the trial court certified the case as a class
action lawsuit, and after an appeal by Cash America, the Supreme
Court of Georgia upheld the class certification in March 2011.
In August 2011, Cash America filed a motion for summary judgment,
and the plaintiffs have requested an extension of time to respond
to the motion. A hearing on this motion is set for October 2011.
The case was previously set for jury trial in October 2011, but
the trial date has been continued and will be reset. Cash America
believes that the Plaintiffs' claims in this lawsuit are without
merit and is vigorously defending this lawsuit.
CASH AMERICA: "Wilson" Class Suit Stayed in Texas Court
-------------------------------------------------------
A lawsuit commenced by Krystle Wilson against Cash America
International, Inc. and its subsidiaries has been stayed in Texas
court, according to the Company's October 26, 2011, Form 10-Q
filing with the U.S. Securities and Exchange Commission for the
quarter ended September 30, 2011.
On December 4, 2009, Krystle Wilson filed a lawsuit against Cash
America Net of Illinois d/b/a CashNetUSA alleging violation of the
Texas Debt Collection Practices Act, violation of the Texas
Deceptive Trade Practices Act, and invasion of privacy. In April
2011, the plaintiff amended her petition to include a purported
class action claim and named Cash America International, Inc.,
Cash America Net Holdings, LLC, Cash America Net of Texas, LLC and
Enova Financial Holdings, LLC as additional defendants (and
corrected the name of the previously-named defendant to Cash
America Net of Illinois, LLC) (collectively, "CashNet"). The
amended petition alleges, among other things, that CashNet's
consumer loan activities violate the Texas Credit Services
Organization Act ("CSOA") and that in its efforts to collect on
loans issued through the CSOA loan program, CashNet violated the
Texas and Federal Fair Debt Collection Practices Acts. The
plaintiff seeks unspecified compensatory damages, attorney's fees
and punitive damages. In June 2011, CashNet removed this action
to the United States District Court for the Northern District of
Texas (Fort Worth Division) and has filed a motion to enforce the
arbitration provision located in the agreements governing the
lending activities. The parties are awaiting the court's ruling
on this motion. In September 2011, the court granted the parties'
joint motion requesting that the case be stayed pending resolution
of the motion to enforce the arbitration provision.
The Company says the Wilson matter is still at an early stage, and
neither the likelihood of an unfavorable outcome nor the ultimate
liability, if any, with respect to this matter can be determined
at this time. CashNet believes that the plaintiff's claims in
this lawsuit are without merit and will vigorously defend this
lawsuit.
CASH AMERICA: "Yulon" Suit vs. Unit Stayed in Pennsylvania
----------------------------------------------------------
The class action lawsuit commenced by Yulon Clerk against a
subsidiary of Cash America International, Inc., has been stayed,
according to the Company's October 26, 2011, Form 10-Q filing with
the U.S. Securities and Exchange Commission for the quarter ended
September 30, 2011.
On April 21, 2009, Yulon Clerk, on behalf of herself and others
similarly situated, filed a purported class action lawsuit in the
Court of Common Pleas of Philadelphia County, Pennsylvania,
against Cash America Net of Nevada, LLC ("CashNet Nevada") and
several other unrelated third-party lenders. The lawsuit alleges,
among other things, that the defendants' lending activities in
Pennsylvania, including CashNet Nevada's online consumer loan
lending activities in Pennsylvania, were illegal and in violation
of various Pennsylvania laws, including the Loan Interest
Protection Law, the Pennsylvania Consumer Discount Company Act
(the "CDCA") and the Unfair Trade Practices and Consumer
Protection Laws. The lawsuit seeks restitution, compensatory
damages (including the trebling of certain damages), statutory
damages, injunctive relief and attorney's fees. The defendants
removed the case to the United States District Court for the
Eastern District of Pennsylvania where the lawsuit now resides.
The case was subsequently reassigned to the same judge presiding
in the Alfeche litigation. In August 2009, the Court severed the
claims against the other defendants originally named in the
litigation. CashNet Nevada filed a motion to enforce the
arbitration provision, including the class action waiver, located
in the agreements governing the lending activities.
In August 2011, the U.S. District Court ruled that the arbitration
provisions, which include the class action waiver, were valid and
enforceable and granted CashNet Nevada's motion to compel
arbitration and stayed the litigation. Neither the likelihood of
an unfavorable outcome nor the ultimate liability, if any, with
respect to any future filed arbitrations can be determined at this
time. CashNet Nevada believes that the plaintiffs' claims are
without merit and will vigorously defend any arbitration claims
that are initiated.
CELANESE CORP: Deal in Canadian Plumbing Suits Remains Pending
--------------------------------------------------------------
The class action lawsuits in Canada against Celanese Corporation
and its subsidiaries are subject to a pending class settlement
that would result in a dismissal of those cases, according to the
Company's October 26, 2011, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended
September 30, 2011.
CNA Holdings LLC ("CNA Holdings"), a US subsidiary of the Company,
which included the US business now conducted by the Ticona
business that is included in the Advanced Engineered Materials
segment, along with Shell Oil Company ("Shell"), E.I. DuPont de
Nemours and Company ("DuPont") and others, has been a defendant in
a series of lawsuits, including a number of class actions,
alleging that plastic resins manufactured by these companies that
were utilized by others in the production of plumbing systems for
residential property were defective for this use and/or
contributed to the failure of such plumbing. Based on, among
other things, the findings of outside experts and the successful
use of Ticona's acetal copolymer in similar applications, CNA
Holdings does not believe Ticona's acetal copolymer was defective
for this use or contributed to the failure of the plumbing. In
addition, in many cases CNA Holdings' potential future exposure
may be limited by, among other things, statutes of limitations and
repose.
In November 1995, CNA Holdings, DuPont and Shell entered into
national class action settlements in the Cox, et al. v. Hoechst
Celanese Corporation, et al., No. 94-0047 (Chancery Ct., Obion
County, Tennessee) matter. The time to file claims against the
class has expired and the entity established by the court to
administer the claims was dissolved in September 2010. In
addition, between 1995 and 2001, CNA Holdings was named as a
defendant in various putative class actions. The majority of
these actions have now been dismissed. As a result the Company
recorded $59 million in reserve reductions and recoveries from
associated insurance indemnifications during 2010. The reserve
was further reduced by $4 million during the nine months ended
September 30, 2011, following the dismissal of the remaining US
case (St. Croix, Ltd., et al. v. Shell Oil Company d/b/a Shell
Chemical Company, Case No. XC-97-CR-467, Virgin Islands Superior
Court) which was appealed during the three months ended
September 30, 2011.
As of September 30, 2011, the class actions in Canada are subject
to a pending class settlement that would result in a dismissal of
those cases. The Company does not believe the Possible Loss
associated with the remaining matters is material. The Company
recorded recoveries and reductions in legal reserves related to
plumbing actions.
DR PEPPER: "Jones" Suit vs. Unit Still Pending in California
------------------------------------------------------------
In 2007, one of Dr Pepper Snapple Group, Inc.'s subsidiaries,
Seven Up/RC Bottling Company Inc., was sued by Robert Jones in the
Superior Court in the State of California (Orange County),
alleging that its subsidiary failed to provide meal and rest
periods and itemized wage statements in accordance with applicable
California wage and hour law. The case, captioned Robert Jones v.
Seven Up/RC Bottling Company of Southern California, Inc., was
filed as a class action. The parties have reached a settlement in
the case, pursuant to which the Company denied any liability or
wrongdoing and reserved all rights, but agreed to a compromise to
end litigation and to pay $4.25 million, which amount was accrued
as of June 30, 2010. The termination of the case is subject to
the satisfaction of the terms and conditions of the settlement
agreement.
No further updates were reported in the Company's October 26,
2011, Form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarter ended September 30, 2011.
ENCORE CAPITAL: Appeals in "Brent" Suit vs. Units Remain Pending
----------------------------------------------------------------
The appeals from the order granting final approval to the
settlement in the lawsuit commenced by Andrea Brent against
subsidiaries of Encore Capital Group, Inc., remain pending,
according to the Company's October 26, 2011, Form 10-Q filing with
the U.S. Securities and Exchange Commission for the quarter ended
September 30, 2011.
On May 19, 2008, an action captioned Brent v. Midland Credit
Management, Inc et. al was filed in the United States District
Court for the Northern District of Ohio Western Division, in which
the plaintiff, Andrea Brent, filed a class action counter-claim
against the Company's subsidiaries Midland Credit Management, Inc.
and Midland Funding LLC (the "Midland Defendants"). The complaint
alleged that the Midland Defendants' business practices violated
consumers' rights under the Fair Debt Collection Practices Act
("FDCPA") and the Ohio Consumer Sales Practices Act. The
plaintiff sought actual and statutory damages for the class of
Ohio residents, plus attorney's fees and costs of class notice and
class administration.
On February 10, 2011, the parties reached an agreement in
principal to settle this lawsuit, as well as two other pending
lawsuits in the Northern District of Ohio - Franklin v. Midland
Funding LLC and Vassalle v. Midland Funding LLC, on a national
class basis, subject to entering into a definitive settlement
agreement and obtaining court approval after notice to the class.
On March 9, 2011, the parties entered into a final settlement
agreement, which was subsequently approved by the court. On
August 12, 2011, the court issued an order granting final approval
to the settlement and dismissing the cases against the Midland
Defendants with prejudice. That order has been appealed by
certain objectors to the settlement, which appeals remain pending.
ENCORE CAPITAL: MDL Panel Allows Transfer of Two Suits to Calif.
----------------------------------------------------------------
The United States Judicial Panel on Multidistrict Litigation
granted Encore Capital Group, Inc.'s motion to transfer to
California two class action lawsuits filed in Illinois, according
to the Company's October 26, 2011, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended September
30, 2011.
On November 2, 2010, and December 17, 2010, two national class
actions entitled Robinson v. Midland Funding LLC and Tovar v.
Midland Credit Management, respectively, were filed in the United
States District Court for the Southern District of California.
The complaints allege that the Company's subsidiaries violated the
the Telephone Consumer Protection Act ("TCPA") by calling
consumers' cellular phones without their prior express consent.
The complaints seek monetary damages under the TCPA, injunctive
relief and other relief, including attorney fees. On May 10, 2011
and May 11, 2011, two class actions entitled Scardina v. Midland
Credit Management, Inc. Midland Funding LLC and Encore Capital
Group, Inc. and Martin v. Midland Funding, LLC, respectively, were
filed in the United States District Court for the Northern
District of Illinois. The complaints allege on behalf of a
putative class of Illinois consumers that the Company's
subsidiaries violated the TCPA by calling consumers' cellular
phones without their prior express consent. The complaints seek
monetary damages under the TCPA, injunctive relief and other
relief, including attorney fees. On July 28, 2011, the Company
filed a motion to transfer the Scardina and Martin cases to the
United States District Court for the Southern District of
California to be consolidated with the Tovar and Robinson cases.
On October 11, 2011, the United States Judicial Panel on
Multidistrict Litigation granted the Company's motion to transfer.
EXELON CORP: Awaits Ruling on Motion to Dismiss Illinois Suit
-------------------------------------------------------------
Exelon Corporation is awaiting a court decision on a motion to
dismiss a purported class action lawsuit pending in Illinois,
according to the Company's October 26, 2011, Form 10-Q filing with
the U.S. Securities and Exchange Commission for the quarter ended
September 30, 2011.
On September 1, 2010, Exelon Generation Company, LLC
("Generation") completed an Asset Sale Agreement (ASA) with
EnergySolutions Inc. and its wholly owned subsidiaries,
EnergySolutions, LLC. (EnergySolutions) and ZionSolutions under
which ZionSolutions has assumed responsibility for decommissioning
Zion Station, which is located in Zion, Illinois, and ceased
operation in 1998.
On July 14, 2011, three people filed a purported class action
lawsuit in the United States District Court for the Northern
District of Illinois naming ZionSolutions and Bank of New York
Mellon as defendants and seeking, among other things, an
accounting for use of Nuclear Decommissioning Trust ("NDT") funds,
an injunction against the use of NDT funds, the appointment of a
trustee for the NDT funds, and the return of NDT funds to
customers of Exelon's subsidiary, Commonwealth Edison Company
("ComEd"), to the extent legally entitled thereto. ZionSolutions
and Bank of New York Mellon filed a motion to dismiss the
complaint on September 13, 2011.
ZionSolutions is subject to certain restrictions on its ability to
request reimbursements from the Zion Station NDT funds as defined
within the ASA. Therefore, the transfer of the Zion Station
assets did not qualify for asset sale accounting treatment and, as
a result, the related NDT funds were reclassified to pledged
assets for Zion Station decommissioning within Generation and
Exelon's Consolidated Balance Sheets and will continue to be
measured in the same manner as prior to the completion of the
transaction. Additionally, the transferred Asset Retirement
Obligation ("ARO") for decommissioning was replaced with a payable
to ZionSolutions in Generation and Exelon's Consolidated Balance
Sheets. Changes in the value of the Zion Station NDT assets, net
of applicable taxes, will be recorded as a change in the payable
to ZionSolutions. At no point will the payable to ZionSolutions
exceed the project budget of the costs remaining to decommission
Zion Station. Any Zion Station NDT funds remaining after the
completion of all decommissioning activities will be returned to
ComEd customers. Generation has retained its obligation to
transfer the spent nuclear fuel ("SNF") at Zion Station to the
United States Department of Energy ("DOE") for ultimate disposal
and has a liability of approximately $64 million, which is
included within the nuclear decommissioning ARO at September 30,
2011. Generation also has retained NDT assets to fund its
obligation to maintain and transfer the SNF at Zion Station.
As of September 30, 2011, the carrying value of the Zion Station
pledged assets and the payable to Zion Solutions was approximately
$763 million and $720 million, respectively. The payable excludes
a liability recorded within Generation's Consolidated Balance
Sheets related to the tax obligation on the unrealized activity
associated with the Zion Station NDT funds. The NDT funds will be
utilized to satisfy the tax obligations as gains and losses are
realized. The current portion of the payable to ZionSolutions,
included in other current liabilities within Generation's
Consolidated Balance Sheets at September 30, 2011, and
December 31, 2010, was $116 million and $127 million,
respectively.
EXELON CORP: Plaintiffs Have Until Dec. to Petition Supreme Ct.
---------------------------------------------------------------
Plaintiffs in the class action lawsuit commenced by participants
of Exelon Corporation's savings plan have until December 2011 to
ask the U.S. Supreme Court to hear their dismissed case, according
to the Company's October 26, 2011, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended September
30, 2011.
On September 11, 2006, five individuals claiming to be
participants in the Exelon Corporation Employee Savings Plan, Plan
#003 (Savings Plan), filed a putative class action lawsuit in the
U.S. District Court for the Northern District of Illinois. The
complaint names as defendants Exelon, its Director of Employee
Benefit Plans and Programs, the Employee Savings Plan Investment
Committee, the Compensation and the Risk Oversight Committees of
Exelon's Board of Directors and members of those committees. On
December 9, 2009, the District Court granted the defendants'
motion to dismiss the amended complaint and enter judgment in
favor of the defendants. The plaintiffs appealed the District
Court's dismissal of their claims to the U.S. Court of Appeals for
the Seventh Circuit who affirmed the dismissal of the class action
lawsuit on September 6, 2011. The plaintiffs have 90 days to file
a petition requesting that the case be heard by the U.S. Supreme
Court.
While Exelon believes it will prevail, the ultimate outcome of the
savings plan claim is uncertain, cannot be estimated and it may
have a material impact on Exelon's results of operations, cash
flows or financial position.
HOSPIRA INC: Awaits Decision in ERISA-Violation Suit Appeal
-----------------------------------------------------------
Hospira, Inc. is awaiting a court decision on the appeal from the
dismissal of a lawsuit alleging violations of the Employee
Retirement Income Security Act of 1974, according to the Company's
October 26, 2011, Form 10-Q filing with the U.S. Securities and
Exchange Commission for the quarter ended September 30, 2011.
Hospira has been named as a defendant in a lawsuit alleging
generally that the spin-off of Hospira from Abbott Laboratories
resulted in a mass termination of employees so as to interfere
with the future attainment of benefits in violation of the
Employee Retirement Income Security Act of 1974 ("ERISA"). The
lawsuit was filed on November 8, 2004, in the U.S. District Court
for the Northern District of Illinois, and is captioned: Myla
Nauman, Jane Roller and Michael Loughery v. Abbott Laboratories
and Hospira, Inc. Plaintiffs generally seek reinstatement in
Abbott benefit plans, disgorgement of profits and attorneys fees.
On November 18, 2005, the complaint was amended to assert an
additional claim against Abbott and Hospira for breach of
fiduciary duty under ERISA. Hospira has been dismissed as a
defendant with respect to the fiduciary duty claim. By Order
dated December 30, 2005, the Court granted class action status to
the lawsuit. As to the sole claim against Hospira, the court
certified a class defined as: "all employees of Abbott who were
participants in the Abbott Benefit Plans and whose employment with
Abbott was terminated between August 22, 2003 and April 30, 2004,
as a result of the spin-off of the HPD [Hospital Products
Division] /creation of Hospira announced by Abbott on August 22,
2003, and who were eligible for retirement under the Abbott
Benefit Plans on the date of their terminations." Trial of this
matter has concluded. On April 22, 2010, the court issued a
ruling in favor of Hospira and Abbott on all counts. Plaintiffs
have appealed that verdict. On June 6, 2011 the appeal was argued
before the United States Court of Appeals for the Seventh Circuit.
Hospira is awaiting a decision on the appeal. In 2008, Hospira
received notice from Abbott requesting that Hospira indemnify
Abbott for all liabilities that Abbott may incur in connection
with this litigation. Hospira denies any obligation to indemnify
Abbott for the claims asserted against Abbott in this litigation.
HARPER TRUCKS: Recalls 292,000 Hand Trucks Due to Injury Hazard
---------------------------------------------------------------
The U.S. Consumer Product Safety Commission, in cooperation with
Harper Trucks Inc., of Wichita, Kansas, announced a voluntary
recall of about 292,000 Hand Trucks. Consumers should stop using
recalled products immediately unless otherwise instructed. It is
illegal to resell or attempt to resell a recalled consumer
product.
When the tires are overinflated, they can explode causing the
wheel hub to separate or break, ejecting pieces of the hub. This
poses an injury hazard to bystanders.
Harper Trucks has received 19 reports of overinflated tires
exploding that resulted in 19 injuries, including broken bones,
loss of sight in one eye, contusions and lacerations.
This recall involves Harper Trucks hand trucks with model numbers
and type of wheels listed in the table. "Harper Truck" and the
model number can be found on an adhesive sticker on the hand truck
frame's cross member. Hand trucks with two-piece, grey metal
wheels are not included in this recall.
Model Number Type of Handle Type of Wheel
------------ -------------- -------------
K52K16 P Handle 1-piece, composite
JEDTK1935P Dual Hand/Platform Truck 3-piece, four bolt,
(Convertible) metal/chrome plated
51TK19 Dual Handles 3-piece, four bolt,
metal/chrome plated
BKTAK19 P Handle 3-piece, four bolt,
metal/chrome plated
PGCSK19BLK Dual Hand 3-piece, four bolt,
metal/chrome plated
Pictures of the recalled products are available at:
http://www.cpsc.gov/cpscpub/prerel/prhtml12/12025.html
The recalled products were manufactured in China, United States,
and Taiwan, and sold at The Home Depot from September 2008 through
March 2009 and Sam's Club from January 1993 through January 2002
for between $28 and $42.
Consumers should stop using the product immediately and contact
Harper Trucks for a free repair kit that includes either lock
washers to secure the four bolts on the 3-piece, metal/chrome
plated wheels or new design replacement tires for the 1-piece
composite tires. For additional information, contact Harper
Trucks toll-free at (800) 835-4099 between 8:30a.m. and 4:30 p.m.
Central Time Monday through Friday, e-mail wheels@harpertrucks.com
or visit the company's Web site at http://www.harpertrucks.com/
J.C. PENNEY: Faces Class Action Over Bogus Membership Programs
--------------------------------------------------------------
Glynis Farrell at Courthouse News Service reports that a class
action claims J.C. Penney is in cahoots with a deceptive marketing
company, Stonebridge Benefit Services, which has a terrible record
of "deceptively and without authorization charg(ing) tens of
thousands of consumers millions of dollars" for its bogus
"membership programs."
Lead plaintiff Bernadine Sims sued Stonebridge and J.C. Penney in
Cook County Chancery Court.
Plano, Texas-based Stonebridge "deceptively enroll consumers in
Membership Programs without their consent" by offering "free
trials" and "fictitious rebate programs," the class claims.
Ms. Sims says Stonebridge partners with large retailers, such as
Penney's, to get their customers' confidential credit card
information, which Stonebridge uses to enroll the unwitting
consumers in "Membership Loyalty Programs" without their
knowledge.
The complaint states: "Preacquired account marketing is a simple
concept: a consumer purchases a product from the retailer either
online or over the phone; thereafter, the retailer 'shares' the
consumer's billing and contact information with a business partner
so that it may market its own product, usually a monthly
membership program providing discounts. This sharing of consumer
information is commonly referred to as 'data pass.' The retailer
or 'merchant partner' who originally acquired the billing
information is paid a fee by the third party for every person who
is willingly or unwillingly enrolled in that third party's
program. However, because the third party receives the consumer's
billing information, preacquired account marketing is open to
extensive abuse in the form of charges stemming form unauthorized
enrollment charges beyond what was authorized.
"The majority of consumers to not consent to the sharing of their
information in this manner, and more often than not are completely
unaware that a merchant has transferred their information to a
third party or that they have become enrolled in a recurring
monthly membership program by that third party. In contrast,
third party sellers and their merchant partners are completely
aware of and act in concert to specifically design the deceptive
business model at issue in this case."
Stonebridge has a slew of "membership programs," with catchy names
such as "Savings2Go, PlanPlus, LeisurePlus, Everyday Bargains,
Backporch, Savings Solutions, Fun Family Rewards, Fun Family
Select, Perfect Home Rewards, and Perfect Home Select
(collectively referred to herein as the 'membership programs').
Defendant Stonebridge has received thousands of complaint from
consumers related to each of its membership programs," according
to the complaint.
The class claims that Stonebridge's so-called "free trials" are
actually negative-option memberships, which consumers must take
the trouble to cancel to avoid being charged repeatedly, which
they often do not know they have "signed up" for, and which seldom
sends the complimentary gifts they promise.
"J.C. Penney has a vested interest in perpetuating and expanding
the fraud that defendant Stonebridge perpetrates on consumers"
because Penney gets a percentage of the money Stonebridge extracts
from each of its victims, the class claims.
Penney's large catalogue business makes the scheme lucrative:
"After a customer orders by telephone, defendant J.C. Penney's
telemarketers enroll the customer in one or more of the Membership
Programs without the customer's express and informed consent. The
telemarketers are trained to speak quickly, and use a uniform
script that fails to fully disclose the terms and conditions of
enrollment in the Membership Programs. Defendant J.C. Penney and
its telemarketers do not obtain the informed consent of consumers
before enrolling them in the Membership Programs, and even enroll
customers against their wishes.
"After consumers place online orders, defendant J.C. Penney uses
negative option billing and fictitious rebate offers to
deceptively enroll consumers in Membership Programs without their
consent. Importantly, whether by negative option or by fictitious
rebate offer, defendant J.C. Penney does not disclose the full
terms of enrollment in its Membership Programs to its online
customers.
"Whether ordering by phone or online, customers do not need to
provide their contact and billing information to defendant
Stonebridge for a Membership Program because defendant J.C. Penney
has already done so. Further, defendant J.C. Penney is fully
aware that its customers are not fully informed of the terms of
enrollment in the Membership Programs, and do not consent to the
enrollment."
Ms. Sims says she was auto-enrolled in the LeisurePlus Membership
program after she used her J.C. Penney credit card in a telephone
order. She says she was contacted by a Stonebridge telemarketer
who offered her a 6-month trial membership that could be canceled
at any time. She says Stonebridge continued to charge her a
monthly enrollment fee after the "free trial" expired.
"After realizing she had been auto-enrolled without her
permission, she attempted to actually use the service so as to
gain some benefit from the unauthorized charges. However, when
plaintiff attempted to use her LeisurePlus membership to receive a
discount while travelling, in direct contradiction to what the
plaintiff was originally told, defendant Stonebridge's customer
service representative informed her that such benefits were not
provided by her enrollment in LeisurePlus," Ms. Sims says.
Ms. Sims says she tried to cancel her membership four times with
no success, and that Stonebridge still is charging her $6 to $9 a
month.
She seeks restitution and class damages of more than $5 million
and punitive damages for consumer fraud, deceptive trade,
violation of the Automatic Contract Renewal Act, violations of the
Electronic Funds Transfer Act, unjust enrichment, negligence,
fraud by omission and breach of contract.
A copy of the Complaint in Sims v. Stonebridge Benefit Services,
Inc., et al., Case No. 11CH27100 (Ill. Cir. Ct., Cook Cty.), is
available at:
http://www.courthousenews.com/2011/10/27/Penneys.pdf
The Plaintiffs are represented by:
Jay Edelson, Esq.
Rafey S. Balabanian, Esq.
Christopher L. Dore, Esq.
EDELSON MCGUIRE, LLC
350 North LaSalle, Suite 1300
Chicago, IL 60654
Telephone: (312) 589-6370
E-mail: jedelson@edelson.com
rbalabanian@edelson.com
cdore@edelson.com
JUST FABULOUS: Faces Class Action Over Undisclosed Fees
-------------------------------------------------------
Courthouse News Service reports that a Los Angeles Superior Court
class action claims Just Fabulous Inc. charges suckers a recurring
monthly fee of $39.95 without proper disclosures, if they
"register" to buy shoes or accessories through its JustFab.com
Web site.
LAKE MACQUARIE: Jeff McCloy Mulls Climate Change Class Action
-------------------------------------------------------------
Damon Cronshaw, writing for Lake Macquarie Reporter, reports that
Hunter businessman Jeff McCloy says he will mount a class action
against Lake Macquarie City Council for devaluing waterfront
properties with its climate change policy.
Mr. McCloy, who owns a waterfront property at Belmont, said the
council must explain what scientific evidence it had to back up
its claims about rising sea levels and the effects of climate
change.
"My current view is they will have a class action against them for
reducing the value of our properties," Mr. McCloy said. "I figure
I'll get a class action going and take the idiots to court, I'm
serious."
As reported in the Newcastle Herald a fortnight ago, a council
study found that almost 10,000 Lake Macquarie properties would be
flood-prone by 2100 because of rising sea levels.
Mr. McCloy said he had received a letter from the council on
Oct. 26 about the matter.
He planned to respond with his own letter to the council.
"I'll put them on notice and ask what evidence they have to make
these ridiculous claims," he said.
"We have the right to know the scientific basis for their claims
and whether they are using theoretical models that have no
definitive way of determining the future."
Lake Macquarie mayor Greg Piper said the council did not need
evidence but a "basis".
"The basis is in concert with policy developed by the state
government and the Commonwealth," Cr. Piper said.
"Jeff, in my view, is being silly on this one. I have a lot of
time for Jeff, but that doesn't mean he's right on everything."
Cr. Piper said the council had to "apply the precautionary
principle on what we're told is the best science".
A council statement said the science on sea level rise was based
on "global sea level satellite measurements and tide gauge data".
"The data is analyzed by the Intergovernmental Panel on Climate
Change and the CSIRO to make projections," the statement said.
Mr. McCloy was expected to air his criticisms of the way
governments and councils have handled climate change at the Hunter
Business Chamber's annual general meeting in Newcastle on Oct. 28.
LOCAL GOV'TS: RPWB Seeks Prelim. Approval of $82-Mil. Settlement
----------------------------------------------------------------
Richardson, Patrick, Westbrook & Brickman, LLC (RPWB) member
James L. Ward, Jr. on Oct. 27 disclosed that the firm has
requested preliminary approval of an $82 million class action
settlement from United States District Judge Patti B. Saris. RPWB
has served as Co-Lead Counsel in this matter since the Court's
appointment of the firm in March 2009.
The class, certified on March 4, 2011, consists of a variety of
local government entities that alleged overpayments for certain
brand-name prescription drugs through their employee health
insurance plans. The proposed settlement includes an express
denial of liability of any kind by McKesson.
The named plaintiffs are the Board of County Commissioners of
Douglas County, Kansas; the City of Baltimore, Maryland; the City
of Panama City, Florida; Anoka County, Minnesota; the City of
Columbia, South Carolina; and the City of Goldsboro, North
Carolina.
Pharmacies are reimbursed by many state and local government
prescription drug plans based on the Average Wholesale Price (AWP)
of each drug as published by First DataBank, Inc. The suit
alleges that McKesson and First DataBank inflated the AWPs of
hundreds of brand-name drugs, which resulted in government
entities paying hundreds of millions of dollars in excessive drug
reimbursements from 2001 to present.
Plaintiffs' Executive Committee also consisted of Co-Lead Counsel
Hagens Berman Sobol Shapiro LLP and the firms of McCulley McCluer
PLLC and Kotchen & Low LLP.
MATTEL INC: Appeals $310-Mil. Judgment in Bratz-Related Suit
------------------------------------------------------------
Mattel, Inc. appealed a $310 million judgment awarded to MGA
Entertainment, Inc., in August 2011, according to Mattel's
October 26, 2011, Form 10-Q filing with the U.S. Securities and
Exchange Commission for the quarter ended September 30, 2011.
In April 2004, Mattel filed a lawsuit in Los Angeles County
Superior Court against Carter Bryant ("Bryant"), a former Mattel
design employee. The lawsuit alleges that Bryant aided and
assisted a Mattel competitor, MGA Entertainment, Inc. ("MGA"),
during the time he was employed by Mattel, in violation of his
contractual and other duties to Mattel. In September 2004, Bryant
asserted counterclaims against Mattel, including counterclaims in
which Bryant sought, as a putative class action representative, to
invalidate Mattel's Confidential Information and Proprietary
Inventions Agreements with its employees. Bryant also removed
Mattel's lawsuit to the United States District Court for the
Central District of California. In December 2004, MGA intervened
as a party-defendant in Mattel's action against Bryant, asserting
that its rights to Bratz properties are at stake in the
litigation.
Separately, in November 2004, Bryant filed an action against
Mattel in the United States District Court for the Central
District of California. The action sought a judicial declaration
that Bryant's purported conveyance of rights in Bratz was proper
and that he did not misappropriate Mattel property in creating
Bratz.
In April 2005, MGA filed a lawsuit against Mattel in the United
States District Court for the Central District of California.
MGA's action alleges claims of trade dress infringement, trade
dress dilution, false designation of origin, unfair competition,
and unjust enrichment. The lawsuit alleges, among other things,
that certain products, themes, packaging, and/or television
commercials in various Mattel product lines have infringed upon
products, themes, packaging, and/or television commercials for
various MGA product lines, including Bratz. The complaint also
asserts that various alleged Mattel acts with respect to
unidentified retailers, distributors, and licensees have damaged
MGA and that various alleged acts by industry organizations,
purportedly induced by Mattel, have damaged MGA. MGA's lawsuit
alleges that MGA has been damaged in an amount "believed to reach
or exceed tens of millions of dollars" and further seeks punitive
damages, disgorgement of Mattel's profits and injunctive relief.
In June 2006, the three cases were consolidated in the United
States District Court for the Central District of California. On
July 17, 2006, the Court issued an order dismissing all claims
that Bryant had asserted against Mattel, including Bryant's
purported counterclaims to invalidate Mattel's Confidential
Information and Proprietary Inventions Agreements with its
employees, and Bryant's claims for declaratory relief.
In November 2006, Mattel asked the Court for leave to file an
Amended Complaint that included not only additional claims against
Bryant, but also included claims for copyright infringement, RICO
violations, misappropriation of trade secrets, intentional
interference with contract, aiding and abetting breach of
fiduciary duty and breach of duty of loyalty, and unfair
competition, among others, against MGA, its CEO Isaac Larian,
certain MGA affiliates and an MGA employee. The RICO claim
alleged that MGA stole Bratz and then, by recruiting and hiring
key Mattel employees and directing them to bring with them Mattel
confidential and proprietary information, unfairly competed
against Mattel using Mattel's trade secrets, confidential
information, and key employees to build their business. On
January 12, 2007, the Court granted Mattel leave to file these
claims as counterclaims in the consolidated cases, which Mattel
did that same day.
Mattel sought to try all of its claims in a single trial, but in
February 2007, the Court decided that the consolidated cases would
be tried in two phases, with the first trial to determine claims
and defenses related to Mattel's ownership of Bratz works and
whether MGA infringed those works. On May 19, 2008, Bryant
reached a settlement agreement with Mattel and is no longer a
defendant in the litigation. In the public stipulation entered by
Mattel and Bryant in connection with the resolution, Bryant agreed
that he was and would continue to be bound by all prior and future
Court Orders relating to Bratz ownership and infringement,
including the Court's summary judgment rulings.
The first phase of the first trial, which began on May 27, 2008,
resulted in a unanimous jury verdict on July 17, 2008, in favor of
Mattel. The jury found that almost all of the Bratz design
drawings and other works in question were created by Bryant while
he was employed at Mattel; that MGA and Isaac Larian intentionally
interfered with the contractual duties owed by Bryant to Mattel,
aided and abetted Bryant's breaches of his duty of loyalty to
Mattel, aided and abetted Bryant's breaches of the fiduciary
duties he owed to Mattel, and converted Mattel property for their
own use. The same jury determined that defendants MGA, Larian,
and MGA Entertainment (HK) Limited infringed Mattel's copyrights
in the Bratz design drawings and other Bratz works, and awarded
Mattel total damages of approximately $100 million against the
defendants. On December 3, 2008, the Court issued a series of
orders rejecting MGA's equitable defenses and granting Mattel's
motions for equitable relief, including an order enjoining the MGA
party defendants from manufacturing, marketing, or selling certain
Bratz fashion dolls or from using the "Bratz" name. The Court
stayed the effect of the December 3, 2008 injunctive orders until
further order of the Court and entered a further specified stay of
the injunctive orders on January 7, 2009.
The parties filed and argued additional motions for post-trial
relief, including a request by MGA to enter judgment as a matter
of law on Mattel's claims in MGA's favor and to reduce the jury's
damages award to Mattel. Mattel additionally moved for the
appointment of a receiver. On April 27, 2009, the Court entered
an order confirming that Bratz works found by the jury to have
been created by Bryant during his Mattel employment were Mattel's
property and that hundreds of Bratz female fashion dolls infringe
Mattel's copyrights. The Court also upheld the jury's award of
damages in the amount of $100 million and ordered an accounting of
post-trial Bratz sales. The Court further vacated the stay of the
December 3, 2008 orders, except to the extent specified by the
Court's January 7, 2009 modification.
MGA appealed the Court's equitable orders to the Court of Appeals
for the Ninth Circuit. On December 9, 2009, the Ninth Circuit
heard oral argument on MGA's appeal and issued an order staying
the District Court's equitable orders pending a further order to
be issued by the Ninth Circuit. The Ninth Circuit opinion
vacating the relief ordered by the District Court was issued on
July 22, 2010. The Ninth Circuit stated that, because of several
jury instruction errors it identified, a significant portion -- if
not all--of the jury verdict and damage award should be vacated.
In its opinion, the Ninth Circuit found that the District Court
erred in concluding that Mattel's Invention agreement
unambiguously applied to "ideas;" that it should have considered
extrinsic evidence in determining the application of the
agreement; and if the conclusion turns on conflicting evidence, it
should have been up to the jury to decide. The Ninth Circuit also
concluded that the District Judge erred in transferring the entire
brand to Mattel based on misappropriated names and that the Court
should have submitted to the jury, rather than deciding itself,
whether Bryant's agreement assigned works created outside the
scope of his employment and whether Bryant's creation of the Bratz
designs and sculpt was outside of his employment. The Court then
went on to address copyright issues which would be raised after a
retrial, since Mattel "might well convince a properly instructed
jury" that it owns Bryant's designs and sculpt. The Ninth Circuit
stated that the sculpt itself was entitled only to "thin"
copyright protection against virtually identical works, while the
Bratz sketches were entitled to "broad" protection against
substantially similar works; in applying the broad protection,
however, the Ninth Circuit found that the lower court had erred in
failing to filter out all of the unprotectable elements of
Bryant's sketches. This mistake, the Court said, caused the lower
court to conclude that all Bratz dolls were substantially similar
to Bryant's original sketches.
Judge Stephen Larson, who presided over the first trial, retired
from the bench during the course of the appeal, and the case was
transferred to Judge David O. Carter. After the transfer, Judge
Carter granted Mattel leave to file a Fourth Amended Answer and
Counterclaims which focused on RICO, trade secret and other
claims, and added additional parties, and subsequently granted in
part and denied in part a defense motion to dismiss those
counterclaims. Later, on August 16, 2010, MGA asserted several
new claims against Mattel in response to Mattel's Fourth Amended
Answer and Counterclaims, including claims for alleged trade
secret misappropriation, an alleged violation of RICO, and
wrongful injunction. Mattel moved to strike and/or dismiss these
claims, as well as certain MGA allegations regarding Mattel's
motives for filing lawsuit. The Court granted that motion as to
the wrongful injunction claim, which it dismissed with prejudice,
and as to the allegations about Mattel's motives, which it struck.
The Court denied the motion as to MGA's trade secret
misappropriation claim and its claim for violations of RICO.
The Court resolved summary judgment motions in late 2010. Among
other rulings, the Court dismissed both parties' RICO claims;
dismissed Mattel's claim for breach of fiduciary duty and portions
of other claims as "preempted" by the trade secrets act; dismissed
MGA's trade dress infringement claims; dismissed MGA's unjust
enrichment claim; dismissed MGA's common law unfair competition
claim; and dismissed portions of Mattel's copyright infringement
claim as to "later generation" Bratz dolls.
Trial of all remaining claims began in early January 2011. During
the trial, and before the case was submitted to the jury, the
Court granted MGA's motions for judgment as to Mattel's claims for
aiding and abetting breach of duty of loyalty and conversion. The
Court also granted a defense motion for judgment on portions of
Mattel's claim for misappropriation of trade secrets relating to
thefts by former Mattel employees located in Mexico.
The jury reached verdicts on the remaining claims in April 2011.
In those verdicts, the jury ruled against Mattel on its claims for
ownership of Bratz-related works, for copyright infringement, and
for misappropriation of trade secrets. The jury ruled for MGA on
its claim of trade secret misappropriation as to 26 of its claimed
trade secrets and awarded $88.5 million in damages. The jury
ruled against MGA as to 88 of its claimed trade secrets. The jury
found that Mattel's misappropriation was willful and malicious.
In early August 2011, the Court ruled on post-trial motions. The
Court rejected MGA's unfair competition claims and also rejected
Mattel's equitable defenses to MGA's misappropriation of trade
secrets claim. The Court reduced the jury's damages award of
$88.5 million to $85.0 million. The Court awarded MGA an
additional $85.0 million in punitive damages and approximately
$140 million in attorney's fees and costs. The Court entered a
judgment which totals approximately $310 million in favor of MGA.
Mattel has appealed the judgment. Mattel does not believe that it
is probable that any of the damages awarded to MGA will be
sustained based on the evidence presented at trial and,
accordingly, a liability has not been accrued for this matter.
MEDCO HEALTH: Antitrust Suit in Pennsylvania Still Pending
----------------------------------------------------------
In August 2003, a lawsuit captioned Brady Enterprises, Inc., et
al. v. Medco Health Solutions, Inc., et al. was filed in the U.S.
District Court for the Eastern District of Pennsylvania against
Merck & Co., Inc. ("Merck") and the Company. The plaintiffs, who
seek to represent a national class of retail pharmacies that had
contracted with the Company, allege that the Company has conspired
with, acted as the common agent for, and used the combined
bargaining power of plan sponsors to restrain competition in the
market for the dispensing and sale of prescription drugs. The
plaintiffs allege that, through the alleged conspiracy, the
Company has engaged in various forms of anticompetitive conduct,
including, among other things, setting artificially low
reimbursement rates to such pharmacies. The plaintiffs assert
claims for violation of the Sherman Act and seek treble damages
and injunctive relief. The plaintiffs' motion for class
certification is currently pending before the Multidistrict
Litigation Court.
In October 2003, a lawsuit captioned North Jackson Pharmacy, Inc.,
et al. v. Medco Health Solutions, Inc., et al. was filed in the
U.S. District Court for the Northern District of Alabama against
Merck & Co., Inc. ("Merck") and the Company. In their Second
Amended Complaint, the plaintiffs allege that Merck and the
Company engaged in price fixing and other unlawful concerted
actions with others, including other pharmacy benefit managements
("PBMs"), to restrain trade in the dispensing and sale of
prescription drugs to customers of retail pharmacies who
participate in programs or plans that pay for all or part of the
drugs dispensed, and conspired with, acted as the common agent
for, and used the combined bargaining power of plan sponsors to
restrain competition in the market for the dispensing and sale of
prescription drugs. The plaintiffs allege that, through such
concerted action, Merck and the Company engaged in various forms
of anticompetitive conduct, including, among other things, setting
reimbursement rates to such pharmacies at unreasonably low levels.
The plaintiffs assert claims for violation of the Sherman Act and
seek treble damages and injunctive relief. The plaintiffs' motion
for class certification has been granted, but this matter has been
consolidated with other actions where class certification remains
an open issue.
In December 2005, a lawsuit captioned Mike's Medical Center
Pharmacy, et al. v. Medco Health Solutions, Inc., et al. was filed
against the Company and Merck in the U.S. District Court for the
Northern District of California. The plaintiffs seek to represent
a class of all pharmacies and pharmacists that had contracted with
the Company and California pharmacies that had indirectly
purchased prescription drugs from Merck and make factual
allegations similar to those in the action commenced by Alameda
Drug Company. The plaintiffs assert claims for violation of the
Sherman Act, California antitrust law and California law
prohibiting unfair business practices. The plaintiffs demand,
among other things, treble damages, restitution, disgorgement of
unlawfully obtained profits and injunctive relief.
In April 2006, the Brady plaintiffs filed a petition to transfer
and consolidate various antitrust actions against PBMs, including
North Jackson, Brady, and Mike's Medical Center before a single
federal judge. The motion was granted in August 2006. These
actions are now consolidated for pretrial purposes in the U.S.
District Court for the Eastern District of Pennsylvania. The
consolidated action is known as In re Pharmacy Benefit Managers
Antitrust Litigation. The plaintiffs' motion for class
certification in certain actions is currently pending before the
Multidistrict Litigation Court.
No further updates were reported in the Company's October 26,
2011, Form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarter ended September 24, 2011.
MEDCO HEALTH: Continues to Defend "Alameda" Suit in California
--------------------------------------------------------------
In January 2004, a lawsuit captioned Alameda Drug Company, Inc.,
et al. v. Medco Health Solutions, Inc., et al. was filed against
the Company and Merck & Co., Inc. ("Merck") in the Superior Court
of California. The plaintiffs, which seek to represent a class of
all California pharmacies that had contracted with the Company and
that had indirectly purchased prescription drugs from Merck,
allege, among other things, that since the expiration of a 1995
consent injunction entered by the U.S. District Court for the
Northern District of California, if not earlier, the Company
failed to maintain an Open Formulary (as defined in the consent
injunction), and that the Company and Merck had failed to prevent
nonpublic information received from competitors of Merck and the
Company from being disclosed to each other. The plaintiffs
further allege that, as a result of these alleged practices, the
Company had been able to increase its market share and
artificially reduce the level of reimbursement to the retail
pharmacy class members, and that the prices of prescription drugs
from Merck and other pharmaceutical manufacturers that do business
with the Company had been fixed and raised above competitive
levels. The plaintiffs assert claims for violation of California
antitrust law and California law prohibiting unfair business
practices. The plaintiffs demand, among other things,
compensatory damages, restitution, disgorgement of unlawfully
obtained profits and injunctive relief. In the complaint, the
plaintiffs further allege, among other things, that the Company
acted as a purchasing agent for its plan sponsor customers,
resulting in a system that serves to suppress competition.
No further updates were reported in the Company's October 26,
2011, Form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarter ended September 24, 2011.
MEDCO HEALTH: Faces 22 Suits Over Proposed Express Scripts Merger
-----------------------------------------------------------------
Medco Health Solutions, Inc., is facing 22 class action lawsuits
over its proposed merger with Express Scripts, Inc., according to
the Company's October 26, 2011, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended
September 24, 2011.
On July 20, 2011, the Company entered into a definitive Merger
Agreement with Express Scripts, Inc. ("Express Scripts") and
certain of its subsidiaries providing for the combination of
Express Scripts and Medco under a new holding company, New Express
Scripts. As a result of the transactions contemplated by the
Merger Agreement, former Medco shareholders and Express Scripts
shareholders will own stock in New Express Scripts.
Twenty-two lawsuits have been filed since the announcement of the
Merger on July 21, 2011, that name as defendants the Company, the
Company's Board of Directors, and Express Scripts. The purported
class action complaints allege, among other things, a breach of
fiduciary duty in connection with the approval of the pending
Merger Agreement between the Company and Express Scripts.
MEDCO HEALTH: Settles Last Two of "Gruer" Series of Suits
---------------------------------------------------------
Medco Health Solutions, Inc., settled for a de minimus amount, two
cases that elected to opt out of the settlement in the Gruer
series of lawsuits, according to the Company's October 26, 2011,
Form 10-Q filing with the U.S. Securities and Exchange Commission
for the quarter ended September 24, 2011.
As previously disclosed, the Gruer series of lawsuits were settled
on a class action basis in 2010, however, the plaintiffs in two of
the remaining actions in the Gruer series of cases, Blumenthal v.
Merck-Medco Managed Care, L.L.C., et al., and United Food and
Commercial Workers Local Union No. 1529 and Employers Health and
Welfare Plan Trust v. Medco Health Solutions, Inc. and Merck &
Co., Inc., elected to opt out of the settlement. In June 2010,
the Company filed for summary judgment against both of these
plaintiffs. In June 2011, the Court issued its opinion dismissing
several of the plaintiffs' fiduciary claims while letting others
survive pending further discovery. Plaintiff, United Food and
Commercial Workers Local Union No. 1529 and Employers Health and
Welfare Plan Trust, subsequently filed a motion with the Court
asking it to reconsider its dismissal of one of the fiduciary
claims. In September 2011, the Company settled both of these
matters for a de minimus amount.
The Company does not believe that it is a fiduciary under the
Employee Retirement Income Security Act of 1974 ("ERISA") (except
in those instances in which it has expressly contracted to act as
a fiduciary for limited purposes), and believes that its business
practices comply with all applicable laws and regulations.
MERS INC: Cleveland County Commissioners File Class Action
----------------------------------------------------------
James S. Tyree, writing for The Norman Transcript, reports that
Cleveland County commissioners have filed a class action lawsuit
against a mortgage registration system and finance corporations
that used it, claiming the companies illegally avoided the filing
of mortgage transactions with county clerks -- and the fees that
are charged with those filings.
The lawsuit against Mortgage Electronic Registration System (MERS)
Inc., its parent company MERSCORP and 12 banking or mortgage
companies was filed on Oct. 25 in Cleveland County District Court.
Cleveland County Commissioner Rod Cleveland said the lawsuit
specifies no dollar amount because attorneys are still
investigating how much money has been lost in Cleveland County and
because other counties could join the suit later with their own
losses.
The Cleveland County Clerk's Office charges $13 for the first
page, $2 for each additional page and a $5 service fee for
mortgage transaction filings, according to the county
commissioners' news release issued on Oct. 26.
The lawsuit states that finance companies have registered more
than 61 million mortgages with MERS since 1997, which represents
more than 60% of mortgages on the market in that time. It also
says MERS members currently track about 31 million active
residential mortgage loans on MERS.
Lending companies recorded those transactions on MERS' private
electronic system, the commissioners said, and not with local
government clerks. On Oct. 24, the county commissioners hired the
law firm Ward & Glass LL.P. to investigate the number of mortgage
transactions that may have circumvented from the Cleveland County
Clerk's Office.
Ward & Glass filed the lawsuit on Oct. 25 as the investigation
continues.
"MERS members failed to record all transfers of legal and
equitable title and security interests in real property in
Cleveland County's, among other Oklahoma counties', public land
records so that they could make a greater profit by avoiding the
attendant recording fees," the commissioners' news release states.
The commissioners are seeking restitution of filing fees, damages
of more than $10,000, legal fees and enforcement of all mortgage
and mortgage assignments in Oklahoma to be filed at the proper
county clerk's office.
The defendant banks in the lawsuit are SpiritBank, Bank of
Oklahoma, Bank of America, Chase Home Mortgage Corporation,
CitiMortgage, GMAC Residential Funding Corporation, Principal
Residential Mortgage Inc., Suntrust Mortgage Inc., Wells Fargo
Bank, N.A. and U.S. Bank National Association. Other companies
could be added upon discovery, the lawsuit states.
MYLAN INC: Unit Continues to Defend Suits Over False Claims
-----------------------------------------------------------
Mylan Inc.'s specialty pharmaceutical business subsidiary, Dey
L.P., continues to defend lawsuits alleging it made false reports
and claims, according to the Company's October 26, 2011, Form 10-Q
filing with the U.S. Securities and Exchange Commission for the
quarter ended September 30, 2011.
Dey is currently a defendant in a lawsuit brought by the state
Attorney General of Louisiana and is also named as a defendant in
several class actions brought by consumers and third-party payors.
Dey has reached a settlement of these class actions, which has
been preliminarily approved by the court. Dey has also reached an
agreement in principle to settle the Louisiana action.
Additionally, a complaint was filed under seal by a plaintiff on
behalf of the United States of America against Dey in August 1997.
In August 2006, the Government filed its complaint-in-intervention
and the case was unsealed in September 2006. The Government
asserted that Dey was jointly liable with a codefendant and sought
recovery of alleged overpayments, together with treble damages,
civil penalties and equitable relief. Dey completed a settlement
of this action in December 2010.
These cases all have generally alleged that Dey falsely reported
certain price information concerning certain drugs it marketed;
that it caused false claims to be made to Medicaid and to
Medicare; and that it caused Medicaid and Medicare to make
overpayments on those claims.
NORTHROP GRUMMAN: Appeal From Pension Plan Suit Ruling Pending
--------------------------------------------------------------
On June 22, 2007, a putative class action was filed against the
Northrop Grumman Pension Plan and the Northrop Grumman Retirement
Plan B and their corresponding administrative committees, styled
as Skinner et al. v. Northrop Grumman Pension Plan, etc., et al.,
in the U.S. District Court for the Central District of California.
The putative class representatives alleged violations of the
Employee Retirement Income Security Act of 1974 (ERISA) and
breaches of fiduciary duty concerning a 2003 modification to the
Northrop Grumman Retirement Plan B. The modification relates to
the employer-funded portion of the pension benefit available
during a five-year transition period that ended on June 30, 2008.
The plaintiffs dismissed the Northrop Grumman Pension Plan, and in
2008, the District Court granted summary judgment in favor of all
remaining defendants on all claims. The plaintiffs appealed, and
in May 2009, the U.S. Court of Appeals for the Ninth Circuit
reversed the decision of the District Court and remanded the
matter back to the District Court for further proceedings, finding
that there was ambiguity in a 1998 summary plan description
related to the employer-funded component of the pension benefit.
After the remand, the plaintiffs filed a motion to certify a
class. The parties also filed cross-motions for summary judgment.
On January 26, 2010, the District Court granted summary judgment
in favor of the Plan and denied the plaintiffs' motion for summary
judgment. The District Court also denied the plaintiffs' motion
for class certification and struck the trial date of March 23,
2010, as unnecessary given the District Court's grant of summary
judgment for the Plan. The plaintiffs appealed the District
Court's order to the Ninth Circuit.
Based upon the information available to Northrop Grumman
Corporation to date, the Company does not believe that the
resolution of any of the specific litigation matters is likely to
have a material adverse effect on its consolidated financial
position, results of operations or cash flows.
No further updates were reported in the Company's October 26,
2011, Form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarter ended September 30, 2011.
NORTHROP GRUMMAN: Awaits Ruling on Cross Motions in ERISA Suit
--------------------------------------------------------------
Northrop Grumman Corporation is awaiting a court decision on
various cross motions for summary judgment in the consolidated
lawsuit alleging violations of the Employee Retirement Income
Security Act, according to the Company's October 26, 2011, Form
10-Q filing with the U.S. Securities and Exchange Commission for
the quarter ended September 30, 2011.
On March 27, 2007, the U.S. District Court for the Central
District of California consolidated two Employee Retirement Income
Security Act (ERISA) lawsuits that had been separately filed on
September 28, 2006, and January 3, 2007, into In Re Northrop
Grumman Corporation ERISA Litigation. The plaintiffs filed a
consolidated Amended Complaint on September 15, 2010, alleging
breaches of fiduciary duties by the Administrative Committees and
the Investment Committees (as well as certain individuals who
served on or supported those Committees) for two 401(k) Plans
sponsored by Northrop Grumman Corporation. The Company itself is
not a defendant in the lawsuit. The plaintiffs claim that these
alleged breaches of fiduciary duties caused the Plans to incur
excessive administrative and investment fees and expenses to the
detriment of the Plans' participants. On August 6, 2007, the
District Court denied plaintiffs' motion for class certification,
and the plaintiffs appealed the District Court's decision on class
certification to the U.S. Court of Appeals for the Ninth Circuit.
On September 8, 2009, the Ninth Circuit vacated the Order denying
class certification and remanded the issue to the District Court
for further consideration. As required by the Ninth Circuit's
Order, the case was also reassigned to a different judge.
By order dated March 29, 2011, the District Court granted the
plaintiffs' motion for class certification. The District Court
held a hearing on May 16, 2011, on various cross motions for
summary judgment. The supplemental briefing requested by the
District Court has been filed and the motions have been submitted.
No trial date has been set. Based upon the information available
to the Company to date, the Company believes that the defendants
have substantive defenses to any potential claims but can give no
assurance that they will prevail in this litigation.
OXY BEVERAGES: Sued Over False Claims on "Oxygizer" Water
----------------------------------------------------------
Courthouse News Service reports that a federal class action claims
that Oxy Beverages Group sells "hyperoxygenated water," called
"Oxygizer," for $3.25 a half-liter, with false claims about its
health benefits.
A copy of the Complaint in Ghazarian v. Oxy Beverages
Handelsgesellschaft mbH, et al., Case No. 11-cv-08860 (C.D.
Calif.), is available at:
http://www.courthousenews.com/2011/10/27/Oxy.pdf
The Plaintiff is represented by:
A. Douglas Mastroianni, Esq.
MASTROIANNI LAW FIRM
633 West Fifth Street
28th Floor
Los Angeles, CA 90071
Telephone: (213) 223-2246
E-mail: mastroiannilaw@yahoo.com
PRAXAIR INC: Continues to Defend Medical Monitoring Class Suits
---------------------------------------------------------------
Praxair, Inc., is a defendant in various class actions for medical
monitoring in connection to the alleged exposure to manganese
contained in welding fumes.
Claims brought by welders alleging that exposure to manganese
contained in welding fumes caused neurological injury. Praxair,
Inc., has never manufactured welding consumables. Such products
were manufactured prior to 1985 by a predecessor company of
Praxair. As of December 31, 2010, Praxair was a co-defendant with
many other companies in lawsuits alleging personal injury caused
by manganese contained in welding fumes. There were a total of
255 individual claimants in these cases, a significant decline
since 2005. The cases were pending in several state and federal
courts. The federal cases have been transferred to the U.S.
District Court for the Northern District of Ohio for coordinated
pretrial proceedings. The plaintiffs seek unspecified
compensatory and, in most instances, punitive damages. In the
past, Praxair has either been dismissed from the cases with no
payment or has settled a few cases for nominal amounts. These
claims raise numerous, individual issues that make them generally
unsuited for class action status. Separately, various class
actions for medical monitoring have been proposed but none have
been certified. The Company says no reserves have been recorded
for these cases as management does not believe that a loss from
them is probable or reasonably estimable.
No further updates were reported in the Company's October 26,
2011, Form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarter ended September 30, 2011.
RESEARCH IN MOTION: Faces Blackberry Outage Suit in California
-------------------------------------------------------------
Zack Whittaker, writing for ZDNet, reports that Research in
Motion, the BlackBerry maker, is facing a class-action lawsuit on
its doorstep in Canada, and others in the United States and around
the world, after an outage which spread globally over four days
last month brought the service offline.
A lawsuit was filed on Oct. 26 in Quebec, brought on behalf of
Canadian users of the BlackBerry service, arguing that Research in
Motion "failed to compensate" customers with refunds for loss of
service, and has yet to "take full responsibility for these
damages."
According to a statement from the law firm that filed the suit,
the proposed class-action suit against the smartphone maker is:
"on behalf of individuals who have BlackBerry smartphones and who
pay for a monthly data plan but were unable to access their
e-mail, BlackBerry Messenger (BBM) and/or Internet for the period
of October 11 to 14, 2001."
Research in Motion did not comment beyond: "RIM will formally
respond to the matter in due course", noting that it had yet to
receive the complaint.
A similar case has also been filed in the U.S. on behalf of
BlackBerry users in California, after an estimated 2.4 million
Californians were left without service for two days.
The U.S. lawsuit was filed in Santa Ana, California in federal
court, brought on behalf of all BlackBerry owners with a service
agreement with the Canadian giant, at the time of the messaging
interruptions.
The U.S. suit was brought by a Californian resident, claiming that
though there was no existing contract between Research in Motion
and himself, the "implied contract" presented itself by the
customer paying the company fees through his wireless network
provider, Sprint.
The U.S. suit estimates that the Canadian smartphone giant earns
at least $3.4 million a day in service revenue, collected from
customers through wireless network carriers.
If the suit is approved, it would likely serve as yet another
headache for the company, which is still struggling after poor
financial outlooks, product launch sales failures in notably the
BlackBerry PlayBook tablet, and difficult investor relations.
The outage affected upwards of 50% of the 70 million users
worldwide, spreading from Europe throughout the Middle East,
Africa, South and Latin America, northwards to the United States
and Canada. The problems stemmed from a European datacenter near
London, which spread across to other regions and datacenters,
causing a massive backlog of pending data.
Understood to be the worst outage in the 12 year history of
Research in Motion, the aftermath of compensation of free
BlackBerry World applications left many angered and frustrated.
The communication from the company was also lamented, after
confusing language and acronyms were used on Twitter by the
Canadian company, leaving many baffled by the still-then
misunderstood outage.
RIGHTNOW TECHNOLOGIES: Being Sold for Too Little, Suit Claims
-------------------------------------------------------------
Courthouse News Service reports that shareholders say RightNow
Technologies is selling itself too cheaply through an unfair
process to Oracle, for $1.4 billion or $43 a share.
A copy of the Complaint in Israni v. RightNow Technologies, Inc.,
et al., Case No. 6977 (Del. Ch. Ct.), is available at:
http://www.courthousenews.com/2011/10/27/SCA.pdf
The Plaintiff is represented by:
Blake A. Bennett, Esq.
COOCH AND TAYLOR, P.A.
The Brandywine Building
1000 West St., 10th Floor
Wilmington, DE 19899-1680
Telephone: (302) 984-3800
E-mail: bbennett@coochtaylor.com
- and -
William B. Federman, Esq.
FEDERMAN & SHERWOOD
10205 North Pennsylvania Avenue
Oklahoma City, OK 73120
Telephone: (405) 235-1560
- and -
Marc S. Henzel, Esq.
LAW OFFICES OF MARC HENZEL
431 Montgomery Ave., Suite B
Merion Station, PA 19066
Telephone: (610) 660-8000
E-mail: mhenzel@henzellaw.com
RYDER SYSTEM: Continues to Defend Wage and Hour Class Suits
-----------------------------------------------------------
Ryder System, Inc. continues to defend class action lawsuits
alleging wage-and-hour violations, according to the Company's
October 26, 2011, Form 10-Q filing with the U.S. Securities and
Exchange Commission for the quarter ended September 30, 2011.
The Company is a defendant in a number of lawsuits containing
various class-action allegations of wage-and-hour violations and
improper pay practice claims. The plaintiffs in these lawsuits
allege, among other things, that they were not paid for certain
hours worked, were not paid overtime or were not provided work
breaks or other benefits. The complaints generally seek
unspecified monetary damages, injunctive relief, or both.
The Company says it cannot currently estimate a reasonably
possible range of loss related to these lawsuits. Although the
final resolution of any such matters could have a material effect
on the Company's consolidated operating results for the particular
reporting period in which an adjustment of the estimated liability
is recorded, the Company believes that any resulting liability
should not materially affect its consolidated financial position.
S1 CORP: Settles Consolidated Shareholder Suit in Delaware
----------------------------------------------------------
S1 Corporation announced that it had reached a settlement in
principal with the plaintiffs in a consolidated class action
lawsuit relating to the now-terminated merger with Fundtech Ltd.
and the proposed acquisition of the Company by ACI Worldwide,
Inc., according to the Company's October 26, 2011, Form 8-K filing
with the U.S. Securities and Exchange Commission.
As previously disclosed, three purported class action lawsuits had
been filed against the Company and its directors in connection
with the now-terminated merger with Fundtech and the proposed
acquisition of the Company by ACI: Levitan v. S1 Corporation, et
al., C.A. No. 6730, Mang v. Dreyer, et al., C.A. No. 6760 and Yu
v. S1 Corporation, et al., C.A. No. 6771, which were filed on July
29, 2011, August 8, 2011 and August 9, 2011, respectively, in the
Court of Chancery of the State of Delaware. On August 18, 2011,
the three cases were consolidated under the caption In re S1
Corporation Shareholders Litigation, C.A. No. 6771-VCP. On
October 25, 2011, the Company, the other named defendants and the
plaintiffs reached an agreement in principle providing for the
settlement and dismissal of their lawsuits. Pursuant to that
agreement, the Company agreed to make certain supplemental
disclosures to its Solicitation/Recommendation Statement on
Schedule 14D-9, as amended.
Pursuant to the agreement, the Company has filed an amendment to
its Solicitation/Recommendation Statement on Schedule 14D-9 with
the Securities and Exchange Commission, which can be accessed free
of charge at the SEC's Web site at http://www.sec.gov,or the
Company's Web site, http://www.s1.com. The amended Schedule 14D-9
contains certain additional disclosures the Company agreed to make
in connection with the settlement of the lawsuit, although the
Company has not admitted in any way that those disclosures are
material or are otherwise required by law. The settlement will
not affect the offer price to be paid in the current exchange
offer by a subsidiary of ACI or the merger consideration the
Company's stockholders would be entitled to receive pursuant to
the terms of the previously announced Transaction Agreement, dated
as of October 3, 2011, by and among the Company, ACI and a
subsidiary of ACI.
About S1 Corporation
Leading banks, credit unions, retailers, and processors need
technology that adapts to the complex and challenging needs of
their businesses. These organizations want solutions that can
respond quickly to changes in the marketplace and help grow their
businesses. For more than 20 years, S1 Corporation (Nasdaq: SONE)
has been a leader in developing software products that offer
flexibility and reliability. Over 3,000 organizations worldwide
depend on S1 for payments, online banking, mobile banking, voice
banking, branch banking and lending solutions that deliver a
competitive advantage. More information is available at
http://www.s1.com
SPIN MASTER: Agrees to $1.3 Million Civil Penalty
-------------------------------------------------
* Spin Master Fails to Report Aqua Dots and
Sells a Banned Hazardous Substance
The U.S. Consumer Product Safety Commission (CPSC) announced that
Spin Master, Inc., of Los Angeles, California, and Spin Master
Ltd. of Toronto, Canada, ("Spin Master") have agreed to pay a
civil penalty of $1,300,000. The penalty agreement
[http://www.cpsc.gov/cpscpub/prerel/prhtml12/12023.pdf]has been
accepted provisionally by the Commission (5-0).
The settlement resolves staff allegations that Spin Master
knowingly failed to report the defect and hazard associated with
Aqua Dots to CPSC immediately, as required by federal law. The
settlement also resolves CPSC staff allegations that Spin Master
knowingly imported and sold Aqua Dots, which were toxic and a
banned hazardous substance, in violation of federal law.
Aqua Dots was a children's craft kit and toy that consisted of
tiny beads of different colors that stuck together when sprayed
with water, allowing children to create various shapes and
designs. Pictures of the recalled products are available at:
http://www.cpsc.gov/cpscpub/prerel/prhtml12/12023.html
CPSC staff alleges that by the middle of October 2007, Spin Master
had received reports that children, and a dog, had become ill and
received emergency medical treatment after ingesting Aqua Dots.
On October 18, 2007, Spin Master learned that Aqua Dots contained
1,4-butylene glycol (TMG), which, upon ingestion, metabolizes to
the controlled substance gamma hydroxybutyrate (GHB). The
following day, Spin Master learned that TMG is harmful if
swallowed, and upon ingestion, targets the kidneys and central
nervous system.
CPSC staff also alleges that in the ensuing days and weeks, Spin
Master continued to receive reports of children falling ill after
ingesting Aqua Dots. Spin Master also learned that children who
ingested a similar product containing TMG, which was manufactured
by the same overseas factory, also had become ill. Spin Master
did not timely report any of the incidents to CPSC.
In early November 2007, CPSC received two reports of children who
had ingested the product, become ill, fallen into comas, and
required hospitalization. On November 5, 2007, CPSC staff
notified Spin Master of an ingestion illness incident that it had
received. Two days later, Spin Master and CPSC announced a
voluntary recall
[http://www.cpsc.gov/cpscpub/prerel/prhtml08/08074.htmlof about
4.2 million units of Aqua Dots.
The recall announcement noted that children who swallow the beads
can become comatose, develop respiratory depression, or have
seizures.
While Spin Master had enlisted an outside testing company to
evaluate the toxicity of the product, the testing was inadequate.
Aqua Dots craft kits were sold nationwide from April 2007 to
November 2007, for between $17 and $30.
Federal law requires manufacturers, distributors, and retailers to
report to CPSC immediately (within 24 hours) after obtaining
information reasonably supporting the conclusion that a product
contains a defect which could create a substantial product hazard,
creates an unreasonable risk of serious injury or death, or fails
to comply with any consumer product safety rule or any other rule,
regulation, standard, or ban enforced by CPSC.
Staff alleges that the chemical composition of Aqua Dots rendered
the product a banned hazardous substance. Federal law prohibits
the importation and sale of banned hazardous substances.
In agreeing to the settlement, Spin Master denies CPSC staff
allegations that it knowingly violated the law.
SYNGENTA CROP: Document Access Appeals in Atrazine Suit Tossed
--------------------------------------------------------------
Steve Korris, writing for The Madison St. Clair Record, reports
that U.S. District Judge Phil Gilbert struck an appeal notice from
Environmental Policy Law Center and Prairie Rivers Network on
Oct. 19, blocking access to 245 private business documents in a
proposed class action over the weed killer atrazine.
Stephen Tillery represents 22 public and private water suppliers
in six Corn Belt states, claiming atrazine contaminates water at
any level of concentration.
As third parties, the groups intervened to plead for unsealing of
records in the suit blaming Syngenta Crop Protection Services,
manufacturer of atrazine, for water contamination.
The Seventh Circuit in Chicago also rejected an appeal from the
environmental groups on Oct. 21 declaring a notice three days
late.
The district court identified deficiencies in the notice it
received.
"It further advises their counsel to become familiar with their
user names, passwords and the proper methods of filing documents
electronically and to consider filing documents sooner than the
last day so they have time to seek assistance from the court if
necessary," Judge Gilbert wrote.
The Seventh Circuit's rejection notice set a Nov. 4 deadline for
the groups to state why the appeal shouldn't be dismissed for lack
of jurisdiction.
It read, "The filing of a circuit rule 3c docketing statement does
not satisfy your obligation under this order."
The center and the network filed a 3c docketing statement anyway,
on Oct. 24.
"The notice of appeal was timely filed on October 17," Howard
Learner of Chicago wrote.
"On October 19, the district court struck ELPC's and PRN's notice
of appeal and asked ELPC and PRN to re-file its notice of appeal,
which ELPC and PRN did on October 20," he wrote.
When Judge Gilbert denied access to the documents, he wrote that
he would remove them from the record rather than keep them under
seal if electronic filing wouldn't make it so unwieldy.
When the groups intervened he shared their view, declaring he
would unseal the entire file if Syngenta didn't show good cause
for sealing each document.
His attitude changed when he found Mr. Tillery didn't cite all the
documents.
"Documents not cited in the briefs should not have been filed at
all and should be stricken," Judge Gilbert wrote in July.
He also found valid reasons for maintaining the sealed status of
documents containing trade secrets, private financial information
and personal information.
He set aside other documents for further review.
The groups moved for reconsideration, and Judge Gilbert denied it
on Sept. 16.
"If the court were to unseal the extraneous documents simply
because they were attached to the plaintiffs' response, the door
would be open to unscrupulous litigants who seek advantage by
threatening to file irrelevant confidential documents produced by
their opponents," he wrote.
"This would negate the value of legitimate protective orders and
hinder the efficient production of documents during discovery," he
wrote.
"It is the plaintiffs' burden to cite to their evidence and
explain its relevance to the issue before the court, and if they
fail to do that, the court will not consider the evidence," he
wrote.
He also denied a motion from the center and the network to rewrite
an order on confidentiality that Magistrate Judge Phil Frazier
entered on Aug. 11.
He wrote that Judge Frazier limited the order to the discovery
phase of the litigation.
He wrote that later, the order will obligate the parties to
justify sealing any documents.
He wrote that he provided a mechanism for the groups to object to
his conclusions.
Mr. Learner posted an appeal notice on Oct. 17, but deputy clerk
Jina Hoyt struck it.
She marked boxes showing that PDF and event didn't match, and that
the document should have been filed as two separate documents.
On Oct. 20, Mr. Learner filed an appeal notice and a motion for
certification of partial final judgment.
"If ELPC and PRN are not allowed to promptly appeal this court's
decision, they will likely have to wait for many months, and
probably years, while the overall litigation proceeds on the
merits of the case," he wrote.
"Any such delay produces harm, given the strong presumption and
public interest in access to court documents, particularly those
which could have relevant information on the safety of atrazine in
the public water supply," he wrote.
The appeal notice arrived at the Seventh Circuit but didn't last
long.
The rejection notice stated that rules require filing a notice of
appeal within 30 days.
It read, "If appellants wish to request an extension of time in
which to file the notice of appeal, they should file an
appropriate motion in the district court, not this court, as soon
as possible."
It read, "Appellants' jurisdictional memorandum should include a
discussion of the status of any such motion."
As of Oct. 26, the groups hadn't asked Judge Gilbert for an
extension.
Mr. Tillery wants Judge Gilbert to declare atrazine defective.
Federal regulators consider it safe up to three parts per billion.
None of Mr. Tillery's clients alleges its concentration exceeds
the federal standard.
TREK BICYCLE: Recalls 27,000 Bicycles Due to Fall Hazard
--------------------------------------------------------
The U.S. Consumer Product Safety Commission and Health Canada, in
cooperation with Trek Bicycle Corporation, of Waterloo, Wisconsin,
announced a voluntary recall of about 27,000 units of Trek 2012 FX
and District bicycles. Consumers should stop using recalled
products immediately unless otherwise instructed. It is illegal
to resell or attempt to resell a recalled consumer product.
The bolt that secures the seat saddle clamp to the seat post can
break posing a fall hazard.
Trek has received four reports of incidents with one injury
involving a broken tooth and lip injury.
The bicycles affected by this recall include the following models:
Model Year 2012: Trek 7.2 FX, 7.3 FX, 7.4 FX, AND 7.5 FX;
District, and 9th District bicycle models: WSD, Livestrong and
Disc models.
The model name is found on the bicycle's frame.
Consumers can determine the model year by looking at the SKU
number stamped on the bottom bracket, which is found near the
pedals. If the last two digits of the SKU are 12, the bicycle is
a Model Year 2012 bicycle. Pictures of the recalled products are
available at:
http://www.cpsc.gov/cpscpub/prerel/prhtml12/12024.html
The recalled products were manufactured in China and sold at
specialty bicycle retailers nationwide between May 2011 and
September 2011 for between $550 and $1,100.
Consumers should stop riding the bicycles immediately and contact
an authorized Trek dealer for a free replacement bolt. For
additional information, contact Trek at 800-373-4594 between 8:00
a.m. and 6:00 p.m. Central Time Monday through Friday or visit the
company's Web site at http://www.trekbikes.com/
U-46: Ex-Superintendent Testifies in Bilingual Education Suit
-------------------------------------------------------------
Amanda Marrazzo, writing for TribLocal, reports that last week
former School District U-46 board members and staff, and a former
superintendent took the stand in a trial in federal court
challenging the Elgin-based school district's bilingual education
and gifted program.
The Class Action suit filed by several families, including three
Hispanic families, alleges that Spanish-speaking students were
mandatorily exited from English Language Learners classes and into
English only speaking classes after five years, whether they were
English proficient or not.
The charges, being presented before Judge Robert Gettleman in the
Federal District Courthouse in Chicago, date back to the 2004-2005
and 2005-2006 school years.
Patricia Whitten, an attorney with Franczek, Radelet, representing
the school district denies the plaintiffs allegations. She will
present evidence in the next phase of the trial, set for March,
refuting the claims.
Ms. Whitten said under the No Child Left Behind mandate, which
went into affect in 2002, all school districts were required to
have English Language Learner students take standardized tests in
English after three years, no matter what their English
proficiency was. Furthermore, state law also states students
should only be in the program for three years, she said.
At the time many students who had not yet achieved proficiency had
been staying in the English Language Learners program longer, some
more than seven years, Ms. Whitten said. In court this week,
former U-46 Supt. Connie Neale testified to that fact.
Ms. Whitten said Ms. Neale testified she told the bilingual
education director at that time that the program needed to be
revamped in order to meet the requirements of the No Child Left
Behind act and get students proficient in English quicker than
they had been.
"But there was not a mass exit of kids whether they were ready or
not, they were monitored and given support services," Ms. Whitten
said.
Ms. Whitten will call witnesses to testify to this and other
issues when trial resumes which is tentatively set for March 12.
The attorney for the plaintiffs, Carole Ashley, declined to
comment.
This is the second phase in a trial that began last March. In
that phase, families of minority students challenged the student
assignment plan for 2004-2005 when new boundaries were drawn up.
UNITED STATES: Black Farmers' $1.25BB Settlement Gets Final Okay
----------------------------------------------------------------
According to an article posted at The Blog of Legal Times by
Mike Scarcella, a federal judge in Washington on Oct. 27 granted
final approval for the $1.25 billion settlement in the black
farmers' class action that alleged government wrongdoing in loan
processing.
U.S. District Judge Paul Friedman noted in his ruling
"overwhelming indications of support for an interest in this
settlement and the comparatively miniscule number of objections to
it."
The settlement resolves claims from farmers who did not
participate in an earlier agreement with the government to receive
compensation for allegations of discrimination in the processing
of loans. Judge Friedman held a fairness hearing in September.
"Although, like any compromise, the settlement agreement before
the court will not satisfy everyone, it offers class members their
best option for obtaining meaningful redress of longstanding
injuries," Judge Friedman said.
Judge Friedman said "the overall context of this litigation
confirms the court's belief that class counsel will provide
adequate representation." The case, the judge said, with its many
separate legal complaints and dozens of attorneys, did not devolve
"into an endless series of squabbles between rival attorneys."
No compensation award will be paid to any claimant, Judge Friedman
said, until there has been a determination on all claims. The
claims process is expected to take a year.
Judge Friedman said after the claims process wraps up, he will
award legal fees between $50.3 million and $90.8 million, which
represents 4.1% to 7.4% of the settlement. The legal fees, he
said, will be divided among class counsel according to a separate
contact the attorneys executed among themselves.
Crowell & Moring partner Andy Marks, in addition to Henry Sanders
of Selma, Ala.'s Chestnut, Sanders, Sanders, Pettaway & Campbell
and Gregorio Francis of Morgan & Morgan, served as lead class
counsel.
Judge Friedman earlier this year granted preliminary approval for
the deal.
VERTRO INC: Being Sold to Inuvo for Too Little, Suit Claims
-----------------------------------------------------------
Marcel Badowski, individually and on behalf of all others
similarly situated v. Peter A. Corrao, Joseph P. Durrett, Adele
Goldberg, Gerald W. Hepp, Lee S. Simonson, Lawrence Weber, Vertro,
Inc., Inuvo, Inc., and Anhinga Merger Subsidiary, Inc., Case No.
652986/2011 (N.Y. Sup. Ct., October 27, 2011) alleges that
Vertro's board of directors breaches its fiduciary duties by
attempting to sell the Company to Inuvo, Inc., by means of an
unfair process and for an unfair price.
The Plaintiff asserts that the Board members have breached their
fiduciary duties by agreeing to the merger for grossly inadequate
consideration. He adds that the Board members have exacerbated
their breaches by agreeing to lock up the Merger with deal
protection devices that preclude other bidders from making a
successful competing offer for the Company.
Mr. Badowski is a shareholder of Vertro.
Vertro, a Delaware corporation, is a software and technology
company that owns and operates the "ALOT" product portfolio. ALOT
offers two primary products to consumers: ALOT Home, a homepage
product, and ALOT Appbar, a piece of software that integrates into
users' web browsers. The Individual Defendants are directors and
officers of the Company.
The Plaintiff is represented by:
Joseph E. Levi, Esq.
W. Scott Holleman, Esq.
LEVI & KORSINSKY LLP
30 Broad Street, 15th Floor
New York, NY 10004
Telephone: (212) 363-7500
Facsimile: (212) 363-7171
E-mail: jlevi@zlk.com
sholleman@zlk.com
WAL-MART STORES: Female Workers Narrow Gender Bias Class Action
---------------------------------------------------------------
Margaret Cronin Fisk and Karen Gullo, writing for Bloomberg News,
report that women who originally sued Wal-Mart Stores Inc. for sex
discrimination on behalf of 1 million female co-workers across the
U.S. amended their suit to cover bias claims of only workers in
California.
The more limited filing on Oct. 27 in federal court in San
Francisco followed a U.S. Supreme Court ruling in June that barred
the original suit as a national class action, or group case,
because the plaintiffs failed to prove the world's largest
retailer had a nationwide policy that led to gender
discrimination.
The new complaint alleges Wal-Mart blocked women in California
from promotions and paid them less than men for comparable work.
A California store manager suggested to one plaintiff that she
"doll up" to become more promotable, while another told a female
assistant manager who missed work because of a sick child that
"this is why we are concerned about promoting women with
children," according to the complaint.
Lawyers for the women said they plan to file "an armada of cases"
against Wal-Mart by regions or states to replace the national case
they initiated in 2001.
"The Supreme Court did not rule on the merits of the action, but
only ruled that the class as certified could not proceed," they
said in the Oct. 27 filing. "It did not preclude prosecution of a
class that was consistent with its newly announced guidelines and
standards."
The claims in the new complaint "aren't representative of the
thousands of women that work at Wal-Mart," said Greg Rossiter, a
Wal-Mart spokesman.
"These claims are unsuitable for class treatment because the
situations of each individual are so different," said Mr. Rossiter
in an e-mail. "Wal-Mart is not the company the plaintiffs say it
is. Not now. Not then."
The amended lawsuit was filed by five current or former company
employees on behalf of all women working in California Wal-Mart
and Sam's Club stores from December 1998 to the present. At least
95,000 current and former female Wal-Mart workers may be covered
by the new complaint, said Brad Seligman, an attorney for the
employees.
The new filing won't answer the Supreme Court's concerns, said
attorney Theodore J. Boutrous Jr., who represents Bentonville,
Arkansas-based Wal-Mart.
"The Supreme Court rejected these very same class action theories
when it reversed the plaintiffs' lawyers' last effort in June," he
said in an e-mail. "The plaintiffs' lawyers do not come close to
meeting the standards for obtaining class certification and their
arguments still rely on the same incorrect and discredited
theories that the Supreme Court repudiated."
Mr. Seligman said the Supreme Court ruled that the plaintiffs
couldn't use nationwide statistics about promotion and pay for
women at Wal-Mart to allege that individual managers made
discriminatory decisions. The amended complaint relies on
statistical and actual evidence showing that at the level of
regional decision-makers, women were being discriminated against,
he said.
Wal-Mart district managers were told at a 2004 meeting that the
key to success was a "single focus to get the job done. Women
tend to be better at information processing. Men are better at
focus," the employees were told, according to the complaint.
"We found and are able to document a staggering pattern of
discriminatory pay and promotion" practices, Mr. Seligman said.
The original lawsuit was filed by six current and former Wal-Mart
workers alleging discrimination in pay and promotions. The women
were granted class-action status in 2004, allowing them to sue as
a group. Wal-Mart appealed and the case was eventually heard by
the U.S. Supreme Court, which blocked the nationwide case from
going forward and sent it back to district court in San Francisco.
Wal-Mart denied bias in pay or promotions and sought reversal of
court decisions allowing class-action status. The Supreme Court
erased the class action in June.
The women allege that Wal-Mart continues to discriminate against
them, according to the Oct. 27 filing. "There have been some
changes in practices," lawyer Joseph Sellers said. "But the
problems women encounter continue."
The plaintiffs must seek a judge's ruling that the California case
can proceed as a group lawsuit. A ruling on that issue could be
appealed by the losing side.
The California lawsuit is Dukes v. Wal-Mart Stores Inc., 01-cv-
02252, U.S. District Court, Northern District of California (San
Francisco). The Supreme Court case is Wal-Mart v. Dukes, 10-
00277, U.S. Supreme Court (Washington).
WELLPOINT INC: Appeal in OON Reimbursement MDL Remains Pending
--------------------------------------------------------------
An appeal from the dismissal of the declaratory judgment action in
the multidistrict litigation over out-of-network reimbursement
remains pending, according to WellPoint, Inc.'s October 26, 2011,
Form 10-Q filing with the U.S. Securities and Exchange Commission
for the quarter ended September 30, 2011.
The Company is currently a defendant in eleven putative class
actions relating to out-of-network, or OON, reimbursement that
were consolidated into a single multi-district lawsuit called In
re WellPoint, Inc. Out-of-Network "UCR" Rates Litigation that is
pending in the United States District Court for the Central
District of California. The lawsuits were filed in 2009. The
plaintiffs include current and former members on behalf of a
putative class of members who received OON services for which the
defendants paid less than billed charges, the American Medical
Association, four state medical associations, OON physicians,
chiropractors, clinical psychologists, podiatrists,
psychotherapists, the American Podiatric Association, California
Chiropractic Association and the California Psychological
Association on behalf of a putative class of all physicians and
all non-physician health care providers, and an OON surgical
center. In the consolidated complaint, the plaintiffs allege that
the defendants violated the Racketeer Influenced and Corrupt
Organizations Act ("RICO"), the Sherman Antitrust Act, Employee
Retirement Income Security Act of 1974 ("ERISA"), federal
regulations, and state law by relying on databases provided by
Ingenix in determining OON reimbursement. A consolidated amended
complaint was filed to add allegations in the lawsuit that OON
reimbursement was calculated improperly by methodologies other
than the Ingenix databases. The Company filed a motion to dismiss
the amended consolidated complaint. The motion was granted in
part and denied in part. The court gave the plaintiffs permission
to replead many of those claims that were dismissed. At the end
of 2009, the Company filed a motion to enjoin the claims brought
by the medical doctors and doctors of osteopathy and certain
medical associations based on prior litigation releases, which was
granted earlier this year, and the court ordered the plaintiffs to
dismiss their claims that are barred by the release. The
physician and medical association plaintiffs filed an emergency
motion to stay the preliminary injunction pending appeal, for the
right to pursue an interlocutory appeal, and for an expedited
appeal, all of which were denied. The plaintiffs also filed a
petition for declaratory judgment asking the Court to find that
these claims are not barred by the releases from the prior
litigation. The Company filed a motion to dismiss the declaratory
judgment action, which was granted. The plaintiffs filed a notice
of appeal from the dismissal of the declaratory judgment action
with the United States Court of Appeals for the Eleventh Circuit.
The appeal is pending.
The Company says it intends to vigorously defend this lawsuit;
however, its ultimate outcome cannot be presently determined.
WELLPOINT INC: Appeal in OON-Related "ADA" Suit Remains Pending
---------------------------------------------------------------
WellPoint, Inc. is currently a defendant in a putative class
action relating to out-of-network, or OON, reimbursement of dental
claims called American Dental Association v. WellPoint Health
Networks, Inc. and Blue Cross of California. The lawsuit was
filed in March 2002 by the American Dental Association, and three
dentists who are suing on behalf of themselves and are seeking to
sue on behalf of a nationwide class of all non-participating
dental providers who were paid less than their actual charges for
dental services provided to members of some of the Company's
affiliates' and subsidiaries' dental plans. The dentists sue as
purported assignees of their patients' rights to benefits under
the Company's dental plans. The complaint alleges that the
Company breached its contractual obligations in violation of ERISA
by paying usual, customary and reasonable (UCR) rates, rather than
the dentists' actual charges, allegedly relying on undisclosed,
non-existent or flawed UCR data. The plaintiffs claim, among
other things, that the data failed to account for differences in
geography, provider specialty, outlier (high) charges, and
complexity of procedure. The complaint further alleges that the
Company was aware that the data was inappropriate to set UCR rates
and that the Company routinely paid OON dentists less than their
actual charges representing that the Company's OON payments were
properly determined usual, customary and reasonable rates. The
lawsuit was pending in the United States District Court for the
Southern District of Florida. The district court granted the
Company's motion for summary judgment and dismissed the case. The
plaintiffs filed a notice of appeal with the United States Court
of Appeals for the Eleventh Circuit.
The Company says it intends to vigorously defend this lawsuit;
however, its ultimate outcome cannot be presently determined.
No further updates were reported in the Company's October 26,
2011, Form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarter ended September 30, 2011.
WELLPOINT INC: Continues to Defend Wrongful Rescission Suits
------------------------------------------------------------
WellPoint, Inc. continues to defend lawsuits alleging wrongful
rescission of individual insurance policies, according to the
Company's October 26, 2011, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended
September 30, 2011.
In various California state courts, the Company is defending a
number of individual lawsuits, including one filed by the Los
Angeles City Attorney, and one purported class action alleging the
wrongful rescission of individual insurance policies. The
lawsuits name WellPoint as well as Blue Cross of California, or
BCC, and BC Life & Health Insurance Company, or BCL&H (which name
changed to Anthem Blue Cross Life and Health Insurance Company in
July 2007), both WellPoint subsidiaries. The lawsuits generally
allege breach of contract, bad faith and unfair business practices
in a purported practice of rescinding new individual members
following the submission of large claims. The parties agreed to
mediate most of these lawsuits and the mediation resulted in the
resolution of some of these lawsuits. Final approval of the class
action settlement was granted on July 13, 2010, and no appeals
were filed. Payments pursuant to the terms of the settlement
commenced in the first quarter of 2011 and were completed during
the second quarter of 2011. The Company says the payments did not
have a material impact on its consolidated financial position or
results of operations.
The Los Angeles City Attorney filed an amended complaint in
October 2010, adding claims of misrepresentation arising from
several public statements made by the Company during 2010. The
Los Angeles City Attorney is requesting two thousand five hundred
dollars ($2,500) per alleged violation of the California Business
and Professions Code. The Company says it intends to vigorously
defend this lawsuit; however, the ultimate outcome cannot be
presently determined.
WELLPOINT INC: Continues to Defend AIC Demutualization Suits
------------------------------------------------------------
WellPoint, Inc., continues to defend several certified or putative
class actions filed as a result of the 2001 Anthem Insurance
Companies, Inc. demutualization, according to the Company's
October 26, 2011, Form 10-Q filing with the U.S. Securities and
Exchange Commission for the quarter ended September 30, 2011.
The Company is currently defending several certified or putative
class actions filed as a result of the 2001 demutualization of
Anthem Insurance Companies, Inc., or AICI, and the initial public
offering of common stock, or IPO, for its holding company, Anthem,
Inc. (n/k/a WellPoint, Inc.). The lawsuits name AICI as well as
Anthem, Inc., or Anthem, n/k/a WellPoint, Inc. The lawsuits are
captioned as Ronald Gold, et al. v. Anthem, Inc. et al.; Mary E.
Ormond, et al. v. Anthem, Inc., et al.; Jeffrey D. Jorling v.
Anthem, Inc., et al; and Ronald E. Mell, Sr., et al. v. Anthem,
Inc., et al. AICI's 2001 Plan of Conversion, or the Plan,
provided for the conversion of AICI from a mutual insurance
company into a stock insurance company pursuant to Indiana law.
Under the Plan, AICI distributed the fair value of the company at
the time of conversion to its Eligible Statutory Members, or ESMs,
in the form of cash or Anthem common stock in exchange for their
membership interests in the mutual company. The lawsuits
generally allege that AICI distributed value to the wrong ESMs or
distributed insufficient value to the ESMs. In Gold, cross
motions for summary judgment were granted in part and denied in
part on July 26, 2006, with regard to the issue of sovereign
immunity asserted by co-defendant, the State of Connecticut (the
"State"). The court also denied the Company's motion for summary
judgment as to plaintiffs' claims on January 10, 2005. The State
appealed the denial of its motion to the Connecticut Supreme
Court. The Company filed a cross-appeal on the sovereign immunity
issue. On May 11, 2010, the Court reversed the judgment of the
trial court denying the State's motion to dismiss the plaintiff's
claims under sovereign immunity and dismissed the Company's cross-
appeal. The case was remanded to the trial court for further
proceedings. Plaintiffs' motion for class certification was
initially argued on June 10, 2011, with continued argument on July
1, 2011, and remains pending.
In the Ormond lawsuit, the Company's motion to dismiss was granted
in part and denied in part on March 31, 2008. The Court dismissed
the claims for violation of federal and state securities laws, for
violation of the Indiana Demutualization Law, for unjust
enrichment, and for negligent misrepresentation with respect to
ESMs residing in Indiana. On September 29, 2009, a class was
certified with respect to some but not all claims asserted in the
plaintiffs' Fourth Amended Complaint. The class consists of all
ESMs residing in Ohio, Indiana, Kentucky or Connecticut who
received cash compensation in connection with the demutualization.
The class does not include employers located in Ohio and
Connecticut that received cash distributions pursuant to the Plan.
As a result of certain theories advanced by plaintiffs, the
Company has filed a conditional motion to decertify the class and
plaintiffs have filed a motion to narrow the class definition. On
July 1, 2011, the Court issued an Order granting in part and
denying in part the Company's motion for summary judgment. The
Court held that the Company was entitled to judgment on all
plaintiffs' claims except those tort claims in connection with the
pricing and sizing of the Anthem, Inc. IPO. Anthem filed a Motion
to Certify this Order for interlocutory review to the United
States Court of Appeals for the Seventh Circuit. The District
Court granted the Company's motion on September 2, 2011. The
Company submitted its Petition for Permission to Appeal with the
Seventh Circuit. However, the petition was denied by the Appeals
Court on October 13, 2011. The Ormond lawsuit is set for trial on
June 18, 2012. In court filings, the plaintiffs in Ormond have
alleged that the plaintiff class is entitled to compensatory
damages ranging from approximately $265.0 million to $545.0
million on the remaining claims, plus prejudgment interest at the
maximum rate allowed by law running from the demutualization in
2001, postjudgment interest at the maximum rate allowed by law,
punitive damages in amounts not less than $500.0 million, and
their costs and expenses in the action. Plaintiffs also have
filed a motion for partial summary judgment, which the Company has
opposed and moved to strike.
On December 23, 2010, plaintiff's motion for class certification
was denied in the Jorling lawsuit. Plaintiff renewed his motion
for class certification on May 1, 2011, and requested that a new
named plaintiff be joined in the lawsuit. In court filings,
plaintiff has alleged that the putative class in Jorling, if
certified as originally proposed, would be entitled to
compensatory damages ranging from approximately $350.0 million to
$385.0 million, plus prejudgment interest at the maximum rate
allowed by law running from the demutualization in 2001,
postjudgment interest at the maximum rate allowed by law, and his
costs and expenses in the action. The Company has moved for
summary judgment on all claims, and plaintiff has moved for
partial summary judgment as to certain claims. Argument on the
Company's motion for summary judgment as well as the plaintiff's
motion for class certification was held before the United States
District Court for the Southern District of Indiana on
September 9, 2011. The matter was taken under advisement.
On November 4, 2009, class was certified in the Mell lawsuit.
That class consists of persons who were continuously enrolled in
the health benefit plan sponsored by the City of Cincinnati
between June 18, 2001, and November 2, 2001. On March 3, 2010,
the Court issued an order granting the Company's motion for
summary judgment. As a result, the Mell lawsuit has been
dismissed. The plaintiffs have filed an appeal with the United
States Court of Appeals for the Sixth Circuit Court, which is
pending.
The Company says it intends to vigorously defend these lawsuits;
however, their ultimate outcome cannot be presently determined.
WELLS FARGO: Homeowners File Foreclosure Fraud Class Action
-----------------------------------------------------------
On behalf of a proposed class of distressed homeowners residing in
New Jersey and Pennsylvania, BHN Law Firm filed a Complaint in the
United States District Court for the District of New Jersey
against Wells Fargo Bank, N.A. and one of its principal
foreclosure law firms.
The caption of the Complaint, filed on October 24, 2011, is Giles
v. Phelan Hallinan & Schmieg, LLP, 1:11-cv-06239 (D.N.J.).
The Complaint alleges that Wells Fargo and Phelan, Hallinan &
Schmieg, a high-volume foreclosure law firm in Pennsylvania and
New Jersey, engaged in a fraudulent scheme to "pile on" unlawful
foreclosure fees from financially troubled families on the brink
of losing their homes. The lawsuit contends that, to carry out
the scheme, defendants systematically filed falsified complaints,
affidavits and mortgage assignments to bring foreclosure actions
in the name of parties without legal standing to sue.
The Complaint explains that, beginning in 2005, Phelan adopted a
business model in which companies under its ownership and control
provide "default management services" incidental to foreclosures,
such as title searches, notary public certifications,
investigations and service of process. The hallmark of the
business model is barebones cost, automated rapid speed,
indifference to quality, grossly inflated charges, and millions of
dollars in unearned profits obtained by Phelan and its mortgage
servicer clients at the expense of defrauded homeowners.
Documents filed with the SEC reveal that, in 2009 and 2010 alone,
Phelan and its affiliated companies obtained $48 million in
"default services" fees from just one of their many clients --
Fannie Mae -- a government sponsored enterprise in which the
brother of Phelan's senior partner held a top management position
as Executive Vice President and Chief Risk Officer.
One of the homeowners leading this lawsuit lost his ability to
earn a living when, as an EMT responding to rescue calls at Ground
Zero on 9/11, he inhaled a mix of dust and debris that caused
life-threatening health problems that remain with him today. When
this hero's medical crisis evolved into a financial nightmare,
Wells Fargo ordered Phelan to remove his family from their home
through foreclosure. The Complaint alleges that, during this
process, Phelan and Wells Fargo (1) identified the wrong financial
institution as plaintiff, (2) recorded bogus mortgage assignments,
(3) filed court documents containing untrue statements of material
fact, (4) included multiple versions of the same lawyer's
"signature" in different documents filed in the same case; (5)
charged vastly overstated foreclosure fees and (6) despite a
formal warning by the misidentified bank, heedlessly continued to
file later foreclosure actions against other homeowners "on
behalf" of the same improperly named bank.
The Complaint seeks monetary and injunctive relief against
defendants under the Racketeer Influenced and Corruption Act, the
New Jersey Consumer Fraud Act and Pennsylvania's Unfair Trade
Practices and Consumer Protection Law.
"It has been more than a year since government authorities
demanded that mortgage servicers and their foreclosure law firms
stop institutionalized abuses that harm homeowners and compromise
the integrity of our judicial system," said homeowner lawyer
John G. Narkin. "This class action complements public law
enforcement, while it seeks justice for fraud victims whose rights
have been violated by institutions concerned only with their own
financial gain."
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S U B S C R I P T I O N I N F O R M A T I O N
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Copyright 2011. All rights reserved. ISSN 1525-2272.
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