/raid1/www/Hosts/bankrupt/CAR_Public/120227.mbx
C L A S S A C T I O N R E P O R T E R
Monday, February 27, 2012, Vol. 14, No. 40
Headlines
2GIG Technologies: Recalls 40T Modules Used in Go!Control Panels
ALLIANCE ONE: Still Awaits Order on Bid to Dismiss Suit in Brazil
AMERICAN SUPERCONDUCTOR: Continues to Defend "Lenartz" Suit
APPLE INC: Center for Class Action Fairness Objects Settlement
CHINA GREEN: Motion to Dismiss Securities Suit Remains Pending
COINSTAR INC: Awaits Class Certification Ruling in "Piechur" Suit
COINSTAR INC: Unit Continues to Defend Consolidated Suit in Ill.
COINSTAR INC: Song-Beverly Act Cases Still Pending in Calif.
COINSTAR INC: To File Settlement in Consolidated Securities Suit
COINSTAR: Agrees to Settle Investor Class Action for $6 Million
CPI INTERNATIONAL: Merger-Related Suit Deal Approved in Dec.
E.I. DUPONT: Discovery in Drinking Water Suit in Ohio Ongoing
E.I. DUPONT: Recorded $175-MM for Imprelis(R) Claims in FY 2011
FACEBOOK INC: Tracks Users Even After They Log Out, Suit Says
FACEBOOK INC: Murphy PA Files Internet Privacy Class Action
GENERAL NUTRITION: Abbey Spanier Files C-4 Extreme Class Action
GOOGLE INC: Attorney General Challenges New Privacy Policy
HOTELS.COM: Faces Class Action in Texas Over Refund Policy
LIGHTSQUARED LLC: Investors Face Challenge in Class Action
LOUISIANA CITIZENS: Decision Expected on Class Action Settlement
MEIJER INC: Recalls 6,102 Touch Point Forced Air Heaters
NOVELLUS SYSTEMS: Being Sold for Too Little, Suit Claims
PASSAIC COUNTY, NJ: Human Rights Advocates Laud Jail Settlement
PUDA COAL: SEC Files Securities Suit in New York
QUAKER OATS: Loses Bid to Dismiss Misleading Label Class Action
RAWLINGS CO: Accused of Mistreating Employees in California
SOCORRO ELECTRIC: Attorneys to Name New Class Representative
UNITED STATES: Yale Immigration Clinic Files Class Action v. ICE
* Class Actions Prompt CFPB Probe Into Bank Overdraft Practices
*********
2GIG Technologies: Recalls 40T Modules Used in Go!Control Panels
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About 40,000 units of GSM Radio Modules used in Go!Control Panels
were voluntarily recalled by 2GIG Technologies Inc., of Lehi,
Utah, in cooperation with the U.S. Consumer Product Safety
Commission. Consumers should stop using the product immediately
unless otherwise instructed. It is illegal to resell or attempt
to resell a recalled consumer product.
GSM radio modules used inside Go!Control Panels for home security
systems can overheat and combust, resulting in a fire or burn
hazard to consumers.
The company is aware of 22 reports of the product overheating,
including three reports of minor smoke, heat or fire damage to the
wall where the control panel was mounted. There have been no
reports of injuries.
The GSM radio module in the Go!Control Panel enables wireless
communication between the home security system and alarm
monitoring companies. The Go!Control panels are 6-inches high and
8.5-inches wide and are made of white plastic. The front of the
control panel has a color touch screen display, a speaker and
"emergency" and "home" buttons. A home security company name may
also appear on the front of the panel. The recalled radio modules
are a component used inside the Go!Control panels. A professional
home security system installer can identify the recalled module.
Consumers cannot identify the module safely. A picture of the
recalled products is available at:
http://www.cpsc.gov/cpscpub/prerel/prhtml12/12724.html
The recalled products were manufactured in China and sold at 2GIG.
2GIG sold the GSM radio modules to home security companies and
security system equipment distributors nationwide and in Canada
between December 2010 and October 2011 for use in Go!Control
Panels. Home security companies installed the modules in control
panels as part of home security systems that varied greatly in
price.
2GIG has directed home security companies to contact consumers,
who will receive a free, installed replacement module. If you
have not been contacted and have a question about whether your
home security system contains the recalled module, contact your
home security company or 2GIG. Consumers should not try to
disconnect or disable the recalled product. For more information
contact your home security company or 2GIG toll-free at (855) 244-
4832 from 8:00 a.m. to 5:00 p.m. Mountain Time Monday through
Friday or visit the firm's Web site at http://www.2gig.com/
ALLIANCE ONE: Still Awaits Order on Bid to Dismiss Suit in Brazil
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On June 6, 2008, Alliance One International, Inc.'s Brazilian
subsidiary and a number of other tobacco processors were notified
of a class action initiated by the ALPAG -- Associacao Lourenciana
de Pequenos Agricultrores ("Association of Small Farmers of Sao
Lourenco"). The class action's focus is a review of tobacco
supplier contracts and business practices, specifically aiming to
prohibit processors from notifying the national credit agency of
producers in debt, prohibiting processors from deducting tobacco
suppliers' debt from payments for tobacco, and seeking the
modification of other contractual terms historically used in the
purchase of tobacco. The case is currently before the 2nd civil
court of Sao Lourenco do Sul. The Company's motion to dismiss the
class action is currently pending.
No further updates were reported in the Company's February 9,
2012, Form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarter ended December 31, 2011.
The Company believes this claim to be without merit and is
vigorously defending it. Ultimate exposure if an unfavorable
outcome is received is not determinable.
Headquartered in Raleigh, North Carolina, Alliance One
International -- http://aointl.com/-- is an independent leaf
tobacco merchant. It provides worldwide service to the large
cigarette manufacturers. It purchases tobacco in more than 45
countries and serves manufacturers of cigarettes and other
consumer tobacco products in over 90 countries. The Company's
revenues are primarily comprised of sales of processed tobacco and
fees charged for related services to manufacturers of consumer
tobacco products around the world.
AMERICAN SUPERCONDUCTOR: Continues to Defend "Lenartz" Suit
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American Superconductor Corporation continues to defend a
consolidated securities class action lawsuit pending in
Massachusetts, according to the Company's February 9, 2012, Form
10-Q filing with the U.S. Securities and Exchange Commission for
the quarter ended December 31, 2011.
Between April 6, 2011, and May 12, 2011, seven putative securities
class action complaints were filed against the Company and two of
its officers in the United States District Court for the District
of Massachusetts; one complaint additionally asserted claims
against the underwriters who participated in the Company's
November 12, 2010 securities offering. On June 7, 2011, the
United States District Court for the District of Massachusetts
consolidated these actions under the caption Lenartz v. American
Superconductor Corporation, et al., Docket No. 1:11-cv-10582-WGY.
On August 31, 2011, Lead Plaintiff, the Plumbers and Pipefitters
National Pension Fund, filed a consolidated amended complaint
against the Company, its officers and directors, and the
underwriters who participated in the Company's November 12, 2010
securities offering, asserting claims under sections 10(b) and
20(a) of the Securities Exchange Act of 1934 and Rule 10b-5
promulgated under the Securities Exchange Act of 1934, as well as
under sections 11, 12(a)(2) and 15 of the Securities Act of 1933.
The complaint alleges that during the relevant class period, the
Company and its officers omitted to state material facts and made
materially false and misleading statements relating to, among
other things, its projected and recognized revenues and earnings,
as well as its relationship with Sinovel Wind Group Co., Ltd. that
artificially inflated the value of the Company's stock price. The
complaint further alleges that the Company's November 12, 2010
securities offering contained untrue statements of material facts
and omitted to state material facts required to be stated therein.
The plaintiffs seek unspecified damages, rescindment of the
Company's November 12, 2010 securities offering, and an award of
costs and expenses, including attorney's fees.
No further updates were reported in the Company's latest SEC
filing.
With respect to the securities litigation, the Company says an
estimate of loss or range of loss cannot be made. There are
numerous factors that make it difficult to meaningfully estimate
possible loss or range of loss at this stage of these litigation
matters, including that: the proceedings are in relatively early
stages, there are significant factual and legal issues to be
resolved, information obtained or rulings made during the lawsuits
could affect the methodology for calculation of rescission and the
related statutory interest rate. In addition, with respect to
claims where damages are the requested relief, no amount of loss
or damages has been specified. Therefore, the Company is unable
at this time to estimate possible losses. The Company believes
that these litigations are without merit, and it intends to defend
these actions vigorously.
APPLE INC: Center for Class Action Fairness Objects Settlement
--------------------------------------------------------------
Law & Industry Daily reports that the Center for Class Action
Fairness has filed an objection to the proposed settlement of a
class-action lawsuit against Apple Inc. over older models of its
MagSafe power adapter.
The 60-watt and 85-watt MPM-1 ("T") Power Adapter models that came
with Apple's MacBook and MacBook Pro portable computers were prone
to splitting. The 2006 lawsuit claimed the adapter design
"dangerously frays, sparks and prematurely fails to work."
In agreeing to settle the lawsuit, Cupertino, Calif.-based Apple
has not admitted to any wrongdoing.
As a part of the settlement, Apple's Adapter Replacement Program
will provide replacement adapters at no charge.
Apple has agreed to provide a cash payment up to $79 to class
members who purchased a replacement adaptor so long as the
purchase was in the first three years of having the computer or
adapter and before Nov. 22.
Meanwhile, plaintiffs' attorneys are seeking attorneys' fees and
expenses of up to $3.1 million for representing the class.
The Washington-based Center for Class Action Fairness (CCAF) filed
an objection to the proposed settlement on behalf of class member
Marie Gryphon of Jamaica Plain, Mass., who purchased a replacement
adapter for an Apple Macbook purchased in August 2006.
The objector's pro bono counsel, CCAF founder and noted attorney
Theodore Frank, argues that the settlement structure is "unduly
burdensome" on class members. For instance, there is no online
claims process, a factor that benefits class counsel and the
defendant.
What's more, the settlement structure "limits class claims,
shields attorneys' fees, and conceals the true value of this
settlement" to the class members, Mr. Frank wrote, objecting to
the proposed settlement in U.S. District Court for the Northern
District of California.
"Their [settlement] design enables class counsel and defendants to
reduce class recovery so as to benefit themselves, an arrangement
that can be made at arm's length without any explicit collusion,
so long as class counsel looks the other way when defendants
insist upon conditions on class recovery," Mr. Frank wrote in a
Jan. 5 filing.
A fairness hearing is set for Feb. 27, at which time District
Court Chief Judge James Ware will consider whether the proposed
settlement is "fair, reasonable, and adequate," according to the
September 2011-issued class notice.
In addition to Mr. Frank, the objector is also represented by
Daniel Greenberg of Greenberg Legal Services in Little Rock, Ark.,
and Kyle Graham of Portola Valley, Calif., and a professor at
Santa Clara Law.
Class counsel in the case is Helen Zeldes of Zeldes & Haeggquist
LLP in San Diego and Steven Skalet of Mehri & Skalet PLLC in the
District of Columbia. Defense counsel in the case is Penelope
Preovolos -- ppreovolos@mofo.com -- of Morrison & Foerster LLP in
San Francisco.
The case is In re Magsafe Apple Power Adapter Litigation, No. C09-
01911-JW, Northern District of California (San Francisco).
CHINA GREEN: Motion to Dismiss Securities Suit Remains Pending
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On October 15, 2010, a class action lawsuit was filed against
China Green Agriculture, Inc. and certain of its current and
former officers in the United States District Court for the
District of Nevada on behalf of purchasers of the Company's common
stock between November 12, 2009, and September 1, 2010. On April
27, 2011, the court appointed the lead plaintiff and lead
plaintiff's counsel. On June 13, 2011, lead plaintiff filed an
amended complaint, which adds several additional defendants and
expands the class period to include purchasers who purchased the
Company's common stock between May 12, 2009, and January 4, 2011.
The amended complaint alleges that the Company and certain of its
current and former officers and directors violated Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934 and Sections 11,
12(a)(2), and 15 of the Securities Act of 1933, as amended, by
making material misstatements and omissions in the Company's
financial statements, securities offering documents, and related
disclosures during the class period. The plaintiffs claim that
such allegedly misleading statements inflated the price of the
Company's common stock and seek monetary damages in an amount to
be determined at trial. Defendants moved to dismiss the amended
complaint on September 19, 2011, and defendants' motions are
currently pending. No hearing has been set for defendants'
motions.
No further updates were reported in the Company's February 9,
2012, Form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarter ended December 31, 2011.
COINSTAR INC: Awaits Class Certification Ruling in "Piechur" Suit
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Coinstar, Inc. is awaiting court decisions on motions for class
certification and summary judgment in the class action lawsuit
filed by Laurie Piechur, according to the Company's February 9,
2012, Form 10-K filing with the U.S. Securities and Exchange
Commission for the year ended December 31, 2011.
In October 2009, an Illinois resident, Laurie Piechur,
individually and on behalf of all others similarly situated, filed
a putative class action complaint against the Company's Redbox
subsidiary in the Circuit Court for the Twentieth Judicial
Circuit, St. Clair County, Illinois. The plaintiff alleges that,
among other things, Redbox charges consumers illegal and excessive
late fees in violation of the Illinois Consumer Fraud and
Deceptive Business Practices Act, and that Redbox's rental terms
violate the Illinois Rental Purchase Agreement Act or the Illinois
Automatic Contract Renewal Act and the plaintiff is seeking
monetary damages and other relief. In November 2009, Redbox
removed the case to the U.S. District Court for the Southern
District of Illinois. In February 2010, the District Court
remanded the case to the Circuit Court for the Twentieth Judicial
Circuit, St. Clair County, Illinois. In May 2010, the court
denied Redbox's motion to dismiss the plaintiff's claims, and also
denied the plaintiff's motion for partial summary judgment. In
November 2011, the plaintiff moved for class certification, and
Redbox moved for summary judgment.
The Company believes that the claims against it are without merit
and intends to defend itself vigorously in this matter.
Currently, no accrual has been established as it was not possible
to estimate the possible loss or range of loss because this matter
had not advanced to a stage where the Company could make any such
estimate.
CoinStar, Inc. provides automated retail solutions, including
redbox and Coin segments.
COINSTAR INC: Unit Continues to Defend Consolidated Suit in Ill.
----------------------------------------------------------------
In March 2011, a California resident, Blake Boesky, individually
and on behalf of all others similarly situated, filed a putative
class action complaint against Coinstar, Inc.'s Redbox subsidiary
in the U.S. District Court for the Northern District of Illinois.
The plaintiff alleges that Redbox retains personally identifiable
information of consumers for a time period in excess of that
allowed under the Video Privacy Protection Act, 18 U.S.C. Sections
2710, et seq. A substantially similar complaint was filed in the
same court in March 2011 by an Illinois resident, Kevin Sterk.
Since the filing of the complaint, Blake Boesky has been replaced
by a different named plaintiff, Jiah Chung, and an amended
complaint has been filed alleging disclosures of personally
identifiable information, in addition to plaintiffs' claims of
retention of such information. Plaintiffs are seeking statutory
damages, injunctive relief, attorneys' fees, costs of lawsuit, and
interest. The court has consolidated the cases. The court has
denied Redbox's motion to dismiss the plaintiffs' claims involving
retention of information, and is still considering Redbox's motion
to dismiss plaintiffs' claims involving disclosure of information.
No further updates were reported in the Company's February 9,
2012, Form 10-K filing with the U.S. Securities and Exchange
Commission for the year ended December 31, 2011.
The Company believes that the claims against it are without merit
and intends to defend itself vigorously in this matter.
Currently, no accrual has been established as it is not possible
to estimate the possible loss or range of loss because this matter
had not advanced to a stage where the Company could make any such
estimate.
CoinStar, Inc. provides automated retail solutions, including
redbox and Coin segments.
COINSTAR INC: Song-Beverly Act Cases Still Pending in Calif.
------------------------------------------------------------
Consumer class action lawsuits filed against a subsidiary of
Coinstar, Inc., remain pending in California, according to the
Company's February 9, 2012, Form 10-K filing with the U.S.
Securities and Exchange Commission for the year ended
December 31, 2011.
In February 2011, a California resident, Michael Mehrens,
individually and on behalf of all others similarly situated, filed
a putative class action complaint against the Company's Redbox
subsidiary in the Superior Court of the State of California,
County of Los Angeles. The plaintiff alleges that, among other
things, Redbox violated California's Song-Beverly Credit Card Act
of 1971 ("Song-Beverly") with respect to the collection and
recording of consumer personal identification information, and
violated the California Business and Professions Code Section
17200 based on the alleged violation of Song-Beverly. A similar
complaint alleging violations of Song-Beverly and the right to
privacy generally was filed in March 2011 in the Superior Court of
the State of California, County of Alameda, by a California
resident, John Sinibaldi. A third similar complaint alleging only
a violation of Song-Beverly, was filed in March 2011 in the
Superior Court of the State of California, County of San Diego, by
a California resident, Richard Schiff. Plaintiffs are seeking
compensatory damages and civil penalties, injunctive relief,
attorneys' fees, costs of lawsuit, and interest. Redbox removed
the Mehrens case to the U.S. District Court for the Central
District of California, the Sinibaldi case to the U.S. District
Court for the Northern District of California, and the Schiff case
to the U.S. District Court for the Southern District of
California. The Sinibaldi case was subsequently transferred to
the U.S. District Court for the Central District of California,
where the Mehrens case is pending, and these two cases have been
consolidated. At the same time, the plaintiffs substituted
Nicolle DiSimone as the named plaintiff in the Mehrens case.
After Redbox filed a motion to dismiss, stay, or transfer, the
Schiff case was transferred to the U.S. District Court for the
Central District of California but has not been consolidated with
the Mehrens case. Redbox moved to dismiss the DiSimone/Sinibaldi
case, and DiSimone/Sinibaldi moved for class certification.
In January 2012, the Court granted Redbox's motion to dismiss with
prejudice and denied DiSimone/Sinibaldi's motion for class
certification as moot. Plaintiffs have until February 2012 to
appeal.
The Company believes that the claims against it are without merit
and intend to defend itself vigorously in this matter. Currently,
no accrual has been established as it is not possible to estimate
the possible loss or range of loss because this matter had not
advanced to a stage where the Company could make any such
estimate.
CoinStar, Inc. provides automated retail solutions, including
redbox and Coin segments.
COINSTAR INC: To File Settlement in Consolidated Securities Suit
----------------------------------------------------------------
Parties in the consolidated securities litigation filed against
Coinstar, Inc., are currently working on a stipulation of
settlement that will be filed with the court this month, according
to the Coinstar's February 9, 2012, Form 10-K filing with the U.S.
Securities and Exchange Commission for the year ended December 31,
2011.
On January 24, 2011, a putative class action complaint was filed
in the U.S. District Court for the Western District of Washington
against Coinstar and certain of its officers. The complaint
asserts claims under Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934, as amended, and Rule 10b-5 promulgated
thereunder. Five substantially similar complaints were later
filed in the same court. Pursuant to an order of the court dated
March 14, 2011, these six putative class actions were consolidated
as a single action entitled In re Coinstar, Inc. Securities
Litigation. On April 19, 2011, the court appointed the Employees'
Retirement System of Rhode Island as lead plaintiff and approved
its selection of lead counsel. A consolidated complaint was filed
on June 17, 2011. The Company moved to dismiss this complaint on
July 15, 2011. On October 6, 2011, the court issued an order
granting in part and denying in part the Company's motion to
dismiss. The order dismissed numerous allegations, including
allegations that the Company's October 28, 2010 revenue and
earnings guidance was false and misleading. The order also
dismissed all claims against three of the Company's officers. The
court has set a trial date for September 9, 2013.
This case purports to be brought on behalf of a class of persons
who purchased or otherwise acquired the Company's stock during the
period from October 28, 2010, to February 3, 2011. Plaintiffs
allege that the defendants violated the federal securities laws
during this period of time by, among other things, issuing false
and misleading statements about the Company's current and
prospective business and financial results. Plaintiffs claim
that, as a result of these alleged wrongs, the Company's stock
price was artificially inflated during the purported class period.
Plaintiffs are seeking unspecified compensatory damages, interest,
an award of attorneys' fees and costs, and injunctive relief.
On January 11, 2012, the Company entered into a memorandum of
understanding with the other parties to settle and resolve the
class action. The settlement provides for a payment to the
plaintiff class of $6.0 million which will be paid by the
Company's insurers. The parties are currently working on a
stipulation of settlement that will be filed with the Court in
February 2012. The class action settlement is subject to
preliminary and, following notice to class members, final approval
by the United States District Court for the Western District of
Washington. The Company has recorded the expected settlement
amount and corresponding insurance recovery within other accrued
liabilities and prepaid expenses and other current assets,
respectively, in the Company's Consolidated Balance Sheets.
Shareholder Derivative Actions
Related to this putative class action complaint, on March 2 and
10, 2011, shareholder derivative actions were filed in the
Superior Court of the State of Washington (King County) on March,
allegedly on behalf of and for the benefit of Coinstar, against
certain of its current and former directors and officers.
Coinstar was named as a nominal defendant. On April 12, 2011, the
court consolidated these actions as a single action entitled In re
Coinstar, Inc. Derivative Litigation. A third substantially
similar complaint was later filed in the same court. On April 18,
2011, two purported shareholder derivative actions were filed in
the U.S. District Court for the Western District of Washington.
On May 26, 2011, the court consolidated the federal derivative
actions and joined them with the securities class actions,
captioned In re Coinstar Securities Litigation, for pre-trial
proceedings. The derivative plaintiffs' consolidated complaint
was filed on July 15, 2011. The Company moved to dismiss this
complaint on August 12, 2011, on the ground that the plaintiffs
had not made a pre-litigation demand on the Company's Board of
Directors and had not demonstrated that such a demand would have
been futile. On November 14, 2011, the court granted the
Company's motion and issued an order dismissing the complaint with
leave to amend the compliant. On November 23, 2011, plaintiffs
moved to stay the action or defer filing of an amended complaint
in order to allow them time to inspect Coinstar's books and
records prior to any such amendment. On December 22, 2011, the
court entered an order granting in part and denying in part
plaintiffs' motion. The order grants plaintiffs' request to defer
filing of an amended complaint until February 23, 2012, but
provided that if plaintiffs choose to file an amended complaint,
they must pay attorneys' fees incurred by defendants on the motion
to dismiss the consolidated complaint.
The state and federal derivative complaints arise out of many of
the factual allegations at issue in the class action, and
generally allege that the individual defendants breached fiduciary
duties owed to Coinstar by selling Coinstar stock while in
possession of material non-public information, and participating
in or failing to prevent misrepresentations regarding Redbox
expectations, performance, and internal controls. The complaints
seek unspecified damages and equitable relief, disgorgement of
compensation, attorneys' fees, costs, and expenses. Because the
complaints are derivative in nature, they do not seek monetary
damages from Coinstar.
CoinStar, Inc. provides automated retail solutions, including
redbox and Coin segments.
COINSTAR: Agrees to Settle Investor Class Action for $6 Million
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Chris Tribbey, writing for Home Media Magazine, reports that
Redbox parent Coinstar has agreed to pay investors $6 million to
settle a class-action lawsuit that accused the company of failing
to disclose information about its agreements with studios and
unjustly inflating its stock price.
The settlement, announced in court filings Feb. 17, needs court
approval.
Investors, led by the Employees' Retirement System of the State of
Rhode Island, filed a consolidated class-action suit in June 2011,
accusing Coinstar of "material misstatements and omissions that
concerned the company's current and future financial condition."
The investors alleged that Coinstar knew it would soon agree to
28-day windows on new-release titles from some studios but
continued to list them in their slate of fourth quarter 2010 films
in financial documents.
"Despite entering into these agreements in [the second quarter of
2010], Coinstar issued increased guidance on Oct. 28, 2010, for
[fourth quarter 2010] and [full year] 2010," the court filing
reads. "The complaint alleges that these forecasts were made at a
time when defendants knew that the company would not be able to
achieve them."
The class action also claimed Coinstar made false statements
regarding the lower demand for the releases subject to the 28-day
delay and lower demand for Blu-ray Disc titles.
The settlement is small compared with the $96 million Coinstar
investors alleged they lost when the company's stock dropped after
the 28-day delays were announced.
"Even if lead plaintiff prevailed at class certification and
summary judgment, there is no doubt that both sides would have to
present complex and nuanced information to a jury that would
include a 'battle of the experts' on the arcana of damages
calculations and securities disclosure requirements," the filing
reads. "The results of the trial would almost certainly not end
the action, as one side, or both, would likely appeal."
The case is similar to a Jan. 16 class-action suit filed against
Netflix by investors. That suit alleges some company officers and
directors enriched themselves while misleading investors during a
10-month period in 2011.
CPI INTERNATIONAL: Merger-Related Suit Deal Approved in Dec.
------------------------------------------------------------
The California Superior Court for the County of Santa Clara
entered in December 2011 its final approval of a settlement
resolving a merger-related class action lawsuit, according to CPI
International Holding Corp.'s February 9, 2012, Form 10-Q filing
with the U.S. Securities and Exchange Commission for the quarter
ended December 31, 2011.
On February 11, 2011, CPI International LLC (formerly, CPI
International, Inc., "Predecessor"), then a Delaware corporation
and publicly traded company, completed its merger with Catalyst
Acquisition, Inc., a Delaware corporation and wholly owned
subsidiary of CPII (formerly, CPI International Acquisition,
Inc.), a Delaware corporation, whereby Merger Sub merged with and
into Predecessor, with Predecessor continuing as the surviving
corporation and a wholly owned subsidiary of CPII. The Merger was
effected pursuant to the Agreement and Plan of Merger, dated as of
November 24, 2010, among Predecessor, CPII and Merger Sub.
Immediately following the consummation of the Merger and related
transactions, Predecessor was converted into a limited liability
company and liquidated, and CPI International Acquisition, Inc.
changed its name to CPI International, Inc.
On July 1, 2010, a putative stockholder class action complaint was
filed against Predecessor, the members of Predecessor's board of
directors, and Comtech Telecommunications Corp. ("Comtech") in
the California Superior Court for the County of Santa Clara,
entitled Continuum Capital v. Michael Targoff, et al. (Case No.
110CV175940). The lawsuit concerned the proposed merger between
Predecessor and Comtech, and generally asserted claims alleging,
among other things, that each member of Predecessor's board of
directors breached his fiduciary duties by agreeing to the terms
of the previously proposed merger and by failing to provide
stockholders with allegedly material information related to the
proposed merger, and that Comtech aided and abetted the breaches
of fiduciary duty allegedly committed by the members of
Predecessor's board of directors. The lawsuit sought, among other
things, class action certification and monetary relief. On July
28, 2010, the plaintiff filed an amended complaint, making
generally the same claims against the same defendants, and seeking
the same relief. In addition, the amended complaint generally
alleged that the consideration that would have been paid to
Predecessor's stockholders under the terms of the proposed merger
was inadequate. On September 7, 2010, Predecessor terminated the
Comtech sale agreement.
On November 24, 2010, Predecessor entered in an agreement and plan
of merger with CPII and Merger Sub, which are affiliates of The
Veritas Capital Fund IV, L.P. ("Veritas Fund"). On
December 15, 2010, the plaintiff filed a second amended complaint,
which removed Comtech as a defendant, added allegations related to
the Merger and to The Veritas Capital Fund IV, L.P. and The
Veritas Capital Fund III, L.P. ("Veritas Capital"), and added a
claim for attorneys' fees. On
December 23, 2010, after Predecessor filed its preliminary proxy
statement relating to a special meeting in connection with the
approval of the Merger, the plaintiff filed a third amended
complaint, adding allegations related to the disclosures in the
preliminary proxy statement. The third amended complaint sought,
among other things, class action certification and monetary
relief.
Predecessor believed the action to be without merit; however, to
avoid the cost and uncertainty of litigation and to complete the
proposed Merger without delay, the defendants entered into a
Memorandum of Understanding concerning settlement with the
plaintiff, followed by a Stipulation of Settlement dated as of
March 29, 2011. Pursuant to the settlement, among other things,
the defendants will receive a release of claims and the plaintiff
will dismiss the third amended complaint with prejudice in
exchange for, among other agreements, an agreement by Predecessor
to make certain additional disclosures concerning the Merger,
which disclosures were included in a definitive proxy statement
filed by Predecessor on January 11, 2011.
On October 7, 2011, the Court granted the parties' joint motion
for preliminary approval of the settlement. As set forth in the
Court's order, the Company caused the Notice of Pendency and
Proposed Settlement to be sent to all persons and entities who
owned CPI common stock from May 10, 2010 through February 11,
2011. The Court received notification of two individual
stockholders seeking exclusion from the settlement before the
Court's exclusion and objection deadlines.
On December 16, 2011, finding that a full opportunity to be heard
was afforded to all interested parties and that sufficient notice
was sent to the settlement class, the Court approved the
settlement and dismissed the action with prejudice as to all
potential parties except the two individuals seeking exclusion.
The Court's Order and Final Judgment were entered the same day.
E.I. DUPONT: Discovery in Drinking Water Suit in Ohio Ongoing
-------------------------------------------------------------
An action over drinking water contamination pending in Ohio is
currently in discovery, according to E. I. du Pont de Nemours and
Company's February 9, 2012, Form 10-K filing with the U.S.
Securities and Exchange Commission for the year ended
December 31, 2011.
In August 2001, a class action, captioned Leach v DuPont, was
filed in West Virginia state court alleging that residents living
near the Washington Works facility had suffered, or may suffer,
deleterious health effects from exposure to perfluorooctanoic acid
and its salts ("PFOA") in drinking water.
DuPont and attorneys for the class reached a settlement in 2004
that binds about 80,000 residents. In 2005, DuPont paid the
plaintiffs' attorneys' fees and expenses of $23 million and made a
payment of $70 million, which class counsel designated to fund a
community health project. The Company is also funding a series of
health studies by an independent science panel of experts (the "C8
Science Panel") in the communities exposed to PFOA to evaluate
available scientific evidence on whether any probable link exists
between exposure to PFOA and human disease. The Company expects
the C8 Science Panel to complete these health studies through July
2012 at a total estimated cost of $33 million.
In December 2011, the C8 Science Panel announced that on the basis
of epidemiologic and other scientific data available to it, the
panel has concluded that there is a probable link, as defined in
the settlement agreement, between exposure to PFOA and pregnancy-
induced hypertension, which includes preeclampsia. A panel of
medical experts will determine an appropriate medical monitoring
protocol, if any, as a result of this finding. If a medical
monitoring protocol is defined, DuPont is required to fund a
medical monitoring program to pay for such medical testing.
Plaintiffs may pursue personal injury claims against DuPont only
for those human disease(s) for which the C8 Science Panel
determines a probable link exists once the C8 Science Panel
completes its work.
In January 2012, the Company put $1 million in an escrow account
as required by the settlement agreement. The Company will
reassess its liability based on the medical monitoring panel's
determination since costs are not reasonably estimable until a
medical monitoring protocol, if any, is identified. The Company
will continue to reassess its liability based on the C8 Science
Panel's future probable link findings, if any, and associated
medical monitoring protocols, if any. Under the settlement
agreement, the Company's total obligation to pay for medical
monitoring cannot exceed $235 million. In addition, the Company
must continue to provide state-of-the-art water treatment systems
designed to reduce the level of PFOA in water to six area water
districts, including the Little Hocking Water Association (LHWA),
and private well users.
During the fourth quarter 2011, the Company reached final
resolution of three actions brought by or on behalf of water
district customers. The West Virginia action was resolved in
DuPont's favor when the U.S. Supreme Court refused in October to
hear plaintiffs' appeal. The two consolidated New Jersey actions
were finally resolved with the settlement payment of $8.3 million
in October 2011. The pending Ohio action was brought by the LHWA
and is currently in discovery. In addition to general claims of
PFOA contamination of drinking water, the action claims "imminent
and substantial endangerment to health and or the environment"
under the Resource Conservation and Recovery Act (RCRA). DuPont
denies these claims and is defending itself vigorously.
While DuPont believes that it is reasonably possible that it could
incur losses related to PFOA matters in addition to those pending
matters for which it has established accruals, a range of such
losses, if any, cannot be reasonably estimated at this time.
E.I. DUPONT: Recorded $175-MM for Imprelis(R) Claims in FY 2011
---------------------------------------------------------------
E. I. du Pont de Nemours and Company recorded a charge of $175
million in cost of goods sold and other operating charges in 2011
to resolve claims over Imprelis(R), according to the Company's
February 9, 2012, Form 10-K filing with the U.S. Securities and
Exchange Commission for the year ended December 31, 2011.
The Company has received claims and been served with multiple
lawsuits seeking class action status alleging that the use of
Imprelis(R) herbicide caused damage to certain trees. In August
2011, the Company suspended sales of Imprelis(R). In September
2011, the Company began a process to fairly resolve claims
associated with the use of Imprelis(R). The deadline for property
owners to file claims was extended to February 1, 2012, as long as
the Company received notice of the intent to file by November 30,
2011. The Company has established review processes to verify and
evaluate damage claims, and based on current information, the
Company recorded a charge of $175 million in cost of goods sold
and other operating charges in 2011 to resolve these claims.
Additional charges could be incurred, but can be reasonably
estimated only after claims are made known and the Company's
review processes are completed. DuPont intends to seek recovery
from its insurance carriers for costs associated with this matter
in excess of $100 million.
FACEBOOK INC: Tracks Users Even After They Log Out, Suit Says
-------------------------------------------------------------
Laura Maguire and Christopher Simon, on behalf of themselves and
all others similarly situated v. Facebook, Inc., Case No. 5:12-cv-
00807 (N.D. Calif., February 17, 2012) alleges that Facebook has
repeatedly represented that it does not track the Internet
activity of its users after they log out of Facebook.com, however,
Facebook did track its users' Internet activity without their
knowledge or consent even after they logged out of Facebook.com.
By surreptitiously intercepting, storing and transmitting its
users' electronic communications, Facebook engaged in conduct that
violates federal wiretapping laws, as well as applicable state
law, the Plaintiffs argue. Hence, they seek damages and
injunctive relief on behalf of themselves and a class of all
others similarly situated.
Ms. Maguire is a resident of Charlotte, North Carolina. Mr. Simon
is a resident of Baltimore, Maryland. The Plaintiffs have
maintained and used active Facebook accounts during the entire
Class Period.
Facebook is a Delaware corporation with its principle place of
business in Palo Alto, California. Facebook.com is a social
networking Web site that allows its users to interact with each
other, and used by more than 800 million people around the world.
The Plaintiffs are represented by:
William H. Murphy, Jr., Esq.
William H. Murphy, III, Esq.
Tonya Osborne Bana, Esq.
Kambon Williams, Esq.
MURPHY, P.A.
One South Street, 23rd Floor
Baltimore, MD 21202
Telephone: (410) 539-6500
Facsimile: (410)539-6599
E-mail: billy.murphy@murphypa.com
hassan.murphy@murphypa.com
tonya.bana@murphypa.com
kambon.williams@murphypa.com
- and -
Peter G. Angelos, Esq.
LAW OFFICES OF PETER G. ANGELOS
100 North Charles Street
Baltimore, MD 21202
Telephone: (410) 649-2000
Facsimile: (410) 659-1782
- and -
Eric H. Gibbs, Esq.
David Stein, Esq.
GIRARD GIBBS LLP
601 California Street, 14th Floor
San Francisco, CA 94104
Telephone: (415) 981-4800
Facsimile: (415) 981-4846
E-mail: ehg@girardgibbs.com
ds@girardgibbs.com
FACEBOOK INC: Murphy PA Files Internet Privacy Class Action
-----------------------------------------------------------
Facebook, Inc., the social networking Web site with more than 800
million users worldwide, unlawfully tracked the internet
activities of its users, the Baltimore-based Murphy, P.A. alleged
in a lawsuit filed on Feb. 17.
Facebook ignored repeated inquiries from an internet technology
and security blogger who discovered that the unique identifiers
Facebook uses to identify its members continued to track their
internet usage even after they had logged off of Facebook.com,
Murphy, P.A. alleged in the lawsuit. Facebook's actions were
unlawful, Murphy, P.A. claimed, because the terms of use and
privacy policies posted on Facebook.com advised Facebook members
that their post-log-out internet activities were not tracked.
According to the lawsuit, which was filed in the U.S. District
Court for the Northern District of California by Murphy, P.A., the
Baltimore-based Law Offices of Peter G. Angelos, and the San
Francisco office of Girard Gibbs LLP, Facebook's actions violated
several Federal and State laws, including the Federal Wiretap Act,
the California Internet Privacy Requirements Act, and the
California Unfair Competition Law.
"The days when online service providers can run roughshod over the
privacy rights of their customers are over," said Murphy, P.A.
Founding Partner William "Billy" Murphy, Jr. "Companies that
operate commercial Web sites, such as Facebook, need to realize
the public is increasingly concerned about its privacy rights.
Perhaps even more importantly, there is a growing community of
security experts and bloggers that is extremely savvy about
internet technology and committed to ensuring that people's
privacy rights are respected and protected."
Murphy, P.A. -- http://www.murphypa.com-- prosecutes class action
cases.
Contact: Lisa Bennett
Murphy PA
Telephone: (410) 951-8817
E-mail: Lisa.Bennett@murphypa.com
GENERAL NUTRITION: Abbey Spanier Files C-4 Extreme Class Action
---------------------------------------------------------------
Abbey Spanier Rodd & Abrams LLP filed a class action lawsuit
against General Nutrition Centers Inc. (GNC) and other retailers
for selling Cellucor's C-4 Extreme, which the companies marketed
as a dietary supplement, but the law firm said it actually
contains the "wholly synthetic" ingredient 1,3 Dimethylamylamine
(DMAA). The plaintiff alleges that the defendants failed to
disclose that the DMAA contained in C-4 Extreme is wholly
synthetic, manufactured and not derived from the geranium plant.
DMAA has been in the spotlight this year, with the military
banning its sales in its commissaries and a California class
action lawsuit that claims bodybuilding and weight management
supplements from Florida-based BPI Sports contained undisclosed
DMAA.
However, DMAA has its proponents too with USPlabs, which makes one
of the most popular DMAA products (Jack3D) on the market, saying
studies have shown it is derived naturally. "We have conducted
some exciting studies at a highly respected U.S. laboratory,"
reported Jack Deschauer, spokesperson for USPlabs.
The American Herbal Products Association (AHPA) didn't ban its
members from selling DMAA, but it did prohibit members from
labeling the human-synthesized version as a derivative of geranium
oil or any part of the geranium plant. AHPA's board approved the
trade requirement in August 2011, and it went into effect on Jan.
13, 2012.
Abbey Spanier Rodd & Abrams said GNC, along with Cellucor Sports
Nutrition, Woodbolt Distribution Ltd, Woodbolt Management LLC and
Woodbolt International, by selling C-4 Extreme, violated the
California Consumer Leal Remedies Act, the California False
Advertising Law and the California Unfair Competition Act. This
action, filed in the United States District Court, Central
District of California (Civil Action No. 12-1336), was brought as
a class action on behalf of all persons in the United States who
purchased C-4 Extreme at any time during the four years prior to
the filing of the lawsuit.
The law firm said when consumers purchased and used C-4 Extreme,
they were unaware that C-4 Extreme contained the "synthetic and
dangerous stimulant" DMAA (also known as 1,3 Dimethylhexaneamine
HCl, 1,3 Dimethylhexaneamine, Methylhexaneamine and Geranamine)
and that DMAA was not derived from the geranium plant or any other
natural source.
Because the plaintiff alleges the DMAA contained in C-4 Extreme is
a synthetic product, it says it is illegal.
"The safety concerns associated with DMAA have been well-
documented, including concerns that DMAA is a dangerous and
addictive substance that can cause headache, nausea and stroke,"
Abbey Spanier Rodd & Abrams said in a statement. "Experts have
noted DMAA has a chemical structure similar to amphetamines and
ephedrine, and can cause increases in heart rate and blood
pressure and even death."
GOOGLE INC: Attorney General Challenges New Privacy Policy
----------------------------------------------------------
Gus G. Sentementes, writing for The Baltimore Sun, reports that
online privacy issues jumped to the forefront on Feb. 22 in
Maryland as the attorney general challenged Google Inc.'s new
privacy policy, a few days after a pair of Baltimore attorneys
filed a class-action lawsuit against Facebook Inc. for allegedly
tracking users who ventured off its online social network.
Attorney General Douglas F. Gansler sent a letter to Google that
demanded a meeting in a week about the company's changes to its
privacy policy, which gives the Internet company deeper access to
users' data across its services, such as Gmail and YouTube.
Thirty-five other states joined Mr. Gansler in support.
"I am deeply concerned about Google's effort to push a major
privacy change on consumers without giving them the choice to opt
in, or at a minimum the opportunity to opt out," Mr. Gansler said
in a statement.
Separately, attorneys William H. "Billy" Murphy and Peter G.
Angelos, who owns the Baltimore Orioles, filed a federal lawsuit
against Facebook in California -- one of among a dozen suits in 11
states that will be consolidated by judges in California. The two
attorneys have litigated several major class-action lawsuits and
won multi-million-dollars payouts over the years.
"Facebook made a promise to its users that it would not track
their Web site activity unless they were signed into Facebook,"
said Mr. Murphy. "And that promise turned out to be false."
Facebook plans to fight the cases in court.
"We believe that these cases are without merit, and we will fight
them vigorously," said Andrew Noyes, a Facebook spokesman.
Online privacy continues to grow as a flashpoint for Web users,
technology companies and Congress. Consumers are increasingly
using social networking applications that connect them with other
people and companies. Facebook has more than 800 million users
worldwide.
More people are using smartphones that can access the Internet and
potentially share the personal information with companies that
provide software on the devices. Privacy watchdogs have long
advocated for safeguards for consumers when it comes to harvesting
their personal data.
Google has drawn fire for its forthcoming privacy changes from
online watchdogs. Lawmakers on Capitol Hill have also questioned
Google's apparent tracking of Internet users through Apple Inc.'s
Safari web browser.
Congress and state officials are looking at how Internet
companies, such as Google and Facebook, handle online privacy.
Many Internet companies, big and small, collect user data in order
to serve more relevant advertisements to their Web visitors. It
is a business model that large companies, and even smaller start-
ups, rely on for revenues.
Currently, users of Google's services can be subject to more than
60 different privacy policies. Those policies have allowed Google
to combine user information across services for years, a company
spokesman said. The new policy starting March 1 would give Google
access to a user's information in a unified manner across all its
services, according to Mr. Gansler's office.
The company presents the changes as an improvement for users.
Google has said users' information will remain private, it won't
sell personal data to advertisers, and its users still can use its
services, such as Google Maps and Search, without signing in.
"Our updated privacy policy will make our privacy practices easier
to understand, and it reflects our desire to create a seamless
experience for our signed-in users," said Chris Gaither, a Google
spokesman, in an e-mail statement.
In the lawsuits filed against Facebook, the plaintiffs --
including those represented by the Baltimore attorneys -- allege
that Facebook tracked users, even after they logged off the site,
according to court papers.
The lawsuit filed by Messrs. Murphy and Angelos is one of the most
comprehensive among the cases filed by several firms across the
country this month. The Baltimore duo are vying with other law
firms to be named as lead attorneys in a class-action suit against
Facebook.
Messrs. Murphy and Angelos have years of experience in high-
profile, class-action litigation. Two years ago, Murphy won a $34
million verdict for restaurant workers in Baltimore who were
sickened by carbon monoxide poisoning.
Mr. Angelos won a $54 million settlement against Constellation
Energy Group Inc. four years ago for Anne Arundel County residents
whose groundwater had been contaminated by the company's disposal
of coal ash. Mr. Angelos did not return a phone call seeking
comment.
Messrs. Murphy and Angelos now have their sights on Facebook.
Facebook's coffers are expected to fill this year with proceeds
from an initial public offering that is expected to raise as much
as $10 billion. Analysts predict that Facebook's market valuation
could top $75 billion.
In court papers, the two Baltimore lawyers cited several federal
and California laws that Facebook allegedly breached when they
used "cookies" -- a piece of digital tracking information stored
in web browser -- to track users across Web sites other than
Facebook.
The lawsuit said that an Australian blogger discovered the
tracking activity in 2010 and blogged about it last September,
triggering interest from online advocacy groups and lawmakers.
A Baltimore man, Christopher Simon, is the lead plaintiff for the
suit filed by Messrs. Murphy and Angelos. Mr. Simon could not be
reached for comment, and Mr. Murphy declined to discuss his
client.
HOTELS.COM: Faces Class Action in Texas Over Refund Policy
----------------------------------------------------------
Courthouse News Service reports that Hotels.com does not back up
its promise to refund money if hotel guests can find a better rate
online, but sets an "arbitrary and undisclosed limit" on refunds,
an irate customer claims in a class action.
Kaylen Silverberg filed a class action against Hotels.com in
Dallas County Court.
She claims the company will not back up its promise: "'after you
book with Hotels.com, if you find a lower publicly available rate
on line for the same dates, hotel, and room category, we will
march the price and refund you the difference.'"
"As it turns out," Ms. Silverberg says. "Hotels.com has an
arbitrary and undisclosed policy to refund only a portion of the
difference between its rate and other, lower rates. For example,
in Silverberg's case, Hotels.com stated that 'was can only refund
you $142,' even though the price difference was substantially
greater."
Ms. Silverberg claims she booked a room through Hotels.com for two
nights in Rancho Palos Verdes, Calif., for $355 per night, then
found a $223 rate at HotelClub.com. A third Web site advertised
an even lower rate, $213, Ms. Silverberg says.
She says she asked Hotels.com to back up its guarantee and was
told it would refund her only $71 a night, which she calls "an
arbitrary and undisclosed limit."
She seeks restitution and class damages for breach of contract and
unjust enrichment.
A copy of the Complaint in Silverberg v. Hotels.com LP, Case No.
12-01819 (Tex. Dist. Ct., Dallas Cty.), is available at:
http://www.courthousenews.com/2012/02/22/Hotels.com.pdf
The Plaintiff is represented by:
Gary D. Eisenstat, Esq.
Keith R. Verges, Esq.
FIGARI & DAVENPORT, L.L.P.
3400 Bank of America Plaza
901 Main Street
Dallas, TX 75202
Telephone: (214) 939-2000
LIGHTSQUARED LLC: Investors Face Challenge in Class Action
----------------------------------------------------------
Paula Schaap, writing for The Deal, reports that investors who
claim Philip Falcone wrongfully burned through $3.4 billion of
their money for his wireless telecommunications startup
LightSquared LLC may find it tough to prove that the hedge fund
manager changed his spots and owes them a refund.
The picture painted by Lili Schad, the lead plaintiff in the
putative class action against Mr. Falcone, is one of a hedge fund
manager taking advantage of his investing prowess to bamboozle
wealthy, but not necessarily ultra-sophisticated investors, into
coming on board to one enterprise, only to find out that he used
their money for something entirely different.
Ms. Schad, for example, is a documentary filmmaker whose movies
often celebrate the outdoor life. Her father, Robert, founded
Husky Injection Molding Systems.
But Mr. Falcone's investment in bankrupt SkyTerra Communications
Inc.'s wireless spectrum, which he then used to start up
LightSquared, could be construed as the kind of distressed
investing that investors were in for when they signed on with his
hedge fund, Harbinger Capital Partners LLC.
Starting in 2007, Mr. Falcone raised more than $20 billion for his
new fund, mostly from family offices and wealthy individuals,
rather than institutional investors, like banks or pension funds,
according to a person with knowledge of the fund.
Ms. Schad claims she invested $4 million in Mr. Falcone's fund
with the understanding that he would invest in distressed
investments; not unlike the subprime mortgages that Mr. Falcone
was famous for betting against.
That is the main tipoff to one of the main problems investors will
face in litigating their lawsuit.
Eric Lewis, of Lewis Baach PLLC, says the courts, especially in
the federal system, scrutinize the offering documents to see how
much discretion the manager has in how he invests money.
"Does it look like an investment manager who made a material
change to the strategy," Mr. Lewis says. "Or does it look like an
investor who took the big gains when they came in and now are
shocked to find out they are losing 18%?"
After all, a lot of investors got very wealthy in 2007 following
Mr. Falcone in his bet against the subprime mortgage debacle.
In the LightSquared case, however, Jacob Zamansky, of Zamansky &
Associates, one of Ms. Schad's lead attorneys, says the fund's
strategy changed materially when Mr. Falcone went "all in" on his
wireless network dream.
Mr. Falcone knew, as early as 2002, that he would be up against
the makers of GPS systems, which complained that LightSquared's
technology would interfere with theirs, Mr. Zamansky claims.
LightSquared lost that fight when the Federal Communications
Commission withdrew its support for a waiver necessary for the
system to operate.
A spokesman for Harbinger Capital says that the suit is without
merit and would be vigorously contested.
One of the few institutional investors in the Harbinger fund was
Goldman, Sachs & Co. But Goldman, being . . . well . . .
Goldman, got its $50 million out in 2009, while other investors
weren't allowed to withdraw their funds. The Securities and
Exchange Commission has started an inquiry into that situation.
Goldman Sachs has, in the past, refused to comment on its
Harbinger investment.
For those investors who couldn't get out, the fund was down 3.44%
in November and down 13.49% year-to-date, and had shrunk to assets
under management of $5.7 billion, the lawsuit alleges.
Of that $5.7 billion, 60% was sunk into LightSquared, and
Harbinger reportedly marked down his investment 50%.
LOUISIANA CITIZENS: Decision Expected on Class Action Settlement
----------------------------------------------------------------
Ed Anderson, writing for The Times-Picayune, reports that the
board that runs the state property insurer of last resorts was set
to meet on Feb. 22 to discuss and possibly vote on settlement in
a lawsuit involving about 25,000 policyholders who allege the
company was late in adjusting claims after Hurricanes Katrina and
Rita in 2005.
The board of the Louisiana Citizens Property Insurance Corp. were
scheduled to meet at 1:00 p.m. at the Department of Insurance
offices in Baton Rouge. The board was expected to discuss the
settlement in the case behind closed doors then vote on it in a
public session.
An earlier meeting was scheduled, but was canceled when some of
the board members indicated they could not attend. Both sides
said they felt that a solution in the long-running litigation
could be reached at the Feb. 22 meeting.
Attorneys for the plaintiffs in the class-action lawsuit won a
judgment -- which has been upheld by the state Supreme Court twice
-- of $92.8 million in 2009. With legal interest of about $10,200
a day, that total is now about $104 million.
The Citizens board has offered a settlement of $80 million with no
more than $25 million going to lawyers. That is on top of $6
million the board authorized for payment instead of an appeal bond
after the 2009 judgment was rendered.
Insurance Commissioner Jim Donelon infuriated the lawyers in the
class action by revealing they wanted $123 million to settle all
claims and liability, $20 million less than the $143 million they
said was the total liability.
Sen. Eric LaFleur, D-Ville Platte, a member of the Citizens board
and a lawyer, met with the plaintiffs lawyers 10 days ago and a
counter-offer was made, but no one said what it is. That offer is
on the table for discussion and a possible vote on Feb. 22.
MEIJER INC: Recalls 6,102 Touch Point Forced Air Heaters
--------------------------------------------------------
The U.S. Consumer Product Safety Commission, in cooperation with
Meijer Inc., of Grand Rapids, Michigan, announced a voluntary
recall of about 6,102 forced air heaters. Consumers should stop
using recalled products immediately unless otherwise instructed.
It is illegal to resell or attempt to resell a recalled consumer
product.
Exposed and unshielded electrical components can cause the heater
to overheat and melt, posing fire and electrical shock hazards.
Meijer received one report of a unit's base burning, melting and
damaging the carpet beneath it. No injuries have been reported.
This recall involves Touch Point brand oscillating forced air fan
heaters with model number HW-218 and date code 0811. The model
number and date code are on a silver sticker on the bottom of the
heater. Universal Product Code (UPC) 7-13733-30927-1 is on the
bottom of the packaging. The heaters are white, 12 inches tall, 9
inches wide and 8 inches deep. They have two round control knobs
and a red warning light on the top front, and a black on/off
switch on the front base that controls the fan's oscillation. The
words "Touch Point" appear on the right front of the heater's
base. A picture of the recalled products is available at:
http://www.cpsc.gov/cpscpub/prerel/prhtml12/12115.html
The recalled products were manufactured in China and sold
exclusively at Meijer stores in Illinois, Indiana, Kentucky,
Michigan and Ohio from September 2011 through November 2011 for
about $20.
Consumers should immediately stop using the recalled heaters and
return them to any Meijer store for a full refund. For additional
information, contact Meijer at (800) 927-8699 between 8:00 a.m.
and 5:00 p.m. Eastern Time Monday through Friday, or visit the
firm's Web site at http://www.meijer.com/
NOVELLUS SYSTEMS: Being Sold for Too Little, Suit Claims
--------------------------------------------------------
James P. Tessitore, on behalf of himself and all others similarly
situated v. Novellus Systems, Inc., Richard S. Hill, William R.
Spivey, Neil R. Bonke, Youssef A. El-Mansy, Glen G. Ossley,
Delbert Whitaker, Yoshio Nishi, Ann D. Rhoads, Krishna Saraswat,
Lam Research Corporation and BLMS Inc., Case No. 5:12-cv-00792
(N.D. Calif., February 17, 2012) is brought on behalf of the
public shareholders of Novellus arising out of a transaction in
which Lam Research will acquire each share of Novellus' common
stock in an all-stock transaction valued at approximately $3.3
billion.
In approving the Proposed Acquisition, the Individual Defendants
have breached their fiduciary duties by, among other things,
agreeing to sell Novellus without first taking steps to ensure
that the Plaintiff and Class members would obtain adequate, fair
and maximum consideration.
Mr. Tessitore is a shareholder of Novellus and a resident of New
York.
Novellus is a California corporation. The Individual Defendants
are officers and directors of Novellus. Lam Research, a Delaware
corporation, is a major supplier of wafer fabrication equipment
and services to the worldwide semiconductor industry for more than
30 years. BLMS is a California corporation and a wholly owned
subsidiary of Lam Research.
The Plaintiff is represented by:
Evan J. Smith, Esq.
BRODSKY & SMITH, LLC
9595 Wilshire Blvd., Suite 900
Beverly Hills, CA 90212
Telephone: (877) 534-2590
Facsimile: (310) 247-0610
E-mail: esmith@brodsky-smith.com
- and -
David A.P. Brower, Esq.
Brian C. Kerr, Esq.
BROWER PIVEN
488 Madison Avenue, 8th Floor
New York, NY 10022
Telephone: (212) 501-9000
Facsimile: (212) 501-0300
E-mail: brower@browerpiven.com
kerr@browerpiven.com
PASSAIC COUNTY, NJ: Human Rights Advocates Laud Jail Settlement
---------------------------------------------------------------
Zach Patberg, writing for NorthJersey.com, reports that human
rights advocates on Feb. 22 hailed as "a huge victory" a
settlement between Passaic County and inmates who filed a class-
action lawsuit over conditions at the jail more than three years
ago.
The agreement, made in late December behind closed doors, will
likely bind the county to a far-reaching jail overhaul, promising
better ventilation, safety equipment, sanitation and officer
treatment for its more than 1,000 inmates, according to a copy of
the settlement. It will now go before federal judge March 27.
"This settlement will be a huge victory for the inmates of Passaic
County Jail, which at one time was notorious for its inhumane and
degrading conditions," said Patricia Perlmutter, an attorney at
Seton Hall University's Center for Social Justice, which led the
case with the American Civil Liberties Union of New Jersey.
The lawsuit's original plaintiffs in 2008 were eight inmates who
said their food was contaminated with rodent droppings, sewage
leaked through floor drains and corrections officers beat inmates
out of view of security cameras.
The settlement, however, would apply to the entire jail
population. It does not seek money, but it would require that a
list of reforms be posted in every room and cell in the jail, and
that an independent monitor inspect the jail at least twice a
year.
Among the other requirements:
-- A new fire detection and alarm system.
-- A new ventilation system that would limit temperature inside
to no less than 65 degrees in the winter and no more than 80
degrees in the summer.
-- More space between beds and toilets.
-- Incentives to keep the jail population under 1,022 to avoid
the crowding that plagued the facility in 2007.
-- More medical and mental health staff to shorten delays to
medical and mental health care.
-- Mandatory training in proper use of force for corrections
officers, and new software to help catch officers using excessive
force on inmates.
In a separate settlement filed Feb. 13, the state Department of
Corrections has agreed to remove inmates from the Passaic County
Jail within 20 days of their conviction or revocation of their
parole. The DOC also would inspect jail at least once a year.
The settlement is still waiting for a fairness hearing from a
federal judge to be set.
Much of the work on the jail is already under way -- with some
completed -- since the county began negotiating a settlement in
2009, according to the Sheriff's Office. Sprinklers and smoke
detectors have been installed in most of the building. The air
conditioning and heating system is under construction in parts of
the jail. The population is down to 1,048 from 1,700 in 2007.
And the medical unit now has a full-time director and an extra
social worker.
Sheriff Richard Berdnik "has been moving this process along," said
Bill Maer, a spokesman for the Sheriff's Office. "He's worked to
making sure it's resolved in a timely manner."
He added however, that deficiencies, such as the proximity of
toilets and beds, "we can't control" unless the jail itself is
expanded.
Mr. Berdnik was not in office when the lawsuit was filed.
The county has so far spent nearly $8 million on fire safety
installations and the first phase of the ventilation upgrades. It
will start searching for contractors in April for the second phase
at an expected cost of $5 million, county spokesman Keith Furlong
said.
"They've made steps, but there's a long way to go," said Jeanne
LoCicero, an ACLU attorney. "We think it could take up to five
years."
The settlement, if a judge approves it next month, represents a
major commitment for jail, which is more than 50 years old. The
cost of dealing with overcrowding and building repairs has been so
high that county officials considered closing it last year. That
plan, which would have housed Passaic inmates in the Bergen and
Essex county jails, was dropped after unions objected.
Complaints about the jail became public after Seton Hall's Center
for Social Justice sent students teams to document its problems.
The center and the ACLU sued in 2008.
The plaintiffs' attorneys said the settlement's most important
item calls for the appointment of independent monitor, Susan
McCampbell, a former acting sheriff in Florida who has done
similar court-appointed jail evaluations in Illinois and the
Virgin Islands.
Ms. McCampbell, with consultants paid by the county, would conduct
at least two jail inspections a year, have private access to
inmates and jail records, and submit progress reports.
The lawsuit's defendants include the county freeholders, former
Sheriff Jerry Speziale, former Warden Charles Meyers, Deputy
Warden George Hayman and former state DOC Commissioner George
Hayman. Judge Dennis Cavanaugh, of the U.S. District Court in
Newark, will rule on the settlement after the March 27 fairness
hearing.
Meanwhile, the plaintiffs' lawyers are already receiving feedback
from inmates who have read the settlement posted around the jail.
The responses, describing such complaints as poor sanitation,
"underscore the problems that we're trying to correct,"
Ms. Perlmutter said.
PUDA COAL: SEC Files Securities Suit in New York
------------------------------------------------
Glancy Binkow & Goldberg LLP on Feb. 22 disclosed that the
Securities and Exchange Commission (SEC) has filed a lawsuit in
the United States District Court for the Southern District of New
York against the Chairman and the former Chief Executive Officer
of Puda Coal, Inc., alleging violations of, among other things,
the Securities Act of 1933 and the Securities Exchange Act of
1934. Glancy Binkow & Goldberg LLP is the court-appointed Co-Lead
Counsel in a securities class action lawsuit, also pending in the
Southern District of New York, which was filed in April 2011 and
seeks to recover shareholder losses on behalf of all persons or
entities who purchased Puda common stock and call options, or sold
Puda put options between November 13, 2009 and October 3, 2011,
and also on behalf of purchasers of Puda shares pursuant and/or
traceable to the Company's December 8, 2010 public offering of its
common stock. The lawsuit filed by Glancy Binkow & Goldberg LLP,
In re Puda Coal Securities Inc. et al. Litigation, Case No. 11-CV-
2598-BSJ, alleges violations of federal securities laws and has
been assigned to United States District Judge Barbara S. Jones.
A copy of the amended Consolidated Shareholder Complaint filed by
Glancy Binkow & Goldberg LLP is available on the firm's Web site
at http://www.glancylaw.com
Copies of the SEC Complaint are available on the SEC's Web site at
http://www.sec.gov
Please contact us by phone to discuss these actions or to obtain a
copy of the Complaint at (310) 201-9150 or Toll Free at (888) 773-
9224, by e-mail to shareholders@glancylaw.com or visit our Web
site at http://www.glancylaw.com
Puda purports to supply metallurgical coking coal to the
industrial sector in the People's Republic of China (PRC) through
the Company's indirect equity ownership in Shanxi Puda Coal Group
Co., Ltd. ("Shanxi Coal") -- a PRC-based coal mining company and
Puda's sole revenue source. The SEC Complaint alleges that the
Company's Chairman, Ming Zhao ("Zhao"), with the knowledge and
complicity of former CEO Liping Zhu ("Zhu"), "looted" the Company
by secretly transferring Puda's controlling interest in Shanxi
Coal to Zhao, through a series of transactions which the Company
failed to disclose in its periodic financial reports.
Specifically, the SEC alleges that in September 2009 Zhao
transferred Puda's 90% stake in Shanxi Coal to himself, and
subsequently transferred a 49% ownership interest in Shanxi Coal
to CITIC Trust Co. Ltd. ("CITIC Trust"), a private equity fund
controlled by the largest state-owned investment firm in the PRC.
Zhao then caused Shanxi Coal to pledge 51% of its assets to CITIC
Trust, as collateral for a $370 million loan to Shanxi Coal, and
in exchange Zhao received more than 1.2 billion preferred shares
of an investment trust holding CITIC Trust's 49% stake in Shanxi
Coal.
The SEC Complaint alleges that Zhao and Zhu failed to disclose the
foregoing transactions to investors, and further alleges that in
2010 Puda conducted two public offerings -- purportedly to raise
capital for mine acquisitions by Shanxi Coal -- without disclosing
that Puda no longer owned any ownership stake in Shanxi Coal. As a
result, CITIC Trust was selling interests in Shanxi Coal to
Chinese investors, at the same time Zhao and Zhu were
misrepresenting to U.S. investors that Puda still owned a 90%
stake in that company.
Likewise, the shareholder class action alleges that Puda was able
to raise more than $100 million from public investors by selling
shares in what was effectively an empty shell company, netting
roughly $14.5 million of illicit proceeds from the sale of
approximately 2.9 million shares of Puda stock in a February 2010
offering, and an additional $108 million from the sale of 9
million shares to public investors in a December 2010 secondary
offering of common stock, which was underwritten by Macquarie
Capital (USA) Inc. and Brean Murray, Carret & Co., LLC.
If you purchased Puda shares pursuant to the Company's December 8,
2010 public offering of its common stock, if you wish to discuss
this action or have any questions concerning this Notice or your
rights or interests with respect to these matters, please contact
Lionel Z. Glancy, Esquire, of Glancy Binkow & Goldberg LLP, 1925
Century Park East, Suite 2100, Los Angeles, California 90067, by
telephone at (310) 201-9150 or Toll Free at (888) 773-9224, by
e-mail to shareholders@glancylaw.com or visit our Web site at
http://www.glancylaw.com
QUAKER OATS: Loses Bid to Dismiss Misleading Label Class Action
---------------------------------------------------------------
Courthouse News Service reports that pending the outcome of
similar claims in California, a federal judge refused to dismiss
one of several class actions alleging that Quaker Oats mislabels
its products as "heart healthy" despite transfat content.
A copy of the Memorandum Opinion and Order in Askin, et al. v. The
Quaker Oats Company, Case No. 11-cv-00111 (N.D. Calif.), is
available at:
http://www.courthousenews.com/2012/02/22/Quaker.pdf
RAWLINGS CO: Accused of Mistreating Employees in California
-----------------------------------------------------------
Monica Quintero and Victoria Quintero, and Members of the general
public similarly situated v. The Rawlings Company LLC, Rawlings
Group, LLC, Rawlings Financial Services, LLC, Rawlings Company,
Rawlings, Inc., Rawlings Corporation, Rawlings Corporation Inc.,
Rawlings Co. Inc., Mercury Casualty Company, Mercury Insurance
Inc., Mercury Insurance Group and Does 1 through 100, Case No.
BC479351 (Calif. Super. Ct., Los Angeles Cty., February 21, 2012)
alleges that the Defendants caused injury, loss and harm to the
Plaintiffs.
The Plaintiffs accuse the Defendants of mistreating the Plaintiffs
and all perspective class members. The Plaintiffs also contend
that the Defendants have engaged in unreasonable, unfair,
deceptive and improper business practices.
The Plaintiffs were employed by and worked for the Defendants in
the collection/insurance business.
The Defendants were involved in a joint business venture and
partnership.
The Plaintiffs are represented by:
Timothy J. Donahue, Esq.
LAW OFFICES OF TIMOTHY J. DONAHUE
374 South Glassell Street
Orange, CA 92866
Telephone: (714)289-2445
Facsimile: (714)289-2450
E-mail: tdonahue@attorneydonahue.com
SOCORRO ELECTRIC: Attorneys to Name New Class Representative
------------------------------------------------------------
T.S. Last, writing for DChieftain.com, reports that attorneys
representing member-owners of Socorro Electric Cooperative in a
proposed class-action lawsuit will name a new representative of
the class, according to papers recently filed.
Originally, Charlie Wagner, a member of the co-op's board of
trustees, was listed as the class representative in a countersuit
which names the nine other trustees, four former trustees and the
co-op's former general manager as defendants. The countersuit
charges the cross claim defendants with breach of fiduciary duty
and fraud.
"Counsel anticipates that an amended complaint on the class action
portion of this litigation (the cross claim) will be filed
shortly, removing Mr. Wagner as proposed class action
representative and thus as cross claim plaintiff," reads a
response to the co-op's motion for a protective order against
Mr. Wagner.
In the co-op's motion for a protective order filed Feb. 1 in 13th
Judicial District Court in Los Lunas, it asserts that Wagner has
been attempting to sidestep rules of discovery by requesting
information by way of the Inspection of Public Records Act.
Mr. Wagner says he was doing no such thing. He told El Defensor
Chieftain that his requests for information regarding records of
payments made to the Kennedy & Han, the law firm representing
Socorro Electric in defense of the countersuit, was done in his
role as a trustee, he said.
In the response to the motion for a protective order, Stephen
Kortemeier, of Socorro's Deschamps & Kortemeier law firm, wrote
that counsel was "absolutely unaware" of Mr. Wagner's requests for
information and that it had not received any information or
documents from Mr. Wagner as a result of his requests.
"It appears . . . that Mr. Wagner has been merely exercising his
rights as a trustee to inform himself on matters affecting the
financial well being of the cooperative: a responsibility clearly
within his fiduciary obligations to the membership, in which he
may be remiss if he doesn't," Mr. Kortemeier wrote.
The response asks the judge hearing the case to deny the co-op's
request for a protective order in that the matter will become moot
once the amended complaint is filed. It further argues that a
protective order would infringe upon Mr. Wagner's obligations as a
trustee.
The filing suggests an arrangement be worked out where documents
provided to Mr. Wagner in his role as a trustee and those
furnished through discovery could be marked to distinguish the
difference. It also asked that the judge reaffirm Mr. Wagner's
right to access information in his capacity as a trustee.
The response came in the wake of a flurry of filings by Kennedy &
Han in recent weeks, including four motions to dismiss the
countersuit and a motion to stay discovery.
Citing a heavy workload, Deschamps & Kortemeier asked for a one-
week extension to respond to the co-op's motions.
Tenth Judicial District Court Judge Albert J. Mitchell Jr.,
assigned to preside over the case by the New Mexico Supreme Court
chief justice, last week granted a request for hearing to address
the motions. That hearing will be held by phone on Feb. 27.
The countersuit came in response to a lawsuit Socorro Electric
filed against all of its approximately 10,000 member-owners in
June 2010. The co-op was challenging the validity of new bylaws
that require it to operate with greater transparency.
Judge Mitchell ruled against the co-op last May, saying bylaws
that compel it to follow the Open Meetings Act and Inspection of
Public Records Act were properly adopted and members were within
their rights to impose them on what is a democratically controlled
cooperative.
UNITED STATES: Yale Immigration Clinic Files Class Action v. ICE
----------------------------------------------------------------
Mary E. O'Leary, writing for New Haven Register, reports that an
immigration law clinic at Yale Law School has filed a federal
class action lawsuit challenging the use of detainers by
Immigration and Customs Enforcement and asked on Feb. 22 that the
suit be expedited now that ICE is rolling out Secure Communities
in Connecticut statewide.
"Detainers are the linchpin of the Secure Communities program.
Without them, the program cannot function," said Matthew Vogel,
law student intern at the Worker and Immigration Rights Advocacy
Clinic, in a statement.
"But confinement pursuant to these ICE notices is unconstitutional
and unauthorized by Congress. The Department of Correction cannot
hold people without lawful authority to do so," he said in a
statement.
Secure Communities is a data sharing program where the FBI sends
arrest information to ICE, which can then request the prison to
detain the individual for 48 hours to allow it to determine if it
wants to assume custody after a case has been adjudicated.
Secure Communities was scheduled to go live in all of Connecticut
on Feb. 22, but the plaintiff in the lawsuit, was charged in a bar
room fight months ago.
Sergio Brizuela, an East Haven man, was arrested in that town in
November and ultimately pleaded to interfering with a police
officer, a misdemeanor, in February.
Travis Silva, another law student intern, said the suit contends
that detainers violate the Fourth, Tenth, and Fourteenth
Amendments of the Constitution.
Mr. Silva said Mr. Brizuela could not post bond and was
incarcerated at the New Haven Correctional Center on Whalley
Avenue since November. After pleading to the misdemeanor on
Feb. 10, he was held for four days before being picked up by ICE.
Mr. Silva said not only do they challenge the constitutionality of
the detainers, but he said no one can be held for more than 48
hours without being charged with a crime.
The suit names Leo Arnone, commissioner of corrections, and Jose
Feliciano, the warden of the Whalley Avenue facility.
Mr. Silva said they want the court to expedite the suit because
they fear there will be an increase in unlawful detentions now
that Secure Communities is officially expected to be put in place
in Connecticut. It wants the court to order the Department of
Correction to answer the lawsuit within days.
The law clinic had broadly hinted it would legally challenge
detainers in a recent press conference. The suit was filed in
U.S. District Court last week and officially served on state
officials on Feb. 22, Mr. Silva said.
The suit was announced on the same day that Immigrant advocates
gathered at the Capitol on Feb. 22 to urge Gov. Dannel P. Malloy
to not participate in the federal Secure Communities program or to
at least set guidelines on who they would detain, if so requested.
About 70 immigrants and their supporters presented a petition that
had the backing of 30 organizations to Michael Lawlor, who vets
criminal justice policies for the governor.
Mr. Lawlor told them that Mr. Malloy understands their concerns
and spoke out against the danger of racial profiling when he was
mayor of Stamford and "in particular he came to the defense of
people who were just trying to get work."
Secure Communities was sold to the states as rounding up the
"worst of the worst" serious felons and national security risks,
but across the country immigrants with no criminal charges or
misdemeanors have ended up deported.
Mr. Silva said Brizuela does not fit the priorities listed by ICE
for deportation. He also has a U.S. child and fiancee.
Mr. Silva said in his case, Mr. Brizuela was picked up by ICE in
an East Haven case, even though another arm of the U.S. Justice
Department has charged its police with profiling Latinos and four
officers have been indicted.
The Department of Homeland Security's own task force criticized
Secure Communities for its confusing goals and its conflicts with
local police departments when traffic violators and minor offenses
are targeted. It said there is consensus around deporting serious
criminals and it should build on this.
In Fairfield County, the only place in Connecticut where the
program has officially rolled out, more than 70 percent of those
deported had no criminal record or had a misdemeanor conviction.
* Class Actions Prompt CFPB Probe Into Bank Overdraft Practices
---------------------------------------------------------------
Ylan Q. Mui, writing for The Washington Post, reports that the
Consumer Financial Protection Bureau was expected to launch an
inquiry on Feb. 22 into banks' overdraft practices, which have
been in regulatory crosshairs in recent years.
The bureau said it will look into whether banks are reordering
customers' debit-card charges to maximize overdraft fees.
Reordering transactions can double or triple penalties, and the
practice has been the target of several class-action lawsuits
against the nation's biggest banks.
The CFPB's inquiry also will focus on bank overdraft policies, how
they market the plans, and their impact on low-income and young
consumers. The agency will solicit feedback from the public.
"Overdraft practices have the capacity to inflict serious economic
harm on the people who can least afford it," CFPB Director Richard
Cordray said in a statement. "We want to learn how consumers are
affected, and how well they are able to anticipate and avoid
paying penalty fees."
Overdraft fees have long irked consumers, who have complained that
withdrawals of as little as $3 from their bank accounts have
resulted in penalties as high as $37. As the recession squeezed
Americans' budgets and anger at the financial industry reached
fever pitch, regulators and lawmakers began moving to curtail
banks' fees.
In 2010, the Federal Reserve began prohibiting banks from imposing
overdraft charges unless a customer had signed up for the service.
The rule only applies to debit-card transactions, not to checks or
recurring withdrawals such as automatic bill pay.
Meanwhile, the Federal Deposit Insurance Corp. issued guidelines
calling for the smaller banks it oversees to set limits on the
number of times customers can be charged overdraft fees in one day
and offer alternatives to those who overdraw their accounts more
than six times in a year. Its guidelines encompass checks and
recurring payments.
As a result of the new regulations and consumer uproar, several
banks, including Bank of America, ended their overdraft programs
all together. A poll by Consumer Reports shortly after the Fed's
ban went into effect found that only 22 percent of customers had
opted into the service. Of those customers, more than half had
experienced an overdraft in the past six months, the poll found.
One thing regulators left unaddressed, however, was the order that
banks processed charges. That issue has been winding its way
through the nation's court system instead. In 2010, a California
judge ordered Wells Fargo to return $203 million in overdraft fees
to customers whose transactions were reordered. Chase, Bank of
America and several other banks have spent hundreds of millions of
dollars to settle a separate class-action lawsuit over the
practice.
The CFPB said it is seeking information on how prevalent the
practice remains and how it affects consumers. It is also
concerned about a 2008 FDIC report that found that 9 percent of
checking account customers made up about 84 percent of overdraft
charges, suggesting that the fees were concentrated among low-
income customers.
The bureau said it also hopes to educate consumers about the
overdraft rules. It is launching a campaign called "What's your
overdraft status?" and has developed a "penalty fee box" that
would appear on checking account statements to help consumers
understand any overdraft charges.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Class Action Reporter is a daily newsletter, co-published by
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A. Adala, Joy A. Agravante, Ivy B. Magdadaro, Psyche A. Castillon,
Julie Anne L. Toledo, Christopher Patalinghug, Frauline Abangan
and Peter A. Chapman, Editors.
Copyright 2012. All rights reserved. ISSN 1525-2272.
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