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/raid1/www/Hosts/bankrupt/CAR_Public/120307.mbx C L A S S A C T I O N R E P O R T E R Wednesday, March 7, 2012, Vol. 14, No. 47 Headlines BP: U.S. Gov't Not Part of $7.8-Bil. Oil Spill Settlement CENTRO: Class Action Trial Opens in Melbourne CENTRO: Class Action Lawyers Balk at "No Liability" Defense CH ENERGY: Being Sold for Too Little, New York Suit Claims CITNALTA CONSTRUCTION: Sued Over Wages for Work in Wall Street DEPUY ORTHOPAEDICS: North Jersey Attorney Files Class Action GLK FOODS: Mexican Workers Sue Over Employment Termination GOVERNMENT OF GUAM: Objects to Tax Refund Class Action NETFLIX INC: Faces Shareholder Class Action Suit in California QBE: Faces Class Actions Over "Force-Placed Insurance" Product QUICKTRIM: Kardashian Sisters Face $5-Mil. Class Action SKECHERS USA: Faces Class Action Over "Shape-Ups" Toning Shoes SNC-LAVALIN: Siskinds, Desmueles Files Class Action SUPERIOR CORP: Accused of Not Paying Employees' Overtime Wages TEVA PHARMACEUTICAL: Petition for Review in "Cipro" Suit Pending WORLD SAVINGS: Sued Over Real Property in San Jose, California * Directors of Australian Companies Worry Over Settlements ********* BP: U.S. Gov't Not Part of $7.8-Bil. Oil Spill Settlement --------------------------------------------------------- Courthouse News Service reports that attorneys for 116,000 Gulf Coast plaintiffs hurt by the Deepwater Horizon oil spill have agreed to a $7.8 billion settlement from BP, but the federal government is not a part of the deal, and is expected to go to trial -- though the trial has been postponed again. The proposed settlement would satisfy claims for economic damage and pay for occasional medical monitoring of some plaintiffs for the next 21 years. BP set up a $20 billion fund, from which the $7.8 billion will be paid, at President Obama's suggestion, in August 2010. The money has been and will be used to pay claims from hundreds of thousands of Gulf Coast fishermen, seafood processors and hotel- and other property-owners who were hurt by the April 20, 2010 spill. The explosion of BP's Deepwater Horizon oil rig killed 11, dumped 5 million barrels of oil into the Gulf of Mexico and caused the worst environmental disaster in U.S. history. The first trial in the massive litigation was postponed for a week, during which speculation raged that plaintiff attorneys and BP might settle with the $14 billion that remains in the fund. On Feb. 24, BP said in a statement that just $7.8 billion will be paid out. U.S. District Judge Carl Barbier, who is overseeing the massive consolidated oil spill litigation, said in an order Feb. 24 that the trial will be postponed again. He gave no date for its opening. "The Court will schedule a status conference with liaison counsel to discuss issues raised by the settlement and to set a new trial date," Judge Barbier's 1-page order states. The order says the trial was postponed again because "such a settlement would likely result in a realignment of the parties in this litigation and require substantial changes to the current Phase I trial plan, and in order to allow the parties to reassess their respective positions." The announced settlement will satisfy only the economic claims brought by Gulf Coast residents and businesses. Other claims brought by the federal government and the states are still pending. But BP's statement that announced the settlement indicated the rest of the $14 billion fund might be used, in part, to satisfy state and federal government interests in the litigation. BP said the $20 billion was originally set aside to fund such interests. BP's oil spill compensation fund has been held by the Gulf Coast Claims Facility and has been overseen by attorney Kenneth Feinberg. Fourteen billion dollars remain in the fund. BP will pay a bit more than half of that to settle with plaintiff steering committee attorneys, who were appointed by the court to handle the litigation. Anthony Buzbee, a Houston plaintiff attorney not on the plaintiff steering committee, who has 12,000 oil spill clients, said he was surprised the settlement was for just half of what remains in the fund. "I don't know enough to criticize it at this point, but based on what I know I can't see the benefit, other than benefiting the lawyers on the committee," Mr. Buzbee told Courthouse News on Feb. 25. BP's press release said that the settlement amount is just an estimate. "While BP has sought to reliably estimate the cost of this proposed settlement, it is possible that the actual cost could be higher or lower than this estimate depending on the outcomes of the court-supervised claims processes," BP said in its statement. "In accordance with its normal procedures, BP will re-evaluate the assumptions underlying this estimate on a quarterly basis as more information, including the outcomes of the court-supervised claims processes, becomes available." BP said in its statement that the fund was never meant to pay just economic damage claims, but all claims arising from the spill. It indicated that the rest of the fund will be used to satisfy state and federal claims. "Other costs to be paid from the trust include state and local government claims, state and local response costs, natural resource damages and related claims, and final judgments and settlements. It is not possible at this time to determine whether the $20 billion trust will be sufficient to satisfy all of these claims as well as those under the proposed settlement. Should the trust not be sufficient, payments under the proposed settlement would be made by BP directly," BP said in its statement. The BP statement added: "The proposed settlement does not include claims against BP made by the United States Department of Justice or other federal agencies (including under the Clean Water Act and for Natural Resource Damages under the Oil Pollution Act) or by the states and local governments." The base fine for Clean Water Act penalties is $1,100 per barrel of oil spilled. If gross negligence is found by the judge, the fine could be as high as $4,300 per barrel. The BP oil spill dumped 4.9 million barrels into the Gulf of Mexico. Those potential damages, then, could come to $21 billion, if the federal government seeks the maximum penalty. The proposed settlement involves two separate agreements: one to resolve claims for economic loss, and another to resolve medical claims. BP said in its statement that the "proposed agreement to resolve medical claims involves payments based on a matrix for certain currently manifested physical conditions, as well as a 21-year medical consultation program for qualifying class members." A copy of the Order in In re: Oil Spill by the Oil Rig "Deepwater Horizon" in the Gulf of Mexico, on April 20, 2010, MDL No. 2179 (E.D. La.), is available at: http://www.courthousenews.com/2012/03/03/BP.pdf CENTRO: Class Action Trial Opens in Melbourne --------------------------------------------- ABC News reports that a Federal Court trial has opened in Melbourne in the class action against property investment firm Centro. Centro's directors have already been found guilty of breaching the Corporations Act for failing to notice billions of dollars in short term debt when they signed off on the company's accounts in 2007. The class action on behalf of Centro shareholders alleges its directors engaged in misleading and deceptive conduct by not disclosing the debts. Shareholders are seeking more than AUD200 million in damages. CENTRO: Class Action Lawyers Balk at "No Liability" Defense ----------------------------------------------------------- Greg Roberts, writing for The Australian Associated Press, reports that the Lawyers for a AUD200 million-plus class action against the Centro group say it is unrealistic for the restructured company to say it is not liable for losses of the old entity. More than four years since the shopping centre owner and funds manager nearly collapsed under AUD5.7 billion in debt, what may be the biggest court case in Australia this year begun in Melbourne on March 5. The civil action is expected to run in the Federal Court sitting in Melbourne for at least 10 weeks. About 5,000 investors accuse Centro of misleading and deceptive conduct for not disclosing in 2007 that it had at least AUD3 billion of interest-bearing debt falling due within 12 months. When it did disclose the current debt its shares plunged -- by 76 per cent in one day on December 17, 2007 -- with many people losing their life savings. Centro has since restructured itself as listed retail property trust Centro Retail Australia, involving an amalgamation of the Centro Retail Group and Centro Properties Group. Senior Counsel Noel Hutley, representing the class action, ridiculed the new Centro entity's "no liability" defense for the actions of the old Centro on March 5. "There is a degree of unreality to sever knowledge about what's happening," he told Justice Michelle Gordon. "One group would have known what the investment group was considering." A common board and executive had overseen the two Centro groups, Mr. Hutley said. The court heard Centro dramatically increased its funds under management by AUD14 billion to AUD25.5 billion in the year leading up to its near collapse. It greatly expanded its operations, the court heard, with its debt gearing (debt to equity) increasing above its own recommended 35- 40 per cent to about 74 per cent by the end of 2008. At least 50 lawyers packed into extra benches in the court on March 5, while more lawyers filled the public gallery. Maurice Blackburn and Slater and Gordon are representing shareholders in the class action. The two Centro companies' debt problems were exacerbated by the tightening of credit during the global financial crisis, when it had been unable to refinance billions of dollars of debt. Publicly listed companies such as Centro must fulfill obligations of continuous disclosure to the ASX; these include timing around maturing debt obligations; the risk of not being able to refinance or meeting profit forecasts. Maurice Blackburn and Centro are separately taking action against Centro's auditors PricewaterhouseCoopers (PWC) for failing to detect errors regarding Centro's debts in its financial accounts. CH ENERGY: Being Sold for Too Little, New York Suit Claims ---------------------------------------------------------- Elizabeth Vivas, On Behalf of Herself and All Others Similarly Situated v. CH Energy Group, Inc., Steven V. Lant, Margarita K. Dilley, Steven M. Fetter, Stanley J. Grubel, Manuel J. Iraola, E. Michael Kruse, Edward T. Tokar, Jeffrey D. Tranen, Ernest R. Verebelyi, Cascade Acquisition Sub Inc., FortisUS Inc., and Fortis Inc., Case No. 650583/2012 (N.Y. Sup. Ct., February 29, 2012) is a shareholder class action lawsuit arising out of the Defendants' February 20, 2012 agreement to sell CH Energy to Fortis at a transaction valued at approximately $1.5 billion. The Plaintiff argues that in pursuing the Proposed Transaction, each of the Defendants has violated applicable law by directly breaching and aiding breaches of fiduciary duties of loyalty and due care owed to the Plaintiff and the proposed Class. The Plaintiff contends that the Proposed Transaction is the product of a flawed process that is designed to ensure the sale of CH Energy to Fortis on terms preferential to Fortis, but detrimental to the Plaintiff and the other public stockholders of CH Energy. Plaintiff seeks to enjoin the Proposed Transaction. Ms. Vivas is a CH Energy shareholder. CH Energy, a New York Corporation, is the holding company of Central Hudson Gas & Electric Corporation, a regulated electric and natural gas subsidiary and Central Hudson Enterprises Corporation, the parent company of CH Energy's unregulated businesses and investments. FortisUS is a Delaware Corporation and wholly-owned subsidiary of Fortis Inc., a Canadian corporation and is the largest investor-owned distribution utility in Canada. Cascade is a New York corporation and wholly owned subsidiary of FortisUS. The Individual Defendants are directors and officers of CH Energy. The Plaintiff is represented by: Mark C. Gardy, Esq. James S. Notis, Esq. Kira German, Esq. GARDY & NOTIS, LLP 501 Fifth Avenue, Suite 1408 New York, NY 10017 Telephone: (212) 905-0509 Facsimile: (212) 905-0508 E-mail: mgardy@gardylaw.com jnotis@gardylaw.com kgerman@gardylaw.com - and - Patricia C. Weiser, Esq. Joseph M. Profy, Esq. James M. Ficaro, Esq. THE WEISER LAW FIRM, P.C. 22 Cassatt Ave. Berwyn, PA 19312 Telephone: (610) 225-2677 Facsimile: (610) 408-8206 E-mail: pw@weiserlawfirm.com - and - Richard A. Maniskas, Esq. RYAN & MANISKAS, LLP 995 Old Eagle School Road, Suite 311 Wayne, PA 19087 Telephone: (484) 588-5516 Facsimile: (484) 450-2582 E-mail: rmaniskas@rmclasslaw.com CITNALTA CONSTRUCTION: Sued Over Wages for Work in Wall Street -------------------------------------------------------------- Adam Pieta and Tadeusz Lagowski, individually and on behalf of all other persons similarly situated who were employed by New York Stone Company, Inc., with respect to certain Public Works Projects awarded by The City of New York, The State of New York, The MTA New York City Transit Authority, The New York City and other government entities v. Citnalta Construction Corp., and New York Stone Company, Case No. 650582/2012 (N.Y. Sup. Ct., February 29, 2012) is brought on behalf of a putative class of individuals who performed construction work for NY Stone to recover wages and benefits, which the Plaintiffs and the members of the class were statutorily and contractually entitled to receive for work they performed for certain projects. The Plaintiffs disclosed that he and the class members worked as tile setters and in related construction trades upon the Wall Street and Fulton Street stations for the 2, 3, 4, and 5 trains (the "Public Works Projects") while NY Stone was under contract or subcontract with the Metropolitan Transit Authority ("MTA") pursuant to various contracts or subcontracts. The Plaintiffs contend that NY Stone willfully breached the Public Works Contracts and Subcontracts by failing to pay Plaintiffs and the other class members the prevailing rates of wages and supplemental benefits for all labor performed upon the sites of the Public Works Projects. The Plaintiffs are residents of the state of New York, and were formerly employed by NY Stone to perform work upon one or more of the Public Works Projects. Citnalta, a New York corporation, entered into contracts to perform construction work on projects known as Wall Street station and Fulton Street station for the 2, 3, 4, and 5 trains (all in the Borough of Manhattan), work under which was subcontracted to NY Stone. NY Stone employed the Plaintiffs to perform work on the Public Works Projects. The Plaintiffs are represented by: Lloyd Ambinder, Esq. VIRGINIA & AMBINDER, LLP Trinity Centre 111 Broadway, Suite 1403 New York, NY 10004 Telephone: (212) 943-9080 E-mail: lambinder@vandallp.com DEPUY ORTHOPAEDICS: North Jersey Attorney Files Class Action ------------------------------------------------------------ North Jersey defective medical device attorney Samuel L. Davis, founding partner of the Davis, Saperstein & Salomon, P.C. law firm of Teaneck, has filed a lawsuit against DePuy Orthopaedics, Inc., the manufacturer of metal-on-metal hip replacement implants. The lawsuit alleges that the devices cause "irreparable harm from undiagnosed metal disease." DePuy should pay for patients'ongoing medical monitoring, which involves yearly orthopedic examinations, MRIs and blood and urine tests, according to the complaint. The lawsuit, filed Feb. 28, is Rodham and Gray v. DePuy Orthopaedics, Inc. (Case No. BER-L-1691-12; Bergen County Superior Court). "The industry has known about the harmful effects of cobalt for at least 25 years and left the American people in the dark about the downside of exposure to toxic levels of cobalt shed from these devices," Mr. Davis said in an interview. Mr. Davis is a New Jersey personal injury and products liability attorney who has litigated knee- and hip-replacement cases since 1989. An investigative report published in BMJ, formerly known as British Medical Journal, says thousands of hip implants made by DePuy Orthopaedics have leaked high levels of toxic cobalt and chromium ions. The toxic metals have destroyed patients' muscle and bone, and will potentially leave some patients with long-term disability, the study says. "Metal-on-metal hip prostheses like the DePuy ASR XL can and do create three to five-fold increases in blood levels of the heavy metals chromium and cobalt," the court filing states. "Toxicity from these metals causes metallosis, a disease that destroys the tissues surrounding the artificial joint. Left unresolved, metallosis creates irreparable harm to the patient from the progressive destruction of the joint tissues." According to the court document, other health issues related to failure of the ASR XL hip implant includes "immediate irreparable harm from undiagnosed metal disease and the effect it has on the joint, even after revision and on other targeted organs, such as the brain, heart, liver, and kidneys." In the Rodham complaint, Mr. Davis has asked that a class be certified and that DePuy be ordered to establish a fund to pay the costs of medical monitoring over the lifetime of all ASR XL Acetabular System hip implant patients. Those costs include annual blood and urine tests and medical imaging such as ultrasound and MRI examinations. "Someone with a well-placed and functioning hip replacement needs to have it removed and replaced if cobalt levels are in the toxic range," Mr. Davis said. "Revision surgery is more complex, riskier and more likely to lead to a permanent disability." In addition to risk of infection and blood clots in a second implant surgery, revisions will not last as long as the 20 to 30 years the original hip implants were expected to last, Mr. Davis said. The BMJ report cites longstanding "evidence of risk from metal-on- metal hips, the manufacturers' inadequate response, and how regulatory bodies failed to give doctors and patients the information they need to make informed decisions." The U.S. Food and Drug Administration (FDA) warned in 2011 about metal ions that shed minute particles of the metal implant that migrate into the bloodstream and damage bone or tissue surrounding the implant and joint. BMJ quotes an internal DePuy memo from July 2005 that says, "In addition to inducing potential changes in immune function, there has been concern for some time that wear debris may be Carcinogenic . . . One study suggested threefold risk of lymphoma and leukemia 10 years after joint replacement." BMJ says it's likely there are more than 500,000 "at risk large diameter" metal-on-metal hips implanted in American patients since 2003 which require monitoring. "We haven't even begun to see all of the problems that victims of the DePuy hip replacement are likely to face in the years ahead," Mr. Davis said. Mr. Davis said many patients may not even realize they have a metal hip implant. He said artificial hip recipients should contact their doctors immediately to determine whether they have metal-on-metal hips. Those who do should obtain a copy of the operative report from the original implant procedure. It will document exactly what they received, including the lot and batch numbers. Patients' doctors should order blood and urine tests and a special MRI, called MARS (metal artifact reducing), to check for metallosis damage, including the formation of pseudotumors around the hip, Mr. Davis added. "So-called 'Silent Metal Disease,' is found in upwards of 30% of patients with no symptoms. Cobalt and chromium poisoning can only be diagnosed promptly through a program of universal and comprehensive monitoring of the entire population of ASR XL patients," according to the complaint. Hip implant patients should contact an attorney experienced in medical products liability cases to learn about their legal right to compensation for damage from the device, Mr. Davis said. They should contact an attorney quickly, Mr. Davis said, because the statute of limitations is relatively short and time may already be running out. About Davis, Saperstein & Salomon, P.C. Davis, Saperstein & Salomon, P.C.'s practice areas include personal injury, auto accidents, drunk driving accidents, motor vehicle accidents, medical malpractice, premises liability, product liability, slip and fall, truck accidents and workers' compensation. GLK FOODS: Mexican Workers Sue Over Employment Termination ---------------------------------------------------------- Lisa Buchmeier at Courthouse News Service reports that in a federal class action, 66 Mexican citizens with visas to work in the United States claim the world's largest sauerkraut factory fired them when faced with the prospect that it might have to pay them higher wages. Lead plaintiff Alejandro Jurado Jimenez sued GLK Foods and its owner and president Ryan A. Downs. GLK Foods (Great Lakes Kraut Foods), of Bear Creek, Wisc., "considers itself to be the largest sauerkraut producer in the world, and maker of America's top selling brands of sauerkraut," according to the complaint. Mr. Jurado says GLK fired him and his 65 co-workers when the cannery believed it would have to increase their pay, under a U.S. Department of Labor rule on foreign guest workers. Congress blocked the Labor Department from implementing the wage increase, but Mr. Jurado says GLK fired him and his class and replaced with a migrant work crew provided by a farm labor contractor from Florida. The sauerkraut workers trimmed, cut and prepared raw cabbage. They were in the United States with H-2B work visas. To get the visas, GLK Foods had to certify to the Labor Department that "there are insufficient available workers within the United States to perform the job, and the employment of aliens will not adversely affect the wages and working conditions of similarly employed U.S. workers." The visa rules also required that GLK pay a wage during the entire certification period that "equals or exceeds the highest of the most recent prevailing wage, the applicable federal, state, or local minimum wage"; provide at least 40 hours per week of work for each worker; provide work for the entire certified period of employment; comply with all federal, state, and local employment laws and regulations; and provide or pay for return transportation from the job site to the workers' homes if workers are terminated before the end of the certified period of employment. GLK also had to certify that it did not seek or collect payment "from an employee for any activity related to obtaining labor certification, including payment of recruiting costs," according to the complaint. GLK Foods certified its workers for H-2B visas from 2006 to 2011. Mr. Jurado seeks certification of two classes: 2006-2008 workers and 2010-2011 workers. The 2006-2008 class claims it was not provided with required disclosures and written employment agreements, and that deductions were taken illegally from their paychecks for room and board. The 2010-2011 class claims it was not paid the prevailing wage rate, was stiffed for overtime pay, and was not given 40 hours work per week during the entire certified period of employment. The 2010-2011 class also claims that they had to pay numerous expenses, including "recruitment fees of between $1,000 and $1,500; the costs of Mexican passports; travel expenses from their respective homes in Mexico to the United States Consulate in Matamoros, Mexico; visa application fees and other expenses necessary to obtain the H-2B visas; lodging expenses in Matamoros, Mexico pending approval of visa applications and before transportation to Wisconsin was arranged; travel expenses from the lodging in Matamoros, Mexico to the border with the United States; and border crossing fees charged by the United States Citizenship and Immigration Services." The workers say they were not reimbursed for any of these costs. They seek damages under the Migrant and Seasonal Agricultural Worker Protection Act, the Fair Labor Standards Act, Wisconsin's Migrant Labor Act, and the Wisconsin Wage Payments, Claims and Collections Act. A second class action was filed by two class members. Jose Enriquez Ramirez and Isidro Enriquez Ramirez say they were told 2 hours before their first sauerkraut shift began that they were no longer needed. They say they paid for all the costs of their recruitment, immigration documents, and travel expenses to and from Mexico, but GLK Foods' Ryan Downs never reimbursed them. A copy of the Complaint in Jurado Jimenez, et al. v. GLK Foods, et al., Case No. 12-cv-00209 (E.D. Wis.), is available at: http://www.courthousenews.com/2012/03/02/Sauerkraut.pdf The Plaintiffs are represented by: Matthew J. Piers, Esq. Mary M. Rowland, Esq. Jose J. Behar, Esq. Jenna Miara, Esq. HUGHES SOCOL PIERS RESNICK & DYM, LTD. 70 W. Madison Street, Suite 4000 Chicago, IL 60602 Telephone: (312) 580-0100 E-mail: mpiers@hsplegal.com mrowland@hsplegal.com jbehar@hsplegal.com jmiara@hsplegal.com - and - Weeun Wang, Eq. FARMWORKER JUSTICE 1126 16th Street, N.W., Suite 270 Washington, D.C. 20036 Telephone: (202) 293-5420 ext. 308 E-mail: wwang@farmworkerjustice.org GOVERNMENT OF GUAM: Objects to Tax Refund Class Action ------------------------------------------------------ Mindy Aguon, writing for Kuam News, reports that the Government of Guam has objections to the proposed class definition in the ongoing tax refund lawsuit in the District Court. Jeffrey and Rea Paeste and Sharon Zapanta filed a class action lawsuit against the government for the payment of tax refunds. They've asked that the court certify the class, or the group of individuals who the lawsuit would cover. The government however contends that the designation of individuals proposed by the plaintiffs is too broad and that there is a conflict within the class since it includes taxpayers who benefit from the Expedited Refund Program. The plaintiffs responded to the objections stating that every taxpayer who submits a claim for a refund shares an interest in having his or her claim fully administered in a timely and equitable manner. The court meanwhile has yet to set a trial date for the case. NETFLIX INC: Faces Shareholder Class Action Suit in California -------------------------------------------------------------- Frank J. Fish, individually and on behalf of all others similarly situated v. Netflix, Inc., Reed Hastings, David B. Wells, Theodore A. Sarandos, Leslie J. Kilgore and Neil D. Hunt, Case No. 5:12-cv- 01030 (N.D. Calif., February 29, 2012) is a securities class action on behalf of all persons or entities who purchased or otherwise acquired the securities of Netflix during the period from December 20, 2010, to October 24, 2011, inclusive, seeking to pursue remedies under Sections 10(b) and 20(a) of the Securities and Exchange Act. The Plaintiff alleges that although the Defendants knew that the Company was being threatened with devastating cost increases, they did not disclose the threat, but instead spoke publicly about its ability to grow. He contends that the Defendants failed to disclose that the extent of the increasing prices for streaming content would have the opposite effect of the Company's "virtuous cycles," either through higher cost of subscriptions for customers which would lead to negative user sentiment, or less available content, which would lead subscribers to look to Netflix's new streaming competitors with more content. Mr. Fish is a shareholder of the Company. He asserts that he purchased Netflix securities at artificially inflated prices during the Class Period and has been damaged thereby. Netflix is a Delaware corporation headquartered in Los Gatos, California. Netflix is subscription video-content service that delivers its product both streaming via the Internet and as DVDs and Blu-Ray discs via mail. The Individual Defendants are directors and officers of the Company. The Plaintiff is represented by: Robert C. Schubert, Esq. Willem F. Jonckheer, Esq. SCHUBERT JONCKHEER & KOLBE LLP Three Embarcadero Center, Suite 1650 San Francisco, CA 94111 Telephone: (415) 788-4220 Facsimile: (415) 788-0161 E-mail: rschubert@schubertlawfirm.com wjonckheer@schubertlawfirm.com - and - Robert I. Harwood, Esq. Matthew M. Houston, Esq. HARWOOD FEFFER LLP 488 Madison Avenue, 8th Floor New York, NY 10022 Telephone: (212) 935-7400 Facsimile: (212) 753-3630 E-mail: rharwood@hfesq.com mhouston@hfesq.com QBE: Faces Class Actions Over "Force-Placed Insurance" Product -------------------------------------------------------------- Ben Butler, writing for Sydney Morning Herald, reports that legal pressure is mounting on embattled insurer QBE over a controversial product forced on struggling home owners in the repossession-hit US. In two class actions in Florida, lawyers acting on behalf of tens of thousands of home owners have made serious allegations of profiteering, collusion and kickbacks in cosy deals between lenders and QBE. While the allegations have yet to be tested in court, a judge recently allowed one class action over the product, known as "force-placed insurance", to go ahead and is considering whether the second should proceed. At the same time, QBE is among insurers that New York authorities are investigating over force-placed insurance, while insurance market Lloyd's recently warned participants -- including QBE -- to comply with US laws covering the product. Lenders take out force-placed insurance to protect their investment when home owners fail to keep their property insured, often because they are also struggling to meet mortgage payments. The cost, which is alleged to be up to 14 times more than equivalent insurance on the open market, is then passed on to the home owner. With about US$50 million in premiums reported to be at stake in Florida, QBE is vigorously fighting both cases. A QBE spokesman said there had been no findings of insurer fault or wrongdoing. "QBE believes that its approach to the pricing of force-placed insurance in Florida appropriately reflects the risks, particularly in relation to catastrophes that prevail in this market," he said. QBE has already had a partial victory in the first action, limiting the potential class of litigants to residents of Florida. In that proceeding, QBE has admitted it did not use an actuary to set the price of force-placed insurance. Instead, it "simply added 20 per cent to the rates of another insurance company", Southern District of Florida judge Robert Scola said in a ruling. In the other class action, QBE subsidiary Balboa, which the company bought just last year, is accused of conspiring with GMAC in "abusive forced-placed insurance practices". Lead plaintiff Christina Ulbrich alleges she was paying $US890 a year for hazard insurance through her insurer. She alleges that despite having a valid policy in place, in January last year GMAC made an "unfair, unconscionable, unjustified, and unlawful" attempt to force-place her with insurance that cost 14 times as much -- more than $US12,700. Ms. Ulbrich also alleges that GMAC received a kickback for force- placing windstorm and flood insurance with Balboa. Judge Scola is considering whether to allow the case to proceed or agree to a motion by GMAC to throw the case out. QUICKTRIM: Kardashian Sisters Face $5-Mil. Class Action ------------------------------------------------------- Benge Nsenduluka, writing for Christian Post, reports that Kim Kardashian and her sisters Khloe and Kourtney have been slapped with a $5 million class action lawsuit for their roles in endorsing the weight loss product QuickTrim. The suit charges that QuickTrim is "marketed by the defendants as a clinically proven formula that will increase metabolism, curb appetite and promote weight loss. In reality, QuickTrim's main ingredient is a large dose of caffeine, which the U.S. Food and Drug Administrator has determined is not a safe or effective treatment for weight control," the Manhattan federal court filing states, according to the New York Post. The reality TV personalities, who are renowned for endorsing countless products, have reportedly angered a number of QuickTrim consumers for what critics allege is false advertising and may be forced to pay damages if the court finds any wrong doing. The court documents also state that QuickTrim products "generally feature . . . photos of one or more of the Kardashian sisters in a bikini or other revealing attire," which some argue is deliberately misleading. Kim, 31, and Khloe, 27, who reportedly earn anywhere up to $10 million per single tweet, have also previously tweeted about their alleged 15-pound weight loss which they both attribute to using QuickTrim, and which legal experts argue is further proof of false advertising. The class-action lawsuit could potentially add yet another blow to the Kardashian empire, which has suffered immensely since Kim filed for divorce from NBA star Kris Humphries after just 72 days of marriage. Viewers of their reality TV show "Keeping Up With the Kardashians" accused Kim of staging her lavish nuptials to 26-year-old Humphries for financial gain after it was reported that she had earned a substantial amount of money after selling her wedding photos, which she has denied. In December, reports swirled linking Kardashian products to Chinese sweatshops, which resulted in further backlash with thousands of consumers uniting to boycott Kardashian products. The Kardashian sisters have not yet addressed the pending lawsuit. SKECHERS USA: Faces Class Action Over "Shape-Ups" Toning Shoes -------------------------------------------------------------- Baltimore product liability lawyer Robert K. Jenner -- rjenner@myadvocates.com -- has teamed up with the Kentucky law firm of Schachter, Hendy & Johnson, P.S.C., in filing a class- action lawsuit on behalf of consumers who allege misleading advertising influenced their decision to buy Skechers "Shape-Ups" toning shoes. The attorneys filed the complaint on February 15, 2012, in the U.S. District Court for the Western District of Kentucky. (Boatright, et al. v. Skechers, U.S.A., Inc., et al. Case No. 3:12-cv-00087-CRS). The lawsuit seeks money damages for consumers who paid a "premium price" for Skechers "Shape-Ups" based on TV, print and Internet ads that touted the toning shoes' health benefits. In reality, the complaint alleges, the shoes provide no additional health benefits. Instead, they pose a risk of injury due to their pronounced rocker bottom sole, according to the complaint. The lawsuit seeks money damages and an order that would stop Skechers from "deceptive and unlawful advertising." According to the lawsuit, the shoes are marketed, sold and promoted by Skechers, U.S.A., Inc., and its subsidiaries. "If you've bought a pair of Skechers 'Shape-Ups shoes for the health benefits, you've been misled," Mr. Jenner said in a statement. "You deserve not only to get mad, but to get your money back." Mr. Jenner is a Maryland defective product lawyer who has been at the forefront of toning shoe injury litigation. His Maryland personal injury firm, Janet, Jenner & Suggs, LLC, currently provides information to consumers on its Toning Shoes Injury Web site and Facebook page. The complaint states that Skechers is currently being investigated for its toning shoes marketing claims by the Federal Trade Commission. In September, the FTC reached a $25 million settlement with Reebok for making similar fitness claims about its own brand of toning shoes, the lawsuit states. Footwear News estimates that Skechers will face a fine of $75 million. In particular, the lawsuit alleges that Skechers promoted that its "Shape-Ups" would provide health benefits "without setting foot in a gym." However, the plaintiffs claim, the company has produced no valid scientific proof that the toning shoes provide any greater benefit than regular athletic shoes. The complaint cites an American Council on Exercise study that concluded, "There is simply no evidence to support the claims that these shoes will help wearers exercise more intensely, burn more calories or improve muscle strength and tone.' However, the lawsuit alleges, the shoes do pose health risks. Because the rocker bottom soles create instability and change gait mechanics, they can trigger chronic injuries and cause wearers to fall and suffer injuries, the plaintiffs claim. Ronald E. Johnson, Jr. of Schachter, Hendy & Johnson, P.S.C., pointed to a May 2011 Consumer Reports article stating that toning shoes had produced more injury reports than any other product in its database. The reported injuries included tendinitis and foot, leg and hip pain. The more severe reported injuries included broken bones. "Skechers needs to be held accountable," Mr. Johnson said. "And consumers need a refund." About Janet, Jenner & Suggs, LLC Janet, Jenner & Suggs, LLC, is a national personal injury and product liability law firm with offices in Baltimore, MD, and Columbia, SC. Robert K. Jenner has more than 27 years of experience representing injured consumers nationwide against the manufacturers of defective products, including medical devices and dangerous drugs. SNC-LAVALIN: Siskinds, Desmueles Files Class Action --------------------------------------------------- The Quebec law firm of Siskinds, Desmeules on March 2 announced the filing in the Quebec Superior Court of a proposed class action against SNC-Lavalin Group Inc., and certain of SNC's current and former officers and directors. The proposed class includes all persons, wherever resident, who acquired securities of SNC from March 13, 2009 to February 28, 2012 inclusive, whether in a prospectus offering or in the secondary market, and seeks C$250 million in damages. The action alleges, among other things, that the defendants made statements that were materially false and misleading in regard to SNC-Lavalin's code of conduct, legal compliance, and internal controls. It is further alleged that SNC and certain members of its senior management team were engaged in unlawful activities in Libya during the Class Period, contrary to the defendants' Class Period statements. If you acquired securities of SNC from March 13, 2009 to February 28, 2012 inclusive, please complete the online information form at: http://www.classaction.ca/joinaction.aspx?action=snclavalin SUPERIOR CORP: Accused of Not Paying Employees' Overtime Wages -------------------------------------------------------------- Enrique Orozco, individually, and on Behalf of All Others Similarly Situated v. Superior Corporation of Illinois, and Nicholas Kautz, individually, and Home Depot U.S.A., Inc., Case No. 2012-L-002243 (Ill. Cir. Ct., Cook Cty., February 29, 2012) alleges that the Defendants improperly classified the Plaintiff and all class members as independent contractors, and were paid a piece rate contingent on the amount of installations completed by each installer. The Defendants improperly deducted monies from wages of the Plaintiff and class members, the Plaintiff alleges. He adds that Defendants permitted him and class members to regularly work more than 40 hours per week without proper overtime compensation. Mr. Orozco is a resident of Illinois and worked as a non-exempt installer for the Defendants in Illinois. Superior is an Illinois corporation with its offices in Elk Grove Village, Illinois. Mr. Kautz is the president and owner of Superior. Home Depot is the world's largest home improvement specialty retailer and service provider. The Defendants are in the business of retailing and installing home improvement specialty items in the state of Illinois. Home Depot employs the services of Superior on a contractual basis. Superior and Mr. Kautz, in turn, employed the Plaintiff and class members, and classified them as independent contractors. The Plaintiff is represented by: Richard J. Miller, Esq. MILLER LAW FIRM, P.C. 1051 Perimeter Drive, Suite 400 Schaumburg, IL 60173 Telephone: (847) 995-1205 E-mail: Richard.Miller@Millerlawfirm.org - and - Scott C. Polman LAW OFFICE OF SCOTT C. POLMAN 8130 N. Milwaukee Ave. Niles, IL 60714 Telephone: (847) 292-1989 TEVA PHARMACEUTICAL: Petition for Review in "Cipro" Suit Pending ---------------------------------------------------------------- Teva Pharmaceutical Industries Limited is awaiting a court decision on plaintiffs' petition for review in a class action lawsuit pending in California filed against a Company subsidiary, according to the Company's February 17, 2012, Form 20-F filing with the U.S. Securities and Exchange Commission for the year ended December 31, 2011. The Company's subsidiary Barr Pharmaceuticals, Inc. has been named as a co-defendant with Bayer Corporation, The Rugby Group, Inc. and others in approximately 38 class action complaints filed in state and federal courts by direct and indirect purchasers of ciprofloxacin (Cipro(R)) from 1997 to the present. The complaints allege that a 1997 Bayer-Barr patent litigation settlement agreement was anti-competitive and violated federal antitrust laws and/or state antitrust and consumer protection laws. In March 2005, the court in the federal multi-district litigation granted summary judgment in Barr's favor and dismissed all of the federal actions before it. Following unsuccessful appeals and petitions for certiorari that were denied by the United States Supreme Court, the federal actions have effectively ended. In addition, all but three state cases (California, Kansas and Florida) have been dismissed. In the California case, the trial court granted defendants' summary judgment motions, and the California Court of Appeal affirmed in October 2011. Plaintiffs have petitioned for review by the California Supreme Court, which has discretion whether to accept the appeal. Barr has opposed the petition. The Kansas action is stayed, and the Florida action is in the very early stages, with no hearings or schedule set to date. Teva believes that the agreements at issue in the matters are valid settlements to patent lawsuits and cannot form the basis of an antitrust claim. WORLD SAVINGS: Sued Over Real Property in San Jose, California -------------------------------------------------------------- Conchita V. Roy and Serafin F. Padlan, individuals, on behalf of themselves and all others similarly situated vs. World Savings Bank, FSB, as the Original Lender; Golden West Savings Association Service Co., a California corporation, as the Original Trustee; Financial Title Company Title Company; Wells Fargo Bank, N.A., as the PSA Master Servicer; Wells Fargo Bank, N.A. PSA Sponsor and Seller; Wells Fargo Asset Securities Corporation, as PSA Depositor; HSBC Bank USA, N.A., as PSA Trustee; Wells Fargo Bank, N.A. PSA Custodian; The Wells Fargo Mortgage Backed Securities 2007-14 Trust, as the PSA Trust Issuing Entity; Cal-Western Reconveyance Corporation, as the Foreclosing Trustee; Joe Krasovic, as Assistant Secretary of MERS, Inc., Rosalyn Hall the Notary of the Assignment of Deed of Trust; and Does 1 through 10, Inclusive, Case No. 111CV213643 (Calif. Super. Ct., Santa Clara Cty., November 21, 2011) is an action brought for declaratory judgment, injunctive and equitable relief, and for compensatory, special, general and punitive damages. At all times relevant to the action, the Plaintiffs assert that they own the property located at 1407 Gordy Drive, San Jose, California 95l31. The Plaintiffs dispute the title and ownership of the real property in question in that the originating mortgage lender, and others, alleged to have ownership, have unlawfully sold, assigned and transferred their ownership and security interest in a Promissory Note and Deed of trust related to the Property, and thus, do not have lawful ownership or security interest in Plaintiffs' home. The Plaintiffs allege that the Defendants cannot show proper receipt, possession, transfer, negotiations, assignment and ownership of the borrower's original Promissory Note and Deed of Trust, resulting in imperfect security interests and claims. The Plaintiffs are residents of the County of San Santa Clara, California. World Savings Bank is the originator of a loan involving the Property and a purported participant in the imperfect securitization of the Note. Financial Title, as the title company, and Golden West as the original trustee, oversaw the recording and processing of both Deed of Trust and Promissory Note. Wells Fargo Bank, as PSA Sponsor and Seller, is the present purported securitization seller of a portion of mortgage loans. Wells Fargo Bank, as PSA Servicer, is the present purported Master Servicer of the mortgage. Wells Fargo Asset, as Depositor, is the present purported securitization depositor of the mortgage. HSBC, as Trustee, is the present purported PSA Trustee and Custodian of the mortgage. Wells Fargo Bank, as PSA Custodian, is the present purported PSA Trustee and Custodian of the mortgage. Wells Fargo Mortgage is the present purported PSA Issuing Trust. Cal-Western is the present purported foreclosing trustee of the mortgage. Joe Krasovic, as Executor of the recorded Substitution of Trustee as Assistant Secretary of Mortgage Electronic Registration Systems, Inc., suspected as Robo-Signor for and is a purported participant in the imperfect securitization of the Note and the Deed of Trust. Rosalyn Hall, as the Notary of the recorded Substitution, is a purported participant in the imperfect securitization of the Note and the Deed of Trust. The Plaintiffs do not know the true names and capacities of the Doe Defendants. The Defendants removed the lawsuit on February 29, 2012, from the Superior Court of the state of California, County of Santa Clara, to the United States District Court for the Northern District of California. The Defendants argue that the removal is proper because the citizenship of the parties is entirely diverse and the amount in controversy exceeds $75,000. The District Court Clerk assigned Case No. 5:12-cv-01034 to the proceeding. The Plaintiffs are not represented by any law firm. The Defendants are represented by: Robert A. Bailey, Esq. Grace B. Kang, Esq. ANGLIN, FLEWELLING, RASMUSSEN, CAMPBELL & TRYTTEN LLP 199 South Los Robles Avenue, Suite 600 Pasadena, CA 91101-2459 Telephone: (626) 535-1900 Facsimile: (626) 577-7764 E-mail: rbailey@afrct.com gkang@afrct.com * Directors of Australian Companies Worry Over Settlements ---------------------------------------------------------- Joe Schneider, writing for Bloomberg News, reports that Australian class-action lawsuit settlements worry company directors because of their size even as such suits account for less than 1 percent of federal court cases, according to a report by law firm King & Wood Mallesons. About 14 class-action suits are filed each year, two decades after the nation allowed such actions, the firm said on March 1 in its review of 2011. Among cases initiated last year, Australia & New Zealand Banking Group Ltd. (ANZ) customers are seeking to recoup AUD50 million ($54 million) in fees they deem illegal. A suit against Centro Properties Ltd., whose shareholders want to recover more than AUD200 million from the collapsed mall operator in a trial starting March 5, is a key case to watch in 2012, the firm said. "Class actions remain a significant concern for both directors and in-house counsel alike due to the scale of many of these claims," the authors of the report wrote. The total value of settlements in shareholder class actions in 2011 surpassed AUD500 million, they said. The Centro lawsuit is "significant because the applicants seek to get around the common law position that shareholders cannot sue auditors for negligence," the law firm said. Centro shareholders allege the company misled them by failing to disclose the full extent of its debts. Unresolved Issue The case may also resolve whether each member of the class has to prove they were misled and incurred damages or the group as a whole is entitled to compensation because the market was misled, Roger Forbes, a partner at King & Wood Mallesons and a co-author of the report, said in a telephone interview. "That's a great unresolved issue," he said. In a class-action suit, one applicant files on behalf of a group of plaintiffs, rather than individuals pursuing claims separately. Plaintiffs have been more willing to include advisers as defendants in class-action lawsuits, recognizing they may be more willing to settle because they often have professional indemnity insurance and reputations to protect, King & Wood Mallesons said. Adding defendants boosts the costs of the litigation, said King & Wood Mallesons, whose 21 office locations include Beijing, Hong Kong and Sydney. It also carries the risk the plaintiffs may have to pay the defendants' legal bills, the law firm said. Company Directors "One development that was predicted but has not been common, is the inclusion of company directors as individual defendants to class actions," the authors wrote. "This reflects the belief that it is the company that has the deeper pockets and reputation to protect." Canada, whose legal system, like Australia's, typically requires the losing side to pay litigation costs, has seen 10 shareholder class-action suits settled for a total of C$100 million ($101 million) since 2005, according to NERA Economic Consulting Ltd. There were 45 Canadian securities class actions under litigation as of Dec. 31, with plaintiffs seeking a total of about C$24.5 billion in damages, NERA said. "We haven't seen that dramatic a spike" in claims in Australia, Mr. Forbes said. He said he expects "a slight and steady increase" in the number of Australian class action lawsuits filed in the future as more law firms enter the field. The Australian and Canadian settlements remain a fraction of those in the U.S., where trials are generally quicker and held before juries who determine damages. The biggest verdicts in U.S. securities class action were for $7.1 billion and $6.1 billion resulting from the collapse of Enron Corp. and WorldCom Inc. respectively. Both settlements took place in 2005. ********* S U B S C R I P T I O N I N F O R M A T I O N Class Action Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. Noemi Irene 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. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The CAR subscription rate is $575 for six months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Peter Chapman at 240/629-3300. * * * End of Transmission * * *