/raid1/www/Hosts/bankrupt/CAR_Public/120410.mbx
C L A S S A C T I O N R E P O R T E R
Tuesday, April 10, 2012, Vol. 14, No. 70
Headlines
21ST CENTURY: Opposes Motion to Remand Class Action
A123 SYSTEMS: Hires Two New Execs Following Defective Battery Suit
ALLY FINANCIAL: Awaits Ruling on Bid to Dismiss "Kessler" Suit
ARCH COAL: Awaits Final Approval of "Saratoga" Suit Settlement
AUSTRALIA: Unit Owners May File Class Action Over Corporate Fees
AVON PRODUCTS: Sued in N.Y. for Rejecting Coty's Buyout Bid
BANK OF THE OZARKS: Sued Over Alleged Excessive Overdraft Fees
CARTER'S INC: Final Hearing on Consolidated Suit Deal on May 31
CELLCO PARTNERSHIP: Sued in N.Y. for Overcharging Text Messages
CENTRAL EUROPEAN: Awaits Decision on Bid to Consolidate Suits
CNH GLOBAL: Settlement of "Yolton" Suit in Approved Nov. 2011
CRST VAN: EEOC Put on Trial After Filing Sexual Harassment Suit
CRUSADER SERVICING: Class Action Transferred to Federal Court
DE BEERS: Class Members' Petition for Certiorari Denied
FIRST ACCEPTANCE: Defends Ordinary Course Class Action Suits
HULU: Hartford Denies Obligation to Defend Class Action
HYPERDYNAMICS CORP: Robbins Geller Files Securities Class Action
IMAX CORP: Issue on Two Parallel Securities Class Actions Arises
IMPERIAL TOBACCO: General Counsel Destroyed Research Documents
J.P. MORGAN: Various Law Firms File ERISA Class Action
JEFFERSON PARISH: Faces Class Action Over School Bus Cameras
KINDRED HEALTHCARE: Delaware Litigation Resolved in October 2011
MASSEY ENERGY: Motion to Dismiss Securities Class Action Tossed
MCDONALD'S CORP: Judge Dismisses Happy Meals Class Action
MEDIVATION INC: Awaits Order on Bid to Dismiss Securities Suit
NOVASTAR MORTGAGE: Judge Dismisses MBS Class Action
PREMIER HOLDING: Motions to Dismiss Securities Suit Pending
QUANTA SERVICES: Defends & Litigates Suits Over Calif. Wildfires
ROCKYOU: Settles Privacy Class Action for $250,000
SCIENCE APPLICATIONS: Harris & Ruble Files Class Action
SEALED AIR: Awaits Canadian Settlement to Become Effective
SEALED AIR: Awaits Effective Date of Cryovac-Related Suits Deal
SKECHERS USA: Awaits Ruling on Bid to Lift Stay in "Morga" Suit
SKECHERS USA: Awaits Ruling on Lift Stay Bid in "Grabowski" Suit
SKECHERS USA: Continues to Defend "Tomlinson" Suit in Arkansas
SKECHERS USA: Faces "Boatright" Class Action Suit in Kentucky
SKECHERS USA: Faces "Hochberg" Class Action Suit in New York
SKECHERS USA: Faces "Loss" Class Action Suit in Kentucky
SKECHERS USA: "Lovston" Class Suit Remains Pending
SKECHERS USA: "Stalker" Class Suit Remains Stayed in California
TJX COMPANIES: Faces Class Action Over Deceptive Advertising
UNITEDHEALTH: Loses Bid to Dismiss ERISA Class Action
WADDELL & REED: Received Favorable Ruling on FLSA Claims in Jan.
WASHINGTON POST: Bid to Amend "Graham" Suit Dismissal Pending
WASHINGTON POST: Continues to Defend Suit vs. Kaplan in Calif.
YAHOO INC: Appeal in Consolidated IPO Suit vs. Unit Withdrawn
YAHOO INC: Continues to Defend Consolidated Suit in California
YAHOO INC: Faces Consolidated Shareholder Suit in Delaware
* Workers Can Bring Class, Collective Actions Simultaneously
*********
21ST CENTURY: Opposes Motion to Remand Class Action
---------------------------------------------------
John O'Brien, writing for Legal Newsline, reports that insurance
companies say lawyers are trying to force a heavy discovery burden
on them in an Arkansas state court by skirting federal law
regulating class actions.
Pending is the lawyers' motion to remand their case to Miller
County, where defendants say they will be unable to defend
themselves against a flood of discovery requests designed to force
a settlement. The companies removed the case to an Arkansas
federal court in January.
The lawsuit, filed in June 2008, alleges a conspiracy among
insurance companies to underpay uninsured or underinsured
motorists claims through the use of a software tool called
Colossus. The plaintiffs have moved to remand the case back to
Arkansas, arguing they are not asking for more than the $5 million
that would subject the case to federal class action law.
"The Class Action Fairness Act provides that such class actions
with national implications be heard in federal court," the
companies' removal notice says.
"While plaintiffs attempt to avoid this court through purportedly
limiting the damages for the putative plaintiff class they want to
represent, the amount at issue in this case as plead in the
complaint far exceeds the $5 million threshold for CAFA
jurisdiction.
"Even if the purported damage limits were to be accepted in
determining the amount in controversy, the value of the requested
injunctive relief brings the amount in controversy well over the
$5 million jurisdictional minimum."
The attorneys representing the plaintiffs are Keil & Goodson of
Texarkana; Nix, Patterson & Roach of Austin and Dangerfield,
Texas; Crowley Normal of Houston; and James Pratt of Camden, Ark.
In their remand motion, they say their lawsuit asserts only
Arkansas state law claims, seeks a class certification of only
Arkansas residents and was filed in an Arkansas state court.
"Despite odd suggestions in the Notice of Removal to the contrary,
Plaintiffs' complaint clearly and obviously alleges a proposed
class limited to Arkansas residents," the motion says.
Motions to dismiss filed in Miller County have been stayed while
U.S. District Judge Susan Hickey decides the jurisdiction issue.
21st Century Insurance filed a response to the remand motion on
March 1. The response includes what the company feels will happen
if the case is remanded to Miller County.
"(T)he 21st Century defendants will be exposed to extraordinary
and unduly burdensome discovery (for which the Arkansas state
court system affords no interlocutory appellate relief) designed
solely to impale defendants on Morton's Fork -- expending money
for attorneys and employees to respond to Plaintiffs' egregious
discovery or paying attorneys' fees to plaintiffs' counsel to
settle the case," it says.
"For while the plaintiffs in this case have said they do not seek
more than $5 million in damages, none of the parties -- plaintiffs
or defendants -- believe for one moment that this case can
possibly be settled unless that settlement first involves paying
attorneys fees to Plaintiffs' counsel in amounts greatly in excess
of $5 million."
A123 SYSTEMS: Hires Two New Execs Following Defective Battery Suit
-----------------------------------------------------------------
Dustin Walsh, writing for Crain's Detroit Business, reports that a
week after announcing it would spend $55 million to replace
defective lithium-ion batteries and facing a new class-action
lawsuit, A123 Systems Inc. hired two new executives to improve
quality and reduce costs, the company said on April 3.
A123 hired Ray Alcodray as chief information officer and Don
Kaiser as global vice president of quality. Both will work out of
A123's Livonia battery plant.
Mr. Alcodray most recently was global information technology
director of manufacturing, quality and light-vehicle systems for
Toledo-based Dana Corp. Mr. Kaiser was CEO of Lean Alliance
Inc.'s North American operations in Troy.
On March 26, Waltham, Mass.-based A123 reported that five
automotive customers received batteries with potentially defective
cells manufactured in Livonia.
A123 said it isolated the problem to the incorrect calibration of
one automated welding machine.
The defective-battery announcement spurred a stock selloff,
dropping A123 shares to an all-time low of $1.30.
The company's stock took another pummeling on April 3 after a
class-action lawsuit was filed in Massachusetts on behalf of
shareholders. Shares were trading at 88 cents on April 3.
A123 projects revenue between $230 million and $300 million for
2012.
ALLY FINANCIAL: Awaits Ruling on Bid to Dismiss "Kessler" Suit
--------------------------------------------------------------
Ally Financial Inc. is awaiting a court decision on its
subsidiary's motion to dismiss a consolidated class action lawsuit
-- the "Kessler Litigation" -- pending in Pennsylvania, according
to the Company's February 28, 2012, Form 10-K filing with the U.S.
Securities and Exchange Commission for the year ended December 31,
2011.
Several putative class actions filed in 2001-2003, all alleging
that originators Community Bank of Northern Virginia and Guaranty
National Bank of Tallahassee charged certain interest rates and
fees in violation of the applicable Secondary Mortgage Loan Act,
were consolidated for settlement purposes in the U.S. District
Court for the Western District of Pennsylvania. On September 22,
2010, the Third Circuit Court of Appeals vacated an order
approving the settlement and remanded the case to the trial court
for further proceedings. On October 10, 2011, plaintiffs filed a
joint consolidated amended class action complaint against, among
others, the Company's subsidiary Residential Funding Company LLC
(RFC), alleging violations of the Real Estate Settlement
Procedures Act; the Truth in Lending Act, as amended by the Home
Ownership and Equity Protection Act; and the Racketeer Influenced
and Corrupt Organizations Act.
RFC's motion to dismiss is outstanding, and the Company intends to
vigorously defend against these claims.
ARCH COAL: Awaits Final Approval of "Saratoga" Suit Settlement
--------------------------------------------------------------
Arch Coal, Inc. is awaiting final court approval of a settlement
resolving a class action lawsuit against its subsidiary,
International Coal Group, Inc. ("ICG"), according to the Company's
February 29, 2012, Form 10-K filing with the U.S. Securities and
Exchange Commission for the year ended
December 31, 2011.
On January 7, 2008, Saratoga Advantage Trust ("Saratoga") filed a
class action lawsuit in the U.S. District Court for the Southern
District of West Virginia against ICG and certain of its officers
and directors seeking unspecified damages. The complaint asserts
claims under Sections 10(b) and 20(a) of the Securities Exchange
Act of 1934, and Rule 10b-5 promulgated thereunder, based on
alleged false and misleading statements in the registration
statements filed in connection with ICG's November 2005
reorganization and December 2005 public offering of common stock.
In addition, the complaint challenges other of ICG's public
statements regarding its operating condition and safety record.
On July 6, 2009, Saratoga filed an amended complaint asserting
essentially the same claims but seeking to add an individual co-
plaintiff. ICG has filed a motion to dismiss the amended
complaint. In June 2011, ICG agreed to settle this matter for a
total of $1.375 million. On August 1, 2011, the court issued its
order preliminarily approving settlement and conducted a
settlement fairness hearing on November 14, 2011. The matter is
pending Court approval.
AUSTRALIA: Unit Owners May File Class Action Over Corporate Fees
----------------------------------------------------------------
Michelle Hele, writing for The Courier-Mail, reports that
desperate unit owners slugged with huge increases in body
corporate fees have joined forces to overturn state government
legislation which has left many struggling to pay their bills and
has the potential to affect thousands.
Already 170 unit owners have signed up to fight the legislation.
Gold Coast-based lawyer Anthony Delaney, representing the group,
said one owner's bill had jumped from AUD13,000 a year to
AUD35,000.
Mr. Delaney said the issue arose after changes to legislation a
year ago.
Once 200 unit owners have signed up they will seek legal opinion
from a Queensland constitutional barrister on whether the
legislation is flawed.
If that move is not successful, they plan to launch a class action
against the State Government.
Premier Campbell Newman has already committed to investigate.
"The Government understands the inequity in the current body
corporate lot entitlement scheme and this is something the
incoming minister will need to work very closely with stakeholders
and unit owners to fix," Mr. Newman said.
"Sorting out the mess left by Labor in the area of body corporate
law is going to take some time, but I expect my minister to sort
it out."
While the issue mainly affects apartment buildings which were
constructed before legislation on lot entitlements was introduced
in 1997, it also affects some newer properties.
When Jacquie and Robert Adamson bought their Gold Coast unit, they
budgeted for body corporate fees of about AUD$6100 a year.
But a change to legislation on how body corporate fees are
calculated and an appeal against the fees the couple were paying
means that the figure has jumped to AUD32,000 a year.
According to Mrs. Adamson, the worst blow is they have been
ordered to pay the fees retrospectively to when the legislation
was introduced in April last year.
The Adamsons bought their Surfers Hawaiian unit in 2005.
Mrs. Adamson is studying to be a nurse, so they are currently
living on one income.
Mrs. Adamson said her starting pay would be about the same as the
fees.
Her husband is a concreter and Mrs. Adamson said it was difficult
to find the money to pay the extra fees.
Mr. Delaney said it was very difficult for some owners to pay.
"What we are arguing for is fairness and equity," he said.
For the Adamsons, the issue has further repercussions.
Mrs. Adamson said real estate agents advised it would be hard to
find a buyer for their unit as the fees were so high.
"We can't afford the fees and we cannot afford to sell under this
legislation," Mrs. Adamson said. "The fees are unfair."
Mr. Adamson said they bought the unit not knowing that fees could
change like this.
"We apparently have no rights to appeal this other than a class
action," he said.
Archers Body Corporate Management director Andrew Staehr said it
was an issue being raised more often, particularly in large unit
complexes.
He said the only thing potential buyers could do was to go through
the body corporate records thoroughly to see if any issues had
been raised about lot entitlements. "It is really buyer beware,"
he said.
According to Department of Justice and Attorney-General figures,
Queensland has more than 38,000 community titles schemes, with
about 355,000 individual lots.
Previously, it was up to the owner-developer of an apartment
building to set the lot entitlements on which body corporate
levies were calculated. Because this could be done without the
developer having to justify how it was calculated, it was thought
in some projects, entitlements were set to advantage the developer
who might want to live in a particular unit.
In 1997, the State Government introduced regulations governing the
allocation of lot entitlements.
Owners of units who thought they were paying more than their fair
share were able to go to a specialist adjudicator or QCAT or the
District Court to have their share adjusted.
Unfortunately for some, even though these fees were adjusted down,
amendments introduced to body corporate legislation in April 2011
meant another owner in the building could appeal and the share
would revert to a higher body corporate fee with no right of
appeal.
There is a three-year window of opportunity for owners to
challenge lot entitlements under the 2011 amendments.
AVON PRODUCTS: Sued in N.Y. for Rejecting Coty's Buyout Bid
-----------------------------------------------------------
Courthouse News Service reports that Avon unreasonably rejected
Coty's $10 billion buyout bid, or $23.25 a share, an Avon
shareholder claims in a class action in New York County Court.
A copy of the Complaint in Feinman v. Avon Products, Inc., et al.,
Index No. 651087/2012 (N.Y. Sup. Ct., N.Y. Cty.), is available at:
http://www.courthousenews.com/2012/04/05/avon.pdf
The Plaintiff is represented by:
Jeffrey H. Squire, Esq.
Justin A. Kuehn, Esq.
BRAGAR WEXLER EAGEL & SQUIRE, PC
885 Third Avenue - Suite 3040
New York, NY 10022
Telephone: (212) 308-5858
E-mail: squire@bragarwexler.com
kuehn@bragarwexler.com
BANK OF THE OZARKS: Sued Over Alleged Excessive Overdraft Fees
--------------------------------------------------------------
Bank of the Ozarks, Inc. is facing a class action lawsuit in
Arkansas alleging improper collection of excessive overdraft fees,
according to the Company's February 29, 2012, Form 10-K filing
with the U.S. Securities and Exchange Commission for the year
ended December 31, 2011.
On January 5, 2012, the Company and its Arkansas state chartered
subsidiary bank, Bank of the Ozarks (the "Bank"), were served with
a summons and complaint filed on December 19, 2011, in the Circuit
Court of Lonoke County, Arkansas, Division III, styled Robert
Walker, Ann B. Hines and Judith Belk vs. Bank of the Ozarks, Inc.
and Bank of the Ozarks, No. CV-2011-777. The complaint alleges
that the defendants have harmed the plaintiffs, former customers
of the Bank, by improper, unfair and unconscionable assessment and
collection of excessive overdraft fees from the plaintiffs.
According to the complaint, plaintiffs claim that the Bank employs
sophisticated software to automate its overdraft system, and that
this system unfairly and inequitably manipulates and alters
customers' transaction records in order to maximize overdraft
penalties, particularly utilizing a practice of posting of items
in "high-to-low" order, despite the actual sequence in which such
items are presented for payment. Plaintiff's claim that the
Bank's deposit agreements with customers do not adequately
disclose the Bank's overdraft assessment policies and are
ambiguous, deceptive, unfair and misleading. Plaintiff's
complaint also alleges that these actions and omissions constitute
breach of contract, breach of the implied covenant of good faith
and fair dealing, unconscionable conduct, conversion, unjust
enrichment and violation of the Arkansas Deceptive Trade Practices
Act. The plaintiffs seek to have the case certified by the court
as a class action for all Bank's overdraft fee policies,
restitution of overdraft fees paid by the plaintiffs and the
putative class as a result of the actions cited in the complaint,
disgorgement of profits as a result of the alleged wrongful
actions and unspecified compensatory and punitive damages,
together with pre-judgment interest, costs and plaintiff's
attorneys' fees.
The Company believes the plaintiffs' claims are unfounded and
intends to defend against these claims.
CARTER'S INC: Final Hearing on Consolidated Suit Deal on May 31
---------------------------------------------------------------
The United States District Court for the Northern District of
Georgia scheduled a hearing for May 31, 2012, to determine whether
Carter's, Inc.'s settlement of a consolidated securities class
action lawsuit will receive final approval, according to the
Company's February 29, 2012, Form 10-K filing with the U.S.
Securities and Exchange Commission for the year ended
December 31, 2011.
A shareholder class action lawsuit was filed on September 19,
2008, in the United States District Court for the Northern
District of Georgia entitled Plymouth County Retirement System v.
Carter's, Inc., No. 1:08-CV-02940-JOF (the "Plymouth Action").
The Amended Complaint filed on May 12, 2009, in the Plymouth
Action asserted claims under Sections 10(b), 20(a), and 20A of the
1934 Securities Exchange Act, and alleged that between February 1,
2006, and July 24, 2007, the Company and certain current and
former executives made material misrepresentations to investors
regarding the successful integration of OshKosh into the Company's
business, and that the share price of the Company's stock later
fell when the market learned that the integration had not been as
successful as represented. Defendants in the Plymouth Action
filed a motion to dismiss the Amended Complaint for failure to
state a claim under the federal securities laws on July 17, 2009,
and briefing of that motion was complete on October 22, 2009.
A separate shareholder class action lawsuit was filed on
November 17, 2009, in the United States District Court for the
Northern District of Georgia entitled Mylroie v. Carter's, Inc.,
No. 1:09-CV-3196-JOF (the "Mylroie Action"). The initial
Complaint in the Mylroie Action asserted claims under Sections
10(b) and 20(a) of the 1934 Securities Exchange Act, and alleged
that between April 27, 2004, and November 10, 2009, the Company
and certain current and former executives made material
misstatements to investors regarding the Company's accounting for
discounts offered to some wholesale customers. The Court
consolidated the Plymouth Action and the Mylroie Action on
November 24, 2009 (the "Consolidated Action"). On March 15, 2010,
the plaintiffs in the Consolidated Action filed their amended and
consolidated complaint. The Company filed a motion to dismiss on
April 30, 2010, and briefing of the motion was complete on July
23, 2010.
On March 16, 2011, the United States District Court for the
Northern District of Georgia granted without prejudice the
Company's motion to dismiss all of the claims in the amended and
consolidated complaint in the Consolidated Action for failure to
state a claim under the federal securities laws. The plaintiffs
filed a second amended and consolidated complaint on July 20,
2011. On December 21, 2011, the Company reached an agreement to
settle the Consolidated Action for an amount which has been paid
by the Company's insurance providers. The settlement agreement
includes no admission of liability or wrongdoing by the Company or
by any other defendants and provides for a full and complete
release of all related claims that were or could have been brought
against the Company, its subsidiaries, and any and all current and
former directors, officers, and employees of the Company and its
subsidiaries. On January 19, 2012, the Court granted preliminary
approval of the settlement and ordered that notice be provided to
the proposed settlement class (as defined in the settlement
agreement).
The Court has scheduled a hearing for May 31, 2012, to determine
whether the settlement will receive final approval.
CELLCO PARTNERSHIP: Sued in N.Y. for Overcharging Text Messages
---------------------------------------------------------------
Courthouse News Service reports that a trade organization for
wireless carriers and its members conspired to overcharge for
application-to-person text messages by restricting "inexpensive"
10-digit numbers for such transmissions, a class claims.
The suit is Club Texting v. Cellco Partnership dba Verizon
Wireless; AT&T Mobility; Sprint Nextel. It was filed in the U.S.
District Court for the Southern District Court of New York.
CENTRAL EUROPEAN: Awaits Decision on Bid to Consolidate Suits
-------------------------------------------------------------
Central European Distribution Corporation is awaiting a court
decision on a motion to consolidate two class action lawsuits,
according to the Company's February 29, 2012, Form 10-K filing
with the U.S. Securities and Exchange Commission for the year
ended December 31, 2011.
On October 24, 2011, a class action complaint titled Steamfitters
Local 449 Pension Fund vs. Central European Distribution
Corporation, et al., was filed in the United States District
Court, District of New Jersey on behalf of a putative class of all
purchasers of the Company's common stock from August 5, 2010,
through February 28, 2011, against the Company and certain of its
officers. The complaint seeks unspecified money damages and
alleges violations of federal securities law in connection with
alleged materially false and misleading statements and/or
omissions regarding the Company's business, financial results and
prospects in its public statements and public filings with the
U.S. Securities & Exchange Commission for the second and third
quarters of 2010, relating to declines in the Company's vodka
portfolio, its need to take an impairment charge relating to the
deterioration in fair value of certain of its brands in Poland and
negative financial results from the launch of Zubrowka Biala, a
new vodka product. Subsequent to the complaint, a second,
substantially identical class action complaint titled Tim Schuler
v. Central European Distribution Corporation, et al., was filed in
the same court. Motions to consolidate the two cases and for the
appointment of lead plaintiff and lead counsel have been filed and
are awaiting decision. As a result, no response to the complaints
has yet been filed.
The Company says it intends to mount a vigorous defense to the
claims asserted.
CNH GLOBAL: Settlement of "Yolton" Suit in Approved Nov. 2011
-------------------------------------------------------------
The U.S. District Court for the Eastern District of Michigan
approved in November 2011 CNH Global N.V.'s settlement of a class
action lawsuit involving its subsidiary, according to the
Company's February 29, 2012, Form 20-F filing with the U.S.
Securities and Exchange Commission for the year ended
December 31, 2011.
In December 2002, six individuals acting on behalf of a purported
class filed a lawsuit, Gladys Yolton, et al. v. El Paso Tennessee
Pipeline Co. and Case Corporation, styled as a class action, in
the Federal District Court for the Eastern District of Michigan
against El Paso Tennessee Pipeline Co. (formerly Tenneco Inc., "El
Paso") and Case, LLC (now known as CNH America LLC, "CNH," a
Company subsidiary). The lawsuit alleged breach of contract and
violations of various provisions of the Employee Retirement Income
Security Act and Labor Management Relations Act arising due to
alleged changes in health insurance benefits provided to employees
of the Tenneco Inc. agriculture and construction equipment
business who retired before selected assets of that business were
transferred to CNH in June 1994. El Paso administers the health
insurance programs for these retirees. An agreement had been
reached with the UAW capping the premium amounts that El Paso
would be required to pay. Any amount above the cap limit would be
the responsibility of the retirees. In 1998, in exchange for a
release of all further liability for above-cap costs, CNH
contributed $28 million to a Voluntary Employee's Beneficiary
Association ("VEBA") to help defray the retirees' above-cap costs.
The lawsuit arose after El Paso notified the retirees that the
VEBA funds were exhausted and the retirees thereafter would be
required to pay the premiums above the cap amounts. The
plaintiffs also filed a motion for preliminary injunction in March
2003, asking the district court to order El Paso and/or CNH to pay
the above-cap amounts. On March 9, 2004, based on an "alter ego"
theory, the district court held that CNH was liable and ordered
that CNH pay the above-cap health insurance benefits. CNH filed a
motion for reconsideration and a motion for stay, both of which
the district court denied on June 3, 2004. CNH and El Paso
appealed to the Sixth Circuit Court of Appeals, but the Sixth
Circuit affirmed the district court's decision. El Paso and CNH
each filed a petition for a writ of certiorari seeking review by
the U.S. Supreme Court. On November 6, 2006, the U.S. Supreme
Court denied El Paso's and CNH's petitions and the matter was
returned to the district court. After extensive discovery, El
Paso and the plaintiffs filed summary judgment motions. CNH filed
a summary judgment motion on the "alter ego" and VEBA release
issues.
On March 7, 2008, the district court entered several orders.
First, it denied El Paso's motion for summary judgment with
respect to the benefits vesting issue, and granted plaintiff's
summary judgment motion with respect to liability. The court also
denied CNH's motion for summary judgment with respect to the
"alter ego" basis of liability, effectively ruling for the
plaintiffs on that issue. The court denied CNH's motion for
summary judgment on the VEBA release issue. The VEBA release
issue was tried the week of January 26, 2009. On October 27,
2009, the court ruled against CNH on the VEBA release issue.
In conjunction with the litigation, CNH filed a summary judgment
motion with the district court asking the court to enforce the
terms of a Reorganization Agreement, which CNH contended obligated
El Paso to defend CNH and indemnify it for all expenses and losses
arising from this lawsuit. The court granted that motion and the
decision has been upheld on appeal by the Sixth Circuit Court of
Appeals. Based on CNH's rights to indemnification under the
Reorganization Agreement now being final, CNH and El Paso reached
a settlement, whereby El Paso fully repaid CNH the amounts
previously paid to the retirees and committed to pay CNH's costs
in litigating the "alter ego" issue and the VEBA release issue
going forward.
In November 2011, the district court approved a settlement of the
Yolton case. The settlement agreement between plaintiffs and El
Paso provides that El Paso pay certain retiree benefits to the
class and that the benefits are guaranteed by El Paso's corporate
parent, El Paso Corporation, who is obligated to provide security
for its guaranty in the event its debt falls below investment
grade. However, CNH could be responsible for certain payments and
obligations in the future if the El Paso entities default on their
obligations under the settlement. In connection with the final
approval of the Yolton Case, CNH agreed to dismiss its lawsuit
against the UAW. CNH can reinitiate its claims if certain events
and defaults occur under the Yolton settlement. On October 17,
2011, it was announced that El Paso Corporation would be acquired
by Kinder Morgan Inc. The acquisition is not expected to affect
the El Paso entities' performance or guarantees of their
settlement obligations. Despite the fact that El Paso has been
finally determined to be financially responsible for the benefits
which the plaintiffs seek, CNH could be exposed to losses if El
Paso and its corporate parent(s) at some future time are unable to
fulfill their indemnification obligations to CNH under the
Reorganization Agreement.
CNH says it is unable to quantify the amount of the health care
obligations and cannot estimate the possible loss or range of
losses on this matter as El Paso administers the health care plan.
It is possible that such losses could be material.
Headquartered in Amsterdam, The Netherlands, CNH Global N.V. makes
agricultural equipment and construction equipment. Its farm
equipment includes tractors, harvesters, sprayers, and hay balers.
The Company also makes light-industrial and construction equipment
including backhoes, excavators, forklifts, wheel loaders, and
telescopic handlers.
CRST VAN: EEOC Put on Trial After Filing Sexual Harassment Suit
---------------------------------------------------------------
The Associated Press reports that the Equal Employment Opportunity
Commission's sexual harassment lawsuit against Cedar Rapids, Iowa-
based CRST Van Expedited Inc. has backfired and put the agency on
trial.
The agency is coping with a court ruling that could make it harder
and more expensive to pursue large discrimination cases against
companies in the Midwest, if not nationwide.
They were learning to become truck drivers but wound up in a
nightmare. In detailed accounts to a federal agency, dozens of
female employees of one of the nation's largest trucking companies
told of being propositioned, groped and even assaulted by male
drivers during cross-country training rides.
"I was beaten, I was fondled, I was humiliated and I was taught
nothing," one trainee, Ramona Villareal, said in a deposition.
And dozens of women who described an ordeal of unwanted and
aggressive sexual conduct may receive no compensation for lost
wages or emotional distress because of judicial criticism of the
agency's investigation.
A February ruling in the case sets a new standard for workplace
class-action lawsuits in the federal court district that includes
Iowa, Arkansas, Missouri, Minnesota, Nebraska and the Dakotas.
Before filing a lawsuit on behalf of employees alleging similar
discrimination, the agency will first have to investigate the
merits of every worker's claim and attempt to reach settlements.
If the agency doesn't, EEOC risks having the case dismissed.
The agency has argued that such a standard is impractical in cases
involving hundreds or thousands of potential victims. At a
minimum, the agency says, investigations would take longer and
delay relief compared to other regions, where class-action cases
can be filed with a lower standard. EEOC has a deadline this week
to determine whether to appeal.
"We are an agency with limited resources already, and this is
something that, if it stands, would make it even more challenging
for us to address and vindicate discriminatory violations in the
8th Circuit," EEOC general counsel P. David Lopez told AP.
But businesses say the ruling could stop unfair legal tactics and
prevent unnecessary and expensive litigation.
"It's incredibly significant," said Chicago lawyer Gerald Maatman
Jr., who represents companies sued by the EEOC. "It is a signal
by the federal courts that the tactics the EEOC has been using
over the last several years may be improper."
The ruling came as the agency has made systemic discrimination
cases -- those involving many employees -- a larger enforcement
priority. EEOC investigates 100,000 complaints of workplace
discrimination annually, and recovered more than $450 million for
employees last year.
The agency's tactics have rattled the business community, which
says lawsuits can cost millions of dollars and destroy
reputations. The U.S. Chamber of Commerce filed a friend-of-the-
court brief in the CRST case denouncing EEOC's tactics and calling
for the agency to be more cooperative with industry.
CRUSADER SERVICING: Class Action Transferred to Federal Court
-------------------------------------------------------------
Lillian Shupe, writing for Hunterdon County Democrat, reports that
a class-action suit initiated by a Lebanon Township homeowner has
been transferred to federal district court.
Jeanne Boyer, who has been fighting to save her own home from
foreclosure, filed the suit on behalf of herself and potentially
thousands of other homeowners in similar situations.
The suit was filed in Hunterdon County Superior Court on March 13
and removed to federal court on March 28.
Ms. Boyer alleges that she is one of many victims of a bid-rigging
scheme that allowed tax lien investors to charge the highest
amount of interest allowed by law. Several people have pleaded
guilty in federal court to Sherman Act violations by conspiring to
eliminate any competition at tax sales.
Among the defendants are Robert W. Stein of Huntington Valley,
Pa., who is president of Crusader Servicing Inc.; David M. Farber
of Cherry Hill, N.J.; and several other people who have pleaded
guilty to Sherman Act violations for rigging bids for the sale of
tax liens auctioned by municipalities throughout the state,
according to the Department of Justice.
Defendants Crusader, Royal Tax Lien Services and Royal Bancshares
of Pennsylvania moved to have the case moved to district court
because there are parties in at least two different states and the
amount of potential claims in the class action likely exceeds $5
million. Also, according to the notice of removal, the number of
people who might have claims likely exceeds 100 members. Crusader
purchased 19,903 liens and Royal Tax Lien Services purchased 8,864
liens between 1998 and 2009, court records say.
Ms. Boyer was about to lose her home on Musconetcong River Road
unless she came up with a total of $113,500 by March 15. Of that
amount, more than $64,000 is accumulated interest. However,
Superior Court Judge Yolanda Ciccone granted a temporary
restraining order in light of a class action suit initiated by
Ms. Boyer through attorney Michael Perle.
According to the suit, the victims of the tax sale scheme are
usually elderly, disabled or victims of a bad economy and unable
to pay burgeoning tax bills. The unscrupulous investors came in,
purchased the debt at tax sales and were able to charge exorbitant
interest fees. If the homeowners could not pay the grossly
inflated bills, the investor ended up with their homes, which are
often worth far more than what was owed.
Tax sale foreclosures do not require the subject property to be
sold at auction, as would happen if the mortgage was not paid.
When a mortgage is not paid, a Sheriff's sale is held and if the
sales price exceeds what is owed to the lender, the property owner
would get the remaining funds.
Ms. Boyer's taxes were paid through the mortgage company until the
mortgage was paid off. Ms. Boyer was responsible for her 2001
taxes but was unaware that she had to pay quarterly instead of
annually, according to the suit. At the time, she was also in the
process of filing for tax relief through the Senior Freeze
Program, which freezes taxes for eligible senior citizens and
disabled adults, regardless of age.
Although her application regarding freezing her 2001 taxes was
still pending, her home was listed in a tax sale held in June
2002.
Crusader Servicing purchased the lien and allegedly since they
were the only bidder -- thanks to the conspiracy among the
investors -- Crusader was allowed to charge the maximum 18%
interest. In August 2002, Crusader then paid the taxes due for
the first three quarters of that year, thus getting additional
liens (at 18% interest) against Ms. Boyer's home without having to
go through a tax sale and without providing any notice to Ms.
Boyer, according to the suit.
The original amount of about $5,567.67 in taxes owed quickly
ballooned to more than $24,000, payable in one lump sum by the
time Ms. Boyer tried to redeem the certificate in January 2004.
Crusader kept paying the taxes, increasing the size of the lien
with each payment.
It was not until Ms. Boyer paid the taxes that were due in August
2008 that Crusader began the foreclosure process, the suit said.
Crusader could have begun foreclosure proceedings once two years
had passed.
According to the suit, "it's the "unlawful accumulation of
interest at 18% (now in excess of $64,000), not the amount of tax
liability itself, which is the obstacle Boyer cannot surmount."
In January, the March 15 date was set that would have given
Crusader the title to the Boyer home. If the redemption date had
been allowed to proceed, Crusader would have gotten a home with a
fair market value of $300,000, for merely the $43,000 in taxes it
has paid since 2002.
Up to 100 other unidentified investors are named as defendants.
Lebanon Township and its tax collector are also named as
defendants but the suit notes that they could join the suit as
plaintiffs.
According to a Department of Justice press release, from as early
as 1998 until approximately spring 2009, Stein and Farber
participated in a conspiracy to rig bids at auctions for the sale
of municipal tax liens in New Jersey by agreeing to allocate among
certain bidders on which liens to bid.
The class action suit seeks to vacate Ms. Boyer's tax sale
certificate as well as certificates for other members of the
class.
An answer to the complaint is due by April 18 and an initial
conference is scheduled in federal court on May 15.
Meanwhile on March 27, another man pleaded guilty in federal court
to bid rigging.
According to a Department of Justice press release: Financial
adviser Robert E. Rothman of New York admitted that from about the
spring of 2000 until approximately February 2009, he participated
in a conspiracy to rig bids at auctions for the sale of municipal
tax liens in New Jersey by agreeing to allocate among certain
bidders on which liens to bid. The Department of Justice said
that Rothman proceeded to submit bids in accordance with his
agreement and purchased tax liens at collusive and non-competitive
interest rates.
"The Antitrust Division's investigation into municipal tax lien
auctions is ongoing and active," said Sharis A. Pozen, acting
Assistant Attorney General in charge of the Department of
Justice's Antitrust Division. "The division will not tolerate
this kind of illegal conduct that harms distressed homeowners."
A violation of the Sherman Act carries a maximum penalty of 10
years in prison and a $1 million fine for individuals. The
maximum fine for a Sherman Act violation may be increased to twice
the gain derived from the crime or twice the loss suffered by the
victim if either amount is greater than the statutory maximum.
Mr. Rothman is the sixth individual to plead guilty as a result of
the ongoing investigation into bid rigging or fraud related to
municipal tax lien auctions. On August 24, 2011, Isadore H. May,
Richard J. Pisciotta Jr., and William A. Collins each pleaded
guilty to one count of bid rigging in connection with their
participation in a conspiracy to allocate liens at New Jersey
auctions. On Feb. 23, Robert W. Stein and David M. Farber each
pleaded guilty to one count of bid rigging in connection with
their participation in this conspiracy.
The ongoing investigation is being conducted by the Antitrust
Division's New York Field Office and the FBI's Atlantic City, New
Jersey Resident Agency.
DE BEERS: Class Members' Petition for Certiorari Denied
-------------------------------------------------------
The Jewelers Vigilance Committee (JVC) has been notified that on
April 2, 2012, the U.S. Supreme Court denied a petition for
certiorari filed by members of the indirect purchaser class in the
De Beers class action lawsuits. A second petition for certiorari
filed by another member of the indirect purchaser class is still
under consideration by the Supreme Court.
The denial of this petition means that the previous decision of
the "en banc" Third Circuit Court of Appeals denying the class
members' attacks on the settlement will be reinstated.
Payment of claims will likely be delayed until the Supreme Court
acts on the second petition for certiorari.
FIRST ACCEPTANCE: Defends Ordinary Course Class Action Suits
------------------------------------------------------------
First Acceptance Corporation is defending itself from class action
lawsuits relating to its insurance operations, according to the
Company's February 29, 2012, Form 10-K filing with the U.S.
Securities and Exchange Commission for the year ended December 31,
2011.
The Company is named as a defendant in various lawsuits, arising
in the ordinary course of business, generally relating to its
insurance operations. All legal actions relating to claims made
under insurance policies are considered by the Company in
establishing its loss and loss adjustment expense reserves. The
Company also faces lawsuits from time to time that seek damages
beyond policy limits, commonly known as bad faith claims, as well
as class action and individual lawsuits that involve issues
arising in the course of the Company's business. The Company
continually evaluates potential liabilities and reserves for
litigation of these types using the criteria established by FASB
ASC 450, Contingencies ("FASB ASC 450"). Pursuant to FASB ASC
450, reserves for a loss may only be recognized if the likelihood
of occurrence is probable and the amount can be reasonably
estimated. If a loss, while not probable, is judged to be
reasonably possible, management will disclose, if it can be
estimated, a possible range of loss or state that an estimate
cannot be made. Management evaluates each legal action and
records reserves for losses as warranted by establishing a reserve
in its consolidated balance sheets in loss and loss adjustment
expense reserves for bad faith claims and in other liabilities for
other lawsuits. Amounts incurred are recorded in the Company's
consolidated statements of operations in losses and loss
adjustment expenses for bad faith claims and in insurance
operating expenses for other lawsuits unless otherwise disclosed.
The Company established an accrual for losses related to the
litigation settlements entered into during fiscal year 2009
related to litigation brought against the Company in Alabama and
Georgia with respect to its sales practices, primarily the sale of
ancillary motor club memberships sold in those states. Pursuant
to the terms of the settlements, eligible class members were
entitled to certain premium credits towards a future automobile
insurance policy with the Company or a reimbursement certificate
for future rental or towing expenses. Benefits to the Georgia and
Alabama class members commenced January 1, 2009, and March 7,
2009, respectively. Premium credits issued to class members were
prorated over a twelve-month term not to extend beyond August
2011, and the class members were entitled to the prorated premium
credit only so long as their insurance premiums remained current
during the twelve-month term.
HULU: Hartford Denies Obligation to Defend Class Action
-------------------------------------------------------
Jamie Ross at Courthouse News Service reports that Hartford
Insurance asked the Superior Court to declare that it need not
cover Hulu for a class action that claims the streaming Web site
tracks user activity.
Two class actions were filed against Hulu and consolidated,
alleging that it "engaged in various 'tracking exploits,' which
allowed it to track users' online activity through the use of
cookies and other identifiers placed on users' computers, and that
it obtained and misused users' personal information," Hartford
says in its complaint.
It seeks a declaration that its "policies do not provide coverage
for the claims against Hulu," that it has no duty to defend Hulu,
and that it "owes no indemnity and no duty to settle."
Hartford claims it is not liable for defending the class action
because the lawsuit does not allege "personal and advertising
injury" or "property damage" within the meaning of any of the
insurance policies.
Hartford also claims that no coverage is available "under the
2009-2010 policies because the period covered by the complaint
does not begin until March 2011."
"Because none of the allegations in the Garvey [class action] suit
fall within the coverage provided by any of the policies, Hartford
is not obligated to defend or indemnify Hulu with respect to the
Garvey suit and Hartford has no obligation to satisfy any judgment
that may be entered or to pay any settlement that may be reached
in the Garvey suit," the insurer says.
Hartford Casualty is represented by:
David Simantob, Esq.
TRESSLER LP
1901 Avenue of the Stars, Suite 450
Los Angeles, CA 90067
Telephone: (310) 203-4862
E-mail: dsimantob@tresslerllp.com
HYPERDYNAMICS CORP: Robbins Geller Files Securities Class Action
----------------------------------------------------------------
Robbins Geller Rudman & Dowd LLP on April 3 disclosed that a class
action has been commenced in the United States District Court for
the Southern District of Texas on behalf of purchasers of
Hyperdynamics Corporation publicly traded securities during the
period between February 17, 2011 and February 15, 2012.
If you wish to serve as lead plaintiff, you must move the Court no
later than 60 days from April 3, 2012. Although other law firms
have issued press releases indicating a different date for lead
plaintiff motions, such press releases were not issued by the
plaintiff in this action and do not constitute notice. If you
wish to discuss this action or have any questions concerning this
notice or your rights or interests, please contact plaintiff's
counsel, Darren Robbins of Robbins Geller at 800/449-4900 or
619/231-1058, or via e-mail at djr@rgrdlaw.com
If you are a member of this class, you can view a copy of the
complaint as filed or join this class action online at:
http://www.rgrdlaw.com/cases/hyperdynamics/
Any member of the putative class may move the Court to serve as
lead plaintiff through counsel of their choice, or may choose to
do nothing and remain an absent class member.
The complaint charges Hyperdynamics and certain of its officers
and directors with violations of the Securities Exchange Act of
1934. Hyperdynamics is an independent oil and gas exploration
company engaged in the development of prospects offshore the
Republic of Guinea in West Africa.
The complaint alleges that during the Class Period, defendants
issued materially false and misleading statements regarding the
Company's business and financial results. As a result of
defendants' false statements, Hyperdynamics stock traded at
artificially inflated prices during the Class Period, reaching a
high of $6.35 per share on March 4, 2011.
On November 9, 2011, Hyperdynamics announced disappointing first
quarter 2012 financial results and reported that it had increased
the cost estimate for its first two exploration wells (the Sabu-1
and Baraka-1 wells) from $80 to $135 million due to an increased
investment in its well logging program, infrastructure bottlenecks
and operational issues with its drill ship. The Company further
announced that there were delays in the progress of its Sabu-1
well and that given the operational challenges with Sabu-1, it
might delay its plans for drilling its Baraka-1 well. Then, on
February 15, 2012, Hyperdynamics announced extremely disappointing
results from its Sabu-1 exploration well, reporting that the Sabu-
1 well was unsuccessful, as the Company only encountered non-
commercial quantities of oil from its exploration activities. On
this news, the price of Hyperdynamics stock fell, closing at $1.44
per share on February 16, 2012, a one-day decline of 29% and a
decline of 77% from its Class Period high.
According to the complaint, the true facts, which were known by
defendants but concealed from the investing public during the
Class Period, were as follows: (a) due to numerous cost overruns
and delays, including logistical delays resulting from limited
port facilities in Guinea as well as issues related to mechanical
and operational matters surrounding the drilling of the Sabu-1
well, the Company would be unable to commence drilling on the
Baraka-1 well; (b) the Company had far greater exposure to
liquidity concerns than it had previously disclosed; and (c) based
on the foregoing, defendants lacked a reasonable basis for their
positive statements about the Company's drilling operations or the
prospective value of the Company's oil and gas concessions.
Plaintiff seeks to recover damages on behalf of all purchasers of
Hyperdynamics publicly traded securities during the Class Period.
The plaintiff is represented by Robbins Geller, which has
expertise in prosecuting investor class actions and extensive
experience in actions involving financial fraud.
Robbins Geller -- http://www.rgrdlaw.com-- is a a 180-lawyer firm
with offices in San Diego, San Francisco, New York, Boca Raton,
Washington, D.C., Philadelphia and Atlanta. It represents
defrauded investors, consumers, and companies, as well as victims
of human rights violations.
IMAX CORP: Issue on Two Parallel Securities Class Actions Arises
----------------------------------------------------------------
Julius Melnitzer, writing for Financial Post, reports that
parallel securities class actions in Canada and the U.S. could
become an unfathomable maze unless courts and regulators from both
countries develop a common set of rules to govern the cases.
A prime example is the situation involving separate securities
class actions that have been brought against Imax Corp. in Canada
and the U.S.
A proposed US$12-million settlement has been reached in the U.S.
case, where the class is limited to those investors who bought
their Imax shares through the Nasdaq stock exchange. Meanwhile,
an Ontario action is still underway where the class is "global"
because it welcomes investors who bought their Imax shares either
on NASDAQ or the Toronto Stock Exchange.
The Imax litigation springs from allegations that it made
misrepresentations that led to a precipitous decline in its share
price a few years ago. The U.S. action was filed in 2007.
Shortly thereafter, Dimitri Lascaris --
dimitri.lascaris@siskinds.com -- of Siskinds LLP in London filed a
parallel case in Ontario.
A problem with the parallel actions became apparent last month,
when Madam Justice Katherine van Rensburg of the Ontario Superior
Court of Justice approved a "Notice of Certification" for the
Ontario case.
The approved form mentions the U.S. action, and advises class
members that remaining in the Ontario class will not preclude them
from being a class member in the U.S. action. However, it does
not mention that the U.S. case has reached a proposed settlement
of US$12-million. The U.S. settlement is conditional on the
Ontario court recognizing the U.S. settlement, and then barring
any U.S. investors who accept that resolution from continuing in
the Ontario case.
A U.S. plaintiff had argued in Ontario that Judge van Rensburg
should hold off on approving the Ontario Notice of Certification
until the U.S. settlement is finalized. In the alternative, the
U.S. plaintiff asked that the Ontario notice include more detail
about the U.S. settlement. Judge van Rensburg rejected those
requests.
Mr. Lascaris lauds the judge's decision. He says that 85% of the
Ontario class consists of investors who purchased on NASDAQ. If
U.S. plaintiff had succeeded, only a small portion of the original
Ontario class would remain.
Given a choice, he believes few members of the U.S. class would
opt out of the U.S. settlement to remain in the Ontario action.
"The reality is that most plaintiffs will see that they're going
to get some money if they just fill out a form, and they won't
really think hard about whether they would get more if they held
out for the Canadian settlement or judgment."
Justice van Rensburg has scheduled a June hearing to determine
whether the Ontario class should be limited as contemplated by the
U.S. settlement. After the judge set that date, however, the U.S.
parties scheduled their "fairness" hearing on the U.S. proposed
settlement to occur just two weeks before the Canadian hearing.
Mr. Lascaris says it's a "fair inference" that the U.S. hearing
has been scheduled in the hope that Justice van Rensburg might be
influenced by a U.S. judge's finding that the U.S. settlement is
fair.
Lawyers on both sides of the class-action bar agree that the
tortuous course of these proceedings does not augur well for
multi-jurisdictional class actions. "This collision between the
U.S. and Canadian proceedings raises important questions about
which class members' best interests class counsel and the courts
on each side of the border are to take into account in approving
settlements," says Barry Glaspell, a member of the class action
defense group at Borden Ladner Gervais LLP's Toronto office.
Mr. Lascaris says the solution is in a common approach.
"This is a case that cries out for a joint Canadian-U.S. protocol,
but it won't be easy, because it will require legislation in both
countries," he says.
Paul Steep of McCarthy Tetrault LLP's Toronto office, who with
colleague Dana Peebles represents the defendants in the Ontario
action, agrees.
"Now that Canadian class actions have become a very real reality,
we definitely need more formalized meshing on cross-border
procedures," he says.
IMPERIAL TOBACCO: General Counsel Destroyed Research Documents
--------------------------------------------------------------
Sue Montgomery, writing for Postmedia News, reports that Imperial
Tobacco's general counsel was involved in destroying research
documents written by the cigarette industry on the health risks of
their products, a Quebec Superior Court heard on April 2.
Testifying at the C$27-billion class-action trial against the
industry, retired lawyer Roger Ackman, 73, said he also hired
Montreal lawyer Simon Potter "to help him."
Mr. Potter is defending Rothmans Benson & Hedges in the class
action, one of three companies being sued. Strangely, he is also
to testify about his role in destroying documents.
His name also appears in a 2006 United States Federal Court
judgment that found American cigarette companies guilty of fraud.
The judge in the case noted that lawyers, Mr. Potter among them,
played a key role in deceiving the public by putting in place,
then carrying out, a policy of destroying documents.
Mr. Ackman, who went all the way to the Quebec Court of Appeal to
get out of testifying at this trial but lost, dodged several
questions on April 2 and when he did answer, favored Imperial
Tobacco, said Superior Court Justice Brian Riordan, who is
presiding over the proceedings.
Mr. Ackman, who left the company in 1999 after about 29 years on
the job, said an agreement existed between Imperial Tobacco and
its major shareholder, British American Tobacco, "to destroy
documents on condition we were given access to the documents."
Gordon Kugler, a lawyer for the plaintiffs, asked Mr. Ackman how
he would know what documents were available if theirs were
destroyed.
"I don't know, it was a long time ago," Mr. Ackman replied.
"Why were lawyers involved in the destruction of research
documents?" Mr. Kugler asked.
"I don't have an answer for that," Mr. Ackman said. "That was the
way it was done."
Mr. Ackman, who was a member of the company's management
committee, said he never read any of the research documents. They
stemmed from studies conducted in the industry's own laboratories
that showed smoking was addictive and caused cancer and other
diseases. The research was kept secret from the public.
The trial, which began last month and is expected to last at least
two years, involves about two million Quebec smokers and is the
largest claim in Canadian history. The plaintiffs allege the
cigarette industry made and sold a product it knew was dangerous.
They also allege the companies stirred up a scientific controversy
about the effects of tobacco products while playing up the alleged
benefits associated with their use, built a common front against
revealing the risks and hazards related to the consumption of
tobacco products and specifically targeted youth to buy tobacco
products.
The companies -- Rothmans Benson & Hedges, JTI McDonald and
Imperial -- deny the allegations.
J.P. MORGAN: Various Law Firms File ERISA Class Action
------------------------------------------------------
Levin Papantonio of Florida, Kennedy & Madonna of New York,
Fishman Haygood of Louisiana, Schneider Wallace of California,
Texas and Arizona, and Meites Mulder & Glink of Illinois on April
4 disclosed that they have filed a class action lawsuit on behalf
of retirement investors against J.P. Morgan Chase & Co. and
various other J.P. Morgan entities (collectively "JP Morgan") over
the sale and administration of the JP Morgan Stable Value Fund
(the "Fund"). According to the Complaint, JP Morgan used the Fund
to offload risky mortgage assets not rated by any third party
credit rating agency known as Alternative Private Placement
Commercial Mortgages ("APPCMs"), and transferred the risks
associated with these assets from JP Morgan to the Fund.
Moreover, the Complaint states that JP Morgan internally rated the
APPCMs to give them a more conservative rating than would be
warranted in view of the assets' actual risks.
The Complaint alleges that the JP Morgan entities violated their
duties under the Employee Retirement Income Security Act of 1974
("ERISA"). ERISA is a federal law that, among other things,
defines the minimum duties owed by those who exercise control over
covered retirement plan assets in order to protect retirement plan
investors and their nest eggs.
"These plan administrators had a duty to act in the best interests
of their investors. Instead, it appears that the administrators
took advantage of their fiduciary position to benefit JP Morgan's
own interests," said James Kauffman -- jkauffman@40levinlaw.com --
an attorney with Levin Papantonio Thomas Mitchell Rafferty &
Proctor, P.A. The Florida firm of Levin Papantonio is handling
this action with its partner firms, Kennedy & Madonna, LLP of New
York; Schneider Wallace Cottrell Brayton & Konecky, LLP of
California, Texas and Arizona; Fishman Haygood Phelps Walmsley
Willis & Swanson LLP of Louisiana; and Meites Mulder & Glink of
Illinois.
The Complaint, filed in the United States District Court for the
Southern District of New York, demands that JP Morgan restore to
the investors all losses incurred through the misuse of the plans'
assets.
JEFFERSON PARISH: Faces Class Action Over School Bus Cameras
------------------------------------------------------------
Mark Waller, writing for The Times-Picayune, reports that the
lawyers who have been challenging traffic cameras at intersections
in Jefferson Parish and New Orleans now are launching an attack on
cameras affixed to school buses in Jefferson that catch violators
who disregard bus-mounted stop signs. Their latest lawsuit argues
that the cameras violate the Louisiana Constitution by using civil
proceedings to address moving violations and giving law
enforcement power to a company motivated by profit instead of
impartiality.
"It's the very same constitutional issues that we raised in the
red light lawsuit," said Joseph McMahon, a lawyer who says he has
signed up more than 20 plaintiffs in the school bus camera case
and seeks to turn it into a class action. He filed the case last
month in 24th Judicial District Court in Gretna.
The Jefferson Parish School Board approved a program in 2007 that
uses cameras inside buses as a security measure against student
misbehavior and driver wrongdoing, and cameras installed on the
exteriors of buses to generate tickets for drivers blowing past
when children are boarding or disembarking.
The program was slow to move, however, because of installation
problems and resistance from drivers who own their buses. School
system officials said nine owner-operators now have the cameras,
along with six buses run by a transportation company. That's a
small portion of the 338 buses that traverse the parish for the
public schools every day.
As currently written, the lawsuit spares the parish School Board
as a defendant but instead targets an ordinance passed by the
Jefferson Parish Council in 2008 allowing the creation of school
bus traffic camera programs and setting fines from $295 to $500.
Mr. McMahon said he could later add the School Board to the suit.
The New Orleans City Council created a similar ordinance in 2010.
Education officials said that none of the buses operating under
the Orleans Parish School Board have cameras and seven buses
serving the Recovery School District are equipped with cameras but
have yet to generate any tickets.
The lawsuit says the Jefferson program violates drivers' due
process rights because the parish ordinance, "immediately assumes
a plaintiff guilty or liable of overtaking a school bus simply
because the plaintiff is the registered owner of the vehicle
photographed."
The complaint says the program deprives drivers of the ability to
confront prosecution witnesses against them, such as police
officers, because the only witnesses are automated devices. It
says the ordinance allows the parish to overstep its authority by
carrying out enforcement on streets controlled by cities or the
state.
Parish Attorney Deborah Foshee said she could not comment on
details of the ongoing case.
The lawsuit names Redflex Traffic Systems of Phoenix as the
company receiving enforcement powers that the plaintiffs deem
invalid, although Redflex is not the company operating the school
bus cameras. That job went to a Harahan firm called ONGO Live. A
Redflex spokesman said Redflex doesn't offer a bus camera service.
Mr. McMahon said the Redflex name serves as a placeholder in the
suit as he gathers more information for the case.
Redflex is the company that installed fixed cameras at
intersections across Jefferson Parish. Those cameras have long
sat dormant, however, after the Parish Council suspended the
program amid concerns about portions of ticket proceeds going to
lobbyists for the firm. Redflex then sued the parish over the
camera freeze and its share of money already collected through
tickets. Parish government has been holding about $20 million
generated through the cameras in escrow.
That case remains pending, as do the other cases filed by
Mr. McMahon against the validity of cameras as enforcement tools.
The contract between the School Board and ONGO Live directs 60
percent of the bus camera revenue to the company, 20 percent to
the school system and 20 percent to the Sheriff's Office, which
has deputies review the gathered footage of drivers. School
officials said the district's share comes to about $20,000 a year
and goes toward buying computers.
As part of his investigation, Mr. McMahon said he is seeking the
number of tickets generated by school bus cameras in Jefferson
Parish. School officials said they don't have immediate access to
that data.
KINDRED HEALTHCARE: Delaware Litigation Resolved in October 2011
----------------------------------------------------------------
A stipulation of settlement and dismissal of a consolidated class
action lawsuit filed in Delaware became final on October 11, 2011,
after the time to file an appeal of the settlement order expired,
according to Kindred Healthcare, Inc.'s February 29, 2012, Form
10-K filing with the U.S. Securities and Exchange Commission for
the year ended December 31, 2011.
On February 10, 2011, Arthur I. Murphy, Jr., a purported
stockholder of the Company's subsidiary, RehabCare Group, Inc.,
filed a purported class action lawsuit in the Circuit Court of St.
Louis County, Missouri (the "Circuit Court") against RehabCare,
RehabCare's directors and Kindred (the "Murphy litigation"); and
on March 2, 2011, Alfred T. Kowalewski, a purported stockholder of
RehabCare, filed a purported class action lawsuit in the Circuit
Court, Missouri against RehabCare, RehabCare's directors and
Kindred (the "Kowalewski litigation" and, together with the Murphy
litigation, the "Missouri litigation"). On February 15, 2011, the
Norfolk County Retirement System, a purported stockholder of
RehabCare, filed a purported class action lawsuit in the Court of
Chancery against RehabCare, RehabCare's directors and Kindred (the
"Norfolk County litigation"); on February 28, 2011, City of
Pontiac General Employees' Retirement System, a purported
stockholder of RehabCare, filed a purported class action lawsuit
in the Court of Chancery against RehabCare, RehabCare's directors
and Kindred (the "City of Pontiac litigation"); and on March 4,
2011, Plumbers & Pipefitters National Pension Fund, a purported
stockholder of RehabCare, filed a purported class action lawsuit
in the Court of Chancery against RehabCare, RehabCare's directors
and Kindred (the "Plumbers & Pipefitters litigation" and, together
with the Norfolk County litigation and the City of Pontiac
litigation, the "Delaware litigation").
The complaints in the Missouri litigation and Delaware litigation
contain similar allegations, including among other things, that
RehabCare's directors breached their fiduciary duties to the
RehabCare stockholders, including their duties of loyalty, due
care, independence, good faith and fair dealing, by entering into
a merger agreement which provides for inadequate consideration to
RehabCare stockholders, and that RehabCare and Kindred aided and
abetted RehabCare's directors alleged breaches of their fiduciary
duties. The plaintiffs seek injunctive relief preventing the
defendants from consummating the transactions contemplated by the
merger agreement, or in the event the defendants consummate the
transactions contemplated by the merger agreement, rescission of
such transactions and attorneys' fees and expenses.
On March 8, 2011, the plaintiffs in the Kowalewski litigation
filed a motion with the Circuit Court to consolidate the Missouri
litigation and to appoint lead counsel. On March 31, 2011, the
plaintiffs in the Kowalewski litigation filed an amended complaint
and a motion for expedited discovery and on April 11, 2011, the
plaintiffs in the Murphy litigation filed an amended complaint and
a motion for expedited discovery. This April 11, 2011 amended
complaint in the Murphy litigation also added Citigroup Global
Markets Inc. as a named defendant in the litigation. On April 7,
2011, the defendants filed a motion to dismiss and/or stay the
Missouri litigation. After holding hearings on April 8 and April
22, 2011, the Circuit Court stayed the Missouri litigation by
Order dated April 25, 2011.
On March 9, 2011, the Court of Chancery consolidated the Delaware
litigation under the caption "In Re RehabCare Group, Inc.
Shareholders Litigation" and plaintiffs filed a verified
consolidated class action complaint on April 5, 2011.
On May 12, 2011, the defendants entered into a memorandum of
understanding with the plaintiffs in the Delaware litigation
regarding the settlement of the Delaware litigation. In
connection with the settlement contemplated by the memorandum of
understanding, (i) Kindred and RehabCare agreed to make certain
additional disclosures related to the proposed merger, which were
contained in a Form 8-K filed with the SEC on May 12, 2011, (ii)
RehabCare agreed to make the payment, at and subject to the
closing of the merger between Kindred and RehabCare, of $2.5
million in cash into a settlement pool for the benefit of the
plaintiff class in In re RehabCare Group, Inc. Shareholders
Litigation, to be distributed after final approval of the
settlement of the Delaware Litigation and (iii) Kindred, Kindred
Healthcare Development, Inc. and RehabCare agreed to enter into an
amendment, dated May 12, 2011, to the merger agreement, dated as
of February 7, 2011, among Kindred, Kindred Healthcare
Development, Inc. and RehabCare, the material terms of which are:
* inclusion of an acknowledgement by Kindred and RehabCare of
the waiver of any existing standstill undertakings for the
benefit of RehabCare;
* change of the definition of "Company Termination Fee" to
mean an amount equal to $13 million; and
* modification of the agreement to eliminate the requirement
for a three-business day period during which Kindred has the
right to match a superior proposal.
A copy of the Amendment to Agreement and Plan of Merger was filed
as Exhibit 2.1 to the Form 8-K filed with the SEC on May 12, 2011.
On June 29, 2011, the parties submitted to the Court of Chancery a
proposed Stipulation of Settlement and Dismissal, which the Court
granted on July 1, 2011. The Court of Chancery held a formal
settlement hearing on September 8, 2011, at which the Court
approved the agreed-upon Stipulation of Settlement and Dismissal
as fair and reasonable, and awarded plaintiffs' attorneys' fees in
the amount of $1.7 million plus expenses incurred. The
Stipulation of Settlement and Dismissal became final on October
11, 2011 after the time to file an appeal of the Court's order
approving the settlement expired.
MASSEY ENERGY: Motion to Dismiss Securities Class Action Tossed
---------------------------------------------------------------
The American Lawyer reports that a federal judge has rejected a
motion to dismiss a proposed securities class action against
Massey Energy and its former directors and officers, allowing
shareholders to continue to press a question that may have a very
costly answer: Did the coal company take a campaign to rebuild its
corporate image too far?
MCDONALD'S CORP: Judge Dismisses Happy Meals Class Action
---------------------------------------------------------
Nick McCann at Courthouse News Service reports that a San
Francisco judge tossed out a class action that sought to stop
McDonald's from offering children free toys to promote its Happy
Meals.
Lead plaintiff Monet Parham claimed, "McDonald's exploits very
young California children and harms their health by advertising
unhealthy Happy Meals with toys directly to them. Children eight
years old and younger do not have the cognitive skills and the
developmental maturity to understand the persuasive intent of
marketing and advertising.
"Thus, McDonald's advertising featuring toys to bait children
violates California law because it is inherently deceptive and
unfair.
"McDonald's advertising is also unfair to its competitors, who do
not choose to attract very young children with the lure of a toy."
Ms. Parham claims that McDonald's "affirmatively and knowingly
targets" children "in order to insidiously and deceptively access
parents' wallets."
McDonald's argued that Ms. Parham failed to state a cause of
action, and failed to prove that she lost money as a result of its
marketing.
Attorneys argued the cases in February. In a two-page order on
April 4, Superior Court Judge Richard Kramer agreed with
McDonald's, and dismissed with prejudice, without leave to amend.
A copy of the Order Sustaining McDonald's Demurrers to Plaintiff's
Amended Complaint in Parham v. McDonald's Corporation, et al.,
Case No. CGC-10-506178 (Calif. Super. Ct., San Francisco Cty.), is
available at http://is.gd/r9jXG8
McDonald's Corporation and McDonald's UsA, LLC were represented
by:
Randall L. Allen, Esq.
Palani P. Rathinasamy, Esq.
Rodrigo Salas, Esq.
ALSTON & BIRD LLP
275 Middlefield Road, Suite 150
Menlo Park, CA 94025
Telephone: (650) 838-2000
E-mail: randall.allen@alston.com
palani.rathinasamy@alston.com
rodrigo.salas@alston.com
MEDIVATION INC: Awaits Order on Bid to Dismiss Securities Suit
--------------------------------------------------------------
Medivation, Inc. is awaiting a court decision on its motion to
dismiss a second amended complaint in a consolidated securities
lawsuit pending in California, according to the Company's February
29, 2012, Form 10-K filing with the U.S. Securities and Exchange
Commission for the year ended December 31, 2011.
In March 2010, the first of several putative securities class
action lawsuits was commenced in the U.S. District Court for the
Northern District of California, naming as defendants the Company
and certain of its officers. The lawsuits are largely identical
and allege violations of the Securities Exchange Act of 1934, as
amended. The plaintiffs allege, among other things, that the
Company disseminated false and misleading statements about the
effectiveness of dimebon for the treatment of Alzheimer's disease.
The plaintiffs purport to seek damages, an award of their costs
and injunctive relief on behalf of a class of stockholders who
purchased or otherwise acquired the Company's common stock between
September 21, 2006, and March 2, 2010. The actions were
consolidated in September 2010 and, in April 2011, the court
entered an order appointing Catoosa Fund, L.P. and its attorneys
as lead plaintiff and lead counsel. Thereafter, the lead
plaintiff filed a consolidated amended complaint, which was
dismissed without prejudice as to all defendants in August 2011.
The lead plaintiff filed a second amended complaint in November
2011.
In January 2012, the Company filed a motion to dismiss the second
amended complaint, which was scheduled to be heard by the Court on
March 16, 2012.
The Company's management believes that it has meritorious defenses
and intends to defend this lawsuit vigorously. However, this
lawsuit is subject to inherent uncertainties, and the actual cost
will depend upon many unknown factors. The outcome of the
litigation is necessarily uncertain, the Company could be forced
to expend significant resources in the defense of the lawsuit and
it may not prevail. Monitoring and defending against legal
actions is time consuming for the Company's management and
detracts from its ability to fully focus its internal resources on
its business activities. In addition, the Company may incur
substantial legal fees and costs in connection with the litigation
and, although the Company believes it is entitled to coverage
under the relevant insurance policies, subject to a $350,000
retention, coverage could be denied or prove to be insufficient.
The Company is not currently able to estimate the possible cost to
it from this matter, as this lawsuit is currently at an early
stage and the Company cannot be certain how long it may take to
resolve this matter or the possible amount of any damages that the
Company may be required to pay. The Company has not established
any reserves for any potential liability relating to this lawsuit.
It is possible that the Company could, in the future, incur
judgments or enter into settlements of claims for monetary
damages. A decision adverse to the Company's interests on these
actions could result in the payment of substantial damages, or
possibly fines, and could have a material adverse effect on its
cash flow, results of operations and financial position. In
addition, the uncertainty of the currently pending litigation
could lead to more volatility in the Company's stock price.
NOVASTAR MORTGAGE: Judge Dismisses MBS Class Action
---------------------------------------------------
The American Lawyer reports that a federal judge has dismissed a
proposed class action against NovaStar Mortgage over $1.32 billion
in mortgage-backed securities investments. MBS investors have
seen their claims whittled down time and again, but it's been rare
for judges to dismiss MBS claims outright.
PREMIER HOLDING: Motions to Dismiss Securities Suit Pending
-----------------------------------------------------------
Motions to dismiss a consolidated third amended complaint are
currently pending in a securities class action lawsuit involving
the chief executive officer of Premier Holding Corp.'s subsidiary,
the Company disclosed in its February 29, 2012, Form 8-K filing
with the U.S. Securities and Exchange Commission.
On February 22, 2012, Premier Holding Corp. (the "Company")
appointed Kevin B. Donovan to serve as Chief Executive Officer of
the Company's wholly-owned subsidiary, WEPOWER Ecolutions Inc.
Concurrently, Mr. Donovan was asked to join the board of directors
of Premier Holding Corp. Mr. Donovan is expected to make a
significant contribution to the Company's second line of business
as an energy services company and integrator of clean energy
solutions, that offer clean technology products and services to
commercial markets and developers and management companies of
large scale residential developments. The Company's second line
of business expects to deliver green solutions, branded
specifically by the business as "ecolutions", which include best
of class alternative energy technologies in wind power turbines,,
solar power systems, energy efficient smart lighting controls for
street lighting, outdoor and indoor lighting systems, energy and
power control management systems for cell towers, refrigeration
systems, fuel reduction solutions for transportation and other
technologies specific to its market. Additional integrated
business offerings will include direct energy services as power
purchase agreements, eco energy asset capital management financing
and leasing programs for solar and wind powered generation
programs for solar and wind farms.
The Company's wholly-owned subsidiary, WEPOWER Ecolutions Inc.
signed an employment agreement with Mr. Donovan that provides for
an annual base salary of $120,000, specified expense
reimbursement, and other benefits. At present, directors of the
Company serve without compensation. In future periods, the
Company anticipates creating a stock and stock option plan to
compensate persons, including directors, who have substantial
responsibility for the management and growth of the Company and
its affiliates.
Mr. Donovan has 25+ years specializing in technology, retail, food
service, hospitality, gaming, sports marketing, interactive
entertainment and new media markets. Mr. Donovan has co-founded
and served as Chairman, Director, CEO and President of public and
private companies during the startup, growth and turnaround phases
of the company's lifecycle, with an emphasis in the creation of
value in challenging environments. From 1994 to date, Mr. Donovan
has been the co-founder and Senior Vice President of Saint Andrews
Golf Corporation Las Vegas; the creator and Senior Vice President
of the All-American SportPark Las Vegas, Callaway Golf Center,
Major League Baseball Slugger Stadium, NASCAR SpeedParks, Pepsi
AllSport Arena, Boston Garden Experience; Director of Dirt
Motorsports; Director of Brand Image for the Salt Lake 2002 Winter
Olympics and 2002 Paralympics Organizing Committees; CEO,
President and Director of Smoothie King Franchises, Inc.; Managing
Director, Vice President of Fotoball USA/K2; co-founder and
President of Bluetorch Online Games/ Planetwide Games, Inc./
MashON; CEO and Interim Co-Chairman of Electronic Game Card, Inc.;
co-founder and Director of WePower, LLC Renewable Energy
Solutions; Director, Consultant R66T WiFi/YMAX Digital Media
Networks; Consultant to HAVI Global Solutions/The Marketing Store;
co-founder and Chief Strategy Officer to Jellyfish LLC
Intelligence; President VitaminSpice, Inc.; Board Member,
Consultant and Strategist for a Director of T.J. Martell
Foundation; Consultant and Strategist for Director of RES
Interactive /Tootsville.com. Education; Associate Arts Degree from
St. Paul College and Augsburg College.
Electronic Game Card, Inc. filed a voluntary petition under
Chapter 7 of the Bankruptcy Code while Mr. Donovan was serving as
CEO and Interim Co-Chairman. See United States Bankruptcy Court,
District of Nevada, Las Vegas Division, Case No. 10-128366. Mr.
Donovan was named as one of several defendants in a purported
class action proceeding for federal securities law violations
against Electronic Game Card, Inc. in the United States District
Court, Central District of California, Case No. 8:10-cv-00252-DOC.
Section 10(b) and Rule 10b-5 claims against Donovan were Dismissed
with a leave to amend in 2011. Motions to Dismiss the
Consolidated Third Amended Complaint are under submission with the
Court.
QUANTA SERVICES: Defends & Litigates Suits Over Calif. Wildfires
----------------------------------------------------------------
Quanta Services, Inc. is defending and litigating lawsuits
involving its subsidiary arising from two wildfires in California,
according to the Company's February 29, 2012, Form 10-K filing
with the U.S. Securities and Exchange Commission for the year
ended December 31, 2011.
On June 18, 2010, PAR Electrical Contractors, Inc., a wholly owned
subsidiary of Quanta (PAR), was named as a third party defendant
in four lawsuits in California state court in San Diego County,
California, all of which arise out of a wildfire in the San Diego
area that started on October 21, 2007, referred to as the Witch
Creek fire. The California Department of Forestry and Fire
Protection issued a report concluding that the Witch Creek fire
was started when the conductors of a three phase 69kV transmission
line, known as TL 637, owned by San Diego Gas & Electric (SDG&E)
touched each other, dropping sparks on dry grass. The Witch Creek
fire, together with another wildfire referred to as the Guejito
fire that allegedly merged with the Witch Creek fire, burned a
reported 198,000 acres, over 1,500 homes and structures and is
alleged to have caused two deaths and numerous personal injuries.
Numerous additional lawsuits were filed directly against SDG&E and
its parent company, Sempra, claiming SDG&E's power lines caused
the fire. The court ordered that the claims be organized into the
four lawsuits and grouped the matters by type of plaintiff,
namely, insurance subrogation claimants, individual/business
claimants, governmental claimants, and a class action matter, for
which class certification has since been denied. PAR is not named
as a direct defendant in any of these lawsuits against SDG&E or
its parent. SDG&E has reportedly settled many of the claims. On
June 18, 2010, SDG&E joined PAR to the four lawsuits as a third
party defendant seeking contractual and equitable indemnification
for losses related to the Witch Creek fire, although a claim for
specific damages has not been made. SDG&E's claims for indemnity
relate to work done by PAR involving the replacement of one pole
on TL 637 about four months prior to the Witch Creek fire.
Quanta does not believe that the work done by PAR was the cause of
the contact between the conductors. However, PAR has notified its
various insurers of the claims. One insurer is participating in
the defense of the matter, while others have reserved their rights
to contest coverage, not stated their position and/or denied
coverage. One insurer filed a lawsuit in the U.S. District Court
for the Southern District of Texas, Houston Division, on April 15,
2011, seeking a declaratory judgment that coverage does not exist.
On June 6, 2011, and June 16, 2011, two other insurers intervened
in the Texas coverage lawsuit making similar claims. On August 5,
2011, PAR and Quanta filed a lawsuit in California state court
against certain insurers seeking a determination that coverage
exists under the policies. PAR also filed a motion in the Texas
coverage lawsuit asking the U.S. District Court for the Southern
District of Texas to defer to the California state court on the
coverage claims.
On December 12, 2011, the Texas court granted PAR's motion and
dismissed the Texas coverage lawsuit, abstaining in favor of the
pending California coverage lawsuit. The insurers have not
appealed that dismissal.
PAR is vigorously defending the third party claims by SDG&E and
continues to work to ensure coverage of any potential liabilities.
An amount equal to the deductibles under certain of Quanta's
applicable insurance policies has been expensed in connection with
these matters. Quanta also previously recorded a liability and
corresponding insurance recovery receivable of $35 million
associated with a policy that is not subject to any of the actions
seeking to deny coverage, with the liability reserve being reduced
as expenses are incurred in connection with these matters and the
receivable being reduced as these expenses are reimbursed by the
insurance carrier. Additional deductibles may apply depending upon
the availability of coverage under other insurance policies.
Given PAR's defenses to the indemnity claims, as well as the
potential for insurance coverage, Quanta cannot estimate the
amount of any possible loss or the range of possible losses that
may exceed Quanta's applicable insurance coverage. However, due
to the nature of these claims, an adverse result in these
proceedings leading to a significant uninsured loss could have a
material adverse effect on Quanta's consolidated financial
condition, results of operations and cash flows.
ROCKYOU: Settles Privacy Class Action for $250,000
--------------------------------------------------
The Recorder reports that app developer RockYou has settled a
proposed privacy class action over alleged security breaches. A
federal judge approved the settlement one day after the Federal
Trade Commission announced that RockYou would pay $250,000 to
settle charges that it had failed to protect children's privacy.
SCIENCE APPLICATIONS: Harris & Ruble Files Class Action
-------------------------------------------------------
Harris & Ruble announced their filing of a class-action lawsuit
against Science Applications International Corporation (SAIC), a
TRICARE Management Authority contractor, alleging the company did
not properly safeguard medical information for an estimated 4.9
million military clinic and hospital patients affected by the mid-
September 2011 theft of computer backup tapes from the unattended
personal vehicle of an SAIC employee.
Filed in the United States District Court for the Northern
District of California, the class-action lawsuit alleges that SAIC
was negligent in protecting patient information stored on backup
tapes and that SAIC failed to properly notify patients within the
timeframe required by law.
In September 2011, backup tapes with unencrypted patient data were
stolen when left in an SAIC employee's personal vehicle parked in
an unattended public garage. SAIC has already had six prior
security breaches concerning sensitive private information--one
being a similar security breach in which computer backup tapes
were stolen. Patients only learned of the security breach two
months after the release of information, when notices were
belatedly sent by SAIC in November 2011.
The backup tapes contained electronic healthcare records used in
the military health system to capture patient data from 1992
through September 7, 2011. The stolen data includes personal
health information consisting of patient information for filling
pharmacy prescriptions, laboratory workups, Social Security
numbers, addresses, telephone numbers, and some personal health
data, such as clinical notes, laboratory tests, prescriptions, and
other health information.
SAIC "utterly failed to protect private medical information for
the millions of patients who entrusted it with their healthcare
and private information," said Attorney Alan Harris. "Securing
encrypting technology was not a priority for SAIC and now patients
will have to worry about what medical or other private information
is out there for others to view. SAIC's statement that it
withheld information about the breach from patients so as not to
raise undue alarm among its beneficiaries is simply inexcusable.
That SAIC is now, after the fact, reviewing its data-protection
security policies to prevent similar breaches in the future does
not excuse the failure to safeguard the confidential information
that has already been disclosed."
For additional information, patients impacted by this data breach
may contact:
Alan Harris, Esq.
Harris & Ruble
6424 Santa Monica Boulevard
Los Angeles, CA 90038
Telephone: (323) 962-3777
E-mail: aharris@harrisandruble.com
SEALED AIR: Awaits Canadian Settlement to Become Effective
----------------------------------------------------------
Sealed Air Corporation is waiting for a settlement resolving class
action claims filed against it in Canada to become effective,
according to the Company's February 29, 2012, Form 10-K filing
with the U.S. Securities and Exchange Commission for the year
ended December 31, 2011.
In November 2004, the Company's Canadian subsidiary Sealed Air
(Canada) Co./Cie learned that it had been named a defendant in the
case of Thundersky v. The Attorney General of Canada, et al. (File
No. CI04-01-39818), pending in the Manitoba Court of Queen's
Bench. W. R. Grace & Co. and W. R. Grace & Co. - Conn. are also
named as defendants. The plaintiff brought the claim as a
putative class proceeding and seeks recovery for alleged injuries
suffered by any Canadian resident, other than in the course of
employment, as a result of Grace's marketing, selling, processing,
manufacturing, distributing and/or delivering asbestos or
asbestos-containing products in Canada prior to the Cryovac
Transaction.
On March 31, 1998, Sealed Air completed a multi-step transaction
(the "Cryovac transaction") involving Grace which brought the
Cryovac Inc. packaging business and the former Sealed Air
Corporation's business under the common ownership of the Company.
A plaintiff filed another proceeding in January 2005 in the
Manitoba Court of Queen's Bench naming the Company and specified
subsidiaries as defendants. The latter proceeding, Her Majesty
the Queen in Right of the Province of Manitoba v. The Attorney
General of Canada, et al. (File No. CI05-01-41069), seeks the
recovery of the cost of insured health services allegedly provided
by the Government of Manitoba to the members of the class of
plaintiffs in the Thundersky proceeding. In October 2005, the
Company learned that six additional putative class proceedings had
been brought in various provincial and federal courts in Canada
seeking recovery from the Company and its subsidiaries Cryovac,
Inc. and Sealed Air (Canada) Co./Cie, as well as other defendants
including W. R. Grace & Co. and W. R. Grace & Co. - Conn., for
alleged injuries suffered by any Canadian resident, other than in
the course of employment (except with respect to one of these six
claims), as a result of Grace's marketing, selling, manufacturing,
processing, distributing and/or delivering asbestos or asbestos-
containing products in Canada prior to the Cryovac transaction.
Grace and W. R. Grace & Co. - Conn. have agreed to defend,
indemnify and hold harmless the Company and its affiliates in
respect of any liability and expense, including legal fees and
costs, in these actions.
In April 2001, Grace Canada, Inc. had obtained an order of the
Superior Court of Justice, Commercial List, Toronto (the "Canadian
Court"), recognizing the Chapter 11 actions in the United States
of America involving Grace Canada, Inc.'s U.S. parent corporation
and other affiliates of Grace Canada, Inc., and enjoining all new
actions and staying all current proceedings against Grace Canada,
Inc. related to asbestos under the Companies' Creditors
Arrangement Act. That order has been renewed repeatedly. In
November 2005, upon motion by Grace Canada, Inc., the Canadian
Court ordered an extension of the injunction and stay to actions
involving asbestos against the Company and its Canadian affiliate
and the Attorney General of Canada, which had the effect of
staying all of the Canadian actions.
The parties finalized a global settlement of these Canadian
actions (except for claims against the Canadian government). That
settlement, which has subsequently been amended (the "Canadian
Settlement"), will be entirely funded by Grace. The Canadian
Court issued an Order on December 13, 2009, approving the Canadian
Settlement.
The Company says it does not have any positive obligations under
the Canadian Settlement, but it is a beneficiary of the release of
claims. The release in favor of the Grace parties (including the
Company) will become operative upon the effective date of a plan
of reorganization in Grace's United States Chapter 11 bankruptcy
proceeding. As filed, the PI Settlement Plan contemplates that
the claims released under the Canadian Settlement will be subject
to injunctions under Section 524(g) of the Bankruptcy Code. The
Bankruptcy Court entered the Bankruptcy Court Confirmation Order
on January 31, 2011, and the Clarifying Order on February 15,
2011, and the District Court entered the District Court
Confirmation Order on January 30, 2012. The Canadian Court issued
an Order on April 8, 2011, recognizing and giving full effect to
the Bankruptcy Court's Confirmation Order in all provinces and
territories of Canada in accordance with the Confirmation Order's
terms. The PI Settlement Plan has not become effective, and the
Company says it can give no assurance that the PI Settlement Plan
(or any other plan of reorganization) will become effective.
Assuming that a final plan of reorganization (whether the PI
Settlement Plan or another plan of reorganization) does become
effective, if the final plan of reorganization does not
incorporate the terms of the Canadian Settlement or if the
Canadian courts refuse to enforce the final plan of reorganization
in the Canadian courts, and if in addition Grace is unwilling or
unable to defend and indemnify the Company and its subsidiaries in
these cases, then the Company could be required to pay substantial
damages, which the Company cannot estimate at this time and which
could have a material adverse effect on its consolidated financial
condition and results of operations.
SEALED AIR: Awaits Effective Date of Cryovac-Related Suits Deal
---------------------------------------------------------------
Sealed Air Corporation awaits W. R. Grace & Co.'s emergence from
bankruptcy, when a settlement resolving class action lawsuits
involving a subsidiary of Sealed Air will become effective,
according to the Company's February 29, 2012, Form 10-K filing
with the U.S. Securities and Exchange Commission for the year
ended December 31, 2011.
Since the beginning of 2000, the Company has been served with a
number of lawsuits alleging that, as a result of the Cryovac
transaction, the Company is responsible for alleged asbestos
liabilities of Grace and its subsidiaries, some of which were also
named as co-defendants in some of these actions.
On March 31, 1998, Sealed Air completed a multi-step transaction
(the "Cryovac transaction") involving Grace which brought the
Cryovac Inc. packaging business and the former Sealed Air
Corporation's business under the common ownership of the Company.
Among these lawsuits are several purported class actions and a
number of personal injury lawsuits. Some plaintiffs seek damages
for personal injury or wrongful death, while others seek medical
monitoring, environmental remediation or remedies related to an
attic insulation product. Neither the former Sealed Air
Corporation nor Cryovac, Inc. ever produced or sold any of the
asbestos-containing materials that are the subjects of these
cases. None of these cases has reached resolution through
judgment, settlement or otherwise. Grace's Chapter 11 bankruptcy
proceeding has stayed all of these cases.
While the allegations in these actions directed to the Company
vary, these actions all appear to allege that the transfer of the
Cryovac business as part of the Cryovac transaction was a
fraudulent transfer or gave rise to successor liability. Under a
theory of successor liability, plaintiffs with claims against
Grace and its subsidiaries may attempt to hold the Company liable
for liabilities that arose with respect to activities conducted
prior to the Cryovac transaction by W. R. Grace & Co. - Conn. or
other Grace subsidiaries. A transfer would be a fraudulent
transfer if the transferor received less than reasonably
equivalent value and the transferor was insolvent or was rendered
insolvent by the transfer, was engaged or was about to engage in a
business for which its assets constitute unreasonably small
capital, or intended to incur or believed that it would incur
debts beyond its ability to pay as they mature. A transfer may
also be fraudulent if it was made with actual intent to hinder,
delay or defraud creditors. If a court found any transfers in
connection with the Cryovac transaction to be fraudulent
transfers, the Company could be required to return the property or
its value to the transferor or could be required to fund
liabilities of Grace or its subsidiaries for the benefit of their
creditors, including asbestos claimants. The Company has reached
an agreement in principle and subsequently signed a settlement
agreement that is expected to resolve all these claims.
In the Joint Proxy Statement furnished to their respective
stockholders in connection with the Cryovac transaction, both
parties to the transaction stated that it was their belief that
Grace and its subsidiaries were adequately capitalized and would
be adequately capitalized after the Cryovac transaction and that
none of the transfers contemplated to occur in the Cryovac
transaction would be a fraudulent transfer. They also stated
their belief that the Cryovac transaction complied with other
relevant laws. However, if a court applying the relevant legal
standards had reached conclusions adverse to the Company, these
determinations could have had a materially adverse effect on the
Company's consolidated financial condition and results of
operations.
On April 2, 2001, Grace and a number of its subsidiaries filed
petitions for reorganization under Chapter 11 of the U.S.
Bankruptcy Code in the U.S. Bankruptcy Court in the District of
Delaware (the "Bankruptcy Court"). Grace stated that the filing
was made in response to a sharply increasing number of asbestos
claims since 1999.
In connection with its Chapter 11 filing, Grace filed an
application with the Bankruptcy Court seeking to stay, among
others, all actions brought against the Company and specified
subsidiaries related to alleged asbestos liabilities of Grace and
its subsidiaries or alleging fraudulent transfer claims. The
court issued an order dated May 3, 2001, which was modified on
January 22, 2002, under which the court stayed all the filed or
pending asbestos actions against the Company and, upon filing and
service on the Company, all future asbestos actions. No further
proceedings involving the Company can occur in the actions that
have been stayed except upon further order of the Bankruptcy
Court.
Committees appointed to represent asbestos claimants in Grace's
bankruptcy case received the court's permission to pursue
fraudulent transfer and other claims against the Company and its
subsidiary Cryovac, Inc., and against Fresenius. The claims
against Fresenius are based upon a 1996 transaction between
Fresenius and W. R. Grace & Co. - Conn. Fresenius is not
affiliated with the Company. In March 2002, the court ordered
that the issues of the solvency of Grace following the Cryovac
transaction and whether Grace received reasonably equivalent value
in the Cryovac transaction would be tried on behalf of all of
Grace's creditors. This proceeding was brought in the U.S.
District Court for the District of Delaware (the "District Court")
(Adv. No. 02-02210).
In June 2002, the court permitted the U.S. government to intervene
as a plaintiff in the fraudulent transfer proceeding, so that the
U.S. government could pursue allegations that environmental
remediation expenses were underestimated or omitted in the
solvency analyses of Grace conducted at the time of the Cryovac
transaction. The court also permitted Grace, which asserted that
the Cryovac transaction was not a fraudulent transfer, to
intervene in the proceeding. In July 2002, the court issued an
interim ruling on the legal standards to be applied in the trial,
holding, among other things, that, subject to specified
limitations, post-1998 claims should be considered in the solvency
analysis of Grace. The Company believes that only claims and
liabilities that were known, or reasonably should have been known,
at the time of the 1998 Cryovac transaction should be considered
under the applicable standard.
With the fraudulent transfer trial set to commence on December 9,
2002, on November 27, 2002, the Company reached an agreement in
principle with the Committees prosecuting the claims against the
Company and Cryovac, Inc., to resolve all current and future
asbestos-related claims arising from the Cryovac transaction. On
the same day, the court entered an order confirming that the
parties had reached an amicable resolution of the disputes among
the parties and that counsel for the Company and the Committees
had agreed and bound the parties to the terms of the agreement in
principle. The agreement in principle called for payment of nine
million shares of the Company's common stock and $513 million in
cash, plus interest on the cash payment at a 5.5% annual rate
starting on December 21, 2002, and ending on the effective date of
an appropriate plan of reorganization in the Grace bankruptcy,
when the Company is required to make the payment. These shares
are subject to customary anti-dilution provisions that adjust for
the effects of stock splits, stock dividends and other events
affecting the Company's common stock, and as a result, the number
of shares of its common stock that it will issue increased to
eighteen million shares upon the two-for-one stock split in March
2007. On December 3, 2002, the Company's Board of Directors
approved the agreement in principle. The Company received notice
that both of the Committees had approved the agreement in
principle as of December 5, 2002. The parties subsequently signed
the definitive Settlement agreement as of November 10, 2003,
consistent with the terms of the agreement in principle. On
November 26, 2003, the parties jointly presented the definitive
Settlement agreement to the District Court for approval. On
Grace's motion to the District Court, that court transferred the
motion to approve the Settlement agreement to the Bankruptcy Court
for disposition.
On June 27, 2005, the Bankruptcy Court signed an order approving
the Settlement agreement. Although Grace is not a party to the
Settlement agreement, under the terms of the order, Grace is
directed to comply with the Settlement agreement subject to
limited exceptions. The order also provides that the Court will
retain jurisdiction over any dispute involving the interpretation
or enforcement of the terms and provisions of the Settlement
agreement. The Company expects that the Settlement agreement will
become effective upon Grace's emergence from bankruptcy pursuant
to a plan of reorganization that is consistent with the terms of
the Settlement agreement.
On June 8, 2004, the Company filed a motion with the District
Court, where the fraudulent transfer trial was pending, requesting
that the court vacate the July 2002 interim ruling on the legal
standards to be applied relating to the fraudulent transfer claims
against the Company. The Company was not challenging the
Settlement agreement. The motion was filed as a protective
measure in the event that the Settlement agreement is ultimately
not approved or implemented; however, the Company still expects
that the Settlement agreement will become effective upon Grace's
emergence from bankruptcy with a plan of reorganization that is
consistent with the terms of the Settlement agreement.
On July 11, 2005, the Bankruptcy Court entered an order closing
the proceeding brought in 2002 by the committees appointed to
represent asbestos claimants in the Grace bankruptcy proceeding
against the Company without prejudice to its right to reopen the
matter and renew in its sole discretion its motion to vacate the
July 2002 interim ruling on the legal standards to be applied
relating to the fraudulent transfer claims against the Company.
As a condition to the Company's obligation to make the payments
required by the Settlement agreement, any final plan of
reorganization must be consistent with the terms of the Settlement
agreement, including provisions for the trusts and releases and
for an injunction barring the prosecution of any asbestos-related
claims against the Company. The Settlement agreement provides
that, upon the effective date of the final plan of reorganization
and payment of the shares and cash, all present and future
asbestos-related claims against the Company that arise from
alleged asbestos liabilities of Grace and its affiliates
(including former affiliates that became the Company's affiliates
through the Cryovac transaction) will be channeled to and become
the responsibility of one or more trusts to be established under
Section 524(g) of the Bankruptcy Code as part of a final plan of
reorganization in the Grace bankruptcy. The Settlement agreement
will also resolve all fraudulent transfer claims against the
Company arising from the Cryovac transaction as well as the
Fresenius claims. The Settlement agreement provides that the
Company will receive releases of all those claims upon payment.
Under the agreement, the Company cannot seek indemnity from Grace
for the Company's payments required by the Settlement agreement.
The order approving the Settlement agreement also provides that
the stay of proceedings involving the Company will continue
through the effective date of the final plan of reorganization,
after which, upon implementation of the Settlement agreement, the
Company will be released from the liabilities asserted in those
proceedings and their continued prosecution against it will be
enjoined.
In January 2005, Grace filed a proposed plan of reorganization
(the "Grace Plan") with the Bankruptcy Court. There were a number
of objections filed. The Official Committee of Asbestos Personal
Injury Claimants (the "ACC") and the Asbestos PI Future Claimants'
Representative (the "FCR") filed their proposed plan of
reorganization (the "Claimants' Plan") with the Bankruptcy Court
in November 2007. On April 7, 2008, Grace issued a press release
announcing that Grace, the ACC, the FCR, and the Official
Committee of Equity Security Holders (the "Equity Committee") had
reached an agreement in principle to settle all present and future
asbestos-related personal injury claims against Grace (the "PI
Settlement") and disclosed a term sheet outlining certain terms of
the PI Settlement and for a contemplated plan of reorganization
that would incorporate the PI Settlement (as filed and amended
from time to time, the "PI Settlement Plan").
On September 19, 2008, Grace, the ACC, the FCR, and the Equity
Committee filed, as co-proponents, the PI Settlement Plan and
several exhibits and associated documents, including a disclosure
statement (as filed and amended from time to time, the "PI
Settlement Disclosure Statement"), with the Bankruptcy Court.
Amended versions of the PI Settlement Plan and the PI Settlement
Disclosure Statement have been filed with the Bankruptcy Court
from time to time. The PI Settlement Plan, which supersedes each
of the Grace Plan and the Claimants' Plan, remains pending and has
not become effective. The committee representing general
unsecured creditors and the Official Committee of Asbestos
Property Damage Claimants are not co-proponents of the PI
Settlement Plan. As filed, the PI Settlement Plan would provide
for the establishment of two asbestos trusts under Section 524(g)
of the United States Bankruptcy Code to which present and future
asbestos-related claims would be channeled. The PI Settlement
Plan also contemplates that the terms of the Settlement agreement
will be incorporated into the PI Settlement Plan and that the
Company will pay the amount contemplated by the Settlement
agreement. On March 9, 2009, the Bankruptcy Court entered an
order approving the PI Settlement Disclosure Statement (the "DS
Order") as containing adequate information and authorizing Grace
to solicit votes to accept or reject the PI Settlement Plan, all
as more fully described in the order. The DS Order did not
constitute the Bankruptcy Court's confirmation of the PI
Settlement Plan, approval of the merits of the PI Settlement Plan,
or endorsement of the PI Settlement Plan. In connection with the
plan voting process in the Grace bankruptcy case, the Company
voted in favor of the PI Settlement Plan that was before the
Bankruptcy Court. The Company will continue to review any
amendments to the PI Settlement Plan on an ongoing basis to verify
compliance with the Settlement agreement.
On June 8, 2009, a senior manager with the voting agent appointed
in the Grace bankruptcy case filed a declaration with the
Bankruptcy Court certifying the voting results with respect to the
PI Settlement Plan. This declaration was amended on
August 5, 2009 (as amended, the "Voting Declaration"). According
to the Voting Declaration, with respect to each class of claims
designated as impaired by Grace, the PI Settlement Plan was
approved by holders of at least two-thirds in amount and more than
one-half in number (or for classes voting for purposes of Section
524(g) of the Bankruptcy Code, at least 75% in number) of voted
claims. The Voting Declaration also discusses the voting results
with respect to holders of general unsecured claims ("GUCs")
against Grace, whose votes were provisionally solicited and
counted subject to a determination by the Bankruptcy Court of
whether GUCs are impaired (and, thus, entitled to vote) or, as
Grace contends, unimpaired (and, thus, not entitled to vote).
According to the Voting Declaration, more than one half of voting
holders of GUCs voted to accept the PI Settlement Plan, but the
provisional vote did not obtain the requisite two-thirds dollar
amount to be deemed an accepting class in the event that GUCs are
determined to be impaired. To the extent that GUCs are determined
to be an impaired non-accepting class, Grace and the other plan
proponents have indicated that they would nevertheless seek
confirmation of the PI Settlement Plan under the "cram down"
provisions contained in Section 1129(b) of the Bankruptcy Code.
On January 31, 2011, the Bankruptcy Court entered a memorandum
opinion (as amended, the "Bankruptcy Court Opinion") overruling
certain objections to the PI Settlement Plan and finding, among
other things, that GUCs are not impaired under the PI Settlement
Plan. On the same date, the Bankruptcy Court entered an order
regarding confirmation of the PI Settlement Plan (as amended, the
"Bankruptcy Court Confirmation Order"). As entered on
January 31, 2011, the Bankruptcy Court Confirmation Order
contained recommended findings of fact and conclusions of law, and
recommended that the District Court approve the Bankruptcy Court
Confirmation Order, and that the District Court confirm the PI
Settlement Plan and issue a channeling injunction under Section
524(g) of the Bankruptcy Code. Thereafter, on
February 15, 2011, the Bankruptcy Court issued an order clarifying
the Bankruptcy Court Opinion and the Bankruptcy Court Confirmation
Order (the "Clarifying Order"). Among other things, the
Clarifying Order provided that any references in the Bankruptcy
Court Opinion and the Bankruptcy Court Confirmation Order to a
recommendation that the District Court confirm the PI Settlement
Plan were thereby amended to make clear that the PI Settlement
Plan was confirmed and that the Bankruptcy Court was requesting
that the District Court issue and affirm the Bankruptcy Court
Confirmation Order including the injunction under Section 524(g)
of the Bankruptcy Code. On March 11, 2011, the Bankruptcy Court
entered an order granting in part and denying in part a motion to
reconsider the Bankruptcy Court Opinion filed by BNSF Railway
Company (the "March 11 Order"). Among other things, the March 11
Order amended the Bankruptcy Court Opinion to clarify certain
matters relating to objections to the PI Settlement Plan filed by
BNSF.
Various parties appealed or otherwise challenged the Bankruptcy
Court Opinion and the Bankruptcy Court Confirmation Order,
including without limitation with respect to issues relating to
releases and injunctions contained in the PI Settlement Plan. On
June 28 and 29, 2011, the District Court heard oral arguments in
connection with appeals of the Bankruptcy Court Opinion and the
Bankruptcy Court Confirmation Order. On January 30, 2012, the
District Court issued a memorandum opinion (the "District Court
Opinion") and confirmation order (the "District Court Confirmation
Order") overruling all objections to the PI Settlement Plan and
confirming the PI Settlement Plan in its entirety (including the
issuance of the injunction under Section 524(g) of the Bankruptcy
Code). On February 2, 2012, Garlock Sealing Technologies LLC
("Garlock") filed a motion (the "Garlock Reargument Motion") with
the District Court requesting that the District Court grant
reargument, rehearing, or otherwise amend the District Court
Opinion and the District Court Confirmation Order insofar as they
overrule Garlock's objections to the PI Settlement Plan. On
February 13, 2012, the Company, Cryovac, and Fresenius Medical
Care Holdings, Inc. filed a joint motion (the "Sealed
Air/Fresenius Motion") with the District Court. The Sealed
Air/Fresenius Motion does not seek to disturb confirmation of the
PI Settlement Plan but requests that the District Court amend and
clarify certain matters in the District Court Opinion and the
District Court Confirmation Order. Also on February 13, 2012,
Grace and the other proponents of the PI Settlement Plan filed a
motion (the "Plan Proponents' Motion") with the District Court
requesting certain of the same amendments and clarifications
sought by the Sealed Air/Fresenius Motion. On February 27, 2012,
certain asbestos claimants known as the "Libby Claimants" filed a
response to the Sealed Air/Fresenius Motion and the Plan
Proponents' Motion (the "Libby Response"). The Libby Response
does not oppose the Sealed Air/Fresenius Motion or the Plan
Proponents' Motion but indicates, among other things, that: (a)
the Libby Claimants have reached a settlement in principle of
their objections to the PI Settlement Plan but that this
settlement has not become effective and (b) the Libby Claimants
reserve their rights with respect to the PI Settlement Plan
pending the effectiveness of the Libby Claimants' settlement. In
addition, parties have appealed the District Court Opinion and the
District Court Confirmation Order to the United States Court of
Appeals for the Third Circuit (the "Third Circuit Court of
Appeals"). By orders dated February 23, 2012, the Third Circuit
Court of Appeals stayed appeals of the District Court Opinion and
the District Court Confirmation Order pending disposition of
motions filed in the District Court with respect to the District
Court Opinion and the District Court Confirmation Order. The
District Court has not ruled on the Garlock Reargument Motion, the
Sealed Air/Fresenius Motion, or the Plan Proponents' Motion. In
addition, on February 27, 2012, Garlock filed a motion (the
"Garlock Stay Motion") requesting that the District Court stay the
District Court Opinion and the District Court Confirmation Order
until the later of 14 days after the disposition of the Garlock
Reargument Motion or disposition of any timely appeal by Garlock
of the District Court Opinion and the District Court Confirmation
Order. The District Court has not ruled on the Garlock Stay
Motion.
Although the Company is optimistic that, if it were to become
effective, the PI Settlement Plan would implement the terms of the
Settlement agreement, the Company says it can give no assurance
that this will be the case notwithstanding the confirmation of the
PI Settlement Plan by the Bankruptcy Court and the District Court.
The terms of the PI Settlement Plan remain subject to amendment.
Moreover, the PI Settlement Plan is subject to the satisfaction of
a number of conditions which are more fully set forth in the PI
Settlement Plan and include, without limitation, the availability
of exit financing and the approval of the PI Settlement Plan
becoming final and no longer subject to appeal. Parties have
appealed the District Court Confirmation Order to the Third
Circuit Court of Appeals or otherwise challenged the District
Court Opinion and the District Court Confirmation Order. Matters
relating to the PI Settlement Plan, the Bankruptcy and District
Court Opinions, and the Bankruptcy and District Court Confirmation
Orders may be subject to further appeal, challenge, and
proceedings before the District Court, the Third Circuit Court of
Appeals, or other courts. Parties may designate various issues to
be considered in challenging the PI Settlement Plan, the
Bankruptcy and District Court Opinions, or the Bankruptcy and
District Court Confirmation Orders, including, without limitation,
issues relating to releases and injunctions contained in the PI
Settlement Plan.
While the Bankruptcy Court and the District Court have confirmed
the PI Settlement Plan, the Company does not know whether or when
the Third Circuit Court of Appeals will affirm the District Court
Confirmation Order or the District Court Opinion, whether or when
the Bankruptcy and District Court Opinions or the Bankruptcy and
District Court Confirmation Orders will become final and no longer
subject to appeal, or whether or when a final plan of
reorganization (whether the PI Settlement Plan or another plan of
reorganization) will become effective. Assuming that a final plan
of reorganization (whether the PI Settlement Plan or another plan
of reorganization) is confirmed by the Bankruptcy Court and the
District Court, and does become effective, the Company does not
know whether the final plan of reorganization will be consistent
with the terms of the Settlement agreement or if the other
conditions to the Company's obligation to pay the Settlement
agreement amount will be met. If these conditions are not
satisfied or not waived by the Company, the Company will not be
obligated to pay the amount contemplated by the Settlement
agreement. However, if the Company does not pay the Settlement
agreement amount, the Company will not be released from the
various asbestos related, fraudulent transfer, successor
liability, and indemnification claims made against the Company and
all of these claims would remain pending and would have to be
resolved through other means, such as through agreement on
alternative settlement terms or trials. In that case, the Company
could face liabilities that are significantly different from its
obligations under the Settlement agreement. The Company cannot
estimate at this time what those differences or their magnitude
may be. In the event these liabilities are materially larger than
the current existing obligations, they could have a material
adverse effect on the Company's consolidated financial condition
and results of operations. The Company will continue to review
the Grace bankruptcy proceedings (including appeals and other
proceedings relating to the PI Settlement Plan, the Bankruptcy and
District Court Opinions, and the Bankruptcy and District Court
Confirmation Orders), as well as any amendments or changes to the
PI Settlement Plan or to Bankruptcy and District Court Opinions
and Confirmation Orders, to verify compliance with the Settlement
agreement.
SKECHERS USA: Awaits Ruling on Bid to Lift Stay in "Morga" Suit
---------------------------------------------------------------
Skechers U.S.A., Inc., is awaiting a court decision on a motion to
lift the stay of a class action lawsuit commenced by Venus Morga
in California, according to the Company's February 29, 2012, Form
10-K filing with the U.S. Securities and Exchange Commission for
the year ended December 31, 2011.
On August 25, 2010, Venus Morga filed an action against the
Company in the United States District Court for the Southern
District of California, Venus Morga v. Skechers U.S.A., Inc., Case
No. 10 CV 1780 JM (MDD), on her behalf and on behalf of all others
similarly situated. The complaint, as subsequently amended,
alleges that the Company's advertising for Shape-ups violates
California's Unfair Competition Law and the California Consumer
Legal Remedies Act, and constitutes a breach of express warranty.
The complaint seeks certification of a nationwide class, damages,
restitution and disgorgement of profits, declaratory and
injunctive relief, corrective advertising, and attorneys' fees and
costs. On March 7, 2011, the court stayed the action on the
ground that the outcomes in pending appeals in two unrelated
actions will significantly affect whether a class should be
certified.
On January 13, 2012, the plaintiff filed a motion to lift the
stay, which Skechers opposed. The court has not issued a decision
on plaintiff's motion, and the stay remains in place.
While it is too early to predict the outcome of the litigation or
a reasonable range of potential losses and whether an adverse
result would have a material adverse impact on the Company's
results of operations or financial position, the Company believes
it has meritorious defenses, vehemently denies the allegations,
believes that class certification is not warranted and intends to
defend the case vigorously.
SKECHERS USA: Awaits Ruling on Lift Stay Bid in "Grabowski" Suit
----------------------------------------------------------------
Skechers U.S.A., Inc., is awaiting a court decision on plaintiff's
motion to lift the stay of a class action lawsuit pending in
California, according to the Company's February 29, 2012, Form 10-
K filing with the U.S. Securities and Exchange Commission for the
year ended December 31, 2011.
On June 18, 2010, Tamara Grabowski filed an action against the
Company in the United States District Court for the Southern
District of California, captioned Tamara Grabowski v. Skechers
U.S.A., Inc., Case No. 10 CV 1300 JM (MDD), on her behalf and on
behalf of all others similarly situated. The complaint, as
subsequently amended, alleges that the Company's advertising for
Shape-ups violates California's Unfair Competition Law and the
California Consumer Legal Remedies Act, and constitutes a breach
of express warranty (the "Grabowski action"). The complaint seeks
certification of a nationwide class, damages, restitution and
disgorgement of profits, declaratory and injunctive relief,
corrective advertising, and attorneys' fees and costs. On
March 7, 2011, the court stayed the action on the ground that the
outcomes in pending appeals in two unrelated actions will
significantly affect whether a class should be certified.
On January 13, 2012, the plaintiff filed a motion to lift the
stay, which Skechers opposed. The court has not issued a decision
on plaintiff's motion, and the stay remains in place.
While it is too early to predict the outcome of the litigation or
a reasonable range of potential losses and whether an adverse
result would have a material adverse impact on the Company's
results of operations or financial position, the Company believes
it has meritorious defenses, vehemently denies the allegations,
believes that class certification is not warranted and intends to
defend the case vigorously.
SKECHERS USA: Continues to Defend "Tomlinson" Suit in Arkansas
--------------------------------------------------------------
Skechers U.S.A., Inc., continues to defend a class action lawsuit
commenced by Patty Tomlinson in Arkansas, according to the
Company's February 29, 2012, Form 10-K filing with the U.S.
Securities and Exchange Commission for the year ended
December 31, 2011.
On January 13, 2011, Patty Tomlinson filed a lawsuit against the
Company in Circuit Court in Washington County, Arkansas, Patty
Tomlinson v. Skechers U.S.A., Inc., Case No. CV11-121-7. The
complaint alleges, on her behalf and on behalf of all others
similarly situated, that the Company's advertising for Shape-ups
violates Arkansas' Deceptive Trade Practices Act, constitutes a
breach of certain express and implied warranties, and is resulting
in unjust enrichment (the "Tomlinson action"). The complaint
seeks certification of a statewide class, compensatory damages,
prejudgment interest, and attorneys' fees and costs. On February
18, 2011, the Company removed the case to the United States
District Court for the Western District of Arkansas, and it is now
pending as Patty Tomlinson v. Skechers U.S.A., Inc., CV 11-05042
JLH. On March 16, 2011, the Company filed a motion to dismiss the
action or transfer it to the United States District Court for the
Southern District of California, in view of the prior pending
Grabowski action. On March 21, 2011, Ms. Tomlinson moved to
remand the action back to Arkansas state court, which motion the
Company opposed. On May 25, 2011, the court ordered the case
remanded to Arkansas state court and denied the Company's motion
to dismiss or transfer as moot, but has stayed remand pending
completion of appellate review. On September 2, 2011, the Company
filed a petition in the United States Supreme Court seeking a writ
of certiorari relating to the propriety of remand, and on November
7, 2011, the Supreme Court denied the Company's petition.
While it is too early to predict the outcome of the litigation or
a reasonable range of potential losses and whether an adverse
result would have a material adverse impact on the Company's
results of operations or financial position, the Company believes
it has meritorious defenses, vehemently denies the allegations,
believes that class certification is not warranted and intends to
defend the case vigorously.
SKECHERS USA: Faces "Boatright" Class Action Suit in Kentucky
-------------------------------------------------------------
Skechers U.S.A., Inc., is facing a class action lawsuit in
Kentucky commenced by Elma Boatright and Sharon White, according
to the Company's February 29, 2012, Form 10-K filing with the U.S.
Securities and Exchange Commission for the year ended December 31,
2011.
On February 15, 2012, Elma Boatright and Sharon White filed a
lawsuit against the Company in the United States District Court
for the Western District of Kentucky, Elma Boatright and Sharon
White v. Skechers U.S.A., Inc., Skechers U.S.A., Inc. II and
Skechers Fitness Group, Case No. 3:12-cv-87-S. The complaint
alleges, on behalf of the named plaintiffs and all others
similarly situated, that the Company's advertising for Shape-ups
is false and misleading, thereby constituting a breach of
contract, breach of implied and express warranties, fraud, and
resulting in unjust enrichment. The complaint seeks certification
of a nationwide class, compensatory damages, and attorneys' fees
and costs.
While it is too early to predict the outcome of the litigation or
a reasonable range of potential losses and whether an adverse
result would have a material adverse impact on the Company's
results of operations or financial position, the Company believes
it has meritorious defenses, vehemently denies the allegations,
believes that class certification is not warranted and intends to
defend the case vigorously.
SKECHERS USA: Faces "Hochberg" Class Action Suit in New York
------------------------------------------------------------
Skechers U.S.A., Inc., is facing a class action lawsuit in New
York over its Shape-ups products, according to the Company's
February 29, 2012, Form 10-K filing with the U.S. Securities and
Exchange Commission for the year ended December 31, 2011.
On November 23, 2011, Wendie Hochberg and Brenda Baum filed a
lawsuit against the Company in the United States District Court
for the Eastern District of New York, Wendie Hochberg and Brenda
Baum v. Skechers U.S.A., Inc., Case No. CV11-5751. The complaint
alleges, on their behalf and on behalf of all others similarly
situated, that the Company's advertising for Shape-ups violates
the New York Consumer Protection Act, and is resulting in unjust
enrichment. The complaint seeks certification of a statewide
class, damages, restitution, disgorgement, injunctive relief, and
attorneys' fees and costs.
While it is too early to predict the outcome of the litigation or
a reasonable range of potential losses and whether an adverse
result would have a material adverse impact on the Company's
results of operations or financial position, the Company believes
it has meritorious defenses, vehemently denies the allegations,
believes that class certification is not warranted and intends to
defend the case vigorously.
SKECHERS USA: Faces "Loss" Class Action Suit in Kentucky
--------------------------------------------------------
Skechers U.S.A., Inc., is facing a class action lawsuit in
Kentucky over its Shape-ups products, according to the Company's
February 29, 2012, Form 10-K filing with the U.S. Securities and
Exchange Commission for the year ended December 31, 2011.
On February 12, 2012, Shannon Loss, Kayla Hedges and Donald Horner
filed a lawsuit against the Company in the United States District
Court for the Western District of Kentucky, Shannon Loss, Kayla
Hedges and Donald Horner v. Skechers U.S.A., Inc., Skechers
U.S.A., Inc. II and Skechers Fitness Group, Case No. 3:12-cv-78-H.
The complaint alleges, on behalf of the named plaintiffs and all
others similarly situated, that the Company's advertising for
Shape-ups is false and misleading, thereby constituting a breach
of contract, breach of implied and express warranties, and
resulting in unjust enrichment. The complaint seeks certification
of a nationwide class, compensatory damages, and attorneys' fees
and costs.
While it is too early to predict the outcome of the litigation or
a reasonable range of potential losses and whether an adverse
result would have a material adverse impact on the Company's
results of operations or financial position, the Company believes
it has meritorious defenses, vehemently denies the allegations,
believes that class certification is not warranted and intends to
defend the case vigorously.
SKECHERS USA: "Lovston" Class Suit Remains Pending
--------------------------------------------------
The class action lawsuit captioned Terena Lovston v. Skechers
U.S.A., Inc., is still pending, according to the Company's
February 29, 2012, Form 10-K filing with the U.S. Securities and
Exchange Commission for the year ended December 31, 2011.
On May 13, 2011, Terena Lovston filed a lawsuit against the
Company in Circuit Court in Lonoke County, Arkansas, Case No. CV-
11-321. The complaint alleges, on her behalf and on behalf of all
others similarly situated, that the Company's advertising for its
toning footwear products violates Arkansas' Deceptive Trade
Practices Act, and is resulting in unjust enrichment. The
complaint seeks certification of a statewide class and
compensatory damages. On June 3, 2011, the Company removed the
case to the United States District Court for the Eastern District
of Arkansas, and it is now pending as Terena Lovston v. Skechers
U.S.A., Inc., 4:11- cv-00460-DPM. On June 6, 2011, the Company
filed a motion to dismiss the action or transfer it to the United
States District Court for the Southern District of California, in
view of the prior pending Grabowski action. On July 19, 2011, the
court indicated its intent to remand the case to Arkansas state
court but stayed remand pending further briefing by the parties.
On August 5, 2011, the court issued an order staying the case
pending completion of the appellate process in the Tomlinson
action. On November 7, 2011, the United States Supreme Court
denied the Company's petition for a writ of certiorari in the
Tomlinson action.
While it is too early to predict the outcome of the litigation or
a reasonable range of potential losses and whether an adverse
result would have a material adverse impact on the Company's
results of operations or financial position, the Company believes
it has meritorious defenses, vehemently denies the allegations,
believes that class certification is not warranted and intends to
defend the case vigorously.
SKECHERS USA: "Stalker" Class Suit Remains Stayed in California
---------------------------------------------------------------
The class action lawsuit commenced by Sonia Stalker remains stayed
in California court, according to Skechers U.S.A., Inc.'s February
29, 2012, Form 10-K filing with the U.S. Securities and Exchange
Commission for the year ended December 31, 2011.
On July 2, 2010, Sonia Stalker filed an action, captioned Sonia
Stalker v. Skechers U.S.A., Inc., against the Company in the
Superior Court of the State of California for the County of Los
Angeles, on her behalf and on behalf of all others similarly
situated, alleging that the Company's advertising for Shape-ups
violates California's Unfair Competition Law and the California
Consumer Legal Remedies Act. The complaint seeks certification of
a nationwide class, actual and punitive damages, restitution,
declaratory and injunctive relief, corrective advertising, and
attorneys' fees and costs. On July 23, 2010, the Company removed
the case to the United States District Court for the Central
District of California, and it is now pending as Sonia Stalker v.
Skechers USA, Inc., CV 10-5460 JAK (JEM). On August 23, 2010, the
Company filed a motion to dismiss the action or transfer it to the
United States District Court for the Southern District of
California, in view of the prior pending Grabowski action. On
August 27, 2010, plaintiff moved to certify the class, which
motion the Company has opposed. On January 21, 2011, the court
stayed the action for the separate reasons that the Grabowski
action was filed first and takes priority under the first-to-file
doctrine and that the outcomes in pending appeals in two unrelated
actions will significantly affect the outcome of plaintiff's
motion for class certification and the resolution of this action.
The stay remains in effect.
While it is too early to predict the outcome of the litigation or
a reasonable range of potential losses and whether an adverse
result would have a material adverse impact on the Company's
results of operations or financial position, the Company believes
it has meritorious defenses, vehemently denies the allegations,
believes that class certification is not warranted and intends to
defend the case vigorously.
TJX COMPANIES: Faces Class Action Over Deceptive Advertising
------------------------------------------------------------
Courthouse News Service reports that The TJX Companies (TJ Maxx)
sell silver-plated earrings deceptively marked as sterling silver
925 (92.5 percent silver), a couple claims in a federal class
action.
A copy of the Complaint in Murtha, et al. v. The TJX Companies,
Inc., Case No. 12-cv-10598 (D. Mass.), is available at:
http://www.courthousenews.com/2012/04/05/CCA.pdf
The Plaintiffs are represented by:
Peter M. Van Dyke, Esq.
EAGAN, DONOHUE, VAN DYKE & FALSEY, LLP
24 Arapahoe Road
West Hartford, CT 06107
Telephone: (860) 232-7200
E-mail: pvd@eddf-law.com
UNITEDHEALTH: Loses Bid to Dismiss ERISA Class Action
-----------------------------------------------------
On March 30, 2012, Federal Court denied UnitedHealth's (UHC)
motion, in its entirety as to all claims, to dismiss the
providers' ERISA class action, alleging that UHC's wrongful
overpayment recoupment is in violation of federal law, ERISA.
ERISAclaim.com now offers executive webinars to examine the
profound legal impact for all payers and providers, as the
industry overpayment recoupment or offsetting crisis has been the
most important financial and legal challenge faced by every
stakeholder in healthcare delivery and reimbursement system.
The Court case info: Premier Health Center, PC, et al. v.
Unitedhealth Group, et al., Case #: 2:11-cv-00425, United States
District Court District of New Jersey, Filed 03/30/12.
"The overpayment recoupment and withholding crisis has been the
No. 1 financial and legal challenge faced by both health plans and
healthcare providers, as more than 50% of the $2.6 trillion in
annual US healthcare expenditure is subject to overpayment
dispute, and more than 10% of previous and future reimbursement
for providers is subject to overpayment recoupment by the payers
in both private and public sectors," says Dr. Jin Zhou, President
of ERISAclaim.com, a national expert on PPACA and ERISA appeals
and compliance.
"Health-care overpayment financial and legal dispute has been
faced by almost all healthcare providers in the past few years,"
added Dr. Zhou.
According to the Court document, the healthcare provider and their
association plaintiffs are challenging defendants' practices of
improperly recouping previously paid health care benefits from
providers without complying with procedural protections under
ERISA, "Plaintiffs allege that United "took steps to coerce the
Individual Plaintiffs and other Class members to return the
alleged overpayments, including by withholding payments from new
and unrelated services and applying them to the alleged debt, or
by filing invalid lawsuits seeking to compel repayment." The
Defendants seek dismissal of Plaintiffs' Amended Complaint for
lack of standing to sue and for having failed to state a claim
upon which relief can be granted pursuant to Fed. R. Civ. P.
12(b)(6). The Court "ORDERED that UnitedHealth Group,
UnitedHealthcare Services, Inc., and OptumHealth Care Solutions,
Inc.'s motion to dismiss-(D.E. 31)-is hereby DENIED as to all
claims", but granted defendants' motions to dismiss claims,
without prejudice, against two subsidiary companies of UHC.
The case factual background was described in the Court document:
"After performing its services, pursuant to the assignment of
benefits form, Premier submits a claim to United who will then
make payment to Premier on the claim. Occasionally, United will
engage in post-payment audits of benefit payments. Following the
post-payment audit process, United determined that they had
erroneously made overpayments to the Plaintiffs and demanded
repayment. Plaintiffs allege that United "took steps to coerce
the Individual Plaintiffs and other Class members to return the
alleged overpayments, including by withholding payments from new
and unrelated services and applying them to the alleged debt, or
by filing invalid lawsuits seeking to compel repayment".
From the court document, "Plaintiffs further allege that many of
the United Plans at issue are governed by ERISA, "which
establishes strict rules and procedures that United or other
entities that administer ERISA plans must comply with."
Furthermore, "ERISA sets forth specific steps that must be
followed when an insurer such as United makes an 'adverse benefit
determination' by denying or reducing benefits, including by
providing a 'full and fair review' of the decision." "By making a
retroactive determination that a previously paid benefit was, in
fact, paid improperly, an insurer makes an adverse benefit
determination under ERISA." Plaintiff avers that "United has
violated ERISA by making its retroactive adverse benefit
determinations without complying with ERISA['s] requirements.
On January 24, 2011, Plaintiffs filed a complaint in the United
States District Court for the District of New Jersey. On
April 22, 2011, Plaintiffs filed an Amended Complaint, which is
the subject of Defendants' United and Health Net motions to
dismiss. The parties have submitted their respective briefs and
the Defendants' motions are now ripe for this Court's
adjudication."
The Court denied the Motion to Dismiss filed by United in its
entirety, including denying UHC's anti-assignment argument and
upholding the standing of all providers' national and state
association plaintiffs:
"In light of the above, the Court finds that based upon
Defendants' course of conduct with Plaintiffs, Defendants have
waived any right to enforce the anti-assignment provision.
Therefore, Plaintiffs have met their burden to establish standing
to sue under ERISA."
"Accordingly, the Court finds that the Associations have standing
to bring ERISA claims on behalf of their individual members."
"ORDERED that UnitedHealth Group, UnitedHealthcare Services, Inc.,
and OptumHealth Care Solutions, Inc.'s motion to dismiss-(D.E.
31)-is hereby DENIED as to all claims."
"If the Court denied each and every legal argument by UHC in this
class action for overpayment recoupment, what does this mean to
every overpayment request by every payer?" asked Dr. Zhou.
WADDELL & REED: Received Favorable Ruling on FLSA Claims in Jan.
----------------------------------------------------------------
The United States District Court for the Southern District of
California granted in January 2012 Waddell & Reed Financial,
Inc.'s motions for summary judgment, according to the Company's
February 29, 2012, Form 10-K filing with the U.S. Securities and
Exchange Commission for the year ended December 31, 2011.
In the action captioned Michael E. Taylor, Kenneth B. Young,
individuals, on behalf of themselves individually and on behalf of
others similarly situated v. Waddell & Reed, Inc., a Delaware
Corporation; and DOES 1 through 10 inclusive; Case No. 09-CV-2909
DMS WVG; in the United States District Court for the Southern
District of California, filed December 28, 2009, the Company was
sued in an individual action, class action and Fair Labor
Standards Act ("FLSA") nationwide collective action by two former
advisors asserting misclassification of financial advisors as
independent contractors instead of employees. Plaintiffs, on
behalf of themselves and a purported class of Waddell & Reed, Inc.
financial advisors, assert claims under the FLSA for minimum wages
and overtime wages, and under California Labor Code Statutes for
timely payment of wages, minimum wages, overtime compensation,
meal periods, reimbursement of losses and business expenses and
itemized wage statements and a claim for Unfair Business Practices
under Section 17200 of the California Business & Professions Code.
Plaintiffs seek declaratory and injunctive relief and monetary
damages.
Plaintiffs moved for conditional collective action certification
under the FLSA. The Company opposed this motion and additionally
moved for summary judgment on Plaintiffs' individual FLSA claims.
The Court issued an order on January 3, 2012, granting the
Company's summary judgment motions, holding that Plaintiffs'
individual FLSA claims fail as a matter of law, and denying
Plaintiffs' motion for conditional collective action certification
under the FLSA as moot. This ruling effectively removes all
nationwide FLSA claims from the case.
Plaintiffs intend to continue to pursue the California claims and
may seek to amend their complaint to attempt to revive certain
FLSA claims. An adverse determination in this matter could have a
material adverse impact on the financial position and results of
operations of the Company. The Company intends to continue to
vigorously defend plaintiffs' claims.
At this stage in this litigation, based upon the information
currently available to the Company, the Company is not able to
determine that an unfavorable outcome is remote, reasonably
possible, or probable, and the Company has determined that it
cannot reasonably estimate either the amount or the range of
possible losses that would result if plaintiffs were to prevail,
therefore, the Company has not made any accruals with respect to
this matter in its consolidated financial statements.
WASHINGTON POST: Bid to Amend "Graham" Suit Dismissal Pending
-------------------------------------------------------------
The Washington Post Company is awaiting a court decision on
plaintiff's motion seeking leave to amend or alter a final
judgment in the class action lawsuit commenced by Donald E. Graham
and Hal S. Jones, according to the Company's February 29, 2012,
Form 10-K filing with the U.S. Securities and Exchange Commission
for the year ended December 31, 2011.
A purported class action complaint was filed against the Company,
Donald E. Graham and Hal S. Jones on October 28, 2010, in the U.S.
District Court for the District of Columbia, by the Plumbers Local
#200 Pension Fund. The complaint alleged that the Company and
certain of its officers made materially false and misleading
statements, or failed to disclose material facts relating to
Kaplan Higher Education (KHE), in violation of the U.S. Federal
securities laws. The complaint sought damages, attorneys' fees,
costs and equitable/injunctive relief. The Company moved to
dismiss the complaint, and on December 23, 2011, the court granted
the Company's motion and dismissed the case with prejudice.
On January 25, 2012, the Plaintiff filed a motion seeking leave to
amend or alter that final judgment; the Company has opposed the
motion.
WASHINGTON POST: Continues to Defend Suit vs. Kaplan in Calif.
--------------------------------------------------------------
The Washington Post Company continues to defend a class action
lawsuit in California filed against its subsidiary, according to
the Company's February 29, 2012, Form 10-K filing with the U.S.
Securities and Exchange Commission for the year ended
December 31, 2011.
On February 6, 2008, a purported class action lawsuit was filed in
the U.S. District Court for the Central District of California by
purchasers of BAR/BRI bar review courses from July 2006 onward
alleging antitrust claims against Kaplan Inc. and West Publishing
Corporation, BAR/BRI's former owner. On April 10, 2008, the court
granted defendants' motion to dismiss. On May 7, 2008, the
plaintiffs filed an appeal to the U.S. Court of Appeals for the
Ninth Circuit. On October 18, 2010, the parties entered into a
stipulation and settlement agreement. The District Court granted
preliminary approval of this proposed settlement on March 21,
2011, but denied final approval thereof on July 1, 2011.
On November 7, 2011, the Ninth Circuit reversed the District
Court's order of dismissal, but stayed the mandate and referred
the matter to the Ninth Circuit mediator for renewed settlement
discussions.
YAHOO INC: Appeal in Consolidated IPO Suit vs. Unit Withdrawn
-------------------------------------------------------------
The remaining appeal in the consolidated securities litigation
involving a Yahoo! Inc. subsidiary has been withdrawn, according
to the Company's February 29, 2012, Form 10-K filing with the U.S.
Securities and Exchange Commission for the year ended
December 31, 2011.
On July 12, 2001, the first of several purported securities class
action lawsuits was filed in the U.S. District Court for the
Southern District of New York against certain underwriters
involved in Overture Services Inc.'s ("Overture") initial public
offering, Overture, and certain of Overture's former officers and
directors. The Court consolidated the cases against Overture.
Plaintiffs allege, among other things, violations of the
Securities Act of 1933 and the Securities Exchange Act of 1934
(the "Exchange Act") involving undisclosed compensation to the
underwriters, and improper practices by the underwriters, and seek
unspecified damages. Similar complaints were filed in the same
court against numerous public companies that conducted IPOs of
their common stock since the mid-1990s. All of these lawsuits
were consolidated. On October 5, 2009, the Court granted class
certification and granted final approval of a stipulated global
settlement and plan of allocation. On October 6, 2010, various
individuals objecting to the settlement filed opening appeal
briefs with the U.S. Court of Appeals for the Second Circuit, and
in early February 2011 Yahoo! and other appellees filed reply
briefs in support of the settlement. The Second Circuit dismissed
one appeal and remanded a second appeal to the District Court for
a determination on standing. On remand, the District Court held
on August 25, 2011, that the individual objector lacked standing
and was not a class member. That ruling was appealed to the
Second Circuit and, on January 13, 2012, the Second Circuit
approved a stipulation withdrawing the appeal, thereby resolving
the remaining objection to the settlement.
YAHOO INC: Continues to Defend Consolidated Suit in California
--------------------------------------------------------------
Yahoo! Inc. continues to defend a consolidated securities class
action lawsuit pending in California, according to the Company's
February 29, 2012, Form 10-K filing with the U.S. Securities and
Exchange Commission for the year ended December 31, 2011.
Since June 6, 2011, two purported stockholder class actions were
filed in the United States District Court for the Northern
District of California against the Company and certain officers
and directors by plaintiffs Bonato and the Twin Cities Pipe Trades
Pension Trust. In October 2011, the District Court consolidated
the two actions under the caption In re Yahoo! Inc. Securities
Litigation and appointed the Pension Trust Fund for Operating
Engineers as lead plaintiff. In a consolidated amended complaint
filed December 15, 2011, the lead plaintiff purports to represent
a class of investors who purchased the Company's common stock
between April 19, 2011, and July 29, 2011, and alleges that during
that class period, defendants issued statements that were
materially false or misleading because they did not disclose
information relating to the restructuring of Alipay.com Co., Ltd.
The complaint purports to assert claims for relief for violation
of Section 10(b) and 20(a) of the Exchange Act and for violation
of Rule 10b-5 thereunder, and seeks unspecified damages,
injunctive and equitable relief, fees and costs.
With respect to the legal proceeding and claims, the Company has
determined, based on current knowledge, that the amount or range
of reasonably possible losses, including reasonably possible
losses in excess of amounts already accrued, is not reasonably
estimable with respect to certain matters and that the aggregate
amount or range of such losses that are estimable would not have a
material adverse effect on the Company's consolidated financial
position, results of operations or cash flows. Amounts accrued as
of December 31, 2010, and December 31, 2011, were not material.
The ultimate outcome of legal proceedings involves judgments,
estimates and inherent uncertainties, and cannot be predicted with
certainty. In the event of a determination adverse to Yahoo!, its
subsidiaries, directors, or officers in these matters, however,
the Company may incur substantial monetary liability, and be
required to change its business practices. Either of these events
could have a material adverse effect on the Company's financial
position, results of operations, or cash flows. The Company may
also incur substantial legal fees, which are expensed as incurred
in defending against these claims.
YAHOO INC: Faces Consolidated Shareholder Suit in Delaware
----------------------------------------------------------
Yahoo! Inc. is facing a consolidated shareholder class action
lawsuit in Delaware, according to the Company's February 29, 2012,
Form 10-K filing with the U.S. Securities and Exchange Commission
for the year ended December 31, 2011.
On December 1, 2011, and December 7, 2011, purported class action
complaints were filed in the Delaware Chancery Court by M & C
Partners, III and Louisiana Municipal Police Employees' Retirement
System, respectively, against the Company and the members of the
Company's board of directors at that time. On December 14, 2011,
the Delaware Chancery Court consolidated the two actions under the
caption In re Yahoo! Shareholders Litig. and appointed lead
plaintiffs. On December 29, 2011, lead plaintiffs filed a
consolidated amended class action complaint purportedly on behalf
of all of the Company's stockholders alleging that the board of
directors breached fiduciary duties by failing to maximize the
Company's value in connection with the strategic review process.
Plaintiffs seek injunctive relief, rescission, fees and costs.
With respect to the legal proceeding and claims, the Company has
determined, based on current knowledge, that the amount or range
of reasonably possible losses, including reasonably possible
losses in excess of amounts already accrued, is not reasonably
estimable with respect to certain matters and that the aggregate
amount or range of such losses that are estimable would not have a
material adverse effect on the Company's consolidated financial
position, results of operations or cash flows. Amounts accrued as
of December 31, 2010, and December 31, 2011, were not material.
The ultimate outcome of legal proceedings involves judgments,
estimates and inherent uncertainties, and cannot be predicted with
certainty. In the event of a determination adverse to Yahoo!, its
subsidiaries, directors, or officers in these matters, however,
the Company may incur substantial monetary liability, and be
required to change its business practices. Either of these events
could have a material adverse effect on the Company's financial
position, results of operations, or cash flows. The Company may
also incur substantial legal fees, which are expensed as incurred
in defending against these claims.
* Workers Can Bring Class, Collective Actions Simultaneously
------------------------------------------------------------
The Legal Intelligencer reports that workers can bring claims
against their employers under both federal collective actions and
state law class actions simultaneously, the 3rd Circuit has ruled,
holding the opt-in mechanism of collective actions is not
inherently incompatible with the opt-out nature of class actions.
*********
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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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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