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/raid1/www/Hosts/bankrupt/CAR_Public/120522.mbx C L A S S A C T I O N R E P O R T E R Tuesday, May 22, 2012, Vol. 14, No. 100 Headlines AETNA INC: Aetna UCR Litigation Still Pending in N.J. Court AFFINION GROUP: Appeal From Dismissal of Suit vs. Unit Pending AFFINION GROUP: Awaits Order on Dismissal Bid in N.Y. Suit AFFINION GROUP: Bid for Status Hearing in 3 Conn. Suits Pending AFFINION GROUP: Continues to Defend Trilegiant-Related Suits AFFINION GROUP: Unit Awaits Ruling on Bid to Dismiss Conn. Suit ALCOA INC: ERISA-Violation Suit Still Pending in Tennessee ALCOA INC: Non-Settled Matters in Virgin Islands Suit Appealed ALCOA INC: Reviews Technical Data From "Lavoie" Suit Plaintiffs ALTRIA GROUP: Awaits Ruling on Bid to Dismiss Claims in Wage Suit ALTRIA GROUP: Smoking and Health Class Suits Pending in Canada AMERICAN PUBLIC: W.Va. Court Orders Class Action Suit Dismissal AFA FOODS: Faces Class Action in Delaware Over Layoffs AQUA-LEISURE: Recalls 40,000 First Fitness Children's Trampolines ARGENTINA: Faces Repsol Suit in N.Y. Over YPF Takeover ARIZONA: Temporary Deal Reached in Mental Health Suit CANADA: "Eminent" Survivor Needed in Claims Process CENTRO RETAIL: High Court Ruling v. Board to Have Wider Impact DOREL JUVENILE: Recalls 868T Safety 1st Toilet and Cabinet Locks FORTINET INC: Class Action Suit in California Still Pending HONDA: Judge Approves Broken A/C Class Action Settlement JPMORGAN CHASE: Finkelstein & Krinsk Files Class Action LOUISIANA CITIZENS: Spends $1.6 Million to Fight Class Action MEYER CORP: Recalls 4,600 Circulon 13-Piece Cookware Sets MURRUMBIDGEE IRRIGATION: Yenda Assoc. Intends to Pursue Class Suit NELNET INC: Subsidiary Continues to Defend Suit in N.J. NEW YORK: Class Action to Challenge Ambulette Contract PNC BANK: Judge Allows Overdraft Fee Class Action to Proceed PORTFOLIO RECOVERY: Still Faces Suit Over TCPA Violation PORTER ATHLETIC: Recalls 44 Climbing Ropes Due to Fall Hazard U.S. STEEL: 7th Cir. Orders Dismissal of Overtime Class Action U.S. STEEL: Still Faces Class Action Suit in Illinois WEST VIRGINIA: Needs to Step Up Education System Overhaul YASSER AWAAD: Faces Class Action Over Medical Malpractice * CANADA: Courts Concerned Over Quality of Class Cert. Evidence * Experts Says Brinker Meal & Rest Break Ruling No Cure-All * Lawyers Recommend IPO Insurance to Clients After Class Actions ********* AETNA INC: Aetna UCR Litigation Still Pending in N.J. Court ----------------------------------------------------------- Aetna Inc. is named as a defendant in several purported class actions and individual lawsuits arising out of its practices related to the payment of claims for services rendered to its members by health care providers with whom the Company does not have a contract ("out-of-network providers"). Among other things, these lawsuits allege that the Company paid too little to its health plan members and/or providers for these services, among other reasons, because of its use of data provided by Ingenix, Inc., a subsidiary of one of its competitors ("Ingenix"). Other major health insurers are the subject of similar litigation or have settled similar litigation. Various plaintiffs who are health care providers or medical associations seek to represent nationwide classes of out-of- network providers who provided services to the Company's members during the period from 2001 to the present. Various plaintiffs who are members in the Company's health plans seek to represent nationwide classes of its members who received services from out- of-network providers during the period from 2001 to the present. Taken together, these lawsuits allege that the Company violated state law, the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), the Racketeer Influenced and Corrupt Organizations Act and federal antitrust laws, either acting alone or in concert with its competitors. The purported classes seek reimbursement of all unpaid benefits, recalculation and repayment of deductible and coinsurance amounts, unspecified damages and treble damages, statutory penalties, injunctive and declaratory relief, plus interest, costs and attorneys' fees, and seek to disqualify the Company from acting as a fiduciary of any benefit plan that is subject to ERISA. Individual lawsuits that generally contain similar allegations and seek similar relief have been brought by health plan members and out-of-network providers. The first class action case was commenced on July 30, 2007. The federal Judicial Panel on Multi-District Litigation (the "MDL Panel") has consolidated these class action cases in the U.S. District Court for the District of New Jersey (the "New Jersey District Court") under the caption In re: Aetna UCR Litigation, MDL No. 2020 ("MDL 2020"). In addition, the MDL Panel has transferred the individual lawsuits to MDL 2020. On May 9, 2011, the New Jersey District Court dismissed the physician plaintiffs from MDL 2020 without prejudice. The New Jersey District Court's action followed a ruling by the United States District Court for the Southern District of Florida (the "Florida District Court") that the physician plaintiffs were enjoined from participating in MDL 2020 due to a prior settlement and release. The United States Court of Appeals for the Eleventh Circuit has dismissed the physician plaintiffs' appeal of the Florida District Court's ruling. Discovery is substantially complete in MDL 2020, several motions are pending, and briefing on class certification has been completed. The court has not set a trial date or a timetable for deciding class certification. The Company says it intends to vigorously defend itself against the claims brought in these cases. No further updates were reported in the Company's April 26, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2012. AFFINION GROUP: Appeal From Dismissal of Suit vs. Unit Pending -------------------------------------------------------------- An appeal from the dismissal of a class action lawsuit against a subsidiary of Affinion Group Holdings, Inc. remains pending, according to the Company's April 26, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2012. On June 25, 2010, a class action lawsuit was filed against Webloyalty Holdings, Inc., and one of its clients in the United States District Court for the Southern District of California alleging, among other things, violations of the Electronic Fund Transfer Act and Electronic Communications Privacy Act, unjust enrichment, fraud, civil theft, negligent misrepresentation, fraud, California Consumers Legal Remedies Act violations, false advertising and California Consumer Business Practice violations. This lawsuit relates to Webloyalty's alleged conduct occurring on and after October 1, 2008. On February 17, 2011, Webloyalty filed a motion to dismiss the amended complaint in this lawsuit. On April 12, 2011, the Court granted Webloyalty's motion and dismissed all claims against the defendants. On May 10, 2011, plaintiff filed a notice appealing the dismissal to the United States Court of Appeals for the Ninth Circuit. Plaintiff filed his opening appeals brief with the Ninth Circuit on October 17, 2011, and defendants filed their respective answering briefs on December 23, 2011. Plaintiff filed its reply brief on January 23, 2012. No date for oral argument on plaintiff's appeal has been set. AFFINION GROUP: Awaits Order on Dismissal Bid in N.Y. Suit ---------------------------------------------------------- Affinion Group Holdings, Inc. is awaiting a court decision on plaintiff's motion to dismiss the Company, without prejudice, from a class action lawsuit pending in New York, according to the Company's April 26, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2012. On November 10, 2010, a class action complaint was filed against the Company, Trilegiant Corporation, 1-800-Flowers.com, and Chase Bank USA, N.A. in the United States District Court for the Eastern District of New York. The complaint asserts various causes of action on behalf of several putative nationwide classes that largely overlap with one another. The claims asserted are in connection with the sale by Trilegiant of its membership programs, including claims under the Electronic Communications Privacy Act, Connecticut Unfair Trade Practices Act, and New York's General Business Law. On April 6, 2011, the Company and Trilegiant filed a motion to compel individual (non-class) arbitration of the plaintiff's claims. The Company's co-defendant, 1-800- Flowers.com, joined in the motion to compel arbitration, and co- defendant Chase Bank filed a motion to stay the case against it pending arbitration, or alternatively to dismiss. The Company does not know when the court will issue a ruling on these motions. On December 23, 2011, the plaintiff sought to dismiss the Company, Trilegiant, and 1-800-Flowers without prejudice. On January 4, 2012, the Company and Trilegiant objected to that dismissal (and 1-800-Flowers joined in that objection), seeking among other things dismissal with prejudice. Plaintiff responded to that objection on January 13, 2012, and the Company does not know when the court will enter a decision. Also, on January 13, 2012, the plaintiff sought to dismiss Chase without prejudice. On January 17, 2012, Chase filed an objection to the plaintiff's dismissal request. That issue is currently being considered by the court. The Company does not know when the court will rule on that issue. AFFINION GROUP: Bid for Status Hearing in 3 Conn. Suits Pending --------------------------------------------------------------- Affinion Group Holdings, Inc. is awaiting a court decision on its request to set a status hearing in each of the three class action lawsuits pending in Connecticut, according to the Company's April 26, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2012. On June 17, 2010, a class action complaint was filed against the Company and Trilegiant Corporation ("Trilegiant") in the United States District Court for the District of Connecticut. The complaint asserts various causes of action on behalf of a putative nationwide class and a California-only subclass in connection with the sale by Trilegiant of its membership programs, including claims under the Electronic Communications Privacy Act, the Connecticut Unfair Trade Practices Act, the Racketeer Influenced Corrupt Organizations Act, the California Consumers Legal Remedies Act, the California Unfair Competition Law, the California False Advertising Law, and for unjust enrichment. On September 29, 2010, the Company filed a motion to compel arbitration of all of the claims asserted in this lawsuit. On February 24, 2011, the court denied the Company's motion. On March 28, 2011, the Company and Trilegiant filed a notice of appeal in the United States Court of Appeals for the Second Circuit, appealing the district court's denial of their motion to compel arbitration. The Company does not know when the appeal will be decided. While that issue is on appeal, the matter has proceeded in the district court. There has been written discovery and depositions. Previously, the court had set a briefing schedule on class certification that called for the completion of class certification briefing on May 18, 2012. However, on March 28, 2012, the court suspended the briefing schedule on the motion due to the filing of two other overlapping class actions in the United States District Court for the District of Connecticut. The first of those cases was filed on March 6, 2012, against the Company, Trilegiant, Chase Bank USA, N.A., Bank of America, N.A., Capital One Financial Corp., Citigroup, Inc., Citibank, N.A., Apollo Global Management, LLC, 1-800-Flowers.Com, Inc., United Online, Inc., Memory Lane, Inc., Classmates Int'l, Inc., FTD Group, Inc., Days Inn Worldwide, Inc., Wyndham Worldwide Corp., People Finderspro, Inc., Beckett Media LLC, Buy.com, Inc., Raukuten USA, Inc., IAC/InteractiveCorp., and Shoebuy.com, Inc. The second of those cases was filed on March 25, 2012, against the same defendants as well as Adaptive Marketing, LLC, Vertrue, Inc., Webloyalty.com, Inc., and Wells Fargo & Co. These two cases assert similar claims as the claims asserted in the earlier-filed lawsuit in connection with the sale by Trilegiant of its membership programs. All three lawsuits have been assigned to a single judge, and the cases may be consolidated. The Company has filed a request in each case asking the court to set a status hearing to discuss scheduling and other matters. AFFINION GROUP: Continues to Defend Trilegiant-Related Suits ------------------------------------------------------------ Affinion Group Holdings, Inc. continues to defend class action lawsuits arising from the sale of Trilegiant Corporation' membership programs, according to the Company's April 26, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2012. On July 13, 2011, a class action lawsuit was filed against Affinion Group, LLC ("AGLLC"), Trilegiant Corporation, Apollo Global Management LLC, and Chase Bank USA, N.A., in the United States District Court for the District of Arizona. The complaint asserted similar causes of action as are asserted in the Connecticut litigation on behalf of putative nationwide classes in connection with the sale by Trilegiant of its membership programs. On October 18, 2011, Trilegiant, AGLLC, and Apollo filed a motion to stay, to which the plaintiff never responded. On November 1, 2011, Trilegiant and AGLLC filed a motion to compel arbitration, and Apollo joined in that motion and also sought dismissal. On December 15, 2011, the plaintiff sought to dismiss the action without prejudice, and on December 21, 2011, Trilegiant, Affinion, and Apollo filed a brief urging the court to dismiss the action with prejudice. On January 17, 2012, Chase filed a motion to transfer this case to the Eastern District of New York ("EDNY"). On or about February 29, 2012, the case was dismissed without prejudice. The same lead plaintiff's law firm also filed a substantially similar class action lawsuit against the same defendants as well as Avis Rent A Car System, LLC, Avis Budget Car Rental LLC, Avis Budget Group, Inc., and Bank of America, N.A. in the United States District Court for the District of Oregon, Portland Division, on July 14, 2011. On December 27, 2011, Plaintiff filed a notice of voluntary dismissal without prejudice, and the case was terminated by the court on January 6, 2012. On August 4, 2011, those same lawyers filed another substantially similar class action lawsuit against the same defendants sued in the Arizona lawsuit in the United States District Court for the Southern District of Ohio. On December 23, 2011, the plaintiff filed a notice of voluntary dismissal as to Trilegiant, AGLLC, and Apollo. On February 10, 2012, the court entered an order dismissing the lawsuit in its entirety without prejudice. On August 8, 2011, those same lawyers filed a substantially similar class action lawsuit against AGLLC, Trilegiant Corporation, Apollo Global Management, LLC, and American Express Company in the United States District Court for the Southern District of New York. On December 5, 2011, the court granted American Express' motion to compel arbitration. On December 14, 2011, the plaintiff filed a notice of voluntary dismissal as to Trilegiant, AGLLC, and Apollo, and the case was closed by the court on the same day. Finally, on October 25, 2011, these same lawyers filed a substantially similar class action lawsuit against AGLLC, Trilegiant, Apollo Global Management, LLC, IAC/InterActiveCorp., Shoebuy.com, and Chase Bank USA, N.A. in the United States District Court for the Central District of California. On December 14, 2011, the plaintiff filed a notice of voluntary dismissal as to all of the defendants except Chase, and the case was terminated by the court on or about February 21, 2012. On October 6, 2011, the plaintiffs in the preceding class action cases (other than the class action cases that were filed in the United States District Court for the District of Connecticut on March 6, 2012, and March 25, 2012, respectively) filed a motion under 28 U.S.C. Section 1407 with the Judicial Panel on Multidistrict Litigation ("JPML") seeking coordinated pretrial proceedings of those class action cases with the case that was filed on June 17, 2010, in the United States Court for the District of Connecticut. (The plaintiffs later sought to include within the proposed consolidated action the case they filed on October 25, 2011). Plaintiffs in those actions argued that the factual allegations in the cases raised common issues that made pretrial transfer appropriate; they sought transfer and consolidation of the cases to the United States District Court for the District of Connecticut. All of the defendants opposed that motion. On December 9, 2011, the JPML entered an order denying consolidation and transfer of these cases. AFFINION GROUP: Unit Awaits Ruling on Bid to Dismiss Conn. Suit --------------------------------------------------------------- Affinion Group Holdings, Inc.'s subsidiary, Webloyalty Holdings, Inc., is awaiting a court decision on its motion to dismiss a class action lawsuit pending in Connecticut, according to the Company's April 26, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2012. On August 27, 2010, a class action lawsuit, which is substantially similar to the one filed in California, was filed against Webloyalty, one of its former clients and one of the credit card associations in the United States District Court for the District of Connecticut alleging, among other things, violations of the Electronic Fund Transfer Act, Electronic Communications Privacy Act, unjust enrichment, civil theft, negligent misrepresentation, fraud and Connecticut Unfair Trade Practices Act violations. This lawsuit relates to Webloyalty's alleged conduct occurring on and after October 1, 2008. On December 23, 2010, Webloyalty filed a motion to dismiss this lawsuit, which had since been amended in its entirety. The court has not yet scheduled a hearing or ruled on Webloyalty's motion. ALCOA INC: ERISA-Violation Suit Still Pending in Tennessee ---------------------------------------------------------- In November 2006, a class action captioned Curtis v. Alcoa Inc., Civil Action No. 3:06cv448 (E.D. Tenn.) was filed by plaintiffs representing approximately 13,000 retired former employees of Alcoa Inc. or Reynolds Metals Company and spouses and dependents of such retirees alleging violation of the Employee Retirement Income Security Act (ERISA) and the Labor-Management Relations Act by requiring plaintiffs, beginning January 1, 2007, to pay health insurance premiums and increased co-payments and co-insurance for certain medical procedures and prescription drugs. Plaintiffs alleged these changes to their retiree health care plans violated their rights to vested health care benefits. Plaintiffs additionally alleged that Alcoa had breached its fiduciary duty to plaintiffs under ERISA by misrepresenting to them that their health benefits would never change. Plaintiffs sought injunctive and declaratory relief, back payment of benefits, and attorneys' fees. Alcoa had consented to treatment of plaintiffs' claims as a class action. During the fourth quarter of 2007, following briefing and argument, the court ordered consolidation of the plaintiffs' motion for preliminary injunction with trial, certified a plaintiff class, bifurcated and stayed the plaintiffs' breach of fiduciary duty claims, struck the plaintiffs' jury demand, but indicated it would use an advisory jury, and set a trial date of September 17, 2008. In August 2008, the court set a new trial date of March 24, 2009 and, subsequently, the trial date was moved to September 22, 2009. In June 2009, the court indicated that it would not use an advisory jury at trial. Trial in the matter was held over eight days commencing September 22, 2009, and ending on October 1, 2009, in federal court in Knoxville, TN, before the Honorable Thomas Phillips, U.S. District Court Judge. At the conclusion of evidence, the court set a post- hearing briefing schedule for submission of proposed findings of fact and conclusions of law by the parties and for replies to the same. Post trial briefing was submitted on December 4, 2009. On March 9, 2011, the court issued a judgment order dismissing plaintiffs' lawsuit in its entirety with prejudice for the reasons stated in its Findings of Fact and Conclusions of Law. On March 23, 2011, plaintiffs filed a motion for clarification and/or amendment of the judgment order, which seeks, among other things, a declaration that plaintiffs' retiree benefits are vested subject to an annual cap and an injunction preventing Alcoa, prior to 2017, from modifying the plan design to which plaintiffs are subject or changing the premiums and deductibles that plaintiffs must pay. Also on March 23, 2011, plaintiffs filed a motion for award of attorneys' fees and expenses. Alcoa filed its opposition to both motions on April 11, 2011. The time for plaintiffs to appeal from the court's March 9, 2011 judgment will not begin until the court disposes of these motions. No further updates were reported in the Company's April 26, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2012. ALCOA INC: Non-Settled Matters in Virgin Islands Suit Appealed -------------------------------------------------------------- Plaintiffs appealed the numerous non-settled matters in the lawsuit pending in the U.S. Virgin Islands, according to Alcoa Inc.'s April 26, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2012. In September 1998, Hurricane Georges struck the U.S. Virgin Islands, including the St. Croix Alumina, L.L.C. (SCA) facility on the island of St. Croix. The wind and rain associated with the hurricane caused material at the location to be blown into neighboring residential areas. SCA undertook or arranged various cleanup and remediation efforts. The Division of Environmental Protection (DEP) of the Department of Planning and Natural Resources (DPNR) of the Virgin Islands Government issued a Notice of Violation that Alcoa has contested. In February 1999, certain residents of St. Croix commenced a civil lawsuit in the Territorial Court of the Virgin Islands seeking compensatory and punitive damages and injunctive relief for alleged personal injuries and property damages associated with "bauxite or red dust" from the SCA facility. The lawsuit, which has been removed to the District Court of the Virgin Islands (the "Court"), names SCA, Alcoa and Glencore Ltd. as defendants, and, in August 2000, was accorded class action treatment. The class was defined to include persons in various defined neighborhoods who "suffered damages and/or injuries as a result of exposure during and after Hurricane Georges to red dust and red mud blown during Hurricane Georges." All of the defendants have denied liability, and discovery and other pretrial proceedings have been underway since 1999. Plaintiffs' expert reports claim that the material blown during Hurricane Georges consisted of bauxite and red mud, and contained crystalline silica, chromium, and other substances. The reports further claim, among other things, that the population of the six subject neighborhoods as of the 2000 census (a total of 3,730 people) has been exposed to toxic substances through the fault of the defendants, and hence will be able to show entitlement to lifetime medical monitoring as well as other compensatory and punitive relief. These opinions have been contested by the defendants' expert reports, that state, among other things, that plaintiffs were not exposed to the substances alleged and that in any event the level of alleged exposure does not justify lifetime medical monitoring. Alcoa and SCA turned over this matter to their insurance carriers who have been providing a defense. Glencore Ltd. is jointly defending the case with Alcoa and SCA and has a pending motion to dismiss. In June 2008, the Court granted defendants' joint motion to decertify the original class of plaintiffs, and certified a new class as to the claim of ongoing nuisance, insofar as plaintiffs seek cleanup, abatement, or removal of the red mud currently present at the facility. (The named plaintiffs had previously dropped their claims for medical monitoring as a consequence of the court's rejection of plaintiffs' proffered expert opinion testimony). The Court expressly denied certification of a class as to any claims for remediation or cleanup of any area outside the facility (including plaintiffs' property). The new class could seek only injunctive relief rather than monetary damages. Named plaintiffs, however, could continue to prosecute their claims for personal injury, property damage, and punitive damages. In August 2009, in response to defendants' motions, the Court dismissed the named plaintiffs' claims for personal injury and punitive damages, and denied the motion with respect to their property damage claims. In September 2009, the Court granted defendants' motion for summary judgment on the class plaintiffs' claim for injunctive relief. In October 2009, plaintiffs appealed the Court's summary judgment order dismissing the claim for injunctive relief and in March 2011, the U.S. Court of Appeals for the Third Circuit dismissed plaintiffs' appeal of that order. In September 2011, the parties reached an oral agreement to settle the remaining claims in the case which would resolve the personal property damage claims of the 12 remaining individual plaintiffs. On March 12, 2012, final judgment was entered in the District Court for the District of the Virgin Islands. Alcoa's share of the settlement is fully insured. On March 23, 2012, plaintiffs filed a notice of appeal of numerous non-settled matters, including but not limited to discovery orders, Daubert rulings, summary judgment rulings, as more clearly set out in the settlement agreement/release between the parties. ALCOA INC: Reviews Technical Data From "Lavoie" Suit Plaintiffs --------------------------------------------------------------- Alcoa Inc. disclosed in its April 26, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2012, that while no further formal proceedings have occurred in the class action lawsuit commenced by Dany Lavoie, Alcoa is reviewing certain technical data provided by the plaintiffs and anticipates providing its own analysis to the plaintiffs shortly. In August 2005, Dany Lavoie, a resident of Baie Comeau in the Canadian Province of Quebec, filed a Motion for Authorization to Institute a Class Action and for Designation of a Class Representative against Alcoa Canada Inc., Alcoa Limitee, Societe Canadienne de Metaux Reynolds Limitee and Canadian British Aluminum in the Superior Court of Quebec in the District of Baie Comeau. Plaintiff seeks to institute the class action on behalf of a putative class consisting of all past, present and future owners, tenants and residents of Baie Comeau's St. Georges neighborhood. He alleges that defendants, as the present and past owners and operators of an aluminum smelter in Baie Comeau, have negligently allowed the emission of certain contaminants from the smelter, specifically Polycyclic Aromatic Hydrocarbons or "PAHs," that have been deposited on the lands and houses of the St. Georges neighborhood and its environs causing damage to the property of the putative class and causing health concerns for those who inhabit that neighborhood. Plaintiff originally moved to certify a class action, sought to compel additional remediation to be conducted by the defendants beyond that already undertaken by them voluntarily, sought an injunction against further emissions in excess of a limit to be determined by the court in consultation with an independent expert, and sought money damages on behalf of all class members. In May 2007, the court authorized a class action lawsuit to include only people who suffered property damage or personal injury damages caused by the emission of PAHs from the smelter. In September 2007, the plaintiff filed his claim against the original defendants, which the court had authorized in May. Alcoa has filed its Statement of Defense and plaintiff has filed an Answer to that Statement. Alcoa also filed a Motion for Particulars with respect to certain paragraphs of plaintiff's Answer and a Motion to Strike with respect to certain paragraphs of plaintiff's Answer. In late 2010, the Court denied these motions. While no further formal proceedings have occurred, Alcoa is reviewing certain technical data provided by the plaintiffs and anticipates providing its own analysis to the plaintiffs shortly. At this stage of the proceeding, the Company says it is unable to reasonably predict an outcome or to estimate a range of reasonably possible loss. ALTRIA GROUP: Awaits Ruling on Bid to Dismiss Claims in Wage Suit ---------------------------------------------------------------- Altria Group, Inc. is awaiting a court decision on its subsidiary's motion to dismiss plaintiffs' claims in a wage and hour class action lawsuit pending in California, according to the Company's April 26, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2012. In September 2011, two former sales representatives employed in California by Altria Group Distribution Company ("AGDC") filed a putative class action in the United States District Court for the Northern District of California, under California's wage and hour laws. The named plaintiffs seek to represent a class of all former sales representatives who worked for AGDC in California at any time since September 2007. The plaintiffs seek overtime pay, recovery of certain wages, reimbursement of business expenses and other non-monetary relief and penalties. In November 2011, the plaintiffs amended their complaint to add an additional claim for penalties under California's Private Attorney General Act. On January 6, 2012, AGDC moved to dismiss certain of plaintiffs' claims and to transfer the case from the Northern District of California to the Central District of California. On February 22, 2012, the district court granted the motion to transfer, and the case was transferred to the Central District of California on March 7, 2012. The motion to dismiss remains pending before the United States District Court for the Central District of California. ALTRIA GROUP: Smoking and Health Class Suits Pending in Canada -------------------------------------------------------------- Altria Group, Inc. and its subsidiary Philip Morris USA Inc. ("PM USA")continue to face lawsuits in Canada filed on behalf of individuals who suffer or have suffered from various diseases including chronic obstructive pulmonary disease, emphysema, heart disease or cancer after smoking defendants' cigarettes, according to Altria's April 26, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2012. Since the dismissal in May 1996 of a purported nationwide class action brought on behalf of allegedly addicted smokers, plaintiffs have filed numerous putative smoking and health class action lawsuits in various state and federal courts. In general, these cases purport to be brought on behalf of residents of a particular state or states (although a few cases purport to be nationwide in scope) and raise addiction claims and, in many cases, claims of physical injury as well. Class certification has been denied or reversed by courts in 59 smoking and health class actions involving PM USA in Arkansas (1), California (1), the District of Columbia (2), Florida (2), Illinois (3), Iowa (1), Kansas (1), Louisiana (1), Maryland (1), Michigan (1), Minnesota (1), Nevada (29), New Jersey (6), New York (2), Ohio (1), Oklahoma (1), Pennsylvania (1), Puerto Rico (1), South Carolina (1), Texas (1) and Wisconsin (1). Altria Group, Inc. and its subsidiary Philip Morris USA Inc. ("PM USA") are named as defendants, along with other cigarette manufacturers, in six actions filed in the Canadian provinces of Alberta, Manitoba, Nova Scotia, Saskatchewan and British Columbia. In Saskatchewan and British Columbia, plaintiffs seek class certification on behalf of individuals who suffer or have suffered from various diseases including chronic obstructive pulmonary disease, emphysema, heart disease or cancer after smoking defendants' cigarettes. In the actions filed in Alberta, Manitoba and Nova Scotia, plaintiffs seek certification of classes of all individuals who smoked defendants' cigarettes. No further updates were reported in the Company's latest SEC filing. AMERICAN PUBLIC: W.Va. Court Orders Class Action Suit Dismissal --------------------------------------------------------------- A district court in West Virginia ordered the dismissal of a putative class action lawsuit against American Public Education, Inc., according to the Company's February 28, 2012, 10-K filing with the U.S. Securities and Exchange Commission for the fiscal year ended December 31, 2011. On August 12, 2010, a putative class action lawsuit was commenced against the Company, Wallace E. Boston, Jr., Frank B. McCluskey and Harry T. Wilkins in the United States Court for the Northern District of West Virginia (Martinsburg Division), encaptioned Douglas N. Gaer v. American Public Education, Inc. et al, C.A. No. 3:10 CV-81. The plaintiff alleged that the Company and the individual defendants violated Section 10(b) of the Exchange Act, Rule 10b-5 promulgated thereunder and Section 20(a) of the Exchange Act. The plaintiff purported to be acting on behalf of a class consisting of purchasers or acquirers of the Company's stock between February 22, 2010 to August 5, 2010. The plaintiff alleged that, as a result of the defendants' allegedly false misleading statements or omissions concerning the Company's prospects, the Company's common stock traded at artificially inflated prices throughout the Class Period. The plaintiff sought compensatory damages and fees and costs, among other relief. In an order dated November 10, 2010, Douglas Gaer and the City of Miami Firefighters' and Police Officers' Retirement Trust were appointed co-lead plaintiffs and lead plaintiffs' counsel was approved. On January 25, 2011, plaintiffs filed an Amended Complaint asserting the same statutory claims against the Company, Boston and Wilkins. On or about March 10, 2011, defendants moved to dismiss the complaint in its entirety. On or about April 25, 2011, plaintiffs filed an opposition to the motion to dismiss. On May 16, 2011, the defendants filed a reply memorandum in support of their motion to dismiss. On December 8, 2011, the Court granted defendants motion to dismiss in its entirety. Accordingly, the Court ordered that the matter be dismissed with prejudice and stricken from the active docket of the Court. The Court further directed that separate judgment be entered in favor of defendants. AFA FOODS: Faces Class Action in Delaware Over Layoffs ------------------------------------------------------ Huffington Post reports that Nadia Sanchez has filed a class action lawsuit in the bankruptcy court in Delaware, asserting that she and 200 co-workers were abruptly laid off early last month when AFA decided to shutter a plant in Southern California amidst an Internet backlash to its controversial beef-trimmings product. According to the report, the lawsuit says the workers weren't given the 60-days advance notice required under the federal Worker Adjustment and Retraining Notification (WARN) Act and California labor law. Ms. Sanchez's lawyer, Rene S. Roupinian of New York, told HuffPost that the low-wage meatpacking workers weren't given any written warning of the impending layoffs. Of the roughly one dozen AFA workers to whom Mr. Roupinian and her colleagues have talked, she said, most appeared to be from Mexico, like Ms. Sanchez, and worked on the floor of the meatpacking plant. The report relates Mr. Roupinian said the workers earned an average of about $8.25 an hour, for an annual salary of roughly $17,000. They worked in a plant just south of downtown Los Angeles, where the mandated living wage for workers on city contracts is $10.42 an hour. About AFA Foods King of Prussia, Pennsylvania-based AFA Foods Inc. is one of the largest processors of ground beef products in the United States. The Company has five processing facilities and two ancillary facilities across the country with annual processing capacity of 800 million pounds. AFA has seven facilities capable of producing 800 million pound of ground beef annually. Revenue in 2011 was $958 million. Yucaipa Cos. acquired the business in 2008 and currently owns 92% percent of the common stock and all of the preferred stock. AFA Foods, AFA Investment Inc. and other affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-11127) on April 2, 2012, after recent changes in the market for its ground beef products and the impact of negative media coverage related to boneless lean beef trimmings -- BLBT -- affected sales. Judge Mary Walrath presides over the case. Lawyers at Jones Day and Pachulski Stang Ziehl & Jones LLP serve as the Debtors' counsel. FTI Consulting Inc. serves as financial advisors and Imperial Capital LLC serves as marketing consultants. Kurtzman Carson Consultants LLC serves as noticing and claims agent. As of Feb. 29, 2012, on a consolidated basis, the Debtors' books and records reflected approximately $219 million in assets and $197 million in liabilities. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed seven members to the official committee of unsecured creditors in the Chapter 11 cases of AFA Investment Inc., AFA Foods and their debtor-affiliates. McDonald Hopkins LLC and Potter Anderson & Corroon LLP represents the Committee. AQUA-LEISURE: Recalls 40,000 First Fitness Children's Trampolines ----------------------------------------------------------------- The U.S. Consumer Product Safety Commission, in cooperation with Aqua-Leisure Industries Inc., of Avon, Massachusetts, announced a voluntary recall of about 40,000 First Fitness(R) Trampolines with Handlebars. Consumers should stop using recalled products immediately unless otherwise instructed. It is illegal to resell or attempt to resell a recalled consumer product. Metal fatigue can cause the handlebar to break away during use, posing a risk of laceration from exposed metal surfaces or other injury from a fall. Aqua-Leisure has received four reports of handlebars breaking from the metal connection joint during use. No injuries have been reported. This recall involves First Fitness Kid's First trampolines with handlebars. The child-size toy trampolines have a red and blue metal handlebar, a blue nylon deck guard and a black jumping deck. "First Fitness" is embossed on the jumping deck in white letters. The trampolines can be identified by model number FF-6902TR and Toys R Us SKN 491463. The model and store numbers can be found on the lower right corner of the back of the packaging. A sewn-in tag on the bottom of the deck lists the factory date code of five numbers followed by "GLTX." A picture of the recalled products is available at: http://www.cpsc.gov/cpscpub/prerel/prhtml12/12181.html The recalled products were manufactured in China and sold exclusively at Toys "R" Us stores nationwide from September 2010 through April 2012 for between $45 and $70. Consumers should immediately take the recalled trampolines from children and contact Aqua-Leisure's recall hotline for a full refund. For additional information, please contact Aqua-Leisure toll-free at (888) 912-7087 between 8:30 a.m. through 5:30 p.m. Eastern Time Monday through Friday, or visit the firm's Web site at http://www.aqualeisure.com/ ARGENTINA: Faces Repsol Suit in N.Y. Over YPF Takeover ------------------------------------------------------ Efe reports that Spanish energy major Repsol has sued Argentina in a New York court over its seizure of a 51 percent stake in Buenos Aires-based oil firm YPF. The class-action suit was filed by Repsol and another YPF shareholder, U.S.-based financial investment advisory firm Texas Yale Capital Corporation. Attorneys for the Spanish group in New York are seeking to have the court force the Argentine government to make an offer to buy all of YPF's outstanding Class D shares in the wake of its decision to expropriate the controlling stake from Repsol. Argentina announced plans for the takeover on April 16 and a bill formalizing the nationalization was signed into law earlier this month. Repsol alleges in the 27-page suit that the Argentine government breached its contractual obligations to other shareholders by failing to make the offer in seizing YPF, Argentina's largest oil producer. The Spanish company has asked that the price of the offer be set in accordance with the law. Repsol's attorneys have added that until that offer is made the Argentine government cannot exercise its voting rights attached to the nationalized shares and faces other restrictions. Separately, Repsol on May 15 made an initial move toward invoking international arbitration over the expropriation, sending a letter to Argentine President Cristina Fernandez formally proclaiming a dispute over the seizure. The move means that if the parties don't reach an accord on compensation within six months, Repsol will take the case to the World Bank's International Center for Settlement of Investment Disputes, sources in the Spanish firm told Efe on May 15. Prior to Argentina's decision to seize control of YPF, Repsol had been the controlling shareholder with a 57.4 percent stake, which the Spanish company's chairman, Antonio Brufau, has valued at $10.5 billion. YPF's new administrators, however, have hinted the government will not pay that much and are auditing the firm's finances amid concerns about a lack of investment and fuel shortages. Repsol, whose current stake in YPF stands at around 6 percent, says the nationalization violates a bilateral treaty on protection of investments. The Argentine federal government is keeping just over half of the controlling 51 percent stake in YPF, with the remainder to be divided among the country's oil-producing provinces. Argentina's Grupo Petersen still holds a 25.46 percent interest and another 17.09 percent of the shares continue to be traded on the Buenos Aires and New York stock exchanges. Repsol has said the recent discovery of massive unconventional shale gas and oil reserves in west-central Argentina was behind the move to seize control of the firm and has denied Buenos Aires' accusations that YPF's dividend policy sapped it of the resources it needed to invest and meet the country's energy needs. It also has said energy companies in Argentina have been discouraged from investing due to regulated fuel and electricity prices. The Spanish government has blasted the expropriation move and retaliated by announcing plans to limit imports of Argentine biodiesel. Madrid said it also will pursue "measures of a diplomatic nature" in various international forums in response to the takeover. According to the Financial Times' Jude Webber, the suit will be heard by Judge Thomas Griesa, who has been examining claims by bondholders burnt in Argentina's 2001 default on nearly $100 billion. ARIZONA: Temporary Deal Reached in Mental Health Suit ----------------------------------------------------- Mary K. Reinhart, writing for The Arizona Republic, reports that new state funding for Arizonans with serious mental illnesses returns some of the services they lost two years ago and paves the way for a temporary agreement in a decades-old class-action lawsuit. The budget for the fiscal year that begins July 1, which Gov. Jan Brewer signed on May 14, includes $38.7 million to restore housing, counseling and other services to people with serious mental illnesses who don't qualify for Medicaid. That's less than the roughly $50 million cut in 2010, and the two- year deal doesn't end the 30-year-old court case. But the money represents a significant turnaround in a lengthy legal battle over treatment of some of the state's most vulnerable residents. About 12,000 people lost a raft of services to budget-balancing reduction. Mental-health advocates and state officials say the new funding brings opportunities for people to recover and thrive with greater emphasis on employment, life skills and peer-support programs. "Our overarching principle is to invest this on the front end, not the back end, in community-support systems to keep people healthier," said Arizona Department of Health Services Director Will Humble, who oversees the state's behavioral-health system. "It really has been a priority in the Governor's Office to get some of those resources back." The July 2010 budget cuts came weeks after the state and attorneys in the Arnold vs. Sarn lawsuit agreed to put the case on hold for two years, in part to prevent lawmakers from repealing the law that underpins it. The lawsuit sought to protect the rights of the seriously mentally ill under an Arizona law that requires the state to provide an array of community services, such as medication, therapy, housing and transportation. Later this month, the governor and attorneys for the mentally ill are expected to announce a new two-year deal. In the meantime, they'll continue to negotiate terms intended to ensure treatment for people with serious mental illnesses and eventually bring an end to the case, first filed in 1981. By the end of the two-year agreement, increased Medicaid eligibility under federal health-care reform -- if it's allowed to take effect -- would cover most, if not all, of the seriously mentally ill who now fall in the non-Medicaid category. The state will agree to use the additional funding for a package of services that include job, living-skills and housing programs and expansion of organizations run by and for people living with schizophrenia, bipolar disorder and other mental illnesses. Health officials also will use existing state funding to allow everyone diagnosed with a serious mental illness to receive brand- name psychiatric drugs, regardless of his or her income, beginning July 1. In 2010, the state forced thousands of people to switch to generic medication if they were ineligible for Medicaid. Ann Rider, executive director of the Recovery Empowerment Network, which runs six community drop-in centers in metro Phoenix, said plans for the new funding recognize that there is far more to treating mental illness than medication. Some people can thrive with therapy and other programs that support their recovery without drugs. "Meds are one tool of many, many, many tools to help people recover," Ms. Rider said. "There are so many more options and many more opportunities to help people get back on their feet." In 2010, Gov. Brewer, faced with a brutal recession, called for a repeal of the law requiring the state to provide services to help balance the budget. As a compromise, the sides agreed to a two- year stay in the lawsuit that allowed the state to cut about $50 million in services for people who earned too much to qualify for Medicaid. Hundreds of people with serious mental illnesses dropped out of sight, dozens lost housing and thousands lost access to group and individual therapy, transportation and community centers. Service providers laid off hundreds of case managers. Mental-health-service providers say the new funding is welcome, but people have struggled mightily over the past two years. "I wish the government of Arizona would stop using people like they were yo-yos -- up and down, up and down, services, no services -- just because of how much money they make," said Mitch Klein, CEO of CHEEERS Center, a peer-run Phoenix drop-in agency that serves about 400 people. "Treat people who need help, when they need it." CANADA: "Eminent" Survivor Needed in Claims Process --------------------------------------------------- Kim Pemberton, writing for Vancouver Sun, reports that an "eminent" Canadian who can restore trust in Canada's Indian residential school compensation process should be appointed to help deal with the remaining clients of Calgary law firm Blott and Company, B.C. Supreme Court Justice Brenda Brown was told. The recommendation was made by lawyer Kathleen Mahoney, representing the Assembly of First Nations, at a hearing to decide whether Blott and Company will be able to continue to represent residential school claimants. One name put forward by Ms. Mahoney was Phil Fontaine, a former national chief of the Assembly of First Nations. Mr. Fontaine was the first Indian residential school abuse survivor to speak out publicly and later went on to negotiate the first compensation agreement and the current Indian Residential School Settlement Act. Mr. Fontaine was also part of a class-action suit resulting in Justice Brown ordering an investigation last fall into Blott and Company after concerns the firm did not properly represent claimants in the Independent Assessment Process, which determines how much compensation, if any, they should be awarded for past physical and or sexual abuse. The investigation's findings were revealed in the hearing last week and included evidence the firm had wrongly helped to arrange high-interest loans, charging between 20 and 60 per cent, for some of their clients in anticipation of them receiving awards. The firm represented a total of 4,100 clients -- including 300 British Columbians -- and has completed 1,168 hearings over the last four years. "Phil Fontaine possesses an incredible ability to reach out to [Blott and Company] claim-ants to restore their trust and confidence in the Settlement Act," Ms. Mahoney said. "Going forward, if there is no engagement with aboriginal people the perception in the survival class will be that once again they are dismissed, told what is good for them and what is in their best interests by the non-aboriginal community, much like the native residential system," she said. Ms. Mahoney said an alternative to Fontaine would be retired Ontario Supreme Court justice Rose Boyko. Catherine Coughlan, the lawyer representing the federal government, said the Alberta Law Society effectively suspended David Blott by not allowing him to have direct contact with his clients. However, the law society's plan to allow the firm's remaining clients to continue to be represented by 12 Blott and Company associates was still of some concern. She also said she believes the court should enforce the recommendation from the court-ordered investigation that Blott and Company be responsible for its estimated C$3 million cost of the investigation. She pointed out in the past five years, Blott and Company had been paid more than C$14.5 million through the IAP process. Outside the hearing, IAP chief adjudicator Daniel Ish said there are about 200 lawyers across Canada who represent native claimants at IAP hearings. Some handle only a few cases a year, however he said it was not uncommon to hear of lawyers representing 60 clients a year, which would earn them around C$1.2 million in legal fees. Mr. Ish said some lawyers are taking on 100 clients a year, which he believes is too high a number for them to properly represent. CENTRO RETAIL: High Court Ruling v. Board to Have Wider Impact -------------------------------------------------------------- Sarah Danckert, writing for The Australian, reports that with a AUD200 million settlement in the works, Centro Retail Australia is now free from the costly and embarrassing class action trial over its spectacular near-collapse in 2007. But corporate governance issues raised in the Centro case and in the High Court's ruling against James Hardie's board are likely to have a wider impact. The settlement in the Centro class action came less than a year after the courts found the shopping centre owner's former directors and executives had breached their duties to shareholders in signing off the company's error-riddled accounts. That ruling reverberated in boardrooms despite the directors and executives receiving only a wrist slap from the court for the $3.1 billion accounting oversight. Now, experts say, companies should note that on top of possible directorship bans and six-figure fines, they also face claims that could affect the group's bottom line and directors' fortunes. "Both the James Hardie and Centro cases send a signal to directors that when they sign off on company reports that there can be real and serious consequences if they are not across the detail of what they are signing," said Ben Hardwick -- BHardwick@slatergordon.com.au -- Victorian practice group leader at Slater & Gordon, which launched one of two claims against the shopping centre owner. There is no doubting the seriousness of Centro's situation for shareholders: the company's share price spiralled in early 2008 when its true debt position, clouded by a complex company structure, became known. The company's short-term debt was key to helping Centro Retail grow by more than 300 per cent to AUD26 billion in 2007. But in the year to June 2007 the audit committee met only twice, while the remuneration committee held eight meetings. "It's a sad diversion of interest and duties," UTS Centre for Corporate Governance director Thomas Clarke said. Maurice Blackburn principal Martin Hyde said the Centro class actions raised questions of possible conflicts created by director double-ups on the boards of associated companies, as well as the execution of duties to shareholders. At the time of its near- collapse, the boards of the recently merged Centro Properties and Centro Retail were identical, and questions have been raised about deals the board signed off that were bad for the less indebted Centro Retail. However, UTS's Mr. Clarke said overlap between the boards of the multiple entities in each corporation was often seen to improve efficiency and consistency. "But nonetheless, directors do have duties to each of the entities that they are a board member of. They cannot neglect their duties to any entity in favor of another," Mr. Clarke said. In addition, he said, both cases redefined company officers to include senior managers who had contributed in some way to board information. "Clearly, boards in Australia need to be careful about that, and executives themselves need to be careful about that." A number of captains of industry fear the responsibility that rulings relating to directors' duties have placed too much responsibility on company directors. The issue of personal liability for directors, which was to be tested in the Centro class action after the collapse of the company's move to avoid liability by changing its responsible entity, is also of concern. According to the Australian Institute of Company Directors, about 40 per cent of directors believe legislation imposing liability on directors is bad for their business decisions and willingness to serve on a board. Fiona Shand, the principal of legal and advisory firm Shand & Associates and the Walton Group, and an AICD facilitator, said financial markets and shareholders were making demands that the non-executives could not deliver. "As a result of the gap between expectation and reality, we face the real prospect that we will lose good directors and in these tough economic times we need the best directors, not the best we can get," Ms. Shand said. Despite the warnings, Centro -- the largest landlord of Woolworths and Coles supermarkets nationally -- has been able to recruit talent to its board and executives ranks. Former ANZ Group deputy chief Bob Edgar now leads the board and former Charter Hall Retail chief Steven Sewell is at the helm. Both appointments were warmly welcomed by the market, but Centro still faces headwinds. DOREL JUVENILE: Recalls 868T Safety 1st Toilet and Cabinet Locks ---------------------------------------------------------------- The U.S. Consumer Product Safety Commission and Health Canada, in cooperation with Dorel Juvenile Group (DJG) Inc., of Columbus, Indiana, announced a voluntary recall of about 183,000 toilet locks and 685,000 cabinet locks. Consumers should stop using recalled products immediately unless otherwise instructed. It is illegal to resell or attempt to resell a recalled consumer product. Young children can unexpectedly disengage the toilet locks and gain access to water in the toilet, posing the risk of drowning. The cabinet locks are being recalled because young children can disengage the lock, posing the risk of injury from dangerous or unsafe items stored in the cabinet. DJG has received 110 reports of toilet locks that did not adequately secure the lid, including eight reports of children, under the age of two, who were able to disengage or break the lock. In addition, DJG has received 278 reports of cabinet locks that did not adequately secure the cabinet, including 71 reports of children between the ages of eight months and five years old who were able to disengage the cabinet locks. In one of the reported incidents, a 13-month-old boy swallowed small, toxic beads from a craft kit. The child was admitted to the hospital, observed overnight and released the next day. This recall involves Safety 1st Sure Fit toilet locks with model numbers 48003 and 48103. The toilet lock is attached to the tank behind the lid and is intended to prevent a child's access to the toilet bowl. This recall also involves Safety 1st cabinet slide locks with model numbers 12013 and 12014. The cabinet slide lock is attached to cabinet knobs or handles to prevent access to the contents of the cabinet. Model numbers can be found on the back of the locks. Pictures of the recalled products are available at: http://www.cpsc.gov/cpscpub/prerel/prhtml12/12180.html The recalled products were manufactured in China and sold at Bed, Bath and Beyond, Burlington Coat Factory, Great Beginnings, Home Depot, Target and Walmart from January 2005 through April 2010 for between $8 and $20 for the toilet locks, and from January 2000 through March 2009 for between $2 and $11 for the cabinet locks. Amazon.com sold both locks through April 2012. Consumers should immediately remove the recalled locks and contact DJG for a free replacement lock of a different model. When removing the recalled locks, consumers are urged to immediately store dangerous items out of reach of children and to prevent unsupervised access to bathrooms. For additional information, please contact DJG toll-free at (877) 416-8105 between 8:00 a.m. and 5:00 p.m. Eastern Time Monday through Friday, or visit the firm's Web site at http://www.djgusa.com/. In March 2012, 900,000 Safety 1st Push 'N Snap cabinet locks were recalled due to lock failure. FORTINET INC: Class Action Suit in California Still Pending ----------------------------------------------------------- Fortinet Inc. continues to defend itself from a class action lawsuit filed by a former stockholder in California, according to the Company's February 28, 2012, 10-K filing with the U.S. Securities and Exchange Commission for the fiscal year ended December 31, 2011. In April 2010, an individual, a former stockholder of Fortinet, filed a class action lawsuit against the Company claiming unspecified damages in the California Superior Court for the County of Los Angeles alleging violation of various California Corporations Code sections and related tort claims alleging misrepresentation and breach of fiduciary duty regarding the 2009 repurchase by Fortinet of shares of its stock while it was a privately-held company. The plaintiff is claiming unspecified damages. In September 2010, the Court granted the Company's motion to transfer the case to the California Superior Court for Santa Clara County and the plaintiff has filed an amended complaint in the Superior Court to add individual defendants, among other amendments. Currently the case is in the early stages, and the Company has determined that, as of this time, there is not a reasonable possibility that a loss may be incurred. HONDA: Judge Approves Broken A/C Class Action Settlement -------------------------------------------------------- Jason Grant, writing for The Star-Ledger, reports that a federal judge in New Jersey has approved a nationwide class-action settlement for the current and former owners and lessees of more than 1 million Honda and Acura cars that allegedly suffered from broken air conditioning systems that manufacturers refused to fix under warranty, according to a lawyer representing the class of plaintiffs and court documents. The federal lawsuit was brought in 2008, plaintiffs' lawyer Matthew Mendelsohn said on May 16, and its settlement -- which Mr. Mendelsohn said is valued at more than $40 million -- was approved last month by U.S. District Judge Katherine S. Hayden in Newark. According to Mr. Mendelsohn, the class represented in the suit included more than 2.4 million current and former owners and lessees. Thus far, he added, about 19,000 of them have made claims under the suit's settlement, although he also expects many more to make claims in the future. "I think the result we were able to achieve in this case was very good," he also said, while noting that it is rare for a lawsuit of this kind to be brought nationwide, rather than in an individual state. The lawsuit was filed in Newark by Mr. Mendelsohn's firm, Mazie Slater Katz & Freeman, because the lead plaintiff, Jon Alin, lives in Montville. Mr. Mendelsohn said the settlement, which comes after more than three years in court, provides tens of millions of dollars in reimbursements and vehicle modifications to be paid for by Honda and Acura, more than $2.5 million in fees and expenses awarded by Judge Hayden to the attorneys representing the settlement class, and approximately $2 million in administrative expenses to be paid by Honda and Acura. Still, he said, two class members have filed objections to the settlement, and that payouts under the settlement are stayed pending resolution of those appeals. According to Mr. Mendelsohn, the cars named in the lawsuit were the 2005 to 2007 Honda Odyssey, the 2002 to 2004 Honda CR-V, and the 2004 Acura TSX. "The problem with the cars was the air conditioning systems was failing prematurely, and in some cases was resulting in catastrophic failures," Mr. Mendlesohn said. "For instance, on the Honda CR-V, the air conditioning compressor would implode and shoot debris throughout the entire air conditioning system, so that it would require replacement of associated air conditioning parts, not just the failed part itself." A call made on May 16 to one of the lead defense lawyers for Honda was not returned. JPMORGAN CHASE: Finkelstein & Krinsk Files Class Action ------------------------------------------------------- Finkelstein & Krinsk LLP and Murray Frank LLP on May 16 disclosed that a class action has been commenced in the United States District Court for the Southern District of New York on behalf of purchasers of JPMorgan Chase & Co. common stock during the period between April 13, 2012 and May 10, 2012. The case number is 1:12- cv-03879. If you wish to serve as lead plaintiff, you must move the Court no later than July 13, 2012. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, or to join this class action, please contact plaintiff's counsel, William R. Restis, Esq. of Finkelstein & Krinsk at 877-493-5366 or 619-238-1333, or via e-mail at wrr@classactionlaw.com 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 alleges violations of the Securities Exchange Act of 1934 that occurred when the Defendants issued materially false and misleading statements regarding the losses and risk of loss to the Company arising from massive bets on derivative contracts related to credit indexes reflecting interest rates on corporate bonds. These derivative bets went horribly wrong, resulting in billions of dollars in lost capital for the Company and billions more in lost market capitalization for JPMorgan shareholders. As alleged in the lawsuit, JPMorgan's credit index derivative positions were so large that they generated market rumors and press coverage in the weeks leading up to the Company's April 13, 2012 earnings conference call with investors. Specifically, the lawsuit alleges that instead of disclosing the extremely risky nature of JPMorgan's derivative bets, and the actual losses that had been incurred at the time, Defendants falsely characterized the derivative positions as mere "hedging" strategies. JPMorgan's CEO, Defendant James "Jamie" Dimon, went so far as to call press reports about the Company's derivative positions a "complete tempest in a teapot." In truth, the Defendants misrepresented the credit index based derivative positions as hedges to imply that any losses would be offset by gains in other JPMorgan investments, thus implying that they posed no risk to the Company. This was false. Defendants' public statements were materially false and misleading when made because they failed to disclose, among other things: (a) JPMorgan's positions in the credit index-based derivative products were not for "hedging" purposes or to "offset other exposures" but were in fact trades on the Company's own account intended to generate income because they were not matched to offset other JPMorgan investments; (b) the Company had already incurred significant and material losses in the credit index-based derivatives when the market learned of JPMorgan's positions, and by the April 13, 2012 conference call with investors; and (c) the Company faced potentially tens of billions of losses resulting from the credit index based derivatives, downgraded credit, and loss of reputational capital. As a result of defendants' false statements, JPMorgan's securities traded at artificially inflated prices during the Class Period. On May 10, 2012, JPMorgan filed an SEC Form 10-Q for the quarter ended March 31, 2012, and after the market close, held a business update conference call with analysts and investors. During the May 10th call, Defendants revealed that the Company had experienced a "slightly more than $2 billion trading loss under synthetic credit positions." As a result of this disclosure, the market price of JPMorgan's common stock fell from $40.74 per share at the market close on May 17, May 10, 2012, to $36.96 per share on May 11, 2012, falling more than 9% on extraordinary volume of 217 million shares. Finkelstein & Krinsk is a national law firm representing institutional investors and consumers in complex class action cases. Contact: William R. Restis, Esq. FINKELSTEIN & KRINSK LLP Telephone: 877-493-5366 E-mail: wrr@classactionlaw.com LOUISIANA CITIZENS: Spends $1.6 Million to Fight Class Action ------------------------------------------------------------- Ted Griggs, writing for The Advocate, reports that over the past eight years, Louisiana Citizens Property Insurance Corp. has spent or budgeted nearly $1.6 million to fight a class-action lawsuit over tardy claims adjustments following the hurricanes of 2005. More than $600,000 of the total came this year as the state-backed insurer scrambled to prevent plaintiffs from seizing more than $100 million from Citizens. "It's kind of tough to tell how much we're going to spend," Citizens Chief Executive Officer Richard Robertson said. In the last month, Citizens' attorneys have argued various issues in state district courts and state courts of appeal in Baton Rouge and Gretna. Citizens' attorneys have also asked the U.S. Supreme Court to overturn a Jefferson Parish state district court's $92.9 million judgment. Since the 2009 ruling, legal interest has increased the total to nearly $105 million. Louisiana taxpayers could be responsible for the entire amount. Under state law, Citizens has the power to levy special assessments on property insurance companies, which pass the fee along to policyholders. Property owners get a tax credit for the special assessment, and that money comes from the state's general fund. According to records provided by Citizens, eight law firms have worked on the lawsuit known as the Oubre class action. The lawsuit was filed in October 2005 by policyholders who claimed Citizens had taken more than 30 days to begin adjusting claims after hurricanes Katrina and Rita. Three years ago, a 24th Judicial District Court judge ruled that Citizens had to pay $5,000 -- the maximum penalty under state law -- to each of the more than 18,500 policyholders affected. Legal interest is adding more than $10,000 each day to the original judgment. The plaintiff attorneys could get as much as 40 percent of the total. Citizens appealed the original ruling and won in the 5th Circuit, but in December the Louisiana Supreme Court overturned the appellate court and reinstated the original judgment. Since then, Citizens has fought to stop the plaintiffs from seizing the insurer's cash to cover the judgment. Insurance Commissioner Jim Donelon, who oversees Citizens, said he hopes the legal maneuvering doesn't end anytime soon. Citizens is now arguing that it is a state agency, which means its assets can't be seized unless Citizens' board agrees or the state Legislature passes a law requiring the payment, Mr. Donelon said. Citizens hopes the issue will eventually end up before the state Supreme Court, and that the court will rule in the insurer's favor. If Citizens wins, the insurer will settle the lawsuit, but a favorable Supreme Court ruling would provide "substantial leverage" in negotiating a deal, Mr. Donelon said. The law firms and the amounts they have been paid or that Citizens has budgeted for their work, according to the insurer's records, include: -- Bienvenu, Foster, Ryan & O'Bannon LLC, $269,850. The New Orleans firm originally acted as Citizens' general counsel and handled litigation for the insurer until 2008. -- Hailey, McNamara, Hall, Larman & Papale LLP, $719,353 from 2008 to present. The New Orleans-based firm began working for Citizens by handling claims litigation but took over the Oubre litigation after Bienvenu Foster decided against continuing as general counsel. -- Gibson, Dunn & Crutcher LLP, $450,000. The Washington, D.C., firm is handling the U.S. Supreme Court lawsuit. -- Breazeale, Sachse & Wilson LLP, $97,933. The Baton Rouge firm is working with Citizens on a number of legal issues. The firm helped put together a proposed $50 million settlement in the class action, which the Citizens board rejected. -- Wegmann & Babst LLC, $14,231. The New Orleans firm is advising Citizens on state constitutional issues and appeals, including whether the state-backed agency is exempt from having its assets seized. -- Metairie-based Bernard, Cassisa, Elliot & Davis, $8,496. The firm's most recent bill was November 2011. -- New Iberia-based Haik, Minvielle and Grubs LLP billed Citizens $7,258 but hasn't worked on the case since 2008. -- Chalmette-based Dysart & Tabary LLC billed Citizens $5,220 but hasn't worked on the case since 2008. -- Paige Harper, Citizens' general counsel, said most attorneys are paid a flat rate of $150 an hour. The exceptions are Hailey, McNamara; Breazeale Sachse; and Wegmann & Babst. The class-action rate for Hailey, McNamara attorneys with less than 10 years of experience is $125 per hour, Harper said. The rate for attorneys with 10 or more years of experience is $175 per hour. Wegmann & Babst is also paid $175 per hour, she said. Breazeale Sachse partners are paid $275 per hour, while associates are paid $150 per hour. Mr. Robertson said those rates were set before he became Citizens' chief executive, but he believes all of the hourly fees are well below what the firms charge their other clients. According to the state Attorney General's Office, there are limits on the hourly rates for legal services, although there can be exceptions. In general, the maximum hourly fee is $175. The Attorney General may grant exceptions on a case-by-case basis, such as hiring attorneys with a recognized area of legal expertise, according to spokeswoman Amanda Papillion Larkins. Although Citizens and plaintiffs' attorneys have discussed settling the lawsuit on a number of occasions, Mr. Robertson said a settlement appears unlikely at this point. "I wouldn't suggest that settlement is absolutely out of the question, but I wouldn't think that there would be a lot of opportunity at this point," Mr. Robertson said. MEYER CORP: Recalls 4,600 Circulon 13-Piece Cookware Sets --------------------------------------------------------- The U.S. Consumer Product Safety Commission, in cooperation with Meyer Corporation U.S., of Vallejo, California, announced a voluntary recall of about 4,600 Circulon Cookware Sets. Consumers should stop using recalled products immediately unless otherwise instructed. It is illegal to resell or attempt to resell a recalled consumer product. The glass lid used with the 5-quart covered saute pan can crack, break or shatter, posing a laceration hazard to consumers. Meyer has received 65 reports of broken or shattered lids. No injuries have been reported. The defective lid is 11 inches in diameter with a rubber and stainless steel handle and a metal rim. The code "IMCP1108" is stamped on the outside of the metal rim. The lid is part of the 13-Piece Circulon Premier Professional cookware set. The cookware is aluminum and stainless steel with rubber and stainless steel handles. In addition to the covered saute pan, the sets include: 1-quart and 3-quart saucepans, a 4-quart saucepot, an 8-quart stockpot, 8.5-, 10- and 12-inch French skillets and four additional glass lids. Pictures of the recalled products are available at: http://www.cpsc.gov/cpscpub/prerel/prhtml12/12182.html The recalled products were manufactured in China and Thailand and sold exclusively at Costco retail stores and Costco.com from about October 2011 through March 2012 for about $200 for the complete set. Consumers should stop using the 11-inch glass lid and contact Circulon customer service to receive a replacement lid. For additional information, contact Circulon customer service at (800) 326-3933, Monday through Friday between 7:00 a.m. and 5:00 p.m. Pacific Time, or visit the firm's Web site at http://www.circulon.com/ MURRUMBIDGEE IRRIGATION: Yenda Assoc. Intends to Pursue Class Suit ------------------------------------------------------------------ ABC Riverina reports that the organizer of a proposed class action against Murrumbidgee Irrigation (MI) says he is determined to pursue the company, even though he is a shareholder. Paul Rosetto says a preliminary report on how irrigation infrastructure affected the floods has been given to the company and Griffith City Council. Mr. Rosetto says a meeting last weekend was expected to formalize a group to pursue a class action, as the future of Yenda is at stake. He says MI could survive a class action. "I've heard that they've lifted their public liability insurance cover so I believe they should be able to handle it," he said. "Secondly I'm hoping that their management should be able to wake up for want of a better word. "A lot of Yenda residents are very concerned about their future. "They don't know whether to re-invest in their homes, because if that escape stays blocked, and the report says this, it could happen all over again next year." Mr. Rosetto says around 200 people attended the initial meeting of the Yenda Association and he expected a similar number on May 19. Mr. Rosetto says the report strengthens the case for a class action against MI. "This is just the tip of the iceberg," he said. "Our next step is after we've incorporated the association to conduct a full hydraulic computer modelling report which will look at the what if scenario of what would have happened if the escape had of been open. "And then we'll be seeking compensation on the difference. "There is a physical blockage there. "MI is the only entity that is responsible for those earthworks and management of the canals, and the simple fact that you have an irrigation system in an area which runs across natural watercourses, means that MI is also by the physical nature of their canals responsible for flooding and drainage management." NELNET INC: Subsidiary Continues to Defend Suit in N.J. ------------------------------------------------------- Peterson's Nelnet LLC, a subsidiary of Nelnet Inc., continues to defend itself from a putative class action lawsuit filed in New Jersey, according to the Company's February 28, 2012, 10-K filing with the U.S. Securities and Exchange Commission for the fiscal year ended December 31, 2011. On January 4, 2011, a complaint against Peterson's Nelnet, LLC, a subsidiary of the Company, was filed in the U.S. federal District Court for the District of New Jersey. The complaint alleges that Peterson's sent six advertising faxes to the named plaintiff in 2008 to 2009 that were not the result of express invitation or permission granted by the plaintiff and did not include certain opt out language. The complaint also alleges that such faxes violated the federal Telephone Consumer Protection Act purportedly entitling the plaintiff to $500 per violation, trebled for willful violations for each of the six faxes. The complaint further alleges that Peterson's had sent putative class members more than 10,000 faxes that violated the TCPA, amounting to more than $5 million in statutory penalty damages and more than $15 million if trebled for willful violations. The complaint seeks to establish a class action for two different classes of plaintiffs: Class A, to whom Peterson's sent unsolicited fax advertisements containing opt out notices similar to those contained in the faxes received by the named plaintiff; and Class B, to whom Peterson's sent fax advertisements containing opt out notices similar to those contained in the faxes received by the named plaintiff. As of February 28, 2012, the District Court has not established or recognized any class. On February 16, 2011, Peterson's filed a motion to dismiss the complaint based on a lack of federal question or diversity jurisdiction with respect to the complaint, which was denied by the District Court on April 15, 2011, shortly after a similar motion to dismiss that had been granted in an unrelated case involving alleged TCPA violations related to faxes was reversed by the U.S. Court of Appeals for the Third Circuit, which has jurisdiction over the District Court. On April 29, 2011, Peterson's filed an answer to the complaint, but also filed a motion for reconsideration of the motion to dismiss. On May 17, 2011, the Appeals Court granted a petition for rehearing of the motion to dismiss in the unrelated TCPA fax case, and on May 31, 2011, Peterson's filed a motion for stay pending the outcome of that rehearing. On September 12, 2011, the motion for stay was granted, and the motion for reconsideration was denied by the District Court. On September 20, 2011, the named plaintiff filed a motion for reconsideration of the District Court's order, and at a hearing on November 22, 2011 the District Court ordered counsel to submit a proposed order to modify the stay for a limited third party subpoena, which the District Court approved on December 5, 2011. On January 18, 2012, the U.S. Supreme Court issued a decision in an unrelated TCPA case which held that federal courts have federal question jurisdiction over private causes of action under the TCPA. On January 20, 2012, the named plaintiff requested that the stay be lifted on the basis of the Supreme Court's decision, and on January 25, 2012, the District Court denied that request since the stay is based on the outcome of the Appeals Court rehearing, and there has been no decision by the Appeals Court with respect to such rehearing. Peterson's intends to continue to contest the suit vigorously. Due to the preliminary stage of this matter and the uncertainty and risks inherent in class determination and the overall litigation process, the Company believes that a meaningful estimate of a reasonably possible loss, if any, or range of reasonably possible losses, if any, cannot currently be made. NEW YORK: Class Action to Challenge Ambulette Contract ------------------------------------------------------ Granny has been kicked to the curb, say ambulette fleet owners fighting the state's new private dispatch system, Chuck Bennett, writing for New York Post, reports. "It is a mess," said Gary Farberov, head of the newly formed Ambulette Para-Transit Coalition. "They are robbing us of patients, they are not paying us on time, and the call center isn't even operating," Mr. Farberov said. Two weeks ago, Atlanta-based LogistiCare Corp. started implementing its $80 million three-year contract to coordinate all non-emergency Medicaid-financed transportation in Brooklyn. It will take over dispatching for the rest of the city by October. But the 200 local fleet owners, who own the vans that take the elderly and disabled to medical visits, scheduled a meeting for May 14 to discuss a class-action lawsuit against the state. "We are seeking an injunction to stop the contract and have the state sit down and work out a fair contract," Mr. Farberov said, citing a list of complaints that includes being dispatched to wrong addresses. That can leave elderly patients waiting hours for a ride. The state Department of Health said LogistiCare will make the ambulette industry more efficient while rooting out fraud and waste. Department spokesman Jeffrey Hammond said the new dispatch will provide better services to Medicaid enrollees while "achieving estimated savings of $77 million dollars over three years." PNC BANK: Judge Allows Overdraft Fee Class Action to Proceed ------------------------------------------------------------ Paul J. Gough, writing for Pittsburgh Business Times, reports that a class-action lawsuit can proceed against PNC Bank in connection with the overdraft fees that are charged for checking accounts. Bloomberg Businessweek reported that the lawsuit against PNC, a unit of PNC Financial Services Group Inc., is one of a number against banks from customers who say it arranged transactions in a customer's accounts from highest to lowest and caused more overdrafts, the magazine said. PNC denies wrongdoing but did not comment for the article. Other banks -- including Citizens Bank, JPMorgan Chase & Co. and Toronto Dominion Bank, have settled similar cases. In February, a judge gave final approval to a settlement in another similar case involving National City Bank, which PNC purchased in 2008. PORTFOLIO RECOVERY: Still Faces Suit Over TCPA Violation -------------------------------------------------------- Portfolio Recovery Associates, Inc. continues to defend itself from a putative consolidated class action lawsuit brought against the Company for allegedly violating the Telephone Consumer Protection Act, according to the Company's February 28, 2012, 10-K filing with the U.S. Securities and Exchange Commission for the fiscal year ended December 31, 2011. The Company has been named as defendant in the following five putative class action cases, each of which alleges that it violated the Telephone Consumer Protection Act by calling consumers' cellular telephones without their prior express consent: Allen v. Portfolio Recovery Associates, Inc., Case No. 10-cv-2658, instituted in the United States District Court for the Southern District of California on December 23, 2010; Meyer v. Portfolio Recovery Associates, LLC, Case No. 37-2011-00083047, instituted in the Superior Court of California, San Diego County on January 3, 2011; Frydman v. Portfolio Recovery Associates, LLC, Case No. 11-cv-524, instituted in the United States District Court for the Northern District of Illinois on January 31, 2011; Bartlett v. Portfolio Recovery Associates, LLC, Case No. 11-cv- 0624, instituted in the United States District Court for the Northern District of Georgia on March 1, 2011; and Harvey v. Portfolio Recovery Associates, LLC, Case No. 11-cv-00582, instituted in the United States District Court for the Middle District of Florida on April 8, 2011. Each of the foregoing complaints allege violations of the TCPA, and seek damages, injunctive relief and attorneys' fees. On December 21, 2011, the United States District Panel on Multi-District Litigation entered an order transferring these matters into one consolidated proceeding in the United States District Court for the Southern District of California, Case No. 11-md-02295. These matters have only recently been consolidated, no litigation has proceeded on whether or not to certify a class or on the merits of the allegations, and no demand has been made. Further, even if a class is ultimately certified, further discovery must take place in order to determine its size. Therefore; any potential loss for these and other similar matters, cannot be estimated at this time; however, in the event that a class is eventually certified and the Company neither settles nor prevails on these matters, its damages, when aggregated, could potentially fall within a range which could be in excess of its established liability, and could be material to its financial condition, results of operations or cash flows for any particular reporting period. PORTER ATHLETIC: Recalls 44 Climbing Ropes Due to Fall Hazard ------------------------------------------------------------- About 44 Porter Athletic Climbing Ropes were voluntarily recalled by Porter Athletic, a division of Litania Sports Group, Inc., of Champaign, Illinois, in cooperation with the U.S. Consumer Product Safety Commission. Consumers should stop using the product immediately unless otherwise instructed. It is illegal to resell or attempt to resell a recalled consumer product. The climbing rope can slip through the clamp that connects at the top, posing a fall hazard for climbers. Porter has received three reports of the rope slipping through the clamp, including one that resulted in back and wrist injuries. This recall involves two models of Porter Athletic climbing ropes. Model number 00118 is a white soft dacron rope with vinyl boot end sold in 12', 16', 20' and 24' lengths. Model number 00119 is a white soft dacron rope with vinyl boot end and rubber knots every 12" sold in 12', 16', 20' and 24' lengths. A picture of the recalled products is available at: http://www.cpsc.gov/cpscpub/prerel/prhtml12/12734.html The recalled products were manufactured in the United States of America and sold online at http://www.porterathletic.com/,by telephone and direct sales through authorized Porter Athletic distributors nationwide from September 2009 through September 2011 for between $387 and $877. Consumers should immediately stop using these recalled climbing ropes. Porter Athletic is repairing the recalled ropes at no cost. Shipping will be provided free of charge to the consumer. The firm is contacting customers directly. For more information, contact Porter Athletic toll-free at (888) 277-7778 between 8:00 a.m. and 5:00 p.m. Central Time Monday through Friday, or visit the firm's Web site at http://www.porterathletic.com/ U.S. STEEL: 7th Cir. Orders Dismissal of Overtime Class Action -------------------------------------------------------------- Joseph Celentino at Courthouse News Service reports that the United States Court of Appeals for the Seventh Circuit ruled that steel workers are not entitled by statute to overtime pay for time spent changing into work clothes and walking from locker rooms to their work site, ordering a class action against U.S. Steel Corporation dismissed. An 800-member class of former and current hourly employees at U.S. Steel's Gary, Indiana plant filed suit under the Fair Labor Standards Act of 1938. The complaint alleged that the company had violated the act by failing to compensate them for changing and travel time, despite express provisions in their collective bargaining agreement precluding payment for these activities. According to the class, the statutory provisions of FLSA override the union agreement. U.S. District Judge Robert Miller divided the question, ruling that the act does not require compensation for clothes-changing time. Judge Miller certified the question of whether or not workers should be compensated for travel time to the 7th Circuit, which granted review. While FLSA explicitly excludes from overtime "any time spent changing clothes or washing at the beginning or end of each workday which was excluded from measured working time . . . by the express terms or by custom or practice under a bona fide collective bargaining agreement applicable to the particular employee," the changing involves putting on "safety equipment" rather than "clothes," voiding the exception. The 7th Circuit's opinion, penned by Judge Richard Posner, included a photograph of a steel worker "modeling" his daily outfit. Judge Posner has frequently included photographs in his opinions, including his recent use of a photo of Bob Marley to illustrate the concept of dreadlocks. The safety function of the clothing does not void the exemption, Judge Posner ruled. "Protection-against sun, cold, wind, blisters, stains, insect bites, and being spotted by animals that one is hunting-is a common function of clothing, and an especially common function of work clothes worn by factory workers. It would be absurd to exclude all work clothes that have a protective function . . . and thus limit the exclusion largely to actors' costumes and waiters' and doormen's uniforms," he wrote. All federal appeals courts except the 9th Circuit, which the opinion criticized as an "outlier," have issued similar rulings. Proceeding to the issue of travel time, the 7th Circuit ruled that employers do not have to pay workers for time spent walking from the locker room to their work site. The court ejected plaintiffs' contention that the activity was outside of an exception to the Portal-to-Portal Act, which generally requires employers to pay for time spent traveling between "principle activities" while at work. Changing clothes is not a "principal activity," the three-judge panel determined. Judge Posner explained the paradox that would be created under the plaintiffs' interpretation: "Suppose it is 100 yards from the plant entrance to the locker room and another 100 yards to the work station. On the plaintiffs' view, traversing the second 100 yards is compensable, though traversing the first 100 yards is not, but if the locker room were adjacent to the work station none of the workers' travel time would be compensable even though the amount of walking they'd be doing would be identical. What sense could that make?" The opinion noted that Congress had specifically added exceptions to the FLSA, which explicitly allow travel time pay to be negotiated by unions and management, in order to eliminate disruptions caused by the Supreme Court rulings that FLSA required overtime payment for the activities. The travel time ruling creates a circuit split on the issue; the 6th Circuit recently released an opposite ruling in Franklin v. Kellogg Company. Noting the Circuit split, the 7th Circuit circulated its opinion to all active judges before release. No judge voted to rehear the case en banc. "If the workers have a legal right to be paid for [time spent at the plant, but not producing steel], the company will be less willing to pay them a high wage for the time during which they are making steel; it will push hard to reduce the hourly wage so that its overall labor costs do not rise," Judge Posner wrote, acknowledging the practical problems with an employee-friendly ruling. "The steel industry is international and highly competitive, and unions temper their wage demands to avoid killing the goose that lays the golden eggs. They don't want the American steel industry to go where so much American manufacturing has gone in recent years-abroad." The opinion concluded by explaining that the 7th Circuit was willing to rule in opposition to the Department of Labor's amicus briefs in favor of the plaintiffs because its recommendation was essentially political. Judge Posner noted that the department's position on whether donning safety equipment must count towards overtime had flip-flopped between the Clinton, Bush, and Obama administrations. "It would be a considerable paradox if before 2001 the plaintiffs would win because the President was a Democrat, between 2001 and 2009 the defendant would win because the President was a Republican, and in 2012 the plaintiffs would win because the President is again a democrat. That would make a travesty of the principal of deference to interpretations of statutes by the agencies responsible for enforcing them," he concluded. The 7th Circuit directed the district court to dismiss the case. U.S. STEEL: Still Faces Class Action Suit in Illinois ----------------------------------------------------- United States Steel Corp. continues to defend itself from class action lawsuits filed by purchasers of its steel products, according to the Company's February 28, 2012, 10-K filing with the U.S. Securities and Exchange Commission for the fiscal year ended December 31, 2011. In a series of lawsuits filed in federal court in the Northern District of Illinois beginning September 12, 2008, individual direct or indirect buyers of steel products have asserted that eight steel manufacturers, including U. S. Steel, conspired in violation of antitrust laws to restrict the domestic production of raw steel and thereby to fix, raise, maintain or stabilize the price of steel products in the United States. The cases are filed as class actions and claim treble damages for the period 2005 to present, but do not allege any damage amounts. U. S. Steel will vigorously defend these lawsuits and does not believe that it has any liability regarding these matters. WEST VIRGINIA: Needs to Step Up Education System Overhaul --------------------------------------------------------- The Associated Press reports that thirty years after a judge ordered West Virginia to overhaul public education funding, employees of the school system at the heart of the case say they've seen little progress. In May 1982, Ohio County Circuit Judge Arthur Recht declared the system of financing public schools unconstitutional. He ordered an overhaul of the education system, creation of measurable performance standards and a mechanism to equalize educational opportunities between rich and poor counties. The ruling stemmed from a class-action lawsuit filed on behalf of Janet Pauley, a mother of five who attended a PTA meeting in Lincoln County and was appalled to find a crumbling four-room elementary school with broken windows, broken chairs and an open sewer running through the playground. The decision led to creation of the state School Building Authority to oversee major construction projects and the Office of Education Performance Audits to monitor schools' progress. It also tweaked the school aid funding formula and promoted equalization of teacher pay. Lincoln County schools maintenance director Dana Smith, who has worked for the school system since the year after the landmark decision, said that while the case probably made possible the construction of the $30 million consolidated Lincoln County High School, little else has changed. "Did the Recht decision equalize funding for us? No, it didn't," Ms. Smith told the Charleston Gazette. "We lose people all the time to Cabell, Boone, Kanawha, Putnam -- they all pay more. We're surrounded by people who've got more money than we've got. Boone and Logan have their coal, Cabell's got all kinds of industry, and we've got the school system. That's our biggest employer in this county -- the school system." Birdie Gandy, treasurer of Lincoln County schools and a longtime school system employee, agreed. "I don't really know anything that we have benefited from on the Recht decision, directly," Ms. Gandy said. "I can't point to anything and say, 'This is a result of the Recht decision.'" Ms. Smith said Lincoln County was home to three of the four high schools that the state said were deteriorating. "We've converted them to middle schools, but they're the same buildings," Ms. Smith said. "We've still got teachers leaving the county because they can get a pay raise somewhere else. We just don't have the tax base here, so we don't have the educational opportunities." Lincoln was short 13 full-time teachers this year. Teacher pay in the county is $900 below the state average, and nearly every surrounding county pays more. Putnam County pays $3,951 more than Lincoln, and Kanawha County pays $2,231 more. In May 1982, Ohio County Circuit Judge Arthur Recht declared the system of financing public schools unconstitutional and ordered the state to equalize opportunities between rich and poor counties. These funding discrepancies are fueled by local excess levies -- a tax on property that goes beyond the state school funding formula, said Dave Mohr, a senior policy analyst for the West Virginia House of Delegates Education Committee. Many counties rely on excess or special levies to fund teacher salaries and basic education needs, such as heating and cooling system repairs. In most cases, there is nothing special or extra about what the funds cover -- counties consistently use excess levies as funding streams for essentials. "Excess levies were not included in the school funding formula, which was a big issue in the case," Mr. Mohr said. "Excess levies are considered something that counties decide on their own." The Recht decision advocated for a statewide excess levy to try to equalize funding, but that proposal proved politically unfeasible and was shot down. Kenna Seal, former director of the Office of Education Performance Audits, doesn't focus so much on financing of schools as on what schools do with the resources they have. He said he saw major changes in Lincoln County because of the Recht decision. "They're no longer on the bottom of the totem pole," Ms. Seal said. "They've got high-quality schools, and they've got someone monitoring them to make sure they've got high-quality schools. I know it's significantly better. Look at the test scores, look at the school facilities -- this is the Recht decision coming to fruition." The OEPA audited Lincoln County's school system in 1999 and found deficiencies in more than 200 areas, including student performance, school curriculum, facilities, accounting practices and hiring practices. The school system was declared to be in a state of emergency when the state Department of Education took it over in 2000. Twelve years later, Lincoln County continues to suffer from low test scores, but there has been a general upward arc, Ms. Seal said. Curriculum has improved. Facilities have gotten better. Hiring discrepancies are a rarity. But there's a long way to go. In 2011, only 39 percent of the 2,240 students in Lincoln County were proficient in reading, according to state Department of Education data. That was below the statewide average of 47 percent proficiency. In math, only 35 percent of the county's students were proficient -- 8 percentage points below the state average. Ms. Smith, who has two sons in the Lincoln County school system, views the modest improvements against the backdrop of what could have been had the Recht decision been fully implemented and financed. "Equalizing the system's a tough thing to do, but we were hoping that more would have been done," he said. YASSER AWAAD: Faces Class Action Over Medical Malpractice --------------------------------------------------------- Tara Edwards, writing for WXYZ, reports that Dearborn-based neurologist Dr. Yasser Awaad is facing a class action. Marie Woolen said she sunk into a depression after finding out the doctor she sent her son to diagnosed him with a condition he didn't have. "It's been devastating," said Ms. Woolen. She's one of hundreds of people involved in the class action. The class action lawsuit has hundreds of parents claiming the doctor diagnosed their children with epilepsy. They believe the heavy medication their kids were placed on has caused physical and psychological damage. "My hopes and dreams have been shattered," said Ms. Woolen. "He can't be a doctor, he can't be a lawyer . . . his memory is completely distorted." "My one daughter's pills were like 500 and something dollars. There were some times where I would literally cry. What do you do? Do you eat? Do you buy the medicine . . . I'd rather buy the medicine," said parent Laura Abdel-Sater. Now, a new bill is being introduced by Senator Arlan Meekhof, Senator John Moolenaar, and Senator Virgil Smith and it has the parents worried. Attorney Brian Benner said it is not tough enough. Parents involved in the class action lawsuit are concerned the bill would allow other doctors who commit malpractice to walk away with no consequences. "This bill makes a mockery out of the justice system. Whatever happened to patient safety? We should have patient safety bills," said attorney Benner, representing the parents involved. "It's like if you go around and say you didn't do it . . . it's okay," said Laura Abdel-Sater. A representative from Senator Moolenaar's office told 7 Action News they were in the early stages in the process of legislation. Still, some mothers who say they have been affected by Dr. Awaad are uneasy. "I'm worried if this bill passes my son will not have any recourse," said Ms. Woolen. Parents involved in the class action suit said they will continue to fight for their children and other kids who could become the victims of malpractice. "He shouldn't have no type of license inflicting this much pain on this many children," said Ms. Abdel-Sater. "What I'd like to see happen is Dr. Awaad's license to be taken away, because he's taken advantage of the most vulnerable of our society and they don't want to see this happen to anyone else," said Mr. Benner. Meanwhile, Mr. Benner and Washington D.C based attorney Nathan Finch are still collecting discoveries in the class action lawsuit. The hope to go to trial sometime next year. * CANADA: Courts Concerned Over Quality of Class Cert. Evidence --------------------------------------------------------------- Barry Glaspell, writing for Canadian Lawyer, reports that Canadian courts are increasingly concerned about the quality of evidence at class action certification hearings. As a result, first steps are being made towards Daubert-like rules of admissibility. Daubert refers to a trilogy of Supreme Court of the United States decisions establishing admissibility standards for expert evidence -- judicial gatekeeping. A particular goal is to ensure expert evidence is relevant, reliable, and the product of a sound methodology. A 2010 Seventh Circuit Court of Appeals ruling, American Honda Motor Company Inc. v. Allen, held that a full Daubert review is required if an expert's evidence is critical to class certification. Last year, SCOTUS, in Wal-Mart Stores Inc. v. Dukes, suggested the same without having to finally decide the issue. So in the U.S., anecdotal evidence is out; class certification judges are to engage in a rigorous evidentiary analysis entailing some overlap with a claim's merits. This increased scrutiny across the border on certification issues has not gone unnoticed in Canada. Some Canadian lawyers have been skirting basic rules of evidence for years -- seeking to establish each of the identifiable class, common issue, and preferable procedure requirements without a robust evidentiary record. These deficiencies have generally fallen into three overlapping categories: -- Class counsel's own evidence on contested points; -- hearsay evidence; and -- inadmissible expert evidence. Class Counsel as Witness Class counsel are not in a reasonable position to be both lawyer and witness on the class certification motion. Provincial rules of professional conduct proscribe lawyers from submitting affidavit evidence on contentious issues. Exceptions have been developed where affidavits deal with purely formal or uncontroverted matters. Documents attached to a lawyer's affidavit, purporting to deal with substantive matters that strike at the core of the certification motion, are not purely formal or uncontroverted matters. Having class counsel be cross-examined, and challenged on their credibility, potentially compromises their role as counsel and their duties to the court. It raises concerns about the proper administration of justice. And legal argument belongs in a brief -- not a lawyer's affidavit! Hearsay Evidence Class certification affidavits must be confined to a statement of facts within the personal knowledge of the deponent or to other evidence the deponent could give if testifying as a witness in court. An affidavit may contain statements of the deponent's information and belief if, but only if, the source of the information and the fact of the belief are specified. Deponents often fail to identify the source of information or to offer any rationale for a belief in information put forward from unidentified sources. It is not credible to accept a general assertion at the outset of a class certification affidavit as to belief in all information thereafter deposed. Failing to attest to belief in specific facts and documents, particularly when no source is provided for each document, is not a technical objection -- it is a fundamental flaw and the offending paragraphs are subject to being struck. To be admitted for the truth of their contents, a document must be shown to be what it purports to be or a true copy of the original and signed or written by the person by whom it purports to be signed or written. It is appropriate to exclude documents from evidence unless the party can properly authenticate them or establish that they ought to be admitted pursuant to a recognized hearsay rule exception. Business records are subject to particular requirements of proof under provincial evidence acts. Downloads from the internet uploaded to class certification affidavits pose serious difficulties -- the affiant in most cases could not possibly attest to a belief in the truth of their contents or to authenticate them. Under Canadian case law, reliability of web site information depends on various factors including careful assessment of its sources, independent corroboration, consideration as to whether it might have been modified from what was originally available, and assessment of the objectivity of the person placing the information online. When these factors cannot be ascertained, little or no weight will be given. Such documents often contain inadmissible triple hearsay, legal or factual opinion, argument, and advocacy. Opposing counsel have no practical opportunity to cross-examine the author of the document or regarding its context. Expert Evidence The third area where Canadian courts are more closely scrutinizing evidence at or prior to certification is "expert" evidence -- frequently filed by persons not so qualified and on topics not suitable for such evidence. Our courts are increasingly vigilant against impermissible attempts to introduce expert evidence through an unqualified lay witness. Opinion evidence can only be tendered through a properly qualified expert. The role of drawing inferences and conclusions is that of the court, not that of the deponent. An affidavit from a non-expert must not contain opinion evidence, legal or factual argument, or advocacy. For example, in a case involving medical or scientific issues of causation, it is necessary to adduce expert evidence to establish a reasonable basis in fact for the existence of a common issue appropriate for certification. In Williams v. Canon Canada Inc., an Ontario judge rejected the purported expertise of a "jack-of- all-trades" purporting to be an internet analyst. Daubert Moves to Canada It is too early to say Daubert-like rules are likely to be applied in Canada in the near future. But Canadian class certification courts are starting to exercise an important evidentiary gatekeeping role. Class certification requirements must be satisfied by evidence meeting the usual criteria for admissibility. Inadmissible evidence including "expert" and lawyers' own, is now being struck in an effort to focus energies on key certification issues in play. Where there are serious concerns with evidence put forward on certification, it is appropriate to address the issue by way of a pre-certification motion. Parties should not be put to the task of preparing responding materials addressing inadmissible evidence. As one Ontario judge recently stated, the rules of evidence and of procedure are designed to promote determination of proceedings on their merits -- to screen out unreliable evidence and to ensure each party is given a fair hearing -- all having regard to concerns of efficiency and economy. Canadian courts, recognizing the importance of ensuring only admissible evidence, may be relied upon when considering the merits of a motion for certification, have repeatedly struck improper affidavits and opinion evidence. This is a very positive development -- the better evidence is at certification, the more likely the access to justice and judicial economy objectives will be met in any particular case. * Experts Says Brinker Meal & Rest Break Ruling No Cure-All ----------------------------------------------------------- Dan Verel, writing for Northbay Business Journal, reports that recent state Supreme Court decision has greatly clarified the long contentious issue of when and how employers must provide meal and rest breaks -- or at least the opportunity for meal and rest breaks -- but employers still need to think carefully about the matter, employment law experts said. The case, Brinker Restaurant Corp. vs. the California Supreme Court, affects thousands of employers in the state and perhaps million of employees, many in the service industry. But while employment law attorneys in the North Bay echoed the notion that the verdict is, overall, an employer-friendly decision, they cautioned that it is no cure-all and that there is always room for interpretation. "The number one impact of Brinker was that it validated the positions that most attorneys and the labor commission had taken for a long time," said Richard Rybicki, who heads Napa-based employment and labor firm Rybicki & Associates. "Employers need to provide but not require employees to take breaks." The issue has vexed employers, many of whom dealt with a steady flow of class-action wage suits because of disputes related to whether the employer was required to force workers to take rest and meal breaks. The ruling put much of that to rest, though, saying that employers are required to offer 30-minute breaks but the employees are free to decide how they use that time, even if they opt out of the break and continue working. "The employer is not obligated to police meal breaks and ensure work thereafter is performed," Associate Justice Kathyrn Werdegar wrote in the majority opinion. "The contention was really driven by a lot of wage and hour class actions. Plaintiffs thought employers should drag employees out by the ear to take breaks," said Shane Anderies, a partner at Anderies & Gomes, an employment and labor law firm with offices in Santa Rosa and San Francisco. That's no longer the case, but Mr. Anderies and Mr. Rybicki both said issues could still arise, and that employers should not let their guard down because of the perceived favorable nature of the ruling. "You only need to show that you offered a break period, but the court threw some wrinkles into it," Mr. Rybicki said. "An employer can't create a workflow that interferes with someone to take a break. And that's a problem in some industries where there is no way for the employer to change the workflow. So employers who have a work flow that will naturally interfere with the ability to take a break will have to think ahead. Service industry employees at restaurants and bars, for example, often work off of tips, which could be viewed as an incentive to not take breaks. Similarly, if a manufacturer paid employees on a per-piece rate, that could also be a disincentive for employees, Mr. Rybicki said, adding that element of the law could provide enough room for further litigation. "I think there will be a significant amount of litigation over the question of what employers or activities are incentives to not take rest periods," he said. Mr. Anderies agreed that the ruling didn't eliminate that possibility, but said a key difference is the overall policy that the ruling creates on a practical side versus individual employers possibly violating the law. "There will be factual disputes, but this is based on policies," he said. "Do I think attorneys and litigants are going the make the same arguments in different forms? Absolutely." He also noted that certain industries have certain rules that may not be as applicable. "Everyone hates the response 'It depends,' but it does. It depends on certain industries and certain facts," he said. Both Messrs. Anderies and Rybicki said employers should look at their policies and adjust them as needed. "Just because it's a favorable ruling, employers still need to have a handbook and have to affirmatively assure employees of the policies," Mr. Anderies said. * Lawyers Recommend IPO Insurance to Clients After Class Actions ---------------------------------------------------------------- Oliver Suess and Carolyn Bandel, writing for Bloomberg News, report that investor lawsuits filed in the wake of share sales by Groupon Inc. and Deutsche Telekom AG are boosting the appeal of insurance for public offerings. Almost 19 percent of the 3,510 initial public offerings on a U.S. stock exchange between 1996 and 2009 were defendants in at least one U.S. securities class-action, according to Cornerstone Research. Groupon, the biggest online coupon company that has slumped by more than half since its November IPO, is being sued by an investor after the firm reported a "material weakness" in its financial controls on March 30. "Shareholders have been getting more trigger-happy in suing companies for damage claims," said Niels Joehnk, who heads financial lines at German insurance broker Schunck Group in Munich. "Therefore lawyers that help prepare an IPO are typically recommending IPO insurance to their clients." While the IPO market hasn't returned to 2007 levels, this month's landmark offering by Facebook Inc. may kick-start sales shelved amid Europe's debt crisis. That may boost the $1 billion IPO insurance market as insurers, including Allianz SE, Zurich Insurance Group AG and Chubb Corp., sell more protection to firms, their executives and bankers against claims relating to mistakes in prospectuses and marketing presentations. "Demand for IPO insurance is on the rise again," said Hamburg- based Dennis Sander, who is responsible for the coverage at Chubb in Germany. "A successful major IPO, such as Facebook, could open the door for other share sales, if the European debt crisis remains under control." Facebook CEO Mark Zuckerberg met with would-be investors on May 7 ahead of an IPO planned for later this month. The social networking site plans to raise as much as $11.8 billion, the biggest ever IPO for an Internet company. Jonathan Thaw, a spokesman for the Menlo Park, California-based company, declined to comment on whether Facebook has purchased IPO insurance. The "vast majority" of share sales have prospectus liability insurance, said Jochen Koerner, a member of the executive board in Germany and Austria at Marsh & McLennan Cos., the world's second- biggest insurance broker. "Sellers as well as other parties involved need to make sure they are covered for more litigious shareholders and a higher complexity of risks that need to be addressed in the IPO prospectus," he said. "We are getting an increasing number of requests for information on IPO insurance." The market for IPO insurance is "$1 billion globally or even more," said Markus English, a European financial lines manager at Zurich-based insurer Ace Ltd. As with directors and officers insurance, Public Offering of Securities Insurance doesn't cover fraudulent behavior. The price of the typically three to six-year policies ranges from 0.4 percent to 10 percent of the amount covered, depending on the assessed risk, according to insurers surveyed by Bloomberg. Sky Deutschland AG expects its prospectus and D&O policies will cover shareholder damage claims relating to offering documents for its 2005 IPO and 2007 capital increase, according to the German Pay-TV broadcaster's 2011 annual report. The firm controlled by Rupert Murdoch's News Corp. also expects "any associated cost, in particular legal costs," to be covered by insurers, Sky said in the report. Sky agreed to a EUR14.5 million ($19 million) settlement with institutional investors in October 2010. Joerg Allgaeuer, a spokesman for Sky Deutschland, declined to comment further. About 50 insurers offer IPO coverage with five or six market leaders, said Carsten Wiesenthal, who is responsible for financial lines coverage in Germany at Munich-based Allianz SE's industrial insurance unit. Since most companies limit their individual IPO coverage to EUR25 million, larger share sales are covered by a group of insurers for as much as EUR300 million, he said. "An IPO is a highly exposed moment in the life of a company and that needs to be covered," said Mr. Wiesenthal. "A lot of IPOs that were put on hold over the last years are now being revisited, which could boost demand for IPO insurance." RAG Stiftung, majority owner of Evonik Industries AG, said on March 23 it plans an IPO of the chemical maker in the first half, after shelving the offering last year. Rheinmetall AG, the maker of KS Kolbenschmidt engine pistons and a partner in Germany's Puma battle tank, will sell shares in its automotive division in the first half of this year to focus on its defense business. Rheinmetall declined to comment on whether the company will buy IPO insurance. Deutsche Telekom AG, Europe's second-largest phone company, is being sued by about 17,000 investors over its sale of 200 million shares in a third public offering in 2000. Investors are seeking about EUR80 million as they claim that Deutsche Telekom's share sale prospectus contained dozens of mistakes. They allege Deutsche Telekom improperly reported the value of real estate and didn't in a timely way disclose its intention to acquire U.S. phone company VoiceStream in 2000. The Frankfurt Higher Regional Court has scheduled a ruling for May 16. Deutsche Telekom declined to comment. Groupon was sued on April 3 by investor Fan Zhang, who alleged that the deal-of-the-day coupon company's officers, directors and underwriters misled investors about its business performance prior to its IPO. Julie Mossler, a spokeswoman for Chicago-based Groupon, declined to comment while Mr. Zhang's lawyers didn't reply to e-mails and phone calls from Bloomberg News. "Every company involved with the public offering of securities is liable for the information it discloses and provides to potential investors," said Christoph Leuzinger, global chief underwriting officer for Management Liability at Zurich Insurance Group AG. "It is a cyclical product, when the economy recovers, you see more IPOs which will automatically lead to more IPO insurance." ********* S U B S C R I P T I O N I N F O R M A T I O N Class Action Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. Noemi Irene A. Adala, Joy A. Agravante, Ivy B. Magdadaro, Psyche A. Castillon, Julie Anne L. Toledo, Christopher Patalinghug, Frauline Abangan and Peter A. Chapman, Editors. Copyright 2012. All rights reserved. ISSN 1525-2272. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The CAR subscription rate is $575 for six months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Peter Chapman at 240/629-3300. * * * End of Transmission * * *