/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/120801.mbx C L A S S A C T I O N R E P O R T E R Wednesday, August 1, 2012, Vol. 14, No. 151 Headlines AMAZON: Court's Denial of Penguin's Arbitration Bid Challenged AMERICAN HONDA: Faces Class Action Over Defective Paint ANASAZI GROUP: Accused of Offering Illegal Loans in Illinois APPLE INC: iPod and iTunes-Related Class Suits Pending in Calif. AURORA LOAN: Faces Class Action Over Illegal Foreclosures BANK OF AMERICA: Faces Class Action in N.Y. Over LIBOR Fraud BANK OF AMERICA: Class Settlement Gets Preliminary Court Okay BANKATLANTIC BANCORP: Gets Favorable Ruling in Class Action BIG LOTS: Two Law Firms Commence Securities Class Action BOEING CO: Appeals in Securities Class Suit Remain Pending BOEING CO: Still Awaits Rulings on Summary Judgment Bids BOEING CO: Still Defends Two ERISA-Violation Suits in Kansas BRISTOL-MYERS: Continues to Defend Suits Over Inflated AWP BRISTOL-MYERS: Defends Class Suit Over Abilify* Co-Pay Program CELANESE CORP: Settlement of Plumbing Suits in Canada Pending DOLLAR TREE: Blumenthal Nordrehaug & Bhowmik Files Class Action DYNEX CAPITAL: Faces Allegheny Cty. Real Estate Owners' Suit ENSLIN & SON: Recalls 314 Pounds of Sausage Products GENERAL MILLS: Faces Class Action Over Misleading Product Labels HIGHMARK INC: Inks MoU with Royal Mile to Settle Class Action HUXTABLE'S KITCHEN: Recalls 5,610 Lbs. of BBQ Chicken Salads LOCKHEED MARTIN: Still Defends Suit Over 401(k) Plans in Illinois LOCKHEED MARTIN: Still Defends Securities Suit in New York LSG SKY: Recalls 735 Pounds of Chicken Wrap Products MATTEL INC: Appeal From $170-Mil. Damages Award Remains Pending MOTOROLA SOLUTIONS: Appeals in "Silverman" Suit Remain Pending MSLGROUP: Plaintiffs in Discrimination Suit to Send Notices NORTHROP GRUMMAN: Sup. Ct. Review in "Skinner" Suit Not Sought OMNICARE INC: Appeal in Consolidated Securities Suit Pending OMNICARE INC: Seeks to Dismiss Consolidated Securities Suit PANERA BREAD: Awaits Final Okay of $5MM Settlement of Two Suits PANERA BREAD: Ex-Employees' Suit Settled and Dismissed in June PICCADILLY FINE: FSIS Lists Stores That Got Recalled Products RADIOSHACK CORP: Mediation Sessions in Illinois Suit Unsuccessful RADIOSHACK CORP: "Brookler" Suit Remanded to Calif. Appeals Court RADIOSHACK CORP: Song-Beverly Act Violations Suits Still Pending RADIOSHACK CORP: Mulls Effect of "Brinker" Decision on "Ordonez" RETAIL PROPERTIES: Faces Shareholder Class Action in Illinois REYNOLDS AMERICAN: "Collora" Suit Remains Stayed in Missouri REYNOLDS AMERICAN: Awaits Decision on "Sateriale" Suit Appeal REYNOLDS AMERICAN: Six Class Suits vs. Unit Pending in Canada REYNOLDS AMERICAN: Aug. Hearing on Fee Issues in "Scott" Suit Set REYNOLDS AMERICAN: "Lights" Class Suits vs. Unit Still Pending REYNOLDS AMERICAN: "Howard" Class Suit Remains Stayed in Ill. REYNOLDS AMERICAN: "Jones" Suit vs. Units Remains Pending in Mo. REYNOLDS AMERICAN: JTI's Indemnification Bid Remains Pending REYNOLDS AMERICAN: Minn. Court Dismissed "Thompson" Suit in June SUPERVALU INC: Independent Grocers Lose Class-Action Status Bid SYNGENTA CROP: Officials Mum on Proposed Class Action Settlement TICKETMASTER: Wheel Chair Users File Discrimination Class Action TONY DOWNS: Recalls 70,500 Lbs. of Canned Chicken Products VISA INC: Vermont Retail Association Opposes Fee Settlement WALGREEN CO: Wins Bid to Dismiss Generic Drug Class Action XCEED FINANCIAL: Settles Overdraft Fee Class Action ********* AMAZON: Court's Denial of Penguin's Arbitration Bid Challenged -------------------------------------------------------------- Andrew Albanese, writing for Publishers Weekly, reports that lawyers for Penguin on July 25 filed a petition with the U.S. Second Circuit Court of Appeals challenging district Judge Denise Cote's June 27 decision denying Penguin's motion to compel arbitration for Amazon and Barnes & Noble e-book customers in the consumer class action case derived from an alleged e-book price- fixing scheme. In a separate development, the federal government said it will file its motion seeking final judgment against the three settling publishers in its federal antitrust suit by August 3. In its original motion, filed March 2, Penguin sought to stay the consumer class action case against them, arguing that Amazon and B&N e-book purchasers expressly agreed in their license agreements to "arbitrate any claims arising from their purchases of e-books." Judge Cote, however, denied the motion, finding that even though the agreements might be "otherwise enforceable," it was invalid in this matter, because it would prevent e-book customers from "vindicating their rights under the Sherman Act." Judge Cote also found that class action was preferable in the case, because it would be "economically irrational" to force the vast number individual e-book purchasers to litigate claims of a pricing conspiracy individually in arbitration proceedings. Meanwhile, the settlement involving three of the five alleged conspirators in the federal governments price-fixing case (Simon & Schuster, HarperCollins, and Hachette) is entering its next phase, following the DoJ's filing its response to public comments on the proposed settlement. A DoJ spokesperon told PW they will file a motion asking the court to approve the proposed final judgment by August 3. It is unclear, however, how quickly the final settlement terms will go into effect. After the government files its motion, there will be more rounds of filings, including responses from the publishers, although deadlines and dates for those subsequent filings were unclear at this time. AMERICAN HONDA: Faces Class Action Over Defective Paint ------------------------------------------------------- Courthouse News Service reports that Honda 2003-07 Accords and Civics have defective paint that delaminates, a class action claims in Federal Court. A copy of the Complaint in Nguyen, et al. v. American Honda Motor Company, Inc., Case No. 12-cv-06426 (C.D. Calif.), is available at: http://www.courthousenews.com/2012/07/27/HondaCA.pdf The Plaintiffs are represented by: Roy A. Katriel, Esq. THE KATRIEL LAW FIRM, PLLC 12707 High Bluff Drive, Suite 200 San Diego, CA 92130 Telephone: (858) 350-4342 E-mail: rak@katriellaw.com - and - Michael D. Braun, Esq. BRAUN LAW GROUP, P.C. 10680 W. Pico Blvd., Suite 280 Los Angeles, CA 90064 Telephone: (310) 836-6000 E-mail: service@braunlawgroup.com ANASAZI GROUP: Accused of Offering Illegal Loans in Illinois ------------------------------------------------------------ Khalilah Starks and Tiffany White and the class members described below v. Tim Coppinger, doing business as Anasazi Group and Anasazi Services, Case No. 2012-CH-28887 (Ill. Cir. Ct., Cook Cty., July 27, 2012) is brought to secure redress from usurious loans made by the Defendants to Illinois residents over the Internet. The Plaintiffs allege that Mr. Coppinger offered and made illegal loans to Illinois residents and collected the loans by debiting bank accounts located in Cook County and the state of Illinois. The Plaintiffs are residents of Illinois. Mr. Coppinger is a resident of Kansas City, Missouri, and does business as Anasazi Group and Anasazi Services. He is in the business of soliciting and making high-interest loans to persons residing in Illinois and elsewhere. The Plaintiffs are represented by: Daniel A. Edelman, Esq. Cathleen M. Combs, Esq. James O. Latturner, Esq. Zachary A. Jacobs, Esq. EDELMAN, COMBS, LATTURNER & GOODWIN, LLC 120 S. LaSalle Street, 18th Floor Chicago, IL 60603 Telephone: (312) 739-4200 Facsimile: (312) 419-0379 E-mail: courtecl@edcombs.com ccombs@edcombs.com jlatturner@edcombs.com APPLE INC: iPod and iTunes-Related Class Suits Pending in Calif. ---------------------------------------------------------------- The antitrust class action lawsuits over Apple Inc.'s iPod and iTunes remains pending, according to the Company's July 25, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended June 30, 2012. The related cases in The Apple iPod iTunes Antitrust Litigation (formerly Charoensak v. Apple Computer, Inc. and Tucker v. Apple Computer, Inc.); and Somers v. Apple Inc. have been filed on January 3, 2005, July 21, 2006, and December 31, 2007, in the United States District Court for the Northern District of California on behalf of a purported class of direct and indirect purchasers of iPods and iTunes Store content, alleging various claims including alleged unlawful tying of music and video purchased on the iTunes Store with the purchase of iPods and unlawful acquisition or maintenance of monopoly market power under Sections 1 and 2 of the Sherman Act, the Cartwright Act, California Business & Professions Code Section 17200 (unfair competition), the California Consumer Legal Remedies Act and California monopolization law. Plaintiffs are seeking unspecified compensatory and punitive damages for the class, treble damages, injunctive relief, disgorgement of revenues and/or profits and attorneys fees. Plaintiffs are also seeking digital rights management free versions of any songs downloaded from iTunes or an order requiring the Company to license its digital rights management to all competing music players. The cases are currently pending. AURORA LOAN: Faces Class Action Over Illegal Foreclosures --------------------------------------------------------- Courthouse News Service reports that Aurora Loan Services, Nationstar Mortgage, and Quality Loan Service Corp. illegally foreclose on homes by falsifying mortgage documents, robosigning and overstating the amount due and fees, a class action claims in Los Angeles Superior Court. BANK OF AMERICA: Faces Class Action in N.Y. Over LIBOR Fraud ------------------------------------------------------------ Courthouse News Service reports that a plaintiff class composed of all lending institutions either headquartered or with a majority of their operations in New York State, claim they suffered damages as a result of Bank of America Corp.'s allegedly fraudulent conduct related to the United States Dollar London Interbank Offered Rate. The case is Berkshire Bank v. Bank of America Corp.; Bank of America N.A. filed in the United States District Court for the Southern District of New York. BANK OF AMERICA: Class Settlement Gets Preliminary Court Okay ------------------------------------------------------------- Travis Sanford at Courthouse News Service reports that Bank of America customers won preliminary court approval of a $20 million settlement over claims the bank signed up and charged credit card customers for a useless credit-protection service. Credit card customers had filed a class action accusing the bank of signing them up for its Credit Protection Plus service without their permission or through deceptive marketing and giving them nothing meaningful in return for the monthly fees they were charged. Bank of America admitted to no wrongdoing in the proposed settlement, but agreed to wind down the service. In the meantime, the bank agreed to waive or eliminate several restrictions it had imposed before enrollees could receive benefits, including employer verification of involuntary unemployment or disability and waiting periods before the service's benefits kicks in. The $20 million will be put into a fund administered by lawyers who brought the action. Customers who say they were enrolled in the program without their consent or through deceptive advertising will be eligible for up to $50 from the fund, while those who say they were denied the benefits they expected can get up to $100. Customers will have until Feb. 26, 2013, to submit claim forms to receive a distribution from the fund. The proposed settlement, which was preliminarily approved by U.S. District Judge Thelton Henderson in San Francisco, limits attorneys' fees to $6.6 million. The final settlement approval hearing is scheduled for Jan. 14, 2013. A copy of the Order Preliminarily Approving Settlement, Conditionally Certifying Class for Settlement Purposes, Approving Form and Manner of Class Notice, and Setting Date for Final Approval of Settlement in In Re Bank of America Credit Protection Marketing and Sales Practices Litigation, Case No. 11-md-02269 (N.D. Calif.), is available at: http://www.courthousenews.com/2012/07/27/BoA%20Approval.pdf BANKATLANTIC BANCORP: Gets Favorable Ruling in Class Action ----------------------------------------------------------- Jessica M. Karmasek, writing for Legal Newsline, reports that a federal appeals court ruled in a private securities fraud class action last week that the evidence was "insufficient" to support a finding of loss causation, an essential element of such a lawsuit. On July 23, the U.S. Court of Appeals for the Eleventh Circuit affirmed a decision by the U.S. District Court for the Southern District of Florida in favor of defendant BankAtlantic Bancorp Inc. State-Boston Retirement System, a shareholder and lead plaintiff in the case, brought a private securities fraud class action against Bancorp. At trial, State-Boston sought to prove that Bancorp had misrepresented the level of risk associated with commercial real estate loans held by its subsidiary, BankAtlantic. BankAtlantic Bancorp Inc. is a publicly traded bank holding company incorporated and headquartered in Florida. BankAtlantic is a federally chartered bank that offers consumer and commercial banking and lending services throughout Florida. From Oct. 19, 2006 to Oct. 25, 2007, State-Boston alleged Bancorp fraudulently misled the public about the deteriorating credit quality of BankAtlantic's commercial real estate portfolio. That portfolio included land acquisition and development loans; land acquisition, development and construction loans; and builder land bank, or BLB, loans. Each of these categories comprised loans to investors to buy land for initial development followed by sale for further development. The BLB loans were made to investors after they had sold options to purchase lots to homebuilders. Non-BLB loans involved no such pre-disbursement option contracts. After the trial, the district court submitted the case to the jury on a verdict form seeking general verdicts and answers to special interrogatories under Federal Rule of Civil Procedure 49(b). When the jury returned a verdict partially in favor of State- Boston, Bancorp moved for judgment as a matter of law under Federal Rule of Civil Procedure 50. Perceiving an inconsistency between two of the jury's interrogatory answers, the district court discarded one of them and granted the motion on the basis of the remaining findings. Eleventh Circuit Judge Gerald Bard Tjoflat wrote that this was done in error. "When a court considers a motion for judgment as a matter of law -- even after the jury has rendered a verdict -- only the sufficiency of the evidence matters," he wrote. "The jury's findings are irrelevant." However, the Eleventh Circuit noted that despite the error, it can affirm the lower court's decision "for any reason supported by the record." "In this case, we conclude that the evidence was insufficient to support a finding of loss causation, an element required to make out a securities fraud claim under Rule 10b-5," Judge Tjoflat wrote in the court's 35-page ruling. The Eleventh Circuit explained that to support a finding that Bancorp's misstatements were a "substantial factor" in bringing about its losses, State-Boston had to present evidence that would give a jury some indication -- "however rough" -- of how much of the decline in Bancorp's stock price resulted not from the fraud but from the general downturn in the Florida real estate market. "None of its evidence excluded the possibility that class members' losses resulted not from anything specific about BankAtlantic's commercial real estate portfolio that Bancorp hid from the public, but from market forces that it had warned of -- and that would likely have caused significant losses for an investor in any bank with a significant credit portfolio in commercial real estate in Florida in 2007," Judge Tjoflat wrote. "Bancorp is therefore entitled to judgment as a matter of law." BIG LOTS: Two Law Firms Commence Securities Class Action -------------------------------------------------------- Leon Worden, writing for SCVNews.com, reports that two law firms, one in New York and one in Atlanta, announced last week they have commenced securities class-action proceedings against Big Lots, joining other firms that took similar steps earlier this month. The firms accuse Big Lots, an Ohio-based discount retailer with approximately 1,500 store locations including one in Canyon Country, of misleading investors by allegedly making false claims about its business outlook. A statement from Morgan & Morgan of New York City claims the false statements violate the Securities Exchange Act of 1934. It says Big Lots "knew but concealed from the investing public that: (a) Big Lots's consumables line -- which represented a third of Big Lots's business -- was deteriorating; and (b) the Company's electronic products business was being adversely affected as shoppers were increasingly seeking online deals for big ticket products, thus adversely affecting the Company's margins and prospects." Another law firm, headed by former SEC attorney Willie Briscoe, claims that Big Lots directors personally profited when the allegedly unloaded shares at inflated prices. "As a result of defendants' alleged false statements," Mr. Briscoe's firm said, "Big Lots stock traded at artificially inflated prices during the Class Period, reaching a high of $46.81 per share on March 27, 2012. Several of Big Lots' executives took advantage of these inflated prices and unloaded hundreds of thousands of shares of Big Lots stock for millions of dollars of personal gain." Morgan & Morgan mentions an April 23 press release from Big Lots in which the retailer announced that its first quarter same-store sales to come in lower than previously projected. "On this news, Big Lots's stock fell $11 per share to close at $34.71 per share the following day," Morgan & Morgan said. On the same news, Zacks Equity Research downgraded Big Lots stock to "underperform." Big Lots hasn't commented. BOEING CO: Appeals in Securities Class Suit Remain Pending ---------------------------------------------------------- An appeal and a cross-appeal relating to the dismissal of a securities class action lawsuit commenced in Illinois remain pending, according to The Boeing Company's July 25, 2012, Form 10- Q filing with the U.S. Securities and Exchange Commission for the quarter ended June 30, 2012. On November 13, 2009, plaintiff shareholders filed a putative securities fraud class action against The Boeing Company and two of the Company's senior executives in federal district court in Chicago. This lawsuit arose from the Company's June 2009 announcement that the first flight of the 787 Dreamliner would be postponed due to a need to reinforce an area within the side-of- body section of the aircraft. Plaintiffs contended that the Company was aware before June 2009 that the first flight could not take place as scheduled due to issues with the side-of-body section of the aircraft, and that the Company's determination not to announce this delay earlier resulted in an artificial inflation of the Company's stock price for a multi-week period in May and June 2009. On March 7, 2011, the Court dismissed the complaint with prejudice. On March 19, 2012, the Court denied the plaintiffs' request to reconsider that order. On April 12, 2012, plaintiffs filed a Notice of Appeal, and on April 25, 2012, Boeing filed a Notice of Cross-Appeal based on the district court's failure to award sanctions against the plaintiffs. No briefing schedule has been set yet. In addition, plaintiff shareholders have filed three similar shareholder derivative lawsuits concerning the flight schedule for the 787 Dreamliner that closely track the allegations in the putative class action lawsuit. Two of the lawsuits were filed in Illinois state court and have been consolidated. The remaining derivative lawsuit was filed in federal district court in Chicago. Following the March 2012 decision confirming the dismissal of the class action complaint, the plaintiffs in these derivative lawsuits agreed to voluntarily dismiss their lawsuits without prejudice. Plaintiff in the federal case filed a Notice of Voluntary Dismissal on June 26, 2012, and the court dismissed the case on June 28, 2012. Plaintiffs in the consolidated state case filed a Notice of Voluntary Dismissal on July 3, 2012, and the Company expects that case to be dismissed shortly. BOEING CO: Still Awaits Rulings on Summary Judgment Bids -------------------------------------------------------- On October 13, 2006, The Boeing Company was named as a defendant in a lawsuit filed in the U.S. District Court for the Southern District of Illinois. Plaintiffs, seeking to represent a class of similarly situated participants and beneficiaries in The Boeing Company Voluntary Investment Plan (the VIP), alleged that fees and expenses incurred by the VIP were and are unreasonable and excessive, not incurred solely for the benefit of the VIP and its participants, and were undisclosed to participants. The plaintiffs further alleged that defendants breached their fiduciary duties in violation of Section 502(a)(2) of the Employee Retirement Income Security Act of 1974 ("ERISA"), and sought injunctive and equitable relief pursuant to Section 502(a)(3) of ERISA. During the first quarter of 2010, the Seventh Circuit Court of Appeals granted a stay of trial proceedings in the district court pending resolution of an appeal made by Boeing in 2008 to the case's class certification order. On January 21, 2011, the Seventh Circuit reversed the district court's class certification order and decertified the class. The Seventh Circuit remanded the case to the district court for further proceedings. On March 2, 2011, plaintiffs filed an amended motion for class certification and a supplemental motion on August 7, 2011. Boeing's opposition to class certification was filed on September 6, 2011. Plaintiffs' reply brief in support of class certification was filed on September 27, 2011. This issue is fully briefed and awaits district court determination. Boeing's motions for summary judgment based on ERISA's statute of repose and for summary judgment on the merits were both filed on December 21, 2011. Plaintiffs' oppositions to the merits and statute of limitations motions were filed on February 6, 2012. Boeing reply briefs were filed on March 7, 2012. No further updates were reported in the Company's July 25, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended June 30, 2012. The Company says it cannot reasonably estimate the range of loss, if any, that may result from this matter given the current procedural status of the litigation. BOEING CO: Still Defends Two ERISA-Violation Suits in Kansas ------------------------------------------------------------ The Boeing Company continues to defend two class action lawsuits in Kansas, according to the Company's July 25, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended June 30, 2012. The Company has been named as a defendant in two pending class action lawsuits filed in the U.S. District Court for the District of Kansas, each related to the 2005 sale of the Company's former Wichita facility to Spirit AeroSystems, Inc. (Spirit). The first action involves allegations that Spirit's hiring decisions following the sale were tainted by age discrimination, violated the Employee Retirement Income Security Act of 1974 ("ERISA"), violated the Company's collective bargaining agreements, and constituted retaliation. The case was brought in 2006 as a class action on behalf of individuals not hired by Spirit. During the second quarter of 2010, the court granted summary judgment in favor of Boeing and Spirit on all class action claims. Following certain procedural motions, plaintiffs filed a notice of appeal to the Tenth Circuit Court of Appeals on August 10, 2011, and are seeking to stay all remaining individual claims in the district court pending resolution of the appeal. Plaintiffs' appellate brief was filed on November 14, 2011. Boeing's appellate brief was filed on January 20, 2012. Oral argument was held on May 10, 2012. The second action, initiated in 2007, alleges collective bargaining agreement breaches and ERISA violations in connection with alleged failures to provide benefits to certain former employees of the Wichita facility. Written discovery closed by joint stipulation of the parties on June 6, 2011. Depositions concluded on August 18, 2011. Plaintiffs' partial motion for summary judgment was filed on December 9, 2011. Boeing's opposition and dispositive motions were filed on February 10, 2012. All briefing was completed on June 4, 2012. Spirit has agreed to indemnify Boeing for any and all losses in the first action, with the exception of claims arising from employment actions prior to January 1, 2005. While Spirit has acknowledged a limited indemnification obligation in the second action, the Company believes that Spirit is obligated to indemnify Boeing for any and all losses in the second action. The Company cannot reasonably estimate the range of loss, if any, that may result from this matter given the current procedural status of the litigation. BRISTOL-MYERS: Continues to Defend Suits Over Inflated AWP ---------------------------------------------------------- Bristol-Myers Squibb Company continues to defend itself from lawsuits alleging inflated average wholesale prices of its products, according to the Company's July 25, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended June 30, 2012. The Company, together with a number of other pharmaceutical manufacturers, has been a defendant in a number of private class actions as well as lawsuits brought by the attorneys general of various states. In these actions, plaintiffs allege that defendants caused the Average Wholesale Prices (AWPs) of their products to be inflated, thereby injuring government programs, entities and persons who reimbursed prescription drugs based on AWPs. The Company is a defendant in four state attorneys general lawsuits pending in state courts around the country. Beginning in August 2010, the Company was the defendant in a trial in the Commonwealth Court of Pennsylvania (Commonwealth Court), brought by the Commonwealth of Pennsylvania. In September 2010, the jury issued a verdict for the Company, finding that the Company was not liable for fraudulent or negligent misrepresentation; however, the Commonwealth Court judge issued a decision on a Pennsylvania consumer protection claim that did not go to the jury, finding the Company liable for $28 million and enjoining the Company from contributing to the provision of inflated AWPs. The Company has moved to vacate the decision and the Commonwealth has moved for a judgment notwithstanding the verdict, which the Commonwealth Court denied. The Company and the Commonwealth have appealed the decision to the Pennsylvania Supreme Court. The Company is currently scheduled to proceed to trial in Mississippi in mid-2013. BRISTOL-MYERS: Defends Class Suit Over Abilify* Co-Pay Program -------------------------------------------------------------- Bristol-Myers Squibb Company is defending a class action lawsuit challenging the legality of its Abilify* co-pay assistance program, according to the Company's July 25, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended June 30, 2012. In March 2012, the Company and its partner Otsuka Pharmaceutical Co., Ltd., were named as co-defendants in a private class action lawsuit filed by union health and welfare funds in the U.S. District Court for the Southern District of New York (SDNY). Plaintiffs are challenging the legality of the Abilify* co-pay assistance program under the Federal Antitrust and the Racketeer Influenced and Corrupt Organizations laws, and seeking damages. The Company has a worldwide commercialization agreement with Otsuka to codevelop and copromote ABILIFY* for the treatment of schizophrenia, bipolar mania disorder and major depressive disorder. The Company says it is not possible at this time to reasonably assess the outcome of this litigation or its potential impact on the Company. CELANESE CORP: Settlement of Plumbing Suits in Canada Pending ------------------------------------------------------------- CNA Holdings LLC ("CNA Holdings"), a U.S. subsidiary of Celanese Corporation, which included the U.S. business now conducted by the Ticona business that is included in the Advanced Engineered Materials segment, along with Shell Oil Company ("Shell"), E.I. DuPont de Nemours and Company ("DuPont") and others, has been a defendant in a series of lawsuits, including a number of class actions, alleging that plastic resins manufactured by these companies that were utilized by others in the production of plumbing systems for residential property were defective for this use and/or contributed to the failure of such plumbing. Based on, among other things, the findings of outside experts and the successful use of Ticona's acetal copolymer in similar applications, CNA Holdings does not believe Ticona's acetal copolymer was defective for this use or contributed to the failure of the plumbing. In addition, in many cases, CNA Holdings' potential future exposure may be limited by, among other things, statutes of limitations and repose. In November 1995, CNA Holdings, DuPont and Shell entered into national class action settlements in the Cox, et al. v. Hoechst Celanese Corporation, et al., No. 94-0047 (Chancery Ct., Obion County, Tennessee) matter. The time to file claims against the class has expired and the entity established by the court to administer the claims was dissolved in September 2010. In addition between 1995 and 2001, CNA Holdings was named as a defendant in various putative class actions. The majority of these actions have now been dismissed. As a result the Company recorded $59 million in reserve reductions and recoveries from associated insurance indemnifications during 2010. The reserve was further reduced by $4 million during the year ended December 31, 2011, following the dismissal of the remaining U.S. case (St. Croix, Ltd., et al. v. Shell Oil Company d/b/a Shell Chemical Company, Case No. XC-97-CR-467, Virgin Islands Superior Court) which was appealed during the three months ended September 30, 2011. As of June 30, 2012, the class actions in Canada are subject to a pending class settlement that would result in a dismissal of those cases. The Company does not believe the Possible Loss associated with the remaining matters is material. The Company recorded recoveries and reductions in legal reserves related to plumbing actions to Other (charges) gains, net in the unaudited interim consolidated statements of operations. No further updates were reported in the Company's July 25, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended June 30, 2012. DOLLAR TREE: Blumenthal Nordrehaug & Bhowmik Files Class Action --------------------------------------------------------------- On July 20, 2012, the class action employment law firm Blumenthal Nordrehaug & Bhowmik filed a wage and hour lawsuit against Dollar Tree Stores, Inc. alleging they misclassified the Plaintiffs, who worked as Store Managers, as exempt from overtime and consequently failed to pay them for all hours worked. Oscar Molina and Sylvia Garcia, et al. vs. Dollar Tree Stores, Inc., Case No. 30-2012- 00585338-CU-OE-CJC is currently pending in the Superior Court for the State of California for the County of Orange. The wage and hour Complaint alleges that the Plaintiffs, who worked as Store Managers, mostly engaged in non-exempt tasks through the day, including working the retail register, taking inventory, and handling customer service requests. The Complaint further alleges that the Store Managers had only a minor role supervising employees, alleging that they had no authority to hire, fire, or promote employees, train employees, or discipline employees. Moreover, the Complaint alleges that "the Plaintiffs were 'Store Managers' in name only, because they did not have managerial duties or authority." Managing partner, Norman B. Blumenthal, stated "large corporations will often use misclassification schemes to get the benefit of all their employees' work while only paying them for some it." The California overtime law firm Blumenthal, Nordrehaug & Bhowmik represents employees of large corporations in various wage and hour lawsuits. DYNEX CAPITAL: Faces Allegheny Cty. Real Estate Owners' Suit ------------------------------------------------------------ Dynex Capital, Inc. is facing a lawsuit brought on behalf of a proposed class of certain real estate owners in Allegheny County, Pennsylvania, according to the Company's July 25, 2012, Form 8-K filing with the U.S. Securities and Exchange Commission. The Company, its subsidiary GLS Capital, Inc. ("GLS"), and the County of Allegheny, Pennsylvania ("Allegheny County"), are named defendants in a putative class action lawsuit filed in June 2012 in the Court of Common Pleas of Allegheny County, Pennsylvania. The proposed class in this action consists of owners of real estate in Allegheny County whose property is or has been subject to a tax lien filed by Allegheny County that Allegheny County either retained or sold to GLS and who were billed by Allegheny County or GLS for attorneys' fees, interest, or prothonotary fees and who sustained economic damages on and after August 14, 2003, in connection with attempts to collect delinquent real estate taxes. The putative class allegations are that Allegheny County, GLS, and the Company violated the class's constitutional due process rights in connection with delinquent tax collection efforts. There are also allegations that amounts recovered from the class by GLS and /or Allegheny County are an unconstitutional taking of private property. The claims against the Company are based solely upon its ownership of GLS. The complaint requests that the Court order GLS to account for the amounts alleged to have been collected in violation of the putative class members' constitutional rights and create a constructive trust for the return of such amounts to members of the purported class. The same class previously filed substantially the same lawsuit in 2004 against GLS and Allegheny County, and GLS's Motion for Summary Judgment is pending in that action. The Company believes the claims are without merit and it intends to defend against them vigorously. ENSLIN & SON: Recalls 314 Pounds of Sausage Products ---------------------------------------------------- * Possible Listeria Monocytogenes Contamination Cited Enslin & Son Packing Company, a Hattiesburg, Mississippi establishment, is recalling approximately 314 pounds of sausage products due to possible Listeria monocytogenes contamination, the U.S. Department of Agriculture's Food Safety and Inspection Service (FSIS) announced. The product subject to recall is: * 1.5-lb. and 2-lb. packages of "Cedar Grove Red Hots." Each package bears the number "P-31806" inside the USDA mark of inspection and contains a use or freeze by date of "09/24/2012" or "09/28/2012." The product was produced on July 16, 2012, and distributed to retail establishments in Meridian and Philadelphia, Mississippi. When available, the retail distribution list will be posted on FSIS' Web site at: http://www.fsis.usda.gov/FSIS_Recalls/Open_Federal_Cases/index.asp The problem occurred as a result of the products testing positive for Listeria monocytogenes and being shipped prior to the company receiving test results. FSIS and the company have received no reports of illnesses associated with consumption of this product. FSIS routinely conducts recall effectiveness checks to verify recalling firms notify their customers of the recall and that steps are taken to make certain that the product is no longer available to consumers. Consumers and media with questions about the recall should contact the Company's President, Augustus Enslin, at (601) 582-9300. Consumers with food safety questions can "Ask Karen," the FSIS virtual representative available 24 hours a day at AskKaren.gov or via smartphone at m.askkaren.gov. "Ask Karen" live chat services are available Monday through Friday from 10:00 a.m. to 4:00 p.m. Eastern Time. The toll-free USDA Meat and Poultry Hotline 1-888- MPHotline (1-888-674-6854) is available in English and Spanish and can be reached from l0:00 a.m. to 4:00 p.m. (Eastern Time) Monday through Friday. Recorded food safety messages are available 24 hours a day. FSIS Lists Stores That Received Recalled Products The U.S. Department of Agriculture's Food Safety and Inspection Service disclosed that certain stores in various states received ground beef products that have been recalled by Enslin & Son Packing Company. The FSIS says the list of store locations may not include all retail locations that have received the recalled product or may include retail locations that did not actually receive the recalled product. Therefore, the FSIS says, it is important that consumers use the product-specific identification information available at the recall notice, in addition to the list of retail stores, to check meat or poultry products in the consumers' possession to see if they have been recalled. Retailer Name City and State ------------- -------------- Save-A-Lot Meridian, Mississippi Cash Saver Meridian, Mississippi William Brothers Philadelphia, Mississippi GENERAL MILLS: Faces Class Action Over Misleading Product Labels ---------------------------------------------------------------- Stephanie Strom, writing for The New York Times, reports that two California mothers are suing General Mills, claiming the giant food company has deceptively marketed its Nature Valley products as natural when they contain highly processed ingredients. The wholesome look of Nature Valley's snack packaging is part of its appeal. But a suit says it misleads consumers. The women are seeking to turn the suit into a class action that would win the profits the company has made selling Nature Valley products that contain such ingredients. But Amy McKendrick, one of the mothers, said she really only wanted to make other parents aware that products they were buying to avoid dyes and processed ingredients for health reasons may not be as pure as they thought based on what they read on packaging. "I've figured out now that something can say it's 100 percent natural on the outside and not be 100 percent natural," Ms. McKendrick said. "I want to make sure other people making purchases understand that, too." Kirstie Foster, a spokeswoman for General Mills, said in an e-mail that the company had not seen the lawsuit. "We are aware of the press release, but to our knowledge, we have not been served with a lawsuit," she said, referring to a news release sent out by the plaintiffs' lawyers. Various surveys have found that consumers prefer foods described as "natural" to those labeled "organic," and both segments are growing and profitable. Ironically, food labeled "organic" must meet verifiable standards set by the federal government, while that labeled "natural" has no such requirements. The words "natural" and "nature" are used on Nature Valley packaging, and the brand's social media presence is dominated by images of nature and wildlife. "General Mills seeks to capitalize on consumers' preference for all-natural foods and the association between such foods and a wholesome way of life," according to the lawsuit. "Consumers are willing to pay more for natural foods because of this association, as well as the perceived higher quality, health and safety benefits and low impact on the environment associated with products labeled as 'natural.'" The lawsuit, filed in the United States District Court for the Northern District of California, charges General Mills with false advertising and anticompetitiveness under California law. It is the latest in a series of lawsuits against General Mills over labeling. At issue are three ingredients -- the sweeteners high fructose corn syrup and high maltose corn syrup, and maltodextrin, a thickener that can also impart a slight sweetness to food. "High maltose corn syrup and maltodextrin are highly processed, do not exist in nature and not even under the most elastic possible definition could they be considered 'natural,'" said Michael F. Jacobson, executive director of the Center for Science in the Public Interest, an advocacy group that works on public health issues and is serving as co-counsel in the lawsuit. The center said it had previously raised concerns about the "natural" claims on Nature Valley products with General Mills in 2010 and that the company had taken high fructose corn syrup out of most of them, but had not removed the other two ingredients. The Food and Drug Administration recently denied an application by the Corn Refiners Association to change the name of high fructose corn syrup to corn sugar on nutrition labels. Consumer groups had opposed the request because some consumers have adverse reactions to the substance and might be confused by the less specific identification. Early onset bipolar disease, attention deficit/hyperactivity disorder, obsessive-compulsive disorder and anxiety were diagnosed in Ms. McKendrick's daughter at age 6, and she was prescribed three medications. After doing some research, Ms. McKendrick, who teaches agriculture in Kern County, Calif., decided to eliminate all foods with dyes and processed ingredients from her daughter's diet to try to control her condition. "Everything we eat is organic or all natural," she said. "I've cut out all additives, preservatives, dye, everything, and after two years of doing that, she's been released from all those diagnoses, all of them." Ms. McKendrick had been feeding her daughter what she thought was a wholly natural diet for some time but some lingering anxiety persisted, she said. During that time, she had purchased Nature Valley Chewy Trail Mix Fruit & Nut Granola Bars, Nature Valley Sweet & Salty Nut Cashew Granola Bars and Nature Valley Dark Chocolate and Peanut Butter Granola Thins for her daughter believing that the "100% Natural" on the box meant they had no processed ingredients in them. Finally, after more research and scouring her Feingold Program Foodlist, a guidebook for people treating mental disorders with diets, she realized the Nature Valley products had processed ingredients in them. "I was shocked," Ms. McKendrick said. "It's false advertising." HIGHMARK INC: Inks MoU with Royal Mile to Settle Class Action ------------------------------------------------------------- Bill Toland, writing for Pittsburgh Post-Gazette, reports that attorneys litigating a class action conspiracy lawsuit led by real estate firm Royal Mile Co. against UPMC and Highmark Inc. have reached a tentative settlement with Highmark -- but not yet with UPMC. Royal Mile and health insurer Highmark have reached an agreement in principal, and signed a "memorandum of understanding" last week. The actual settlement paperwork is to be filed within 30 days. The agreement was not unexpected, as Royal Mile had filed a motion at the beginning of July telling the U.S. District Court that it was in settlement talks with Highmark. The Whitehall-based real estate firm filed a federal lawsuit in 2010 alleging that a "conspiracy" between Highmark and UPMC had raised the firm's health insurance premiums. Royal Mile said that UPMC, back then, had refused to contract with major, national health insurance companies, while Highmark, "in exchange," had eliminated a low-cost insurance product. The alleged result was higher premiums that cost Royal Mile and other area businesses millions of dollars. The Royal Mile suit had been filed in conjunction with an earlier federal suit, initiated by West Penn Allegheny Health System, which had likewise argued that Highmark and UPMC conspired to squeeze WPAHS out of the local health care market. But Highmark and WPAHS are now business partners; Highmark and UPMC have arrived at a contract extension that runs through 2014; and UPMC has since entered contracts with a variety of national health insurance companies. Royal Mile and the rest of the class will receive "prospective injunctive relief," but not financial damages -- Highmark has agreed that WPAHS "will not enter into any contract with any health care insurer that requires the insurer to treat West Penn more favorably than any other provider of health care services" through 2014. In other words, no more "favored nation" contracts in which one party gets more favorable rates than the rest. In addition, Highmark has agreed to "cooperate reasonably in the continued litigation" of the Royal Mile suit against the non- settling defendants, meaning UPMC. As a result, Highmark will furnish Royal Mile and the plaintiffs with certain documents relating to the alleged antitrust conspiracy between Highmark and UPMC. The memo also says that Highmark, within 20 days of the approval of the settlement, will provide Royal Mile and plaintiffs' counsel "with copies of all economic studies in its possession that may support an antitrust claim against" UPMC. The settlement, after it is filed, would still have to be approved by the court. On July 26, Highmark said that as "there is no final settlement agreement between Highmark and Royal Mile, [we] have no statement at this time." HUXTABLE'S KITCHEN: Recalls 5,610 Lbs. of BBQ Chicken Salads ------------------------------------------------------------ * Possible Listeria Monocytogenes Contamination Cited Huxtable's Kitchen, a Vernon, California establishment, is recalling approximately 5,610 pounds of barbeque chicken salads. The salads contain diced onions that are the subject of a Food and Drug Administration (FDA) recall due to possible Listeria monocytogenes contamination, the U.S. Department of Agriculture's Food Safety and Inspection Service (FSIS) announced. The product subject to recall is: * 14.5-oz trays of "TRADER JOE'S BBQ CHICKEN SALAD." The product subject to recall bears the establishment number "P- 11079" inside the USDA mark of inspection. Each package also has a sticker with use-by dates through July 30, 2012. The product was produced between July 20, 2012, and July 24, 2012, and was distributed to retail establishments in Arizona, New Mexico, Southern California, Southern Nevada and Texas. When available, the retail distribution list will be posted on FSIS' Web site at: http://www.fsis.usda.gov/FSIS_Recalls/Open_Federal_Cases/index.asp FSIS was alerted to the problem by Huxtable's Kitchen. The company was informed by a supplier that diced onions used in the product are subject to an FDA recall. FSIS and the company have received no reports of illnesses associated with consumption of this product. FSIS routinely conducts recall effectiveness checks to verify recalling firms notify their customers of the recall and that steps are taken to make certain that the product is no longer available to consumers. Consumers with questions about the recall should contact the company's Director of Quality Assurance, Juan Castro, at (323) 923-2885. News reporters with questions about the recall should contact the company's President, Jason Knight, at (323) 923-2905. Consumers with food safety questions can "Ask Karen," the FSIS virtual representative available 24 hours a day at AskKaren.gov or via smartphone at m.askkaren.gov. "Ask Karen" live chat services are available Monday through Friday from 10:00 a.m. to 4:00 p.m. Eastern Time. The toll-free USDA Meat and Poultry Hotline 1-888- MPHotline (1-888-674-6854) is available in English and Spanish and can be reached from l0:00 a.m. to 4:00 p.m. (Eastern Time) Monday through Friday. Recorded food safety messages are available 24 hours a day. FSIS Lists Stores That Received Recalled Products The U.S. Department of Agriculture's Food Safety and Inspection Service disclosed that Trader Joe's Stores in Arizona, Southern California, Southern Nevada, New Mexico and Texas received ground beef products that have been recalled by Huxtable's Kitchen. The FSIS says the list of store locations may not include all retail locations that have received the recalled product or may include retail locations that did not actually receive the recalled product. Therefore, the FSIS says, it is important that consumers use the product-specific identification information available at the recall notice, in addition to the list of retail stores, to check meat or poultry products in the consumers' possession to see if they have been recalled. LOCKHEED MARTIN: Still Defends Suit Over 401(k) Plans in Illinois ----------------------------------------------------------------- On September 11, 2006, Lockheed Martin Corporation and Lockheed Martin Investment Management Company (LMIMCo), a subsidiary, were named as defendants in a lawsuit filed in the U.S. District Court for the Southern District of Illinois, seeking to represent a class of purportedly similarly situated participants and beneficiaries in two of its 401(k) plans. Plaintiffs allege that the Company or LMIMCo caused its plans to pay expenses that were higher than reasonable by, among other actions, permitting service providers of the plans to engage in revenue sharing, paying investment management fees for the company stock funds, and causing the company stock funds to hold cash for liquidity, thus reducing the return on those funds. Plaintiffs also allege that the Company failed to disclose information appropriately relating to the fees associated with managing the plans. In August 2008, plaintiffs filed an amended complaint, adding allegations that the Company breached fiduciary duties under the Employee Retirement Income Security Act of 1974 ("ERISA") by providing inadequate disclosures with respect to the Stable Value Fund offered under the Company's 401(k) plans. On March 31, 2009, the Judge dismissed a number of plaintiffs' claims, leaving three claims for trial, specifically plaintiffs' claims involving the company stock funds, the Stable Value Fund, and overall fees. The Court also granted class certification on two of plaintiffs' claims. The Company appealed the class certification. On March 15, 2011, the U.S. Court of Appeals for the Seventh Circuit vacated the District Court's class certification order and remanded the case to the District Court. The complaint does not allege a specific calculation of damages, and the Company reasonably cannot estimate the possible loss, or range of loss, which could be incurred if plaintiffs were to prevail in the allegations, but believes that the Company has substantial defenses. The Company disputes the allegations and is defending against them. No further updates were reported in the Company's July 25, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended June 24, 2012. Lockheed Martin Corporation is a global security company and engages in the research, design, development, manufacture, integration, and sustainment of advanced technology systems and products. LOCKHEED MARTIN: Still Defends Securities Suit in New York ---------------------------------------------------------- On July 20, 2011, the City of Pontiac General Employees' Retirement System filed a class action lawsuit against Lockheed Martin Corporation and three of its executive officers (Robert J. Stevens, Chairman and Chief Executive Officer; Bruce L. Tanner, Executive Vice President and Chief Financial Officer; and Linda R. Gooden, Executive Vice President, Information Systems & Global Solutions (IS&GS)) in the U.S. District Court for the Southern District of New York. The complaint was filed on behalf of purchasers of the Company's common stock from April 21, 2009, through July 21, 2009, and alleges that the Company violated certain sections of the federal securities laws by allegedly making statements, primarily about the then-expected performance of its IS&GS business segment, that contained either false statements of material facts or omitted material facts necessary to make the statements made not misleading, or engaged in other acts that operated as an alleged fraud upon class members who purchased the Company's common stock during that period. The complaint further alleges that the statutory safe harbor provided for forward-looking statements does not apply to any of the allegedly false statements. The complaint does not allege a specific amount of monetary damages. The Company believes that the allegations are without merit and are defending against them. No further updates were reported in the Company's July 25, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended June 24, 2012. Lockheed Martin Corporation is a global security company and engages in the research, design, development, manufacture, integration, and sustainment of advanced technology systems and products. LSG SKY: Recalls 735 Pounds of Chicken Wrap Products ---------------------------------------------------- * Possible Listeria Monocytogenes Contamination Cited LSG Sky Chefs, an Orlando, Florida establishment, is recalling approximately 735 pounds of ready-to-eat chipotle chicken wrap products. The products contain diced onions that are the subject of a Food and Drug Administration (FDA) recall due to possible Listeria monocytogenes contamination, the U.S. Department of Agriculture's Food Safety and Inspection Service (FSIS) announced. The following products are subject to recall: * 6.9-ounce packages of "RaceTrac Chipotle Chicken Wrap." Each package has a "Sell Thru" date of July 27 to July 31, 2012, and bears the establishment number "P-19682" inside the USDA mark of inspection. The products were produced at the company's Orlando, FL facility and are the only LSG Sky Chefs product that is affected by this recall. The products were produced from July 22 to July 26, 2012, and shipped for distribution to retail establishments in Florida. FSIS was alerted to the problem by LSG Sky Chefs. The Company informed the agency that diced onions subject to an FDA recall were contained in the pico de gallo used in the chicken wraps produced on the dates listed. FSIS, FDA and the Company have received no reports of illnesses associated with consumption of these products. FSIS routinely conducts recall effectiveness checks to verify that recalling firms notify their customers of the recall and that steps are taken to make certain that the product is no longer available to consumers. When available, the retail distribution list(s) will be posted on the FSIS Web site at: http://www.fsis.usda.gov/FSIS_Recalls/Open_Federal_Cases/index.asp Consumption of food contaminated with Listeria monocytogenes can cause listeriosis, an uncommon but potentially fatal disease. Healthy people rarely contract listeriosis. However, listeriosis can cause high fever, severe headache, neck stiffness and nausea. Listeriosis can also cause miscarriages and stillbirths, as well as serious and sometimes fatal infections in those with weakened immune systems, such as infants, the elderly and persons with HIV infection or undergoing chemotherapy. Individuals concerned about an illness should contact a health care provider. Consumers with questions about the recall should contact Sherrie Scott, a company compliance officer, at (770) 331-7600, ext. 1402. Media with questions about the recall should contact David Margulies, the company's spokesperson, at (214) 914-1275. Consumers with food safety questions can "Ask Karen," the FSIS virtual representative available 24 hours a day at AskKaren.gov or via smartphone at m.askkaren.gov. "Ask Karen" live chat services are available Monday through Friday from 10:00 a.m. to 4:00 p.m. Eastern Time. The toll-free USDA Meat and Poultry Hotline 1-888- MPHotline (1-888-674-6854) is available in English and Spanish and can be reached from l0:00 a.m. to 4:00 p.m. (Eastern Time) Monday through Friday. Recorded food safety messages are available 24 hours a day. FSIS Lists Stores That Received Recalled Products The U.S. Department of Agriculture's Food Safety and Inspection Service disclosed that Racetrac stores in Florida received ground beef products that have been recalled by LSG Sky Chefs. The FSIS says the list of store locations may not include all retail locations that have received the recalled product or may include retail locations that did not actually receive the recalled product. Therefore, the FSIS says, it is important that consumers use the product-specific identification information available at the recall notice, in addition to the list of retail stores, to check meat or poultry products in the consumers' possession to see if they have been recalled. MATTEL INC: Appeal From $170-Mil. Damages Award Remains Pending --------------------------------------------------------------- Mattel, Inc.'s appeal from a monetary award, including $170 million in damages and $140 million in attorney's fees and costs, in favor of MGA Entertainment, Inc., remains pending, according to the Company's July 25, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended June 30, 2012. In April 2004, Mattel filed a lawsuit in Los Angeles County Superior Court against Carter Bryant ("Bryant"), a former Mattel design employee. The lawsuit alleges that Bryant aided and assisted a Mattel competitor, MGA Entertainment, Inc. ("MGA"), during the time he was employed by Mattel, in violation of his contractual and other duties to Mattel. In September 2004, Bryant asserted counterclaims against Mattel, including counterclaims in which Bryant sought, as a putative class action representative, to invalidate Mattel's Confidential Information and Proprietary Inventions Agreements with its employees. Bryant also removed Mattel's lawsuit to the United States District Court for the Central District of California. In December 2004, MGA intervened as a party-defendant in Mattel's action against Bryant, asserting that its rights to Bratz properties are at stake in the litigation. Separately, in November 2004, Bryant filed an action against Mattel in the United States District Court for the Central District of California. The action sought a judicial declaration that Bryant's purported conveyance of rights in Bratz was proper and that he did not misappropriate Mattel property in creating Bratz. In April 2005, MGA filed a lawsuit against Mattel in the United States District Court for the Central District of California. MGA's action alleges claims of trade dress infringement, trade dress dilution, false designation of origin, unfair competition, and unjust enrichment. The lawsuit alleges, among other things, that certain products, themes, packaging, and/or television commercials in various Mattel product lines have infringed upon products, themes, packaging, and/or television commercials for various MGA product lines, including Bratz. The complaint also asserts that various alleged Mattel acts with respect to unidentified retailers, distributors, and licensees have damaged MGA and that various alleged acts by industry organizations, purportedly induced by Mattel, have damaged MGA. MGA's lawsuit alleges that MGA has been damaged in an amount "believed to reach or exceed tens of millions of dollars" and further seeks punitive damages, disgorgement of Mattel's profits and injunctive relief. In June 2006, the three cases were consolidated in the United States District Court for the Central District of California. On July 17, 2006, the Court issued an order dismissing all claims that Bryant had asserted against Mattel, including Bryant's purported counterclaims to invalidate Mattel's Confidential Information and Proprietary Inventions Agreements with its employees, and Bryant's claims for declaratory relief. In November 2006, Mattel asked the Court for leave to file an Amended Complaint that included not only additional claims against Bryant, but also included claims for copyright infringement, Racketeer Influenced and Corrupt Organizations Act ("RICO") violations, misappropriation of trade secrets, intentional interference with contract, aiding and abetting breach of fiduciary duty and breach of duty of loyalty, and unfair competition, among others, against MGA, its CEO Isaac Larian, certain MGA affiliates and an MGA employee. The RICO claim alleged that MGA stole Bratz and then, by recruiting and hiring key Mattel employees and directing them to bring with them Mattel confidential and proprietary information, unfairly competed against Mattel using Mattel's trade secrets, confidential information, and key employees to build their business. On January 12, 2007, the Court granted Mattel leave to file these claims as counterclaims in the consolidated cases, which Mattel did that same day. Mattel sought to try all of its claims in a single trial, but in February 2007, the Court decided that the consolidated cases would be tried in two phases, with the first trial to determine claims and defenses related to Mattel's ownership of Bratz works and whether MGA infringed those works. On May 19, 2008, Bryant reached a settlement agreement with Mattel and is no longer a defendant in the litigation. In the public stipulation entered by Mattel and Bryant in connection with the resolution, Bryant agreed that he was and would continue to be bound by all prior and future Court Orders relating to Bratz ownership and infringement, including the Court's summary judgment rulings. The first phase of the first trial, which began on May 27, 2008, resulted in a unanimous jury verdict on July 17, 2008, in favor of Mattel. The jury found that almost all of the Bratz design drawings and other works in question were created by Bryant while he was employed at Mattel; that MGA and Isaac Larian intentionally interfered with the contractual duties owed by Bryant to Mattel, aided and abetted Bryant's breaches of his duty of loyalty to Mattel, aided and abetted Bryant's breaches of the fiduciary duties he owed to Mattel, and converted Mattel property for their own use. The same jury determined that defendants MGA, Larian, and MGA Entertainment (HK) Limited infringed Mattel's copyrights in the Bratz design drawings and other Bratz works, and awarded Mattel total damages of approximately $100 million against the defendants. On December 3, 2008, the Court issued a series of orders rejecting MGA's equitable defenses and granting Mattel's motions for equitable relief, including an order enjoining the MGA party defendants from manufacturing, marketing, or selling certain Bratz fashion dolls or from using the "Bratz" name. The Court stayed the effect of the December 3, 2008 injunctive orders until further order of the Court and entered a further specified stay of the injunctive orders on January 7, 2009. The parties filed and argued additional motions for post-trial relief, including a request by MGA to enter judgment as a matter of law on Mattel's claims in MGA's favor and to reduce the jury's damages award to Mattel. Mattel additionally moved for the appointment of a receiver. On April 27, 2009, the Court entered an order confirming that Bratz works found by the jury to have been created by Bryant during his Mattel employment were Mattel's property and that hundreds of Bratz female fashion dolls infringe Mattel's copyrights. The Court also upheld the jury's award of damages in the amount of $100 million and ordered an accounting of post-trial Bratz sales. The Court further vacated the stay of the December 3, 2008 orders, except to the extent specified by the Court's January 7, 2009 modification. MGA appealed the Court's equitable orders to the Court of Appeals for the Ninth Circuit. On December 9, 2009, the Ninth Circuit heard oral argument on MGA's appeal and issued an order staying the District Court's equitable orders pending a further order to be issued by the Ninth Circuit. The Ninth Circuit opinion vacating the relief ordered by the District Court was issued on July 22, 2010. The Ninth Circuit stated that, because of several jury instruction errors it identified, a significant portion -- if not all -- of the jury verdict and damage award should be vacated. In its opinion, the Ninth Circuit found that the District Court erred in concluding that Mattel's Invention agreement unambiguously applied to "ideas;" that it should have considered extrinsic evidence in determining the application of the agreement; and if the conclusion turns on conflicting evidence, it should have been up to the jury to decide. The Ninth Circuit also concluded that the District Judge erred in transferring the entire brand to Mattel based on misappropriated names and that the Court should have submitted to the jury, rather than deciding itself, whether Bryant's agreement assigned works created outside the scope of his employment and whether Bryant's creation of the Bratz designs and sculpt was outside of his employment. The Court then went on to address copyright issues which would be raised after a retrial, since Mattel "might well convince a properly instructed jury" that it owns Bryant's designs and sculpt. The Ninth Circuit stated that the sculpt itself was entitled only to "thin" copyright protection against virtually identical works, while the Bratz sketches were entitled to "broad" protection against substantially similar works; in applying the broad protection, however, the Ninth Circuit found that the lower court had erred in failing to filter out all of the unprotectable elements of Bryant's sketches. This mistake, the Court said, caused the lower court to conclude that all Bratz dolls were substantially similar to Bryant's original sketches. Judge Stephen Larson, who presided over the first trial, retired from the bench during the course of the appeal, and the case was transferred to Judge David O. Carter. After the transfer, Judge Carter granted Mattel leave to file a Fourth Amended Answer and Counterclaims which focused on RICO, trade secret and other claims, and added additional parties, and subsequently granted in part and denied in part a defense motion to dismiss those counterclaims. Later, on August 16, 2010, MGA asserted several new claims against Mattel in response to Mattel's Fourth Amended Answer and Counterclaims, including claims for alleged trade secret misappropriation, an alleged violation of RICO, and wrongful injunction. Mattel moved to strike and/or dismiss these claims, as well as certain MGA allegations regarding Mattel's motives for filing lawsuit. The Court granted that motion as to the wrongful injunction claim, which it dismissed with prejudice, and as to the allegations about Mattel's motives, which it struck. The Court denied the motion as to MGA's trade secret misappropriation claim and its claim for violations of RICO. The Court resolved summary judgment motions in late 2010. Among other rulings, the Court dismissed both parties' RICO claims; dismissed Mattel's claim for breach of fiduciary duty and portions of other claims as "preempted" by the trade secrets act; dismissed MGA's trade dress infringement claims; dismissed MGA's unjust enrichment claim; dismissed MGA's common law unfair competition claim; and dismissed portions of Mattel's copyright infringement claim as to "later generation" Bratz dolls. Trial of all remaining claims began in early January 2011. During the trial, and before the case was submitted to the jury, the Court granted MGA's motions for judgment as to Mattel's claims for aiding and abetting breach of duty of loyalty and conversion. The Court also granted a defense motion for judgment on portions of Mattel's claim for misappropriation of trade secrets relating to thefts by former Mattel employees located in Mexico. The jury reached verdicts on the remaining claims in April 2011. In those verdicts, the jury ruled against Mattel on its claims for ownership of Bratz-related works, for copyright infringement, and for misappropriation of trade secrets. The jury ruled for MGA on its claim of trade secret misappropriation as to 26 of its claimed trade secrets and awarded $88.5 million in damages. The jury ruled against MGA as to 88 of its claimed trade secrets. The jury found that Mattel's misappropriation was willful and malicious. In early August 2011, the Court ruled on post-trial motions. The Court rejected MGA's unfair competition claims and also rejected Mattel's equitable defenses to MGA's misappropriation of trade secrets claim. The Court reduced the jury's damages award of $88.5 million to $85.0 million. The Court awarded MGA an additional $85.0 million in punitive damages and approximately $140 million in attorney's fees and costs. The Court entered a judgment which totals approximately $310 million in favor of MGA. Mattel has appealed the judgment and the appeal is now fully briefed. Mattel's appeal challenges the entirety of the district court's monetary award in favor of MGA, including both the award of $170 million in damages for alleged trade secret misappropriation and approximately $140 million in attorney's fees and costs. Mattel does not believe that it is probable that any of the damages awarded to MGA will be sustained based on the evidence presented at trial and, accordingly, a liability has not been accrued for this matter. MOTOROLA SOLUTIONS: Appeals in "Silverman" Suit Remain Pending -------------------------------------------------------------- Two appeals from the final approval of Motorola Solutions, Inc.'s $200 million settlement of a class action lawsuit remain pending, according to the Company's July 25, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended June 30, 2012. A purported class action lawsuit on behalf of the purchasers of Motorola securities between July 19, 2006, and January 5, 2007, Silverman v. Motorola, Inc., et al., was filed against the Company and certain current and former officers and directors of the Company on August 9, 2007, in the United States District Court for the Northern District of Illinois. The complaint alleges violations of Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934, as well as, in the case of the individual defendants, the control person provisions of the Securities Exchange Act. The operative amended complaint primarily alleges that the defendants knowingly made incorrect statements concerning Motorola's projected revenues for the third and fourth quarter of 2006. The complaint also challenges Motorola's accounting and disclosures for certain transactions entered into in the third quarter of 2006. The complaint seeks unspecified damages and other relief relating to the purported inflation in the price of Motorola shares during the class period. On August 25, 2009, the district court granted plaintiff's motion for class certification. On February 1, 2012, the parties in the Silverman litigation signed a settlement agreement to resolve all claims in that case for $200 million, $150 million of which is being paid by the Company's insurance carriers. The district court approved the settlement agreement on May 9, 2012. Two appeals have been filed from the judgment entered pursuant to the settlement -- one challenging the court's approval of certain terms of the settlement, and the other challenging the fee award to the attorneys for the class. Those appeals are pending and no hearing has been scheduled. MSLGROUP: Plaintiffs in Discrimination Suit to Send Notices ----------------------------------------------------------- Brittaney Kiefer, writing for PRWeek, reports that the plaintiffs in the class action lawsuit against MSLGroup and parent Publicis Groupe are expected to send notices inviting other women to join the action in the next few weeks. Both sides met in a court conference on July 20 to review the proposed content of the notice. The court selected the language to be included in the letter, so now the plaintiffs will revise it and finalize a list of recipients provided by the defendants. A US District Court judge ruled June 29 that the plaintiffs had presented enough evidence of widespread gender pay discrimination to invite other women to join the class action suit. Once other potential plaintiffs are notified of the class action, they will have up to 60 days to opt into it. MSL and Publicis can still try to decertify the suit by arguing there was no widespread discrimination. Monique da Silva, a former healthcare director at MSL, filed the $100 million class action suit in February 2011 seeking to represent women who worked at the agency from 2008 until the date of judgment. It alleged MSL and the holding company paid female professionals less; did not promote women at the same rate as male counterparts; and conducted discriminatory demotions, terminations, and reassignments for female staffers during the agency's 2009 reorganization. In April, MaryEllen O'Donohue, Laurie Mayers, Heather Pierce, and Katherine Wilkins were added as plaintiffs to the suit. NORTHROP GRUMMAN: Sup. Ct. Review in "Skinner" Suit Not Sought -------------------------------------------------------------- Northrop Grumman Corporation disclosed in its July 25, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended June 30, 2012, that Skinner, et al., did not ask the U.S. Supreme Court to review a summary judgment in their class action lawsuit. On June 22, 2007, a putative class action, Skinner et al. v. Northrop Grumman Pension Plan, etc., et al., was filed against the Northrop Grumman Pension Plan and the Northrop Grumman Retirement Plan B and their corresponding administrative committees in the U.S. District Court for the Central District of California. The putative class representatives alleged violations of Employee Retirement Income Security Act of 1974 (ERISA) and breaches of fiduciary duty concerning a 2003 modification to the Northrop Grumman Retirement Plan B. The modification relates to the employer-funded portion of the pension benefit available during a five-year transition period that ended on June 30, 2008. The plaintiffs dismissed the Northrop Grumman Pension Plan, and in 2008, the District Court granted summary judgment in favor of all remaining defendants on all claims. The plaintiffs appealed, and in May 2009, the U.S. Court of Appeals for the Ninth Circuit reversed the decision of the District Court and remanded the matter back to the District Court for further proceedings, finding that there was ambiguity in a 1998 summary plan description related to the employer-funded component of the pension benefit. After the remand, the plaintiffs filed a motion to certify a class. The parties also filed cross-motions for summary judgment. On January 26, 2010, the District Court granted summary judgment in favor of the Plan and denied the plaintiffs' motion for summary judgment. The District Court also denied the plaintiffs' motion for class certification and struck the trial date of March 23, 2010, as unnecessary given the District Court's grant of summary judgment for the Plan. The plaintiffs appealed the District Court's order to the Ninth Circuit. On March 16, 2012, the Ninth Circuit affirmed the district court. On March 30, 2012, the plaintiffs moved for rehearing or rehearing en banc, which the Ninth Circuit denied on April 30, 2012. The plaintiffs did not seek review by the U.S. Supreme Court. OMNICARE INC: Appeal in Consolidated Securities Suit Pending ------------------------------------------------------------ An appeal from the dismissal of a consolidated class action lawsuit over Omnicare, Inc.'s December 2005 public offering remains pending, according to the Company's July 25, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended June 30, 2012. In February 2006, two substantially similar putative class action lawsuits were filed in the United States District Court for the Eastern District of Kentucky, and were consolidated and entitled Indiana State Dist. Council of Laborers & HOD Carriers Pension & Welfare Fund v. Omnicare, Inc., et al., No. 2:06cv26. The amended consolidated complaint was filed against Omnicare, three of its officers and two of its directors and purported to be brought on behalf of all open-market purchasers of Omnicare common stock from August 3, 2005, through July 27, 2006, as well as all purchasers who bought their shares in the Company's public offering in December 2005. The complaint contained claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (and Rule 10b-5) and Section 11 of the Securities Act of 1933 and sought, among other things, compensatory damages and injunctive relief. Plaintiffs alleged that Omnicare (i) artificially inflated its earnings (and failed to file GAAP-compliant financial statements) by engaging in improper generic drug substitution, improper revenue recognition and overvaluation of receivables and inventories; (ii) failed to timely disclose its contractual dispute with UnitedHealth Group Inc.; (iii) failed to timely record certain special litigation reserves; and (iv) made other allegedly false and misleading statements about the Company's business, prospects and compliance with applicable laws and regulations. The defendants filed a motion to dismiss the amended complaint on March 12, 2007, and on October 12, 2007, the court dismissed the case. On November 9, 2007, plaintiffs appealed the dismissal to the United States Court of Appeals for the Sixth Circuit. On October 21, 2009, the Sixth Circuit Court of Appeals generally affirmed the district court's dismissal, dismissing plaintiff's claims for violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5. However, the appellate court reversed the dismissal for the claim brought for violation of Section 11 of the Securities Act of 1933, and returned the case to the district court for further proceedings. On December 30, 2010, plaintiffs filed a motion in the district court requesting permission to file a third amended complaint. On February 4, 2011, the defendants filed a motion to dismiss the sole remaining claim in plaintiff's second amended complaint. On July 14, 2011, the court granted both motions and deemed the third amended complaint filed. This complaint asserts a claim under Section 11 of the Securities Act of 1933 on behalf of all purchasers of Omnicare common stock in the December 2005 public offering. The new complaint alleges that the 2005 registration statement contained false and misleading statements regarding Omnicare's policy of compliance with all applicable laws and regulations with particular emphasis on allegations of violation of the federal anti-kickback law in connection with three of Omnicare's acquisitions, Omnicare's contracts with two of its suppliers and its provision of pharmacist consultant services. On August 19, 2011, the defendants filed a motion to dismiss plaintiffs' most recent complaint and on February 13, 2012, the court dismissed the case and struck the case from the docket. On March 12, 2012, plaintiffs filed a notice of appeal in the United States Court of Appeals for the Sixth Circuit. OMNICARE INC: Seeks to Dismiss Consolidated Securities Suit ----------------------------------------------------------- Omnicare, Inc. is seeking dismissal of a consolidated securities class action lawsuit pending in Kentucky, according to the Company's July 25, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended June 30, 2012. On August 24, 2011, a class action complaint entitled Ansfield v. Omnicare, Inc., et al. was filed on behalf of a putative class of all purchasers of the Company's common stock from January 10, 2007, through August 5, 2010, against the Company and certain of its current and former officers in the United States District Court for the Eastern District of Kentucky, alleging violations of federal securities law in connection with alleged false and misleading statements with respect to the Company's compliance with federal and state Medicare and Medicaid laws and regulations. On October 21, 2011, a class action complaint entitled Jacksonville Police & Fire Pension Fund v. Omnicare, Inc. et al. was filed on behalf of the same putative class of purchasers as is referenced in the Ansfield complaint, against the Company and certain of its current and former officers, in the U.S. District Court for the Eastern District of Kentucky. Plaintiffs allege substantially the same violations of federal securities law as are alleged in the Ansfield complaint. Both complaints seek unspecified money damages. The Court has appointed lead counsel and a consolidated amended complaint was filed on May 11, 2012. The Company filed a motion to dismiss on July 16, 2012. The Company believes that the claims asserted are without merit and intends to defend against them vigorously. PANERA BREAD: Awaits Final Okay of $5MM Settlement of Two Suits --------------------------------------------------------------- Panera Bread Company awaits the final approval of its settlement of two class action lawsuits for $5 million, according to the Company's July 25, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended June 26, 2012. On December 9, 2009, a purported class action lawsuit was filed against Panera Bread Company and one of its subsidiaries by Nick Sotoudeh, a former employee of a subsidiary of Panera Bread Company. The lawsuit was filed in the California Superior Court, County of Contra Costa. On April 22, 2011, the complaint was amended to add another former employee, Gabriela Brizuela, as a plaintiff. The complaint alleged, among other things, violations of the California Labor Code, failure to pay overtime, failure to provide meal and rest periods and termination compensation and violations of California's Business and Professions Code. The complaint sought, among other relief, class certification of the lawsuit, unspecified damages, costs and expenses, including attorneys' fees, and such other relief as the Court might find just and proper. On November 17, 2011, the parties entered into a Memorandum of Agreement regarding settlement of this purported class action lawsuit and the purported class action lawsuit filed by David Carter. Under the terms of the Memorandum of Agreement, the parties have agreed to settle this matter for a maximum aggregate amount of $5.0 million for settlement payments to purported class members, plaintiffs' attorneys' fees, and costs of administering the settlement. The Memorandum of Agreement contains no admission of wrongdoing. The terms and conditions of the settlement were preliminarily approved by the Court on June 8, 2012. The aggregate settlement amount of $5.0 million is included in accrued expenses in the Company's Consolidated Balance Sheets as of June 26, 2012, and December 27, 2011. Carter Lawsuit On July 22, 2011, a purported class action lawsuit was filed against Panera Bread Company and one of its subsidiaries by David Carter, a former employee of a subsidiary of Panera Bread Company, and Nikole Benavides, a purported former employee of one of the Company's franchisees. The lawsuit was filed in the California Superior Court, County of San Bernardino. The complaint alleges, among other things, violations of the California Labor Code, failure to pay overtime, failure to provide meal and rest periods and termination compensation and violations of California's Business and Professions Code. The complaint seeks, among other relief, collective and class certification of the lawsuit, unspecified damages, costs and expenses, including attorneys' fees, and such other relief as the Court might find just and proper. This matter was consolidated with the lawsuit filed by Nick Sotoudeh, and is the subject of a Memorandum of Agreement. PANERA BREAD: Ex-Employees' Suit Settled and Dismissed in June -------------------------------------------------------------- The class action lawsuit commenced by former employees of Panera Bread Company was dismissed with prejudice following court approval of the parties' settlement, according to the Company's July 25, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended June 26, 2012. On December 16, 2010, a purported class action lawsuit was filed against Panera Bread Company and one of its subsidiaries by Denarius Lewis, Caroll Ruiz, and Corey Weiner, former employees of a subsidiary of Panera Bread Company. The lawsuit was filed in the United States District Court for Middle District of Florida. The complaint alleged, among other things, violations of the Fair Labor Standards Act. The complaint seeks, among other relief, collective, and class certification of the lawsuit, unspecified damages, costs and expenses, including attorneys' fees and such other relief as the Court might find just and proper. On February 29, 2012, the parties agreed to settle this matter for an amount up to an aggregate of $1.5 million for settlement payments to purported class members, plaintiffs' attorneys' fees, and costs of administering the settlement. The agreement includes no admission of wrongdoing. The terms and conditions of the settlement were approved by the Court on June 26, 2012, and the matter was dismissed with prejudice. The settlement amount of $1.5 million is included in accrued expenses in the Company's Consolidated Balance Sheets as of June 26, 2012, and December 27, 2011. PICCADILLY FINE: FSIS Lists Stores That Got Recalled Products ------------------------------------------------------------- The U.S. Department of Agriculture's Food Safety and Inspection Service disclosed that certain stores in various states received ground beef products that have been recalled by Piccadilly Fine Foods. The FSIS says the list of store locations may not include all retail locations that have received the recalled product or may include retail locations that did not actually receive the recalled product. Therefore, the FSIS says, it is important that consumers use the product-specific identification information available at http://is.gd/qaoPGM,in addition to the list of retail stores, to check meat or poultry products in the consumers' possession to see if they have been recalled. Retailer Name City and State ------------- -------------- Campbell Farmers Market Campbell, California Mountain View Farmers Market Mountain View, California Palo Alto Farmers Market Palo Alto, California Top Nosh Cafe San Jose, California RADIOSHACK CORP: Mediation Sessions in Illinois Suit Unsuccessful ----------------------------------------------------------------- Mediation sessions held in March and June in a consolidated class action lawsuit pending in Illinois were unsuccessful and did not result to a settlement, RadioShack Corporation said in its July 25, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended June 30, 2012. On September 26, 2011, Scott D.H. Redman filed a putative class action lawsuit against the Company in the United States District Court for the Northern District of Illinois, captioned Redman v. RadioShack Corporation. Mr. Redman claims that the Company violated certain provisions of the Fair and Accurate Credit Transactions Act of 2003 ("FACTA"), which amended the Fair Credit Reporting Act, by displaying the expiration dates of the Company's customers' credit or debit cards on electronically printed transaction receipts. Mr. Redman filed a motion seeking to certify a class that includes all persons to whom the Company provided an electronically printed transaction receipt, in transactions occurring after June 3, 2008, that displayed the expiration date of the person's credit or debit card. On November 3, 2011, Mario Aliano and Vitoria Radavicuite filed a similar putative class action lawsuit against the Company, also in the United States District Court for the Northern District of Illinois, alleging similar violations of FACTA. Mr. Aliano and Ms. Radavicuite initially filed a motion seeking to certify a class that includes all persons to whom the Company provided an electronically printed transaction receipt, in transactions occurring in Illinois after June 3, 2008, that displayed the expiration date of the person's credit or debit card. On December 28, 2011, Mr. Aliano and Ms. Radavicuite filed an amended complaint and an amended motion seeking to certify a class that was not limited to transactions occurring in Illinois. On January 11, 2012, the Aliano lawsuit was reassigned to the judge presiding over the Redman lawsuit on the basis of relatedness, and the two cases were consolidated for all purposes. On January 25, 2012, the presiding judge referred the matter to the magistrate judge assigned to the consolidated cases for mediation, extending the time by which the Company must respond to the pending complaints to such time as the magistrate judge shall order, and is holding the motions for class certification in abeyance. Mediation sessions were held in March and June of 2012. Neither resulted in a settlement, and the Company continues to vigorously defend these cases. The outcome of these cases is uncertain and the ultimate resolution of them could have a material adverse effect on the Company's consolidated financial statements in the period in which the resolutions are recorded. RADIOSHACK CORP: "Brookler" Suit Remanded to Calif. Appeals Court ----------------------------------------------------------------- The California Supreme Court remanded the class action lawsuit styled Brookler v. RadioShack Corporation to the California Court of Appeals, according to the Company's July 25, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended June 30, 2012. On April 6, 2004, plaintiffs filed a putative class action in Los Angeles Superior Court, Brookler v. RadioShack Corporation, claiming that the Company violated California's wage and hour laws relating to meal and rest periods. The meal period portion of the case was originally certified as a class action in February 2006. The Company's first Motion for Decertification of the class was denied in August 2007. After a favorable decision at the California Court of Appeals in the similar case of Brinker Restaurant Corporation v. Superior Court, the Company filed a second motion for decertification, and in October 2008 the trial court granted the Company's motion. The plaintiffs in Brookler appealed this ruling. Due to the unsettled nature of California law regarding the obligations of employers in respect of meal periods, the Company and the Brookler plaintiffs requested that the California Court of Appeals stay its ruling on the plaintiffs' appeal of the class decertification ruling pending the California Supreme Court's decision in Brinker. The appellate court denied this joint motion and then heard oral arguments in the case on August 5, 2010. On August 26, 2010, the California Court of Appeals reversed the trial court's decertification of the class, and the Company's Petition for Rehearing was denied on September 14, 2010. On September 28, 2010, the Company filed a Petition for Review with the California Supreme Court, which granted review and placed the case on hold pending its decision in Brinker. On April 12, 2012, the California Supreme Court issued its decision in Brinker. On June 20, 2012, the California Supreme Court remanded the Brookler case to the California Court of Appeals instructing it to vacate its prior order and reconsider its ruling in light of its ruling in Brinker. The Company says the outcome of this case is uncertain and the ultimate resolution of it could have a material adverse effect on its consolidated financial statements in the period in which the resolution is recorded. RADIOSHACK CORP: Song-Beverly Act Violations Suits Still Pending ---------------------------------------------------------------- In November 2010, RadioShack Corporation received service of process with respect to the first of four putative class action lawsuits filed in California (Sosinov v. RadioShack, Los Angeles Superior Court; Bitter v. RadioShack, Federal District Court, Central District of California; Moreno v. RadioShack, Federal District Court, Southern District of California; and Grant v. RadioShack, San Francisco Superior Court). The plaintiffs in all of these cases seek damages under California's Song-Beverly Credit Card Act (the "Act"). Plaintiffs claim that under one section of the Act, retailers are prohibited from recording certain personal identification information regarding their customers while processing credit card transactions unless certain statutory exceptions are applicable. The Act provides that any person who violates this section is subject to a civil penalty not to exceed $250 for the first violation and $1,000 for each subsequent violation. In each of the cases, plaintiffs allege that the Company violated the Act by asking them for personal identification information while processing a credit card transaction and then recording it. No further updates were reported in the Company's July 25, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended June 30, 2012. The Company says the outcomes of these cases are uncertain and the ultimate resolution of these cases could have a material adverse effect on its consolidated financial statements in the period in which the resolution is recorded. RADIOSHACK CORP: Mulls Effect of "Brinker" Decision on "Ordonez" ---------------------------------------------------------------- RadioShack Corporation is still evaluating the potential effect of the decision in the "Brinker" case on the class action lawsuit filed by Daniel Ordonez, the Company disclosed in its July 25, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended June 30, 2012. In May 2010, Daniel Ordonez, on behalf of himself and all other similarly situated current and former employees, filed a Complaint against the Company in the Los Angeles Superior Court, captioned Ordonez v. RadioShack Corporation. In July 2010, Mr. Ordonez filed an Amended Complaint alleging, among other things, that the Company failed to provide required meal periods, provide required rest breaks, pay overtime compensation, pay minimum wages, and maintain required records. In September 2010, the Company removed the case to the United States District Court for the Central District of California. The proposed putative class in Ordonez consists of all current and former non-exempt employees for a period within the four (4) years preceding the filing of the case. The meal period claims raised in Ordonez are similar to the claims raised in Brookler case. Pursuant to a motion filed by the Ordonez parties, the court recently granted a Stipulation and Order to Stay Proceedings pending the decision of the California Supreme Court in Brinker. On April 12, 2012, the California Supreme Court issued its decision in Brinker. The Company says it is still evaluating the potential effect of this decision on Ordonez. The outcome of this case is uncertain and the ultimate resolution of it could have a material adverse effect on the Company's consolidated financial statements in the period in which the resolution is recorded. RETAIL PROPERTIES: Faces Shareholder Class Action in Illinois ------------------------------------------------------------- Retail Properties of America, Inc. on July 27 disclosed that a purported stockholder of the Company has filed a putative class action complaint against the Company and certain of its officers and directors in the United States District Court for the Northern District of Illinois. The complaint alleges, among other things, that the Company and the individual defendants breached their fiduciary duties when the Company listed its stock on the New York Stock Exchange and made a concurrent equity offering. The complaint seeks unspecified damages and other relief. Based on its initial review of the complaint, the Company believes the lawsuit to be without merit and intends to defend the action vigorously. About RPAI Retail Properties of America, Inc. -- http://www.rpai.com -- is a fully integrated, self-administered and self-managed real estate investment trust that owns and operates shopping centers across 35 states. The company is one of the largest owners and operators of shopping centers in the United States. REYNOLDS AMERICAN: "Collora" Suit Remains Stayed in Missouri ------------------------------------------------------------ A "lights" class-action case is pending against each of Reynolds American Inc.'s subsidiary, R. J. Reynolds Tobacco Company ("RJR Tobacco") and Brown & Williamson Holdings, Inc. ("B&W") in Missouri. In Collora v. R. J. Reynolds Tobacco Co., a case filed in May 2000 in Circuit Court, St. Louis County, Missouri, a judge in St. Louis certified a class in December 2003. In April 2007, the court granted the plaintiffs' motion to reassign Collora and the following cases to a single general division: Craft v. Philip Morris Companies, Inc. and Black v. Brown & Williamson Tobacco Corp. In April 2008, the court stayed the case pending U.S. Supreme Court review in Good v. Altria Group, Inc. A nominal trial date of January 10, 2011, was scheduled, but it did not proceed at that time. There is currently no activity in the case. No further updates were reported in the Company's July 25, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended June 30, 2012. RAI says in the event RJR Tobacco and its affiliates or indemnitees lose one or more of the pending "lights" class-action lawsuits, RJR Tobacco could face bonding difficulties depending upon the amount of damages ordered, if any, which could have a material adverse effect on RJR Tobacco's, and consequently RAI's, results of operations, cash flows or financial position. REYNOLDS AMERICAN: Awaits Decision on "Sateriale" Suit Appeal ------------------------------------------------------------- Reynolds American Inc. is awaiting a decision on the appeal from the dismissal of the class action lawsuit styled Sateriale v. R. J. Reynolds Tobacco Co., according to the Company's July 25, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended June 30, 2012. In Sateriale v. R. J. Reynolds Tobacco Co., a class action filed in November 2009 in the U.S. District Court for the Central District of California, the plaintiffs brought the case on behalf of all persons who tried unsuccessfully to redeem Camel Cash certificates from 1991 through March 31, 2007, or who held Camel Cash certificates as of March 31, 2007. The plaintiffs allege that in response to the defendants' action to discontinue redemption of Camel Cash as of March 31, 2007, customers, like the plaintiffs, attempted to exchange their Camel Cash for merchandise and that the defendants, however, did not have any merchandise to exchange for Camel Cash. The plaintiffs allege unfair business practices, deceptive practices, breach of contract and promissory estoppel. The plaintiffs seek injunctive relief, actual damages, costs and expenses. In January 2010, the defendants filed a motion to dismiss, which prompted the plaintiffs to file an amended complaint in February 2010. The class definition changed to a class consisting of all persons who reside in the U.S. and tried unsuccessfully to redeem Camel Cash certificates, from October 1, 2006 (six months before the defendant ended the Camel Cash program), or who held Camel Cash certificates as of March 31, 2007. The plaintiffs also brought the class on behalf of a proposed California subclass, consisting of all California residents meeting the same criteria. In May 2010, RJR Tobacco's motion to dismiss the amended complaint for lack of jurisdiction over subject matter and, alternatively, for failure to state a claim was granted with leave to amend. The plaintiffs filed a second amended complaint. In July 2010, RJR Tobacco's motion to dismiss the second amended complaint was granted with leave to amend. The plaintiffs filed a third amended complaint, and RJR Tobacco filed a motion to dismiss in September 2010. In December 2010, the court granted RJR Tobacco's motion to dismiss with prejudice. Final judgment was entered by the court and the plaintiffs filed a notice of appeal in January 2011. Oral argument occurred on May 7, 2012. A decision is pending. REYNOLDS AMERICAN: Six Class Suits vs. Unit Pending in Canada ------------------------------------------------------------- Reynolds American Inc. continues to defend six class action lawsuits filed against its subsidiary in Canada, according to the Company's July 25, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended June 30, 2012. The six putative Canadian class actions were filed against various Canadian and non-Canadian tobacco-related entities, including Reynolds American Inc.'s subsidiary, R. J. Reynolds Tobacco Company ("RJR Tobacco") and one of its affiliates, in courts in the Provinces of Alberta, British Columbia, Manitoba, Nova Scotia, and Saskatchewan, although the plaintiffs' counsel have been actively pursuing only the action pending in Saskatchewan at this time: * In Adams v. Canadian Tobacco Manufacturers' Council, a case filed in July 2009 in the Court of Queen's Bench for Saskatchewan against Canadian and non-Canadian tobacco-related entities, including RJR Tobacco and one of its affiliates, the plaintiffs brought the case on behalf of all individuals who were alive on July 10, 2009, and who have suffered, or who currently suffer, from chronic obstructive pulmonary disease, emphysema, heart disease or cancer, after having smoked a minimum of 25,000 cigarettes designed, manufactured, imported, marketed or distributed by the defendants. * In Dorion v. Canadian Tobacco Manufacturers' Council, a case filed in June 2009, in the Court of Queen's Bench of Alberta against Canadian and non-Canadian tobacco-related entities, including RJR Tobacco and one of its affiliates, the plaintiffs brought the case on behalf of all individuals, including their estates, dependents and family members, who purchased or smoked cigarettes designed, manufactured, marketed or distributed by the defendants. * In Kunka v. Canadian Tobacco Manufacturers' Council, a case filed in 2009 in the Court of Queen's Bench of Manitoba against Canadian and non-Canadian tobacco-related entities, including RJR Tobacco and one of its affiliates, the plaintiffs brought the case on behalf of all individuals, including their estates, and their dependents and family members, who purchased or smoked cigarettes manufactured by the defendants. * In Semple v. Canadian Tobacco Manufacturers' Council, a case filed in June 2009 in the Supreme Court of Nova Scotia against Canadian and non-Canadian tobacco-related entities, including RJR Tobacco and one of its affiliates, the plaintiffs brought the case on behalf of all individuals, including their estates, dependents and family members, who purchased or smoked cigarettes designed, manufactured, marketed or distributed by the defendants for the period of January 1, 1954, to the expiry of the opt out period as set by the court. * In Bourassa v. Imperial Tobacco Canada Limited, a case filed in June 2010 in the Supreme Court of British Columbia against Canadian and non-Canadian tobacco-related entities, including RJR Tobacco and one of its affiliates, the plaintiffs brought the case on behalf of all individuals, including their estates, who were alive on June 12, 2007, and who have suffered, or who currently suffer from chronic respiratory diseases, after having smoked a minimum of 25,000 cigarettes designed, manufactured, imported, marketed, or distributed by the defendants. * In McDermid v. Imperial Tobacco Canada Limited, a case filed in June 2010 in the Supreme Court of British Columbia against Canadian and non-Canadian tobacco-related entities, including RJR Tobacco and one of its affiliates, the plaintiffs brought the case on behalf of all individuals, including their estates, who were alive on June 12, 2007, and who have suffered, or who currently suffer from heart disease, after having smoked a minimum of 25,000 cigarettes designed, manufactured, imported, marketed, or distributed by the defendants. In each of these six cases, the plaintiffs allege fraud, fraudulent concealment, breach of warranty, breach of warranty of merchantability and of fitness for a particular purpose, failure to warn, design defects, negligence, breach of a "special duty" to children and adolescents, conspiracy, concert of action, unjust enrichment, market share liability, joint liability, and violations of various trade practices and competition statutes. The plaintiffs seek compensatory and aggravated damages; punitive or exemplary damages; the right to waive the torts and claim disgorgement of the amount of revenues or profits the defendants received from the sale of tobacco products to putative class members; interest pursuant to the Pre-judgment Interest Act and other similar legislation; and other relief the court deems just. Pursuant to the terms of the 1999 sale of RJR Tobacco's international tobacco business, RJR Tobacco has tendered the defense of these six actions to Japan Tobacco Inc. Subject to a reservation of rights, JTI has assumed the defense of RJR Tobacco and its current or former affiliates in these actions. REYNOLDS AMERICAN: Aug. Hearing on Fee Issues in "Scott" Suit Set ----------------------------------------------------------------- A hearing to consider pending motions over fees and expenses in the class action lawsuit captioned Scott v. American Tobacco Co. is currently set for August 22, 2012, according to Reynolds American Inc.'s July 25, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended June 30, 2012. On November 5, 1998, in Scott v. American Tobacco Co., a case filed in District Court, Orleans Parish, Louisiana, the trial court certified a medical monitoring or smoking cessation class of Louisiana residents who were smokers on or before May 24, 1996. The case was brought against the major U.S. cigarette manufacturers, including Reynolds American Inc.'s subsidiary R. J. Reynolds Tobacco Company ("RJR Tobacco") and Brown & Williamson Holdings, Inc. ("B&W"), seeking to recover an unspecified amount of damages to pay for medical monitoring and smoking cessation programs. In July 2003, the jury returned a verdict in favor of the defendants on the plaintiffs' claim for medical monitoring and found that cigarettes were not defectively designed. However, the jury also made certain findings against the defendants on claims relating to fraud, conspiracy, marketing to minors and smoking cessation. Notwithstanding these findings, this portion of the trial did not determine liability as to any class member or class representative. What primarily remained in the case was a class- wide claim that the defendants pay for a program to help people stop smoking. In May 2004, the jury returned a verdict in the amount of $591 million on the class's claim for a smoking cessation program. In September 2004, the defendants posted a $50 million bond, pursuant to legislation that limits the amount of the bond to $50 million collectively for Master Settlement Agreement ("MSA") signatories, and noticed their appeal. RJR Tobacco posted $25 million (the portions for RJR Tobacco and B&W) towards the bond. In February 2007, the Louisiana Court of Appeals upheld the class certification and found the defendants responsible for funding smoking cessation for eligible class members. The appellate court also ruled, however, that the defendants were not liable for any post-1988 claims, rejected the award of prejudgment interest, struck eight of the 12 components of the smoking cessation program and remanded the case for further proceedings. In particular, the appellate court ruled that no class member, who began smoking after September 1, 1988, could receive any relief, and that only those smokers, whose claims accrued on or before September 1, 1988, would be eligible for the smoking cessation program. The plaintiffs had previously expressly represented to the trial court that none of their claims accrued before 1988 and that the class claims did not accrue until around 1996, when the case was filed. The defendants' application for writ of certiorari with the Louisiana Supreme Court was denied in January 2008. The defendants' petition for writ of certiorari with the U.S. Supreme Court was denied in June 2008. In July 2008, the trial court entered an amended judgment in the case, finding that the defendants are jointly and severally liable for funding the cost of a court-supervised smoking cessation program and ordered the defendants to deposit approximately $263 million together with interest from June 30, 2004, into a trust for the funding of the program. The court also stated that it would favorably consider a motion to return to defendants a portion of unused funds at the close of each program year in the event the monies allocated for the preceding program year were not fully expended because of a reduction in class size or underutilization by the remaining plaintiffs. In December 2008, the trial court judge signed an order granting the defendants an appeal from the amended judgment. In April 2010, the court of appeals amended but largely affirmed the trial court's July 2008 judgment and ordered the defendants to deposit with the court $242 million with judicial interest from July 21, 2008, until paid. The defendants' motion for rehearing was denied. In September 2010, the defendants' application for writ of certiorari or review and their emergency motion to stay execution of judgment with the Louisiana Supreme Court were denied. In September 2010, the U.S. Supreme Court granted the defendant's motion to stay the judgment pending applicants' timely filing, and the Court's disposition, of a petition for writ of certiorari. The defendants filed a petition for writ of certiorari in the U.S. Supreme Court in December 2010. The court denied the petition in June 2011. RJR Tobacco accrued $139 million, the portions of the judgment allocated to RJR Tobacco and B&W, in the second quarter of 2011. RJR Tobacco paid the judgment in August 2011. In December 2011, the plaintiffs filed a motion for assessment of attorneys' fees and costs for the prosecution of the case. The plaintiffs asserted a right to recover fees from the fund, but they claimed fees should be assessed against the defendants, instead of the fund. On January 6, 2012, the defendants filed exceptions and motion to strike seeking to dismiss any claim for fees from the defendants, as opposed to the fund, which were denied by the trial court. On April 4, 2012, the defendants filed an application for supervisory writs with the Louisiana Fourth Circuit Court of Appeal. In May 2012, the parties entered into an agreement that all fees and expenses will come from the fund and that no additional monies will come from the defendants. The agreement specifically provides that it is binding on class counsel and is not contingent on any further action or ruling by the court. Thus, the defendants contend that even if the court ultimately decides not to make an award from the fund or awards an amount far less than class counsel seeks, class counsel are still bound to seek fees solely from the fund and never from the defendants. The parties also agreed that all appeal bonds in the case could be released, and the trial court did in fact later release the appeal bonds in June 2012. The defendants alerted the Louisiana Fourth Circuit that the issue of whether fees could be awarded against the defendants, as opposed to the fund, had been resolved by agreement. The writ application nonetheless remains pending and has not been formally withdrawn given subsequent events. Specifically, on May 31, 2012, it was disclosed that the court had set up a trust with three trustees to oversee the funds deposited and to oversee implementation of the cessation program. The three trustees filed an ex parte motion on May 31, 2012, to intervene in the action for the purpose of potentially opposing any award of fees and expenses from the fund. The trial court granted the motion to intervene without providing the parties an advance opportunity to object. The plaintiffs and the defendants moved to vacate that order, and those motions are pending, with a hearing set for August 22, 2012. The plaintiffs' counsel and the trustees are in discussions to see if they can agree on an award of fees from the fund prior to the August 22, 2012 hearing. As noted, even if class counsel and the trust are not able to reach an agreement and the trustees ultimately oppose any award from the fund, the defendants contend that class counsel are bound by their May 2012 agreement to seek fees only from the fund and they are barred from enforcing any award of fees from any other source. REYNOLDS AMERICAN: "Lights" Class Suits vs. Unit Still Pending -------------------------------------------------------------- "Lights" class action lawsuits involving Reynolds American Inc.'s subsidiary remain pending, according to the Company's July 25, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended June 30, 2012. The "lights" class-action cases are pending against Reynolds American Inc.'s subsidiary, R. J. Reynolds Tobacco Company ("RJR Tobacco") and Brown & Williamson Holdings, Inc. ("B&W") in Illinois (2), Missouri (2), California (1) and Arizona (1). The classes in these cases generally seek to recover $50,000 to $75,000 per class member for compensatory and punitive damages, injunctive and other forms of relief, and attorneys' fees and costs from RJR Tobacco and/or B&W. In general, the plaintiffs allege that RJR Tobacco or B&W made false and misleading claims that "lights" cigarettes were lower in tar and nicotine and/or were less hazardous or less mutagenic than other cigarettes. The cases typically are filed pursuant to state consumer protection and related statutes. Many of these "lights" cases were stayed pending review of the Good v. Altria Group, Inc. case by the U.S. Supreme Court. In that "lights" class-action case pending against Altria Group, Inc. and Philip Morris USA, the U.S. Supreme Court decided that these claims are not preempted by the Federal Cigarette Labeling and Advertising Act or by the Federal Trade Commission's, referred to as FTC, historic regulation of the industry. Since this decision in December 2008, a number of the stayed cases have become active again. The seminal "lights" class-action case involves RJR Tobacco's competitor, Philip Morris, Inc. Trial began in Price v. Philip Morris, Inc. in January 2003. In March 2003, the trial judge entered judgment against Philip Morris in the amount of $7.1 billion in compensatory damages and $3 billion in punitive damages. Based on Illinois law, the bond required to stay execution of the judgment was set initially at $12 billion. Philip Morris pursued various avenues of relief from the $12 billion bond requirement. On December 15, 2005, the Illinois Supreme Court reversed the lower court's decision and sent the case back to the trial court with instructions to dismiss the case. On December 5, 2006, the trial court granted the defendant's motion to dismiss and for entry of final judgment. The case was dismissed with prejudice the same day. In December 2008, the plaintiffs filed a petition for relief from judgment, stating that the U.S. Supreme Court's decision in Good v. Altria Group, Inc. rejected the basis for the reversal. The trial court granted the defendant's motion to dismiss the plaintiffs' petition for relief from judgment in February 2009. In March 2009, the plaintiffs filed a notice of appeal to the Illinois Appellate Court, Fifth Judicial District, requesting a reversal of the February 2009 order and remand to the circuit court. On February 24, 2011, the appellate court entered an order, concluding that the two-year time limit for filing a petition for relief from a final judgment began to run when the trial court dismissed the plaintiffs' lawsuit on December 18, 2006. The appellate court therefore found that the petition was timely, reversed the order of the trial court, and remanded the case for further proceedings. Philip Morris filed a petition for leave to appeal to the Illinois Supreme Court. On September 28, 2011, the Illinois Supreme Court denied Philip Morris's petition for leave to appeal and returned the case to the trial court for further proceedings. The plaintiffs filed a petition for relief from the judgment in February 2012. A hearing is scheduled for August 21, 2012. RAI says in the event RJR Tobacco and its affiliates or indemnitees lose one or more of the pending "lights" class-action lawsuits, RJR Tobacco could face bonding difficulties depending upon the amount of damages ordered, if any, which could have a material adverse effect on RJR Tobacco's, and consequently RAI's, results of operations, cash flows or financial position. REYNOLDS AMERICAN: "Howard" Class Suit Remains Stayed in Ill. ------------------------------------------------------------- In Howard v. Brown & Williamson Tobacco Corp., a case filed in February 2000 in Circuit Court, Madison County, Illinois, a judge certified a class in December 2001. In June 2003, the trial judge issued an order staying all proceedings pending resolution of the Price v. Philip Morris, Inc. case. The plaintiffs appealed this stay order to the Illinois Fifth District Court of Appeals, which affirmed the Circuit Court's stay order in August 2005. There is currently no activity in the case. No further updates were reported in Reynolds American Inc.'s July 25, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended June 30, 2012. RAI says in the event RJR Tobacco and its affiliates or indemnitees lose one or more of the pending "lights" class-action lawsuits, RJR Tobacco could face bonding difficulties depending upon the amount of damages ordered, if any, which could have a material adverse effect on RJR Tobacco's, and consequently RAI's, results of operations, cash flows or financial position. REYNOLDS AMERICAN: "Jones" Suit vs. Units Remains Pending in Mo. ---------------------------------------------------------------- In Jones v. American Tobacco Co., Inc., a case filed in December 1998 in Circuit Court, Jackson County, Missouri, the defendants removed the case to the U.S. District Court for the Western District of Missouri in February 1999. The action was brought against the major U.S. cigarette manufacturers, including Reynolds American Inc.'s subsidiary, R. J. Reynolds Tobacco Company ("RJR Tobacco") and Brown & Williamson Holdings, Inc. ("B&W"), and parent companies of U.S. cigarette manufacturers, including R.J. Reynolds Tobacco Holdings, Inc. ("RJR"), by tobacco product users and purchasers on behalf of all similarly situated Missouri consumers. The plaintiffs allege that their use of the defendants' tobacco products has caused them to become addicted to nicotine. The plaintiffs seek to recover an unspecified amount of compensatory and punitive damages. The case was remanded to the Circuit Court in February 1999. There has been limited activity in this case. No further updates were reported in the Company's July 25, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended June 30, 2012. REYNOLDS AMERICAN: JTI's Indemnification Bid Remains Pending ------------------------------------------------------------ A request for indemnification in a class action lawsuit filed against a subsidiary of the purchaser of Reynolds American Inc.'s former international tobacco business remains pending, according to the Company's July 25, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended June 30, 2012. By purchase agreement dated May 12, 1999, referred to as the 1999 Purchase Agreement, R.J. Reynolds Tobacco Holdings, Inc. ("RJR") and R. J. Reynolds Tobacco Company ("RJR Tobacco") sold the international tobacco business to Japan Tobacco Inc. ("JTI"). Under the 1999 Purchase Agreement, RJR and RJR Tobacco retained certain liabilities relating to the international tobacco business sold to JTI. Under its reading of the indemnification provisions of the 1999 Purchase Agreement, JTI has requested indemnification for damages allegedly arising out of these retained liabilities. As previously reported, a number of the indemnification claims between the parties relating to the activities of Northern Brands in Canada have been resolved. The other matters for which JTI has requested indemnification for damages under the indemnification provisions of the 1999 Purchase Agreement are: * In a letter dated March 31, 2006, counsel for JTI stated that JTI would be seeking indemnification under the 1999 Purchase Agreement for any damages it may incur or may have incurred arising out of a Southern District of New York grand jury investigation, a now-terminated Eastern District of North Carolina grand jury investigation, and various actions filed by the European Community and others in the U.S. District Court for the Eastern District of New York, referred to as the EDNY, against RJR Tobacco and certain of its affiliates on November 3, 2000, August 6, 2001, and October 30, 2002, and against JTI on January 11, 2002. * JTI also has sought indemnification relating to a Statement of Claim filed on April 23, 2010, against JTI Macdonald Corp., referred to as JTI-MC, by the Ontario Flue-Cured Tobacco Growers' Marketing Board, referred to as the Board, Andy J. Jacko, Brian Baswick, Ron Kichler, and Aprad Dobrenty, proceeding on their own behalf and on behalf of a putative class of Ontario tobacco producers that sold tobacco to JTI-MC during the period between January 1, 1986, and December 31, 1996, referred to as the Class Period, through the Board pursuant to certain agreements. The Statement of Claim seeks recovery for damages allegedly incurred by the class representatives and the putative class for tobacco sales during the Class Period made at the contract price for duty free or export cigarettes with respect to cigarettes that, rather than being sold duty free or for export, purportedly were sold in Canada, which allegedly breached one or more of a series of contracts dated between June 4, 1986, and July 3, 1996. A motion to dismiss has been filed. * Finally, JTI has advised RJR and RJR Tobacco of its view that, under the terms of the 1999 Purchase Agreement, RJR and RJR Tobacco are liable for a roughly $1.7 million judgment entered in 1998, plus interest and costs, in an action filed in Brazil by Lutz Hanneman, a former employee of a former RJR Tobacco subsidiary. RJR and RJR Tobacco deny that they are liable for this judgment under the terms of the 1999 Purchase Agreement. Although RJR and RJR Tobacco recognize that, under certain circumstances, they may have these and other unresolved indemnification obligations to JTI under the 1999 Purchase Agreement, RJR and RJR Tobacco disagree with JTI as to (1) what circumstances relating to any such matters may give rise to indemnification obligations by RJR and RJR Tobacco, and (2) the nature and extent of any such obligation. RJR and RJR Tobacco have conveyed their position to JTI, and the parties have agreed to resolve their differences at a later time. REYNOLDS AMERICAN: Minn. Court Dismissed "Thompson" Suit in June ---------------------------------------------------------------- The U.S. District Court for the District of Minnesota dismissed in June 2012 the class action lawsuit captioned Thompson v. R. J. Reynolds Tobacco Co., according to Reynolds American Inc.'s July 25, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended June 30, 2012. In Thompson v. R. J. Reynolds Tobacco Co., a case filed in February 2005 in District Court, Hennepin County, Minnesota, Reynolds American Inc.'s subsidiary, R. J. Reynolds Tobacco Company ("RJR Tobacco") removed the case to the U.S. District Court for the District of Minnesota. In October 2007, the U.S. District Court remanded the case to state district court. In May 2009, the court entered an agreed scheduling order that bifurcates merits and class certification discovery. The parties were engaged in class certification discovery. In July 2009, the plaintiffs in this case and in Dahl v. R. J. Reynolds Tobacco Co. filed a motion to consolidate for discovery and trial. In October 2009, the court companioned the two cases and reserved its ruling on the motion to consolidate, which it said will be reevaluated as discovery progresses. In February 2010, a stipulation and order was entered to stay proceedings in this case and in Dahl until completion of all appellate review in Curtis v. Altria Group, Inc. In June 2012, the court dismissed the case with prejudice. RAI says in the event RJR Tobacco and its affiliates or indemnitees lose one or more of the pending "lights" class-action lawsuits, RJR Tobacco could face bonding difficulties depending upon the amount of damages ordered, if any, which could have a material adverse effect on RJR Tobacco's, and consequently RAI's, results of operations, cash flows or financial position. SUPERVALU INC: Independent Grocers Lose Class-Action Status Bid --------------------------------------------------------------- Dan Browning, writing for Star Tribune, reports that a group of independent grocers will not get class-action status to press their antitrust cases against Supervalu Inc. and C&S Wholesale Grocers Inc. over a deal to divide up markets in the Midwest and New England. U.S. District Judge Ann Montgomery said in an order made public on July 26 that the plaintiffs had failed to establish a case that an agreement between Eden Prairie-based Supervalu and C&S, based in Keene, N.H., had caused a common injury to the myriad potential plaintiffs in the class. Supervalu spokesman Mike Siemienas said the ruling puts the ball in the plaintiffs' court. "We believe the court reached the right conclusion and are pleased with the outcome," he said. "This ruling means the case cannot proceed as a class action." Plaintiffs attorney Joe Bruckner said his clients disagree with the ruling and are devising a strategy to move forward. "Clearly, it's not the ruling we had hoped for," Mr. Bruckner said. "By no means is it over. . . . An agreement to divide markets among the country's two largest grocery wholesalers, we think, is clearly a violation of the antitrust laws and we're confident of the underlying merits of our claim." The plaintiffs are retail grocers who allege that Supervalu and C&S, two of the nation's largest grocery product wholesalers by sales volume, agreed to split up territory and customers to reduce competition. They filed two separate lawsuits alleging that the agreement drove up prices, and they seek unspecified treble damages and attorney's fees under the Clayton Antitrust Act. The controversy dates to 2003 when Supervalu was looking to divest itself of underperforming retail stores, customer agreements and operating warehouses in New England. It began negotiations with C&S, according to a sworn statement by David Boehnen, a Supervalu executive involved in the discussions. Supervalu dubbed the divestiture project "Operation Salmon." But in April 2003 another major wholesaler, Fleming Cos. Inc. of Lewisville, Texas, filed for Chapter 11 bankruptcy protection. Supervalu sought to acquire much of Fleming's wholesale business operations, Mr. Boehnen said. But negotiations faltered, and C&S stepped in. Supervalu and C&S negotiated an agreement in September 2003 in which C&S assigned to Supervalu certain Fleming assets for its Midwest wholesale operations, and Supervalu assigned to C&S its New England wholesale assets and certain retail assets, Mr. Boehnen said. The "assets exchange agreement" included a non-compete provision that barred Supervalu and C&S from supplying former customers served from a certain distribution center for two years, and each agreed not to solicit those customers for five years. Both sides presented experts to argue that the agreement either did, or did not, harm the independent grocers. Judge Montgomery analyzed the arguments separately for New England and for the Midwest in an exhaustive, 34-page opinion and order. She noted that the price negotiations between the wholesalers and individual retailers varied widely. Although that by itself doesn't bar a class-action, Judge Montgomery found that the plaintiffs had failed to establish that they suffered a common harm. SYNGENTA CROP: Officials Mum on Proposed Class Action Settlement ---------------------------------------------------------------- Bethany Krajelis, writing for The Madison St. Clair Record, reports that although plaintiffs in a Madison County class action lawsuit that led to federal litigation over the weed killer atrazine will be included in the $105 million proposed settlement, it appears they don't want to talk about it -- or at least not yet. A message left last week for Richard Hayes, president of Holiday Shores Sanitary District, at the district's office was returned by an employee, who referred media questions to Korein Tillery, the law firm that filed the class action lawsuit against Syngenta Crop Protection and Syngenta AG on the sanitary district's behalf in Madison County in 2004. A message left at Mr. Hayes' home, as well as at the law office of the district's attorney, Bob Perica, went unreturned. And the same goes for messages left last week for officials for some of the plaintiff municipalities involved in the federal lawsuit, including the Village of Coulterville and the City of Gillespie. David Willey, the city manager for the City of Greenville, the lead plaintiff in the federal suit, returned a message left for the city's attorney, Patrick Schuafelberger, and declined comment on behalf of the city, noting the pending nature of the settlement. These messages sought comment from the officials of the plaintiff municipalities as to their involvement and impression of the proposed settlement, as well as how it would directly impact their village or city. In addition, a message left on July 25 with Stephen Tillery's secretary seeking comment from the attorney who spearheaded the lawsuits was not immediately returned. In 2004, Mr. Tillery filed six separate class action suits in Madison County Circuit Court against various manufacturers of atrazine, a commonly used agricultural herbicide. The plaintiffs claimed that atrazine ran off farm field and into their drinking water supplies. Six years later, Mr. Tillery filed a class action lawsuit in federal court on behalf of the City of Greenville and several other water providers in six Midwestern states. In May, the Syngenta defendants agreed to pay $105 million to settle the suit. If approved, the proposed settlement would resolve all pending litigation over these claims, including matters in Madison County that include other companies besides Syngenta, such as Dow AgroSciences and Drexel, according to a transcript of the May 30 hearing on a motion for preliminary approval of the settlement. Mr. Tillery said during the May hearing that the proposed settlement provides community water systems the chance to test their water systems for atrazine and if appropriate, file claims up until late August. If approved, claimants would receive a fixed payment of $5,000 to help cover the cost of testing for atrazine (two tests per year at $250 each for 10 years) and a pro-rata share of the remaining balance of the settlement fund. The proposed settlement also provides plaintiff attorneys about $34.9 million in fees to share. Mr. Tillery and Michael Pope, the attorney representing the Syngenta defendants, said at the May hearing that the settlement will resolve the claims of more than 1,800 water providers. Mr. Tillery also noted that a formula will be used to determine exactly how much each claimant will receive under the settlement. If the settlement is approved, Mr. Tillery said in May that 157 claimants would get between $20,000 and $50,000, 96 would receive between $50,000 and $100,000, 151 would be eligible for between $100,000 and $500,000, 14 systems would get $500,000 and one system would receive $1 million. According to the Holiday Shores Sanitary District's Web site, which provides minutes of its board meetings, trustees went into closed executive session in May to discuss updates of litigation. They also went into a closed session in June to discuss employee salary review and litigation, which is allowed under provisions of the state's Open Meeting Act. The minutes of the June meeting, however, did make one mention to Syngenta. During a discussion on possible decreases in expenses for the district's 2012-2013 budget, officials noted that "since the sale of the water plant and the Syngenta settlement are uncertain for this fiscal period, a budget amendment will be considered at the time they occur." Jim McCann, president of the Holiday Shores Association, said he wasn't surprised by the lack of response to media calls on the Syngenta settlement. His association is not included in the litigation. He said the board discussed it in 2004 and 2005 after Mr. Tillery inquired about whether it would like to be a party to the suit and decided not to do so. Mr. McCann said the sanitary district does not keep the board updated on the litigation, but emphasized that the board has not asked for it do so either. He said he follows the proposed settlement through media reports. As someone who has been drinking water provided by the district for about two decades, Mr. McCann said he does not have any concerns over the safety of the water. When the litigation first began, he said he was worried over negative publicity that might be created by the fact the association and district share a similar name. On the bright side, Mr. McCann said the litigation hasn't created a mass exodus of residents, inquiries from potential residents or fears over the safety of the drinking water. "Our water is really good," he said. "It's not a concern." The proposed settlement is set to face a final fairness hearing Oct. 22 in Benton before U.S. District Judge Phil Gilbert. TICKETMASTER: Wheel Chair Users File Discrimination Class Action ---------------------------------------------------------------- On July 27, 2012, John Whitbread, a music fan who uses a wheelchair, filed a Class Action Lawsuit in Los Angeles Superior Court against Ticketmaster, Los Angeles County, and Los Angeles Philharmonic Association. Mr. Whitbread alleges that Ticketmaster does not allow wheelchair users to purchase wheelchair accessible tickets directly online. Instead, a wheelchair user must go through the elaborate process of sending in a request for tickets and then wait for a telephone call in order to purchase tickets. The lawsuit alleges that this is precisely what happened when Mr. Whitbread attempted to purchase Journey tickets for the Hollywood Bowl. Mr. Whitbread is not seeking damages. Instead, the lawsuit is designed to require Ticketmaster to allow wheelchair users to purchase tickets directly online like any other concert goer. The lawsuit, Case No. BC489093, alleges that each of the defendants are in violation of California State law, including California's Disabled Persons Act. These laws follow the requirement of the Americans with Disability Act which mandates: "A public accommodation that sells tickets for a single event or series of events shall modify its policies, practices, or procedures to ensure that individuals with disabilities have an equal opportunity to purchase tickets for accessible seating through the same methods of distribution [as other patrons]" [See 28 C.F.R. Sec. 36.302(f)(ii)]. The Action seeks certification of a plaintiff class of wheelchair users and an order from the Court to compel Defendants to permit wheelchair users to purchase tickets for venues directly online. The lawsuit alleges that Defendants discriminatory actions include: "The denial of access to the same methods of ticket purchases to individuals on account of their disability -- specifically, wheelchair users often cannot purchase wheelchair accessible tickets directly online through Ticketmaster's Web site -- however, individuals who purchase non-accessible seats enjoy the amenity of purchasing tickets directly online." TONY DOWNS: Recalls 70,500 Lbs. of Canned Chicken Products ---------------------------------------------------------- * Mislabeling and Undeclared Allergen Cited Tony Downs Foods Company, a Madelia, Minnesota establishment is recalling approximately 70,500 pounds of premium chunk chicken due to mislabeling and an undeclared allergen, the U.S. Department of Agriculture's Food Safety and Inspection Service (FSIS) announced. The products may actually contain 'Beef with Gravy.' The canned beef product contains wheat, an allergen not declared on the canned chicken label. The product subject to recall is: * 12.5-oz. cans of "Tyson Premium Chunk Chicken." The incorrectly labeled products subject to recall bear the code date of "8965 248A 12139" and "Best by May 18, 2015" ink-jetted on the bottom of each can. Each label bears the number P-65 inside the USDA mark of inspection. Correctly labeled cans are inkjetted with the code "1392TDM4600" and "P65" beneath a "Use By May 18 2015" date and are not subject to recall. These products were produced on May 18, 2012, and were distributed to retail establishments nationwide. The problem was discovered after the firm received customer complaints that the product was incorrectly labeled. FSIS and the company have received no reports of adverse reactions due to consumption of these products. Anyone concerned about a reaction should contact a healthcare provider. FSIS routinely conducts recall effectiveness checks to verify recalling firms notify their customers of the recall and to ensure that steps are taken to make certain that the product is no longer available to consumers. Consumers with questions about the recall should contact the company's Tyson Consumer Hotline at 866-328-3156. Media with questions about the recall should contact Tyson Public Relations Manager, Worth Sparkman, at 479-290-6358. Consumers with food safety questions can "Ask Karen," the FSIS virtual representative available 24 hours a day at AskKaren.gov. The toll-free USDA Meat and Poultry Hotline 1-888-MPHotline (1- 888-674-6854) is available in English and Spanish and can be reached from l0:00 a.m. to 4:00 p.m. (Eastern Time) Monday through Friday. Recorded food safety messages are available 24 hours a day. VISA INC: Vermont Retail Association Opposes Fee Settlement ----------------------------------------------------------- Jane Lindholm, writing for Vermont Public Radio, reports that the Vermont Retail Association is speaking out against a proposed lawsuit settlement regarding credit card swipe fees. The class action lawsuit, representing 7 million merchants nationwide, claimed Visa and Mastercard colluded in a price fixing scheme. In the proposed settlement to the case, Visa and Mastercard would pay about $6 billion and reduce swipe fees for eight months. But Tasha Wallis of the Vermont Retail Association says this settlement would actually hurt local businesses. "Six billion sounds like a great deal of money, but looking at the fact that retailers pay $30 billion a year in credit card swipe fees, billions more in debit card swipe fees, that's really not a lot of cash at the end of the day." Ms. Wallis says the proposed solution is a temporary one and would not address the permanent issue of how much credit card companies can charge merchants. "There has been a lot of congressional attention to this issue and we're hopeful at some point that Congress or the regulators will take action to require a reduction in these fees, which are so high. And there's some concern out there that an agreement in that suit would be game over, end of story, and we don't want to be in that position," Ms. Wallis explained. Ms. Wallis says that swipe fees are the third biggest cost of doing business for many local retailers, after paying rent and salaries. The Vermont Retail Association joins WalMart, Target, and the National Association of Convenience Stores in opposing the settlement, which has not yet been finalized. WALGREEN CO: Wins Bid to Dismiss Generic Drug Class Action ---------------------------------------------------------- Reuters reports that Walgreen Co. and generic drug maker Par Pharmaceutical Cos. Inc. won dismissal on July 26 of a proposed class-action lawsuit accusing the companies of overcharging for various generic drugs in an effort to increase profits. The lawsuit, filed in January by a union benefits fund, had accused Walgreen and Par of violating federal racketeering laws. But U.S. District Judge Samuel Der-Yeghiayan in Chicago concluded the fund's claims were based on violations of state and federal laws that don't create a right for private lawsuits. "Since the Fund's complaint relies on regulatory violations to support its RICO claims, the Fund has failed to state a claim upon which relief can be granted," Judge Der-Yeghiayan wrote. Kenneth Wexler, a lawyer for the plaintiff United Food and Commercial Workers Unions and Employers Midwest Health and Pension Fund, said he was studying the opinion and "didn't expect it." "We're considering our options," he said. The complaint alleged that from 1999 through 2006, Walgreen and Par conspired to boost profits by illegally filling prescriptions with Par's more expensive drugs rather than specific ones doctors prescribed. The drugs included generic versions of the antidepressant Prozac and anti-acid medication Zantac. The lawsuit was filed following the unsealing of a whistleblower lawsuit against Par in July 2011, according to the complaint. That case remains pending. "We agree completely with the court's decision," Rob Andalman, a lawyer for Walgreen, said in an e-mail. A spokeswoman and lawyer for Par did not respond to requests for comment. In 2008, Walgreen agreed to a $35 million settlement to resolve claims by the federal government and 42 states and Puerto Rico that it had overcharged state Medicaid funds through filling prescriptions with more expensive generic versions of Zantac and Prozac. Par earlier said it had agreed to be acquired by TPG for $1.9 billion. The case is In re: United Food and Commercial Workers Unions and Employers Midwest Health Benefits Fund vs. Walgreen Co., U.S. District Court for Northern District of Illinois, No. 12-CV-00204. XCEED FINANCIAL: Settles Overdraft Fee Class Action --------------------------------------------------- Peter Strozniak, writing for Credit Union Times, reports that Xceed Financial Federal Credit Union has agreed to a confidential out-of-court settlement with a member who filed a class action lawsuit against the El-Segundo, Calif., credit union for unfair business practices by allegedly re-sequencing debit charge transactions to maximize overdraft fees. "The parties have entered into a confidential settlement agreement to avoid time and expense of litigation and without admitting fault or liability of any kind," according to court documents that officially dismissed the case. The agreement was reached July 20 in the U.S. District Court in Los Angeles. Cuthbert Shillingford, who joined the $751 million Xceed Financial in 2006, filed the lawsuit in April after noticing he was charged repeated overdraft fees of $29 each. He claimed some of the overdraft fees were not proper and resulted from Xceed's re- sequencing of his transactions. Calls to attorneys representing Xceed Financial Federal CU and Mr. Shillingford about the settlement were not returned. A call to Xceed Financial Federal CU also was not returned. The Xceed Financial lawsuit represented the first against credit unions claiming the re-sequencing of debit card transactions to make more overdraft fee revenue. In June, a San Jose, Calif.-based attorney filed seven class action lawsuits against credit unions in California, Illinois and Alabama alleging they committed deceptive business practices that involved "the systematic manipulation and re-ordering of electronic debit transactions from the highest dollar amount to the lowest dollar amount . . . to maximize the amount of overdraft fees collected." The lawsuit names $9.4 billion SchoolsFirst Federal Credit Union of Santa Ana, Calif.; the $6 billion Star One Credit Union of Sunnyvale, Calif.; the $1.3 billion Kern Schools Federal Credit Union of Bakersfield, Calif.; the $2 billion Educational Employees Credit Union of Fresno, Calif., the $8.4 billion Alliant Credit Union of Chicago; the $590 million Alabama Telco Credit Union of Hoover, Ala.; and the $1.25 billion America's First Federal Credit Union of Birmingham, Ala. If the accused credit unions are maximizing overdraft income, it doesn't show in their financial performance reports. All but two reported fee and operating income to average assets below peer averages during first-quarter 2012. Star One reported only 0.16% fee income to average assets, compared to the peer average of 1.38%. Alliant's fee income was only 0.19% of average assets. Kern Schools was the lone exception, reporting 2.39% fee income to average assets. According to 5300 reports published on the NCUA's Web site, Kern Schools collected $4.78 million from fees and $2.8 million in other noninterest income, which includes CUSO revenue. Rick Heldebrant, president/CEO of Star One, told Credit Union Times last month his institution does not reorder transactions nor does it order them largest transaction to smallest during processing. He said the allegations in the suit are false. Kern Schools President/CEO Steve Renock told Credit Union Times in June that he "believes the allegations are not correct at this time." The lawsuits come as the Consumer Financial Protection Bureau is researching overdraft practices and collecting information from financial service providers and the public. In 2011, class action lawsuit Closson v. Bank of America resulted in a $410 million settlement. According to the settlement Web site, Bank of America was forced to pay up to $78 to customers who could prove they had an account at BofA, had account accessibility through a debit card, check card or another other card used for debit purchases, and paid at least one insufficient funds fee, overdraft fee, returned item fee, over-limit fee or similar fee related to a debit card transaction between 2000 and 2007. On June 26, the Boston-based Citizens Bank settled its overdraft class action lawsuit for $137.5 million. The $30 billion Citizens settlement was part of a broader class action suit that reportedly involves more than 30 banks. ********* 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 * * *