CAR_Public/121213.mbx             C L A S S   A C T I O N   R E P O R T E R

          Thursday, December 13, 2012, Vol. 14, No. 247

                             Headlines

AETNA INC: Conn. Medical Society Welcomes $120-Mil. Settlement
ARIZONA BEVERAGES: Class in Arizona Iced Tea Suit Certified
BOK FINANCIAL: Payment Made in Nov. to Overdraft Fee Suit Class
CHRYSLER LLC: Product Liability Class Suit Goes to SDNY Court
CITIGROUP INC: Hearing on Securities Suit Settlement on Jan. 15

CITIGROUP INC: Class Standing Granted in N.J. Carpenters Suit
CITIGROUP INC: Defends Consolidated ERISA Litigation II in N.Y.
CITIGROUP INC: Faces "Rentokil" Suit Over Euro Notes Offerings
CITIGROUP INC: Sup. Ct. Refuses to Review ERISA Suit Dismissal
CONSUMER PORTFOLIO: Illinois Suit Now Fully and Finally Settled

CREXUS INVESTMENT: Being Sold to Annaly for Too Little, Suit Says
D. & B. CORP: Faces Exotic Dancers' Employment Suit
DISTRICT OF COLUMBIA: Forgotten-Child Episode Won't Hit Settlement
FORD: Sued Over False Claims on 2013 C-Max & Fusion Hybrids
GENESIS HEALTHCARE: Supreme Court Looks Into Wage Theft Suit

HCA HOLDINGS: Awaits Ruling on Bid to Dismiss Securities Suit
HOSTESS BRANDS: Employees File Class Suit Over WARN Act Violations
HP: Taps Morgan Lewis to Represent it in Autonomy Class Actions
NAT'L HOCKEY: Dec. 18 Conference Hearing in Antitrust Suit Set
OXFORD HEALTH: Supreme Court to Weigh Class Arbitration Issue

PARS INT'L: Filipino Teachers' H-1B Class Action Likely to Drag
REISS INNOVATIONS: Recalls 500 High-Powered Magnet Desk Toy Sets
ROBBINS GELLER: In Trouble Over Class Action Confidential Witness
STERLING FINANCIAL: Claims in Overdraft Fees Suits Dismissed
THOMAS JEFFERSON: Law School Graduates' Class Action Can Proceed

TRILEGIANT CORP: Faces Class Action Over Alleged Racketeering
VERTEX PHARMACEUTICALS: Faces "Bristol" Suit in Massachusetts
VIVUS INC: Kovtun Appeals Dismissal of Securities Suit
WATERSCAPE RESORT: Court Rules on Pavarini's Summary Judgment Bid
ZOOM TAN: Class Action Over Spam-Texting Ongoing

                          *********



AETNA INC: Conn. Medical Society Welcomes $120-Mil. Settlement
--------------------------------------------------------------
The Associated Press reports that the Connecticut State Medical
Society is welcoming a $120 million class action settlement with
Aetna over out-of-network payments to providers and consumers.

The society was one of 10 associations that joined with the
American Medical Association in a lawsuit against the insurer.

Aetna, which is based in Hartford, said Dec. 7 it will pay $60
million, most of it after the settlement receives final court
approval, and then as much as $60 million more after claims are
submitted and validated.  Aetna, the nation's third-largest health
insurer, said it admitted no wrongdoing in the settlement.

Matthew C. Katz, executive vice president and chief executive of
the Connecticut State Medical Society, says the settlement
recognizes years of work by the medical group and other
organizations on behalf of doctors and patients.


ARIZONA BEVERAGES: Class in Arizona Iced Tea Suit Certified
-----------------------------------------------------------
Rebekah Kaufman and Alexis Amezcua, writing for Morrison &
Foerster, report that a federal judge in the Northern District of
California has certified a California class of Arizona Iced Tea
purchasers.  What is striking is that the court only certified a
class for declaratory and injunctive relief and denied plaintiffs'
bid to certify a class seeking monetary restitution based on the
purchase price.  Ries, et al. v. Arizona Beverages USA LLC, et
al., No. 3:10-cv-001139-DS, 2012 U.S. Dist. LEXIS 169853 (N.D.
Cal. Nov. 27, 2012).

The case involves claims under California's unfair competition and
false advertising laws, challenging the defendants' representation
that Arizona Iced Tea is "all natural" given that the beverage
contains high fructose corn syrup ("HFCS") and citric acid.
Forty-eight different beverages are named in the complaint.

After largely denying defendants' simultaneous motion for summary
judgment, the court turned to plaintiffs' motion for class
certification.  Plaintiffs sought certification of a class
consisting of all California purchasers of an Arizona brand
beverage from March 2006 to the present "which contained [HFCS] or
citric acid [and] which were marked, advertised, or labeled as
being 'All Natural,' or '100% Natural.'"  Notably, plaintiffs only
sought certification under Federal Rule of Civil Procedure
23(b)(2), thereby avoiding a host of battles over whether the
putative class could satisfy Rule 23(b)(3)'s predominance
requirement.  Issues such as whether plaintiffs could show on a
class-wide basis that members of the putative class saw, much less
relied on, the "all natural" labeling thus did not have to be
resolved.

Plaintiffs perhaps thought they could have their cake and eat it
too by nonetheless seeking restitution on behalf of the class.
The court dashed any such hope.  Citing the Supreme Court's
decision in Dukes, the court noted that Rule 23(b)(2) "does not
authorize class certification when each class member would be
entitled to an individualized award of monetary damages."  Id. at
*52.  Further, it was clear that plaintiffs' pursuit of monetary
relief was not secondary or incidental to the injunctive relief
sought:

"Although plaintiffs describe their pursuit of monetary relief as
secondary to their desire for corrective advertising and cessation
of the allegedly deceptive labeling practices when arguing for
class certification, based on the entire record in this case it is
clear the monetary relief predominates."

The court accordingly granted class certification for the purposes
of declaratory and injunctive relief and denied certification "to
the extent plaintiffs seek monetary damages, including
restitution, refund, reimbursement and disgorgement."  Thus,
though plaintiffs managed to certify a class, they failed in their
attempt to bypass the requirements of 23(b)(3), and still seek
restitution.


BOK FINANCIAL: Payment Made in Nov. to Overdraft Fee Suit Class
---------------------------------------------------------------
BOK Financial Corporation disclosed in its November 6, 2012, Form
10-Q filing with the U.S. Securities and Exchange Commission for
the quarter ended September 30, 2012, that payment of its $19
million settlement of a class action lawsuit was made to the class
in November.

In 2010, the Company's bank subsidiary was named as a defendant in
three class actions alleging that the manner in which the bank
posted charges to its consumer deposit accounts was improper.
These actions were consolidated and settled on November 23, 2011,
in Multi-District Litigation pending in the United States District
Court for the Southern District of Florida.  The settlement was
approved by the Court on August 29, 2012.  The settlement amount
of $19 million was paid to the plaintiff class on May 4, 2012,
payment was made to the class in November 2012.  The settlement
was fully accrued for in 2011.

BOK Financial Corporation -- http://www.bokf.com/-- a financial
holding company, offers a range of financial products and services
to commercial and industrial customers, and other financial
institutions and consumers.  It operates in three segments:
Commercial Banking, Consumer Banking, and Wealth Management.  The
Company was founded in 1910 and is headquartered in Tulsa,
Oklahoma.


CHRYSLER LLC: Product Liability Class Suit Goes to SDNY Court
-------------------------------------------------------------
New Jersey District Judge Michael A. Shipp granted the request of
Chrysler Group, LLC, to transfer the venue of a product liability
class action lawsuit to the U.S. District Court for the Southern
District of New York.

Jay Miller and Brooke Wiliman filed their original complaint on
Feb. 8, 2012, and an amended to the complaint on March 14, 2012.
In the Amended Complaint, the Plaintiffs, on behalf of a putative
class, allege the existence of design defects in several models of
Chrysler-brand vehicles that were manufactured, marketed, and
distributed between 2006 and the present.  The Plaintiffs contend
that design defects and faulty installation of their factory-
installed sunroofs caused leakage and, as a result thereof, harmed
The Plaintiffs.  The Plaintiffs assert a total of 11 claims based
on alleged design flaws: (1) breach of contract; (2) breach of
duty of good faith and fair dealing; (3) breach of express
warranty; (4) breach of implied warranty; (5) breach of the
Magnuson-Moss Act, 15 U.S.C. Sec. 2301; (6) negligence; (7)
negligent misrepresentation; (8) violation of the New Jersey
Consumer Fraud Act; (9) unjust enrichment; (10) injunctive and
equitable relief; and (11) declaratory judgment.

Chrysler Group, which purchased the assets of Chrysler LLC during
its 2009 bankruptcy, said the "the threshold issue" underlying its
Motion to Transfer "is whether Chrysler Group assumed the
liabilities for the claims Plaintiffs make, and the relief they
seek," under the terms of the Bankruptcy Court's June 1, 2009
order approving the sale.   Chrysler Group argued that the
Bankruptcy Court is the appropriate court to make this
determination because it issued the Sale Order and retained
jurisdiction to interpret the Sale Order.

The case is, MILLER, Plaintiffs, v. CHRYSLER GROUP, LLC,
Defendant, Civil Action No. 12-760 (D. N.J.).  A copy of the
Court's Dec. 7, 2012 Opinion is available at http://is.gd/Q1hsyV
from Leagle.com.

                          About Chrysler

Chrysler Group LLC, formed in 2009 from a global strategic
alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram
Truck, Mopar(R) and Global Electric Motorcars (GEM) brand
vehicles and products.  Headquartered in Auburn Hills, Michigan,
Chrysler Group LLC's product lineup features some of the world's
most recognizable vehicles, including the Chrysler 300, Jeep
Wrangler and Ram Truck.  Fiat will contribute world-class
technology, platforms and powertrains for small- and medium-sized
cars, allowing Chrysler Group to offer an expanded product line
including environmentally friendly vehicles.

Chrysler LLC and 24 affiliates on April 30, 2009, sought Chapter
11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead
Case No. 09-50002).  Chrysler hired Jones Day, as lead counsel;
Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory
Group LLC, and Greenhill & Co. LLC, for financial advisory
services; and Epiq Bankruptcy Solutions LLC, as its claims agent.

As of Dec. 31, 2008, Chrysler had $39,336,000,000 in assets and
$55,233,000,000 in debts.  Chrysler had $1.9 billion in cash at
that time.

In connection with the bankruptcy filing, Chrysler reached an
agreement with Fiat SpA, the U.S. and Canadian governments and
other key constituents regarding a transaction under Section 363
of the Bankruptcy Code that would effect an alliance between
Chrysler and Italian automobile manufacturer Fiat.  Under the
terms approved by the Bankruptcy Court, the company formerly
known as Chrysler LLC on June 10, 2009, formally sold
substantially all of its assets, without certain debts and
liabilities, to a new company that will operate as Chrysler Group
LLC.  Fiat acquired a 20% equity interest in Chrysler Group as
part of the deal.

The U.S. and Canadian governments provided Chrysler with
$4.5 billion to finance its bankruptcy case.  Those loans were
repaid with the proceeds of the bankruptcy estate's liquidation.

In April 2010, the Bankruptcy Court confirmed Chrysler's
Liquidating Plan.  That Plan was declared effective April 30,
2010.  The Debtor changed its corporate name to Old CarCo
following the sale.


CITIGROUP INC: Hearing on Securities Suit Settlement on Jan. 15
---------------------------------------------------------------
A fairness hearing is scheduled for January 15, 2013, in
connection with Citigroup Inc.'s $590 million settlement of a
consolidated securities litigation, according to the Company's
November 6, 2012, Form 10-Q filing with the U.S. Securities and
Exchange Commission for the quarter ended September 30, 2012.

Citigroup and its affiliates and subsidiaries and current and
former officers, directors and employees (collectively referred to
as Citigroup and Related Parties) have been named as defendants in
four putative class actions filed in the United States District
Court for the Southern District of New York.  On August 19, 2008,
these actions were consolidated under the caption IN RE CITIGROUP
INC. SECURITIES LITIGATION.  The consolidated amended complaint
asserts claims arising under Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 on behalf of a putative class of
purchasers of Citigroup common stock from January 1, 2004, through
January 15, 2009.  On November 9, 2010, the district court issued
an opinion and order dismissing all claims except those arising
out of Citigroup's exposure to collateralized debt obligations
(CDOs) for the time period February 1, 2007, through April 18,
2008.  Fact discovery is underway.  Plaintiffs have not yet
quantified the putative class's alleged damages.  During the
putative class period, as narrowed by the district court, the
price of Citigroup's common stock declined from $54.73 at the
beginning of the period to $25.11 at the end of the period.
(These share prices represent Citi's common stock prices prior to
its 1-for-10 reverse stock split, effective May 6, 2011.

On August 29, 2012, the District Court issued an order
preliminarily approving the parties' settlement in IN RE CITIGROUP
INC. SECURITIES LITIGATION, pursuant to which Citigroup has agreed
to pay $590 million.  A fairness hearing is scheduled for January
15, 2013.  Additional information relating to this action is
publicly available in court filings under the docket number 07
Civ. 9901 (S.D.N.Y.) (Stein, J.).


CITIGROUP INC: Class Standing Granted in N.J. Carpenters Suit
-------------------------------------------------------------
Class certification was granted in October 2012 in the lawsuit
filed by the New Jersey Carpenters Health Fund, according to
Citigroup Inc.'s November 6, 2012, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended September
30, 2012.

On October 15, 2012, the United States District Court for the
Southern District of New York granted lead plaintiffs' amended
motion for class certification in NEW JERSEY CARPENTERS HEALTH
FUND V. RESIDENTIAL CAPITAL LLC, ET AL., having previously denied
lead plaintiffs' motion for class certification on January 18,
2011.  Plaintiffs in this action allege violations of Sections 11,
12, and 15 of the Securities Act of 1933 and assert disclosure
claims on behalf of a putative class of purchasers of mortgage-
backed securities issued by Residential Accredited Loans, Inc.
pursuant or traceable to prospectus materials filed on March 3,
2006, and April 3, 2007.  Citigroup Global Markets Inc. (CGMI) is
one of the underwriter defendants.  Additional information
relating to this action is publicly available in court filings
under the docket number 08 CV 8781 (S.D.N.Y.) (Baer, J.).


CITIGROUP INC: Defends Consolidated ERISA Litigation II in N.Y.
---------------------------------------------------------------
Citigroup Inc. is defending itself against a consolidated class
action lawsuit in New York alleging violations of the Employee
Retirement Income Security Act of 1974, according to the Company's
November 6, 2012, Form 10-Q filing with the U.S. Securities and
Exchange Commission for the quarter ended September 30, 2012.

Beginning on October 28, 2011, several putative class actions were
filed in the United States District Court for the Southern
District of New York by current or former Citigroup employees
asserting claims under ERISA against Citigroup and its affiliates
and subsidiaries and current and former officers, directors and
employees (collectively referred to as Citigroup and Related
Parties) alleged to have served as ERISA plan fiduciaries from
2008 to 2009.  On July 27, 2012, these actions were consolidated
under the caption IN RE CITIGROUP ERISA LITIGATION II, and on
September 14, 2012, plaintiffs filed a consolidated complaint.
Additional information relating to this action is publicly
available in court filings under the docket number 11 Civ. 7672
(S.D.N.Y.) (Koeltl, J.).


CITIGROUP INC: Faces "Rentokil" Suit Over Euro Notes Offerings
--------------------------------------------------------------
Citigroup Inc. is facing a class action lawsuit related to its
offerings of medium term Euro Notes, according to the Company's
November 6, 2012, Form 10-Q filing with the U.S. Securities and
Exchange Commission for the quarter ended September 30, 2012.

On August 30, 2012, Rentokil-Initial Pension Scheme filed a
putative class action complaint against Citigroup and its
affiliates and subsidiaries and current and former officers,
directors and employees (collectively referred to as Citigroup and
Related Parties) on behalf of purchasers of 26 Citigroup offerings
of medium term Euro Notes issued between October 12, 2005, and
February 25, 2009.  The complaint asserts claims under Section 90
of the Financial Services and Markets Act 2000 and includes
allegations similar to those asserted in IN RE CITIGROUP INC. BOND
LITIGATION.  Additional information relating to this action is
publicly available in court filings under the docket number 12
Civ. 6653 (S.D.N.Y.) (Stein, J.).


CITIGROUP INC: Sup. Ct. Refuses to Review ERISA Suit Dismissal
--------------------------------------------------------------
The United States Supreme Court denied in October 2012 plaintiffs-
appellants' petition for a writ of certiorari seeking review of an
appellate court's dismissal of the complaint in GRAY v. CITIGROUP
INC., according to the Company's November 6, 2012, Form 10-Q
filing with the U.S. Securities and Exchange Commission for the
quarter ended September 30, 2012.

Beginning in November 2007, numerous putative class actions were
filed in the United States District Court for the Southern
District of New York by current or former Citigroup Inc. employees
asserting claims under the Employee Retirement Income Security Act
(ERISA) against Citigroup and its affiliates and subsidiaries and
current and former officers, directors and employees alleged to
have served as ERISA plan fiduciaries.  On August 31, 2009, the
district court granted defendants' motion to dismiss the
consolidated class action complaint, captioned IN RE CITIGROUP
ERISA LITIGATION.  Plaintiffs appealed the dismissal and, on
October 19, 2011, the United States Court of Appeals for the
Second Circuit affirmed the district court's order dismissing the
case.  Additional information relating to this action is publicly
available in court filings under the docket number 07 Civ. 9790
(S.D.N.Y.) (Stein, J.) and 09-3804 (2d Cir.) and 11A1045 (S. Ct.).

On June 22, 2012, plaintiffs-appellants filed a petition for a
writ of certiorari to the United States Supreme Court seeking
review of the United States Court of Appeals for the Second
Circuit's decision affirming the district court's dismissal of
plaintiffs' complaint in GRAY v. CITIGROUP INC.

On October 15, 2012, the United States Supreme Court denied
plaintiffs-appellants' petition for a writ of certiorari seeking
review of the United States Court of Appeals for the Second
Circuit's decision affirming the district court's dismissal of
plaintiffs' complaint in GRAY v. CITIGROUP INC.  Additional
information relating to this action is publicly available in court
filings under the docket numbers 07 Civ. 9790 (S.D.N.Y.) (Stein,
J.), 09-3804-cv (2d Cir.), and No. 11-1531 (S. Ct.).


CONSUMER PORTFOLIO: Illinois Suit Now Fully and Finally Settled
---------------------------------------------------------------
Consumer Portfolio Services, Inc. disclosed in its November 6,
2012, Form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarter ended September 30, 2012, that the
Griffith Litigation is now fully and finally settled.

The Company was named as defendant in a putative class action
known as the Griffith Litigation brought in federal district court
in Chicago, Illinois.  In June 2012, the court gave final approval
to a settlement agreed to between the Company and the plaintiffs,
pursuant to which (i) a class was certified for settlement
purposes only, and (ii) the Company agreed to pay a fixed amount
of plaintiff attorney fees and also make payments against claims
made by members of the class, the amount of which would depend on
class members' responses to the Company's notice of the
settlement.  As of September 30, 2012, all amounts payable
pursuant to the settlement have been paid, and the matter is fully
and finally settled.  The amount paid had been recorded as a
liability as of June 30, 2012.


CREXUS INVESTMENT: Being Sold to Annaly for Too Little, Suit Says
-----------------------------------------------------------------
Gary Sosnovich, on behalf of itself and all others similarly
situated v. Patrick J. Corcoran, Roberto B. Eastep, Ronald Daniel
Kazel, Nancy Jo Kuenstner, Kevin J. Riordan, Annaly Capital
Management, Inc., Fixed Income Discount Advisory Company, and
Crexus Investment Corp., Case No. 654027/2012 (N.Y. Sup. Ct.,
November 20, 2012) is brought on behalf of shareholders of CreXus
Investment Corp. against the Defendants for aiding and abetting
the breaches of fiduciary duty by CreXus' board of directors in
connection with Annaly's proposal to acquire all of the
outstanding shares of CreXus that it does not already own for
$12.50 per share in cash for a total transaction value of
approximately $958 million.

The Proposed Transaction is a fait accompli because Annaly
controls CreXus through its 12.4% ownership interest, its
appointment of two of CreXus's five directors, and because each of
CreXus's officers, including Kevin Riordan, CreXus' chief
executive officer and president, Robert Restrick, its Chief
Operating Officer, and Daniel Wickey, its Chief Financial Officer
and Secretary, are all employees of Annaly or its wholly-owned
subsidiary Fixed Income Discount Advisory Company ("FIDAC"), the
Plaintiff alleges.  The Plaintiff adds that by placing the
interests of Annaly and FIDAC above the interests of CreXus'
public shareholders, the Board will approve a transaction that
significantly undervalues CreXus.

The Plaintiff is a shareholder of CreXus common stock.

CreXus is a Maryland corporation based in New York.  CreXus is a
real estate investment trust and, therefore, must pay out 90% of
its earnings to shareholders to avoid taxation at the corporate
level.  The Company is managed by FIDAC, a wholly-owned subsidiary
of defendant Annaly.  CreXus acquires, manages and finances
commercial mortgage loans and other commercial real estate debt,
commercial mortgage-backed securities and other commercial real
estate assets.  The Individual Defendants are directors and
officers of the Company.

Annaly is the largest mortgage REIT listed on the New York Stock
Exchange.  Annaly purchased 25% of the common shares of CreXus in
a private placement concurrent with CreXus's initial public
offering and an additional 5 million shares in 2011.  FIDAC is an
investment advisor and serves as the manager of CreXus.  FIDAC is
a wholly-owned subsidiary of Annaly.

The Plaintiff is represented by:

          Ira M. Press, Esq.
          J. Brandon Walker, Esq.
          KIRBY MCINERNEY LLP
          825 Third Avenue, 16th Floor
          New York, NY 10022
          Telephone: (212) 371-6600
          Facsimile: (212) 751-2540
          E-mail: ipress@kmllp.com
                  bwalker@kmllp.com


D. & B. CORP: Faces Exotic Dancers' Employment Suit
---------------------------------------------------
Ashley Denisevich, individually, and on behalf of all others
similarly situated v. D. & B. Corp. d/b/a The Squire Lounge and
Mark Filtranti individually, Case No. SUCV2012-04169 (Mass. Super.
Ct., November 14, 2012) is brought by the Plaintiff individually
and on behalf of a class of all other individuals similarly
situated, who have performed services as exotic dancers for the
Defendants.

The Defendants misclassified the Plaintiff and the proposed Class
as independent contractors despite the fact that the Plaintiff and
the proposed class were employees and must legally be treated as
employees for wages, overtime, health insurance, and all other
employment purposes and benefits, the Plaintiff alleges.  The
Plaintiff contends that each of the Defendants has violated the
rights of Plaintiff and proposed Class members, under
Massachusetts statutory and common law.

The Plaintiff is a resident of Suffolk County, Massachusetts, who
has provided services as an exotic dancer to the Defendants on
numerous and various occasions from February 2011 to on April
2012.

D.& B. Corp. is a Massachusetts corporation with a principal place
of business at in Peabody, Massachusetts.  D. & B. Corp. owns and
operates and the adult entertainment club known as THE SQUIRE
LOUNGE located in Revere, Massachusetts.  Mark Filtranti, a
resident of Salisbury, Essex County, Massachusetts, has exercised
dominion and control over the Plaintiff and Class members as the
president and director of D. & B. Corp.

The Plaintiff is represented by:

          David D. Dishman, Esq.
          DAVID D. DISHMAN, P.C.
          224 Lewis Wharf
          Boston, MA 02110
          Telephone: (617) 523-5252
          E-mail: dave.dishman@gmail.com


DISTRICT OF COLUMBIA: Forgotten-Child Episode Won't Hit Settlement
------------------------------------------------------------------
Emma Brown, writing for The Washington Post, reports that an
episode in which a 4-year-old boy was left forgotten aboard a
school bus for seven hours should not interfere with the upcoming
settlement of a long-running class-action suit involving
transportation of D.C. special-education students, a federal judge
indicated during a status hearing on Dec. 5.

A city investigation of the episode led to the firing of two
employees who had failed to observe several safety procedures.

Judge Paul L. Friedman of the U.S. District Court of the District
of Columbia appeared satisfied on Dec. 5 that the incident was an
isolated instance of employee misconduct, not a symptom of broad
mismanagement.

"I don't think any of us want this incident to be a reason why
this case can't be settled after 17 years," Judge Friedman said.

The class-action suit was brought in 1995 by D.C. parents who
charged that the city had failed to provide reliable
transportation for more than 3,000 students with disabilities.

The long-running suit, Petties v. District of Columbia, led to
federal oversight of the city's special-education school buses
until November, when Judge Friedman agreed that the city had
demonstrated that it can provide safe and consistent service.

The suit is scheduled to be dismissed after a Dec. 19 fairness
hearing meant to give parents a chance to weigh in on the
District's performance.

The forgotten-child episode led lawyers for the Petties plaintiffs
to call for an independent investigation of the incident.  They
retreated from that position on Dec. 5 and asked instead to meet
with District officials.

"We still do have some further questions before we're confident
that the District has done everything it can to make sure children
in its custody are safe," said plaintiffs' lawyer Steven Ney.

Ellen Efros, a lawyer representing the District, agreed to a
meeting.  But she said city officials had responded rapidly and
decisively to a problem that stemmed from the bad judgment of two
people.

"If people don't do what they're supposed to do, we can't control
for that," she said, "unless we replace everybody with robots."
Ms. Efros said the U.S. attorney's office is looking into whether
the two fired employees should be criminally charged.

Judge Friedman agreed that no one should expect perfection from a
bureaucracy.  The standard for dismissing Petties, he said, is a
high level of confidence -- among lawyers representing affected
families and among the families themselves -- that the District
can manage its own system responsibly without court involvement.

"The confidence level is much higher than it used to be," he said.

Judge Friedman said he expects the Petties fairness hearing to go
forward as planned Dec. 19.


FORD: Sued Over False Claims on 2013 C-Max & Fusion Hybrids
-----------------------------------------------------------
Courthouse News Service reports that Ford falsely advertised that
its 2013 C-Max and Fusion Hybrids get 47 mpg, a class action
claims in Federal Court.


GENESIS HEALTHCARE: Supreme Court Looks Into Wage Theft Suit
------------------------------------------------------------
Scott Lemieux, writing for American Prospect, reports Symczyk v.
Genesis Healthcare Corp., which the Supreme Court considered on
Dec. 5 at oral argument, presents another case in which
conservatives on the Supreme Court might erect a barrier making
FLSA harder to enforce.

The case involves a lawsuit filed by Laura Symczyk, who alleged
that Genesis Healthcare had committed wage theft against her and
her co-workers.  According to Symczyk, Genesis routinely docked
the pay of workers (including herself) for lunch breaks that were
not taken.  Reflecting the strength of her claim, Genesis offered
her $7,500 plus associated fees to settle.  Ms. Symczyk, however,
rejected the offer, believing that she was suing not just for
herself but for her co-workers.  She wanted time for her lawyers
to determine if her case could be brought as a class-action suit,
representing all the victims of wage theft at Genesis.

When Ms. Symczyk refused to accept the offer, however, Genesis
sought to get her lawsuit dismissed before a decision about a
class-action suit could be made.  The company argued that because
the offer would have satisfied Ms. Symczyk's claims, the lawsuit
should be dismissed as "moot" (that is, because the courts lack
jurisdiction due to the case having been dismissed).  Because
Ms. Symczyk did not see the offer as resolving the potential
collective dispute, however, she argued that the offer did not
render the case moot.  Moreover, since under the federal Rules of
Civil Procedure an offer that is not accepted within 40 days is
considered withdrawn, it would be perverse to argue that
Ms. Symczyk (who has not had any of her claims redressed) has no
ongoing stake in the litigation.

If the Supreme Court accepts Genesis's arguments, it would provide
a road map for corporations that desperately want to avoid class-
action suits.  Corporations can simply make offers to settle
relatively modest individual claims, and even if plaintiffs
selflessly choose not to accept, merely making an offer can
preempt a class-action lawsuit.

To accept Genesis's argument, which is not compelled by either the
Constitution or by any statute, would have disturbing
implications.  As argued with respect to the legal arguments over
a class-action suit against Wal-Mart's pervasive gender
discrimination, class-action lawsuits are absolutely critical.
Many workers who have their rights violated lack the knowledge or
resources to pursue claims and can also be subject to
intimidation.  And while wage theft can at least be proved in an
individual case, claims of racial or gender discrimination often
require more systematic evidence than any individual case can
provide, making preemptive settlements even more likely to
undermine the law.

Conditions in the health-care industry provide a particularly
compelling case against building new, judicially created barriers
to class-action lawsuits.  As the National Women's Law Center and
the Service Employees International Union point out in a joint
statement about the case, "[w]age and hour violations -- such as
requiring staff to work during meal breaks or to work overtime
without compensation are commonplace in the nursing home industry,
where the workers are predominantly women earning near poverty-
level wages."  It was with this in mind that Ms. Symczyk
presumably refused to be bought off.  The Supreme Court should not
create new law in order to deny her co-workers the opportunity of
a day in court.


HCA HOLDINGS: Awaits Ruling on Bid to Dismiss Securities Suit
-------------------------------------------------------------
HCA Holdings, Inc. is awaiting a court decision on its motion to
dismiss a consolidated securities class action lawsuit, according
to the Company's November 6, 2012, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended September
30, 2012.

On October 28, 2011, a shareholder action, Schuh v. HCA Holdings,
Inc. et al., was filed in the United States District Court for the
Middle District of Tennessee seeking monetary relief.  The case
sought to include as a class all persons who acquired the
Company's stock pursuant or traceable to the Company's
Registration Statement issued in connection with the March 9, 2011
initial public offering.  The lawsuit asserted a claim under
Section 11 of the Securities Act of 1933 against the Company,
certain members of the board of directors, and certain
underwriters in the offering.  It further asserted a claim under
Section 15 of the Securities Act of 1933 against the same members
of the board of directors.  The action alleged various
deficiencies in the Company's disclosures in the Registration
Statement.  Subsequently, two additional class action complaints,
Kishtah v. HCA Holdings, Inc. et al. and Daniels v. HCA Holdings,
Inc. et al., setting forth substantially similar claims against
substantially the same defendants were filed in the same federal
court on November 16, 2011, and December 12, 2011, respectively.
All three of the cases were consolidated.

On May 3, 2012, the court appointed New England Teamsters &
Trucking Industry Pension Fund as Lead Plaintiff for the
consolidated action.  On July 13, 2012, the lead plaintiff filed
an amended complaint asserting claims under Sections 11 and
12(a)(2) of the Securities Act of 1933 against the Company,
certain members of the board of directors, and certain
underwriters in the offering.  It further asserts a claim under
Section 15 of the Securities Act of 1933 against the same members
of the board of directors and Hercules Holdings II, LLC, a
majority shareholder of the Company.  The consolidated complaint
alleges deficiencies in the Company's disclosures in the
Registration Statement and Prospectus relating to: (1) the
accounting for the Company's 2006 recapitalization and 2010
reorganization; (2) the Company's failure to maintain effective
internal controls relating to its accounting for such
transactions; and (3) the Company's Medicare and Medicaid revenue
growth rates.  The Company and other defendants moved to dismiss
the amended complaint on September 11, 2012.

Founded in 1968, HCA Holdings, Inc. --
http://www.hcahealthcare.com/-- through its subsidiaries,
provides health care services in the United States.  The Company
owns, manages, or operates hospitals, freestanding surgery
centers, diagnostic and imaging centers, radiation and oncology
therapy centers, rehabilitation and physical therapy centers, and
various other facilities.  The Company is headquartered in
Nashville, Tennessee.


HOSTESS BRANDS: Employees File Class Suit Over WARN Act Violations
------------------------------------------------------------------
William Dean, Robert Gregory, Henry Dini, Fred Shourds, and
Michael Jablonowski, on behalf of themselves and other similarly
situated individuals, commenced a class action against Hostess
Brands, Inc., IBC Sales Corporation, IBC Services, LLC, IBC
Trucking, LLC, Interstate Brands Corporation, and MCF Legacy,
Inc., for violations of the Worker Adjustment and Retraining
Notification Act, 29 U.S.C. Sec. 2101 et seq..  Dean et al. seek
to recover 60 days of wages and benefits from Hostess for Class
Members who were terminated without cause as part of plant
closings or mass layoffs ordered by Hostess without the notice
required by the WARN Act.  The Plaintiffs argued their post-
petition claims for wages under the WARN Act are entitled to first
priority administrative expense status under 11 U.S.C. Sec.
503(b)(1)(A).

The case is, William Dean, Robert Gregory, Henry Dini, Fred
Shourds, and Michael Jablonowski, Individually and as Class
Representatives on behalf of a Putative Class of all others
similarly situated, Plaintiffs, v. Hostess Brands, Inc., IBC Sales
Corporation; IBC Services, LLC, IBC Trucking, LLC, Interstate
Brands Corporation, and MCF Legacy, Inc., Defendants, Adv. Proc.
No. 12-_____ (Bankr. S.D.N.Y.).

The Plaintiffs are represented by:

          David S. Preminger, Esq.
          KELLER ROHRBACK L.L.P.
          770 Broadway, Second Floor
          New York, NY 10003
          Tel: (646) 495-6198
          Fax: (646) 495-6197
          E-mail: dpreminger@kellerrohrback.com

               - and -

          Lynn L. Sarko, Esq.
          Mark Griffin, Esq.
          Tana Lin, Esq.
          Deirdre Glynn Levin, Esq.
          KELLER ROHRBACK L.L.P.
          1201 Third Avenue, Suite 3200
          Seattle, WA 98101
          Tel: (206) 623-1900
          Fax: (206) 623-3384

               - and -

          Gary A. Gotto, Esq.
          KELLER ROHRBACK P.L.C.
          3101 N Central Ave., Ste. 1400
          Phoenix, AZ 85012-2643
          Tel: (602) 248-0088
          E-mail: ggotto@kellerrohrback.com

                       About Hostess Brands

Founded in 1930, Irving, Texas-based Hostess Brands Inc., is known
for iconic brands such as Butternut, Ding Dongs, Dolly Madison,
Drake's, Home Pride, Ho Hos, Hostess, Merita, Nature's Pride,
Twinkies and Wonder.  Hostess has 36 bakeries, 565 distribution
centers and 570 outlets in 49 states.

Hostess filed for Chapter 11 bankruptcy protection early morning
on Jan. 11, 2011 (Bankr. S.D.N.Y. Case Nos. 12-22051 through
12-22056) in White Plains, New York.  DHostess Brands disclosed
assets of $982 million and liabilities of $1.43 billion as of the
Chapter 11 filing.

The bankruptcy filing was made two years after predecessors
Interstate Bakeries Corp. and its affiliates emerged from
bankruptcy (Bankr. W.D. Mo. Case No. 04-45814).

In the new Chapter 11 case, Hostess has hired Jones Day as
bankruptcy counsel; Stinson Morrison Hecker LLP as general
corporate counsel and conflicts counsel; Perella Weinberg Partners
LP as investment bankers, FTI Consulting, Inc. to provide an
interim treasurer and additional personnel for the Debtors, and
Kurtzman Carson Consultants LLC as administrative agent.

Matthew Feldman, Esq., at Willkie Farr & Gallagher, and Harry
Wilson, the head of turnaround and restructuring firm MAEVA
Advisors, are representing the Teamsters union.

Attorneys for The Bakery, Confectionery, Tobacco Workers and Grain
Millers International Union and Bakery & Confectionery Union &
Industry International Pension Fund are Jeffrey R. Freund, Esq.,
at Bredhoff & Kaiser, P.L.L.C.; and Ancela R. Nastasi, Esq., David
A. Rosenzweig, Esq., and Camisha L. Simmons, Esq., at Fulbright &
Jaworski L.L.P.

The official committee of unsecured creditors selected New York
law firm Kramer Levin Naftalis & Frankel LLP as its counsel. Tom
Mayer and Ken Eckstein head the legal team for the committee.

Hostess Brands in mid-November opted to pursue the orderly wind
down of its business and sale of its assets after the Bakery,
Confectionery, Tobacco and Grain Millers Union (BCTGM) commenced a
nationwide strike.  The Debtor failed to reach an agreement with
BCTGM on contract changes.  Hostess Brands said it intends to
retain approximately 3,200 employees to assist with the initial
phase of the wind down. Employee headcount is expected to decrease
by 94% within the first 16 weeks of the wind down.  The entire
process is expected to be completed in one year.

The bankruptcy judge signed a formal order on Nov. 30 giving final
approval to wind-down procedures. The latest budget projects the
$49 million loan for the Chapter 11 case being paid down to
$21.2 million by Feb. 22.


HP: Taps Morgan Lewis to Represent it in Autonomy Class Actions
---------------------------------------------------------------
The Recorder reports that Morgan Lewis partner Marc Sonnenfeld has
confirmed he will represent HP in federal class actions that
accuse HP executives of breaching their fiduciary duties and
grossly overpaying for Autonomy in an $11.1 billion transaction.
Mr. Sonnenfeld's role shows his firm's long relationship with HP
remains intact despite the firm's representation of Autonomy on
antitrust issues during the deal.


NAT'L HOCKEY: Dec. 18 Conference Hearing in Antitrust Suit Set
--------------------------------------------------------------
Dominic Patten, writing for Deadline.com, reports that major
League Baseball, the NHL, Comcast and DirecTV failed on Dec. 5 in
their team effort to get an antitrust class action suit against
them dismissed in a New York District Court.  "Plaintiffs have
plausibly alleged that the NHL and MLB have used their monopoly
power to restrict the broadcast of television programming in a
manner that harms competition," said the ruling from U.S. District
Judge Shira Scheindlin on Dec. 5.  The ruling means the class
action instigated in the spring can go forward. The various
plaintiffs claim that the leagues, regional sports networks and
the cable and satellite companies have created monopolies over the
airing of games on TV and online by dividing up territories and
instating blackouts.  In a response this summer, the defendants
said the plaintiff's claims were "meritless" and sought to have
the case tossed.  While the judge rejected the notion that self-
proclaimed "middlemen" DirecTV, Comcast and the regional sports
networks actively conspired to monopolize individual markets,
Judge Sheindlin kept everyone on the hook for their collective
actions.  "The notion that the exhibition of league games on
television and the Internet is clearly a 'league issue' is
contrary to long-standing precedent that agreements limiting the
telecasting of professional sports games are subject to antitrust
scrutiny," Judge Scheindlin wrote in the 53-page ruling.

A conference hearing in New York has been scheduled for December
18.

"Plaintiffs have adequately alleged harm to competition with
respect to the horizontal agreements among individual hockey and
baseball clubs, as part of the NHL and MLB, to divide the
television market.  Making all games available as part of a
package, while it may increase output overall, does not, as a
matter of law, eliminate the harm to competition wrought by
preventing the individual teams from competing to sell their games
outside their home territories in the first place.  And plaintiffs
in this case -- the consumers -- have plausibly alleged that they
are the direct victims of this harm to competition," the judge
added.

The plaintiffs are represented by Michael Buchman --
mbuchman@pomlaw.com -- of Pomerantz Grossman Hufford Dahlstrom &
Gross as well as Edward Diver -- ndiver@langergrogan.com -- Howard
Langer -- hlanger@langergrogan.com -- and Peter Leckman --
pleckman@langergrogan.com -- of Langer Grogan & Diver PC.  Several
New York law firms represent the defendants.


OXFORD HEALTH: Supreme Court to Weigh Class Arbitration Issue
-------------------------------------------------------------
Barbara Leonard at Courthouse News Service reports that Oxford
Health Plans persuaded the Supreme Court to determine whether a
doctor must arbitrate claims of service-reimbursement violations.

When Dr. Ivan Sutter contracted with Oxford to provide primary
care health services for its clients in 1998, he agreed to accept
compensation at predetermined reimbursement rates.

Though the agreement contained a broad arbitration clause, there
was no reference to class arbitration.

In 2002, Dr. Sutter accused Oxford of failing to make prompt and
accurate reimbursement payments to participating physicians.

Oxford moved to compel arbitration of the class action Dr. Sutter
filed in New Jersey, and the court agreed.

An arbitrator determined in 2003 that the parties' agreement
provided for class arbitration.

After the arbitration proceeded on a classwide basis, Oxford said
that the arbitrator had authorized class arbitration in excess of
his powers.

A federal judge in New Jersey refused to vacate the award,
however, and the 3rd Circuit affirmed in April 2012.

It rejected Oxford's claims that vacatur was required under Stolt-
Nielsen S.A. v. AnimalFeeds International Corp., a 2010 Supreme
Court decision.  The high court granted certiorari on Dec. 7, and
granted two motions of would-be amicus curiae.  Both the U.S.
Chamber of Commerce and DRI - The Voice of the Defense Bar will
file briefs as friends of the court.


PARS INT'L: Filipino Teachers' H-1B Class Action Likely to Drag
---------------------------------------------------------------
David North, writing for Center Immigration Studies, reports that
a hearing in a Los Angeles federal courtroom that recently started
may cast some light on two quite different, but related,
immigration-policy matters:

  -- A squalid program to exploit Filipino H-1B teachers and deny
jobs to citizen teachers, run by a good-sized Louisiana school
district; and

  -- The potential utility of using a class action lawsuit to
correct the resulting abuses.

The ingredients are a familiar social/legal stew: there is the
penny-pinching employer, in this case the school system; a
poverty-stricken and thus docile foreign workforce (the teachers);
and several landsmen of the teachers, playing the role of the
middlemen, all too ready to exploit their fellow Filipinos.

And then there is the federally administered H-1B program, for
professional-level alien workers, prepared to facilitate many
types of overseas hiring and often pretty oblivious of potential
problems therein.  The application of this foreign worker program
to some public schools was described in an earlier CIS
Backgrounder, "H-1B + K-12 = ?".

The specific Louisiana issue is not a new one, and was covered in
some detail by both USA Today and in Mr. North's blog two years
ago, but the matter is now in open court before a federal judge,
and it is a class action proceeding.

The 350 teachers, mostly women, had been recruited in the
Philippines by an organization called PARS International and run
by Lourdes Navarro, who lives in Glendale, Calif. (which is why
the case was filed in that state).  The teachers had been forced
by the middleman agency to pay illegal fees of as much as $16,000
to get the jobs.  The school district -- which has a population in
excess of 400,000 -- either knew about the shake-downs and ignored
them or should have known about them, the teachers charge.

Now $16,000 is a large sum of money in the Philippines, and in
many cases the would-be teachers went heavily in debt in order to
meet the demands.

The defendants in this civil case include Ms. Navarro (previously
convicted of defrauding California's Medi-Cal program of $1
million), some of her relatives, her firm, and the East Baton
Rouge Parish School District and several of its officials.  The
teachers worked for that school district and several others in the
state, but only East Baton Rouge is listed as a defendant.

The plaintiffs' lawyers are also charging that their clients were
subject to human trafficking, an element usually not found in H-1B
cases.  Mr. North said "My sense is that one of the attractions of
this foreign workforce to their employers was their total lack of
bargaining power; if one of these Filipina teachers were to be
placed in an awkward classroom setting, she had no option but to
tough it out.  A citizen teacher in the same situation could look
for work in some other school district.  If the foreign teacher
quit her job she would face possible deportation."

The decision to file a civil, class action suit against
Ms. Navarro, her relatives, her firm, and the school district is
an interesting one that has a variety of implications in terms of
immigration policy.  Class action suits are not routine in cases
involving nonimmigrants.

The focus of class action suits is dual: There is an effort to
secure monetary damages for the injured parties (in this case the
school teachers) and to get the judge to issue a detailed order
correcting the current abusive practices.

"That's all very well, but the last class action suit in a
foreign-worker matter that I followed closely, the one against
sweatshop operators in the Commonwealth of the Northern Mariana
Islands (just north of Guam) 15 years ago, sought only to improve
wages and working conditions for foreign workers and did not lift
a finger to push the employers to hire U.S. citizens," Mr. North
said.

Similarly, a class action case filed on behalf of disadvantaged
teachers is unlikely to explore another negative aspect of the
situation; many of the teachers so hired were for special
education positions, meaning that the least advantaged of the
system's children were most likely to be taught by teachers who
did not have English as their first language.

With those caveats noted, however, a victory for the teachers
would be a loss for the exploitative middlemen and will be costly
to the employer -- all of which will make that employer, and other
school districts, think twice before using the H-1B program in the
future.

The $4.2 million dollar bill run up by the Prince George's County
(Md.) school board earlier this year for underpaying its H-1B
teachers carried a similar message.  In that instance, described
in an earlier CIS blog the U.S. Labor Department, not a judge,
lowered the boom.

"My sense is that there is less use of the H-1B program by school
districts now than in the recent past.  To some extent that
relates to enforcement actions and to some extent to the growing
number of unemployed citizen teachers seeking those jobs," Mr.
North said.

The nonimmigrant Filipino teachers in this case have a powerful
Washington, D.C., law firm on their side, Covington & Burling.
Their efforts are also supported by the Southern Poverty Law
Center (generally a high-immigration organization), by the
American Federation of Teachers (AFL-CIO), and by a U.S.-based arm
of the Labor Party of the Philippines (Partido ng Manggagawa), an
interesting combination, and one not found routinely in battles
regarding the rights of foreign workers.

The court case will probably drag on for a long time, but the
teachers have already won the first round; that was the decision
of the judge, never an easy one, that the plaintiffs could, in
fact, be viewed as a class.


REISS INNOVATIONS: Recalls 500 High-Powered Magnet Desk Toy Sets
----------------------------------------------------------------
The U.S. Consumer Product Safety Commission, in cooperation with
importer, Reiss Innovations LLC, of Manchester, Connecticut, and
manufacturer, Global Goler Co. Limited, of Guangdong, China,
announced a voluntary recall of about 500 High-Powered Magnet desk
toys.  Consumers should stop using recalled products immediately
unless otherwise instructed.  It is illegal to resell or attempt
to resell a recalled consumer product.

When two or more magnets are swallowed, they can link together
inside a child's intestines and clamp onto body tissues, causing
intestinal obstructions, perforations, sepsis and death.  Internal
injury from magnets can pose serious lifelong health effects.

Reiss Innovations has received no reports of incidents or
injuries.  CPSC has received 80 reports of incidents involving
ingestion of other high powered magnets, resulting in 79 reports
seeking medical intervention.

This recall involves high-powered magnet sets sold under the
DynoCube.com brand name for use as a novelty item or desk toy.
Each set contains 216 small, silver-colored, spherical magnets
that are approximately 5 millimeters in diameter.  Pictures of the
recalled products are available at:

     http://www.cpsc.gov/cpscpub/prerel/prhtml13/13062.html

The recalled products were manufactured in China and sold
exclusively at Amazon.com/Dynocube.com from July 2011 through
April 2012 for about $20.

Consumers should stop using the recalled magnet sets immediately
and contact Reiss Innovations for instructions on returning the
magnet sets for a full refund.  Reiss Innovations may be reached
toll-free at (866) 212-8314, from 9:00 a.m. to 5:00 p.m. Eastern
Time Monday through Friday, or online at http://www.DynoCube.com/
and click on the recall button on the top right-hand side of the
page for more information.


ROBBINS GELLER: In Trouble Over Class Action Confidential Witness
-----------------------------------------------------------------
Alison Frankel, writing for Thomson Reuters, reports that the
securities class action firm Robbins Geller Rudman & Dowd keeps
running into problems with confidential witnesses.  In a case in
federal court in Manhattan, U.S. Senior District Judge Jed Rakoff
held a seven-hour hearing to decide if the plaintiffs' firm
misrepresented its contacts with four former Lockheed Martin
employees who disavowed the allegations Robbins Geller attributed
to them in a securities fraud complaint against Lockheed.  Judge
Rakoff hasn't ruled but, at the end of the hearing in October,
said that three of the former Lockheed employees that Robbins
Geller cited as confidential witnesses weren't credible when they
denied speaking with the plaintiffs' firm.  The Manhattan judge is
now pondering whether hearsay evidence obtained from confidential
witnesses is sufficient to push securities class actions past
defense dismissal motions.

Robbins Geller, meanwhile, is dealing with confidential witness
recantations -- and ensuing defense accusations of misconduct --
in at least two other securities class actions, one in federal
court in Atlanta, the other in Birmingham, Alabama.  But an angry
order issued on Dec. 4 by the judge in Alabama shows that the
fallout from these disputes over confidential witnesses isn't
limited to the plaintiffs' bar.  U.S. District Judge Inge Johnson
ordered Victor Hayslip of Burr & Forman -- who represents
individual defendants in Robbins Geller's Alabama class action
against Regions Financial -- to send a letter to U.S. District
Judge William Duffey in Atlanta, apologizing for Mr. Hayslip's
previous "inappropriate and unprofessional" letter alerting Judge
Duffey to accusations against Robbins Geller in the Alabama case.

The backstory on Judge Johnson's order is a bit complicated, but
it shows how messy these confidential witness recantations can be.
Judge Duffey, the Atlanta judge, is presiding over Robbins
Geller's securities class fraud case against SunTrust Banks.  The
complaint in that case, like so many in securities class actions,
relied on information from a former employee.  Yet when the former
SunTrust worker was contacted by defense counsel, he denied
telling Robbins Geller's investigator what was attributed to him
and said he wasn't even employed by the bank at the time of the
events described in the complaint.  Based on the recantation,
Judge Duffey ended up dismissing the class action.

But that wasn't the end of the matter. Robbins Geller had told the
judge that its lawyers had no direct knowledge of when the witness
was employed at SunTrust, since he had only spoken with the firm's
investigator, Desiree Torres.  After Judge Duffey issued his
dismissal order, Ms. Torres contacted the judge's clerk.
According to a subsequent order by Judge Duffey, the investigator
said that Robbins Geller lawyers had, in fact, sat in on
interviews in which the informant said he didn't have direct
knowledge of the supposed fraud.  Concerned about the disparity in
the accounts of Robbins Geller and its own investigator, Judge
Duffey scheduled a Dec. 18 hearing to hear testimony from
Ms. Torres.  He later denied a motion by Robbins Geller to close
the hearing to the public.

The Alabama case against Regions featured similar recantations by
five former employees cited in Robbins Geller's complaint.  All
five Regions witnesses were interviewed by Ms. Torres, the
investigator in the SunTrust case.  But unlike the judge in
Atlanta, Judge Johnson refused to dismiss the Regions Financial
class action, despite the recantations.  After she certified a
class of investors in June, the defendants appealed certification
to the U.S. Court of Appeals for the 11th Circuit.

On Nov. 28, the Alabama and Atlanta cases intersected.  Defense
counsel Mr. Hayslip sent a letter to Judge Duffey, describing the
controversy over Ms. Torres, Robbins Geller and the confidential
witnesses in the Regions Financial case in Alabama.  Because of
those events, Mr. Hayslip told the Atlanta judge, his clients in
the Alabama class action had "a very strong and legitimate
interest" in keeping the Dec. 18 hearing in the SunTrust case open
to the public.

Mr. Hayslip sent his letter to all of the lawyers in the SunTrust
case, including Andrew Brown -- andrewb@rgrdlaw.com -- of Robbins
Geller, who is also lead counsel for the class in the Regions
Financial case.  The next day, Robbins Geller asked Judge Johnson
to hold a status conference on Mr. Hayslip's letter.  The defense
lawyer, Robbins Geller asserted, had violated protective orders
issued by Judge Johnson and had misrepresented the facts of the
Regions case. "Additionally, defendants' letter gratuitously seeks
to impugn the integrity of plaintiffs' counsel and investigator in
this case for their conduct in this case, in that unrelated
matter," the plaintiffs' motion said.

Mr. Hayslip sent another letter to Judge Duffey on Nov. 30,
withdrawing his previous letter "as I represent no party to (the
SunTrust) action." He also said he hadn't meant to cast doubt on
Mr. Brown's character.

That letter wasn't enough to appease Judge Johnson in Alabama,
however, especially after Mr. Hayslip told her he was out of the
country and unavailable to attend the status conference Robbins
Geller had requested.  In the seven-page order Judge Johnson
issued on Dec. 4, she blasted Mr. Hayslip for contacting Judge
Duffey and for accusing Robbins Geller of misleading her.  Indeed,
she said the defense lawyer was the one who had "engaged in a
pattern and practice of submitting unsubstantiated and misleading
statements to this court."  Judge Johnson ordered Mr. Hayslip to
draft a letter to Judge Duffey and to the 11th Circuit "containing
a sincere apology for misleading and attempting to mislead
(them)."  The judge also said she'd lift the protective order in
the Regions case so Robbins Geller could address the assertions in
Mr. Hayslip's letter when it appears before Judge Duffey in the
SunTrust hearing later this month.

Mr. Hayslip told Thomson Reuters' Ms. Frankel in an e-mail that he
is still out of the country and is working on a response to Judge
Johnson's order.

In his Nov. 30 letter to Judge Duffey, Mr. Hayslip said that he
did not believe he'd done anything wrong or violated a protective
order by sending his first letter to the Atlanta judge.


STERLING FINANCIAL: Claims in Overdraft Fees Suits Dismissed
------------------------------------------------------------
Claims in two class action lawsuits over overdraft fees were
dismissed in October 2012, according to Sterling Financial
Corporation's November 6, 2012, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended September
30, 2012.

On March 22, 2012, Sterling and its subsidiary Sterling Savings
Bank were named as defendants in a purported class action lawsuit
filed by a Washington customer of Sterling Savings Bank in King
County, Washington, Superior Court, and on May 25, 2012, Sterling
Savings Bank was named a defendant in a similar purported class
action lawsuit filed on behalf of a customer in the U.S. District
Court of Oregon.  These lawsuits challenged the manner in which
overdraft fees were charged and the disclosures related to posting
order of debit card and ATM transactions, and alleged claims for
breach of contract, breach of the covenant of good faith and fair
dealing, unconscionability, conversion, unjust enrichment, and a
violation of state consumer protection laws.  The two lawsuits
encompassed claims on behalf of Sterling Savings Bank customers
from the five states in which Sterling Savings Bank presently
conducts business.  On October 17, 2012, Sterling announced the
dismissal of the plaintiffs' claims.

Spokane, Washington-based Sterling Financial Corporation --
http://www.sterlingfinancialcorporation-spokane.com/-- is a bank
holding company, organized under the laws of Washington State in
1992.  The principal subsidiaries of Sterling are Sterling Savings
Bank and Golf Savings Bank.  Subsequent to June 30, 2010, Golf
Savings Bank was merged with and into Sterling Savings Bank, with
the mortgage banking operations of Golf Savings Bank continuing to
operate as a division of Sterling Savings Bank.


THOMAS JEFFERSON: Law School Graduates' Class Action Can Proceed
----------------------------------------------------------------
Greg Moran, writing for North County Times, reports that the
class-action lawsuit filed against the Thomas Jefferson School of
Law by four graduates who said they were misled by the school's
data on how many graduates land jobs can go forward, a San Diego
judge has ruled.

Superior Court Judge Joel Pressman rejected the school's moves to
throw out the suit in a ruling issued Nov. 30.  The move clears
the way for the case to go to trial.

The lawsuit contends the school inflated statistics on the
percentage of graduates who find work after getting a degree as
lawyers, and they would never have enrolled in the school if they
knew the employment data had been skewed.

Thomas Jefferson officials tried to get the suit thrown out.
Among other things, their lawyers argued that the lead plaintiff,
Anna Alaburda, had turned down a full-time legal job paying
$60,000 a year.

But Judge Pressman sided with the graduates. He wrote that as a
consumer Ms. Alaburda was purchasing a legal education.

"Representations regarding that legal education are material to
the decision of whether to enroll," Judge Pressman wrote.

Brian Procel, the lawyer for the graduates, said the judge's
decision "was a tremendous ruling for the plaintiffs."

Numerous similar lawsuits have been filed against law schools
across the country, but none has gotten as far as the one
challenging Thomas Jefferson in downtown San Diego.

The school, which has consistently denied the allegations and
defended its job reporting data, said in a statement it was
disappointed with the ruling.  The statement noted that the ruling
did not say the allegations against the school have any merit, but
simply allows the suit to proceed to the next phase of discovery.


TRILEGIANT CORP: Faces Class Action Over Alleged Racketeering
-------------------------------------------------------------
Christine Stuart at Courthouse News Service reports that led by
Trilegiant Corp., major banks and retailers "conspired to defraud
hundreds of thousands of consumers" by cramming their credit cards
for unauthorized "subscription services," a RICO class action
claims in Federal Court.

Lead defendants in the 90-page racketeering complaint are
Trilegiant, its parent company the Affinion Group, and their
"controlling owner," Apollo Global Management.

Banking-credit card defendants include Bank of America, Capital
One, Chase Bank, Citibank and Wells Fargo.

Retail-online defendants include Orbitz, PeopleFindersPro, Days
Inn, Hotwire, United Online, IAC/Interactive, Buy.com and
Priceline.

Lead plaintiff David Frank says: "This action is brought to
redress the shocking behavior of some of this country's largest
companies, which have combined and conspired to defraud hundreds
of thousands of consumers into paying for 'club' memberships and
subscription services that the consumer never authorized.  Each
participant in this scheme profited handsomely from its
participation, and each participant knew that the particulars of
the scheme would result in consumers being defrauded.

"The 'cramming' of charges for unwanted memberships and services
that is the subject of this lawsuit has already been determined by
the United States Senate Committee on Commerce, Science and
Transportation (the 'Senate Commerce Committee') and New York
Attorney General, after extensive investigation, to be a fraud."

Citing a Nov. 16, 2009 report, the class claims: "'Hundreds of e-
commerce merchants-including many of the best known, respected
Web sites and retailers on the Internet-allow these companies to
use aggressive sales tactics against their customers, and share in
the revenues generated by these misleading tactics.'  What
occurred, and continues to occur, is white-collar racketeering,
plain and simple."

The class claims that "the scheme was initiated by defendant
Trilegiant Corporation," with its corporate parents, Affinion and
Apollo, "but the scheme also required Internet e-commerce merchant
partners and the willing participation of credit card companies,"
who "colluded" with Trilegiant.

"Trilegiant started the scheme by creating so-called 'membership'
and discount 'clubs,'" the complaint states.  "Trilegiant sold
these products, which have no real value, to consumers through an
insidious set of business practices.  Trilegiant carefully created
its scheme to exploit known consumer tendencies in order to create
consumer confusion and ultimately defraud consumers into paying
'membership' fees to such 'clubs' for which the consumers never
even realize they signed up.

"Trilegiant's business practices are well-known to the e-merchant
defendants (as well as the broader e-merchant community) and
defendant credit card companies, each of which is an essential
part of Trilegiant's fraudulent scheme.  Trilegiant requires the
complicity of the e-merchant defendants for its scheme to succeed,
and Trilegiant pays them handsomely to participate in the scheme
to defraud.  Trilegiant secures the participating of the e-
merchant defendants by contracting with them to approve
Trilegiant's practice of interpolating itself into the checkout
practice when consumers, such as plaintiff, are completing an
online purchase.  As explained by the Senate report, '(i)n
exchange for bounties or other payments, reputable online
retailers agree to let Affinion [] sell club memberships to
consumers are they are in the process of buying movie tickets,
plane tickets or other online goods and services.  The sales
tactics used . . . exploit consumers' expectation about the online
'checkout' process.'"

"Trilegiant pays substantial 'bounties' and other amounts to the
e-merchant defendants," the complaint continues.  "For example,
Priceline received an upfront lump sum payment of over $1 million
just to let Trilegiant in the door, and then collected a sizeable
percentage of each dollar Trilegiant collected from Priceline
customers.  The aggregate of the fees 'earned' by the e-merchant
defendants is staggering: Congressional records indicate the
Trilegiant paid Memory Lane (operating its business as
Classmates.com) in excess of $70 million.  Trilegiant paid other
defendants, including 1-800-Flowers and FTD, at least $10 million
as their share of the fraudulent racketeering scheme."

The class claims that the e-merchants "are not merely passive
participants in the fraudulent scheme," but "retain final approval
over what Trilegiant shows the customer in the midst of the
e-merchant defendants' checkout process, and contracts allow the
most facially deceptive aspects of the scheme: the post-
transaction offer, the passive datapass, and negative option
billing."

These are the three primary ways the racketeering scheme is
carried out, according to the complaint.

"(a) Post-Transaction Offers: As is common in internet sales
transactions, when a customer is ready to complete his or her
purchases from an e-merchant defendant, he/she is prompted to
input his or her confidential billing information, including his
or her credit or debit card number.  After this, but before
confirming the sales transaction with an e-merchant defendant,
Trilegiant inserts its membership program offer with the promise
of an upfront gift such as cash-back rewards.  Because of the
positioning of this 'post transaction offer' in the purchase
process, the consumer is led to believe that he or she is
completing the original transaction with an e-merchant defendant."

"(b) Datapass: At the heart of the defendants' fraudulent
marketing scheme lies a 'datapass' arrangement, where a consumer
is enrolled, unwittingly, in a Trilegiant membership program
without ever directly providing his/her credit card information.
Instead, an e-merchant defendant, pursuant to its partnership
agreement with Trilegiant, passes on the consumer's credit card
information to Trilegiant, without the consumer's knowledge or
consent, and without any form of communication between an e-
merchant defendant and the consumer authorizing this 'datapass'."

"(c) Negative Option Billing: Once the consumer is unwittingly
enrolled in one or more of Trilegiant's membership programs,
Trilegiant begins to automatically charge the consumer's credit or
debit card, again without the consumer's authorization.  The
defendant credit card companies then process these unauthorized
charges and debits the consumer's account, despite the evidence
that Trilegiant is in violation of numerous credit card rules."

The class claims the defendant e-merchants are complicit in
"Trilegiant's insidious use of a practice known as 'refund
mitigation', which seeks to keep as much of the money the consumer
unwittingly paid after a consumer discovers the fraud on his or
her credit card statements."

"Trilegiant, knowing that a consumer will attempt to seek
immediate cancellation, as well as a full refund, upon discovering
that he or she was unwillingly enrolled in these membership
programs and charged unauthorized monthly fees, employs various
tactics to minimize the amount of refund to be issued to the
consumer.  These tactics include training call center employees to
quickly cancel without a refund as soon as a customer complains,
and demanding that the request for cancellation be in writing.
The scripts used are shared with the e-merchant defendants, who
select how many 'rebuttals' the call center employee may pitch
during the cancellation process.  E-merchant defendants are even
flown out to the main Trilegiant call center to listen to call
center employees as they follow the fraudulent scripts.
Trilegiant treats the customer calling in to cancel after they
detect the fraud on their credit card bill as a marketing
opportunity. Trilegiant instructs its trainee call service
representatives that '(a)t Affinion Group, a consultant working an
8-hour shift will take between 75-100 calls.  On high call volume
days, this number may be even higher.  Approximately 80% of these
calls will be from members wishing to cancel their memberships.
Your job will be to convince them, based on the merits of the
program and the benefits, to retain their membership.'  To
translate this into the context of the scheme, the sales
representatives are trained to do what Trilegiant fails to do when
the customer allegedly 'signs up' for the Trilegiant membership
club-get the customer's assent to have their card charged and
become a member of the 'club.'

"The e-merchant defendants are not innocent recipients of the
funds.  They are involved in or have knowledge of each step of the
process, they clearly know about the use of the datapass and the
confusing nature of the Trilegiant 'pop up' window in the checkout
process; and they were, and are, aware of and complicit in the
refund mitigation component of the scheme."

The class seeks restitution, disgorgement, an injunctions, treble
damages and punitive damages for RICO fraud, aiding and abetting,
mail fraud, wire fraud, bank fraud, credit card fraud, violations
of the Electronic Communications Privacy Act, unfair trade,
business law violations, and unjust enrichment.

Lead counsel is Karen Leser-Grenon, with Shepherd, Finkelman,
Miller, and Shah of Chester, Conn.  Twelve law offices from 10
states signed on as co-counsel.

Here are the defendants: Trilegiant Corporation, Inc.; Affinion
Group, LLC; Apollo Global Management, LLC; 1-800-Flowers.com,
Inc.; Beckett Media LLC; Buy.com, Inc.; Classmates International,
Inc.; Days Inns Worldwide, Inc.; FTD Group, Inc.; Hotwire, Inc.;
IAC/InterActiveCorp; Memory Lane, Inc.; Orbitz Worldwide, LLC;
PeopleFindersPro, Inc.; Priceline.com, Inc.; Shoebuy.com, Inc.;
TigerDirect, Inc.; United Online, Inc.; Wyndham Worldwide Corp;
Bank of America, N.A.; Capital One Financial Corporation; Chase
Bank USA, N.A.; Chase Paymentech Solutions, LLC; Citibank, N.A;
Citigroup, Inc.; and Wells Fargo Bank, NA.


VERTEX PHARMACEUTICALS: Faces "Bristol" Suit in Massachusetts
-------------------------------------------------------------
Vertex Pharmaceuticals Incorporated is facing a shareholder class
action lawsuit brought by the City of Bristol Pension Fund,
according to the Company's November 6, 2012, Form 10-Q filing with
the U.S. Securities and Exchange Commission for the quarter ended
September 30, 2012.

On September 6, 2012, a purported shareholder class action, City
of Bristol Pension Fund v. Vertex Pharmaceuticals Incorporated, et
al., was filed in the United States District Court for the
District of Massachusetts, naming the Company and certain officers
and directors of the Company as defendants.  The lawsuit alleges
that the Company made material misrepresentations and/or omissions
of material fact in the Company's disclosures during the period
from May 7, 2012, through June 28, 2012, all in violation of
Section 10(b) of the Securities Exchange Act of 1934, as amended,
and Rule 10b-5 promulgated thereunder.  The plaintiffs seek
unspecified damages on behalf of the putative class, unspecified
injunctive relief and an award of costs and expenses, including
attorney's fees.  The Company believes that this action is without
merit and intends to defend it vigorously.  As of September 30,
2012, the Company has not recorded any reserves for this purported
class action.


VIVUS INC: Kovtun Appeals Dismissal of Securities Suit
------------------------------------------------------
The plaintiff in the putative class action lawsuit captioned
Kovtun v. Vivus, Inc., et al., appealed to the U.S. Court of
Appeals for the Ninth Circuit the dismissal of its class action
lawsuit, according to the Company's November 6, 2012, Form 10-Q
filing with the U.S. Securities and Exchange Commission for the
quarter ended September 30, 2012.

The Company and two of its officers were defendants in a putative
class action lawsuit captioned Kovtun v. Vivus, Inc., et al., Case
No. 4:10-CV-04957-PJH, in the U.S. District Court, Northern
District of California.  The action, filed in November 2010,
alleged violations of Section 10(b) and 20(a) of the federal
Securities Exchange Act of 1934 based on allegedly false or
misleading statements made by the defendants in connection with
the Company's clinical trials and NDA for Qsymia as a treatment
for obesity.  In the Amended Class Action Complaint filed on April
4, 2011, the plaintiff alleged generally that the defendants
misled investors regarding the prospects for Qsymia's NDA
approval, and the drug's efficacy and safety.  On June 3, 2011,
the defendants filed a motion to dismiss, which, after briefing
and argument was granted but extending plaintiff leave to amend.
On November 9, 2011, plaintiff filed his Second Amended Class
Action Complaint, again generally alleging that the defendants
misled investors regarding the prospects for Qsymia's NDA
approval, and Qsymia's efficacy and safety.  On December 30, 2011,
defendants filed a motion to dismiss the Second Amended Complaint.

Briefing concluded in late March 2012, and the motion was argued
to the Court on April 18, 2012.  On September 27, 2012, Judge
Phyllis J. Hamilton granted defendants' motion to dismiss the
Second Amended Complaint and dismissed the action with prejudice.
She entered final judgment for defendants the same day.

On October 26, 2012, plaintiff filed a Notice of Appeal to the
U.S. Court of Appeals for the Ninth Circuit.

VIVUS, Inc. -- http://www.vivus.com/-- a biopharmaceutical
company, is developing therapies to address obesity, sleep apnea,
diabetes, and male sexual health.  Its lead investigational
product, Qnexa, has completed Phase 3 clinical trials for the
treatment of obesity.  Qnexa is also in Phase 2 clinical
development for the treatment of type 2 diabetes and obstructive
sleep apnea.  The Company was founded in 1991 and is headquartered
in Mountain View, California.


WATERSCAPE RESORT: Court Rules on Pavarini's Summary Judgment Bid
-----------------------------------------------------------------
Bankruptcy Judge Stuart M. Bernstein granted, in part, and denied,
in part, Pavarini McGovern LLC's request for summary judgment in
its class action adversary complaint against Waterscape Resort
LLC.  Pavarini was retained as general contractor by Waterscape to
construct a building in Manhattan. Allegedly owed roughly $11
million, Pavarini commenced the class action contending that
Waterscape diverted certain trust fund monies owed to Pavarini
and, ultimately, the subcontractors that worked on the Project.
U.S. Bank, National Association and USB Capital Resources, Inc.
f/k/a USB Capital Funding Corp., provided loan facilities to
Waterscape to refinance pre-existing debt and fund the
construction of the Project, a 45-story hotel and condominium
building located at 66-70 West 45th Street in Manhattan.  Pavarini
also sued U.S. Bank.

In July 2011, Waterscape confirmed its Second Amended Plan of
Reorganization roughly one month after Pavarini commenced the
adversary proceeding.  The Plan contemplated the sale of the hotel
portion of the Project free and clear of all liens, claims and
interests, and all but $14 million from the hotel sale proceeds
would be paid to U.S. Bank in partial satisfaction of its Class 1
claim.  The balance would fund an $11 million Trust Fund Account
for the benefit of the overlapping Class 3 Lien Law/trust fund
claimants; the remaining $3 million would fund the Class 5 Reserve
Account for the benefit of the unsecured creditors in that class.

The lawsuit is, PAVARINI McGOVERN, LLC, Plaintiff, v. WATERSCAPE
RESORT LLC, et al., Defendants, Adv. Proc. No. 11-02248 (Bankr.
S.D.N.Y.).  A copy of the Court's Dec. 10, 2012 Memorandum
Decision is available at http://is.gd/6H64vffrom Leagle.com.

Eric W. Sleeper, Esq. -- esleeper@bartonesq.com -- at Barton LLP,
argues for Pavarini McGovern.

                       About Waterscape Resort

Waterscape Resort LLC, aka Cassa NY Hotel and Residences, filed
for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No.
11-11593) on April 5, 2011.  Waterscape acquired property
consisting of three contiguous buildings at 66, 68 and 70 West
45th Street in Manhattan, for the sum of $20 million, and
developed the property into a 45-storey condominium project
including a luxury hotel, a restaurant and luxury residential
apartments.  The purchase was financed with a $17 million
acquisition loan and mortgage from U.S. Bank Association.  The
Cassa NY Hotel and Residences features 165 hotel rooms, and above
the hotel units, 57 residences.

Brett D. Goodman, Esq., and Lee William Stremba, Esq., at Troutman
Sanders LLP represent the Debtor as Bankruptcy Counsel.  Holland &
Knight LLP serves as its special litigation counsel.  The Debtor
disclosed $214,285,027 in assets and $158,756,481 in liabilities
as of the Chapter 11 filing.

A 3-member Official Committee of Unsecured Creditors has been
appointed in the Debtor's Chapter 11 case.  Schiff Hardin LLP,
serves as the Committee's counsel.

U.S. Bankruptcy Judge Stuart Bernstein confirmed Waterscape's
reorganization plan on July 22, 2011, which calls for repaying
much of the company's debt with proceeds from the $128 million
sale of the hotel section of the development.  The Plan was filed
on May 6, 2011.


ZOOM TAN: Class Action Over Spam-Texting Ongoing
------------------------------------------------
Aisling Swift, writing for Naples Daily News, reports that
with texting now more prevalent, junk mail has gone from the
mailbox and e-mails to cell phones.

As a result, customers may end up paying extra charges -- about 20
cents -- for unwanted, repeated and unsolicited texts, with
premium texts hitting pocketbooks harder -- $1 or more.

That's prompted a spate of spam-texting lawsuits, including a
recent class-action complaint targeting Zoom Tan of Naples, which
in turn blames a third-party texting service it used for its 40
salons in Florida and New York.

Shaina A. Rutherford, who owns a Bonita Springs landscaping
business, amended her September class-action lawsuit in late
October after Zoom Tan and Club Texting, which does business as EZ
Texting, filed responses denying liability.

"Without authorizing these messages or providing consent to
receive these messages, I began to receive texts from Zoom Tan and
its marketing agency on a regular basis," Ms. Rutherford said of
texted spray tan ads that began in 2011.

An answer to Ms. Rutherford's suit filed last month by Zoom Tan's
attorney, Justin Mazzara of Fort Myers, states that Zoom Tan
obtains cell phone numbers "at which a customer consents to
receive texts" and its "spam-free" notice tells customers it uses
them only for informational purposes, including to alert them to
items left behind, new store openings, health news and special
events.

New York-based Club Texting filed a motion to dismiss the case
last month, saying it's an "intermediary software provider" and
Zoom Tan used its software to send the texts.

"By analogy, if someone using TurboTax's software committed tax
fraud by misrepresenting their income to the IRS, TurboTax could
hardly be considered to have 'made' the misrepresentation to the
IRS simply by providing the software that transmitted its users'
tax documents," the Club Texting motion said.

Ms. Rutherford's attorney, Kenneth Gilman of Bonita Springs,
contends Ms. Rutherford never gave consent to receive the repeated
text ads and that in February 2012, the FCC issued stronger
requirements for obtaining express consent that go into effect
next year.

"These heightened standards will require companies to obtain prior
express written consent before engaging in mass text-message
marketing campaigns, such as the campaign at issue in this suit,"
Mr. Gilman said.

Analysts predict mass text blasts will increase because they're an
inexpensive, quick and direct form of advertising -- targeting
hundreds of consumers at once, sometimes for as little as a penny
each.

There are 321.7 million cell phone users nationwide and 184.3
billion texts are sent monthly, according to CTIA-The Wireless
Association.

There are 321.7 million cell phone users nationwide and 184.3
billion texts are sent monthly, according to CTIA-The Wireless
Association.

The Telephone Consumer Protection Act and FCC prohibit companies
from using automated dialing services to send texts without
obtaining consent, unless for an emergency.

Under the law, a consumer can seek $500 per unauthorized message
or $1,500, triple damages -- if they're willful and intentional.
The federal Controlling the Assault of Non-Solicited Pornography
and Marketing (CAN-SPAM) Act also bans unwanted commercial e-mails
sent to cell phones, which often appear as texts.

Texts, called Short Message Service, SMS, and Multimedia Messaging
Service MMS, which include audio, videos and photos, are used
frequently to target customers due to their 98% "open rate" -- 98
out of 100 recipients open them -- compared with 10% for e-mails,
according to California-based marketing company Mogreet.

Because customers opt-in, they give a company permission to text.

"It's probably the best kind of permission marketing you can get,"
said Mark Cyr, president of Dolphin Global Technology Solutions of
Naples, a shared short-code mobile marketing company.  "Customers
opt in because they want texts.  Ninety five to 98% are opened in
the first four seconds."

Under the law, a consumer can seek $500 per unauthorized message
or $1,500, triple damages -- if they're willful and intentional.
The federal Controlling the Assault of Non-Solicited Pornography
and Marketing (CAN-SPAM) Act also bans unwanted commercial e-mails
sent to cell phones, which often appear as texts.

It can cost $500 monthly to register a random short code texting
number or $1,000 monthly for a custom or vanity texting code, so
many small- and medium-sized Naples businesses -- such as Jump On
Express (JOE), Simply Southern Barbeque and Purely You Spa -- use
Dolphin Global.

Companies can pay $150 monthly to Dolphin Global to use its short-
code number, 97063, enabling customers to opt in to receive texts
about services and deals.  For example, JOE customers can text
JOERIDE to 97063 to opt-in to get a schedule, or they can text
JOECLUB for special offers.

"Each text should have an opt-out at the bottom, if they're
legitimate," Mr. Cyr said.

Due to high response and customer-conversion rates for texts, the
return on investment is much higher than for e-mails, explained
Jackie Truong, Mogreet's senior associate marketing manager, who
noted that national retailer Charlotte Russe reported its text-
message program gets 10 times more response than its e-mail
marketing promotions.

To avoid pitfalls, such as class-action lawsuits, business owners
must be aware of government regulations and how not to antagonize
customers.

Last month, Papa John's Pizza, owned by part-time Naples resident
John Schnatter, was hit by a $250 million class-action lawsuit
after a federal judge in Seattle certified plaintiffs in a 2010
complaint as a class -- allowing anyone who received the texts to
get a part of any settlement or verdict.

So far, the heftiest spam texting verdict or settlement involves
Jiffy Lube.  In August, Heartland Automotive Services, the
nation's largest Jiffy Lube franchisee, and TextMarks agreed to
pay $47 million to settle a class-action lawsuit involving 2.3
million cell phone users.

The lawsuit contends five franchisees sent customers 500,000
unwanted texts to offer deals for pizza, with some receiving 15 in
a row -- some in the middle of the night.

The franchisees used a mass-messaging service called OnTime4U,
which also is a defendant.  When the lawsuit was filed, the
franchisees stopped using OnTime4U after a Papa John's corporate
memo warned that sending unsolicited messages to cell phones "is
most likely illegal."

Papa John's plans to appeal.

So far, the heftiest spam texting verdict or settlement involves
Jiffy Lube.  In August, Heartland Automotive Services, the
nation's largest Jiffy Lube franchisee, and TextMarks agreed to
pay $47 million to settle a class-action lawsuit involving 2.3
million cell phone users.  It didn't admit wrongdoing, but agreed
to obtain "informed written consent" for text ads and give the 2.3
million customers a $17.29 certificate to use at Jiffy Lube.

Dell and the Huffington Post also were hit in August by spam
texting class-action lawsuits.  The Dell lawsuit alleges a
computer customer received more than 100 automated calls demanding
past due payments, while the online media outlet is accused of
sending news updates at all hours, even after the customer revoked
consent.

Ms. Truong, of marketing firm Mogreet, said businesses are getting
accustomed to the regulatory environment for text message
marketing.

"Companies like ours have always provided a helping hand because
it's best for consumers, advertisers and us," she said.  "There
are really a few simple rules to follow, but marketers are coming
to understand that if they can prove they have the consumer's
explicit consent to send messages to them, 90% of the suits would
go away."


                           *********

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.

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Information contained herein is obtained from sources believed to
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The CAR subscription rate is $575 for six months delivered via
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firm for the term of the initial subscription or balance thereof
are $25 each.  For subscription information, contact Peter Chapman
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