/raid1/www/Hosts/bankrupt/CAR_Public/130107.mbx
C L A S S A C T I O N R E P O R T E R
Monday, January 7, 2013, Vol. 15, No. 4
Headlines
ACADEMY SPORTS: Recalls 6,300 Game Winner Crossbow Cocking Ropes
ARCH COAL: "Saratoga" Class Suit vs. ICG Dismissed in August
BANK OF AMERICA: Faces Anti-Racketeering Class Action in Calif.
BIOSANTE PHARMACEUTICALS: Wants Securities Suit Dismissed
CAREER EDUCATION: Settlement of TCPA Violation Suits Approved
CAREER EDUCATION: Faces "Brainard" Class Action Suit in Florida
EMBARQ MANAGEMENT: 10th Cir. Affirms Dismissal of Spyware Claims
ENERGY TRANSFER: Settled Sunoco Merger-Related Suit in September
FIRST AMERICAN: Judge Decertifies Title Insurance Class Action
FIRSTENERGY CORP: Awaits Ohio Supreme Court Ruling on Appeal
FIRSTENERGY CORP: Still Defends Suits Over Bruce Mansfield Plant
HAWKEYE STEEL: Recalls 2,500 Units of Top Hatch Egg Incubators
HYATT HOTELS: Sued for Using Tips to Cover "Glass Breakage"
JETBLUE AIRWAYS: Appellate Court Affirms Class Action Dismissal
JUNIPER NETWORKS: Hearing on Bid to Dismiss Class Suit on Jan. 13
L'OREAL: Sued Over False Claims on "Anti-Aging" Products
LADENBURG THALMANN: Awaits Approval of IPO Suit Settlement
LADENBURG THALMANN: Still Awaits Order on Bid to Dismiss IPO Suit
LOUISIANA: Jan. 15 Opt-Out Deadline for Comite River Class Action
NATIONAL SECURITIES: Faces Overtime Class Action in California
PACIFIC LIFE: Court Revives Class Action Over Excessive Fees
PHILADELPHIA: Faces Gun Permit Application Privacy Class Action
REALNETWORKS INC: Settled Illinois Consumer Suit in October
REYNOLDS AMERICAN: Appeal in "Smith" Class Suit vs. Unit Pending
REYNOLDS AMERICAN: Arizona Ct. Dismissed "Shaffer" Suit in Sept.
REYNOLDS AMERICAN: Awaits Ruling in "Sateriale" Suit vs. Unit
REYNOLDS AMERICAN: Class Suits vs. Unit Still Pending in Canada
REYNOLDS AMERICAN: Parties Negotiate Atty. Fees in "Scott" Suit
REYNOLDS AMERICAN: Five "Lights" Lawsuits v. Units Still Pending
REYNOLDS AMERICAN: Jan. 30 Status Conference in "Turner" Suit Set
REYNOLDS AMERICAN: "Jones" Suit Remains Pending in Missouri
REYNOLDS AMERICAN: JTI's Indemnification Bid Still Pending
REYNOLDS AMERICAN: "Parsons" Suit Remains Stayed in West Virginia
REYNOLDS AMERICAN: Still Awaits Ruling in "Tatum" ERISA Suit
REYNOLDS AMERICAN: Still No Activity in "Collora" Class Suit
REYNOLDS AMERICAN: Still No Activity in "Howard" Suit in Illinois
REYNOLDS AMERICAN: Still No Activity in "Young" Suit in Louisiana
REYNOLDS AMERICAN: Unit Dismissed as Defendant in "Brown" Suit
RPM PIZZA: Settles Robo-Call Class Action for $9.75 Million
SAMSUNG SDI: Faces Another Antitrust Class Suit in California
SIRIUS XM: Ted Frank Challenges Class Action Settlement
TPG CAPITAL: Sued For Not Paying Admin. Assistants' OT Wages
VISA: Merchants May Impose Credit Card Fees Following Settlement
YAHOO INC: Consolidated Securities Suit Dismissal Appealed
*********
ACADEMY SPORTS: Recalls 6,300 Game Winner Crossbow Cocking Ropes
----------------------------------------------------------------
The U.S. Consumer Product Safety Commission, in cooperation with
Academy Sports + Outdoors, of Katy, Texas, announced a voluntary
recall of about 6,300 Game Winner(R) crossbow cocking ropes.
Consumers should stop using recalled products immediately unless
otherwise instructed. It is illegal to resell or attempt to
resell a recalled consumer product.
The hooks attaching the cocking rope to the crossbow string can
break and cause it to recoil, posing a laceration hazard.
The Company has received four reports of the hooks on the cocking
ropes breaking, causing the rope to recoil. Three of the
incidents resulted in lacerations.
This recall involves Game Winner(R) cocking ropes with model
number FSGWAR3018 and UPC 400214726596. The cocking ropes help
users get a better grip on the crossbow string and aid in pulling
it back. They have an approximately 50-inch long black nylon
rope, two black plastic hooks and two t-handles. The model and
UPC numbers are located on the instruction card that comes with
the product. A picture of the recalled products is available at:
http://www.cpsc.gov/cpscpub/prerel/prhtml13/13086.html
The recalled products were manufactured in China and sold
exclusively at Academy stores nationwide and on the Company's Web
site http://www.academy.com/between June 2012 and October 2012
for about $10.
Consumers should immediately stop using the recalled cocking ropes
and return them to Academy for a full refund. Academy Sports +
Outdoors may be reached toll-free at (888) 922-2336, from 8:00
a.m. to 10:00 p.m. Central Time Monday through Saturday and from
9:00 a.m. to 8:00 p.m. Central Time on Sunday, or online at
http://www.academy.com/and click on Help + Support and Product
Recall Info for more information.
ARCH COAL: "Saratoga" Class Suit vs. ICG Dismissed in August
------------------------------------------------------------
The class action lawsuit brought by Saratoga Advantage Trust
against a subsidiary of Arch Coal, Inc. was dismissed in August
2012, following the parties' settlement of the lawsuit, according
to the Company's November 8, 2012, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended September
30, 2012.
On January 7, 2008, Saratoga Advantage Trust ("Saratoga") filed a
class action lawsuit in the U.S. District Court for the Southern
District of West Virginia against Arch Coal, Inc.'s subsidiary,
International Coal Group, Inc. ("ICG"), and certain of its
officers and directors seeking unspecified damages. The complaint
asserts claims under Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, based
on alleged false and misleading statements in the registration
statements filed in connection with ICG's November 2005
reorganization and December 2005 public offering of common stock.
In addition, the complaint challenges other of ICG's public
statements regarding its operating condition and safety record.
On July 6, 2009, Saratoga filed an amended complaint asserting
essentially the same claims but seeking to add an individual co-
plaintiff. ICG has filed a motion to dismiss the amended
complaint. In June 2011, ICG agreed to settle this matter for a
total of $1.375 million. On August 1, 2011, the court issued its
order preliminarily approving settlement and conducted a
settlement fairness hearing on November 14, 2011.
On August 31, 2012, the court approved the settlement and
dismissed the case with prejudice.
BANK OF AMERICA: Faces Anti-Racketeering Class Action in Calif.
---------------------------------------------------------------
Courthouse News Service reports that a dozen banks and their
subsidiaries violated federal anti-racketeering law in
manipulating the London interbank offered rate (Libor) for the
U.S. dollar to give the appearance of financial stability, a class
claims in the United States District Court for the Northern
District of California.
The suit is Carl Payne; Kenneth Coker v. Bank of America; Barclays
Bank; Citigroup.
BIOSANTE PHARMACEUTICALS: Wants Securities Suit Dismissed
---------------------------------------------------------
BioSante Pharmaceuticals, Inc. disclosed in its November 8, 2012,
Form 10-Q filing with the U.S. Securities and Exchange Commission
for the quarter ended September 30, 2012, that it intends to seek
dismissal of a securities class action lawsuit.
On February 3, 2012, a purported class action lawsuit was filed in
the United States District Court for the Northern District of
Illinois under the caption Thomas Lauria, on behalf of himself and
all others similarly situated v. BioSante Pharmaceuticals, Inc.
and Stephen M. Simes naming the Company and the Company's
President and Chief Executive Officer, Stephen M. Simes, as
defendants. The complaint alleges that certain of the Company's
disclosures relating to the efficacy of LibiGel and its commercial
potential were false and/or misleading and that such false and/or
misleading statements had the effect of artificially inflating the
price of the Company's securities resulting in violations of
Section 10(b) of the Securities Exchange Act of 1934, as amended
(Exchange Act), Rule 10b-5 and Section 20(a) of the Exchange Act.
Although a substantially similar complaint was filed in the same
court on February 21, 2012, such complaint was voluntarily
dismissed by the plaintiff in April 2012. The plaintiff seeks to
represent a class of persons who purchased the Company's
securities between February 10, 2010, and December 15, 2011, and
seeks unspecified compensatory damages, equitable and/or
injunctive relief, and reasonable costs, expert fees and
attorneys' fees on behalf of such purchasers. The Company
believes the action is without merit and intends to defend the
action vigorously. On October 10, 2012, the District Court
entered an order setting the dates on which the plaintiff's
consolidated amended complaint is due and establishing a briefing
schedule on the defendants' anticipated motion to dismiss. On
November 6, 2012, plaintiff filed a consolidated amended
complaint; the Company and Mr. Simes intended to file motions to
dismiss the consolidated amended complaint by December 21, 2012.
CAREER EDUCATION: Settlement of TCPA Violation Suits Approved
-------------------------------------------------------------
Career Education Corporation's settlement of two class action
lawsuits alleging violations of the Telephone Consumer Protection
Act Litigation was approved in October 2012, according to the
Company's November 8, 2012, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended September
30, 2012.
On August 4, 2010, a putative class action lawsuit was filed in
the Circuit Court of Cook County, Illinois, by Sheila Fahey
alleging that she had received an unauthorized text message
advertisement in violation of the Telephone Consumer Protection
Act (the "TCPA"). On September 3, 2010, the Company removed this
case to the U.S. District Court for the Northern District of
Illinois.
On August 18, 2010, the same counsel representing plaintiffs in
the Fahey action filed a similar lawsuit in the U.S. District
Court for the Northern District of Illinois on behalf of Sergio
Rojas alleging similar violations of the TCPA based on the same
text messages. Rojas, like Fahey, sought class certification of
his claims. The alleged classes are defined to include all
persons who received unauthorized text message advertisements from
the Company as part of the International Academy of Design &
Technology ("IADT") test marketing campaign. Rojas and Fahey each
sought an award trebling the statutory damages to the class
members, together with costs and reasonable attorneys' fees.
On March 14, 2012, the Company entered into a settlement agreement
with plaintiffs' counsel resolving the claims asserted in both
cases. On October 23, 2012, the Court granted final approval of
this settlement. Under the terms of the settlement agreement, the
Company has agreed to pay $200 to each person who received the
subject text message who can be identified and returns a valid
claim form. Following an additional arbitration process, the
Court awarded class counsel attorneys' fees of $3.5 million as a
total amount for both the Rojas and Fahey cases. Based upon the
information available to it, the Company recorded a charge of $6.0
million in the fourth quarter of 2011 which represents its best
estimate of the loss related to these matters.
CAREER EDUCATION: Faces "Brainard" Class Action Suit in Florida
---------------------------------------------------------------
Career Education Corporation is facing a class action lawsuit in
Florida commenced by Danielle Brainard, et al., according to the
Company's November 8, 2012, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended September
30, 2012.
On September 11, 2012, a putative class action was filed in the
United States District Court for the Middle District of Florida,
captioned Danielle Brainard, et al. v. Career Education
Corporation and Sanford-Brown Limited, Inc. d/b/a/ Sanford-Brown
College and d/b/a/ Sanford-Brown Institute-Orlando. In their
complaint, plaintiffs alleged causes of action under Florida's
Deceptive and Unfair Trade Practices Act and the Federal Racketeer
Influenced and Corrupt Organizations Act ("RICO"), for breach of
the implied covenant of good faith and fair dealing, unjust
enrichment, and breach of fiduciary duty. Plaintiffs allege that
defendants made a variety of misrepresentations to them, relating
generally to salary and employment prospects, instructor
qualifications, transferability of credits, the necessity for
completing a medical assistant program before enrolling in other
technical programs, career placement services, the reputation of
Sanford-Brown College and Sanford-Brown Institute, the value and
quality of the education, the overall cost to attend the school,
and relevant student loan information. The putative classes are
defined as including (1) all students who are or have enrolled in
defendants' degree programs at its Tampa and Orlando, Florida
campuses during an undetermined time period, and (2) all students
who are or have enrolled in defendants' degree programs at any of
their Sanford-Brown campuses throughout the United States during
an undetermined period who were told by defendants that they had
to complete a medical assistant program prior to enrolling in
other technical programs. Plaintiffs seek to recover damages and
also seek declaratory and injunctive relief.
On October 18, 2012, plaintiffs filed a First Amended Complaint.
In this amended pleading, plaintiffs added several additional
plaintiffs and a claim for civil conspiracy. The deadline for
defendants to answer or otherwise respond to the First Amended
Complaint was November 5, 2012.
Because of the many questions of fact and law that have already
arisen and that may arise in the future, the outcome of this legal
proceeding is uncertain at this point. Based on information
available to it at present, the Company says it cannot reasonably
estimate a range of potential loss, if any, for this action
because, among other things, the Company's potential liability
depends on whether a class or classes are certified and, if so,
the composition and size of any such class(es) as well as on an
assessment of the appropriate measure of damages, if the Company
was to be found liable. Accordingly, the Company has not
recognized any liability associated with this action.
EMBARQ MANAGEMENT: 10th Cir. Affirms Dismissal of Spyware Claims
----------------------------------------------------------------
Jonny Bonner at Courthouse News Service reports that a class
failed to show that two Internet providers secretly installed
spyware on their broadband networks to facilitate targeted online
advertising, the United States Court of Appeals for the Tenth
Circuit ruled.
Kathleen and Terry Kirch sued Embarq Management and United
Telephone Co. of Eastern Kansas for violation of the Electronic
Communications Privacy Act (ECPA) in 2010.
Doing business as CenturyLink, the Delaware-based companies faced
claims that they funneled Internet users' communications to a
third-party advertiser NebuAd. The spyware, which was tied to
users' Internet Service Provider (ISP) addresses, left undeletable
tracking cookies and could not be detected through individual
privacy or security settings, according to the complaint.
NebuAd monitored and profiled individual users -- eavesdropping on
their email and search histories -- to send targeted advertising
on webpages that the users visited, according to the complaint.
But Embarq and United countered that it did not have access to
user profiles or data collected by NebuAd. They also said that
the Kirches consented to any alleged interception by agreeing to
its privacy policy. Any acquired user communications would have
occurred only in the ordinary course of ISP business activities,
the providers said.
They insist that NebuAd had not intercepted users' communications
because the limited information acquired about their Internet
communications did not include the contents of those
communications.
A Kansas City federal judge granted the providers summary judgment
in 2011, ruling that the companies had not intercepted the
Kirches' communications.
The court also rejected an argument that the providers could be
liable on a theory of aiding and abetting NebuAd, ruling that the
Kirches had consented to any interception by agreeing to the terms
of their providers' privacy policy.
The 10th Circuit affirmed last week.
"Like the district court, we need not address whether NebuAd
intercepted any of the Kirches' electronic communications," Judge
Harris Hartz wrote for a three-member panel. "Because the ECPA
creates no aiding-and-abetting civil liability, Embarq is liable
only if it itself intercepted those communications."
NebuAd did not give ISPS access to information different from its
ordinary access to data flowing over its network, the 10th Circuit
ruled.
Though NebuAd may have violated the statute, the ISPs could not be
held responsible as an aider and abettor, according to the ruling.
"Although NebuAd acquired various information about Embarq users
during the course of the technology test, Embarq cannot be liable
as an aider and abettor," Judge Hartz wrote. "It was undisputed
that Embarq's access to that information was no different from its
access to any other data flowing over its network. Because this
access was only in the ordinary course of providing Internet
services as an ISP, this access did not constitute an interception
within the meaning of the statute."
The privacy statute "defines intercept as 'the aural or other
acquisition of the contents of any wire, electronic, or oral
communication through the use of any electronic, mechanical, or
other device,'" the ruling states. "No 'interception,' and hence
no violation of the ECPA, occurs if the contents of a
communication are acquired in the ordinary course of business of
an ISP because the Act's definition of electronic, mechanical, or
other device excludes 'any telephone or telegraph instrument,
equipment or facility, or any component thereof . . . (ii) being
used by a provider of wire or electronic communication service in
the ordinary course of its business."
CenturyLink told Congress that the NebuAd test affected 26,000
subscribers in Kansas and 6 million across the country, the
Kirches said.
A copy of the decision in Kirch, et al. v. Embarq Management Co.,
et al., No. 11-3275 (10th Cir.), is available at:
http://www.ca10.uscourts.gov/opinions/11/11-3275.pdf
ENERGY TRANSFER: Settled Sunoco Merger-Related Suit in September
----------------------------------------------------------------
Energy Transfer Partners, L.P. settled in September 2012 class
action lawsuits arising from its merger with Sunoco, Inc.,
according to the Company's November 8, 2012, Form 10-Q filing with
the U.S. Securities and Exchange Commission for the quarter ended
September 30, 2012.
On October 5, 2012, Sam Acquisition Corporation, a Pennsylvania
corporation and a wholly-owned subsidiary of Energy Transfer
Partners, L.P. ("ETP"), completed its merger with Sunoco, Inc.
("Sunoco"). Under the terms of the merger agreement, Sunoco
shareholders received a total of approximately 54,971,724 ETP
Common Units and a total of approximately $2.6 billion in cash.
Following the announcement of the Sunoco Merger on April 30, 2012,
eight putative class action and derivative complaints were filed
in connection with the Sunoco Merger in the Court of Common Pleas
of Philadelphia County, Pennsylvania. Each complaint names as
defendants the members of Sunoco's board of directors and alleges
that they breached their fiduciary duties by negotiating and
executing, through an unfair and conflicted process, a merger
agreement that provides inadequate consideration and that contains
impermissible terms designed to deter alternative bids. Each
complaint also names as defendants Sunoco, ETP, Energy Transfer
Partners GP, L.P. ("ETP GP"), Energy Transfer Partners, L.L.C.
("ETP LLC") and Sam Acquisition Corporation, alleging that they
aided and abetted the breach of fiduciary duties by Sunoco's
directors; some of the complaints also name Energy Transfer
Equity, L.P. ("ETE") as a defendant on those aiding and abetting
claims. In September 2012, all of these lawsuits were settled
with no payment obligation on the part of any of the defendants
following the filing of Current Reports on Form 8-K that included
additional disclosures that were incorporated by reference into
the proxy statement related to the Sunoco Merger. It is
anticipated that the plaintiffs' attorneys will seek compensation
for attorneys' fees related to their efforts in obtaining these
additional disclosures; the Company currently is not able to
estimate how much these fees will be.
FIRST AMERICAN: Judge Decertifies Title Insurance Class Action
--------------------------------------------------------------
Jennifer M. Keas at Foley & Lardner LLP reports that In Campbell
v. First American, a federal judge in Maine has issued a ruling
decertifying a class action involving claims that First American
Title Insurance Co. overcharged refinance customers for their
title insurance.
As members of the financial services industry may be all too
aware, class certification is a critical point in litigation. A
decision to grant class certification places great pressure on the
defendant to settle -- often without regard for the actual merits
of the case. On the other hand, a certification denial can be the
"death knell" of the case because the claim of the named plaintiff
alone may be too small to justify the expense of going forward.
In general, a court will certify a class if it is persuaded that
many related individual claims can be decided together, with a key
element being the predominance of "common" issues. Class
treatment is generally inappropriate where resolution of the
claims would require individualized review.
In the Campbell case, Judge George Z. Singal originally had
certified a class of homeowners that included all persons who had
refinanced a prior mortgage on residential property in Maine that
was issued within two years of the refinancing and who had
purchased title insurance from First American and paid more than
the statutorily approved refinance rate. Two years later,
however, Judge Singal was willing to re-examine -- and reverse --
that ruling. He explained that courts remain free to revisit
class certification order at any time prior to final judgment.
Citing stricter class certification standards in the wake of the
Supreme Court's 2011 Wal-Mart Stores, Inc. v. Dukes decision, as
well as developments in the factual record, Judge Singal found
that there was no longer sufficient commonality to justify class
certification.
The court observed that the Dukes decision has transformed the
class certification commonality standard from a "low bar" to "a
far more searching inquiry." Under Dukes, class certification
requires not just a common question, but also common answers.
Moreover, a defendant retains a right to litigate defenses to
individual claims.
In Campbell, it became clear to the court that there was no common
cause for the alleged title insurance overcharge, but rather that
"each class member presents unique facts as to what was presented
in connection with their purchase of the title insurance and what
steps were taken to ascertain whether they qualified for First
American's published refinance rate." First American also had
different defenses as to why individual class members had not
received this lower rate. Thus, "neither liability nor damages
can be established on a class wide basis," the court found.
The record supported this analysis. At the time of the initial
class certification, First American largely relied on declarations
that it submitted to the court. However, the court was under the
impression that if a borrower had previously received a title
policy from First American, then it was entitled to a re-issue
rate and that the failure to receive this rate could be attributed
in some common way to First American's failure to ascertain or
assume the existence of the prior policy. Two years later, when
First American moved to decertify, the parties had conducted
significant additional discovery, which revealed that the
plaintiffs' claims could not be resolved without reviewing each of
their individual transactions. First American had conducted a
detailed review of 230 title policies (and their underlying files)
identified by the plaintiffs as overcharges. The review showed
that about one-third involved no overcharge at all. Some
plaintiffs had, in fact, received the refinance rate. For various
reasons, others were ineligible. In yet other instances, the file
contained insufficient information to determine whether the
homeowner was entitled to the refinance rate.
The case is Campbell v. First American Title Insurance Co., No.
2:08-cv-003119-GZS, in the U.S. District Court for the District of
Maine. As a practical matter, a decertification order may have a
particularly deterrent effect on class counsel who risk investing
massive resources pursuing a case post-certification only to have
the judge change his or her mind down the road. Judge Singal's
ruling joins a number of recent decisions reflecting a legal
climate where it may be increasingly difficult to secure class
certification. Of note is a decision earlier this year in Howland
v. First American Title Insurance Co., 672 F.3d 525 (7th Cir.
2012), in which the Seventh Circuit affirmed the denial class
certification in a RESPA case.
FIRSTENERGY CORP: Awaits Ohio Supreme Court Ruling on Appeal
------------------------------------------------------------
FirstEnergy Corp. is awaiting a court decision from the Supreme
Court of Ohio with respect to an appeal from the dismissal of a
class action lawsuit filed by customers, according to the
Company's November 8, 2012, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended September
30, 2012.
In February 2010, a class action lawsuit was filed in Geauga
County Court of Common Pleas against FirstEnergy, The Cleveland
Electric Illuminating Company, an Ohio electric utility operating
subsidiary; and Ohio Edison Company, an Ohio electric utility
operating subsidiary, seeking declaratory judgment and injunctive
relief, as well as compensatory, incidental and consequential
damages, on behalf of a class of customers related to the
reduction of a discount that had previously been in place for
residential customers with electric heating, electric water
heating, or load management systems. The reduction in the
discount had been approved by the Public Utilities Commission of
Ohio ("PUCO"). In March 2010, the named-defendant companies filed
a motion to dismiss the case due to the lack of jurisdiction. The
court granted the motion to dismiss and the plaintiffs appealed
the decision to the Court of Appeals of Ohio. The Court of
Appeals affirmed the dismissal of the Complaint by the Court of
Common Pleas on all counts except for one relating to an
allegation of fraud which it remanded to the trial court. The
Companies timely filed a notice of appeal with the Supreme Court
of Ohio on December 5, 2011, challenging this one aspect of the
Court of Appeals opinion. The Supreme Court of Ohio heard
arguments on the appeal in September 2012.
FIRSTENERGY CORP: Still Defends Suits Over Bruce Mansfield Plant
----------------------------------------------------------------
In July 2008, three complaints representing multiple plaintiffs
were filed against FirstEnergy Generation Corp. ("FGCO"), a
subsidiary of FirstEnergy Corp., in the U.S. District Court for
the Western District of Pennsylvania seeking damages based on air
emissions from the coal-fired Bruce Mansfield Plant. Two of these
complaints also seek to enjoin the Bruce Mansfield Plant from
operating except in a "safe, responsible, prudent and proper
manner." One complaint was filed on behalf of twenty-one
individuals and the other is a class action complaint seeking
certification as a class with the eight named plaintiffs as the
class representatives. FGCO believes the claims are without merit
and intends to vigorously defend itself against the allegations
made in these complaints, but, at this time, is unable to predict
the outcome of this matter or estimate the possible loss or range
of loss.
No further updates were reported in the Company's November 8,
2012, Form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarter ended September 30, 2012.
HAWKEYE STEEL: Recalls 2,500 Units of Top Hatch Egg Incubators
--------------------------------------------------------------
The U.S. Consumer Product Safety Commission, in cooperation with
the Brower Division of Hawkeye Steel Products Inc., of Houghton,
Iowa, announced a voluntary recall of about 2,500 Egg Incubators.
Consumers should stop using recalled products immediately unless
otherwise instructed. It is illegal to resell or attempt to
resell a recalled consumer product.
The base can ignite during use, posing a fire hazard to the
consumer.
Brower received three reports of fires, all of which resulted in
property damage. No injuries have been reported.
The product is a round, light gray plastic egg incubator with a
clear plastic top used to hatch many different types of eggs. The
incubator is 18 inches in diameter and 12 inches tall. The
recalled Model TH120 Brower Top Hatch Incubator has two main
components -- a tray and a base. A crank arm and a turner motor
are located in the base. The crank arm snaps into place on the
turner motor. The motor turns the crank arm which, in turn,
rotates the tray. The clear plastic top has an engraving which
says, "THIS SIDE UP." The model number is located on the side of
the packaging box. Pictures of the recalled products are
available at:
http://www.cpsc.gov/cpscpub/prerel/prhtml13/13085.html
The recalled products were manufactured in the United States of
America and sold at Mills Fleet Farm, Stromberg's Chick and
Gamebirds, Unlimited and other farm supply retailers from January
2009 to September 2010 for about $190.
Consumers should immediately stop using the product and contact
the Company for a free replacement base. Brower may be reached at
(800) 553-1791, from 8:00 a.m. to 5:00 p.m. Central Time Monday
through Friday or online at http://www.browerequip.com/recall.pdf
HYATT HOTELS: Sued for Using Tips to Cover "Glass Breakage"
-----------------------------------------------------------
William Dotinga at Courthouse News Service reports that Hyatt
Hotels and the Manchester Financial Group steal workers' tips to
cover "glass breakage," whether employees have broken any glasses
or not, a class action claims in Superior Court.
Former room service delivery worker Leonardo Acosta sued Host
Hotels and Resorts, Manchester Financial Group and Hyatt Hotels
Corp.
Mr. Acosta worked for the Manchester Grand Hyatt in San Diego
until January 2012. He seeks compensatory and exemplary damages
for unfair competition, conversion and money had and received.
According to Mr. Acosta, Manchester Financial laid down employment
policies at the Manchester Grand Hyatt that are still followed,
even though the hotel was sold to Host Hotels in 2010.
Since exiting the San Diego hotel scene, Manchester owner Doug
Manchester has purchased both the San Diego Union-Tribune and the
North County Times, combining the two struggling newspapers into
the dominant daily in the city and county of San Diego.
Mr. Acosta claims that under policies Manchester began in 2003,
the hotel pools the tips of its room service delivery staff and
withholds a fixed percentage of them.
"Hyatt and the other defendants maintain that the monies are
withheld pursuant to Hyatt's policy of reimbursing themselves for
purported 'glass breakage.' The same percentage of gratuities was
withheld from all room service delivery workers in plaintiffs' tip
pool, without regard to the amount of breakage, if any, during any
pay period. The same percentage of gratuities was withheld from
all room service delivery workers in plaintiffs' tip pool, without
regard to whether any purported breakage was caused by any
dishonest or willful act, or by the gross negligence of any
employee . . . [and] without regard to the individual, if any,
responsible for the alleged breakage," Mr. Acosta claims.
Mr. Acosta claims that the withholdings, which have been standard
policy since at least 2003, violate California labor law.
"Defendants violated the 'unlawful' prong of the unfair
competition law by violating California's labor code . . . which
provides that 'no employer or agent shall take or receive any
gratuity or part thereof that is paid, given to or left for an
employee. Defendants also violated the 'unlawful' prong of the
unfair competition law by violating California Industrial Wage
Order . . . which provides that 'no employer shall make any
deduction from the wage or require reimbursement from any employee
for any cash shortage, breakage or loss of equipment, unless it
can be shown that the shortage, breakage or loss is caused by a
dishonest or willful act, or by the gross negligence of the
employee," Mr. Acosta says in the complaint.
He seeks restitution, compensatory and exemplary damages, and
injunctions to keep the hoteliers from withholding tips from
workers.
Manchester has been a heavy hitter for years in San Diego.
Circulation at the Union-Tribune has dipped by 4 percent since he
took over the paper in 2011.
According to a KPBS report, some believe the neophyte publishing
magnate uses the papers to wage a personal propaganda war to
further his political beliefs and real estate development
interests.
"Listen, we're interested in serving everybody in San Diego
because we love the city," Manchester told KPBS. He added: "I've
always said under Ronald Reagan, we had Steve Jobs, we had Johnny
Cash and we had Bob Hope and under Obama, we have no cash, no jobs
and no hope."
Manchester said he's aware that readers are canceling
subscriptions, but claims circulation is up. Reuters recently
reported that he and the publisher of the Orange County Register
want to acquire the entire Tribune stable -- including the Los
Angeles Times and Chicago Tribune -- when Tribune emerges from
bankruptcy, which happened on Dec. 31.
Mr. Acosta is represented by David Bower -- dbower@faruqilaw.com
-- with Faruqi & Faruqi in Los Angeles.
JETBLUE AIRWAYS: Appellate Court Affirms Class Action Dismissal
---------------------------------------------------------------
Andrew Keshner, writing for The New York Law Journal, reports that
a Brooklyn appellate court has clipped the wings of a putative
class action suit from an airline passenger who spent 11 hours on
the tarmac waiting for her flight to take off.
"The plaintiff's intentional tort and fraud claims relate to the
provision of airline service and are, therefore, preempted by
federal law," Justice Leonard Austin wrote for a unanimous panel
of the Appellate Division, Second Department, in Biscone v.
JetBlue Airways, 700140/10.
Justices Mark Dillon, Anita Florio and Sheri Roman joined the
Dec. 26 decision affirming the lower court's partial dismissal.
The ruling also upheld a denial of a motion to reargue a denied
bid for class certification. Arguments were heard on Feb. 7,
2012.
In the underlying case, Katharine Biscone, a comedy writer, was
bound for Burbank, Calif., from John F. Kennedy International
Airport on Feb. 14, 2007. Scheduled to depart at 6:45 a.m., the
JetBlue plane left the terminal shortly thereafter. But it stayed
on the ground for the next 11 hours. Ms. Biscone finally was let
off at 5:30 p.m., then waited another two hours to retrieve
baggage.
In the first five hours on the tarmac, Ms. Biscone kept her seat
belt fastened because the crew told the passengers the weather was
"holding us up" and the plane could leave on five minutes' notice.
In the next five hours, the crew told passengers if they wanted to
leave and take another flight, they had to inform a crew member.
A passenger allegedly tried to deplane but the "flight attendant
bullied and intimidated him to stay on the plane," telling him
that the carrier would not help in finding another flight, and
that no flights were available.
Other passengers also allegedly tried getting out, but the
airplane personnel said attempts to force oneself off a plane
could mean a 20-year prison term pursuant to the Federal Patriot
Act.
Small amounts of water and snacks were passed out periodically as
the plane's ventilation was shut down, causing the cabin to become
"sweltering." After 10 hours, the captain told passengers that
because the toilet tanks were now full, no one could "do a
[number] 2."
As a result of the ordeal, Ms. Biscone said she missed a friend's
film premiere and "important" business meetings that resulted in
"lost business opportunities."
Having undergone shoulder surgery six months earlier, she said she
experienced cramping, aches and mental distress. She claimed that
resulted in six months of physical pain and treatment for panic
and anxiety attacks.
Ms. Biscone filed her suit in February 2008. She asserted five
cause of action: false imprisonment; negligence and negligence per
se; intentional infliction of emotion distress; fraud and deceit;
and breach of contract.
Among its arguments for dismissal, JetBlue argued the tort claims
were preempted by the 1978 Airline Deregulation Act. That law
removed government control over airfare and services, and included
a preemption provision preventing states from establishing their
own regulation.
The preemption clause barred states from "enact[ing] or
enforc[ing] a law, regulation, or other provision having the force
and effect of law related to a price, route, or service of an air
carrier that may provide air transportation."
In October 2010, Queens Supreme Court Justice Valerie Brathwaite
Nelson held the Airline Deregulation Act did not apply to tort
claims for personal injury but did apply to other tort claims
pertaining to airline service.
As a result, she dismissed the false imprisonment, intentional
infliction of emotional distress and fraud and deceit claims. She
let the breach of contract claim proceed, along with the
negligence claim to the extent it was predicated on personal
injury.
On appeal, Ms. Biscone said 11-hour confinement on a grounded
aircraft was not related to the provision of service contemplated
by the federal law's preemption clause.
She also contended the underlying tort claims were too attenuated
from the federal law's aim of market deregulation.
JetBlue countered that the preemption clause at issue was broad.
The dismissed claims, it argued, were "an impermissible attempt to
regulate through state law an airline's operations and practices
during ground delays."
In his decision, Justice Austin observed that the federal
deregulation act's preemption provision -- particularly the clause
"related to a price, route, or service" -- have attracted
"considerable attention in the federal courts."
The U.S. Supreme Court has addressed the provision, and
specifically the "related to" phrase, three times, he noted.
In its 1992 ruling in Morales v. Trans World Airlines, 504 U.S.
374, the high court held the "related to" phrase expressed "a
broad preemptive purpose" but was not limitless.
The Supreme Court has not explicitly addressed the definition of
"service," said Justice Austin, and federal appellate courts have
been divided on its meaning as a result.
He noted that the Second Circuit, in striking down New York's
enforcement of a "passenger bill of rights," in Air Transport
Association of America v. Cuomo, 520 F.3d 218, did not
specifically define "service." But the circuit did not have
trouble viewing the supply of food and necessities during ground
delay as part of a airline's service, said Justice Austin (NYLJ,
March 26, 2008).
Justice Austin observed that a 1994 ruling by then-Southern
District Judge Sonia Sotomayor in Rombom v. United Air Lines, 867
F.Supp 214, established a three-part test "generally applied" in
the Second Circuit to determine if state law claims relate to
"service" as contemplated by the federal deregulation act.
The Rombom test first requires deciding if "the activity at issue
in the claim is an airline service." It then asks, if the
activity at issue is a service, "whether the claim affects the
airline service directly or tenuously, remotely, or peripherally."
Lastly, if the activity "directly implicates a service" the courts
have to decide if the "underlying tortious conduct was reasonably
necessary to the provision of the service."
Rombom said claims should not be preempted where the incident is
"outrageous conduct that goes beyond the scope of normal aircraft
operations."
Applying the Rombom test, Justice Austin said Ms. Biscone could
not show the claims were not subject to preemption.
For example, the fraud and deceit claim failed because it was
based on alleged misrepresentations about when the plane would
take off.
"The subject statements by airline personnel were directly related
to the provision of an airline service. Since the plaintiff's
fraud and deceit cause of action does not allege behavior that is
outrageous and beyond the scope of normal airline operations, it
is preempted," said Justice Austin.
The intentional infliction of emotional distress claim also failed
because it was rooted in the supply of things like food, water and
restroom facilities.
"This conduct expressly relates to airline 'services,' as that
term is construed by a majority of the federal circuits," said
Justice Austin.
Paul Hudson of Valatie, N.Y. represented Ms. Biscone.
JetBlue Airways Corporation was represented by Christopher Kelly
-- christopher.kelly@hklaw.com -- Judith Nemsick --
judith.nemsick@hklaw.com -- and Christine Tramontano --
christine.tramontano@hklaw.com -- of Holland & Knight.
JUNIPER NETWORKS: Hearing on Bid to Dismiss Class Suit on Jan. 13
-----------------------------------------------------------------
A hearing on Juniper Networks, Inc.'s motion to dismiss a class
action lawsuit commenced by City of Royal Oak Retirement System is
scheduled for January 31, 2013, according to the Company's
November 8, 2012, Form 10-Q filing with the U.S. Securities and
Exchange Commission for the quarter ended September 30, 2012.
On August 15, 2011, a purported securities class action lawsuit,
captioned City of Royal Oak Retirement System v. Juniper Networks,
Inc., et al., Case No. 11-cv-04003-LHK, was filed in the United
States District Court for the Northern District of California
naming the Company and certain of its officers and directors as
defendants. The complaint alleges that the defendants made false
and misleading statements regarding the Company's business and
prospects. Plaintiffs seek an unspecified amount of monetary
damages on behalf of the purported class. On January 9, 2012, the
Court appointed City of Omaha Police and Fire Retirement System
and City of Bristol Pension Fund as lead plaintiffs. Lead
plaintiffs allege that defendants made false and misleading
statements about the Company's business and future prospects, and
failed to adequately disclose the impact of certain changes in
accounting rules. Lead plaintiffs purport to assert claims for
violations of Sections 10(b), 20(a) and 20A of the Securities
Exchange Act of 1934 and SEC Rule 10b-5 on behalf of those who
purchased or otherwise acquired Juniper Networks' common stock
between July 20, 2010, and July 26, 2011, inclusive. On March 14,
2012, Defendants filed motions to dismiss lead plaintiffs' amended
complaint. On July 23, 2012, the Court issued an order dismissing
the action and giving lead plaintiffs leave to file an amended
complaint. Lead plaintiffs filed their second amended complaint
on August 20, 2012. Defendants filed a motion to dismiss the
second amended complaint on September 17, 2012, and lead
plaintiffs filed their opposition on October 22, 2012.
Defendants' reply brief was due November 8, 2012.
A hearing on the motion to dismiss is scheduled for January 31,
2013.
L'OREAL: Sued Over False Claims on "Anti-Aging" Products
--------------------------------------------------------
Courthouse News Service reports that three federal class actions
claim L'Oreal and Lancome push their "anti-aging" products with
false claims.
LADENBURG THALMANN: Awaits Approval of IPO Suit Settlement
----------------------------------------------------------
Ladenburg Thalmann Financial Services Inc. is awaiting court
approval of its settlement of a class action lawsuit in
Washington, according to the Company's November 8, 2012, Form 10-Q
filing with the U.S. Securities and Exchange Commission for the
quarter ended September 30, 2012.
In December 2011, a purported class action lawsuit was filed in
the U.S. District Court for the Western District of Washington
against HQ Sustainable Maritime Industries, Inc. ("HQS"), various
individuals, Ladenburg and another broker-dealer as underwriters
of 2009 and 2010 offerings of HQS common stock. The complaint
alleges that the defendants, including Ladenburg, are liable for
violations of federal securities laws. The complaint seeks
unspecified damages. On September 28, 2012, the parties entered
into a settlement agreement, which is pending court approval. The
stipulated settlement provides for no contribution by Ladenburg.
LADENBURG THALMANN: Still Awaits Order on Bid to Dismiss IPO Suit
-----------------------------------------------------------------
In December 2011, a purported class action lawsuit was filed in
the U.S. District Court for the Southern District of Florida
against FriendFinder Networks, Inc. ("FriendFinder"), various
individuals, Ladenburg Thalmann Financial Services Inc. and
another broker-dealer as underwriters for the May 11, 2011
FriendFinder initial public offering. The complaint alleged that
the defendants, including Ladenburg, are liable for violations of
federal securities laws. The complaint sought unspecified
damages. Defendants' motions to dismiss the complaint are
currently pending.
No further updates were reported in the Company's November 8,
2012, Form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarter ended September 30, 2012.
The Company believes that the claims are without merit and, if
they are not dismissed, intends to vigorously defend against them.
LOUISIANA: Jan. 15 Opt-Out Deadline for Comite River Class Action
-----------------------------------------------------------------
Joe Gyan Jr., writing for The Advocate, reports that thousands of
taxpayers in East Baton Rouge, Livingston and Ascension parishes
have until mid-January to decide whether to remain in a class-
action lawsuit that alleges the Amite River Basin District
collected millions of dollars in unauthorized local property taxes
for the Comite River Diversion Canal project.
Jan. 15 is the official "opt-out" date.
Chris Whittington, one of three attorneys appointed to represent
the class of taxpayers, said every affected taxpayer will receive
notice in the mail of the impending date and an opt-out form.
Advertisements also have been put in newspapers, including The
Advocate, and notices have been placed at major courthouses in
each parish, he said.
Affected taxpayers are automatically members of the class and do
not have to opt in, Mr. Whittington said. The Jan. 15 deadline
applies only to those persons who wish to opt out of the suit, he
said.
"As a member of the class you will be bound by any decision held
in this case. You do, however, have the opportunity to opt-out of
this suit," reads an ad published Dec. 3 in The Advocate.
"You have the right, if you wish, to have an attorney of your
choice present any claim you allegedly have; however, you will be
personally responsible for any additional fees and expenses
charged by your personal attorney," the ad states.
"If you opt-out of the class action and fail to take whatever
action may be necessary to protect your interests . . . you may be
forever barred from bringing any action with regard to any claim
for the return of the tax dollars at issue in this case," the ad
notes.
Mr. Whittington estimated the size of the class at more than
84,000 people.
When Terry Campbell, of the Central area, filed his suit in late
2010, he alleged the Amite River Basin District had collected more
than $7.3 million in unauthorized local property taxes for
construction of the Comite diversion project.
Mr. Whittington said that amount has now climbed to $13 million.
The suit says a 2001 agreement between the Amite district and the
state required an end to the local tax once property owners
provided $6 million for the massive flood-control project. An
extra $7.3 million in property taxes was collected, according to
the suit.
Dietmar Rietschier, executive director of the Amite River Basin
Commission, testified in February that the $6 million figure was
the "original estimate" for the 10-year duration of the 3-mill tax
approved by voters in 2000. Voters in 2010 approved a 10-year
extension of the tax at 2.65 mills, he said.
In a recent interview concerning the opt-out date, Larry Bankston,
who represents the Amite district commission, said the suit has no
merit.
"The tax money is all going toward the project," he added.
Mr. Bankston said an invalidation of the tax would kill the
project, on which more than $50 million already has been spent.
"We are proceeding with the (U.S. Army) Corps of Engineers to
construct the project," he said.
Mr. Whittington said property owners were required to pay no more
or no less than $6 million.
"Period. End of story," he said. "The court of appeal has ruled
on many occasions that we have a case."
The project, designed to transfer flood waters on the Amite and
Comite rivers to the Mississippi River, is expected to cost in the
neighborhood of $188 million.
State District Judge Wilson Fields, who is presiding over the
case, certified the suit as a class-action.
Opt-out forms must be returned to the following address:
Plaintiff's Steering Committee, 2223 Quail Run Drive, Suite B,
Baton Rouge, LA 70808.
NATIONAL SECURITIES: Faces Overtime Class Action in California
--------------------------------------------------------------
Courthouse News Service reports that National Securities
Industries stiffs security guards for overtime and minimum wages,
a class action claims in Santa Clara County Court.
PACIFIC LIFE: Court Revives Class Action Over Excessive Fees
------------------------------------------------------------
Tim Hull at Courthouse News Service reports that federal pre-
emption cannot block a class action alleging that Pacific Life
Insurance Company charges excessive fees, the United States Court
of Appeals for the Ninth Circuit ruled on Jan. 2.
A group of investors that purchased variable universal life
insurance policies from Pacific Life filed a class action in
California claiming that the company's "cost of insurance" fee is
out of step with industry standards.
Variable universal life insurance is connected to investments and
allows the policyholder to borrow against gains. Both the 11th
and 7th Circuits have previously ruled that such policies are
securities under federal law.
The Securities Litigation Uniform Standards Act of 1998 (SLUSA)
bars state-level claims for "misrepresentations or fraudulent
omission in connection with the purchase or sale of covered
securities."
U.S. District Judge David Carter dismissed the investors' case in
Santa Ana, finding that the SLUSA precluded the claims for breach
of contract, bad faith and unfair competition under California
law.
Even after giving the plaintiffs two chances to amend the
complaint, Judge Carter found that it still contained references
to "hidden loads and concealment," and thus was precluded by the
federal law.
But a unanimous federal appeals panel entered a partial reversal
on Jan. 2.
"The class claims for breach of contract and breach of the duty of
good faith and fair dealing are not precluded by SLUSA, even if
such claims relate to the purchase or sale of a covered security,"
Chief Judge Alex Kozinski wrote for panel in Pasadena.
"Plaintiffs allege that their insurer promised one thing and
delivered another," he added. "That's a straightforward contract
claim that doesn't rest on misrepresentation or fraudulent
omission."
The panel revived the contract claims "on the condition that
plaintiffs amend their complaint to remove any reference to
deliberate concealment or fraudulent omission."
The state-level unfair competition claims remain lost. "To
succeed on this claim, plaintiffs need not show that Pacific
misrepresented the cost of insurance or omitted critical details,"
Judge Kozinski wrote. "They need only persuade the court that
theirs is the better reading of the contract term."
"Just as plaintiffs cannot avoid SLUSA through crafty pleading,
defendants may not recast contract claims as fraud claims by
arguing that they 'really' involve deception or
misrepresentation," he added.
A copy of the Opinion in Freeman Investments, L.P., et al. v.
Pacific Life Insurance Company, No. 09-55513 (9th Cir.), is
available at http://is.gd/oZFqVS
PHILADELPHIA: Faces Gun Permit Application Privacy Class Action
---------------------------------------------------------------
Courthouse News Service reports that Philadelphia invades privacy
by releasing names of people whose applications for gun permits
are denied or revoked, five John Does claim in a class action in
the Court of Common Pleas.
REALNETWORKS INC: Settled Illinois Consumer Suit in October
-----------------------------------------------------------
RealNetworks, Inc. disclosed in its November 8, 2012, Form 10-Q
filing with the U.S. Securities and Exchange Commission for the
quarter ended September 30, 2012, that it settled in October 2012
a class action lawsuit initiated in Illinois.
On May 24, 2012, a putative class action lawsuit was filed against
the Company in Illinois federal court by an individual consumer
subscriber to one of the Company's subscription products. The
lawsuit asserted that certain online marketing practices of the
Company's marketing affiliates violate federal and state laws. In
October 2012, the Company settled this matter for an immaterial
amount.
REYNOLDS AMERICAN: Appeal in "Smith" Class Suit vs. Unit Pending
----------------------------------------------------------------
An appeal challenging a summary judgment order favoring Reynolds
American, Inc.'s subsidiary in a class action commenced in Kansas
remains pending, according to the Company's October 23, 2012, Form
10-Q filing with the U.S. Securities and Exchange Commission for
the quarter ended September 30, 2012.
A number of tobacco wholesalers and consumers have sued U.S.
cigarette manufacturers, including Reynolds American, Inc.'s
subsidiary R. J. Reynolds Tobacco Company ("RJR Tobacco") and
Brown & Williamson Holdings, Inc. ("B&W"), in federal and state
courts, alleging that cigarette manufacturers combined and
conspired to set the price of cigarettes in violation of antitrust
statutes and various state unfair business practices statutes. In
these cases, the plaintiffs asked the court to certify the
lawsuits as class actions on behalf of other persons who purchased
cigarettes directly or indirectly from one or more of the
defendants. As of September 30, 2012, all of the federal and
state court cases on behalf of indirect purchasers had been
dismissed.
In Smith v. Philip Morris Cos., Inc., a case filed in February
2000, and pending in District Court, Seward County, Kansas, the
court granted class certification in November 2001, in an action
brought against the major U.S. cigarette manufacturers, including
RJR Tobacco and B&W, and the parent companies of the major U.S.
cigarette manufacturers, including R.J. Reynolds Tobacco Holdings,
Inc. ("RJR"), seeking to recover an unspecified amount in actual
and punitive damages. The plaintiffs allege that the defendants
participated in a conspiracy to fix or maintain the price of
cigarettes sold in the United States. In an opinion dated March
23, 2012, the court granted summary judgment in favor of RJR
Tobacco and B&W on the plaintiffs' claims. On July 18, 2012, the
plaintiffs filed a notice of appeal.
Headquartered in Winston-Salem, North Carolina, Reynolds American
Inc. ("RAI") -- http://www.reynoldsamerican.com/-- is a holding
company whose operating subsidiaries cigarette manufacturer R. J.
Reynolds Tobacco Company (RJR); smokeless tobacco products
manufacturer American Snuff Company, LLC; super-premium cigarette
brand manufacturer, Santa Fe Natural Tobacco Company, Inc.
(SFNTC); and Niconovum AB.
On July 30, 2004, the U.S. assets, liabilities and operations of
Brown & Williamson Tobacco Corporation, now known as Brown &
Williamson Holdings, Inc. ("B&W"), an indirect, wholly owned
subsidiary of British American Tobacco p.l.c. ("BAT), were
combined with R. J. Reynolds Tobacco Company, a wholly owned
operating subsidiary of R.J. Reynolds Tobacco Holdings, Inc.
("RJR"), a wholly owned subsidiary of RAI. These July 30, 2004,
transactions generally are referred to as the B&W business
combination. As a result of the B&W business combination, B&W
owns approximately 42% of RAI's outstanding common stock. In
2006, RAI, through a subsidiary, completed its acquisition of
American Snuff Co. and Rosswil, LLC.
REYNOLDS AMERICAN: Arizona Ct. Dismissed "Shaffer" Suit in Sept.
----------------------------------------------------------------
An Arizona court dismissed in September 2012 the class action
lawsuit captioned Shaffer v. R. J. Reynolds Tobacco Co., according
to Reynolds American Inc.'s October 23, 2012, Form 10-Q filing
with the U.S. Securities and Exchange Commission for the quarter
ended September 30, 2012.
The Shaffer lawsuit is a case filed in October 2009 in the
Superior Court of Pima County, Arizona, against RJR Tobacco, RAI
and other defendants. The plaintiffs brought the case on behalf
of all persons residing in Arizona who purchased, not for resale,
defendants' cigarettes labeled as "light" or "ultra-light" from
the date of the defendants' first sales of such cigarettes in
Arizona to the date of judgment. The plaintiffs allege consumer
fraud, concealment, non-disclosure, negligent misrepresentation
and unjust enrichment. The plaintiffs seek a variety of damages,
including compensatory, restitutionary and punitive damages. In
November 2009, the defendants removed the case to the U.S.
District Court for the District of Arizona, and RJR Tobacco and
RAI filed their answers to the complaint. On April 26, 2012, the
plaintiffs' motion for partial summary judgment on the grounds of
the purported collateral estoppel effect of certain findings in
United States v. Philip Morris USA, Inc., was denied. In
September 2012, the parties filed a stipulation of dismissal, and
the court dismissed the case with prejudice.
The Company says that 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.
Headquartered in Winston-Salem, North Carolina, Reynolds American
Inc. ("RAI") -- http://www.reynoldsamerican.com/-- is a holding
company whose operating subsidiaries include the second largest
cigarette manufacturer in the United States, R. J. Reynolds
Tobacco Company; the second largest smokeless tobacco products
manufacturer in the United States, American Snuff Company, LLC;
the manufacturer of the fastest growing super-premium cigarette
brand, Santa Fe Natural Tobacco Company, Inc. (SFNTC); and
Niconovum AB.
On July 30, 2004, the U.S. assets, liabilities and operations of
Brown & Williamson Tobacco Corporation, now known as Brown &
Williamson Holdings, Inc. ("B&W"), an indirect, wholly owned
subsidiary of British American Tobacco p.l.c. ("BAT), were
combined with R. J. Reynolds Tobacco Company, a wholly owned
operating subsidiary of R.J. Reynolds Tobacco Holdings, Inc.
("RJR"), a wholly owned subsidiary of RAI. These July 30, 2004,
transactions generally are referred to as the B&W business
combination. As a result of the B&W business combination, B&W
owns approximately 42% of RAI's outstanding common stock. In
2006, RAI, through a subsidiary, completed its acquisition of
American Snuff Co. and Rosswil, LLC.
REYNOLDS AMERICAN: Awaits Ruling in "Sateriale" Suit vs. Unit
-------------------------------------------------------------
Reynolds American Inc. is awaiting a court decision on its
subsidiary's motion for rehearing en banc in the class action
lawsuit captioned Sateriale v. R. J. Reynolds Tobacco Co.,
according to the Company's October 23, 2012, Form 10-Q filing with
the U.S. Securities and Exchange Commission for the quarter ended
September 30, 2012.
The Sateriale class action was 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. In July 2012, the appellate
court affirmed the dismissal of the plaintiffs' claims under the
Unfair Competition Law and the Consumer Legal Remedies Acts and
reversed the dismissal of the plaintiffs' claims for promissory
estoppel and breach of contract. RJR Tobacco filed a motion for
rehearing or rehearing en banc in August 2012.
Headquartered in Winston-Salem, North Carolina, Reynolds American
Inc. ("RAI") -- http://www.reynoldsamerican.com/-- is a holding
company whose operating subsidiaries include the second largest
cigarette manufacturer in the United States, R. J. Reynolds
Tobacco Company; the second largest smokeless tobacco products
manufacturer in the United States, American Snuff Company, LLC;
the manufacturer of the fastest growing super-premium cigarette
brand, Santa Fe Natural Tobacco Company, Inc. (SFNTC); and
Niconovum AB.
On July 30, 2004, the U.S. assets, liabilities and operations of
Brown & Williamson Tobacco Corporation, now known as Brown &
Williamson Holdings, Inc. ("B&W"), an indirect, wholly owned
subsidiary of British American Tobacco p.l.c. ("BAT), were
combined with R. J. Reynolds Tobacco Company, a wholly owned
operating subsidiary of R.J. Reynolds Tobacco Holdings, Inc.
("RJR"), a wholly owned subsidiary of RAI. These July 30, 2004,
transactions generally are referred to as the B&W business
combination. As a result of the B&W business combination, B&W
owns approximately 42% of RAI's outstanding common stock. In
2006, RAI, through a subsidiary, completed its acquisition of
American Snuff Co. and Rosswil, LLC.
REYNOLDS AMERICAN: Class Suits vs. Unit Still Pending in Canada
---------------------------------------------------------------
Reynolds American Inc. continues to defend six class action
lawsuits filed against its subsidiary in Canada, according to the
Company's October 23, 2012, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended
September 30, 2012.
The six putative Canadian class actions were filed against various
Canadian and non-Canadian tobacco-related entities, including
RAI'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.
Headquartered in Winston-Salem, North Carolina, Reynolds American
Inc. ("RAI") -- http://www.reynoldsamerican.com/-- is a holding
company whose operating subsidiaries include the second largest
cigarette manufacturer in the United States, R. J. Reynolds
Tobacco Company; the second largest smokeless tobacco products
manufacturer in the United States, American Snuff Company, LLC;
the manufacturer of the fastest growing super-premium cigarette
brand, Santa Fe Natural Tobacco Company, Inc. (SFNTC); and
Niconovum AB.
On July 30, 2004, the U.S. assets, liabilities and operations of
Brown & Williamson Tobacco Corporation, now known as Brown &
Williamson Holdings, Inc. ("B&W"), an indirect, wholly owned
subsidiary of British American Tobacco p.l.c. ("BAT), were
combined with R. J. Reynolds Tobacco Company, a wholly owned
operating subsidiary of R.J. Reynolds Tobacco Holdings, Inc.
("RJR"), a wholly owned subsidiary of RAI. These July 30, 2004,
transactions generally are referred to as the B&W business
combination. As a result of the B&W business combination, B&W
owns approximately 42% of RAI's outstanding common stock. In
2006, RAI, through a subsidiary, completed its acquisition of
American Snuff Co. and Rosswil, LLC.
REYNOLDS AMERICAN: Parties Negotiate Atty. Fees in "Scott" Suit
---------------------------------------------------------------
Reynolds American Inc. disclosed in its October 23, 2012, Form 10-
Q filing with the U.S. Securities and Exchange Commission for the
quarter ended September 30, 2012, that class counsel in the
lawsuit styled Scott v. American Tobacco Co. have been working
with trustees of the medical monitoring and smoking cessation
program to come to an agreement on a fee award from the fund that
will meet with approval of the trustees.
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 RJR Tobacco and B&W, seeking to recover
roughly $13.2 billion 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 but also found in favor of the plaintiffs on the claim
for smoking cessation. In May 2004, the jury returned a verdict
in the amount of $591 million on the class's claim for a smoking
cessation program.
The defendants appealed, and 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 and remanded for further proceedings. The defendants'
applications for writ of certiorari with the Louisiana Supreme
Court and the U.S. Supreme Court were denied in 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 ordering the defendants to deposit approximately $263 million
together with interest into the registry of the court for the
funding of the program. In December 2008, the trial court judge
signed an order granting the defendants an appeal from the amended
judgment. In 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 $278 million. The
defendants' motion for rehearing was denied, and their application
for writ of certiorari or review and emergency motion to stay
execution of judgment with the Louisiana Supreme Court were
denied. In 2011, the U.S. Supreme Court denied the defendant's
petition for writ of certiorari. The defendants were thus
required to pay the judgment and interest totaling approximately
$278 million, with RJR Tobacco paying $139 million, the portions
of the judgment allocated to RJR Tobacco and B&W.
In December 2011, after the judgment amount was paid in full, the
plaintiffs filed a motion for assessment of attorneys' fees and
costs for the prosecution of the case against the defendants
rather than 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
defendants agreed to surrender 50% of their reversionary interest
in any funds left over at the end of the 10-year program. The
agreement specifically provides that it is binding on class
counsel and is not contingent on any further action or ruling by
the court. 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 remains pending as the trial
court has not yet entered any fee award. Class counsel have been
working with the three trustees appointed by the court to assist
in implementing the program to come to an agreement on a fee award
from the fund that will meet with approval of the trustees. The
cessation program began in July 2012 and is scheduled to last for
10 years.
Headquartered in Winston-Salem, North Carolina, Reynolds American
Inc. ("RAI") -- http://www.reynoldsamerican.com/-- is a holding
company whose operating subsidiaries include the second largest
cigarette manufacturer in the United States, R. J. Reynolds
Tobacco Company; the second largest smokeless tobacco products
manufacturer in the United States, American Snuff Company, LLC;
the manufacturer of the fastest growing super-premium cigarette
brand, Santa Fe Natural Tobacco Company, Inc. (SFNTC); and
Niconovum AB.
On July 30, 2004, the U.S. assets, liabilities and operations of
Brown & Williamson Tobacco Corporation, now known as Brown &
Williamson Holdings, Inc. ("B&W"), an indirect, wholly owned
subsidiary of British American Tobacco p.l.c. ("BAT), were
combined with R. J. Reynolds Tobacco Company, a wholly owned
operating subsidiary of R.J. Reynolds Tobacco Holdings, Inc.
("RJR"), a wholly owned subsidiary of RAI. These July 30, 2004,
transactions generally are referred to as the B&W business
combination. As a result of the B&W business combination, B&W
owns approximately 42% of RAI's outstanding common stock. In
2006, RAI, through a subsidiary, completed its acquisition of
American Snuff Co. and Rosswil, LLC.
REYNOLDS AMERICAN: Five "Lights" Lawsuits v. Units Still Pending
----------------------------------------------------------------
Five class action lawsuits involving Reynolds American Inc.'s
subsidiary over the use of the term "lights" remain pending in
state and federal courts in Illinois, Missouri and Arizona,
according to the Company's October 23, 2012, Form 10-Q filing with
the U.S. Securities and Exchange Commission for the quarter ended
September 30, 2012.
"Lights" class-action cases are pending against RAI's subsidiary,
R. J. Reynolds Tobacco Company ("RJR Tobacco"), and Brown &
Williamson Holdings, Inc. ("B&W") in Illinois (2), Missouri (2)
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 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 occurred on August 21, 2012. A decision
is pending.
The Company says that 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.
Headquartered in Winston-Salem, North Carolina, Reynolds American
Inc. ("RAI") -- http://www.reynoldsamerican.com/-- is a holding
company whose operating subsidiaries include the second largest
cigarette manufacturer in the United States, R. J. Reynolds
Tobacco Company; the second largest smokeless tobacco products
manufacturer in the United States, American Snuff Company, LLC;
the manufacturer of the fastest growing super-premium cigarette
brand, Santa Fe Natural Tobacco Company, Inc. (SFNTC); and
Niconovum AB.
On July 30, 2004, the U.S. assets, liabilities and operations of
Brown & Williamson Tobacco Corporation, now known as Brown &
Williamson Holdings, Inc. ("B&W"), an indirect, wholly owned
subsidiary of British American Tobacco p.l.c. ("BAT), were
combined with R. J. Reynolds Tobacco Company, a wholly owned
operating subsidiary of R.J. Reynolds Tobacco Holdings, Inc.
("RJR"), a wholly owned subsidiary of RAI. These July 30, 2004,
transactions generally are referred to as the B&W business
combination. As a result of the B&W business combination, B&W
owns approximately 42% of RAI's outstanding common stock. In
2006, RAI, through a subsidiary, completed its acquisition of
American Snuff Co. and Rosswil, LLC.
REYNOLDS AMERICAN: Jan. 30 Status Conference in "Turner" Suit Set
-----------------------------------------------------------------
A status conference has been scheduled for January 30, 2013, in
the lawsuit captioned Turner v. R. J. Reynolds Tobacco Co.,
according to Reynolds American Inc.'s October 23, 2012, Form 10-Q
filing with the U.S. Securities and Exchange Commission for the
quarter ended September 30, 2012.
In Turner v. R. J. Reynolds Tobacco Co., a case filed in February
2000 in Circuit Court, Madison County, Illinois, a judge certified
a class in November 2001. In June 2003, RJR Tobacco filed a
motion to stay the case pending Philip Morris's appeal of the
Price v. Philip Morris Inc. case, which the judge denied in July
2003. In October 2003, the Illinois Fifth District Court of
Appeals denied RJR Tobacco's emergency stay/supremacy order
request. In November 2003, the Illinois Supreme Court granted RJR
Tobacco's motion for a stay pending the court's final appeal
decision in Price. On October 11, 2007, the Illinois Fifth
District Court of Appeals dismissed RJR Tobacco's appeal of the
court's denial of its emergency stay/supremacy order request and
remanded the case to the Circuit Court. A status conference is
scheduled for January 30, 2013.
Headquartered in Winston-Salem, North Carolina, Reynolds American
Inc. ("RAI") -- http://www.reynoldsamerican.com/-- is a holding
company whose operating subsidiaries include the second largest
cigarette manufacturer in the United States, R. J. Reynolds
Tobacco Company; the second largest smokeless tobacco products
manufacturer in the United States, American Snuff Company, LLC;
the manufacturer of the fastest growing super-premium cigarette
brand, Santa Fe Natural Tobacco Company, Inc. (SFNTC); and
Niconovum AB.
On July 30, 2004, the U.S. assets, liabilities and operations of
Brown & Williamson Tobacco Corporation, now known as Brown &
Williamson Holdings, Inc. ("B&W"), an indirect, wholly owned
subsidiary of British American Tobacco p.l.c. ("BAT), were
combined with R. J. Reynolds Tobacco Company, a wholly owned
operating subsidiary of R.J. Reynolds Tobacco Holdings, Inc.
("RJR"), a wholly owned subsidiary of RAI. These July 30, 2004,
transactions generally are referred to as the B&W business
combination. As a result of the B&W business combination, B&W
owns approximately 42% of RAI's outstanding common stock. In
2006, RAI, through a subsidiary, completed its acquisition of
American Snuff Co. and Rosswil, LLC.
REYNOLDS AMERICAN: "Jones" Suit Remains Pending in Missouri
-----------------------------------------------------------
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 Reynolds American's
October 23, 2012, Form 10-Q filing with the U.S. Securities and
Exchange Commission for the quarter ended September 30, 2012.
Headquartered in Winston-Salem, North Carolina, Reynolds American
Inc. ("RAI") -- http://www.reynoldsamerican.com/-- is a holding
company whose operating subsidiaries include the second largest
cigarette manufacturer in the United States, R. J. Reynolds
Tobacco Company; the second largest smokeless tobacco products
manufacturer in the United States, American Snuff Company, LLC;
the manufacturer of the fastest growing super-premium cigarette
brand, Santa Fe Natural Tobacco Company, Inc. (SFNTC); and
Niconovum AB.
On July 30, 2004, the U.S. assets, liabilities and operations of
Brown & Williamson Tobacco Corporation, now known as Brown &
Williamson Holdings, Inc. ("B&W"), an indirect, wholly owned
subsidiary of British American Tobacco p.l.c. ("BAT), were
combined with R. J. Reynolds Tobacco Company, a wholly owned
operating subsidiary of R.J. Reynolds Tobacco Holdings, Inc.
("RJR"), a wholly owned subsidiary of RAI. These July 30, 2004,
transactions generally are referred to as the B&W business
combination. As a result of the B&W business combination, B&W
owns approximately 42% of RAI's outstanding common stock. In
2006, RAI, through a subsidiary, completed its acquisition of
American Snuff Co. and Rosswil, LLC.
REYNOLDS AMERICAN: JTI's Indemnification Bid Still 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 October 23, 2012, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended September
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 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
(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.
No further updates were reported in the Company's latest Form 10-Q
filing.
Headquartered in Winston-Salem, North Carolina, Reynolds American
Inc. ("RAI") -- http://www.reynoldsamerican.com/-- is a holding
company whose operating subsidiaries cigarette manufacturer R. J.
Reynolds Tobacco Company (RJR); smokeless tobacco products
manufacturer American Snuff Company, LLC; super-premium cigarette
brand manufacturer, Santa Fe Natural Tobacco Company, Inc.
(SFNTC); and Niconovum AB.
On July 30, 2004, the U.S. assets, liabilities and operations of
Brown & Williamson Tobacco Corporation, now known as Brown &
Williamson Holdings, Inc. ("B&W"), an indirect, wholly owned
subsidiary of British American Tobacco p.l.c. ("BAT), were
combined with R. J. Reynolds Tobacco Company, a wholly owned
operating subsidiary of R.J. Reynolds Tobacco Holdings, Inc.
("RJR"), a wholly owned subsidiary of RAI. These July 30, 2004,
transactions generally are referred to as the B&W business
combination. As a result of the B&W business combination, B&W
owns approximately 42% of RAI's outstanding common stock. In
2006, RAI, through a subsidiary, completed its acquisition of
American Snuff Co. and Rosswil, LLC.
REYNOLDS AMERICAN: "Parsons" Suit Remains Stayed in West Virginia
-----------------------------------------------------------------
In Parsons v. A C & S, Inc., a case filed in February 1998 in
Circuit Court, Ohio County, West Virginia, the plaintiff sued
asbestos manufacturers, 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), seeking to
recover $1 million in compensatory and punitive damages
individually and an unspecified amount for the class in both
compensatory and punitive damages. The class was brought on
behalf of persons who allegedly have personal injury claims
arising from their exposure to respirable asbestos fibers and
cigarette smoke. The plaintiffs allege that Mrs. Parsons' use of
tobacco products and exposure to asbestos products caused her to
develop lung cancer and to become addicted to tobacco. In
December 2000, three defendants, Nitral Liquidators, Inc.,
Desseaux Corporation of North American and Armstrong World
Industries, filed bankruptcy petitions in the U.S. Bankruptcy
Court for the District of Delaware, In re Armstrong World
Industries, Inc. Pursuant to section 362(a) of the Bankruptcy
Code, Parsons is automatically stayed with respect to all
defendants.
No further updates were reported in Reynolds American's
October 23, 2012, Form 10-Q filing with the U.S. Securities and
Exchange Commission for the quarter ended September 30, 2012.
Headquartered in Winston-Salem, North Carolina, Reynolds American
Inc. ("RAI") -- http://www.reynoldsamerican.com/-- is a holding
company whose operating subsidiaries include the second largest
cigarette manufacturer in the United States, R. J. Reynolds
Tobacco Company; the second largest smokeless tobacco products
manufacturer in the United States, American Snuff Company, LLC;
the manufacturer of the fastest growing super-premium cigarette
brand, Santa Fe Natural Tobacco Company, Inc. (SFNTC); and
Niconovum AB.
On July 30, 2004, the U.S. assets, liabilities and operations of
Brown & Williamson Tobacco Corporation, now known as Brown &
Williamson Holdings, Inc. ("B&W"), an indirect, wholly owned
subsidiary of British American Tobacco p.l.c. ("BAT), were
combined with R. J. Reynolds Tobacco Company, a wholly owned
operating subsidiary of R.J. Reynolds Tobacco Holdings, Inc.
("RJR"), a wholly owned subsidiary of RAI. These July 30, 2004,
transactions generally are referred to as the B&W business
combination. As a result of the B&W business combination, B&W
owns approximately 42% of RAI's outstanding common stock. In
2006, RAI, through a subsidiary, completed its acquisition of
American Snuff Co. and Rosswil, LLC.
REYNOLDS AMERICAN: Still Awaits Ruling in "Tatum" ERISA Suit
------------------------------------------------------------
A North Carolina court has yet to issue a ruling on an amended
complaint filed against a unit of Reynolds American, Inc.,
according to the Company's October 23, 2012, Form 10-Q filing with
the U.S. Securities and Exchange Commission for the quarter ended
September 30, 2012.
In May 2002, in Tatum v. The R.J.R. Pension Investment Committee
of the R. J. Reynolds Tobacco Company Capital Investment Plan, an
employee of RJR Tobacco filed a class-action lawsuit in the U.S.
District Court for the Middle District of North Carolina, alleging
that the defendants, R.J. Reynolds Tobacco Holdings, Inc. ("RJR"),
RJR Tobacco, the RJR Employee Benefits Committee and the RJR
Pension Investment Committee, violated the Employee Retirement
Income Security Act of 1974 (ERISA). The actions about which the
plaintiff complains stem from a decision made in 1999 by RJR
Nabisco Holdings Corp., subsequently renamed Nabisco Group
Holdings Corp. (NGH), to spin off RJR, thereby separating NGH's
tobacco business and food business. As part of the spin-off, the
401(k) plan for the previously related entities had to be divided
into two separate plans for the now separate tobacco and food
businesses. The plaintiff contends that the defendants breached
their fiduciary duties to participants of the RJR 401(k) plan when
the defendants removed the stock funds of the companies involved
in the food business, NGH and Nabisco Holdings Corp. (Nabisco), as
investment options from the RJR 401(k) plan approximately six
months after the spin-off. The plaintiff asserts that a November
1999 amendment (the "1999 Amendment") that eliminated the NGH and
Nabisco funds from the RJR 401(k) plan on January 31, 2000,
contained sufficient discretion for the defendants to have
retained the NGH and Nabisco funds after January 31, 2000, and
that the failure to exercise such discretion was a breach of
fiduciary duty. In his complaint, the plaintiff requests, among
other things, that the court require the defendants to pay as
damages to the RJR 401(k) plan an amount equal to the subsequent
appreciation that was purportedly lost as a result of the
liquidation of the NGH and Nabisco funds.
In July 2002, the defendants filed a motion to dismiss, which the
court granted in December 2003. In December 2004, the U.S. Court
of Appeals for the Fourth Circuit reversed the dismissal of the
complaint, holding that the 1999 Amendment did contain sufficient
discretion for the defendants to have retained the NGH and Nabisco
funds as of February 1, 2000, and remanded the case for further
proceedings. The court granted the plaintiff leave to file an
amended complaint and denied all pending motions as moot. In April
2007, the defendants moved to dismiss the amended complaint. The
court granted the motion in part and denied it in part, dismissing
all claims against the RJR Employee Benefits Committee and the RJR
Pension Investment Committee. The remaining defendants, RJR and
RJR Tobacco, filed their answer and affirmative defenses in June
2007. The plaintiff filed a motion for class certification, which
the court granted in September 2008. The district court ordered
mediation, but no resolution of the case was reached. In
September 2008, each of the plaintiffs and the defendants filed
motions for summary judgment, and in January 2009, the defendants
filed a motion to decertify the class. A second mediation
occurred in June 2009, but again no resolution of the case was
reached. The district court overruled the motions for summary
judgment and the motion to decertify the class.
A non-jury trial was held in January and February 2010. During
closing arguments, the plaintiff argued for the first time that
certain facts arising at trial showed that the 1999 Amendment was
not validly adopted, and then moved to amend his complaint to
conform to this evidence at trial. On June 1, 2011, the court
granted the plaintiff's motion to amend his complaint and found
that the 1999 Amendment was invalid.
The parties filed their findings of fact and conclusions of law on
February 4, 2011. A decision is pending.
No further updates were reported in the Company's latest Form 10-Q
filing.
Headquartered in Winston-Salem, North Carolina, Reynolds American
Inc. ("RAI") -- http://www.reynoldsamerican.com/-- is a holding
company whose operating subsidiaries cigarette manufacturer R. J.
Reynolds Tobacco Company (RJR); smokeless tobacco products
manufacturer American Snuff Company, LLC; super-premium cigarette
brand manufacturer, Santa Fe Natural Tobacco Company, Inc.
(SFNTC); and Niconovum AB.
On July 30, 2004, the U.S. assets, liabilities and operations of
Brown & Williamson Tobacco Corporation, now known as Brown &
Williamson Holdings, Inc. ("B&W"), an indirect, wholly owned
subsidiary of British American Tobacco p.l.c. ("BAT), were
combined with R. J. Reynolds Tobacco Company, a wholly owned
operating subsidiary of R.J. Reynolds Tobacco Holdings, Inc.
("RJR"), a wholly owned subsidiary of RAI. These July 30, 2004,
transactions generally are referred to as the B&W business
combination. As a result of the B&W business combination, B&W
owns approximately 42% of RAI's outstanding common stock. In
2006, RAI, through a subsidiary, completed its acquisition of
American Snuff Co. and Rosswil, LLC.
REYNOLDS AMERICAN: Still No Activity in "Collora" Class Suit
------------------------------------------------------------
In December 2003, a judge in St. Louis certified a class in the
case captioned Collora v. R. J. Reynolds Tobacco Co. The case was
filed in May 2000 in Circuit Court, St. Louis County, Missouri,
over the use of the term "lights" in certain products. 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, according to Reynolds
American Inc.'s October 23, 2012, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended
September 30, 2012.
Headquartered in Winston-Salem, North Carolina, Reynolds American
Inc. ("RAI") -- http://www.reynoldsamerican.com/-- is a holding
company whose operating subsidiaries include the second largest
cigarette manufacturer in the United States, R. J. Reynolds
Tobacco Company; the second largest smokeless tobacco products
manufacturer in the United States, American Snuff Company, LLC;
the manufacturer of the fastest growing super-premium cigarette
brand, Santa Fe Natural Tobacco Company, Inc. (SFNTC); and
Niconovum AB.
On July 30, 2004, the U.S. assets, liabilities and operations of
Brown & Williamson Tobacco Corporation, now known as Brown &
Williamson Holdings, Inc. ("B&W"), an indirect, wholly owned
subsidiary of British American Tobacco p.l.c. ("BAT), were
combined with R. J. Reynolds Tobacco Company, a wholly owned
operating subsidiary of R.J. Reynolds Tobacco Holdings, Inc.
("RJR"), a wholly owned subsidiary of RAI. These July 30, 2004,
transactions generally are referred to as the B&W business
combination. As a result of the B&W business combination, B&W
owns approximately 42% of RAI's outstanding common stock. In
2006, RAI, through a subsidiary, completed its acquisition of
American Snuff Co. and Rosswil, LLC.
REYNOLDS AMERICAN: Still No Activity in "Howard" Suit in Illinois
-----------------------------------------------------------------
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, according to Reynolds
American Inc.'s October 23, 2012, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended
September 30, 2012.
Headquartered in Winston-Salem, North Carolina, Reynolds American
Inc. ("RAI") -- http://www.reynoldsamerican.com/-- is a holding
company whose operating subsidiaries include the second largest
cigarette manufacturer in the United States, R. J. Reynolds
Tobacco Company; the second largest smokeless tobacco products
manufacturer in the United States, American Snuff Company, LLC;
the manufacturer of the fastest growing super-premium cigarette
brand, Santa Fe Natural Tobacco Company, Inc. (SFNTC); and
Niconovum AB.
On July 30, 2004, the U.S. assets, liabilities and operations of
Brown & Williamson Tobacco Corporation, now known as Brown &
Williamson Holdings, Inc. ("B&W"), an indirect, wholly owned
subsidiary of British American Tobacco p.l.c. ("BAT), were
combined with R. J. Reynolds Tobacco Company, a wholly owned
operating subsidiary of R.J. Reynolds Tobacco Holdings, Inc.
("RJR"), a wholly owned subsidiary of RAI. These July 30, 2004,
transactions generally are referred to as the B&W business
combination. As a result of the B&W business combination, B&W
owns approximately 42% of RAI's outstanding common stock. In
2006, RAI, through a subsidiary, completed its acquisition of
American Snuff Co. and Rosswil, LLC.
REYNOLDS AMERICAN: Still No Activity in "Young" Suit in Louisiana
-----------------------------------------------------------------
In Young v. American Tobacco Co., Inc., a case filed in November
1997 in Circuit Court, Orleans Parish, Louisiana, the plaintiffs
brought an ETS class action against 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"), on behalf of all residents of Louisiana who, though not
themselves cigarette smokers, have been exposed to secondhand
smoke from cigarettes which were manufactured by the defendants,
and who allegedly suffered injury as a result of that exposure.
The plaintiffs seek to recover an unspecified amount of
compensatory and punitive damages. In October 2004, the trial
court stayed this case pending the outcome of the appeal in the
case captioned Scott v. American Tobacco Co., Inc.
There is currently no activity in the case, according to Reynolds
American Inc.'s October 23, 2012, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended
September 30, 2012.
Headquartered in Winston-Salem, North Carolina, Reynolds American
Inc. ("RAI") -- http://www.reynoldsamerican.com/-- is a holding
company whose operating subsidiaries include the second largest
cigarette manufacturer in the United States, R. J. Reynolds
Tobacco Company; the second largest smokeless tobacco products
manufacturer in the United States, American Snuff Company, LLC;
the manufacturer of the fastest growing super-premium cigarette
brand, Santa Fe Natural Tobacco Company, Inc. (SFNTC); and
Niconovum AB.
On July 30, 2004, the U.S. assets, liabilities and operations of
Brown & Williamson Tobacco Corporation, now known as Brown &
Williamson Holdings, Inc. ("B&W"), an indirect, wholly owned
subsidiary of British American Tobacco p.l.c. ("BAT), were
combined with R. J. Reynolds Tobacco Company, a wholly owned
operating subsidiary of R.J. Reynolds Tobacco Holdings, Inc.
("RJR"), a wholly owned subsidiary of RAI. These July 30, 2004,
transactions generally are referred to as the B&W business
combination. As a result of the B&W business combination, B&W
owns approximately 42% of RAI's outstanding common stock. In
2006, RAI, through a subsidiary, completed its acquisition of
American Snuff Co. and Rosswil, LLC.
REYNOLDS AMERICAN: Unit Dismissed as Defendant in "Brown" Suit
--------------------------------------------------------------
Reynolds American Inc.'s subsidiary, R. J. Reynolds Tobacco
Company (RJR Tobacco) was dismissed in September 2012 as a
defendant in a California consumer class action lawsuit, according
to the Company's October 23, 2012, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended September
30, 2012.
On April 11, 2001, in Brown v. American Tobacco Co., Inc., a case
filed in June 1997 in Superior Court, San Diego County,
California, the court granted in part the plaintiffs' motion for
certification of a class composed of residents of California who
smoked at least one of the defendants' cigarettes from June 10,
1993 through April 23, 2001, and who were exposed to the
defendants' marketing and advertising activities in California.
The action was brought against the major U.S. cigarette
manufacturers, including RJR Tobacco and Brown & Williamson
Holdings, Inc. (B&W), seeking to recover restitution, disgorgement
of profits and other equitable relief under California Business
and Professions Code Sec. 17200 et seq. and Sec. 17500 et seq.
However, the underlying substantive claims have been reduced to
include primarily allegations regarding the use of the descriptor
"lights" and statements made during the class period about the
health risks of cigarettes. Certification was granted as to the
plaintiffs' claims that the defendants violated Sec. 17200 of the
California Business and Professions Code pertaining to unfair
competition. The court, however, refused to certify the class
under the California Legal Remedies Act and on the plaintiffs'
common law claims. In March 2005, the court granted the
defendants' motion to decertify the class, and in September 2006,
the California Court of Appeal affirmed the order decertifying the
class. In November 2006, the plaintiffs' petition for review with
the California Supreme Court was granted, and in May 2009, the
court reversed the decision of the trial court, and the California
Court of Appeal that decertified the class and remanded the case
to the trial court for further proceedings. In March 2010, the
trial court found that the plaintiffs' "lights" claims were not
preempted by the Federal Cigarette Labeling and Advertising Act
and denied the defendants' second motion for summary judgment.
The plaintiffs filed a tenth amended complaint in September 2010.
RJR Tobacco and B&W filed their answers to the complaint.
Subsequently, on February 24, 2011, the court found that the named
class representatives were not adequate, were not typical, and
lacked standing. The plaintiffs' motion for reconsideration was
denied. The court granted the plaintiffs' motion to amend the
complaint by adding new class representatives and denied the
defendants' motion to dismiss. The plaintiffs filed an eleventh
amended complaint adding new class representatives in July 2011.
In May 2012, the court issued rulings that decertified the class
on false statements concerning additives, nicotine manipulation
and conspiracy to mislead concerning health risks of smoking.
However, the court declined to decertify the class on the "lights"
issue. In September 2012, the court granted the plaintiffs'
request for dismissal with prejudice as to certain defendants and
dismissed RJR Tobacco and B&W with prejudice.
Headquartered in Winston-Salem, North Carolina, Reynolds American
Inc. ("RAI") -- http://www.reynoldsamerican.com/-- is a holding
company whose operating subsidiaries include the second largest
cigarette manufacturer in the United States, R. J. Reynolds
Tobacco Company; the second largest smokeless tobacco products
manufacturer in the United States, American Snuff Company, LLC;
the manufacturer of the fastest growing super-premium cigarette
brand, Santa Fe Natural Tobacco Company, Inc. (SFNTC); and
Niconovum AB.
On July 30, 2004, the U.S. assets, liabilities and operations of
Brown & Williamson Tobacco Corporation, now known as Brown &
Williamson Holdings, Inc. ("B&W"), an indirect, wholly owned
subsidiary of British American Tobacco p.l.c. ("BAT), were
combined with R. J. Reynolds Tobacco Company, a wholly owned
operating subsidiary of R.J. Reynolds Tobacco Holdings, Inc.
("RJR"), a wholly owned subsidiary of RAI. These July 30, 2004,
transactions generally are referred to as the B&W business
combination. As a result of the B&W business combination, B&W
owns approximately 42% of RAI's outstanding common stock. In
2006, RAI, through a subsidiary, completed its acquisition of
American Snuff Co. and Rosswil, LLC.
RPM PIZZA: Settles Robo-Call Class Action for $9.75 Million
-----------------------------------------------------------
Bohrer Law Firm, LLC on Jan. 2 announced the Settlement of a Class
Action Lawsuit involving RPM Pizza, LLC and Domino's Pizza.
There is a $9.75 million Settlement in a class action lawsuit with
RPM Pizza, LLC, a Domino's Pizza franchised operator. The lawsuit
claims that the Defendants violated federal law by sending pre-
recorded messages ("robo-calls") about pizza and other food
products to consumers in Louisiana, Alabama, and Mississippi
without the recipients' prior express consent. The Defendants
deny that they violated the law.
Potential Class members are included if, between May 20, 2006 and
May 20, 2010, they received a robo-call on their cell phone that
was sent by or for RPM or one of its Domino's franchised stores
without prior express consent. The robo-calls advertised pizza
and other food products offered for sale at RPM's stores in the
states of Louisiana, Alabama, and Mississippi.
People who received a call between May 20, 2009 and May 20, 2010
are eligible to get a cash payment of up to $15. People who
received a call between May 20, 2006 and May 19, 2009 are eligible
to get a free large one-topping pizza (in-store pick-up only).
To confirm whether they are included in the Settlement and find
out whether they are eligible for a cash payment or a voucher,
potential Class Members should visit
http://www.PizzaSettlement.comor call 1-877-552-1288 and provide
the cell phone number(s) they had from May 20, 2006 to May 20,
2010.
To get benefits, Class Members must submit a Claim Form by May 4,
2013. Class Members who wish to object to the Settlement or some
part of it must do so by February 10, 2013. Class Members who
wish to exclude themselves from the Class may do so by February
22, 2013. Additional information concerning the lawsuit may be
found at http://www.PizzaSettlement.comor can be obtained by
calling 1-877-552-1288.
SAMSUNG SDI: Faces Another Antitrust Class Suit in California
-------------------------------------------------------------
Piya Robert Rojanasathit, Individually and on Behalf of All Others
Similarly Situated v. Samsung SDI America, Inc.; Samsung SDI Co.,
Ltd.; Hitachi Ltd.; Hitachi Maxell, Ltd.; LG Chem, Ltd.; LG Chem
America, Inc.; Maxell Corporation of America; Panasonic
Corporation; Panasonic Corporation of North America; Sanyo
Electronic Co., Ltd.; Sanyo North America Corporation; Sony
Corporation; Sony Electronics, Inc.; Sony Energy Devices
Corporation, Case No. 3:12-cv-06183 (N.D. Calif., December 6,
2012) alleges that the Defendants, their parents, subsidiaries and
affiliates, conspired to fix unlawfully and raise artificially the
prices of Lithium Ion Rechargeable Batteries.
The Defendants and other co-conspirators agreed, combined, and
conspired to inflate, fix, raise, maintain, or stabilize
artificially the price of Li-Ion Rechargeable Batteries, Mr.
Rojanasathit alleges. He argues that the Defendants' conspiracy
was an illegal and unreasonable restraint of interstate and
foreign commerce in violation of the Sherman Act and the laws of
numerous states.
Mr. Rojanasathit is a resident of San Carlos, California. During
the Class Period, he purchased a Samsung Galaxy Nexus GT-i9250
smartphone; extended Li-Ion Rechargeable Battery for Samsung
Galaxy Nexus GT-i9250; Sony Cyber-Shot DSC-TX10 16.2 MP Waterproof
Digital Still Camera; Sony Cyber-shot DSC-TX5 10.2MPCMOS Digital
Camera; Canon PowerShot SD950IS 12.IMP Digital Camera; Canon
PowerShot SD800 IS 7.1MP Digital Elph Camera; Dell XPS 15 X15L-
1024ELS; five T-Mobile Gl Phones; Dell Inspiron 1525; Dell
Inspiron 8600; Dell Studio 15; two Dell Xps 1330s; Dell XPS M170;
and two Lenovo t420s, all of which contain a Li-Ion Rechargeable
Battery containing a cell manufactured by a Defendant.
Samsung SDI is a Korean corporation based in Gyeonggi, South
Korea, and 20% owned by the Korean conglomerate Samsung
Electronics, Inc. Samsung SDI America is a California corporation
based in San Jose, California, and a wholly owned subsidiary of
Samsung SDI.
Sony Corporation is a Japanese corporation based in Tokyo, Japan.
Sony Energy is a Japanese corporation based in Fukushima, Japan.
Sony Energy Devices Corporation is a wholly owned subsidiary of
Sony Corporation. Sony Electronics is a Delaware corporation
based in San Diego, California, and a wholly owned subsidiary of
Sony Corporation.
Hitachi Ltd. is a Japanese company based in Tokyo, Japan. Hitachi
Maxell is a Japanese corporation based in Tokyo, Japan, and a
wholly owned subsidiary of Hitachi, Ltd. Maxell is a New Jersey
corporation based in Woodland Park, New Jersey.
LG Chem is a Korean corporation based in Seoul, South Korea. LG
Chem is an affiliate of Seoul-based conglomerate LG Electronics.
LG Chem America is a New Jersey corporation based in Englewood
Cliffs, New Jersey, and a wholly owned subsidiary of LG Chem.
Panasonic Corp. is a Japanese corporation based in Osaka, Japan.
Panasonic Corp. was formerly known as Matsushita Electric
Industrial Co. Panasonic manufactures and sells Lithium Ion
Rechargeable Batteries under the Panasonic name and also under the
name of Defendant and wholly owned subsidiary Sanyo Electric Co.,
Ltd. Panasonic Corporation of North America, formerly known as
Matsushita Electric Corporation of America, is a Delaware
Corporation based in Secaucus, New Jersey, and a wholly owned and
controlled subsidiary of Panasonic Corporation. Sanyo is a
Japanese corporation based in Osaka, Japan. Sanyo North America
Corporation is a Delaware corporation based in San Diego,
California, and a wholly owned subsidiary of Sanyo Electric Co.,
Ltd.
The Defendants manufacture, market, and sell Lithium Ion
Rechargeable Batteries throughout the United States and the world.
The Defendants collectively controlled approximately two-thirds or
more of the worldwide market for Lithium Ion Rechargeable
Batteries throughout this period, and over 80 percent of the
market in the early part of this period.
The Plaintiff is represented by:
Joseph M. Breall, Esq.
Jill L. Diamond, Esq.
BREALL & BREALL, LLP
1550 Bryant Street, Suite 575
San Francisco, CA 94103
Telephone: (415) 345-0545
Facsimile: (415) 345-0538
E-mail: jmbreall@breallaw.com
jill@breallaw.com
SIRIUS XM: Ted Frank Challenges Class Action Settlement
-------------------------------------------------------
Alison Frankel, writing for Thomson Reuters, reports that Benjamin
Wilson -- bwilson@bdlaw.com -- of Beveridge & Diamond and John
Daniels -- john.daniels@quarles.com -- of Quarles & Brady are two
of the three African-American chairmen of Am Law 200 firms
(Maurice Watson of Husch Blackwell is the third). Messrs. Wilson
and Daniels, who have known each other since they overlapped at
Harvard Law School in the 1970s, sat down with a few Reuters
journalists to talk about the African American Managing Partners
Network, a networking group of law firm leaders that they're
championing. Mr. Daniels, in particular, talked about his goal of
promoting African Americans as great lawyers and rainmakers, not
as supporting partners. Both he and Mr. Wilson said that one way
to achieve this sort of Diversity 2.0 is to encourage a legal
industry version of the National Football League's "Rooney Rule,"
in which, beginning in 2003, the NFL required teams to interview
minority candidates for high-level coaching jobs. Just as the
ranks of minority coaches have increased considerably since the
Rooney Rule was instituted, Messrs. Wilson and Daniels believe
that if general counsel make an effort to interview black
candidates when they're looking for outside lawyers, African
Americans will win those assignments.
One federal judge in Manhattan has been using the power of his
position to impose a version of the Rooney Rule for the last
several years. Since 2007, when U.S. District Judge Harold Baer
appoints plaintiffs' firms to serve as lead counsel in class
actions in his courtroom, he requires them to include at least one
woman and one minority lawyer to staff the case. Judge Baer has
been unapologetic about his motives. In a 2010 interview with The
New York Law Journal, the judge said firms "are behind where they
should be" in promoting diversity. He "saw the counsel approval
process as a tool at his disposal" to address what he regards as a
persistent problem, the Law Journal wrote.
Plaintiffs' firms now expect that they'll have to wear diversity
on their sleeves when they appear before Judge Baer, but last
December the judge's policy came under attack from Ted Frank of
the Center for Class Action Fairness. Mr. Frank appealed Judge
Baer's approval of Sirius XM's settlement of an antitrust class
action, arguing (as he usually does) that the only true
beneficiaries of the deal were plaintiffs' lawyers, in this case
Grant & Eisenhofer. Mr. Frank also claimed, with amicus support
from The Center for Individual Rights, that Judge Baer violated
the due process and equal protection rights of the class when he
imposed a diversity requirement on the class's lawyers. The class
action gadfly compared Judge Baer's order to excluding jurors from
a trial on the basis of their race. "We have lots of precedent
that the judicial system is supposed to be above this," he told me
last year. "It's counter to what America stands for."
The 2nd Circuit Court of Appeals on Dec. 20 declined to take up
Mr. Frank's challenge. In a non-precedential summary order,
Judges Robert Sack, Denny Chin and Raymond Lohier said Judge Baer
had not abused his discretion in approving the Sirius settlement,
which they said was substantively fair, given the class's slim
chance of prevailing at trial and the difficulty of evaluating the
benefit to class members. The appeals court also said Grant &
Eisenhofer's $13 million in fees and expenses was reasonable. The
panel acknowledged Mr. Frank's diversity argument, but then
sidestepped it.
Mr. Frank's clients, objectors to the settlement, hadn't shown
that the class received inferior representation from Grant &
Eisenhofer, the panel said. So, regardless of Judge Baer's
diversity directive, objectors couldn't point to any injury. As a
result, the appeals court said, Mr. Frank's clients didn't have
standing to challenge Judge Baer's class certification order
calling on class counsel to include minority lawyers in staffing
the case. The 2nd Circuit didn't even reach Mr. Frank's
constitutional arguments.
In an interview on Dec. 21, Mr. Frank said he's considering his
clients' options. He continued to compare Judge Baer's diversity
requirements to the exclusion of minorities from juries, arguing
that both sorts of race-based decisions are unconstitutional. The
2nd Circuit, he said, wanted to find a way to avoid the difficult
issues his objection raised.
TPG CAPITAL: Sued For Not Paying Admin. Assistants' OT Wages
------------------------------------------------------------
Erica Shankle, on behalf of herself and all others similarly
situated v. TPG Capital, L.P., and Does 1 through 50, inclusive,
Case No. CGC-12-525935 (Calif. Super. Ct., San Francisco Cty.,
November 7, 2012) is brought on behalf of all individuals employed
as Administrative Assistants or their equivalent positions at TPG
Capital in California at any time within four years before the
filing of the complaint until January 1, 2012.
Ms. Shankle alleges that TPG Capital violated state wage laws by
failing to pay overtime for all time she actually worked. She
adds that she and the putative class members are owed "waiting
time penalties," restitution of overtime wages, attorneys' fees,
and all costs of lawsuit.
Ms. Shankle is a resident of the state of California.
TPG Capital is a limited partnership organized under the laws of
the state of Delaware, and with its corporate headquarters in Fort
Worth, Texas. The true names and capacities of the Doe Defendants
are currently unknown.
The Company removed the lawsuit on December 6, 2012, from the
Superior Court of the state of California, County of San
Francisco, to the United States District Court for the Northern
District of California. TPG Capital argues that the removal is
proper because the amount placed in controversy by the Plaintiff's
class claims exceeds $5 million. The District Court Clerk
assigned Case No. 3:12-cv-06181 to the proceeding.
The Plaintiff is represented by:
Jeremy David Pasternak, Esq.
LAW OFFICES OF JEREMY PASTERNAK
445 Bush Street, 6th Floor
San Francisco, CA 94108
Telephone: (415) 693-0300
Facsimile: (415) 693-0393
E-mail: rs@pasternaklaw.com
- and -
Joshua Geoffrey Konecky, Esq.
SCHNEIDER WALLACE COTTRELL BRAYTON KONECKY LLP
180 Montgomery Street, Suite 2000
San Francisco, CA 94104
Telephone: (415) 421-7100
Facsimile: (415) 421-7105
E-mail: jkonecky@schneiderwallace.com
The Defendants are represented by:
Catherine A. Conway, Esq.
Jesse A. Cripps, Jr., Esq.
GIBSON DUNN & CRUTCHER LLP
333 South Grand Avenue
Los Angeles, CA 90071-3197
Telephone: (213) 229-7000
Facsimile: (213) 229-7520
E-mail: cconway@gibsondunn.com
jcripps@gibsondunn.com
- and -
Rachel S. Brass, Esq.
Sarah Zenewicz, Esq.
GIBSON DUNN & CRUTCHER LLP
555 Mission Street, Suite 3000
San Francisco, CA 94105-0921
Telephone: (415) 393-8200
Facsimile: (415) 393-8306
E-mail: rbrass@gibsondunn.com
szenewicz@gibsondunn.com
VISA: Merchants May Impose Credit Card Fees Following Settlement
----------------------------------------------------------------
Patricia Sabatini, writing for Pittsburgh Post-Gazette, reports
that just as credit card holders begin mending the wounds of their
holiday purchases, they could be sideswiped by a new fee.
The consumer advocacy group Consumer Action is urging people to be
on alert for so-called checkout fees that some retailers could
begin to impose on credit card transactions starting Jan. 27.
Merchant trade groups contend most retailers, fearing customer
backlash, will not charge the fee. But Consumer Action wants
cardholders to be aware of the possibility and options for
fighting back.
"We're not sure whether retailers are going to charge these fees,"
said Ruth Susswein, deputy director of national priorities at
Consumer Action in Washington, D.C. "They may not for competitive
reasons. Some of it will depend on whether the other guy does
it."
She noted that the practice is banned in 10 states, including
California, Florida and New York. There is no such ban in
Pennsylvania.
Consumers who encounter the fees should voice their displeasure,
which may persuade merchants to drop them, Ms. Susswein said.
Merchants won the right to charge the fees under a class action
settlement with Visa, MasterCard and big banks reached last summer
and tentatively approved by a judge in November.
The fee allows merchants to recoup the swipe fees they pay to
process credit card transactions, which typically range between
1.5 percent and 3 percent of the purchase amount. Checkout fees
are capped at 4 percent, meaning a cardholder buying $100 in
merchandise could face up to a $4 surcharge.
Visa and the other defendants also agreed to pay merchants just
over $6 billion and temporarily reduce swipe fees to settle
allegations that they engaged in anti-competitive practices and
price fixing when processing credit card payments.
To avoid blindsiding customers, merchants that impose checkout
fees must disclose the surcharge at store entrances, at the
register and on customer receipts. Online businesses must put a
notice on their homepage.
Checkout fees don't apply to debit card transactions, whose swipe
fees were reduced by the federal government in 2011.
Ms. Susswein emphasized that credit card holders could be charged
different checkout fees depending on which card they use. For
example, customers with reward cards could be charged more because
they typically cost merchants more to process.
Before the class action settlement, Visa and MasterCard had
prohibited retailers from surcharging customers who use credit
cards. They also had barred merchants from offering discounts for
cash purchases, but that prohibition was lifted in 2011 under a
settlement with the U.S. Justice Department. Some businesses had
side deals with Visa and MasterCard allowing cash discounts even
before that settlement.
Although a judge gave the class action settlement preliminary
approval, some major retailers involved in the case aren't happy
with the deal and are pushing hard to get it scuttled, saying it
does not fundamentally alter the anti-competitive swipe fee
structure.
"An overwhelming portion of the retail community [including
plaintiffs in the case] oppose the settlement and are committed to
fighting its final OK," Retail Industry Leaders Association
spokesman Brian Dodge said in an e-mail.
As for checkout fees, he said, "Retailers don't want to surcharge
customers, and I know of none that intend to."
Meanwhile, Visa and MasterCard have said they are making
preparations for checkout fees, including changing back-office
systems to handle the record keeping.
Terms of the class action settlement take effect 60 days after
preliminary approval. That will give retailers the option of
charging checkout fees starting the end of this month even though
the deal hasn't received final court approval.
For more on checkout fees visit http://www.consumer-action.org
YAHOO INC: Consolidated Securities Suit Dismissal Appealed
----------------------------------------------------------
Plaintiffs to a consolidated securities class action have appealed
the dismissal of their lawsuit, according to Yahoo! Inc.'s
November 8, 2012, Form 10-Q filing with the U.S. Securities and
Exchange Commission for the quarter ended September 30, 2012.
Since June 6, 2011, two purported stockholder class actions were
filed in the United States District Court for the Northern
District of California against the Company and certain officers
and directors by plaintiffs Bonato and the Twin Cities Pipe Trades
Pension Trust. In October 2011, the District Court consolidated
the two actions under the caption In re Yahoo! Inc. Securities
Litigation and appointed the Pension Trust Fund for Operating
Engineers as lead plaintiff. In a consolidated amended complaint
filed December 15, 2011, the lead plaintiff purports to represent
a class of investors who purchased the Company's common stock
between April 19, 2011, and July 29, 2011, and alleges that during
that class period, defendants issued statements that were
materially false or misleading because they did not disclose
information relating to Alibaba Group Holding Limited's
restructuring of Alipay.com Co., Ltd. The complaint purports to
assert claims for relief for violation of Section 10(b) and 20(a)
of the Exchange Act and for violation of Rule 10b-5 thereunder,
and seeks unspecified damages, injunctive and equitable relief,
fees and costs. On August 10, 2012, the court granted defendants'
motion to dismiss the consolidated amended complaint. Plaintiffs
have appealed.
With respect to the legal proceedings and claims, the Company has
determined, based on current knowledge, that the amount or range
of reasonably possible losses, including reasonably possible
losses in excess of amounts already accrued, is not reasonably
estimable with respect to certain matters and that the aggregate
amount or range of such losses that are estimable would not have a
material adverse effect on the Company's consolidated financial
position, results of operations or cash flows. Amounts accrued as
of December 31, 2011, and September 30, 2012, were not material.
The ultimate outcome of legal proceedings involves judgments,
estimates and inherent uncertainties, and cannot be predicted with
certainty. In the event of a determination adverse to Yahoo!, its
subsidiaries, directors, or officers in these matters, however,
the Company may incur substantial monetary liability, and be
required to change its business practices. Either of these events
could have a material adverse effect on the Company's financial
position, results of operations, or cash flows. The Company may
also incur substantial legal fees, which are expensed as incurred,
in defending against these claims.
Yahoo! Inc. -- http://www.yahoo.com/-- together with its
subsidiaries, operates as a digital media company that delivers
personalized digital content and experiences through various
devices worldwide. It offers online properties and services to
users; and a range of marketing services to businesses. The
Company's communications and communities offerings include Yahoo!
Mail, Yahoo! Messenger, Yahoo! Groups, Yahoo! Answers, Flickr, and
Connected TV. The Company was founded in 1994 and is
headquartered in Sunnyvale, California.
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S U B S C R I P T I O N I N F O R M A T I O N
Class Action Reporter is a daily newsletter, co-published by
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Toledo, Christopher Patalinghug, Frauline Abangan and Peter A.
Chapman, Editors.
Copyright 2013. All rights reserved. ISSN 1525-2272.
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