/raid1/www/Hosts/bankrupt/CAR_Public/130108.mbx
C L A S S A C T I O N R E P O R T E R
Tuesday, January 8, 2013, Vol. 15, No. 5
Headlines
ALLSCRIPTS HEALTHCARE: Faces Class Action Over MyWay EHR System
BANK OF AMERICA: April 5 Settlement Fairness Hearing Set
BANKSIA SECURITIES: Solicitor Mulls Use of Litigation Fund
CAREER EDUCATION: 80 "Amdador" Suit Opt-Out Plaintiffs Remaining
CAREER EDUCATION: Active Plaintiffs in "Vasquez" Suit Total 900
CAREER EDUCATION: Arbitration Denial in "Surrett" Suit Appealed
CAREER EDUCATION: Continues to Defend "Ross" Class Action Suit
CAREER EDUCATION: Awaits "Lilley" Suit Plaintiffs' Next Move
CAREER EDUCATION: Appeal From "Wilson" Suit Dismissal Pending
CAREER EDUCATION: "Morales" Case Incorporated in "Houck" Suit
DOLE FOOD: Faces Class Action in Calif. Over Labor Law Violation
DOLE FOOD: Faces Class Action Over Alleged Unpaid Wages
FACEBOOK INC: Jan. 23 Pretrial Conference Set for IPO Class Action
FORTINET INC: May Settle Stockholder Class Action for $1 Mil.
GILSTER-MARY LEE: Recalls Food Club Chocolate Chunk Brownie Mix
GOOGLE INC: Judge Dismisses Right to Privacy Class Action
KINNIKINNICK FOODS: Recalls Pie Crusts Due to Undeclared Eggs
LORILLARD INC: Appeal in Kansas Indirect Purchaser Suit Pending
LORILLARD INC: Flight Attendant Suits vs. Unit Remain Pending
LORILLARD INC: Loews Defends Three Product Liability Suits
LORILLARD INC: Atty. Fees and Cost Issue in "Scott" Suit Resolved
LORILLARD INC: Tobacco-Related Antitrust Suit vs. Unit Concluded
LORILLARD INC: Unit Dismissed From "Brown" Suit in September
MCKINLEY HIGH SCHOOL: Faces Class Action Over Sexual Abuse
METROPCS COMMUNICATIONS: Faces 4 Suits Over Deutsche Telekom Deal
MONTEREY FINANCIAL: Sued For Advance-Fee-Talent Act Violations
NATIONWIDE INSURANCE: Ohio Law Firm Mulls Class Action
NORTHERN STATES: Appeal From 2nd "Comer" Suit Dismissal Pending
QEP RESOURCES: "Chieftain" Plaintiffs May Demand More Than $200MM
REMINGTON ARMS: Faces Class Action Over Bolt-Action Rifles
SATYAM COMPUTER: Judge Tosses Fraud Class Action v. Ex-Directors
SILVERCORP METALS: Denies Financial Misconduct Allegations
SINO-FOREST CORP: Settles Class Action Over Ernst & Young Audits
SPIRAL FOODS: More than 600 Australians Join Bonsoy Class Action
TEMPUR-PEDIC INT'L: Faces 2 Shareholder Class Suits in Kentucky
TEMPUR-PEDIC INT'L: Faces 6 Class Suits Over Sealy Merger Deal
TRAVELZOO INC: Continues to Defend Consolidated Securities Suit
TRW AUTOMOTIVE: Defends Antitrust Class Suits in Michigan
WEST BANCORPORATION: West Bank Continues to Defend Iowa Suit
WR GRACE: Still Awaits Plan Effective Date, ZAI Claims Resolution
*********
ALLSCRIPTS HEALTHCARE: Faces Class Action Over MyWay EHR System
---------------------------------------------------------------
Brian Bandell, writing for South Florida Business Journal, reports
that a lawsuit filed in Miami-Dade County Circuit Court seeks
class action status for doctors who use the MyWay electronic
health records (EHR) from Allscripts Healthcare Solutions.
Panama City-based Pain Clinic of Northwest FL filed a purported
class action lawsuit on Dec. 20 against Chicago-based Allscripts.
It says that about 5,000 small group physicians were sold MyWay
from 2009 until late last year, when the company stopped
supporting the product.
Allscripts spokesman Seth Frank could not be reached for comment.
The company was also hit with a federal shareholder class action
securities fraud lawsuit in the Northern Illinois District last
year over allegations that it misled investors about the
performance of its EHR programs.
MyWay, which cost about $40,000 per physician to implement, had
"shortcoming and inherent defects" and Allscripts misled Pain
Clinic of Northwest FL owner Dr. Robert Joseph about the quality
of the program before he purchased it in June 2012, according to
the complaint.
Medical providers can earn bonus payments from federal programs by
using an EHR system designated as "meaningful use" by the federal
government. However, the complaint says Allscripts was unable to
obtain "meaningful use" status for MyWay because of the problems
with the program.
"Allscripts has been unjustly enriched by retaining the money paid
by MyWay purchasers and users without delivering an EHR software
product that performs as it was intended to work," the complaint
states.
In addition to unjust enrichment, the complaint also alleges
breach of warranty by Allscripts.
Allscripts announced in October that it would discontinue MyWay
and transition its users to the EHR Pro software program for free.
This program was previously offered only to large medical groups.
"The 'free upgrade' to EHR Pro is not free of substantial cost,"
the complaint states. "MyWay users -- already unhappy with a
defective product they paid enormous money to acquire, train and
develop -- must learn a new interface after spending so much time
acclimating to the old system, and will continue to suffer the
financial loss of the time and expense to re-train employees and
migrate data, as well as the added cost to license and maintain a
more complicated software program that exceeds the needs of most
small physician practice groups."
The complaint claims that Allscripts imposed thousands of dollars
in fees on users to release their data back to them should they
choose to work with a different EHR company.
The plaintiffs are represented by Adam M. Moskowitz --
amm@kttlaw.com -- of Coral Gables-based Kozyak Tropin &
Throckmorton, and Allen Joseph -- ajoseph@fuerstlaw.com -- of
Miami-based Fuerst Ittleman David & Joseph. Many doctors have
called complaining about MyWay since he filed the lawsuit, said
Mr. Moskowitz, including one who said the conversion to EHR Pro
would cost his practice $100,000. Mr. Moskowitz added that he
expects many more physicians to join the lawsuit.
"These smaller physician practices don't have the time for this,"
he said. "They already invested months training in on this
program and loading their data into it and now they are stuck."
Allscripts sold MyWay through 125 channel reseller organizations
throughout the country. The largest in the Southeast was Miami-
based Healthcare Data Solutions, which is owned by Rodney Barreto.
Healthcare Data Solutions was profiled as a growing company by the
Business Journal in March.
Interviewed by the Business Journal in November, Healthcare Data
Solutions President Chad Novitski said the company was helping its
500-plus clients either convert to EHR Pro with Allscripts or
migrate to Aprima Medical Software's EHR for free -- since the
latter system is similar to MyWay. Healthcare Data Solutions' 35
employees will move forward as an Aprima reseller, he added.
Mr. Moskowitz said he does not expect to add any of the MyWay
channel resellers to the lawsuit since they were given the same
misleading information from Allscripts that the doctors received.
BANK OF AMERICA: April 5 Settlement Fairness Hearing Set
--------------------------------------------------------
Kaplan Fox & Kilsheimer LLP, Bernstein Litowitz Berger & Grossmann
LLP, Kessler Topaz Meltzer & Check LLP on Jan. 3 issued a
statement regarding the Bank of America Corp. Securities
Litigation.
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK
IN RE BANK OF AMERICA CORP. SECURITIES, DERIVATIVE, AND EMPLOYEE
RETIREMENT INCOME SECURITY ACT (ERISA) LITIGATION
THIS DOCUMENT RELATES TO: Consolidated Securities Action, Master
File No. 09 MDL 2058 (PKC), ECF CASE
SUMMARY NOTICE OF (I) PROPOSED SETTLEMENT AND PLAN OF ALLOCATION;
(II) SETTLEMENT FAIRNESS HEARING; AND (III) MOTION FOR AN AWARD OF
ATTORNEYS' FEES AND REIMBURSEMENT OF LITIGATION EXPENSES
To: All persons and entities who (1) held Bank of America
Corporation ("BoA") common stock as of October 10, 2008, and were
entitled to vote on the merger between BoA and Merrill Lynch &
Co., Inc. ("Merrill") that was consummated on January 1, 2009; (2)
purchased or otherwise acquired the common stock of BoA during the
period from September 18, 2008 through January 21, 2009,
inclusive, excluding shares of BoA common stock acquired by
exchanging Merrill common stock for BoA common stock through the
merger between the two companies; (3) purchased or otherwise
acquired January 2011 call options on BoA common stock during the
period from September 18, 2008 through January 21, 2009,
inclusive; or (4) purchased BoA common stock issued under the
Registration Statement and Prospectus for the BoA common stock
offering that occurred on or about October 7, 2008, and who were
damaged thereby (the "Class"). (fn 1)
PLEASE READ THIS NOTICE CAREFULLY; YOUR RIGHTS WILL BE AFFECTED BY
THE SETTLEMENT OF A CLASS ACTION LAWSUIT PENDING IN THIS COURT.
PLEASE DO NOT CONTACT THE COURT OR THE CLERK'S OFFICE REGARDING
THIS NOTICE.
PLEASE DO NOT CONTACT BANK OF AMERICA CORPORATION REGARDING THIS
NOTICE.
ALL QUESTIONS ABOUT THIS NOTICE, THE PROPOSED SETTLEMENT, OR YOUR
ELIGIBILITY TO PARTICIPATE IN THE SETTLEMENT SHOULD BE DIRECTED TO
CO-LEAD COUNSEL OR THE CLAIMS ADMINISTRATOR, WHOSE CONTACT
INFORMATION IS PROVIDED BELOW, RATHER THAN TO BOA OR THE COURT.
YOU ARE HEREBY NOTIFIED, pursuant to Rule 23 of the Federal Rules
of Civil Procedure and an Order of the United States District
Court for the Southern District of New York, that Court-appointed
Lead Plaintiffs, the State Teachers Retirement System of Ohio; the
Ohio Public Employees Retirement System; the Teacher Retirement
System of Texas; Stichting Pensioenfonds Zorg en Welzijn,
represented by PGGM Vermogensbeheer B.V.; and Fjarde AP-Fonden, on
behalf of themselves and the Court-certified Class, in the above-
captioned securities class action (the "Action") have reached a
proposed settlement of the Action with defendants BoA, Merrill,
Kenneth D. Lewis, John A. Thain, Joe L. Price, Neil A. Cotty, Banc
of America Securities LLC, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, William Barnet III, Frank P. Bramble, Sr., John T.
Collins, Gary L. Countryman, Tommy R. Franks, Charles K. Gifford,
Monica C. Lozano, Walter E. Massey, Thomas J. May, Patricia E.
Mitchell, Thomas M. Ryan, O. Temple Sloan, Jr., Meredith R.
Spangler, Robert L. Tillman, and Jackie M. Ward (collectively, the
"Defendants") for $2,425,000,000.00 and certain corporate
governance enhancements to be implemented or continued by BoA,
that, if approved, will resolve all claims in the Action.
A hearing will be held on April 5, 2013 at 2:00 p.m. before The
Honorable P. Kevin Castel, in the United States District Court for
the Southern District of New York, Daniel Patrick Moynihan United
States Courthouse, 500 Pearl Street, Courtroom 12C, New York, NY
10007, to determine (i) whether the proposed Settlement should be
approved as fair, reasonable, and adequate; (ii) whether the
Action should be dismissed with prejudice against Defendants, and
the releases specified and described in the Stipulation and
Agreement of Settlement dated November 30, 2012 should be granted;
(iii) whether the proposed Plan of Allocation should be approved
as fair and reasonable; and (iv) whether Co-Lead Counsel's
application for attorneys' fees and reimbursement of expenses
should be approved.
If you are a member of the Class, your rights will be affected by
the pending Action and the Settlement, and you may be entitled to
share in the Settlement Fund. If you have not yet received the
full printed Notice of (I) Proposed Settlement and Plan of
Allocation; (II) Settlement Fairness Hearing; and (III) Motion for
an Award of Attorneys' Fees and Reimbursement of Litigation
Expenses (the "Settlement Notice") and the Proof of Claim Form,
you may obtain copies of these documents by contacting the Claims
Administrator at In re Bank of America Corp. Securities
Litigation, c/o The Garden City Group, Inc., Claims Administrator,
P.O. Box 9876, Dublin, Ohio 43017-5776, (855) 733-8308. Copies of
the Settlement Notice and Proof of Claim Form can also be
downloaded from the Web site for the Action,
http://www.boasecuritieslitigation.comor from Co-Lead Counsel's
respective Web sites.
If you are a Class Member, in order to be eligible to receive a
payment under the proposed Settlement, you must submit a Proof of
Claim Form postmarked no later than April 25, 2013. If you are a
Class Member and do not submit a proper Proof of Claim Form, you
will not be eligible to share in the distribution of the net
proceeds of the Settlement but you will nevertheless be bound by
any judgments or orders entered by the Court in the Action.
If you previously submitted a request for exclusion from the Class
in connection with the Notice of Pendency of Class Action ("Class
Notice") and you wish to remain excluded, no further action is
required. If you previously submitted a request for exclusion
from the Class in connection with the Class Notice and you want to
opt-back into the Class and be eligible to receive a payment from
the Settlement Fund, you must submit a request to opt-back into
the Class in writing such that it is received no later than
March 5, 2013, in accordance with the instructions set forth in
the Settlement Notice. If you previously submitted a request for
exclusion from the Class in connection with the Class Notice and
do not opt-back into the Class in accordance with the instructions
set forth in the Settlement Notice, you will not be bound by any
judgments or orders entered by the Court in the Action and you
will not be eligible to share in the net proceeds of the
Settlement.
Any objections to the proposed Settlement, the proposed Plan of
Allocation, or Co-Lead Counsel's application for attorneys' fees
and reimbursement of expenses, must be filed with the Court and
delivered to Co-Lead Counsel and representative counsel for
Defendants such that they are received no later than March 5,
2013, in accordance with the instructions set forth in the
Settlement Notice.
Inquiries, other than requests for the Settlement Notice, may be
made to:
Bernstein Litowitz Berger & Grossmann LLP
Max W. Berger, Esq.
Steven B. Singer, Esq.
1285 Avenue of the Americas
New York, NY 10019
Kaplan Fox & Kilsheimer LLP
Robert N. Kaplan, Esq.
Frederic S. Fox, Esq.
850 Third Avenue, 14th Floor
New York, NY 10022
Kessler Topaz Meltzer & Check, LLP
David Kessler, Esq.
Gregory M. Castaldo, Esq.
280 King of Prussia Road
Radnor, PA 19087
Requests for the Settlement Notice should be made to:
In re Bank of America Corp. Securities Litigation c/o The Garden
City Group, Inc. P.O. Box 9876 Dublin, Ohio 43017-5776 (855) 733-
8308 http://www.boasecuritieslitigation.com
By Order of the Court
(fn 1) Certain persons and entities are excluded from the Class by
definition and others are excluded pursuant to request. A
complete description of who is excluded from the Class is set
forth in the full Settlement Notice referred to in this notice and
available at http://www.boasecuritieslitigation.com
BANKSIA SECURITIES: Solicitor Mulls Use of Litigation Fund
----------------------------------------------------------
Everard Himmelreich, writing for The Standard, reports that
heavyweights in both commercial law and forensic accounting have
been assembled to run a class action legal case against the failed
Banksia Securities and Cherry Fund finance companies, the company
directors and auditors.
A Melbourne solicitor handling the class action, Mark Elliott,
said notice was lodged with the Victorian Supreme Court on
December 24 and involved more than 16,000 investors with Banksia
Securities Limited (BSL) and the associated Cherry Fund Limited
(CFL).
Mr. Elliott said he expected the court to accept an application
for Banksia investor Laurence Bolitho of Kyabram to be the lead
plaintiff, representing investors in the two companies.
He said investors had the choice to "opt out" of the class action
but he did not expect to lose the case.
Mr. Elliott said he had received the names of all investors in the
two companies from their receivers, McGrathNicol, and would be
sending investors a letter outlining the details of the class
action.
A Web site would also be set up to give investors more information
about the class action.
Mr. Elliott said investors who supported the class action would
share on a "pro rata" basis in any settlement or court ruling in
their favor.
None of them, apart from the lead plaintiff Mr. Bolitho, would
bear any costs if they lost the case, he said.
Mr. Elliott said he had made "adequate arrangements for any
adverse costs orders" but declined to be specific about the
arrangements.
"If there are any adverse cost orders, they will be Mr. Bolitho's
problem," he said on Jan. 2.
Mr. Elliott has 25 years' experience as a solicitor and is a
former partner in the Australia-based Minter Ellison international
law firm.
The class action will be run by leading Melbourne barrister Norman
O'Bryan, a senior counsel with extensive experience in commercial
law, with the support of "a bevy of lawyers", Mr. Elliott said.
A heavyweight international accountancy company, Ferrier Hodgson,
has also been retained to provide financial analysis and forensic
accountancy services.
Mr. Elliott said funding the class action through a litigation
fund was among the options being considered.
Litigation funding companies are a third party to litigation and
provide funds to enable litigants to meet legal costs.
Mr. Elliott said he was "horrified" at what he read in the
December 7 report to investors by the receivers McGrathNicol.
The report had confirmed his belief that "something is not right"
in the way the two companies had been managed.
The class action alleges that BSL and CFL were not run in a proper
and efficient manner.
It also alleges the trustee company for BSL and CFL, the Sydney-
based The Trust Company, had failed to adequately supervise and
investigate the financial position and viability of BSL and CFL.
It also alleges the auditors for BSL and CFL, RSD Chartered
Accountants of Bendigo, failed to adequately audit BSL and CFL's
books or report any breaches of law to the Australian Securities
and Investment Commission.
The fifth defendant named in the writ are the BSL and CFL
directors who are alleged to have failed to adequately manage the
financial position and viability of the two companies and protect
the interests of investors.
The directors are Geoffrey Grenville Skewes, of Warrnambool,
Patrick John Godfrey, of Kyabram, Nicholas Livingston Carr, of
Geelong, Neil Stewart Mathison, of Geelong, and Peter William
Keating, of Melbourne.
CAREER EDUCATION: 80 "Amdador" Suit Opt-Out Plaintiffs Remaining
----------------------------------------------------------------
Career Education Corporation said 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 there are about 80
plaintiffs remaining in the Abarca, Andrade and Aprieto legal
proceedings composed of plaintiffs who opted-out of the class
action lawsuit styled Amador, et al. v. California Culinary
Academy and Career Education Corporation.
On September 27, 2007, Allison Amador and 36 other current and
former students of the California Culinary Academy ("CCA") filed a
complaint in the California Superior Court in San Francisco.
Plaintiffs plead their original complaint as a putative class
action and allege four causes of action: fraud; constructive
fraud; violation of the California Unfair Competition Law; and
violation of the California Consumer Legal Remedies Act.
Plaintiffs contend that CCA made a variety of misrepresentations
to them, primarily oral, during the admissions process. The
alleged misrepresentations relate generally to the school's
reputation, the value of the education, the competitiveness of the
admissions process, and the students' employment prospects upon
graduation, including the accuracy of statistics published by CCA.
On April 3, 2008, the same counsel representing plaintiffs in the
Amador action filed the Adams action (Adams, et al. v. California
Culinary Academy and Career Education Corporation) on behalf of
Jennifer Adams and several other unnamed members of the Amador
putative class. The Adams action also was styled as a class
action and was based on the same allegations underlying the Amador
action and attempted to plead the same four causes of action pled
in the Amador action. The Adams action was deemed related to the
Amador action and was being handled by the same judge.
The parties executed a formal settlement agreement as of
November 1, 2010. On April 18, 2012, the Court issued an order
granting final approval of the settlement and on April 19, 2012,
the Court entered a final judgment on the settlement.
On June 3, 2011, the same attorneys representing the class in the
Amador action filed a separate complaint in the San Francisco
County Superior Court entitled Abarca v. California Culinary
Academy, Inc., et al, on behalf of 115 individuals who are opt
outs in the Amador action and/or non-class members, and therefore
not subject to the Amador settlement. On June 15, 2011, the same
attorneys filed another action in the San Francisco County
Superior Court entitled Andrade, et al. v. California Culinary
Academy, Inc., et al., on behalf of another 31 individuals who are
opt outs in the Amador action and/or non-class members, and
therefore not subject to the Amador settlement. On August 12,
2011, plaintiffs' counsel filed a third action on behalf of five
individuals who opted out of or were not parties to the Amador
settlement entitled Aprieto, et al. v. California Culinary
Academy. None of these three lawsuits are being prosecuted as a
class action. They each allege the same claims as were previously
alleged in the Amador action, plus claims for breach of contract
and violations of the repealed California Education Code. The
plaintiffs in these cases seek damages, including consequential
damages, punitive damages and attorneys' fees. The Company has
not responded to these three complaints, which have been deemed
related and transferred to the same judge who has been handling
the Amador case, because they have been stayed pending a final
determination as to which of the remaining individual plaintiffs
have viable claims that are not barred by the final judgment on
the settlement in the class action. Certain of the plaintiffs in
these cases filed claims or received notice of the settlement and
did not file claims, and therefore their individual claims will be
barred. The parties are engaged in preliminary discovery and a
further status conference is scheduled for January 22, 2013.
Based on the Company's records, it appears that there are
approximately 126 plaintiffs whose claims are not barred by the
settlement, 44 of which accepted offers to compromise pursuant to
the California Code of Civil Procedure and were paid approximately
$0.4 million in the aggregate in settlement of these claims.
These amounts were recorded in the third quarter of 2012 and the
majority of the payments were made by
September 30, 2012. There are about 80 plaintiffs remaining.
Because of the many questions of fact and law that may arise as
discovery and pre-trial proceedings progress, the outcome of the
Abarca, Andrade and Aprieto legal proceedings with respect to the
remaining plaintiffs 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 these
actions because these matters are in their early stages and
involve many unresolved issues of fact and law. Accordingly, the
Company has not recognized any liability associated with these
actions.
CAREER EDUCATION: Active Plaintiffs in "Vasquez" Suit Total 900
---------------------------------------------------------------
Career Education Corporation 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 there are
approximately 900 active plaintiffs in the consolidated lawsuit
entitled Daniel Vasquez and Cherish Herndon v. California School
of Culinary Arts, Inc. and Career Education Corporation.
On June 23, 2008, a putative class action lawsuit was filed in the
Los Angeles County Superior Court entitled Daniel Vasquez and
Cherish Herndon v. California School of Culinary Arts, Inc. and
Career Education Corporation. The plaintiffs allege causes of
action for fraud, constructive fraud, violation of the California
Unfair Competition Law and violation of the California Consumer
Legal Remedies Act. The plaintiffs allege improper conduct in
connection with the admissions process during the alleged class
period. The alleged class is defined as including "all persons
who purchased educational services from California School of
Culinary Arts, Inc. ("CSCA"), or graduated from CSCA, within the
limitations periods applicable to the alleged causes of action
(including, without limitation, the period following the filing of
the action)." Defendants successfully demurred to the
constructive fraud claim and the Court has dismissed it.
Defendants also successfully demurred to plaintiffs' claims based
on alleged violations of California's former Educational Reform
Act. Plaintiffs' motion for class certification was denied by the
Court on March 6, 2012.
Plaintiffs' counsel have filed eight separate but related
"multiple plaintiff actions" entitled Banks, et al. v. California
School of Culinary Arts, Los Angeles County Superior Court (by 316
individuals); Abrica v. California School of Culinary Arts, Los
Angeles County Superior Court (by 373 individuals); Aguilar, et
al. v. California School of Culinary Arts, Los Angeles County
Superior Court (by 88 individuals); Alday v. California School of
Culinary Arts, Los Angeles Superior Court (by 73 individuals);
Ackerman, et al. v. California School of Culinary Arts, Los
Angeles County Superior Court (by 27 individuals); Arechiga, et
al. v. California School of Culinary Arts, Los Angeles County
Superior Court (by 60 individuals); Anderson, et al., v.
California School of Culinary Arts, Los Angeles County Superior
Court (by 58 individuals); and Allen v. California School of
Culinary Arts, Los Angeles Superior Court (by 12 individuals).
All eight cases are being prosecuted on behalf of over one
thousand former students. The allegations are the same as those
asserted in the Vasquez class action case. The individual
plaintiffs in these cases seek compensatory and punitive damages,
disgorgement and restitution of tuition monies received,
attorneys' fees, costs and injunctive relief. All of these cases
have been deemed related to the Vasquez class action and therefore
are pending before the same judge who is presiding over the
Vasquez case.
On June 15, 2012, pursuant to a stipulation by the parties, the
plaintiffs filed a consolidated amended complaint in the Vasquez
action consolidating all eight of the separate actions.
Defendants' response to the consolidated complaint was filed on
July 13, 2012. The Court has lifted the stay on actions that were
consolidated and the parties are now engaged in discovery.
On June 22, 2012, defendants filed motions to compel arbitration
of plaintiffs' claims. On August 10, 2012, the Court granted the
motions with respect to two later versions of the arbitration
agreement at issue, and denied the motions with respect to the
earliest version signed by certain of the plaintiffs.
Approximately 54 individuals signed the later two versions of the
arbitration agreement, and their claims are subject to
arbitration.
Over the last few months, defendants sent out offers to compromise
pursuant to the California Code of Civil Procedure to 1,069
individual plaintiffs, 334 of which were accepted. The total
amount that has been or will be paid to eliminate these claims is
approximately $2.1 million. This aggregate amount was recorded in
the third quarter of 2012 and the majority of the payments were
made by September 30, 2012. Due to the recent addition of new
plaintiffs, there are currently approximately 900 active
plaintiffs in the consolidated action.
Because of the many questions of fact and law that have already
arisen and that may arise in the future, the outcome of these
legal proceedings 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 these
actions with respect to the current plaintiffs because the
Company's possible liability depends 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 these actions.
CAREER EDUCATION: Arbitration Denial in "Surrett" Suit Appealed
---------------------------------------------------------------
A subsidiary of Career Education Corporation appealed the denial
of its motion to compel arbitration in the class action lawsuit
captioned Surrett, et al. v. Western Culinary Institute, Ltd. and
Career Education Corporation, 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 March 5, 2008, a complaint was filed in Portland, Oregon, in
the Circuit Court of the State of Oregon in and for Multnomah
County naming Western Culinary Institute, Ltd. and the Company as
defendants. Plaintiffs filed the complaint individually and as a
putative class action and alleged two claims for equitable relief:
violation of Oregon's Unlawful Trade Practices Act ("UTPA") and
unjust enrichment. Plaintiffs filed an amended complaint on April
10, 2008, which added two claims for money damages: fraud and
breach of contract. Plaintiffs allege that Western Culinary
Institute, Ltd. ("WCI") made a variety of misrepresentations to
them, relating generally to WCI's placement statistics, students'
employment prospects upon graduation from WCI, the value and
quality of an education at WCI, and the amount of tuition students
could expect to pay as compared to salaries they could expect to
earn after graduation. WCI subsequently moved to dismiss certain
of plaintiffs' claims under Oregon's UTPA; that motion was granted
on September 12, 2008.
On February 5, 2010, the Court entered a formal Order granting
class certification on part of plaintiff's UTPA and fraud claims
purportedly based on omissions, denying certification of the rest
of those claims and denying certification of the breach of
contract and unjust enrichment claims. The class consists of
students who enrolled at WCI between March 5, 2006, and March 1,
2010, excluding those who dropped out or were dismissed from the
school for academic reasons.
Plaintiffs filed a Fifth Amended Complaint on December 7, 2010,
which included individual and class allegations by Nathan Surrett.
Class notice was sent on April 22, 2011, and the opt-out period
expired on June 20, 2011. The class consisted of approximately
2,600 members. They are seeking tuition refunds, interest and
certain fees paid in connection with their enrollment at WCI.
On May 23, 2012, WCI filed a motion to compel arbitration of
claims by 1,062 individual class members who signed enrollment
agreements containing express class action waivers. The Court
issued an Order denying the motion on July 27, 2012. WCI filed an
appeal from the Court's Order and on August 30, 2012, the Court of
Appeals issued an Order granting WCI's motion to compel the trial
court to cease exercising jurisdiction in the case. Thus, all
proceedings with the trial court have been stayed pending the
outcome of the appeal.
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 of the inherent difficulty in assessing the appropriate
measure of damages and the number of class members who might be
entitled to recover damages, if the Company was to be found
liable. Accordingly, the Company has not recognized any liability
associated with this action.
CAREER EDUCATION: Continues to Defend "Ross" Class Action Suit
--------------------------------------------------------------
Career Education Corporation continues to defend a class action
lawsuit captioned Ross, et al. v. Career Education Corporation, 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 January 13, 2012, a class action complaint was filed in the
United States District Court for the Northern District of
Illinois, naming the Company and various individuals as defendants
and claiming that the defendants violated Section 10(b) of the
Securities Exchange Act of 1934 (the "Exchange Act") by making
material misstatements in and omitting material information from
the Company's public disclosures concerning its schools' job
placement rates and its compliance with accreditation policies.
The complaint further claimed that the individual defendants
violated Section 20(a) of the Exchange Act by virtue of their
positions as control persons of the Company. Plaintiff asks for
unspecified amounts in damages, interest, and costs, as well as
ancillary relief. On March 23, 2012, the Court appointed KBC
Asset Management NV, the Oklahoma Police Pension & Retirement
Systems, and the Oklahoma Law Enforcement Retirement System, as
lead plaintiffs in the action. On May 3, 2012, lead plaintiffs
filed a consolidated amended complaint, asserting the same claims
alleged in the initial complaint, and naming the Company and two
former executive officers as defendants. Lead plaintiffs seek
damages on behalf of all persons who purchased the Company's
common stock between February 19, 2009, and November 21, 2011. On
October 30, 2012, the Court ruled on defendants' motion to
dismiss. The motion was granted as to defendant Graham and denied
as to the other defendants. The Court further ordered the parties
to meet and confer regarding discovery. A status hearing was
scheduled for November 19, 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 of the inherent difficulty in assessing the appropriate
measure of damages and the number of potential class members who
might be entitled to recover damages, if the Company was to be
found liable. Accordingly, the Company has not recognized any
liability associated with this action.
CAREER EDUCATION: Awaits "Lilley" Suit Plaintiffs' Next Move
------------------------------------------------------------
Career Education Corporation is waiting plaintiffs' next move
following class decertification in the lawsuit entitled Lilley, et
al. v. Career Education Corporation, 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 February 11, 2008, a class action complaint was filed in the
Circuit Court of Madison County, Illinois, naming the Company and
Sanford-Brown College, Inc. as defendants. Plaintiffs filed
amended complaints on September 5, 2008, and September 24, 2010.
The five plaintiffs named in the amended complaint are former
students who attended a medical assistant program at Sanford-Brown
College located in Collinsville, Illinois. The amended complaint
asserts claims for alleged violations of the Illinois Private
Business and Vocational Schools Act, for alleged unfair conduct
and deceptive conduct under the Illinois Consumer Fraud and
Deceptive Business Practices Act, as well as common law claims of
fraudulent misrepresentation and fraudulent omission.
In the amended complaint filed on September 24, 2010, the
plaintiffs allege that the school's enrollment agreements
contained false and misleading information regarding placement
statistics, job opportunities and salaries and that Admissions,
Financial Aid and Career Services personnel used standardized
materials that allegedly contained false and/or deceptive
information. Plaintiffs also allege that the school misused a
standardized admissions test to determine program placement when
the test was not intended for that purpose; failed to provide
allegedly statutorily required loan repayment information; and
misrepresented the transferability of credits. Plaintiffs seek
compensatory, treble and punitive damages, disgorgement and
restitution of all tuition monies received from medical assistant
students, attorneys' fees, costs and injunctive relief.
Defendants filed a motion to dismiss the amended complaint on
October 20, 2010. On October 27, 2010 the Court granted
defendants' motion with respect to plaintiffs' fraudulent omission
claims. The Court denied the motion with respect to the statutory
claims under the Private Schools Act and the Illinois Consumer
Fraud Act and the common law fraudulent misrepresentation claim.
By Order dated December 3, 2010, the Court certified a class
consisting of all persons who attended Sanford-Brown College in
Collinsville, Illinois and enrolled in the Medical Assisting
Program during the period from July 1, 2003, through November 29,
2010. This class consists of approximately 2,300 members. On
February 10, 2011, the Fifth District Court of Appeals granted
defendants' petition for leave to appeal the trial court's class
certification order.
By Order filed on October 25, 2012, the Appellate Court reversed
the class certification order. The Appellate Court also ruled
that the four named plaintiffs can proceed with their individual
causes of action and, if successful, receive an award of actual
damages, treble damages if fraud is proven, injunctive relief and
reasonable attorneys' fees and costs. Plaintiffs had until
November 15, 2012, to file a Petition for Rehearing with the
Appellate Court. Plaintiffs could also seek review of the
Appellate Court's decision by filing a Petition for Leave to
Appeal with the Illinois Supreme Court.
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 of the inherent difficulty in assessing the appropriate
measure of damages and the number of potential class members who
might be entitled to recover damages, if the Company was to be
found liable. Accordingly, the Company has not recognized any
liability associated with this action.
CAREER EDUCATION: Appeal From "Wilson" Suit Dismissal Pending
-------------------------------------------------------------
An appeal from the dismissal of the class action lawsuit styled as
Wilson, et al. v. Career Education Corporation remains pending,
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 11, 2011, Riley Wilson, a former Admissions
Representative based in Minnesota, filed a complaint in the United
States District Court for the Northern District of Illinois. The
two-count complaint asserts claims of breach of contract and
unjust enrichment arising from the Company's decision to terminate
the Company's Admissions Representative Supplemental Compensation
Plan. In addition to his individual claims, Wilson also seeks to
represent a nationwide class of similarly situated Admissions
Representatives who also were affected by termination of the plan.
On October 6, 2011, the Company filed a motion to dismiss the
complaint. On November 25, 2011, Wilson moved for class
certification and appointment of class counsel, but briefing on
that issue and all discovery were stayed pending a decision on the
motion to dismiss. On April 13, 2012, the Court granted the
Company's motion to dismiss in its entirety and dismissed
plaintiff's complaint for failure to state a claim. The Court
dismissed this action with prejudice on
May 14, 2012. On June 11, 2012, plaintiff filed a Notice of
Appeal with the United States Court of Appeals for the Seventh
Circuit appealing the final judgment of the trial court. Briefing
was completed on October 30, 2012. No hearing date for the appeal
has been set.
Because plaintiff has filed a notice of appeal, 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. Accordingly, the Company has not recognized any liability
associated with this action.
CAREER EDUCATION: "Morales" Case Incorporated in "Houck" Suit
-------------------------------------------------------------
A class action lawsuit filed by Juan Antonio Morales has been
closed and incorporated to the case filed by Kishia Houck,
according to Career Education Corporation's November 8, 2012, Form
10-Q filing with the U.S. Securities and Exchange Commission for
the quarter ended September 30, 2012.
On May 23, 2012, a putative class action was filed in the Circuit
Court of the Thirteenth Judicial Circuit for Hillsborough County,
Florida, captioned Kishia Houck, et al. v. Career Education
Corporation and International Academy of Merchandising & Design,
Inc. The Houck plaintiffs allege causes of action under Florida's
Deceptive and Unfair Trade Practices Act and for breach of the
implied covenant of good faith and fair dealing, unjust
enrichment, and breach of fiduciary duty. They allege that
defendants made a variety of misrepresentations to them, relating
generally to salary and employment prospects, instructor
qualifications, transferability of credits, career placement
services, the reputation of the International Academy of
Merchandising & Design, Inc., the value and quality of the
education, the overall cost to attend the school, and relevant
student loan information. The putative class is defined as
including all students who are or have enrolled in defendants'
degree programs at its Tampa and Orlando, Florida campuses during
an undetermined time period. The Houck plaintiffs seek to recover
damages and also seek declaratory and injunctive relief.
On July 5, 2012, the action was removed to the U.S. District Court
for the Middle District of Florida. On August 3, 2012, the Houck
plaintiffs filed a Third Amended Class Action Complaint. On
September 7, 2012, defendants moved to dismiss the Houck
plaintiffs' claims and to compel arbitration. On October 12,
2012, the parties jointly moved the court to postpone most case
activity until it decides whether to refer the case for
arbitration.
On September 11, 2012, a second putative class action was filed in
the United States District Court for the Middle District of
Florida, captioned Juan Antonio Morales, et al. v. Career
Education Corporation and International Academy of Merchandising &
Design, Inc. The Morales plaintiffs allege essentially the same
factual bases and causes of action as in Houck lawsuit, but they
have added a request for punitive damages. The definition of the
putative class in Morales is the same as in Houck.
On October 23, 2012, the Morales plaintiffs filed a First Amended
Complaint in which, among other things, they added several
additional plaintiffs, including a proposed class representative,
and a claim for civil conspiracy. Thus, Morales included causes
of action under Florida's Deceptive and Unfair Trade Practices
Act, and for breach of the implied covenant of good faith and fair
dealing, unjust enrichment, breach of fiduciary duty, and civil
conspiracy. On November 2, 2012, the court ordered Morales
closed, incorporated it into Houck, and ordered that all further
pleadings shall be filed in Houck.
Because of the many questions of fact and law that have already
arisen and that may arise in the future, the outcome of these
legal proceedings 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 these
actions because, among other things, the Company's potential
liability depends on whether a class is certified and, if so, the
composition and size of any such class 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.
DOLE FOOD: Faces Class Action in Calif. Over Labor Law Violation
----------------------------------------------------------------
Courthouse News Service reports that Dole Food Co. and Bud of
California, a food packer, force employees to work off the clock,
a class action claims in Monterey County Court.
DOLE FOOD: Faces Class Action Over Alleged Unpaid Wages
-------------------------------------------------------
Sara Rubin, writing for Monterey County Weekly, reports that
Dole Food Company is facing a class-action lawsuit, filed Dec. 26
in Monterey County Superior Court, alleging a failure to pay its
workers for the time they spend taking those elaborate sanitary
suits on and off.
The simplicity of opening a pre-washed, bagged salad in your
kitchen belies complex systems of conveyors, belts and tumblers
that make up vegetable processing plants. The Willy Wonka-style
rooms are usually chilly caverns with damp concrete floors, where
workers in lab coats, gloves and hairnets transform fresh greens
into ready-to-eat packages.
"The time that Dole requires its employees to work without
compensation on a daily basis is substantial," the complaint
states.
"Donning and doffing" cases became a hot topic in legal circles
last year when the U.S. Supreme Court upheld a Court of Appeals
ruling that required a Delaware poultry processor to pay workers
for the time they spent -- 20.013 minutes on average, according to
court papers -- gearing up, then removing protective wear at the
end of a shift.
The 2012 ruling cemented a 2005 Supreme Court decision
interpreting donning and doffing rules in the 1938 Fair Labor
Standards Act, the country's hallmark worker's rights law.
In writing for the unanimous court, Chief Justice John Paul
Stevens wrote, "[Federal law] does not strictly define the
workday's limits as the period from 'whistle to whistle.'"
The class action argues that dressing in protective gear and
sanitizing hands and shoe soles are food safety practices that
workers are required to use to comply with Dole's policies. "All
of these activities are performed for the benefit of Dole," the
suit states.
Since the leafy greens industry began applying stricter food
safety protocols after a deadly outbreak of E. coli in spinach in
2006, such practices have gotten increased attention industrywide.
"It adds an extra burden to provide hairnets and shoe covers,"
Monterey County Farm Bureau Executive Director Norm Groot says.
"It cuts into production time."
The 2012 Supreme Court ruling determined that although some
practices aren't required by law, they should be paid for if
they're essential to the job. In some cases, like protective
gloves for knife-wielding workers, there's an obvious safety
benefit to workers, but also to employers who save on worker's
comp and lost sick time.
"We absolutely comply with all applicable labor laws and
regulations," Dole spokesman Marty Ordman says. The Weekly
provided a copy of the suit to Dole representatives, but they were
unable to comment on the specific allegations in the suit by press
time.
The lead plaintiff, Jose Luis Hernandez who worked in Dole's
Soledad plant, and his attorneys, Stuart Chandler of Fresno and
Daniel Hunt of Pasadena, were not available for comment by the
Weekly's deadline.
The complaint also alleges Dole routinely violated lunch and rest
break requirements because employees again need to don and doff
their gear, and that time shouldn't be counted toward break time.
"Dole knew or should have known that its policies and practices
were expressly contrary to California law and unfair," the
complaint states.
Dole reported 2011 revenues of $7.2 billion, with about 36,000
full-time employees around the world and another 23,000 seasonal
workers at any given time, according to its Web site.
"Dole is committed to treating its employees with openness, candor
and respect," according to a separate corporate social
responsibility Web site launched in 2011.
FACEBOOK INC: Jan. 23 Pretrial Conference Set for IPO Class Action
------------------------------------------------------------------
David Zielenziger, writing for International Business Times,
reports that a federal judge has set Jan. 23 for a pretrial
conference of parties involved in the giant class-action lawsuit
brought against Facebook as a result of its controversial May 2012
initial public offering.
U.S. District Court Judge Robert W. Sweet, in Manhattan, who was
assigned the consolidated cases by a panel of 11 other federal
judges, will preside over the conference and the subsequent trial.
Lawyers had previously said the judges would assign the trial to
New York because of proximity to Facebook's principal
underwriters, Morgan Stanley, Goldman Sachs and JPMorgan Chase, as
well as the court's familiarity with complex financial matters.
Facebook, of Menlo Park, Calif., had also sought New York to be
the venue for the trial, which might have been set for the federal
court in San Francisco.
Judge Sweet designated a group of institutional investors
including state pension funds from North Carolina as the lead
plaintiff, with two other groups claiming negligence by Nasdaq OMX
Group, where Facebook shares are traded.
Facebook has denied all charges and will likely have to make
available its principals, including CEO Mark Zuckerberg and CFO
David Ebersman, for pretrial examination as well as appearances.
The plaintiffs allege the underwriters sold IPO shares knowing the
company would report lower-than-expected revenue growth and
earnings following the IPO, without making that knowledge
available to all investors.
Last month, Massachusetts fined Morgan Stanley $5 million for
improper supervision of its research analysts, two months after
the state fined Citibank $2 million for improperly supervising the
analyst covering Facebook, who was fired.
Shares of Facebook, priced at $38 in the IPO on May 17, closed at
$28, up $1.38 on Jan. 2. They traded as low as $17.55 in early
September.
FORTINET INC: May Settle Stockholder Class Action for $1 Mil.
-------------------------------------------------------------
Fortinet Inc. disclosed in its October 30, 2012, Form 10-Q filing
with the U.S. Securities and Exchange Commission for the quarter
ended September 30, 2012, that is it is likely to settle a
stockholder class action lawsuit in California for about $1
million.
In April 2010, an individual, a former stockholder of Fortinet,
filed a class action lawsuit against the Company claiming
unspecified damages in the California Superior Court for the
County of Los Angeles alleging violation of various California
Corporations Code sections and related tort claims alleging
misrepresentation and breach of fiduciary duty regarding the 2009
repurchase by Fortinet of shares of its stock while the Company
was a privately-held company. In September 2010, the Court
granted the Company's motion to transfer the case to the
California Superior Court for Santa Clara County and the plaintiff
has filed several amended complaints in the Superior Court to add
individual defendants, among other amendments.
The Superior Court had set a trial date for December 2012, but
subsequently the Company has made progress in settlement
discussions for the matter. It has determined that, as of October
30, 2012, it is reasonably likely that to settle this matter,
Fortinet will pay approximately $1.0 million, which has been
accrued as of September 30, 2012.
Fortinet Inc. provides network security solutions, which enable
broad, integrated and high performance protection against dynamic
security threats while simplifying the IT security infrastructure
for enterprises, service providers and governmental entities
worldwide. As of September 30, 2012, it has shipped over
1,000,000 appliances to more than 10,000 channel partners and to
more than 140,000 end-customers worldwide, including a majority of
the Fortune Global 100.
GILSTER-MARY LEE: Recalls Food Club Chocolate Chunk Brownie Mix
---------------------------------------------------------------
Gilster-Mary Lee Corp. of Chester, Illinois, is voluntarily
recalling one lot of Chocolate Chunk Brownie Mix because it
contains cartons containing undeclared walnuts. (Wrong
packaging/cartons were used that do not declare walnuts). People
who have an allergy or severe sensitivity to walnuts run the risk
of serious or life threatening allergic reaction if they consume
these products.
The only brand involved is Food Club Chocolate Chunk Brownie Mix
packaged in cases of 12/14.25oz. Cartons have a Best By date of
NOV 28 13 D02 (UPC# 36800-13486). This Best By date code is
located on the corrugated case AND on the top flap of the carton.
Consumers should return the product to the store or discard it. A
picture of the recalled products' labels is available at:
http://www.fda.gov/Safety/Recalls/ucm334111.htm
The product was distributed to Abingdon, VA. Warehouse on
December 5, 2012.
Gilster-Mary Lee became aware of the mis-packaging during an
internal review. Investigation indicated that during this
production run walnut brownie cartons were inadvertently exchanged
with plain Chocolate Chunk Brownie cartons. No illnesses have
been reported in connection with this recall.
For questions, consumers can call Gilster-Mary Lee Corp. at 618-
826-2361 ext. 3283 or 3035, 8:00 a.m. to 4:30 p.m. Central
Standard Time.
GOOGLE INC: Judge Dismisses Right to Privacy Class Action
---------------------------------------------------------
Alison Frankel, writing Thomson Reuters, reports that last June,
while the country was transfixed by the U.S. Supreme Court's
ruling on the constitutionality of Obamacare, the justices quietly
ducked an issue that has bedeviled Silicon Valley for more than a
decade. The court issued a ruling that it had "improvidently"
granted certiorari in a case called First American Financial v.
Edwards, which presented the question of whether plaintiffs have
standing to sue if they cannot demonstrate an injury. The Supreme
Court's decision to pass left in place a finding by the United
States Court of Appeals for the Ninth Circuit that plaintiffs can
establish standing through a statutory claim even if they weren't
harmed by the defendant's conduct.
Tech companies had been hoping for a different result, since
plaintiffs in class actions claiming violations of their privacy
often can't show that they suffered any actual injury from the use
of their personal information. Defendants have been fairly
successful with arguments that class members in privacy cases
can't establish standing through an injury-in-fact, but plaintiffs
can still survive dismissal motions by citing violations of laws
that carry statutory damages. That's why cases such as the class
action involving Facebook's "Sponsored Stories" advertising result
in multimillion-dollar settlements: Defendants face statutory
claims by legions of class members.
On Dec. 28, Google avoided a similar fate, at least for the time
being. U.S. Magistrate Judge Paul Grewal of San Jose, California,
dismissed a class action asserting that the universal terms of
service Google imposed in March 2012 violated users' privacy
rights, as well as the federal Wiretap Act and California state
consumer laws. The magistrate said that the class, represented by
Gardy & Notis, Grant & Eisenhofer and Bursor & Fisher, can file an
amended complaint based on the state Right to Publicity Act but
said that plaintiffs will have to show specifically that Google
used their voice or likeness without their consent, which they so
far haven't been able to do.
The class had argued in its response to Google's motion to dismiss
that members suffered actual damages when, for instance, they had
to replace Android devices to avoid Google's invasive policies.
The magistrate said, however, that the amended complaint hadn't
established that (or any other) injury. "Plaintiffs have not
identified a concrete harm from the alleged combination of their
personal information across Google's products and contrary to
Google's previous policy sufficient to create an injury in fact,"
Judge Grewal said. Moreover, he wrote, class counsel couldn't
solve that problem by asserting statutory violations. "Nothing in
the precedent of the 9th Circuit or other appellate courts confers
standing on a party that has brought statutory or common law
claims based on nothing more than the unauthorized disclosure of
personal information, let alone an unauthorized disclosure by a
defendant to itself," the magistrate said, citing U.S. District
Court Judge Lucy Koh's November 2011 decision in Low v. LinkedIn.
The ruling lets Google off a very large hook, considering that the
class action was filed on behalf of every owner of an Android
device and everyone with a Google account. The company is
represented by Michael Page -- mpage@durietangri.com -- of Durie
Tangri, who declined comment.
KINNIKINNICK FOODS: Recalls Pie Crusts Due to Undeclared Eggs
-------------------------------------------------------------
Kinnikinnick Foods of 10940 120 street, Edmonton, AB, is warning
consumers with Egg Allergies not to consume Kinnikinnick Frozen
Pie Crust because it contains EGG products which may not be
indicated on an applied ingredient label. Products without an
ingredient label applied to the box are not subject to this recall
as they correctly list the product as containing eggs.
The product being recalled is:
Kinnikinnick Pie Crust (frozen)
Weight: 290 g/10 oz Qty/Pkg: 2
UPC: 62013300600 9
Distributed in the United States
The product is distributed across United States.
BB2013NO30
BB2013DE12
BB2013DE13
BB2013DE14
BB2013DE17
This incorrectly labeled Kinnikinnick Frozen Pie Crust may cause a
serious or life-threatening reaction in persons with allergies to
EGGS. A picture of the recalled products' labels is available at:
http://www.fda.gov/Safety/Recalls/ucm334118.htm
Consumers who are allergic to EGGS should return the product to
point of sale for a refund.
There have been no reported illnesses associated with this recall.
Consumers can contact Kinnikinnick Foods by calling 780-424-2900
or by e-mailing info@kinnikinnick.com.
For more information, media please contact: Jerry Bigam
Kinnikinnick Foods Inc. Edmonton, AB Canada 7802212900
LORILLARD INC: Appeal in Kansas Indirect Purchaser Suit Pending
---------------------------------------------------------------
An appeal from the dismissal of an indirect purchaser class action
lawsuit in Kansas remains pending, according to Lorillard, Inc.'s
October 26, 2012, Form 10-Q filing with the U.S. Securities and
Exchange Commission for the quarter ended September 30, 2012.
Approximately 30 antitrust lawsuits were filed in 2000 and 2001 on
behalf of putative classes of consumers in various state courts
against cigarette manufacturers. The lawsuits all alleged that
the defendants entered into agreements to fix the wholesale prices
of cigarettes in violation of state antitrust laws which permit
indirect purchasers, such as retailers and consumers, to sue under
price fixing or consumer fraud statutes. More than 20 states
permit such lawsuits. The Company's principal operating
subsidiary, Lorillard Tobacco Company, was a defendant in all but
one of these indirect purchaser cases. Lorillard, Inc. was not
named as a defendant in any of these cases. Four indirect
purchaser lawsuits, in New York, Florida, New Mexico and Michigan,
thereafter were dismissed by courts in those states. The actions
in all other states, except for Kansas, were either voluntarily
dismissed or dismissed by the courts.
In the Kansas case, the District Court of Seward County certified
a class of Kansas indirect purchasers in 2002. In July 2006, the
Court issued an order confirming that fact discovery was closed,
with the exception of privilege issues that the Court determined,
based on a Special Master's report, justified further fact
discovery. In October 2007, the Court denied all of the
defendants' privilege claims, and the Kansas Supreme Court
thereafter denied a petition seeking to overturn that ruling. On
March 23, 2012, The District Court of Seward County granted the
defendants' motions for summary judgment dismissing the Kansas
lawsuit. Plaintiff's motion for reconsideration was denied. On
July 18, 2012, plaintiff filed a notice of appeal to the Court of
Appeals for the State of Kansas.
Lorillard, Inc., through its subsidiaries, is engaged in the
manufacture and sale of cigarettes. Its principal products are
marketed under the brand names of Newport, Kent, True, Maverick
and Old Gold with substantially all of its sales in the United
States of America. Lorillard recently acquired blu ecigs, the
leading electronic cigarette company in the U.S. The Company is
based in Greensboro, North Carolina.
LORILLARD INC: Flight Attendant Suits vs. Unit Remain Pending
-------------------------------------------------------------
Lawsuits brought by flight attendants against Lorillard, Inc.'s
subsidiary are still pending, according to the Company's October
26, 2012, Form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarter ended September 30, 2012.
The Company's principal operating subsidiary, Lorillard Tobacco
Company, and three other cigarette manufacturers are the
defendants in each of the pending Flight Attendant Cases.
Lorillard, Inc. is not a defendant in any of these cases. These
lawsuits were filed as a result of a settlement agreement by the
parties, including Lorillard Tobacco, in Broin v. Philip Morris
Companies, Inc., et al. (Circuit Court, Miami-Dade County,
Florida, filed October 31, 1991), a class action brought on behalf
of flight attendants claiming injury as a result of exposure to
environmental tobacco smoke. The settlement agreement, among
other things, permitted the plaintiff class members to file these
individual lawsuits. These individuals may not seek punitive
damages for injuries that arose prior to January 15, 1997. The
period for filing Flight Attendant Cases expired in 2000 and no
additional cases in this category may be filed.
The judges who have presided over the cases that have been tried
have relied upon an order entered in October 2000 by the Circuit
Court of Miami-Dade County, Florida. The October 2000 order has
been construed by these judges as holding that the flight
attendants are not required to prove the substantive liability
elements of their claims for negligence, strict liability and
breach of implied warranty in order to recover damages. The court
further ruled that the trials of these lawsuits are to address
whether the plaintiffs' alleged injuries were caused by their
exposure to environmental tobacco smoke and, if so, the amount of
damages to be awarded.
Lorillard Tobacco was a defendant in each of the eight Flight
Attendant Cases in which verdicts have been returned. Defendants
have prevailed in seven of the eight trials. In one of the seven
cases in which a defense verdict was returned, the court granted
plaintiff's motion for a new trial and, following appeal, the case
has been returned to the trial court for a second trial. The six
remaining cases in which defense verdicts were returned are
concluded. In the single trial decided for the plaintiff, French
v. Philip Morris Incorporated, et al., the jury awarded $5.5
million in damages. The court, however, reduced this award to
$500,000. This verdict, as reduced by the trial court, was
affirmed on appeal and the defendants have paid the award.
Lorillard Tobacco's share of the judgment in this matter,
including interest, was approximately $60,000.
As of October 22, 2012, none of the Flight Attendant Cases were
scheduled for trial. Trial dates are subject to change.
Lorillard, Inc., through its subsidiaries, is engaged in the
manufacture and sale of cigarettes. Its principal products are
marketed under the brand names of Newport, Kent, True, Maverick
and Old Gold with substantially all of its sales in the United
States of America. Lorillard recently acquired blu ecigs, the
leading electronic cigarette company in the U.S. The Company is
based in Greensboro, North Carolina.
LORILLARD INC: Loews Defends Three Product Liability Suits
----------------------------------------------------------
Lorillard, Inc.'s former parent is defending three class action
lawsuits alleging product liability claims, according to the
Company's October 26, 2012, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended September
30, 2012.
In connection with the separation of the Company from Loews
Corporation, Lorillard entered into a separation agreement with
Loews (the "Separation Agreement") and agreed to indemnify Loews
and its officers, directors, employees and agents against all
costs and expenses arising out of third party claims (including,
without limitation, attorneys' fees, interest, penalties and costs
of investigation or preparation for defense), judgments, fines,
losses, claims, damages, liabilities, taxes, demands, assessments
and amounts paid in settlement based on, arising out of or
resulting from, among other things, Loews's ownership of or the
operation of Lorillard and its assets and properties, and its
operation or conduct of its businesses at any time prior to or
following the Separation (including with respect to any product
liability claims).
Loews is a defendant in three pending product liability cases,
each of which are purported Class Action Cases. Pursuant to the
Separation Agreement, Lorillard is required to indemnify Loews for
the amount of any losses and any legal or other fees with respect
to such cases.
Lorillard, Inc., through its subsidiaries, is engaged in the
manufacture and sale of cigarettes. Its principal products are
marketed under the brand names of Newport, Kent, True, Maverick
and Old Gold with substantially all of its sales in the United
States of America. Lorillard recently acquired blu ecigs, the
leading electronic cigarette company in the U.S. The Company is
based in Greensboro, North Carolina.
LORILLARD INC: Atty. Fees and Cost Issue in "Scott" Suit Resolved
-----------------------------------------------------------------
An agreement with respect attorney's fees and costs in the class
action lawsuit captioned Scott v. The American Tobacco Company, et
al., involving a subsidiary of Lorillard, Inc., was resolved in
May 2012, according to the Company's October 26, 2012, Form 10-Q
filing with the U.S. Securities and Exchange Commission for the
quarter ended September 30, 2012.
In one Class Action Case against the Company's principal operating
subsidiary, Lorillard Tobacco Company, Scott v. The American
Tobacco Company, et al. (District Court, Orleans Parish,
Louisiana, filed May 24, 1996), a Louisiana jury awarded damages
to the certified class in 2004. The jury's award was reduced on
two separate occasions in response to defendants' appeals, but
defendants exhausted their appeals and have paid the final
judgment. In August 2011, Lorillard Tobacco paid approximately
$69.7 million, or one-fourth of the award, to satisfy its portion
of the final judgment and the interest that accrued while appeals
were pending.
In 1997, Scott was certified a class action on behalf of certain
cigarette smokers resident in the State of Louisiana who desire to
participate in medical monitoring or smoking cessation programs
and who began smoking prior to September 1, 1988, or who began
smoking prior to May 24, 1996, and allege that defendants
undermined compliance with the warnings on cigarette packages.
Counsel for the certified class had filed a motion for attorneys'
fees, for costs and expenses, and for an award to the class
representatives. In May 2012, an agreement was reached among all
parties that released all claims against the defendants for
attorneys' fees and costs, and provided that class counsel would
seek a fee only from the fund awarded to the class.
No further updates were reported in the Company's latest SEC
filing.
Lorillard, Inc., through its subsidiaries, is engaged in the
manufacture and sale of cigarettes. Its principal products are
marketed under the brand names of Newport, Kent, True, Maverick
and Old Gold with substantially all of its sales in the United
States of America. Lorillard recently acquired blu ecigs, the
leading electronic cigarette company in the U.S. The Company is
based in Greensboro, North Carolina.
LORILLARD INC: Tobacco-Related Antitrust Suit vs. Unit Concluded
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A tobacco-related antitrust class action lawsuit involving a
subsidiary of Lorillard, Inc., was concluded in October 2012,
according to the Company's October 26, 2012, Form 10-Q filing with
the U.S. Securities and Exchange Commission for the quarter ended
September 30, 2012.
The Company's subsidiary, Lorillard Tobacco Company, is a
defendant in a tobacco-related antitrust case. Lorillard, Inc. is
not a defendant in this case. In 2000 and 2001, a number of cases
were brought against cigarette manufacturers, including Lorillard
Tobacco, alleging that defendants conspired to set the price of
cigarettes in violation of federal and state antitrust and unfair
business practices statutes. Plaintiffs sought class
certification on behalf of persons who purchased cigarettes
directly or indirectly from one or more of the defendant cigarette
manufacturers. All of the other cases have been either
successfully defended or voluntarily dismissed. Another case in
this category was brought by a small cigarette manufacturer
against a number of states and the cigarette manufacturers,
including Lorillard Tobacco, that signed the Master Settlement
Agreement with 46 states, the District of Columbia, the
Commonwealth of Puerto Rico, Guam, the U.S. Virgin Islands,
American Samoa and the Commonwealth of the Northern Mariana
Islands. Lorillard, Inc. was not a party to this case. It was
alleged that certain provisions of the Master Settlement Agreement
violate the antitrust laws. On February 22, 2012, the Court of
Appeals for the Sixth Circuit affirmed the judgment of the
District Court dismissing the case, and as of October 22, 2012,
this case has been successfully dismissed and concluded.
Lorillard, Inc., through its subsidiaries, is engaged in the
manufacture and sale of cigarettes. Its principal products are
marketed under the brand names of Newport, Kent, True, Maverick
and Old Gold with substantially all of its sales in the United
States of America. Lorillard recently acquired blu ecigs, the
leading electronic cigarette company in the U.S. The Company is
based in Greensboro, North Carolina.
LORILLARD INC: Unit Dismissed From "Brown" Suit in September
------------------------------------------------------------
Lorillard, Inc.'s subsidiary was dismissed from the class action
lawsuit styled Brown v. The American Tobacco Company, Inc., et
al., in September 2012, according to the Company's October 26,
2012, Form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarter ended September 30, 2012.
In the class action lawsuit that had been pending against the
Company's principal operating subsidiary, Lorillard Tobacco
Company, Brown v. The American Tobacco Company, Inc., et al.
(Superior Court, San Diego County, California, filed June 10,
1997), the California Supreme Court in 2009 vacated an order that
had previously decertified a class and returned Brown to the trial
court for further activity. The class in Brown is composed of
residents of California who smoked at least one of defendants'
cigarettes between June 10, 1993, and April 23, 2001, and who were
exposed to defendants' marketing and advertising activities in
California. The trial court has permitted plaintiffs to assert
claims based on the alleged misrepresentation, concealment and
fraudulent marketing of "light" or "ultra-light" cigarettes. In
May 2012, the court ruled on separate motions by the defendants to
decertify the class and to determine the suitability of currently
named plaintiffs to represent the class. The court found that the
class action could proceed as to the "light" claims, but that only
one of the currently named plaintiffs was suitable to represent
the class. Lorillard, Inc. was not a defendant in Brown. In
September 2012, the court entered an order that dismissed
Lorillard Tobacco from this case.
Lorillard, Inc., through its subsidiaries, is engaged in the
manufacture and sale of cigarettes. Its principal products are
marketed under the brand names of Newport, Kent, True, Maverick
and Old Gold with substantially all of its sales in the United
States of America. Lorillard recently acquired blu ecigs, the
leading electronic cigarette company in the U.S. The Company is
based in Greensboro, North Carolina.
MCKINLEY HIGH SCHOOL: Faces Class Action Over Sexual Abuse
----------------------------------------------------------
Purna Nemani at Courthouse News Service reports that as Hawaii
nails down a class-action settlement involving sexual abuse at the
state Center for the Deaf and Blind, it faces a new lawsuit on
similar charges.
In the new complaint, the mother of 18-year-old A.H. claims her
daughter was raped by fellow students and a state employee at
three Hawaii schools.
The mother, R.H., claims her daughter is "incompetent," with an
I.Q. of 40.
She sued the state, its Department of Education, state
Superintendent Kathryn Matayoshi, McKinley High School vice
principal Anthony Jones and its special education teacher Chris
Nakagawa. A.H. attended the School for the Deaf and the Blind,
the Lanakila Center, and McKinley High, all state schools,
according to the complaint in Oahu First Circuit Court.
The mother claims that her daughter's teacher and state
administrators not only failed to investigate the abuse that
occurred on and off school grounds, but conspired to cover it up,
and then suspended her.
The mother claims that special-ed teacher Mr. Nakagawa described
her daughter like this in a required report: "'Socially, [A.H.]
seems to get along well with her peers. She is a pleasant girl
with a good sense of humor. Only concern I have is for peers not
to take advantage of her.'"
The complaint continues: "Notwithstanding defendant Nakagawa and
the Hawaii DOE's substantial knowledge not only of A.H.s
susceptibility, but that she was being affirmatively abused and
assaulted, they did nothing to protect A.H. To the contrary, the
Hawaii DOE unjustifiably blamed R.H. and disciplined A.H. for its
own failures to protect her. One such incident occurred on
January 4, 2011, when defendants became aware that a student
demanded openly in a classroom that A.H. meet him in the bathroom
and perform oral sex on him. When school administrators
discovered this act they disciplined A.H. for this incident by
suspending her from school rather than taking further care in
protecting and supervising her.
"Defendant Anthony Jones wrongly blamed the incident on R.H. and
accused her of lacking suitable parenting skills."
According to the complaint, Dr. Karen Tyson, a clinical
psychologist, reported in 2011 that A.H. was "highly susceptible
to peer pressure and had engaged in inappropriate sexual behavior
on several occasions as a result of coercion by her student
peers."
Dr. Tyson, who is not a party to the complaint, helped A.G.
develop social skills and recommended she "be taught emergency
help-seeking behavior," the mother says.
"Dr. Tyson stated that [A.H.] should not ever be unsupervised
while on school grounds. Defendants failed and refused to follow
Dr. Tyson's recommendations."
A.H. split her attendance between McKinley High School, Lanakila
Center for skills training and the Hawaii Center for the Deaf and
Blind in Honolulu. Her mom claims the girl was abused at all
three schools, due to her psychological condition, beginning in
the 9th grade.
The complaint states: "In an April 15, 2011 'Functional Behavioral
Assessment Initial Inquiry,' report prepared by the defendant
Hawai'i DOE, A.H. is described as gullible. The report recounts a
number of acts of sexual abuse as a result of A.H. being coerced
by other students due to her susceptibility resulting from the
defendants' failure to monitor and supervise her as well as other
students. It is reported that these incidents not only occurred
at McKinley, but also the Hawai'i Center for the Deaf and the
Blind and Lanakila, which A.H. also attended. The DOE was fully
aware that while at Lanakila, a State of Hawaii adult employee,
defendant Doe 1, repeatedly sexually molested A.H. and had other
inappropriate contact with her, including providing A.H. with his
phone number, making contact with her and attempting to make
contact with her after school hours and on weekends. This
employee wrote down a schedule for A.H. on a calendar to indicate
when he wanted to sexually abuse her."
A.H. eventually told her mother that "bad things" were happening
at school, then suffered a mental breakdown and required three
months of hospitalization, the mom claims.
In an August 2011 class action complaint, a mother claimed her
deaf son was one of as many as 35 students who were sexually
abused by a gang who called themselves the "Ringleaders" at the
Hawaii Center for the Deaf and Blind.
According to that complaint, as Courthouse News reported at the
time: "The Ringleaders coerced students into doing what the
Ringleaders wanted by threats of violence and sexual attack,
including sodomy and rape."
Students' personal property and clothing were stolen, and a girl
became pregnant under the state's watch, according to the class
action.
The class action alleged that a school counselor, "Scott O'Neal[,]
himself engaged in inappropriate and questionable activities with
students at the school, including having them stay with him
overnight. Out of malice and an improper purpose, defendants at
times concealed and conspired to conceal what was going on an
negligently, recklessly, and intentionally failed to take
effective action to stop the wrongful activities."
The 2011 complaint was removed to Federal Court, and on Dec. 21,
2012, U.S. District Judge Kevin S.C. Chang presided over a closed-
door settlement conference.
Those attorneys are drafting a settlement agreement.
In the new case, the mother and daughter seek punitive damages for
sexual assault and battery and negligence. They are represented
by Paul Alston -- palston@ahfi.com -- with Alston Hunt Floyd & Ing
and Stanley Levin -- slevin@davislevin.com -- with the Levin
Education Access Project.
METROPCS COMMUNICATIONS: Faces 4 Suits Over Deutsche Telekom Deal
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MetroPCS Communications Inc. is defending itself against four
class action complaints relating to its merger agreement with
Deutsche Telekom AG, et al., according to the Company's
October 30, 2012, Form 10-Q filing with the U.S. Securities and
Exchange Commission for the quarter ended September 30, 2012.
MetroPCS, its Board of directors, and an officer, among others,
have been named as defendants in a series of putative shareholder
class and/or derivative actions filed in Delaware and Texas
relating to the entry into a Business Combination Agreement, dated
October 3, 2012, by and between Deutsche Telekom AG, an
Aktiengesellschaft organized in Germany, T-Mobile Global
Zwischenholding GmbH, a Gesellschaft mit beschrankter Haftung
organized in Germany and a direct wholly owned subsidiary of
Deutsche Telekom ("Global"), T-Mobile Global Holding GmbH, a
Gesellschaft mit beschrankter Haftung organized in Germany and a
direct wholly-owned subsidiary of Global ("Holding"), T-Mobile
USA, Inc., a Delaware corporation and direct wholly-owned
subsidiary of Holding ("T-Mobile") and the Company wherein
MetroPCS agreed to (1) engage in a recapitalization which entails
a reverse stock split and cash payment to shareholders, (2) take
Deutsche Telekom's interest in T-Mobile, and (3) issue stock to
Deutsche Telekom (the "Transaction").
The Merger Litigation includes:
(i) a putative class action lawsuit filed by Paul Benn, an
alleged MetroPCS shareholder, on October 11, 2012 in the
Court of Chancery in the State of Delaware, Civil Action
No. 7938 (the "Benn Action");
(ii) a putative class action lawsuit filed by Joseph Marino, an
alleged MetroPCS shareholder, on October 11, 2012 in the
Court of Chancery in the State of Delaware, Civil Action
No. 7940 (the "Marino Action") (the Benn Action and Marino
Actions together, the Delaware Merger Actions);
(iii) a putative class action and shareholder derivative action
filed by Adam Golovoy, an alleged MetroPCS shareholder, on
October 10, 2012 in the County Court at Law No. 1, Dallas
County, Texas, Civil Action No. CC-12-06144 (the "Golovoy
Action"); and
(iv) a putative class action and shareholder derivative action
filed by Nagendra Polu and Fred Lorquet, who are alleged
MetroPCS shareholders, on October 10, 2012 in the County
Court at Law No. 5, Dallas County, Texas, Civil Action No.
CC-12-06170 (the "Polu-Lorquet Action") (the Golovoy
Action and Polu-Lorquet Actions together, the "Texas
Merger Actions").
The various plaintiffs in the Merger Litigation allege that the
defendants breached their fiduciary duties by failing to obtain
sufficient value for MetroPCS shareholders in the Transaction, to
establish a process that adequately protected the interests of
MetroPCS shareholders, and to adequately ensure that no conflicts
of interest occurred. The plaintiffs in the Merger Litigation
also allege that the defendants breached their fiduciary duties by
agreeing to certain terms in the Business Combination Agreement
that allegedly restricted the defendants' ability to obtain a more
favorable offer, including the "no solicitation," "superior
proposal," and termination fee provisions, and that those
provisions, together with the Company's Rights Agreement and a
Support Agreement between Deutsche Telekom and Madison Dearborn
Partners, constitute breaches of the defendants' fiduciary duties.
The plaintiffs in the Merger Litigation seek injunctive relief,
unspecified compensatory and/or rescissory damages, unspecified
punitive damages, attorney's fees, other expenses, and costs. All
of the plaintiffs in the Merger Litigation seek a determination
that their alleged claims may be asserted on a class-wide basis.
In addition, the plaintiffs in the Texas Merger Actions also
assert putative derivative claims, as shareholders on behalf of
the Company, against the individually named defendants for breach
of fiduciary duty, abuse of control, gross mismanagement, unjust
enrichment and corporate waste in connection with the Transaction.
Additional similar putative class and/or derivative lawsuits may
be filed.
Due to the complex nature of the legal and factual issues involved
in these actions, the outcome is not presently determinable. If
the various actions in the Merger Litigation were to proceed
beyond the pleading stage, MetroPCS could be required to incur
substantial defense costs and expenses and/or be required to pay
substantial damages or settlement costs, and could divert
management's attention, all of which could materially adversely
affect the Company's business, financial condition and operating
results. The Company intends to vigorously defend against the
claims in the Merger Litigation.
MetroPCS Communications Inc. is a wireless telecommunications
carrier that currently offers wireless broadband mobile services
primarily in selected major metropolitan areas in the United
States, including the Atlanta, Boston, Dallas/Fort Worth, Detroit,
Las Vegas, Los Angeles, Miami, New York, Orlando/Jacksonville,
Philadelphia, Sacramento, San Francisco and Tampa/Sarasota
metropolitan areas.
MONTEREY FINANCIAL: Sued For Advance-Fee-Talent Act Violations
--------------------------------------------------------------
Matt Reynolds at Courthouse News Service reports that a class
action claims a financial services firm is trying to collect money
from families who received financing as part of a scam targeting
aspiring child actors.
Lead plaintiff Randy Alltizer sued Monterey Financial Services in
Superior Court. Mr. Allitzer says Monterey was the finance
company for the defunct Los Angeles company, Be LLC.
He claims Be "took in millions of dollars in illegal fees from
thousands of California families," so their children could
audition for talent agents, in violation of California's Advance-
Fee-Talent Services Act.
"Monterey acted as Be's finance company," the complaint states.
"Monterey purchased the contracts Be made with its customers, and
collected a substantial portion of the money purportedly owed by
consumers under Be's contracts.
"The California Legislature passed AFTSA [the Advance-Fee-Talent
Services Act] to prevent and prohibit essentially the exact scheme
perpetrated by Be."
Mr. Allitzer claims that Be also signed clients to contracts
without rights to refunds or to cancel.
Mr. Alltizer claims that his child was invited to a Be screen
test. He says he signed a contract with Be in 2008, based on its
promise that it would provide access to auditions to talent
agents.
But Mr. Allitzer claims, for the class, that "ability to pay," not
talent, was what mattered to Be, which only created a "perception
that Be's membership was exclusive and based on merit."
After child actors were told they had made the cut, Be offered
their families a package costing $2,500 to $5,000 per child,
Mr. Allitzer says.
"If the family could not afford Be's service fee upfront, Be's
talent directors would seek financing for Be's service fee from
Monterey," according to the complaint.
Be then offered children a chance to audition in "talent
showcases," through its affiliate, Dynamic Showcases, the
complaint states. "Be paid talent agents, talent managers, and/or
casting directors roughly $150 to $175 to attend these showcases,"
the complaint states, for which Dynamic charged Be's clients $25 a
head.
But "Dynamic Showcases could not operate economically in this
manner," so "Be's services fees effectively subsidized Dynamic
Showcases' operations," Mr. Allitzer says.
Mr. Allitzer claims the scheme unraveled after investigative
reports by NBC and ABC affiliates in San Francisco in 2008.
Then two Be customers sued and a federal judge ruled that the
service contracts violated the Advance-Fee-Talent Services Act,
according to the complaint.
After Be closed shop, Monterey Financial tried to collect the
unpaid bills, Mr. Alitzer says.
"Despite such express and/or implied knowledge of the illegality
of Be's contracts, Monterey has continued to attempt to collect on
these contracts, Monterey has continued to dun former customers of
Be for unpaid balances on Be contracts and has reported and to
threaten to report the unpaid balances to credit reporting
agencies," the complaint states.
Mr. Allitzer seeks restitution, class damages for unfair
competition and consumer law violations, an injunction and costs.
He is represented by David Parisi with Parisi & Havens, of Sherman
Oaks.
NATIONWIDE INSURANCE: Ohio Law Firm Mulls Class Action
------------------------------------------------------
Young Ha, writing for Insurance Journal, reports that an Ohio law
firm that represented a former Nationwide Insurance agent for a
$42.8 million jury verdict is getting ready to file a class action
against the insurer "in the near future."
Attorney Caryn Groedel and her law firm Caryn Groedel & Associates
in Cleveland represented former agent Christine Lucarell. In
November, a jury in Mahoning County, Ohio, handed down $42.8
million in damages for Ms. Lucarell for her claim that the insurer
imposed unrealistic terms on her agency intended to make her fail
and withheld support services.
Since then, the Columbus, Ohio-headquartered Nationwide has filed
motions requesting judgment in its favor notwithstanding the
verdict or, in the alternative, a new trial. Nationwide has
denied all allegations made by Ms. Lucarell.
"Nationwide believes there were significant legal and factual
errors made at the trial. It's important to note that our
objective is to recruit agents and set them up to succeed, not to
fail," according to a Nationwide statement provided to Insurance
Journal.
Nationwide is also arguing that the $42.8 million damage amount
awarded by the jury in the civil suit is not feasible under Ohio's
tort-reform statutes. These statutes require the total award to
be under $10 million, according the insurer.
Ms. Groedel told Insurance Journal that since the verdict was
announced, she has so far heard from some 70 former Nationwide
agents with similar complaints. She will be the lead attorney in
the forthcoming class action. Ms. Lucarell's case is "just the
tip of the iceberg," said Ms. Groedel.
In Christine Lucarell v. Nationwide Mutual Insurance Company in
the Court of Common Pleas, Mahoning County, Ohio, former
Nationwide agent Ms. Lucarell alleged that Nationwide recruited
Ms. Lucarell and hundreds of others around the country through the
insurer's Agency Executive (AE) program as exclusive agents --
with a chance to become independent agents after a successful
completion of a pre-agreed 36-month production time. Ms. Lucarell
was one of around 500 agents that took part in the insurer's
three-year AE program.
In her complaint, Ms. Lucarell alleged that she was required to
take out a loan from Nationwide's Federal Credit Union (NFCU), now
called Nationwide Bank, to cover initial business expenses. But
Ms. Lucarell charged that Nationwide later required her to sign
modified plans that set increasingly "unrealistic" and "flawed"
quotas -- with the alleged goal of setting up AE program agents to
fail and taking away their profitable books of business.
The complaint alleges that Nationwide's intent was to "fail AE
agents and terminate their agencies once agents had generated a
profitable book of business for Nationwide, but before the agents
completed their production period."
The complaint also alleges that after Ms. Lucarell began operating
her Nationwide agency in February 2006, Nationwide withheld
necessary support services. Ms. Lucarell also alleged that
Nationwide decided to stop loan disbursements in early 2009, and
when she was no longer able to make interest payments on her
loans, the insurer allegedly told Ms. Lucarell that the company
would keep some of her future commissions in lieu of interest
payments. Ms. Lucarell left the company in July 2009. She
alleges that her forced resignation and Nationwide's taking away
her profitable book of policies resulted in her losing her home
and her car. She also alleged that it ruined her credit and her
ability to find work as an insurance agent.
The complaint alleges that Nationwide used similar tactics against
the majority of agents in the AE program. Attorney Groedel
alleged there was a widespread, systemic plan within Nationwide to
lure these agents to the AE program and then find a reason to
terminate them and take away their books of business.
The $42.8 million jury verdict consisted of $36 million in
punitive damages and $6.8 million in compensatory damages ($5.7
million in lost profits, $1 million in emotional damages, and
$100,000 for retaliation).
In its court filings, Nationwide categorically denied all
allegations made by Ms. Lucarell.
"Most small businesses would be happy to receive $265,000 loan
with no payments due for three years and another $373,000 in free
cash infusions. Christine Lucarell claimed it ruined her,"
Nationwide stated.
Ms. Lucarell started her small agency at the beginning of 2006,
according to Nationwide. "By the fall of 2007, she told
Nationwide she was running out of cash. She reported in her own
e-mails to Nationwide that she needed $8,000 per month to stay
afloat. During the next 20 months, Nationwide gave her $323,000 to
stay afloat," according to Nationwide. "This was on top of the
$50,000 it had already given her -- a grant, not a loan."
Nationwide alleged that despite these substantial cash infusions
far in excess of the monthly expenses she represented to
Nationwide, during this time she constantly described herself as
desperate for cash.
The company alleged that during those times, Ms. Lucarell made
numerous purchases for her and her family, including: a second
home, two new cars, a new Chevy Silverado 1500 for her husband, a
new Jacuzzi, a Starcraft trailer, and several elective surgeries.
"Lucarell never produced any records showing how she spent the
money Nationwide gave her," Nationwide alleged in its court
filings.
"And she never contested Nationwide's analysis that over $400,000
of the $800,000 in loans, grants and commission she received was
unaccounted for."
In one four-month period toward the end of the relationship, she
received $110,000 cash from Nationwide, according to the insurer.
Part of the $110,000 cash was a single lump sum payment of $60,000
at the beginning of November 2008, according to Nationwide.
"She kept the money and chose not to make her first loan payment
of $2,000 due December 1, 2008. Nationwide gave her another
$25,000 in January 2009 and she stopped paying rent on her
agency's offices the next month. She then skipped the next four
monthly loan payments, even though she received four notices that
she was in default," Nationwide alleged.
Nationwide argued that even after she defaulted on her loan, and
even after she fell below her performance targets, Nationwide
still gave her another $25,000 cash in May 2009 after she sought
more money.
"She never disclosed to Nationwide that while pleading for more
money, she was applying for appointments with other insurance
companies and that she was shutting down her agency," Nationwide
alleged. The company also charged that Ms. Lucarell maintains
active appointments to write many types insurance, including auto,
home, life, accident and health, and variable annuity.
Nationwide also argues that it doesn't make much financial sense
to set agents up for fail, as the plaintiff alleged: "Lucarell
argued that Nationwide provided almost $800,000 to Lucarell in the
form of loans, grants, and commissions just so it could secure
premium income of $600,000, which was the size of the book she
serviced at the time of her resignation."
Nationwide alleged that the disarray resulting from her abrupt
resignation caused policyholders to leave Nationwide so that
within a year of her departure, the book of policies shrank to
$240,000. The insurer said it makes about 5 percent profit on
premium in the best of years, or $12,000 on $240,000.
NORTHERN STATES: Appeal From 2nd "Comer" Suit Dismissal Pending
---------------------------------------------------------------
An appeal from the dismissal of a class action lawsuit styled
Comer vs. Xcel Energy Inc. et al., remains pending, according to
Northern States Power Company's October 26, 2012, Form 10-Q filing
with the U.S. Securities and Exchange Commission for the quarter
ended September 30, 2012.
In May 2011, less than a year after their initial lawsuit was
dismissed, plaintiffs in the purported class action lawsuit
captioned Comer vs. Xcel Energy Inc. et al., filed a second
lawsuit against more than 85 utility, oil, chemical and coal
companies in the U.S. District Court in Mississippi. The
complaint alleges defendants' CO2 emissions intensified the
strength of Hurricane Katrina and increased the damage plaintiffs
purportedly sustained to their property. Plaintiffs base their
claims on public and private nuisance, trespass and negligence.
Among the defendants named in the complaint are the Company and
its parent, Xcel Energy Inc. The amount of damages claimed by
plaintiffs is unknown. The defendants, including Xcel Energy
Inc., believe this lawsuit is without merit and filed a motion to
dismiss the lawsuit. In March 2012, the U.S. District Court
granted this motion for dismissal. In April 2012, plaintiffs
appealed this decision to the U.S. Court of Appeals for the Fifth
Circuit.
Although Xcel Energy Inc. believes the likelihood of loss is
remote based primarily on existing case law, it is not possible to
estimate the amount or range of reasonably possible loss in the
event of an adverse outcome of this matter. No accrual has been
recorded for this matter.
QEP RESOURCES: "Chieftain" Plaintiffs May Demand More Than $200MM
-----------------------------------------------------------------
QEP Resources, Inc. said in its October 30, 2012, Form 10-Q filing
with the U.S. Securities and Exchange Commission for the quarter
ended September 30, 2012, that plaintiffs in the lawsuit styled
Chieftain Royalty Company v. QEP Energy Company, Case No CJ2011-1,
U. S. District Court for Oklahoma, may seek in excess of $200
million in damages.
The class action was filed by two royalty owners on behalf of all
QEP Energy royalty owners in the state of Oklahoma since 1988,
asserting various claims for damages related to royalty valuation
on all of QEP's Oklahoma wells. These claims include breach of
contract, breach of fiduciary duty, fraud, unjust enrichment,
tortious breach of contract, conspiracy, and conversion, based
generally on asserted improper deduction of post-production costs.
The court has certified the class as to the breach of contract,
breach of fiduciary duty and unjust enrichment claims. Because
this case involves complex legal issues and uncertainties, a large
class of plaintiffs and a large number of producing properties and
wells, and because the proceedings are in the early stages, with
substantive discovery yet to be conducted, the Company is unable
to estimate a reasonably possible loss or range of loss. Although
the plaintiff class has not made a formal demand, based upon the
class allegations, the Company believes the class may seek damages
in excess of $200 million. QEP Energy is still evaluating the
claims, but believes that it has properly valued and paid royalty
under Oklahoma law and will vigorously defend this case.
QEP Resources, Inc. (is a holding company with three major lines
of business: natural gas and crude oil exploration and production;
midstream field services; and energy marketing. These businesses
are conducted through the Company's three principal subsidiaries:
(1) QEP Energy Company acquires, explores for, develops and
produces natural gas, crude oil, and natural gas liquids (NGL);
(2) QEP Field Services Company provides midstream field services,
including natural gas gathering and processing, compression and
treating services, for affiliates and third parties; and (3) QEP
Marketing Company markets affiliate and third-party natural gas
and oil, and owns and operates an underground gas storage
reservoir.
REMINGTON ARMS: Faces Class Action Over Bolt-Action Rifles
----------------------------------------------------------
Courthouse News Service reports that Remington Arms Model 700
bolt-action rifles with Walker fire control shoot without a
trigger pull, a class action claims in Miami Federal Court.
SATYAM COMPUTER: Judge Tosses Fraud Class Action v. Ex-Directors
----------------------------------------------------------------
Nate Raymond, writing for Reuters, reports that a U.S. federal
judge dismissed claims against seven former directors of Satyam
Computer Services Ltd. in shareholder lawsuits stemming from the
massive fraud at the heart of India's largest corporate scandal.
U.S. District Judge Barbara Jones in New York ruled on Jan. 2 the
lawsuits failed to allege that the ex-directors recklessly failed
to discover the fraud, which came to be known as "India's Enron."
The lawsuits center on the revelation by Satyam's founder and
former chairman, Ramalinga Raju, that what had been India's
fourth-largest outsourcing firm had for several years inflated its
revenue, income and cash balances by more than $1 billion.
In her decision on Jan. 2, Judge Jones said the allegations
primarily focused on the actions of a small group of insiders,
reinforcing an inference the audit committee's members "were
themselves victims of the fraud."
Lawyers for the directors welcomed the decision.
"It was truly unfortunate that these directors, diligent
individuals of the highest integrity, were ever named as
defendants," said Irwin Warren, a lawyer for five of the seven
directors involved in the case.
Gordon Atkinson, a lawyer for former board member Vinod Dham, in
an e-mail said the decision would hopefully help vindicate his
client and the other outside directors, "who were themselves
victims of the Satyam fraud, not perpetrators or otherwise
responsible for it."
Lawyers for the plaintiffs did not respond to requests for
comment.
Satyam shareholders began filing lawsuits in 2009 after the
scandal broke.
In 2011 Satyam, now called Mahindra Satyam Ltd., and its auditor,
PricewaterhouseCoopers, agreed to pay $125 million and $25.5
million, respectively, to settle claims filed by shareholders.
That same year, Satyam and PwC agreed to pay a combined $17.5
million to settle claims made by the U.S. Securities and Exchange
Commission and Public Company Accounting Oversight Board.
The 2011 settlements did not include Satyam's former directors,
who continued to litigate the case that ultimately ended in the
Jan. 2 ruling.
In her ruling, Judge Jones also said the investors could not file
claims arising from stock purchases made on the National Stock
Exchange of India, citing a 2010 U.S. Supreme Court case
restricting investor claims in U.S. courts involving stocks bought
on overseas exchanges.
Investors had also filed claims involving Satyam American
depositary shares, which were not impacted by the Supreme Court
ruling.
The lead plaintiffs include Public Employees' Retirement System of
Mississippi, Mineworkers' Pension Scheme, SKAGEN AS and Sampension
KP Livsforsikring A/S.
Judge Jones also dismissed claims brought by a former Satyam
employee on behalf of employees who exercised stock options. The
judge also voided claims on jurisdictional grounds against two
companies owned by the Raju family -- Maytas Infra Ltd. and Maytas
Properties.
Adam Finkel, a lawyer for Maytas Properties, in an e-mail said his
clients were pleased with the decision.
The case is In re Satyam Computer Services Ltd. Securities
Litigation, U.S. District Court, Southern District of New York,
09-2027.
SILVERCORP METALS: Denies Financial Misconduct Allegations
----------------------------------------------------------
Peter Koven, writing for Financial Post, reports that for more
than a year, Silvercorp Metals Inc. has faced allegations of
misconduct at its operations in China. Now they form the basis of
a formal lawsuit.
New-York based The Rosen Law Firm P.A has launched a class-action
suit against the company and three of its senior executives,
including chief executive Rui Feng. They are accused of
overstating financial results from Silvercorp's flagship Ying
mine, causing investors to buy the stock at "artificially inflated
and distorted" prices.
The suit relies largely on the work of Jon Carnes, a formerly
anonymous short seller who repeatedly questioned Silvercorp's
financials under the pseudonym "Alfred Little." Silvercorp outed
his true identity and sued him, but the action was dismissed by a
U.S. court last year on freedom of speech grounds.
Lawyer Laurence Rosen, who founded the Rosen firm and is leading
the class action suit, said on Jan. 2 he felt confident enough to
launch the suit after conducting his own investigation.
"I did as thorough an investigation as I could and additional
facts came out," he said.
Mr. Carnes made his initial allegations against Silvercorp in the
fall of 2011, when he suggested that reported production and
resource figures from the Ying mine were too good to be true. He
pointed to alleged discrepancies between regulatory filings in
China and North America related to the property.
He later accused Vancouver-based Silvercorp of working directly
with legal authorities in China to arrest and harass his
researchers, including funding a police investigation. He then
suggested the company tried to cover up its actions.
Those latter allegations also made their way into the class action
suit.
"Silvercorp used its influence with the local Chinese government
to cause it unlawfully to detain Huang Kun, a Canadian citizen and
one of the in-country researchers who has assisted Mr. Carnes,"
the statement of claim said.
Silvercorp has denied any wrongdoing, calling the actions of
Mr. Carnes and other short sellers a "short and distort" scheme.
But the ongoing allegations have hurt its share price, which
dropped more than 20% in 2012.
Chinese companies such as Silvercorp have come under increased
scrutiny from lawyers, auditors and investors since Sino-Forest
Corp. was accused of fraud in 2011. Silvercorp recently changed
auditors because former auditor Ernst & Young LLP (which also
audited Sino-Forest) "significantly" increased its fee budget.
A call to a Silvercorp spokesman was not returned.
SINO-FOREST CORP: Settles Class Action Over Ernst & Young Audits
----------------------------------------------------------------
Sino-Forest Corporation on Dec. 28 issued a Notice of Proposed
Settlement with Ernst & Young LLP.
TO: Everyone, including non-Canadians, who acquired Sino-Forest
Corporation securities (including shares and/or notes) in the
primary or secondary market in any jurisdiction between March 31,
2006 and August 26, 2011 and to everyone, including non-Canadians,
who has, had, could have had or may have a claim of any kind
against Ernst & Young LLP, Ernst & Young Global Limited or any of
its member firms and any person or entity affiliated or connected
thereto, in relation to Sino-Forest, Ernst & Young's audits of
Sino-Forest's financial statements and any other work performed by
Ernst & Young related to Sino-Forest.
Background of Sino-Forest Class Action and CCAA Proceeding
In June and July of 2011, class actions were commenced in the
Ontario Superior Court of Justice and the Quebec Superior Court by
certain plaintiffs against Sino-Forest, its senior officers and
directors, its underwriters, a consulting company, and its
auditors, including Ernst & Young. In January 2012, a proposed
class action was commenced against Sino-Forest and other
defendants in the Southern District of New York.
The actions alleged that the public filings of Sino-Forest
contained false and misleading statements about Sino-Forest's
assets, business, and transactions.
Since that time, the litigation has been vigorously contested. On
March 30, 2012, Sino-Forest obtained creditor protection under the
Companies' Creditors Arrangement Act, within which proceeding the
Ontario
Superior Court ordered a stay of proceedings against the company
and other parties, including Ernst & Young.
Orders and other materials relevant to the CCAA Proceeding can be
found at the CCAA Monitor's website at
http://cfcanada.fticonsulting.com/sfc/(the "Monitor's Website")
On December 10, 2012, a Plan of Arrangement was approved by the
court in the CCAA Proceeding. As part of this Plan of
Arrangement, the court approved a framework by which the
Plaintiffs may enter into settlement agreements with any of the
third-party defendants to the Proceedings. The Plan expressly
contemplates the Ernst & Young Settlement (as defined in the
Plan), approval of which is now sought.
Who Acts For the E&Y Settlement Class
Koskie Minsky LLP, Siskinds LLP, and Siskinds Desmeules, sencrl
represent the E&Y Settlement Class in the Proceedings. If you
want to be represented by another lawyer, you may hire one to
appear in court for you at your own expense.
You will not have to directly pay any fees and expenses to Class
Counsel. However, if this action succeeds or there is a monetary
settlement, Class Counsel will seek to have their fees and
expenses paid from any money obtained for the class or paid
separately by the defendants.
About Sino-Forest Corp.
Sino-Forest Corporation -- http://www.sinoforest.com/-- is a
commercial forest plantation operator in China. Its principal
businesses include the ownership and management of tree
plantations, the sale of standing timber and wood logs, and the
complementary manufacturing of downstream engineered-wood
products. Sino-Forest also holds a majority interest in
Greenheart Group Limited, a Hong-Kong listed investment holding
company with assets in Suriname (South America) and New Zealand
and involved in sustainable harvesting, processing and sales of
its logs and lumber to China and other markets around the world.
Sino-Forest's common shares have been listed on the Toronto Stock
Exchange under the symbol TRE since 1995.
Sino-Forest Corporation on March 30, 2012, obtained an initial
order from the Ontario Superior Court of Justice for creditor
protection pursuant to the provisions of the Companies' Creditors
Arrangement Act.
Under the terms of the Order, FTI Consulting Canada Inc. will
serve as the Court-appointed Monitor under the CCAA process and
will assist the Company in implementing its restructuring plan.
Gowling Lafleur Henderson LLP is acting as legal counsel to the
Monitor.
During the CCAA process, Sino-Forest expects its normal day-to-
day operations to continue without interruption. The Company has
not planned any layoffs and all trade payables are expected to
remain unaffected by the CCAA proceedings.
SPIRAL FOODS: More than 600 Australians Join Bonsoy Class Action
----------------------------------------------------------------
Daniella Miletic, writing for The Age, reports that more than 600
Australians have joined a class action against the distributor and
manufacturer of Bonsoy soy milk, claiming they fell ill from
excessive iodine levels the companies knew about years before the
product was recalled.
Legal firm Maurice Blackburn has expanded a multimillion-dollar
action against Australian brand owner Spiral Foods to include the
two Japanese companies that manufactured and exported Bonsoy,
Marusan-ai Co. Ltd. and Muso Co. Ltd.
The law firm has filed an amended statement of claim in the
Victorian Supreme Court that alleges the three companies involved
were aware of a test conducted in 2006 that revealed Bonsoy
contained high levels of iodine but ignored the results.
Bonsoy voluntarily recalled its product in December 2009 after it
was found to contain iodine levels at 31 milligrams per litre.
According to the statement of claim, iodine levels in one glass of
Bonsoy were seven times higher than the "safe limit" of daily
consumption food authorities recommended.
The claim alleges Bonsoy had excessive iodine levels since mid-
2003, when Spiral Foods requested Marusan-ai and Muso reformulate
Bonsoy using iodine-rich kombu, derived from seaweed, instead of
salt.
Irina Lubomirska, a senior associate at Maurice Blackburn, says
despite the test results in 2006 the companies failed to act even
though they were allegedly contacted on three occasions by
customers expressing concerns about iodine levels.
The claim says hundreds of consumers suffered thyroid illness as a
result.
TEMPUR-PEDIC INT'L: Faces 2 Shareholder Class Suits in Kentucky
---------------------------------------------------------------
Tempur-Pedic International Inc. is facing two shareholder class
action lawsuits over a drop in the Company's stock price,
according to the Company's October 30, 2012, Form 10-Q filing with
the U.S. Securities and Exchange Commission for the quarter ended
September 30, 2012.
Following a drop in the Company's stock price, on June 20 and 22,
2012, two lawsuits were filed against the Company and two named
executive officers in the United States District Court for the
Eastern District of Kentucky (Lexington Division), purportedly on
behalf of a class of shareholders who purchased the Company's
stock between January 25, 2012 and June 5, 2012.
(1) Norfolk County Retirement System, Individually and on behalf
of all others similarly situated, Plaintiff v. Tempur-
Pedic International Inc., Mark A. Sarvary and Dale E.
Williams; filed June 20, 2012
(2) Arthur Benning, Jr., Individually and on behalf of all
others similarly situated, Plaintiff v. Tempur-Pedic
International Inc., Mark A. Sarvary and Dale E. Williams;
filed June 22, 2012
The complaints assert claims under Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934, alleging, among other things,
false and misleading statements and concealment of material
information relating to the Company's deteriorating competitive
position and projected net sales, earnings per diluted share and
related financial performance. The plaintiffs seek damages,
interest, costs, attorney's fees, expert fees and unspecified
equitable/injunctive relief.
The Company strongly believes that the shareholder lawsuits lack
merit and intends to defend against the claims vigorously. This
litigation is at a preliminary stage, and the outcome is
uncertain, however, and although the Company does not currently
expect to incur a loss with respect to these matters, it cannot
currently predict the manner and timing of the resolution of the
lawsuits, an estimate of a range of losses or any minimum loss
that could result in the event of an adverse verdict in these
lawsuits, or whether its applicable insurance policies will
provide sufficient coverage for these claims. Accordingly, the
Company can give no assurance that these matters will not have a
material adverse effect on its financial position or results of
operations.
Tempur-Pedic International Inc. is a manufacturer, marketer and
distributor of premium mattresses and pillows, which it sells in
approximately 80 countries under the TEMPUR(R) and Tempur-Pedic(R)
brands.
TEMPUR-PEDIC INT'L: Faces 6 Class Suits Over Sealy Merger Deal
--------------------------------------------------------------
Tempur-Pedic International Inc. is facing six class action
lawsuits arising from its merger agreement with Sealy Corporation,
according to the Company's October 30, 2012, Form 10-Q filing with
the U.S. Securities and Exchange Commission for the quarter ended
September 30, 2012.
On September 26, 2012, the Company entered into an Agreement and
Plan of Merger to acquire Sealy by merging Sealy with a newly-
formed subsidiary of the Company. Sealy, headquartered in
Trinity, North Carolina, owns one of the largest bedding brands in
the world, and manufactures and markets a complete line of bedding
products. Subject to the terms and conditions of the Merger
Agreement, at the effective time and as a result of the Merger,
each share of common stock of Sealy issued and outstanding
immediately prior to the effective time of the Merger will be
cancelled and (other than shares held by Sealy or the Company or
their subsidiaries or Sealy stockholders who properly exercise
appraisal rights) converted into the right to receive $2.20 in
cash. The Company anticipates that the total consideration to be
paid, including the assumption or repayment of outstanding
indebtedness of Sealy less cash assumed, will be approximately
$1.3 billion. Concurrently, and in connection with entering into
the Merger Agreement, the Company entered into a firm debt
commitment letter with Bank of America, N.A. and Merrill Lynch,
Pierce, Fenner & Smith, pursuant to which, subject to the
conditions set forth therein, Bank of America has committed to
provide to the Company (a) $1.77 billion in senior secured credit
facilities (collectively, the "Senior Credit Facilities"),
comprised of (i) a term loan A facility of $650.0 million, (ii) a
term loan B facility of $770.0 million and (iii) a revolving
credit facility of $350.0 million; and (b) $350.0 million in
senior unsecured bridge loans (the "Bridge Loans") to be made
available to the Company as interim financing in the event that
its proposed issuance of $350.0 million in senior unsecured notes
(the "Notes") is not completed on or prior to the date of
consummation of the Merger. The proceeds of the Senior Credit
Facilities and either Bridge Loans or the Notes (collectively, the
"Facilities") will be used to finance the Merger, for the
repayment, defeasance or redemption of substantially all existing
indebtedness of the Company and Sealy, the costs and expenses
related to the Merger and the closing of the Facilities and the
ongoing working capital and other general corporate purposes of
the Company after consummation of the Merger. The transaction is
expected to be completed in the first half of calendar 2013 and is
subject to regulatory clearance under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, and other customary
conditions. The Merger Agreement contains certain termination
rights for both the Company and Sealy and further provides that,
upon termination of the Merger Agreement under certain
circumstances, Sealy may be obligated to pay the Company a
termination fee of $25.0 million. In addition, if antitrust
enforcement agencies either commence or inform the parties that
they intend to commence an action to enjoin the Merger, the
Company may be required to pay Sealy (i) a termination fee of
$90.0 million if both parties elect to terminate the Merger
Agreement or (ii) a termination fee of $90.0 million (or $40.0
million if the Company elects to terminate the Merger Agreement
but Sealy does not so elect to terminate) if the Merger does not
close due to a failure to receive antitrust approval in the nine
months following the execution of the Merger Agreement, subject to
certain extensions.
Following the Company's announcement of its expected acquisition
of Sealy, shareholders of Sealy filed the six putative class
action lawsuits (collectively, the "Merger Lawsuits") against
Sealy, its board of directors, the Company and its subsidiary,
Silver Lightning Merger Company:
(1) Benjamin B. Clarke, Individually and On Behalf of All
Others Similarly Situated v. Lawrence J. Rogers, Richard
W. Roedel, John B. Replogle, Paul J. Norris, Dean B.
Nelson, Gary E. Morin, James W. Johnson, Deborah G.
Ellinger, Simon E. Brown, Sealy Corporation, Tempur-Pedic
International Inc. and Silver Lightning Merger Company,
filed October 2, 2012
(2) Robert A. Justewicz, Individually and On Behalf of All
Others Similarly Situated v. Sealy Corporation, Lawrence
J. Rogers, Paul J. Norris, James W. Johnson, Simon E.
Brown, Gary E. Morin, Dean B. Nelson, Richard W. Roedel,
Deborah G. Ellinger, John B. Replogle, Silver Lightning
Merger Company and Tempur-Pedic International Inc., filed
October 3, 2012
(3) Deno Singh, On Behalf of Himself and All Others Similarly
Situated v. Lawrence J. Rogers, Richard W. Roedel, John B.
Replogle, Paul J. Norris, Dean B. Nelson, Gary E. Morin,
James W. Johnston, Deborah G. Ellinger, Simon E. Brown,
Sealy Corporation, Tempur-Pedic International Inc. and
Silver Lightning Merger Company, filed October 15, 2012
(4) Jay M. Plourde, On Behalf of Himself and All Others
Similarly Situated v. Sealy Corporation, Lawrence J.
Rogers, Paul Norris, James W. Johnston, Simon E. Brown,
Gary E. Morin, Dean B. Nelson, Richard Roedel, Deborah G.
Ellinger, John B. Replogel, Tempur-Pedic International
Inc., Kohlberg Kravis Roberts & Co. L.P. and Silver
Lightning Merger Company, filed October 15, 2012
(5) Keith Gamble, Individually and On Behalf of All Others
Similarly Situated v. Lawrence J. Rogers, Richard W.
Roedel, John B. Replogle, Paul J. Norris, Dean B. Nelson,
Gary E. Morin, James W. Johnston, Deborah G. Ellinger,
Simon E. Brown, Sealy Corporation, Tempur-Pedic
International Inc. and Silver Lightning Merger Company,
filed October 16, 2012
(6) Curtis Nall, On Behalf of Himself and All Others Similarly
Situated Shareholders of Sealy Corporation v. Lawrence C.
Rogers, James W. Johnston, Simon E. Brown, Gary E. Morin,
Dean B. Nelson, Richard Roedel, Deborah G. Ellinger, John
B. Replogle, Paul J. Norris, Sealy Corporation, Tempur-
Pedic, International Inc., KKR Millennium GP LLC, KKR &
Co. L.P., and Silver Lightning Merger Company, filed
October 17, 2012
The Merger Lawsuits generally allege breach of fiduciary duty
against Sealy and its board of directors and allege aiding and
abetting breach of fiduciary duties against the Company and
Silver. The Merger Lawsuits generally claim that the consideration
to be paid to Sealy stockholders under the Merger Agreement is
inadequate, that the Merger Agreement contains unfair deal
protection provisions and that the Sealy directors are subject to
conflicts of interest. The Merger Lawsuits generally seek
damages, attorneys' fees and injunctive relief to enjoin the
completion of the Merger. The Company believes that the Merger
Lawsuits lack merit and intends to defend against the claims
vigorously.
The litigation is at a preliminary stage and the outcome is
uncertain, however, and although the Company does not currently
expect to incur a loss with respect to these matters, the Company
cannot currently predict the manner and timing of the resolution
of the Merger Lawsuits, an estimate of a range or losses or any
minimum loss that could result in the event of an adverse verdict
in these lawsuits, or whether the Company's or Sealy's applicable
insurance policies will provide sufficient coverage for these
claims. Accordingly, the Company can give no assurance that these
matters will not have a material adverse effect on the Company's
financial position or results of operations.
Tempur-Pedic International Inc. is a manufacturer, marketer and
distributor of premium mattresses and pillows, which it sells in
approximately 80 countries under the TEMPUR(R) and Tempur-Pedic(R)
brands.
TRAVELZOO INC: Continues to Defend Consolidated Securities Suit
---------------------------------------------------------------
Beginning on August 9, 2011, two purported class action lawsuits
were commenced in the United States District Court for the
Southern District of New York. On January 6, 2012, a Consolidated
and Amended Class Action Complaint was filed. The complaint
asserts claims under Section 10(b) and 20(a) pursuant to the
Securities Exchange Act of 1934 ("Exchange Act") alleging that
between March 16, 2011, and July 21, 2011, Travelzoo Inc. and/or
the individual defendants purportedly issued materially false and
misleading statements. In particular, the complaint asserts,
among other things, allegations challenging certain statements
relating to the Company's growth. The complaint also makes
allegations regarding the Company's Getaways business and asserts
that certain officers and directors sold stock while in possession
of materially adverse non-public information. The action seeks
unspecified damages and the Company is unable to estimate the
possible loss or range of losses that could potentially result
from the action. The Company believes that the action is without
merit and intends to defend the lawsuits vigorously.
No further updates were reported in the Company's October 26,
2012, Form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarter ended September 30, 2012.
TRW AUTOMOTIVE: Defends Antitrust Class Suits in Michigan
---------------------------------------------------------
TRW Automotive Holdings Corp. is defending itself against
antitrust class action lawsuits in Michigan, according to the
Company's October 30, 2012, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended September
30, 2012.
In June 2012, TRW Automotive Holdings Corp. was named as a
defendant in purported class action lawsuits filed in the United
States District Court for the Eastern District of Michigan on
behalf of vehicle purchasers, lessors and dealers alleging that
the Company and certain of its competitors conspired to fix and
raise prices for Occupant Safety Systems products in the U.S. The
Company says it intends to defend these cases vigorously.
Management believes that the ultimate resolution of these cases
will not have a material effect on the Company's financial
statements as a whole.
TRW Automotive Holdings Corp. is a large and diversified supplier
of automotive systems, modules and components to global automotive
original equipment manufacturers, or OEMs, and related
aftermarkets. Its operations primarily encompass the design,
manufacture and sale of active and passive safety related
products, which often includes the integration of electronics
components and systems. It operates its business along four
segments: Chassis Systems, Occupant Safety Systems, Electronics
and Automotive Components. The Company is primarily a "Tier 1"
supplier, with over 84% of its end-customer sales in 2011 made to
major OEMs. Of its 2011 sales, approximately 49% were in Europe,
32% were in North America, 14% were in Asia Pacific, and 5% were
in the rest of the world.
WEST BANCORPORATION: West Bank Continues to Defend Iowa Suit
------------------------------------------------------------
On September 29, 2010, West Bank, a subsidiary of West
Bancorporation, Inc., was sued in a purported class action lawsuit
that, as amended, contains allegations that nonsufficient funds
fees charged by West Bank to Iowa resident noncommercial customers
on bank card transactions were impermissible finance charges under
the Iowa Consumer Credit Code, rather than allowable fees, and
that the sequence in which West Bank formerly posted items for
payment violated its duties of good faith under the Iowa Uniform
Commercial Code and Consumer Credit Code. West Bank believes the
allegations in the lawsuit are factually and legally inaccurate.
West Bank is vigorously defending this litigation. The amount of
potential loss, if any, cannot be reasonably estimated now because
there are substantial and different defenses concerning the
various claims of potential liability and class certification.
Even if legal liability is established under some theory, which
West Bank believes would be improper under existing Iowa law, the
amount of each plaintiff's damage claim would likely require
individual determination due to the potential applicability of
different offsets or credits.
No further updates were reported in the Company's October 26,
2012, Form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarter ended September 30, 2012.
WR GRACE: Still Awaits Plan Effective Date, ZAI Claims Resolution
-----------------------------------------------------------------
W.R. Grace & Co. is awaiting the effective date of it Chapter 11
Plan, which plan incorporates a settlement of lawsuits asserting
asbestos-related personal and property damage claims relating to
Zonolite(R) Attic Insulation ("ZAI"), 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.
Grace is a defendant in property damage and personal injury
lawsuits relating to previously sold asbestos-containing products.
As of April 2, 2001 (the bankruptcy filing date), Grace was a
defendant in 65,656 asbestos-related lawsuits, 17 involving claims
for property damage (one of which has since been dismissed), and
the remainder involving 129,191 claims for personal injury. Due
to the Bankruptcy Filing, holders of asbestos-related claims are
stayed from continuing to prosecute pending litigation and from
commencing new lawsuits against the Debtors. Grace's obligations
with respect to present and future asbestos claims will be
determined through the Chapter 11 process.
The plaintiffs in asbestos property damage lawsuits generally seek
to have the defendants pay for the cost of removing, containing or
repairing the asbestos-containing materials in the affected
buildings. Various factors can affect the merit and value of PD
Claims, including legal defenses, product identification, the
amount and type of product involved, the age, type, size and use
of the building, the legal status of the claimant, the
jurisdictional history of prior cases, the court in which the case
is pending, and the difficulty of asbestos abatement, if
necessary.
Out of 380 asbestos property damage cases (which involved
thousands of buildings) filed prior to the Filing Date, 16 remain
unresolved. Eight cases relate to Zonolite(R) Attic Insulation
("ZAI"), a former Grace attic insulation product, and eight relate
to a number of former asbestos-containing products (two of which
also are alleged to involve ZAI).
Approximately 4,400 additional PD claims were filed prior to the
March 31, 2003 claims bar date established by the Bankruptcy
Court. (The March 31, 2003 claims bar date did not apply to ZAI
claims.) Grace objected to virtually all PD claims on a number of
legal and factual bases. As of September 30, 2012, approximately
430 PD Claims subject to the March 31, 2003 claims bar date remain
outstanding. The Bankruptcy Court has approved settlement
agreements covering approximately 410 of such claims for an
aggregate allowed amount of $151.6 million.
Eight of the ZAI cases were filed as purported class action
lawsuits in 2000 and 2001. In addition, 10 lawsuits were filed as
purported class actions in 2004 and 2005 with respect to persons
and homes in Canada. These cases seek damages and equitable
relief, including the removal, replacement and/or disposal of all
such insulation. The plaintiffs assert that this product is in
millions of homes and that the cost of removal could be several
thousand dollars per home. As a result of the Filing, all of
these cases have been stayed.
Based on Grace's investigation of the claims described in these
lawsuits, and testing and analysis of this product by Grace and
others, Grace believes that ZAI was and continues to be safe for
its intended purpose and poses little or no threat to human
health. The plaintiffs in the ZAI lawsuits dispute Grace's
position on the safety of ZAI. In December 2006, the Bankruptcy
Court issued an opinion and order holding that, although ZAI is
contaminated with asbestos and can release asbestos fibers when
disturbed, there is no unreasonable risk of harm from ZAI. In the
event the Joint Plan does not become effective, the ZAI claimants
have reserved their right to appeal such opinion and order if and
when it becomes a final order.
At the Debtors' request, in July 2008, the Bankruptcy Court
established a claims bar date for U.S. ZAI PD Claims and approved
a related notice program that required any person with a U.S. ZAI
PD Claim to submit an individual proof of claim no later than
October 31, 2008. Approximately 17,960 U.S. ZAI PD Claims were
filed prior to the October 31, 2008 claims bar date, and as of
September 30, 2012, an additional 1,310 U.S. ZAI PD Claims were
filed. Under the Canadian ZAI Settlement, all Canadian ZAI PD
Claims filed before December 31, 2009, would be eligible to seek
compensation from the Canadian ZAI property damage claims fund.
Approximately 13,100 Canadian ZAI PD Claims were filed by December
31, 2009.
In November 2008, the Debtors, the Putative Class Counsel to the
U.S. ZAI property damage claimants, the PD FCR, and the Equity
Committee reached an agreement designed to resolve all present and
future U.S. ZAI PD Claims. The terms of the U.S. and Canadian ZAI
agreements in principle have been incorporated into the terms of
the Joint Plan and related documents. Grace's recorded asbestos-
related liability does not include the agreements in principle to
settle the ZAI liability that is part of the Joint Plan. The
recorded asbestos-related liability at September 30, 2012, which
is based on the Prior Plan, assumes the risk of loss from ZAI
litigation is not probable. If the Joint Plan or another plan of
reorganization reflecting the agreements in principle does not
become effective and Grace's view as to risk of loss from ZAI
litigation is not sustained, Grace believes the cost to resolve
the U.S. ZAI litigation may be material.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Class Action Reporter is a daily newsletter, co-published by
Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania,
USA, and Beard Group, Inc., Washington, D.C., USA. Noemi Irene
A. Adala, Joy A. Agravante, Ivy B. Magdadaro, Julie Anne L.
Toledo, Christopher Patalinghug, Frauline Abangan and Peter A.
Chapman, Editors.
Copyright 2013. All rights reserved. ISSN 1525-2272.
This material is copyrighted and any commercial use, resale or
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