/raid1/www/Hosts/bankrupt/CAR_Public/130523.mbx
C L A S S A C T I O N R E P O R T E R
Thursday, May 23, 2013, Vol. 15, No. 101
Headlines
ALLY FINANCIAL: Appeal Against N.J. Carpenters Suit Class Denied
ALLSTATE CORPORATION: Appeals Certification of Montana Claimants
ALLSTATE CORPORATION: 'Romero I' Age Bias Suit Still Pending
ALLSTATE CORPORATION: Continues to Face ERISA Suit by Agents
AMERIPRISE FINANCIAL: Discovery Proceeds in ERISA Lawsuit
AMERIPRISE FINANCIAL: May, June Schedules Set in Dismissal Motion
APPRIVA MEDICAL: Shareholders Win $250MM Jury Award in ev3 Case
BAYER AG: MDL Panel Orders Consolidation of Mirena IUD Cases
BOEING CO: Continues to Defend ERISA-Violation Suit in Illinois
BOEING CO: Continues to Defend ERISA-Violation Suits in Kansas
BOEING CO: Expects Proceedings in Securities Suit to Occur in Q2
CBS CORPORATION: Settlement in Suit v. Simon & Schuster Approved
CEMEX SAB: Defends Homeowner Class Suit vs. Unit in Israel
CHEVRON CORP: Pursues Fraud Claims v. Patton Boggs in Ecuador Case
CHEVRON CORP: Judge Orders CEO to Testify in Ecuador Case
CHEVRON CORP: Retains 60 Law Firms to Discredit Plaintiffs Lawyer
CNINSURE INC: Awaits Ruling on Bid to Dismiss Securities Suit
CNOOC LTD: Bid to Dismiss "Sinay" Class Suit Remains Pending
CON-WAY INC: Continues to Face California Wage and Hour Lawsuit
CVS CAREMARK: Awaits Alabama Supreme Court Ruling on Cert. Appeal
CVS CAREMARK: Attempts to Certify Class in Antitrust Suit Pending
CVS CAREMARK: Plaintiffs Appeal Dismissal of New Hampshire Case
DEUTSCHE BANK: Sued in Calif. Over Alleged Unlawful Eviction
DIEBOLD INC: Stock Suit v. Company, Officers, Auditor Continues
ECO-CUISINE: Recalls Various Mixes Due to Possible Health Risk
ENBRIDGE ENERGY: Sued in Relation to Line 6B Crude Oil Release
EQUITY LIFESTYLE: Settles Calif. Tenant Association's Lawsuit
EQUITY LIFESTYLE: Members Appeal Ruling Denying Class Status
FMC CORPORATION: Faces Possible Novel Cross-Border "Class Action"
FMC CORPORATION: Continues to Face Canadian Antitrust Actions
GALVESTON SHRIMP: Recalls Pre-Packaged Texas Gulf Shrimps
GAS INDEX PRICING LITIGATION: Appeals Court Reverses Judgments
INTER-CON SECURITY: Gets Favorable Ruling in Workers' Wage Suit
INTERNET GOLD: Abandonment of Suit Over Monthly Fees Approved
INTERNET GOLD: Abandonment of Suit Over Spam Messages Approved
INTERNET GOLD: Appeal From NIS900,000 Award Still Pending
INTERNET GOLD: Appeal From Dismissal of Overseas Call Suit Open
INTERNET GOLD: Appeal in Class Suit vs. Bezeq Int'l Pending
INTERNET GOLD: Appeal in Suit Over Illegal Collection Pending
INTERNET GOLD: Appeal in Suit Over Monthly Benefits Pending
INTERNET GOLD: Bezeq Int'l Defends Suit Over Use of Calling Cards
INTERNET GOLD: Cert. Bid in Suit Over Call Detail Records Erased
INTERNET GOLD: Class Claims in Network Malfunction Suit Abandoned
INTERNET GOLD: Class Suit Over Use of Handset Remains Pending
INTERNET GOLD: DBS Faces Suit Over Channel 5+ Disconnection
INTERNET GOLD: Defends Class Suits Alleging Customer Claims
INTERNET GOLD: Defends Suit by Handicapped People vs. Units
INTERNET GOLD: Defends Suit Over High Speed Internet Service
IVY ASSET: Judge Approves Counsel Fees in Madoff Settlement
KEYCORP: N.D. Ohio Judge Affirms Termination of ERISA Lawsuit
LABOR READY: Arbitration Ruling in Wage and Hour Suit Reversed
LUMBER LIQUIDATORS: Still Defends "Prusak" Suit in Illinois
MA LABORATORIES: Judge Strikes Down Arbitration Agreement
MADISON COUNTY, IL: Tax Buyers Seek Dismissal of Class Action
NEW YORK, NY: Defends Massive Use of Stop-and-Frisk Policy
NEW YORK, NY: Stop & Frisk Judge Appreciates Judicial Independence
PA CHILD CARE: Judge Certifies Two Classes in Kids-for-Cash Suits
PACKAGING CORPORATION: Still Faces Suit Over Containerboard Sale
PAIN THERAPEUTICS: Continues to Defend Securities Class Suit
PDC ENERGY: May 2014 Jury Trial in C.D. Calif. Class Suit
PHOENIX COS: Final Hearing on "Curran" Suit Deal on May 28
PHOENIX COS: Faces "Strougo" Securities Suit in Connecticut
PORTLAND GENERAL: Ordered Once Again to Provide Customer Refunds
QUEST DIAGNOSTICS: Aware of Class Suits Over Billing Practices
QUEST DIAGNOSTICS: Celera Acquisition Suit Remains Pending
QUEST DIAGNOSTICS: Continues to Defend "Mt. Lookout" Class Suit
QUEST DIAGNOSTICS: Judgment Bid in "Seibert" Suit Partly Granted
QUEST DIAGNOSTICS: Parties in Suit v. Celera Engaged in Discovery
QUEST DIAGNOSTICS: Bid to Dismiss Sales Rep. Suit Still Pending
SKYWORKS SOLUTIONS: July 26 Hearing on Suit Over AATI Acquisition
SM ENERGY: Faces Suit Over Royalty Valuation; No Class Yet
TELLABS INC: Faces Consolidated Securities Lawsuit in Illinois
TOYOTA MOTOR: Sudden Acceleration Settlement Faces Objections
TOYOTA MOTOR: Plaintiffs' Lawyers May Get Access to Source Code
UNION PACIFIC: Latham Fights Trial Counsel Disqualification Bid
WELLPOINT INC: Awaits Ruling in One Demutualization-Related Suit
WELLPOINT INC: Still Awaits Ruling on Bid to Dismiss OON MDL
WHIRLPOOL CORP: Awaits OK of $30-Mil. Settlement in Embraco Suit
WHIRLPOOL CORP: Continues to Defend Product Liability Suits
WHIRLPOOL CORP: Defends Suits Over Front Load Washing Machines
YOUTUBE LLC: Judge Denies Class Certification in Copyright Suit
* Entrepreneurs Want Suits Over Internet ADA Infractions Curbed
* Survey Outlines Strategies to Reduce Class Action Costs
* U.S. Employers See Increase in Number of Wage-and-Hour Lawsuits
*********
ALLY FINANCIAL: Appeal Against N.J. Carpenters Suit Class Denied
----------------------------------------------------------------
A class was certified upon Plaintiffs' request for reconsideration
in New Jersey Carpenters Litigation filed against Ally Financial
Inc. The defendants' application for leave to appeal the class
certification was denied on March 26, 2013.
ALLSTATE CORPORATION: Appeals Certification of Montana Claimants
----------------------------------------------------------------
The Allstate Corporation appealed an order certifying a class of
Montana claimants who were not represented by attorneys with
respect to the resolution of auto accident claims.
Allstate said it is vigorously defending a class action lawsuit in
Montana state court challenging aspects of its claim handling
practices in Montana. The plaintiff alleges that the Company
adjusts claims made by individuals who do not have attorneys in a
manner that unfairly resulted in lower payments compared to
claimants who were represented by attorneys.
In January 2012, the court certified a class of Montana claimants
who were not represented by attorneys with respect to the
resolution of auto accident claims.
The court certified the class to cover an indefinite period that
commences in the mid-1990's. The certified claims include claims
for declaratory judgment, injunctive relief and punitive damages
in an unspecified amount. Injunctive relief may include a claim
process by which unrepresented claimants could request that their
claims be readjusted.
No compensatory damages are sought on behalf of the class. To
date no discovery has occurred related to the potential value of
the class members' claims. The Company has asserted various
defenses with respect to the plaintiff's claims which have not
been finally resolved, and has appealed the order certifying the
class, according to the company's 10-Q filing with the Securities
and Exchange Commission for the quarter ended March 31, 2013.
The proposed injunctive relief claim process would be subject to
defenses and offsets ordinarily associated with the adjustment of
claims. Any differences in amounts paid to class members compared
to what class members might be paid under a different process
would be speculative and subject to individual variation and
determination dependent upon the individual circumstances
presented by each class claimant. In the Company's judgment a
loss is not probable.
ALLSTATE CORPORATION: 'Romero I' Age Bias Suit Still Pending
------------------------------------------------------------
Parties in lawsuits called Romero I and EEOC I lodged by former
employee agents against The Allstate Corporation filed cross
motions for summary judgment with respect to the validity of
waiver and release.
The Company continues to defend matters relating to the Company's
agency program reorganization announced in 1999. Although these
cases have been pending for many years, they currently are in the
early stages of litigation because of appellate court proceedings
and threshold procedural issues.
These matters include a lawsuit filed in 2001 by the U.S. Equal
Employment Opportunity Commission (EEOC) alleging retaliation
under federal civil rights laws (EEOC I) and a class action filed
in 2001 by former employee agents alleging retaliation and age
discrimination under the Age Discrimination in Employment Act
(ADEA), breach of contract and ERISA violations (Romero I).
In 2004, in the consolidated EEOC I and Romero I litigation, the
trial court issued a memorandum and order that, among other
things, certified classes of agents, including a mandatory class
of agents who had signed a release, for purposes of effecting the
court's declaratory judgment that the release was voidable at the
option of the release signer. The court also ordered that an
agent who voided the release must return to Allstate "any and all
benefits received by the [agent] in exchange for signing the
release." The court also stated that, "on the undisputed facts of
record, there is no basis for claims of age discrimination."
The EEOC and plaintiffs asked the court to clarify and/or
reconsider its memorandum and order and in January 2007, the judge
denied their request. In June 2007, the court reversed its prior
ruling that the release was voidable and granted the Company's
motions for summary judgment, ruling that the asserted claims were
barred by the release signed by most plaintiffs.
Plaintiffs filed a notice of appeal with the U.S. Court of Appeals
for the Third Circuit. In July 2009, the Third Circuit vacated
the trial court's entry of summary judgment in the Company's favor
and remanded the cases to the trial court for additional
discovery, including additional discovery related to the validity
of the release and waiver. In its opinion, the Third Circuit held
that if the release and waiver is held to be valid, then all of
the claims in Romero I and EEOC I are barred.
Thus, if the waiver and release is upheld, then only the claims in
Romero I asserted by the small group of employee agents who did
not sign the release and waiver would remain for adjudication.
In January 2010, following the remand, the cases were assigned to
a new judge for further proceedings in the trial court.
Plaintiffs filed their Second Amended Complaint on July 28, 2010.
Plaintiffs seek broad but unspecified "make whole relief,"
including back pay, compensatory and punitive damages, liquidated
damages, lost investment capital, attorneys' fees and costs, and
equitable relief, including reinstatement to employee agent status
with all attendant benefits for up to approximately 6,500 former
employee agents.
Despite the length of time that these matters have been pending,
to date only limited discovery has occurred related to the damages
claimed by individual plaintiffs, and no damages discovery has
occurred related to the claims of the putative class. Nor have
plaintiffs provided any calculations of the putative class's
alleged back pay or the alleged liquidated, compensatory or
punitive damages, instead asserting that such calculations will be
provided at a later stage during expert discovery. Damage claims
are subject to reduction by amounts and benefits received by
plaintiffs and putative class members subsequent to their
employment termination.
Little to no discovery has occurred with respect to amounts earned
or received by plaintiffs and putative class members in mitigation
of their alleged losses. Alleged damage amounts and lost benefits
of the approximately 6,500 putative class members also are subject
to individual variation and determination dependent upon
retirement dates, participation in employee benefit programs, and
years of service.
Discovery limited to the validity of the waiver and release is
closed. The parties filed cross motions for summary judgment with
respect to the validity of the waiver and release on April 8, 2013
and are in the process of briefing those motions. At present, no
class is certified.
ALLSTATE CORPORATION: Continues to Face ERISA Suit by Agents
------------------------------------------------------------
Parties in a lawsuit called Romero II lodged by former employee
agents against The Allstate Corporation filed cross motions for
summary judgment with respect to the validity of waiver and
release.
The putative nationwide class action has been filed by former
employee agents alleging various violations of ERISA, including a
worker classification issue (Romero II). These plaintiffs are
challenging certain amendments to the Agents Pension Plan and are
seeking to have exclusive agent independent contractors treated as
employees for benefit purposes.
Romero II was dismissed with prejudice by the trial court, was the
subject of further proceedings on appeal, and was reversed and
remanded to the trial court in 2005. In June 2007, the court
granted the Company's motion to dismiss the case. Plaintiffs
filed a notice of appeal with the Third Circuit.
In July 2009, the Third Circuit vacated the district court's
dismissal of the case and remanded the case to the trial court for
additional discovery, and directed that the case be reassigned to
another trial court judge.
In its opinion, the Third Circuit held that if the release and
waiver is held to be valid, then one of plaintiffs' three claims
asserted in Romero II is barred. The Third Circuit directed the
district court to consider on remand whether the other two claims
asserted in Romero II are barred by the release and waiver.
In January 2010, following the remand, the case was assigned to a
new judge (the same judge for the Romero I and EEOC I cases) for
further proceedings in the trial court. On April 23, 2010,
plaintiffs filed their First Amended Complaint. Plaintiffs seek
broad but unspecified "make whole" or other equitable relief,
including losses of income and benefits as a result of their
decision to retire from the Company between November 1, 1999 and
December 31, 2000.
They also seek repeal of the challenged amendments to the Agents
Pension Plan with all attendant benefits revised and recalculated
for thousands of former employee agents, and attorney's fees and
costs. Despite the length of time that this matter has been
pending, to date only limited discovery has occurred related to
the damages claimed by individual plaintiffs, and no damages
discovery has occurred related to the claims of the putative
class. Nor have plaintiffs provided any calculations of the
putative class's alleged losses, instead asserting that such
calculations will be provided at a later stage during expert
discovery.
Damage claims are subject to reduction by amounts and benefits
received by plaintiffs and putative class members subsequent to
their employment termination.
Little to no discovery has occurred with respect to amounts earned
or received by plaintiffs and putative class members in mitigation
of their alleged losses. Alleged damage amounts and lost benefits
of the putative class members also are subject to individual
variation and determination dependent upon retirement dates,
participation in employee benefit programs, and years of service.
As in Romero I and EEOC I, discovery limited to issues relating to
the validity of the waiver and release is closed. The parties
filed cross motions for summary judgment with respect to the
validity of the waiver and release on April 8, 2013 and are in the
process of briefing those motions. At present, class
certification has not been decided.
AMERIPRISE FINANCIAL: Discovery Proceeds in ERISA Lawsuit
---------------------------------------------------------
Parties in a suit filed against Ameriprise Financial Inc. in the
United States District Court for the District of Minnesota over
alleged breached of fiduciary duties under ERISA are engaged in
discovery.
In October 2011, the putative class action lawsuit entitled Roger
Krueger, et al. vs. Ameriprise Financial, et al. was filed in the
United States District Court for the District of Minnesota against
the Company, certain of its present or former employees and
directors, as well as certain fiduciary committees on behalf of
participants and beneficiaries of the Ameriprise Financial 401(k)
Plan.
The alleged class period is from October 1, 2005 to the present.
The action alleges that Ameriprise breached fiduciary duties under
ERISA, by selecting and retaining primarily proprietary mutual
funds with allegedly poor performance histories, higher expenses
relative to other investment options and improper fees paid to
Ameriprise Financial or its subsidiaries.
The action also alleges that the Company breached fiduciary duties
under ERISA because it used its affiliate Ameriprise Trust Company
as the Plan trustee and record-keeper and improperly reaped
profits from the sale of the record-keeping business to Wachovia
Bank, N.A. Plaintiffs allege over $20 million in damages.
Plaintiffs filed an amended complaint on February 7, 2012. On
April 11, 2012, the Company filed its motion to dismiss the
Amended Complaint. The Court denied the motion to dismiss on
November 20, 2012, and now the parties are engaged in discovery.
The Company cannot reasonably estimate the range of loss, if any,
that may result from this matter due to the early procedural
status of the case, the absence of class certification, the lack
of a formal demand on the Company by the plaintiffs and
plaintiffs' failure to allege any specific, evidence-based
damages.
AMERIPRISE FINANCIAL: May, June Schedules Set in Dismissal Motion
-----------------------------------------------------------------
These are the recent schedules set in a suit filed against
Ameriprise Financial Services in relation to its sales of the
Inland Western (now known as Retail Properties of America, Inc.)
REIT:
-- plaintiff's response to the motion to dismiss is due
on May 24, 2013; and
-- the Company's reply in support of its motion to dismiss
is due on June 28, 2013.
In October 2012, the putative class action lawsuit entitled
Jeffers vs. Ameriprise Financial Services, et al. was filed
against the Company in the United States District Court for the
Northern District of Illinois.
The action also names as defendants RPAI, several of RPAI's
executives, and several members of RPAI's board. The action
alleges that the Company failed to perform required due diligence
and misrepresented various aspects of the REIT including fees
charged to clients, risks associated with the product, and
valuation of the shares on client account statements.
Plaintiffs seek unspecified damages. The Company was served in
December 2012, and, on April 19, 2013, moved to dismiss the
complaint. At this time, Plaintiff's response to the motion to
dismiss is due on May 24, 2013. The Company's reply in support of
its motion to dismiss is due on June 28, 2013. At this time, oral
argument on the Company's motion to dismiss has not been
scheduled. The Company cannot reasonably estimate the range of
loss, if any, that may result from this matter due to the early
procedural status of the case, the absence of class certification,
the lack of a formal demand on the Company by the plaintiffs and
plaintiffs' failure to allege any specific, evidence-based
damages.
APPRIVA MEDICAL: Shareholders Win $250MM Jury Award in ev3 Case
---------------------------------------------------------------
According to Law360, a Delaware state jury on May 1 awarded $250
million to Appriva Medical Inc. shareholders claiming that medical
company ev3 Inc. and private equity backer Warburg Pincus had
skipped out on $175 million in milestone payments ev3 had promised
when it bought Appriva and its groundbreaking stroke-prevention
technology.
The jury decided that ev3 had never planned to make good on the
promised payments, as reflected by internal documents from April
2003 showing the Minnesota company had never had them on the
books, a source said on May 1. Thus, ev3 didn't act in good faith
when pursuing the milestones, breaking the stated terms of its
merger agreement.
"We are very pleased that the jury recognized that the Appriva
shareholders were entitled to the benefit of their bargain when
they sold their pathbreaking anti-stroke medical device to ev3,"
the plaintiffs' lead counsel, Eric Leon of Kirkland & Ellis LLP,
said on May 1.
Appriva was a California medical device company whose new device,
which could be placed in a heart to prevent a stroke, proved
promising at early clinical trials, according to the shareholders'
complaint.
After drawing interest from Warburg-backed ev3, Appriva in July
2002 agreed to a deal in which ev3 would pay $50 million up front
and $175 million in milestone bonuses to Appriva founders Michael
Lesh and Erik van der Burg, their venture capitalist backers, and
Appriva's employees. As part of the merger contract, ev3 could
define the terms of the four milestones, so long as the company
did so in good faith with Appriva's shareholders.
The milestone payments were tied to U.S. Food and Drug
Administration regulatory approvals and other achievements in the
commercialization of the device, known as a percutaneous left
atrial appendage transcatheter occlusion device, according to
court documents.
But ev3 never reached any of the milestones with the technology --
including the first, in which ev3 aimed to filed an application
for an FDA clinical trial by January 2005.
After ev3 found out that getting FDA approval would take longer
than expected, Warburg lost interest in the technology and shifted
its focus and investments to other ventures, a source said.
In April 2009, Appriva shareholders sued ev3, claiming breach of
contract, fraud and other allegations. The lawsuit sought damages
to be determined at trial, in accordance with the companies'
merger agreement.
At the trial, which took place four years later, plaintiffs'
attorneys showed through ev3's internal documents that the company
had never intended to distribute any of the promised milestone
payments, a source said.
The trial took nine days, after which the jury reached its
verdict. The jury found that ev3 had breached its 2002 merger
agreement and that the Appriva shareholders were entitled to all
the promised milestone payments related to the development of the
device, according to Kirkland & Ellis.
In addition to the $175 million in milestone payments, the jury
awarded the plaintiffs an additional $75 million to $80 million in
interest payments dating back to 2005.
Counsel and a representative for ev3 did not immediately respond
to requests for comment on May 1.
The plaintiffs are represented by Jon E. Abramczyk and Matthew R.
Clark of Morris Nichols Arsht & Tunnell LLP, with Eric F. Leon,
Joseph Serino Jr., Jay P. Lefkowitz and John Del Monaco of
Kirkland & Ellis LLP of counsel, and Robert A. Goodin and Francine
T. Radford of Goodin MacBride Squeri Day & Lamprey LLP of counsel.
The defendant is represented by Matt Neiderman and Benjamin A.
Smyth of Duane Morris LLP, with Jeffrey J. Bouslog, Bret A. Puls,
Dennis E. Hansen and Cynthia S. Wingert of Oppenheimer Wolff &
Donnelly LLP of counsel, and Matthew A. Taylor and Seth A.
Goldberg of Duane Morris LLP of counsel.
The cases are Michael Lesh et al. v. ev3 Inc., case numbers 05C-
05-218 and 05C-11-208, in the Superior Court of the State of
Delaware in and for New Castle County.
BAYER AG: MDL Panel Orders Consolidation of Mirena IUD Cases
------------------------------------------------------------
Amanda Bronstad, writing for The National Law Journal, reports
that on April 8, the U.S. Judicial Panel on Multidistrict
Litigation ordered all personal injury cases involving the Mirena
IUD -- now numbering more than 40 -- coordinated before a judge in
White Plains, N.Y.
BOEING CO: Continues to Defend ERISA-Violation Suit in Illinois
---------------------------------------------------------------
On October 13, 2006, The Boeing Company was named as a defendant
in a lawsuit filed in the U.S. District Court for the Southern
District of Illinois. Plaintiffs, seeking to represent a class of
similarly situated participants and beneficiaries in The Boeing
Company Voluntary Investment Plan (the VIP), alleged that fees and
expenses incurred by the VIP were and are unreasonable and
excessive, not incurred solely for the benefit of the VIP and its
participants, and were undisclosed to participants. The
plaintiffs further alleged that defendants breached their
fiduciary duties in violation of Section 502(a)(2) of the Employee
Retirement Income Security Act of 1974, and sought injunctive and
equitable relief pursuant to Section 502(a)(3) of ERISA. During
the first quarter of 2010, the Seventh Circuit Court of Appeals
granted a stay of trial proceedings in the district court pending
resolution of an appeal made by Boeing in 2008 to the case's class
certification order.
On January 21, 2011, the Seventh Circuit reversed the district
court's class certification order and decertified the class. The
Seventh Circuit remanded the case to the district court for
further proceedings. On March 2, 2011, the plaintiffs filed an
amended motion for class certification and a supplemental motion
on August 7, 2011. Boeing's opposition to class certification was
filed on September 6, 2011. The Plaintiffs' reply brief in
support of class certification was filed on September 27, 2011.
The court has stated its intent to issue rulings on the amended
motion for class certification and the alternative motion to
proceed as a direct action for breach of fiduciary duty and then
stay the case until it is determined if an appeal of the class
certification order is filed. As a result, on September 19, 2012,
the district court issued an order denying Boeing's motions for
summary judgment as premature pending class determination.
No further updates were reported in the Company's April 24, 2013,
Form 10-Q filing with the U.S. Securities and Exchange Commission
for the quarter ended March 31, 2013.
The Company says it cannot reasonably estimate the range of loss,
if any, that may result from this matter given the current
procedural status of the litigation.
Chicago-based The Boeing Company makes commercial jets and is also
a defense contractor. The Company's business units include
Commercial Airplanes and Boeing Defense, Space & Security (BDS;
comprising Military Aircraft, Network & Space Systems, and Global
Services & Support).
BOEING CO: Continues to Defend ERISA-Violation Suits in Kansas
--------------------------------------------------------------
The Boeing Company continues to defend itself against class action
lawsuits pending in Kansas alleging violations of the Employee
Retirement Income Security Act of 1974, according to the Company's
April 24, 2013, Form 10-Q filing with the U.S. Securities and
Exchange Commission for the quarter ended
March 31, 2013.
In connection with the 2005 sale of the Company's former Wichita
facility to Spirit AeroSystems, Inc. (Spirit), certain individuals
not hired by Spirit alleged that Spirit's hiring decisions
following the sale were tainted by age discrimination, violated
ERISA, violated the Company's collective bargaining agreements,
and constituted retaliation.
The case was brought in 2006 as a class action on behalf of
individuals not hired by Spirit. In 2012, the Tenth Circuit Court
of Appeals affirmed the district court's 2010 summary judgment in
favor of Boeing and Spirit on all class action claims, but the
parties were not precluded from making claims on an individual
basis. As of March 31, 2013, 89 individuals have asserted
individual claims related to this matter. Spirit has agreed to
indemnify Boeing for any and all losses.
Also related to the 2005 sale of the former Wichita facility, on
February 16, 2007, an action entitled Harkness et al. v. The
Boeing Company et al. was filed in the U.S. District Court for the
District of Kansas, alleging collective bargaining agreement
breaches and ERISA violations in connection with alleged failures
to provide benefits to certain former employees of the Wichita
facility. On December 11, 2012, the court denied plaintiffs'
motion for summary judgment and granted Boeing's motion for
summary judgment on plaintiffs' claim that amendment of The Boeing
Company Employee Retirement Plan violated The International
Association of Machinists and Aerospace Workers (IAM) collective
bargaining agreement, as well as individual ERISA Section 510
claims for interference with benefits. The court denied Boeing's
motion for all other claims. The parties are preparing to conduct
additional discovery in anticipation of further court proceedings,
which have not yet been scheduled.
The Company believes that Spirit is obligated to indemnify Boeing
for any and all losses in this matter, although to date Spirit has
acknowledged a limited indemnification obligation. The Company
currently estimates that the putative class includes 2,000 former
Wichita employees. The Company cannot reasonably estimate the
range of loss, if any, that may result from both these matters
given the current procedural status of the litigation.
Chicago-based The Boeing Company makes commercial jets and is also
a defense contractor. The Company's business units include
Commercial Airplanes and Boeing Defense, Space & Security (BDS;
comprising Military Aircraft, Network & Space Systems, and Global
Services & Support).
BOEING CO: Expects Proceedings in Securities Suit to Occur in Q2
----------------------------------------------------------------
The Boeing Company said in its April 24, 2013, Form 10-Q filing
with the U.S. Securities and Exchange Commission for the quarter
ended March 31, 2013, that it expects certain proceedings in a
securities class action lawsuit pending in Illinois to occur by
the end of the second quarter of 2013.
On November 13, 2009, the plaintiff shareholders filed a putative
securities fraud class action against The Boeing Company and two
of the Company's senior executives in federal district court in
Chicago. This lawsuit arose from the Company's June 2009
announcement that the first flight of the 787 Dreamliner would be
postponed due to a need to reinforce an area within the side-of-
body section of the aircraft. The Plaintiffs contended that the
Company were aware before June 2009 that the first flight could
not take place as scheduled due to issues with the side-of-body
section of the aircraft, and that the Company's determination not
to announce this delay earlier resulted in an artificial inflation
of the Company's stock price for a multi-week period in May and
June 2009. On March 7, 2011, the Court dismissed the complaint
with prejudice and, on March 19, 2012, the Court denied the
plaintiffs' request to reconsider that order. On April 12, 2012,
the plaintiffs filed a Notice of Appeal, and on April 25, 2012,
Boeing filed a Notice of Cross-Appeal based on the district
court's failure to award sanctions against the plaintiffs.
On March 26, 2013, the Seventh Circuit Court of Appeals affirmed
the dismissal of the complaint. The appeals court remanded the
case to the district court for the sole purpose of determining
whether sanctions should be imposed on the plaintiffs' counsel
and, if so, in what amount. The Company expects those proceedings
to occur by the end of the second quarter of 2013.
Chicago-based The Boeing Company makes commercial jets and is also
a defense contractor. The Company's business units include
Commercial Airplanes and Boeing Defense, Space & Security (BDS;
comprising Military Aircraft, Network & Space Systems, and Global
Services & Support).
CBS CORPORATION: Settlement in Suit v. Simon & Schuster Approved
----------------------------------------------------------------
Court approval was obtained in the settlement of a multi-district
litigation filed against Simon & Schuster, Inc. (a CBS Corporation
subsidiary) by, among others, private litigant plaintiffs, who are
e-book purchasers, alleging that the defendants are in violation
of federal and/or state antitrust laws in connection with the sale
of e-books.
On December 9, 2011, the United States Judicial Panel on
Multidistrict Litigation issued an order consolidating in the
United States District Court for the Southern District of New York
various purported class action suits that private litigants had
filed in federal courts in California and New York.
On January 20, 2012, the plaintiffs filed a consolidated amended
class action complaint with the court against the Publishing
parties. These private litigant plaintiffs, who are e-book
purchasers, allege that, among other things, the defendants are in
violation of federal and/or state antitrust laws in connection
with the sale of e-books pursuant to agency distribution
arrangements between each of the publishers and e-book retailers.
The consolidated amended class action complaint generally seeks
multiple forms of damages for the purchase of e-books and
injunctive and other relief. On March 2, 2012, the Publishing
parties filed a motion to dismiss this action. On May 15, 2012,
the court denied the motion to dismiss.
On April 10, 2012, for purposes of settlement and without any
admission of wrongdoing or liability, Simon & Schuster and two of
the other Publishing parties entered into a settlement stipulation
and proposed final judgment with the United States Department of
Justice in connection with the DOJ's investigations of agency
distribution of e-books.
In furtherance of this settlement, on April 11, 2012, the DOJ
filed an antitrust action in the United States District Court for
the Southern District of New York against the Publishing parties
and concurrently filed the Stipulation with the court.
On September 7, 2012, the Stipulation was approved by the court
and final judgment was entered. The Stipulation does not involve
any monetary payments by Simon & Schuster, but will require the
adoption of certain business practices for a 24 month period and
certain compliance practices for a five year period.
On June 11, 2012, for purposes of settlement and without any
admission of wrongdoing or liability, Simon & Schuster entered
into a proposed settlement agreement to resolve the antitrust
action filed by a number of states and the Commonwealth of Puerto
Rico against several of the Publishing parties in the United
States District Court for the Western District of Texas, which was
transferred to the United States District Court for the Southern
District of New York (States) on April 30, 2012.
The proposed settlement provides that, certain Publishing parties,
including Simon & Schuster, will pay agreed upon amounts for
consumer restitution, among other things, and also requires the
adoption of certain business and compliance practices, which are
substantially similar to those described in the Stipulation with
the DOJ. On September 14, 2012, the court granted preliminary
approval of the proposed settlement, which all states (except
Minnesota), the District of Columbia and the United States
territories joined.
On October 15, 2012, Simon & Schuster paid the agreed upon amounts
into an escrow account pending final court approval. On February
8, 2013, the court approved the proposed settlement following a
final settlement approval hearing that day.
The Company believes that the States' settlement will likely
resolve the class claims of those private litigant plaintiffs in
the MDL litigation who reside in the areas covered by the States'
settlement and who do not opt out of such settlement.
Commencing on February 24, 2012, similar antitrust suits have been
filed under Canadian law against the Publishing parties by private
litigants in Canada, purportedly as class actions. Simon &
Schuster (a subsidiary) intends to vigorously defend itself in the
MDL and Canadian matters.
In addition, the European Commission and Canadian Competition
Bureau are conducting separate competition investigations of
agency distribution arrangements of e-books in this industry and
Simon & Schuster is cooperating with these investigations. On
September 19, 2012, the EC began accepting public comment on the
terms of a proposed settlement. On December 12, 2012, following
the close of that comment period, the EC accepted the proposed
settlement. The settlement between the EC and certain Publishing
parties, including Simon & Schuster, requires the adoption of
certain business and compliance practices similar to those
described in the Stipulation with the DOJ.
CEMEX SAB: Defends Homeowner Class Suit vs. Unit in Israel
----------------------------------------------------------
CEMEX, S.A.B. de C.V., is defending a subsidiary in Israel from a
class action lawsuit brought by a homeowner, according to the
Company's April 24, 2013, Form 20-F filing with the U.S.
Securities and Exchange Commission for the year ended
December 31, 2012.
On June 21, 2012, one of the Company's subsidiaries in Israel was
notified about an application for the approval of a class action
lawsuit against it. The application was filed by a homeowner who
built his house with concrete supplied by the Company's Israeli
subsidiary in October 2010. According to the application, the
plaintiff claims that the concrete supplied to him did not meet
with the "Israel Standard for Concrete Strength No. 118" and that,
as a result, the Company's Israeli subsidiary acted unlawfully
toward all of its customers who requested a specific type of
concrete but that received concrete that did not comply with the
Israeli standard requirements. As per the application, the
plaintiff claims that the supply of the alleged non-conforming
concrete has caused financial and non-financial damages to those
customers, including the plaintiff. The Company presumes that the
class action would represent the claim of all the clients who
purchased the alleged non-conforming concrete from the Company's
Israeli subsidiary during the past seven years, the limitation
period according to applicable laws in Israel. The damages that
could be sought amount to approximately 276 million Israeli
Shekels (approximately U.S.$75.66 million as of March 31, 2013,
based on an exchange rate of 3.648 Israeli Shekels to U.S.$1.00).
The Company's Israeli subsidiary has submitted a formal response
to the corresponding court. At this stage, the Company believes
the application is vexatious and should be dismissed without any
expense to the Company. As of April 24, 2013, the Company's
subsidiary in Israel is analyzing the legal strategy to be
employed and is also not able to assess the likelihood of the
class action application being approved or, if approved, of an
adverse result, but if adversely resolved, the Company does not
believe the final resolutions would have a material adverse impact
on its financial results.
Founded in 1906 in Mexico, CEMEX, S.A.B. de C.V. --
http://www.cemex.com/-- is one of the largest cement companies in
the world. CEMEX is a holding company primarily engaged, through
its operating subsidiaries, in the production, distribution,
marketing and sale of cement, ready-mix concrete, aggregates,
clinker and other construction materials throughout the world.
CHEVRON CORP: Pursues Fraud Claims v. Patton Boggs in Ecuador Case
------------------------------------------------------------------
Jan Wolfe, writing for The Litigation Daily, reports that as
expected, Chevron Corp. has decided to pursue fraud claims against
Patton Boggs, the largest law firm to represent the plaintiffs who
won a $19 billion environmental pollution judgment against the oil
company in Ecuador. In a motion filed on May 10, Chevron alleges
that Patton Boggs tried to cover up evidence that the judgment,
issued by an Ecuadorian court in 2011, was the product of bribery
and ghostwriting on the part of other lawyers for the plaintiffs.
"Despite the uncontradicted evidence to the contrary, Patton Boggs
has falsely asserted in the U.S. that this judgment is legitimate
and not the product of a corrupt process in which Patton Boggs
and/or its co-counsel colluded with the Ecuadorian court or court
experts," Chevron's lawyers at Gibson Dunn & Crutcher wrote.
"Patton Boggs either knew in advance of the ghostwriting of the
judgment against Chevron or must have become quickly aware of it
once Chevron began to make the evidence known, and yet Patton
Boggs continued to further the fraudulent scheme."
The Ecuadorian plaintiffs first brought their case against Chevron
more than two decades ago. They have been represented by a team
of attorneys led by Steven Donziger, a former public defender who
now runs his own New York-based firm. Since winning their mega-
judgment two years ago, the plaintiffs have sought to enforce it
in Argentina, Canada, and Brazil. (Chevron has virtually no assets
in Ecuador.)
Patton Boggs signed on as co-counsel in 2010. James Tyrrell,
managing partner of the firm's New York and New Jersey offices and
national chair of its toxic tort and product liability practice
groups, has been in charge of the case for Patton Boggs. The
litigation funding group Burford Capital Ltd agreed to fund Patton
Boggs's work. Under the terms of their deal, both Burford and
Patton Boggs stood to collect a sizable award if they ever got the
judgment enforced.
Chevron brought racketeering claims in 2011 against Mr. Donziger,
his co-counsel, and Stratus Consulting, an environmental
consulting firm. According to the oil company, representatives of
the plaintiffs bribed an Ecuadorian judge and ghostwrote a
supposedly independent expert report, known as the Cabrera report
after its author.
Chevron's suit, which is before U.S. district judge Lewis Kaplan
in Manhattan, has gone well for the company so far. Stratus
settled in April, admitting that it helped author the Cabrera
report. Also in April, Burford Capital CEO Christopher Bogart
declared in an affidavit that Patton Boggs misled Burford to
believe that the plaintiffs' contacts with Cabrera were limited
and legal. Observers like Fortune's Roger Parloff have previously
speculated that Chevron would target Patton Boggs.
Patton Boggs brought its own malicious prosecution claim against
Chevron in February 2012. Judge Kaplan, who is hearing that case
too, gave Chevron a deadline of May 10 to decide if it wanted to
bring its own claims against Patton Boggs.
Just beating the buzzer, Chevron moved for leave to file
counterclaims on May 10. As foreshadowed by the affidavit from
Burford's CEO, the company alleges that Patton Boggs tried to
cover up fraud in the Cabrera report by "making false
representations mischaracterizing the relation between the
[plaintiffs'] attorneys and Cabrera, and by bringing in new
experts who relied on Cabrera's data while purporting to confirm
Cabrera'a conclusion on an independent basis -- all without
disclosing the fraudulent nature of the ghostwritten report."
Chevron seeks compensatory and punitive damages for fraud,
malicious prosecution, and violations of New York Judiciary Law
Sec. 487, a so-called attorney deceit statute.
A spokesman for Patton Boggs sent the following statement on
May 12: "Chevron's proposed complaint against Patton Boggs is
perhaps the starkest example yet of how Chevron will use its
limitless resources to intimidate and harass anyone that dares to
help the Ecuadorian Plaintiffs in their 20-year battle for
justice. This cynical strategy will not work. We are proud that
we have helped the indigenous and farming communities that have
been so adversely impacted by Chevron's actions. Patton Boggs has
acted conscientiously, ethically and in good faith at all times
since becoming involved in this case in 2010, and will not be
intimidated by Chevron's scare tactics. We will continue to
zealously represent our clients and will not stand by idly and
allow Chevron to disrupt our work and tarnish our reputation. We
will defend ourselves in this case, and we are confident that the
world will see through Chevron's increasingly transparent efforts
to divert attention from its liability in Ecuador and from the
suffering of the Amazon communities."
CHEVRON CORP: Judge Orders CEO to Testify in Ecuador Case
---------------------------------------------------------
Brendan Pierson, writing for New York Law Journal, reports that
Southern District Magistrate Judge James Francis IV has ruled that
Chevron CEO John Watson must testify in the oil company's fraud
case against Ecuadorian citizens who are trying to enforce a $19
billion judgment they won against Chevron in an Ecuadorian court
in a case over rainforest pollution.
CHEVRON CORP: Retains 60 Law Firms to Discredit Plaintiffs Lawyer
-----------------------------------------------------------------
Jan Wolfe, writing for The Litigation Daily, reports that Chevron
Corporation has retained 60 law firms in its effort to discredit
Steven Donziger, the plaintiffs lawyer who helped win a massive
judgment against the oil company in Ecuador. Mr. Donziger, on the
other hand, may soon be representing himself. His longtime
lawyer, John Keker of Keker & Van Nest, has asked to withdraw from
the feud, claiming that Chevron's "scorched-earth" litigation
approach has left him no choice.
Mr. Keker filed a 15-page withdrawal motion on May 3 in U.S.
district court in Manhattan, where Chevron is pursuing fraud and
racketeering claims against Mr. Donziger and his allies.
According to Mr. Keker, Mr. Donziger has gone broke trying to
fight Chevron's army of lawyers and owes Keker & Van Nest $1.4
million for his defense in the Manhattan action, which is being
heard by Judge Lewis Kaplan.
"Through scorched-earth litigation, executed by its army of
hundreds of lawyers, Chevron is using its limitless resources to
crush defendants and win this case through might rather than
merit," Mr. Keker wrote. "Encouraged by [Kaplan's] implacable
hostility to Donziger, Chevron will file any motion, however
meritless, in the hope that [Kaplan] will use it to hurt
Donziger."
In his own statement, Mr. Donziger said, "I admit that Chevron's
strategy of resource exhaustion has succeeded in the short-term to
the point that I can no longer afford to pay my lawyers at Keker &
Van Nest to represent me in the New York proceeding." Mr.
Donziger added, "I will now proceed pro se against Chevron with
the option of trying to re-hire my lawyers should circumstances
change."
Mr. Donziger helped a group of Ecuadorian villagers secure a $19
billion environmental judgment against Chevron in Ecuador in 2011.
Chevron subsequently brought an extortion and racketeering case in
U.S. district court in Manhattan against Mr. Donziger, his co-
counsel, his environmental consultants, and 47 of his Ecuadorian
clients (45 of whom have defaulted). Mr. Donziger retained
Mr. Keker in early 2011, as Global Lawyer columnist Michael
Goldhaber reported.
In the last year, the oil giant has presented evidence that it
says shows that the plaintiffs bribed a judge and ghostwrote a
supposedly independent expert report. Judge Kaplan has issued
rulings and made remarks favorable to the company.
The combination of Chevron's tactics and Judge Kaplan's hostility
have turned the case into a show trial, Mr. Keker wrote in his
brief, and he wants no part of it.
Craig Smyser of Houston-based Smyser Kaplan & Veselka, an attorney
for the two Ecuadorian plaintiffs who have made appearances in the
New York case, also filed a withdrawal motion on May 3. Mr.
Smyser wrote that the Ecuadorian plaintiffs will continue to be
represented in the New York action by New York-based solo
practitioner Julio Gomez.
CNINSURE INC: Awaits Ruling on Bid to Dismiss Securities Suit
-------------------------------------------------------------
CNinsure Inc. is awaiting a court decision on its motion to
dismiss a securities class action lawsuit, according to the
Company's April 24, 2013, Form 20-F filing with the U.S.
Securities and Exchange Commission for the year ended
December 31, 2012.
On October 17, 2011, Pieter van Dongen, an alleged purchaser of
the Company's American Depositary Receipts ("ADRs") brought a
purported class action against the Company, and three of its then-
executive officers. The complaint asserts that between March 2,
2010 and September 14, 2011, the alleged class period, the
defendants defrauded purchasers of the Company's ADRs through the
dissemination of materially false and misleading statements
regarding the Company's income, incentive compensation and future
prospects by allegedly overstating net income, and failing to
properly account for incentives provided to the Company's agents.
The complaint asserts claims under Section 10(b) of the Security
Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder
and under Section 20(a) of the Exchange Act.
On December 6, 2011, the Company and van Dongen, entered into a
stipulation providing that within forty-five days after the
court's entry of an order appointing a lead plaintiff under the
Private Securities Litigation Reform Act, the lead plaintiff must
either file a consolidated complaint or give notice of its intent
not to do so (and therefore proceed on its initial complaint).
The stipulation establishes a briefing schedule under which the
Company's response to the operative complaint is due forty-five
days after such filing or notice; the lead plaintiff's opposition
is due 45 days later; and the Company's reply is due 30 days
later. The stipulation was "so ordered" by the Court on
December 7, 2011. On December 16, 2011, two other alleged
purchasers of the Company's ADRs, who are represented by the same
law firm that represents van Dongen, moved for appointment as lead
plaintiffs, and no other prospective plaintiff moved for
appointment as lead plaintiff by the December 16, 2011 deadline.
In an order dated June 26, 2012, the Court granted the two other
alleged purchasers' motion, appointing them as lead plaintiffs.
On August 13, 2012, the lead plaintiffs filed an amended
complaint. The Company (which is the only defendant that has been
served so far) filed a motion to dismiss the amended complaint on
October 1, 2012. On November 8, 2012, the Company and lead
plaintiffs entered into a stipulation extending the time for lead
plaintiffs to file an opposition to the Company's motion to
dismiss and related briefing. According to the stipulation, lead
plaintiffs were required to file their opposition to the Company's
motion to dismiss by November 29, 2012. On
November 28, 2012, lead plaintiffs filed a brief in opposition to
the motion to dismiss, and on January 10, 2013, the Company filed
its reply.
The Company says the outcome of the class action cannot be
reliably estimated with reasonable certainty at this stage and no
provision has thus been made as of December 31, 2011, and 2012.
CNinsure Inc. -- http://www.cninsure.net/-- is an independent
insurance intermediary company operating in China. CNinsure was
incorporated in Cayman Islands and is headquartered in Guangdong,
China.
CNOOC LTD: Bid to Dismiss "Sinay" Class Suit Remains Pending
------------------------------------------------------------
CNOOC Limited's motion to dismiss a class action lawsuit commenced
by Sam Sinay in New York remains pending, according to the
Company's April 24, 2013, Form 20-F filing with the U.S.
Securities and Exchange Commission for the year ended
December 31, 2012.
On October 11, 2012, the Company was served with a purported class
action complaint filed by Sam Sinay, individually and on behalf of
all others similarly situated in the Unites States District Court
for the Southern District of New York (the "Complaint"). The
Complaint is lodged against the Company and certain of its
officers, which alleges that during the period between January 27,
2011, and September 16, 2011, the Company made materially false
and misleading statements regarding its business and financial
results and the oil spill accidents occurred at the Penglai 19-
3oilfield.
The Company believes that the allegations and the claims in the
Complaint are without merit and intends to defend itself
vigorously against such claims and no provision has been made in
these financial statements. On December 21, 2012, the Company
filed a motion to dismiss the Complaint in the same court.
CNOOC Limited -- http://www.cnoocltd.com/-- is a Hong Kong
limited liability company headquartered in Central, Hong Kong.
The Company is an upstream company specializing in the
exploration, development and production of oil and natural gas.
CON-WAY INC: Continues to Face California Wage and Hour Lawsuit
---------------------------------------------------------------
Con-way is a defendant in several class action lawsuits alleging
violations of the state of California's wage and hour laws.
Plaintiffs allege that Con-way failed to pay certain drivers for
all compensable time and that certain other drivers were not
provided with required meal breaks and rest breaks. Plaintiffs
seek to recover unspecified monetary damages, penalties, interest
and attorneys' fees.
The two primary cases are Jorge R. Quezada v. Con-way Inc., dba
Con-way Freight, (the "Quezada" case), and Jose Alberto Fonseca
Pina, et al, v. Con-way Freight Inc., et al. (the "Pina" case).
The Quezada case was initially filed in February 2009 in San Mateo
County Superior Court, and was removed to the U.S. District Court
of California, Northern District. The Pina case was initially
filed in November 2009 in Monterey County Superior Court and was
removed to the U.S. District Court of California, Northern
District.
By agreement of the parties, in March 2010, the Pina case and the
Quezada case were deemed related and transferred to the same
judge. On April 12, 2012, the Court granted Plaintiff's request
for class certification in the Pina case as to a limited number of
issues. On October 15, 2012, the Court granted Plaintiffs' request
for class certification in the Quezada case and granted summary
judgment as to certain issues.
Con-way has denied any liability with respect to these claims and
intends to vigorously defend itself in this case. Con-way plans to
appeal the class certification and summary judgment rulings.
CVS CAREMARK: Awaits Alabama Supreme Court Ruling on Cert. Appeal
-----------------------------------------------------------------
Parties in a lawsuit filed against CVS Caremark Corporation over
its 1999 settlement of various securities class action and
derivative lawsuits are arguing in court over the class
certification in the case.
Caremark was named in a putative class action lawsuit filed in
October 2003 in Alabama state court by John Lauriello, purportedly
on behalf of participants in the 1999 settlement of various
securities class action and derivative lawsuits against Caremark
and others. Other defendants include insurance companies that
provided coverage to Caremark with respect to the settled
lawsuits.
The Lauriello lawsuit seeks approximately $3.2 billion in
compensatory damages plus other non-specified damages based on
allegations that the amount of insurance coverage available for
the settled lawsuits was misrepresented and suppressed. A similar
lawsuit was filed in November 2003 by Frank McArthur, also in
Alabama state court, naming as defendants, among others, Caremark
and several insurance companies involved in the 1999 settlement.
This lawsuit was stayed as a later-filed class action, but
McArthur was subsequently allowed to intervene in the Lauriello
action. Following the close of class discovery, the trial court
entered an Order on August 15, 2012 that granted the plaintiffs'
motion to certify a class pursuant to Alabama Rule of Civil
Procedures 23(b)(3) but denied their request that the class also
be certified pursuant to Rule 23(b)(1).
In addition, the August 15, 2012 Order appointed class
representatives and class counsel. The defendants have filed a
notice of appeal with the Alabama Supreme Court and the plaintiffs
have filed a notice of cross-appeal. The proceedings in the trial
court are stayed by statute pending a decision on the appeal and
cross-appeal by the Alabama Supreme Court.
CVS CAREMARK: Attempts to Certify Class in Antitrust Suit Pending
-----------------------------------------------------------------
Motions for class certification in the suit In Re Pharmacy Benefit
Managers Antitrust Litigation, including the North Jackson
Pharmacy case, remain pending, according to the Form 10-Q that CVS
Caremark Corporation filed with the Securities and Exchange
Commission for the quarter ended March 31, 2013.
Various lawsuits have been filed alleging that CVS Caremark
Corporation has violated applicable antitrust laws in establishing
and maintaining retail pharmacy networks for client health plans.
In August 2003, Bellevue Drug Co., Robert Schreiber, Inc. d/b/a
Burns Pharmacy and Rehn-Huerbinger Drug Co. d/b/a Parkway Drugs
#4, together with Pharmacy Freedom Fund and the National Community
Pharmacists Association filed a putative class action against
Caremark in Pennsylvania federal court, seeking treble damages and
injunctive relief.
This case was initially sent to arbitration based on the contract
terms between the pharmacies and Caremark. In October 2003, two
independent pharmacies, North Jackson Pharmacy, Inc. and C&C, Inc.
d/b/a Big C Discount Drugs, Inc., filed a putative class action
complaint in Alabama federal court against Caremark and two PBM
competitors, seeking treble damages and injunctive relief.
The North Jackson Pharmacy case against two of the Caremark
entities named as defendants was transferred to Illinois federal
court, and the case against a separate Caremark entity was sent to
arbitration based on contract terms between the pharmacies and
Caremark. The Bellevue arbitration was then stayed by the parties
pending developments in the North Jackson Pharmacy court case.
In August 2006, the Bellevue case and the North Jackson Pharmacy
case were both transferred to Pennsylvania federal court by the
Judicial Panel on Multidistrict Litigation for coordinated and
consolidated proceedings with other cases before the panel,
including cases against other PBMs. Caremark appealed the decision
which vacated an order compelling arbitration and staying the
proceedings in the Bellevue case and, following the appeal, the
Court of Appeals reinstated the order compelling arbitration of
the Bellevue case.
Following remand, plaintiffs in the Bellevue case sought dismissal
of their complaint to permit an immediate appeal of the reinstated
order compelling arbitration and pursued an appeal to the Third
Circuit Court of Appeals. In November 2012, the Third Circuit
Court reversed the district court ruling and directed the parties
to proceed in federal court. Motions for class certification in
the coordinated cases within the multidistrict litigation,
including the North Jackson Pharmacy case, remain pending, and the
court has permitted certain additional class discovery and
briefing. The consolidated action is now known as the In Re
Pharmacy Benefit Managers Antitrust Litigation.
CVS CAREMARK: Plaintiffs Appeal Dismissal of New Hampshire Case
---------------------------------------------------------------
The dismissal of a securities class action filed against CVS
Caremark Corporation in the United States District Court for the
District of New Hampshire remains under appeal, according to CVS'
Form 10-Q filing with the Securities and Exchange Commission for
the quarter ended March 31, 2013.
In November 2009, a securities class action lawsuit was filed in
the United States District Court for the District of Rhode Island
purportedly on behalf of purchasers of CVS Caremark Corporation
stock between May 5, 2009 and November 4, 2009.
The lawsuit names the Company and certain officers as defendants
and includes allegations of securities fraud relating to public
disclosures made by the Company concerning the PBM business and
allegations of insider trading.
In addition, a shareholder derivative lawsuit was filed in
December 2009 in the same court against the directors and certain
officers of the Company. A derivative lawsuit is a lawsuit filed
by a shareholder purporting to assert claims on behalf of a
corporation against directors and officers of the corporation.
This lawsuit, which was stayed pending developments in the related
securities class action, includes allegations of, among other
things, securities fraud, insider trading and breach of fiduciary
duties and further alleges that the Company was damaged by the
purchase of stock at allegedly inflated prices under its share
repurchase program.
In January 2011, both lawsuits were transferred to the United
States District Court for the District of New Hampshire. In June
2012, the court granted the Company's motion to dismiss the
securities class action. The plaintiffs subsequently appealed the
court's ruling on the motion to dismiss. The derivative lawsuit
will remain stayed pending the outcome of this appeal of the
securities class action.
DEUTSCHE BANK: Sued in Calif. Over Alleged Unlawful Eviction
------------------------------------------------------------
David C. Eblovi and Monica K. Eblovi, individually and as private
attorneys general on behalf of other unknown members of the
general public similarly situated v. Deutsche Bank National Trust
Company; RBS Acceptance Inc. (f/k/a Greenwich Capital Acceptance
Inc.); RBS Financial Products Inc. (f/k/a Greenwich Capital
Financial Products Inc.); Nationwide Title Clearing Inc.; Central
Mortgage Company d/b/a Central Mortgage Loan Servicing Company;
MTC Financial Inc. d/b/a Trustee Corps; and Does 1-100], Case No.
4:13-cv-02314 (N.D. Cal., May 21, 2013) alleges that the
Defendants violated the Protecting Tenants at Foreclosure Act of
2009 and the Racketeer Influenced and Corrupt Organizations Act,
among other laws.
The action is brought by the Eblovis on behalf of affected
individuals who reside, or who resided, in properties to which the
Deed of Trust was originally granted to the now defunct Downey
Savings and Loan Association. The Plaintiffs assert that they
were tenants legally and properly in possession of property that
was foreclosed upon in late 2010-early 2011 by Central Mortgage
Company and Trustee Corps, purportedly at the request and for the
benefit of Deutsche Bank National Trust Company, as Trustee for
DSLA Mortgage Loan Trust 2006-AR1.
The Plaintiffs allege that there is no evidence that the loans and
associated collateral were ever legally transferred out of
Downey's ownership, and there is significant and substantial
evidence that if there was a transfer of ownership, it was not to
the DSLA Trusts as intended and required by law, but was instead
to a relatively small Arkansas loan servicing corporation named
Central Mortgage Company. They argue that the failure of Downey
to transfer ownership to the Trusts, and the failure of the
Trustee for the Trusts to insure compliance with the law, has
resulted in significantly more than 20,000 California mortgages
being in a state of limbo. They add that not only was the
transactional record for these thousands of mortgages fatally
compromised, it was in totality a scheme to defraud the public,
the mortgagees, the residents of the subject properties and the
investors in the Trusts.
The Eblovis are citizens of California and are residents of Half
Moon Bay, California.
Deutsche Bank National Trust Company is a subsidiary of Deutsche
Bank AG, and is a national bank organized and existing as a
national association under the National Bank Act. DSLA Mortgage
Loan Trust 2006-AR1 is a Real Estate Mortgage Conduit and has
claimed ownership of 2,584 residential mortgages originated by
Downey Savings and Loan Association.
RBS Acceptance Inc. is a Delaware corporation headquartered in
Stamford, Connecticut. Prior to April 2009, RBS Acceptance Inc.
was known as Greenwich Capital Acceptance Inc., the purported
"Depositor" for all of the DSLA Series of Trusts. RBS Financial
Products Inc. is a Delaware corporation headquartered in Stamford,
Connecticut. Prior to April 2009, RBS Financial Products Inc. was
known as Greenwich Capital Financial Products Inc., the purported
"Seller" for all of the DSLA Series of Trusts.
Nationwide Title Clearing Inc. is a Florida corporation with its
primary place of business in Palm Harbor, Florida. Central
Mortgage Company is an Arkansas corporation headquartered in
Little Rock, Arkansas. MTC Financial Inc. is a California
corporation headquartered in Irvine, California.
Downey Savings and Loan Association was a retail bank engaged
between 2003 and 2008 primarily in the issuing of tens of
thousands of mortgage loans, many of them high risk and toxic
"ARM" or "Interest Only" loans. Downey is not a named defendant
in this lawsuit because the bank was shut down and placed into
receivership by the Federal Deposit Insurance Corporation in late
2008.
The Plaintiffs believe that each Defendant was the agent, servant
or employee of Deutsche Bank National Trust Company. The
Plaintiffs are unaware of the true names and capacities of the Doe
Defendants.
The Plaintiffs are not represented by any law firm.
DIEBOLD INC: Stock Suit v. Company, Officers, Auditor Continues
---------------------------------------------------------------
Diebold Inc. continues to face a securities suit in the United
States District Court for the Northern District of Ohio, according
to its Form 10-Q filing with the Securities and Exchange
Commission for the quarter ended March 31, 2013.
On June 30, 2010, a shareholder filed a putative class action
complaint in the United States District Court for the Northern
District of Ohio alleging violations of the federal securities
laws against the Company, certain current and former officers, and
the Company's independent auditors (Louisiana Municipal Police
Employees Retirement System v. KPMG et al. , No. 10-CV-1461).
The complaint seeks unspecified compensatory damages on behalf of
a class of persons who purchased the Company's stock between June
30, 2005 and January 15, 2008 and fees and expenses related to the
lawsuit.
The complaint generally relates to the matters set forth in the
court documents filed by the SEC in June 2010 finalizing the
settlement of civil charges stemming from the investigation of the
Company conducted by the Division of Enforcement of the SEC.
ECO-CUISINE: Recalls Various Mixes Due to Possible Health Risk
--------------------------------------------------------------
Eco-Cuisine of Boulder, Colorado, is recalling all lots of T3314
Basic Brownie Mix, T3333 Betty Brownie Mix with Vanilla, T3388
Ground Beef Style Quick Mix, T3394 Sausage Style Quick Mix, T3416
Chocolate Cookie Mix, T3417 Lemon Muffin Mix, and T3418 English
Scone Mix, CM25COOK Basic Cookie Mix 25 lb. bag, CM25MUFF Basic
Muffin Mix 25 lb. bag, CM25SCON Basic Scone Mix 25 lb. Bag,
because it has the potential to be contaminated with Salmonella,
an organism which can cause serious and sometimes fatal infections
in young children, frail or elderly people, and others with
weakened immune systems. Healthy persons infected with Salmonella
often experience fever, diarrhea (which may be bloody), nausea,
vomiting and abdominal pain. In rare circumstances, infection
with Salmonella can result in the organism getting into the
bloodstream and producing more severe illnesses such as arterial
infections (i.e., infected aneurysms), endocarditis and arthritis.
The baking mix products were distributed nationwide through direct
sales and food service distribution centers.
Products affected are:
Product
Code Description Packaging Size
------- ----------- --------------
T3314 Eco-Cuisine Basic 1 lb. bag/10 bags per box
Brownie Mix or 25 lb. bulk box
T3333 Eco-Cuisine Betty 17.5 oz bag/10 bags per box
Brownie Mix with
Vanilla
T3388 Eco-Cuisine Ground 10 lb box
Beef Style Quick Mix
T3394 Eco-Cuisine Sausage 10 lb box
Style Quick Mix
T3416 Eco-Cuisine Chocolate 1 lb. bag/10 bags per case
Cookie Mix
T3417 Eco-Cuisine Lemon 1 lb. bag/10 bags per case
Muffin Mix
T3418 Eco-Cuisine English 1 lb. bag/10 bags per case
Scone Mix
CM25COOK Central Milling 25 lb bag
Basic Cookie Mix
CM25MUFF Central Milling 25 lb bag
Basic Muffin Mix
CM25SCON Central Milling 25 lb bag
Basic Scone Mix
Pictures of the recalled products are available at:
http://www.fda.gov/Safety/Recalls/ucm353312.htm
No illnesses have been reported to date.
The recall was as the result of notification by CHS Foods that
ingredients used in the aforementioned products were being
recalled for Salmonella. The Company has ceased the production
and distribution of the product as FDA and the Company continue
their investigation as to what caused the problem.
Consumers who have purchased the above listed products are urged
to return it to the place of purchase for a full refund.
Consumers with questions may contact Eco-Cuisine Monday through
Friday 8:00 a.m. to 5:00 p.m. Mountain Daylight Time at 303-402-
0289.
ENBRIDGE ENERGY: Sued in Relation to Line 6B Crude Oil Release
--------------------------------------------------------------
A number of governmental agencies and regulators have initiated
investigations into the Line 6B crude oil release. Approximately
30 actions or claims have been filed against Enbridge Energy
Partners L.P. and its affiliates, in state and federal courts in
connection with the Line 6B crude oil release, including direct
actions and actions seeking class status.
Based on the current status of these cases, Enbridge do not expect
the outcome of these actions to be material. On July 2, 2012,
PHMSA announced a Notice of Probable Violation, or NOPV, related
to the Line 6B crude oil release, including a civil penalty of
$3.7 million that we paid during the third quarter of 2012.
EQUITY LIFESTYLE: Settles Calif. Tenant Association's Lawsuit
-------------------------------------------------------------
Equity Lifestyle Properties, Inc. obtained final approval of a
deal that settled a lawsuit filed by The City and the Homeowners'
Association of Meadowbrook Estates in Santee, California.
The Company disclosed on its recent 10-Q filing with the
Securities and Exchange Commission: "In June 2003, we won a
judgment against the City of Santee in California Superior Court
(Case No. 777094). The effect of the judgment was to invalidate,
on state law grounds, two rent control ordinances the City of
Santee had enforced against us and other property owners.
"However, the Court allowed the City to continue to enforce a rent
control ordinance that predated the two invalid ordinances (the
"Prior Ordinance"). As a result of the judgment we were entitled
to collect a one-time rent increase based upon the difference in
annual adjustments between the invalid ordinance(s) and the Prior
Ordinance and to adjust our base rents to reflect what we could
have charged had the Prior Ordinance been continually in effect.
"The City of Santee appealed the judgment. The City and the
Homeowners' Association of Meadowbrook Estates ("Tenant
Association") also each sued us in separate actions in the
California Superior Court (Case Nos. GIE 020887 and GIE 020524)
alleging that the rent adjustments pursuant to the judgment
violated the Prior Ordinance, sought to rescind the rent
adjustments, and sought refunds of amounts paid, and penalties and
damages in these separate actions.
"As a result of further proceedings and a series of appeals and
remands, we were required to and did release the additional rents
to the Tenant Association's counsel for disbursement to the
tenants, and we have ceased collecting the disputed rent amounts.
The Tenant Association continued to seek damages, penalties and
fees in their separate action based on the same claims the City
made on the tenants' behalf in the City's case. We moved for
judgment on the pleadings in the Tenant Association's case on the
ground that the Tenant Association's case was moot in light of the
result in the City's case.
"On November 6, 2008, the Court granted us motion for judgment on
the pleadings without leave to amend. The Tenant Association
appealed. In June 2010, the Court of Appeal remanded the case for
further proceedings. On remand, on December 12, 2011, the Court
granted us motion for summary judgment and denied the Tenant
Association's motion for summary judgment.
"On January 9, 2012, the Court entered judgment in our favor,
specifying that the Tenant Association shall recover nothing. On
January 26, 2012, the Court set March 30, 2012 as the date for
hearing our motion for attorneys' fees and the Tenant
Associations' motion to reduce our claim for costs. On March 26,
2012, the Tenant Association filed a notice of appeal.
"On August 16, 2012, we and the Tenant Association entered a
settlement agreement pursuant to which the Tenant Association
dismissed its appeal in exchange for our agreement to dismiss our
claims for attorneys' fees and other costs. Because the matter was
a class action by the Tenant Association, on January 18, 2013 the
Court held a fairness hearing to consider final approval of the
settlement, and approved the settlement."
EQUITY LIFESTYLE: Members Appeal Ruling Denying Class Status
------------------------------------------------------------
Thousand Trails members who are suing Equity LifeStyle Properties,
Inc. filed with the United States Court of Appeals for the Ninth
Circuit a petition for leave to appeal from the order denying
class certification.
Equity LifeStyle said in a regulatory filing with the Securities
and Exchange Commission that: "On July 29, 2011, we were served
with a class action lawsuit in California state court filed by two
named plaintiffs, who are husband and wife. Among other
allegations, the suit alleges that the plaintiffs purchased a
membership in our Thousand Trails network of campgrounds and paid
annual dues; that they were unable to make a reservation to
utilize one of the campgrounds because, they were told, their
membership did not permit them to utilize that particular
campground; that we failed to comply with the written disclosure
requirements of various states' membership camping statutes; that
we misrepresented that we provide a money-back guaranty; and that
we misrepresented that the campgrounds or portions of the
campgrounds would be limited to use by members.
"Allegedly on behalf of "between 100,000 and 200,000" putative
class members, the suit asserts claims for alleged violation of:
(1) the California Civil Code Sections 1812.300, et seq.; (2) the
Arizona Revised Statutes Sections 32-2198, et seq.; (3) Chapter
222 of the Texas Property Code; (4) Florida Code Sections 509.001,
et seq.; (5) Chapter 119B of the Nevada Administrative Code; (6)
Business & Professions Code Sections 17200, et seq., (7) Business
& Professions Code Sections 17500; (8) Fraud - Intentional
Misrepresentation and False Promise; (9) Fraud - Omission; (10)
Negligent Misrepresentation; and (11) Unjust Enrichment.
"The complaint seeks, among other relief, rescission of the
membership agreements and refund of the member dues of plaintiffs
and all others who purchased a membership from or paid membership
dues to us since July 21, 2007; general and special compensatory
damages; reasonable attorneys' fees, costs and expenses of suit;
punitive and exemplary damages; a permanent injunction against the
complained of conduct; and pre-judgment interest.
"On August 19, 2011, we filed an answer generally denying the
allegations of the complaint, and asserting affirmative defenses.
On August 23, 2011, we removed the case from the California state
court to the federal district court in San Jose. On July 23, 2012,
we filed a motion to deny class certification. On July 24, 2012,
the plaintiffs filed a motion for leave to amend their class
action complaint to add four additional named plaintiffs.
"On August 28, 2012, the Court held a hearing on our motion to
deny class certification and on the plaintiffs' motion for leave
to amend. Separately, on September 14, 2012, the plaintiffs filed
a motion for class certification, on which the Court held a
hearing on November 6, 2012."
On March 18, 2013, the Court entered an order denying class
certification and denying the plaintiffs' motion for leave to
amend their class action complaint. The individual claims of the
two named plaintiffs remain pending. On April 1, 2013, the
plaintiffs filed with the United States Court of Appeals for the
Ninth Circuit a petition for leave to appeal from the order
denying class certification, which is in the briefing stage and
remains pending.
FMC CORPORATION: Faces Possible Novel Cross-Border "Class Action"
-----------------------------------------------------------------
FMC Corporation is subject to actions brought by private
plaintiffs relating to alleged violations of European and Canadian
competition and antitrust laws.
FMC said in a regulatory filing with the Securities and Exchange
Commission that: "Multiple European purchasers of hydrogen
peroxide who claim to have been harmed as a result of alleged
violations of European competition law by hydrogen peroxide
producers assigned their legal claims to a single entity formed by
a law firm. The single entity then filed a lawsuit in Germany in
March 2009 against European producers, including our wholly-owned
Spanish subsidiary, Foret. Initial defense briefs were filed in
April 2010, and an initial hearing was held during the first
quarter of 2011, at which time case management issues were
discussed."
"At a subsequent hearing in October 2011, the Court indicated that
it was considering seeking guidance from the European Court of
Justice ("ECJ") as to whether the German courts have jurisdiction
over these claims. After submission of written comments on this
issue by the parties, on March 1, 2012, the judge announced that
she would refer the jurisdictional issues to the ECJ. Such a
referral to the ECJ normally takes 12-18 months for completion
after the formal reference.
"The judge has not yet formally made the referral. Since the case
is in the preliminary stages and is based on a novel procedure --
namely the attempt to create a cross-border "class action" which
is not a recognized proceeding under EU or German law -- [the
company is] unable to develop a reasonable estimate of [its]
potential exposure of loss at this time."
FMC CORPORATION: Continues to Face Canadian Antitrust Actions
-------------------------------------------------------------
FMC Corporation continues to face a lawsuit by a certified class
of direct and indirect purchasers of hydrogen peroxide from 1994
to 2005 in the Ontario Superior Court of Justice.
In 2005, after public disclosures of the U.S. federal grand jury
investigation into the hydrogen peroxide industry (which resulted
in no charges brought against [the company]) and the filing of
various class actions in U.S. federal and state courts, which have
all been settled, putative class actions against FMC Corporation
and five other major hydrogen peroxide producers were filed in
provincial courts in Ontario, Quebec and British Columbia under
the laws of Canada.
The other five defendants have settled these claims for a total of
approximately $20.6 million.
On September 28, 2009, the Ontario Superior Court of Justice
certified a class of direct and indirect purchasers of hydrogen
peroxide from 1994 to 2005. [FMC's] motion for leave to appeal the
class certification decision was denied in June 2010. Since then,
the case has been largely dormant.
In early 2012 the parties began a more detailed dialogue on
discovery and at a hearing on April 5, 2012, they requested the
judge to issue more specific guidance on document production. The
court instead stayed the litigation pending resolution by the
Canadian Supreme Court of the viability of indirect purchaser
claims.
The Canadian Supreme Court heard argument on that issue in October
2012. Since the proceedings are in the preliminary stages with
respect to the merits, we are unable to develop a reasonable
estimate of our potential exposure of loss at this time.
GALVESTON SHRIMP: Recalls Pre-Packaged Texas Gulf Shrimps
---------------------------------------------------------
Galveston Shrimp Company has issued a precautionary voluntary
recall of its pre-packaged Texas Gulf Shrimp due to foreign
material found in a bag. The pre-packaged bags are shipped to HEB
Stores. Customers who recently purchased pre-packaged Gulf Shrimp
are encouraged to check their refrigerators and/or freezers.
"Galveston Shrimp Company is committed to delivering the highest
quality product to our retail partners, and in turn, their
customers," said Nello Cassarino, President of Galveston Shrimp
Co. "This recall is precautionary to ensure the integrity of our
products."
Below is the list of products affected by the recall:
Description and UPC Code (Sold by the bag)
* Medium Raw Wild Gulf Brown Shrimp, 51/60 Count
* Medium Raw Wild Gulf White Shrimp, 51/60 Count
- UPC Codes: 27241-45451; 27241-45551; 793573-86138
* Large Raw Wild Gulf Brown Shrimp, 41/50 Count
* Large Raw Wild Gulf White Shrimp, 41/50 Count
- UPC Codes: 27241-45441; 27241-72010; 793573-86137
* Large Raw Wild Gulf Brown Shrimp, 31/42 Count
- UPC Codes: 27241-45430; 27241-45436; 27241-45530;
27241-45536; 27241-45431; 27241-45531;
793573-86135; 793573-86136; 79357386145
* Extra Large Wild Gulf Brown Shrimp, 26/30 Count
* Extra Large Wild Gulf White Shrimp, 26/30 Count
- UPC Codes: 27241-45426; 27241-72005; 793573-86134
* Jumbo Wild Gulf Brown Shrimp, 16/25 Count
- UPC Codes: 27241-45419; 27241-45519; 27241-72020;
793573-86155
* Jumbo Wild Gulf Brown Shrimp, 16/20 Count
* Jumbo Wild Gulf White Shrimp, 16/20 Count
- UPC Codes: 27241-45416; 793573-86132; 793573-86142
* Colossal Wild Gulf Brown Shrimp, 10/15 Count
* Colossal Wild Gulf Brown Shrimp, 10/15 Count
- UPC Codes: 27241-45410; 27241-45412; 27241-45512;
27241-72000; 27241-72015; 793573-86131;
793573-86141
GAS INDEX PRICING LITIGATION: Appeals Court Reverses Judgments
--------------------------------------------------------------
ONEOK Inc. and its subsidiary, ONEOK Energy Services Company L.P.
(OESC), along with several other energy companies, are defending
multiple lawsuits arising from alleged market manipulation or
false reporting of natural gas prices to natural gas-index
publications.
On April 10, 2013, the United States Court of Appeals for the
Ninth Circuit reversed the summary judgments that had been granted
in favor of ONEOK, OESC and other unaffiliated defendants in the
following cases: Reorganized FLI, Learjet, Arandell, Heartland and
NewPage. The Ninth Circuit also reversed the summary judgment that
had been granted in favor of OESC on all state law claims asserted
in the Sinclair case. The Ninth Circuit remanded the cases back to
the United States District Court for the District of Nevada for
further proceedings.
Because of the uncertainty surrounding the Gas Index Pricing
Litigation, including an insufficient description of the purported
classes and other related matters, Oneok said in a regulatory
filing with the Securities and Exchange Commission it cannot
reasonably estimate a range of potential exposures at this time.
However, it is reasonably possible that the ultimate resolution of
these matters could result in future charges that may be material
to its results of operations.
INTER-CON SECURITY: Gets Favorable Ruling in Workers' Wage Suit
---------------------------------------------------------------
In SIMPSON v. INTER-CON SECURITY SYSTEMS, INC., the Defendant asks
a federal district court to compel arbitration of the Plaintiffs'
claims.
Plaintiffs M. Leonard Simpson and Tural Alisker worked as security
guards for Inter-Con Security Systems, Inc. Plaintiffs contend
that Inter-Con is liable for various violations of federal and
state wage-and-hour laws.
Inter-Con argued that both Plaintiffs signed an arbitration
agreement covering all of their claims in their suit. Because
that arbitration agreement precludes class actions, collective
actions, and class arbitration, Inter-Con believes that the
Plaintiffs have no right to pursue claims on behalf of other
Inter-Con guards.
District Judge Richard A. Jones granted Inter-Con's motion in that
it concludes that the arbitration agreement is not procedurally
unconscionable and that, assuming the Plaintiffs signed it, it
mandates arbitration of all of the Plaintiffs' claims and
precludes pursuing those claims on a classwide basis.
However, the court denied the motion "pending supplemental
briefing, to the extent it seeks a ruling that Plaintiffs actually
signed the arbitration agreement," Judge Jones said.
The case is M. LEONARD SIMPSON, et al., Plaintiffs, v. INTER-CON
SECURITY SYSTEMS, INC., Defendant, Case No. C12-1955RAJ, (W.D.
Wash.).
A copy of the District Court's May 10, 2013 Order is available at
http://is.gd/evYReFfrom Leagle.com.
INTERNET GOLD: Abandonment of Suit Over Monthly Fees Approved
-------------------------------------------------------------
The Tel Aviv District Court approved in February 2013 the
abandonment of a purported class action lawsuit alleging that a
subsidiary of Internet Gold - Golden Lines Ltd. unlawfully
collects a certain monthly fee from its customers, according to
the Company's April 24, 2013, Form 20-F filing with the U.S.
Securities and Exchange Commission for the year ended
December 31, 2012.
In August 2012, a claim was filed against Pelephone Communications
Ltd. in the Tel Aviv District Court together with a motion for its
certification as a class action. The plaintiffs contended that
Pelephone unlawfully collects a monthly fee from its customers for
payment by standing order. The amount of the application is
estimated in the total amount of NIS161 million. In February 2013
the court approved the abandonment of the claim and the motion for
its certification as a class action.
Internet Gold - Golden Lines Ltd. -- http://www.igld.com/-- is a
communications group in Israel headquartered in Ramat Gan. The
Company's principal subsidiaries are B Communications Ltd.,
formerly known as 012 Smile.Communications Ltd., and Goldmind
Media Ltd., formerly known as Smile.Media Ltd.
INTERNET GOLD: Abandonment of Suit Over Spam Messages Approved
--------------------------------------------------------------
The abandonment of a purported class action lawsuit alleging that
a subsidiary of Internet Gold - Golden Lines Ltd. sent spam
messages was approved in September 2012, according to the
Company's April 24, 2013, Form 20-F filing with the U.S.
Securities and Exchange Commission for the year ended
December 31, 2012.
In June 2012, a claim was filed against Pelephone Communications
Ltd. in the Tel Aviv District Court together with an application
for its certification as a class action. The applicants allege
that Pelephone is in violation of Section 30A of the
Communications Law by sending marketing messages (spam) despite
the applicants' failure to agree to receive them. The amount of
the alleged damages was NIS455 million. In September 2012, the
Court approved the abandonment of the claim and the motion for its
certification as a class action.
Internet Gold - Golden Lines Ltd. -- http://www.igld.com/-- is a
communications group in Israel headquartered in Ramat Gan. The
Company's principal subsidiaries are B Communications Ltd.,
formerly known as 012 Smile.Communications Ltd., and Goldmind
Media Ltd., formerly known as Smile.Media Ltd.
INTERNET GOLD: Appeal From NIS900,000 Award Still Pending
---------------------------------------------------------
On September 2, 2007, a claim was filed with the Tel Aviv District
Court together with a motion to certify it as a class action
against several corporations operating eCommerce Web sites,
including Goldmind Media Ltd.'s P1000 Web site, which was the
Company's at the time, as well as against several suppliers.
Goldmind is a subsidiary of Internet Gold - Golden Lines Ltd. The
petitioners claimed that these sites have deceived and defrauded
participants in online auctions by unrightfully preventing them
from winning products that the sites determined as "under-priced."
The plaintiffs also claimed that this practice was carried out
through the use of fictitious bidders during the auction process.
On June 1, 2011, the Court rejected the motion to certify the
claim as a class action against all respondents, as it ruled,
among other things, that the plaintiffs did not prove any of the
pre-conditions for the certification of a class action according
to the Israeli law. The Court further ruled that the plaintiffs
shall pay the respondents costs totaling approximately NIS900,000.
On July 17, 2011, the plaintiffs appealed the decision to the
Supreme Court.
No further updates were reported in the Company's April 24, 2013,
Form 20-F filing with the U.S. Securities and Exchange Commission
for the year ended December 31, 2012.
Internet Gold - Golden Lines Ltd. -- http://www.igld.com/-- is a
communications group in Israel headquartered in Ramat Gan. The
Company's principal subsidiaries are B Communications Ltd.,
formerly known as 012 Smile.Communications Ltd., and Goldmind
Media Ltd., formerly known as Smile.Media Ltd.
INTERNET GOLD: Appeal From Dismissal of Overseas Call Suit Open
---------------------------------------------------------------
An appeal from the dismissal of a purported class action lawsuit
over calls made overseas remains pending, according to Internet
Gold - Golden Lines Ltd.'s April 24, 2013, Form 20-F filing with
the U.S. Securities and Exchange Commission for the year ended
December 31, 2012.
In August 2011, a motion was filed with the District Court
(Central Region) against Pelephone Communications Ltd., Cellcom
Israel Ltd. and Partner Communications Company Ltd., together with
an application for its certification as a class action. The
amount of the action against the respondents is not specified.
The action addresses the charge for calls made overseas when the
call time is rounded up to a whole minute, and this, as alleged by
the claimant, is contrary to the provisions of the license and in
contravention of the law. In September 2012, the court dismissed
the claim and the motion for certification as a class action. In
November 2012, the applicants filed an appeal against the ruling
in the Supreme Court.
Internet Gold - Golden Lines Ltd. -- http://www.igld.com/-- is a
communications group in Israel headquartered in Ramat Gan. The
Company's principal subsidiaries are B Communications Ltd.,
formerly known as 012 Smile.Communications Ltd., and Goldmind
Media Ltd., formerly known as Smile.Media Ltd.
INTERNET GOLD: Appeal in Class Suit vs. Bezeq Int'l Pending
-----------------------------------------------------------
On May 4, 2009, a claim was filed with the Tel Aviv District
Court, together with a motion to certify it as a class action,
against Bezeq International Ltd., a subsidiary of Internet Gold -
Golden Lines Ltd. The plaintiff alleged the improper increase in
the tariffs for Internet access services following the first year
of operation and improper charges for services that that it did
not order. The plaintiff sought reimbursement of the excess
amounts paid by entire group of customers, for whom the price of
the services provided to them was raised after the first year, by
NIS216 million. On June 5, 2011, the Court dismissed the claim
and the motion to certifying it as a class action, and ordered the
plaintiff to pay expenses of NIS50,000. On September 4, 2011, the
plaintiff appealed the decision to the Supreme Court.
No further updates were reported in the Company's April 24, 2013,
Form 20-F filing with the U.S. Securities and Exchange Commission
for the year ended December 31, 2012.
Internet Gold - Golden Lines Ltd. -- http://www.igld.com/-- is a
communications group in Israel headquartered in Ramat Gan. The
Company's principal subsidiaries are B Communications Ltd.,
formerly known as 012 Smile.Communications Ltd., and Goldmind
Media Ltd., formerly known as Smile.Media Ltd.
INTERNET GOLD: Appeal in Suit Over Illegal Collection Pending
-------------------------------------------------------------
An appeal from the dismissal of an additional claim in the lawsuit
alleging unlawful collection of funds remains pending, according
to Internet Gold - Golden Lines Ltd.'s April 24, 2013, Form 20-F
filing with the U.S. Securities and Exchange Commission for the
year ended December 31, 2012.
In November 2006, a claim was filed against Bezeq - The Israel
Telecommunications Corp., Ltd. in the Tel Aviv District Court
together with an application for its recognition as a class
action, in the amount of NIS189 million, on the grounds of
unlawful collection of money in cases of disconnection due to non-
payment. In February 2011, the plaintiff filed an additional
claim together with an application for its recognition as a class
action in the amount of NIS44 million, in the Central District
Court concerning a refund of payment for "related services" for
the period after the line had been disconnected. The second claim
from February 2011, and the application for its recognition as a
class action were dismissed on March 28, 2012. On May 8, 2012, an
appeal was filed.
Internet Gold - Golden Lines Ltd. -- http://www.igld.com/-- is a
communications group in Israel headquartered in Ramat Gan. The
Company's principal subsidiaries are B Communications Ltd.,
formerly known as 012 Smile.Communications Ltd., and Goldmind
Media Ltd., formerly known as Smile.Media Ltd.
INTERNET GOLD: Appeal in Suit Over Monthly Benefits Pending
-----------------------------------------------------------
An appeal from the dismissal of a purported class action lawsuit
alleging that a subsidiary of Internet Gold - Golden Lines Ltd.
withholds from its subscribers monthly benefits remains pending,
according to the Company's April 24, 2013, Form 20-F filing with
the U.S. Securities and Exchange Commission for the year ended
December 31, 2012.
In December 2010, a claim was filed in the Central District Court
together with an application for its certification as a class
action. The amount of the claim is not specified. The applicant
alleges that Pelephone Communications Ltd. withholds from its
subscribers one or more monthly benefits due to the fact that the
date of the first invoice is not necessarily the same as the
actual date of joining the plan. In May 2012, the court dismissed
the application for certification, and in June 2012 the decision
was appealed in the Supreme Court.
Internet Gold - Golden Lines Ltd. -- http://www.igld.com/-- is a
communications group in Israel headquartered in Ramat Gan. The
Company's principal subsidiaries are B Communications Ltd.,
formerly known as 012 Smile.Communications Ltd., and Goldmind
Media Ltd., formerly known as Smile.Media Ltd.
INTERNET GOLD: Bezeq Int'l Defends Suit Over Use of Calling Cards
-----------------------------------------------------------------
Internet Gold - Golden Lines Ltd.'s subsidiary is defending a
purported class action lawsuit related to the use of international
calling cards, according to the Company's April 24, 2013, Form 20-
F filing with the U.S. Securities and Exchange Commission for the
year ended December 31, 2012.
In February 2012, a claim was filed with the Tel Aviv District
Court, together with an application for its certification as a
class action, seeking monetary damages against Bezeq International
Ltd. and two other licensees based on facts similar to those
alleged in the 2008 action with respect to the use of
international calling cards. The plaintiff alleged that the
Respondents misled customers who purchased dialing services by
means of pre-paid international calling cards with respect to the
number of minutes on the card. The applicant estimates the amount
claimed from Bezeq International (as well as from each of the
other respondents), in the name of the entire group, to be NIS2.7
billion.
Internet Gold - Golden Lines Ltd. -- http://www.igld.com/-- is a
communications group in Israel headquartered in Ramat Gan. The
Company's principal subsidiaries are B Communications Ltd.,
formerly known as 012 Smile.Communications Ltd., and Goldmind
Media Ltd., formerly known as Smile.Media Ltd.
INTERNET GOLD: Cert. Bid in Suit Over Call Detail Records Erased
----------------------------------------------------------------
A request for approving a class action lawsuit was erased by the
Tel Aviv District Court in February 2013, according to Internet
Gold - Golden Lines Ltd.'s April 24, 2013, Form 20-F filing with
the U.S. Securities and Exchange Commission for the year ended
December 31, 2012.
In September 2012, a claim was filed against Pelephone
Communications Ltd. in the Tel Aviv District Court together with
an application for its certification as a class action. The
applicant alleged that Pelephone does not include a call details
record in its phone bill, and this is contrary to Ministry of
Communication instructions and Pelephone's license. The total
amount of the class action is about NIS109 million. In February
2013, the request for approving a class action lawsuit was erased
by the court for inaction.
Internet Gold - Golden Lines Ltd. -- http://www.igld.com/-- is a
communications group in Israel headquartered in Ramat Gan. The
Company's principal subsidiaries are B Communications Ltd.,
formerly known as 012 Smile.Communications Ltd., and Goldmind
Media Ltd., formerly known as Smile.Media Ltd.
INTERNET GOLD: Class Claims in Network Malfunction Suit Abandoned
-----------------------------------------------------------------
The request to abandon applications for certification as a class
action in the lawsuit arising from a malfunction in the network of
an Internet Gold - Golden Lines Ltd. subsidiary was approved in
October 2012, according to the Company's April 24, 2013, Form 20-F
filing with the U.S. Securities and Exchange Commission for the
year ended December 31, 2012.
In January 2011, the following four claims arising from a
malfunction in Bezeq - The Israel Telecommunications Corp., Ltd.'s
network on January 25, 2011, together with applications for their
certification as class actions were filed against Bezeq: (i) a
claim estimated at NIS104 million in the Nazareth District Court;
(ii) a claim estimated at NIS135 million in the District Court for
the Central District; (iii) a claim estimated at NIS84 million in
the Haifa District Court; and (iv) a claim estimated at NIS217
million in the Tel Aviv District Court. Subsequently, all four
claims were transferred to the Tel Aviv District Court and on
November 27, 2011, the court decided to consolidate the hearing of
the last two claims and to dismiss the first two claims. The
plaintiffs allege that Bezeq's customers were disconnected from
Bezeq's services and were unable to make proper use of their
telephone lines, resulting in losses.
On October 9, 2012, the Court approved the applicants' request to
abandon their applications for certification as a class action.
Internet Gold - Golden Lines Ltd. -- http://www.igld.com/-- is a
communications group in Israel headquartered in Ramat Gan. The
Company's principal subsidiaries are B Communications Ltd.,
formerly known as 012 Smile.Communications Ltd., and Goldmind
Media Ltd., formerly known as Smile.Media Ltd.
INTERNET GOLD: Class Suit Over Use of Handset Remains Pending
-------------------------------------------------------------
A class action lawsuit over the use of handset, which was not
purchased from an Internet Gold - Golden Lines Ltd. subsidiary
remains pending, according to the Company's April 24, 2013, Form
20-F filing with the U.S. Securities and Exchange Commission for
the year ended December 31, 2012.
In May 2012, a claim was filed against Pelephone Communications
Ltd. in the Tel Aviv District Court, together with an application
for its certification as a class action. The amount of the action
is NIS124 million. According to the applicant, Pelephone does not
inform customers who wish to subscribe for its services utilizing
a handset, which was not purchased from Pelephone, that since the
handset does not support the 850 MHz frequency, they will only
have partial reception on one frequency rather than two.
Internet Gold - Golden Lines Ltd. -- http://www.igld.com/-- is a
communications group in Israel headquartered in Ramat Gan. The
Company's principal subsidiaries are B Communications Ltd.,
formerly known as 012 Smile.Communications Ltd., and Goldmind
Media Ltd., formerly known as Smile.Media Ltd.
INTERNET GOLD: DBS Faces Suit Over Channel 5+ Disconnection
-----------------------------------------------------------
Internet Gold - Golden Lines Ltd.'s subsidiary is facing a
purported class action lawsuit related to the disconnection of
customers from channel 5+, according to the Company's April 24,
2013, Form 20-F filing with the U.S. Securities and Exchange
Commission for the year ended December 31, 2012.
In March 2013, a claim was filed in the Tel Aviv District Court
against DBS Satellite Service (1998) Ltd. together with a motion
to certify it as a class action. According to the claimant, DBS
disconnected customers from channel 5+ and reconnected them only
after the said customers contacted DBS and positively asked to be
reconnected, but continued collecting fees for the channel from
those customers who did not contact them and were, therefore, not
reconnected. The claimant estimated that his own damage is
NIS1,065 of which NIS1,000 is non-monetary damage, but did not
include a total amount for the class action.
Internet Gold - Golden Lines Ltd. -- http://www.igld.com/-- is a
communications group in Israel headquartered in Ramat Gan. The
Company's principal subsidiaries are B Communications Ltd.,
formerly known as 012 Smile.Communications Ltd., and Goldmind
Media Ltd., formerly known as Smile.Media Ltd.
INTERNET GOLD: Defends Class Suits Alleging Customer Claims
-----------------------------------------------------------
Internet Gold - Golden Lines Ltd. is defending itself against
class action lawsuits alleging customer claims, according to the
Company's April 24, 2013, Form 20-F filing with the U.S.
Securities and Exchange Commission for the year ended
December 31, 2012.
During the normal course of business, claims were filed against
the Company by its customers. These are mainly motions for
certification of class actions and the ensuing claims concerning
the alleged unlawful collection of payment and impairment of the
services provided by the Company. At December 31, 2012, these
claims amount to NIS146,155,000. In the opinion of the management
of the Company, based, inter alia, on legal opinions as to the
likelihood of success of the claims, the financial statements
include appropriate provisions of NIS3,038,000, where provisions
are required to cover the exposure resulting from such claims.
After the balance sheet date, a settlement agreement for two class
actions whose claims totaled NIS32,608,000 was given the force of
a court judgment.
Internet Gold - Golden Lines Ltd. -- http://www.igld.com/-- is a
communications group in Israel headquartered in Ramat Gan. The
Company's principal subsidiaries are B Communications Ltd.,
formerly known as 012 Smile.Communications Ltd., and Goldmind
Media Ltd., formerly known as Smile.Media Ltd.
INTERNET GOLD: Defends Suit by Handicapped People vs. Units
-----------------------------------------------------------
Internet Gold - Golden Lines Ltd. is defending its subsidiaries
from a class action lawsuit brought on behalf of the handicapped
members of the public, according to the Company's April 24, 2013,
Form 20-F filing with the U.S. Securities and Exchange Commission
for the year ended December 31, 2012.
In February 2012, an action was filed in the Jerusalem District
Court, together with an application for its certification as a
class action, against Bezeq - The Israel Telecommunications Corp.,
Ltd. and Pelephone Communications Ltd., and two other cellular
companies. The plaintiffs allege that the respondents do not
offer the handicapped members of the public accessible handsets
and services in a fitting manner and that they are therefore in
breach of the law and the regulations. The plaintiffs are
requesting certification of the claim as a class action in the
name of a group of handicapped people and are claiming monetary
compensation of NIS361 million against all the defendants for the
losses they allege (monetary loss, non-monetary loss, and
infringement of autonomy) as well as other relief.
Internet Gold - Golden Lines Ltd. -- http://www.igld.com/-- is a
communications group in Israel headquartered in Ramat Gan. The
Company's principal subsidiaries are B Communications Ltd.,
formerly known as 012 Smile.Communications Ltd., and Goldmind
Media Ltd., formerly known as Smile.Media Ltd.
INTERNET GOLD: Defends Suit Over High Speed Internet Service
------------------------------------------------------------
Internet Gold - Golden Lines Ltd.'s subsidiary is defending itself
against a class action lawsuit over high speed Internet service,
according to the Company's April 24, 2013, Form 20-F filing with
the U.S. Securities and Exchange Commission for the year ended
December 31, 2012.
In March 2012, a claim was filed against Pelephone Communications
Ltd. in the Tel Aviv District Court, together with an application
for its certification as a class action. The grounds for the claim
are that Pelephone allegedly makes false representations to the
public according to which it provides a surfing experience on its
network at extremely high speeds. According to the plaintiffs,
they conducted dozens of measurements showing that the surfing
speed on the respondent's cellular network is lower than
specified. According to the claim, this state of affairs caused
and causes cumulative personal loss of NIS560. The total amount
of the application is estimated be approximately NIS242 million,
subject to data to be produced by Pelephone as part of the
proceeding.
Internet Gold - Golden Lines Ltd. -- http://www.igld.com/-- is a
communications group in Israel headquartered in Ramat Gan. The
Company's principal subsidiaries are B Communications Ltd.,
formerly known as 012 Smile.Communications Ltd., and Goldmind
Media Ltd., formerly known as Smile.Media Ltd.
IVY ASSET: Judge Approves Counsel Fees in Madoff Settlement
-----------------------------------------------------------
Christine Simmons, writing for New York Law Journal, reports that
a federal judge has approved plaintiffs counsel fees in a $219
million settlement related to Bernard Madoff's Ponzi scheme,
rejecting objections by the New York attorney general that the
fees were "wildly excessive" but trimming a portion of the request
for what she said were unnecessary hours reviewing some documents.
The settlement arises from separate actions brought by Attorney
General Eric Schneiderman, the U.S. Labor Department and 13
plaintiffs firms on behalf of investors against Ivy Asset
Management, a subsidiary of Bank of New York Mellon, accusing it
of advising clients to invest with Madoff despite serious concerns
about his operations. The parties reached a $219 million
settlement, in which Ivy would pay most of the funds.
Plaintiffs lawyers had requested $40.8 million in fees, about
20 percent, and $1.2 million in expenses as part of the
settlement. Schneiderman and other objectors criticized the number
of hours reflected in the request and said plaintiffs counsel had
merely "piggybacked" on the attorney general's work to reach the
settlement with Ivy.
But Southern District Judge Colleen McMahon said in her May 9
ruling that the attorney general's suit was dormant.
"Once the action was filed, the NYAG effectively stopped doing
anything at all," she said.
Judge McMahon said it's undisputed that private plaintiffs counsel
carried the "laboring oar" in the settlement negotiations, which
took about nine months to conclude. She rejected the attorney
general's argument that the fee award should be rejected because
the attorney general had earlier been offered a $140 million
settlement.
"When the Private Lawsuits revved up for litigation and when
settlement negotiations commenced, the settlement pot did not
contain $140 million. The settlement pot was empty," she said.
"I will not allow the NYAG to take credit for a settlement that
for whatever reason, it did not obtain."
Judge McMahon called the settlement "nothing short of
extraordinary" and said she was not aware of any other Madoff-
related case where counsel have found a way to resolve all private
and regulatory claims simultaneously and with the concurrence of
the Madoff bankruptcy trustee.
Judge McMahon said the 20 percent fee request is actually below
the range of fee awards in similar actions where court approval of
fees is required.
She said the total number of hours expended by all counsel in all
matters -- 118,000 -- is "admittedly, a lot of attorney and
paralegal hours."
"Could the case have been litigated more efficiently? Without a
doubt," she wrote. "Does the result justify the fee? Absolutely."
Judge McMahon said she has "struggled for several weeks" with the
issue of compensation for document review, and had she thought
ahead at the beginning, she would have had specific directives
about how much the court could authorize for hourly rates for
document reviewers.
"There is absolutely no excuse for paying those temporary, low
over-head employees $40 or $50 an hour and then marking up their
pay ten times for billing purposes," Judge McMahon said.
But the judge said it's unfair to impose a rule ex post facto.
She said she was left with the "firm conviction that class
plaintiffs expended unnecessary hours reviewing the regulatory
documents." Therefore, she wrote, she would reduce by 25 percent
the fee requested by the five class action firms for the work they
did reviewing documents that had been produced to the regulators.
These firms include Lowey Dannenberg Cohen & Hart; Kessler Topaz
Meltzer & Check; Bernstein Liebhard; Cohen Milstein Sellers & Toll
and Wolf Haldenstein Adler Freeman & Herz.
Overall, Judge McMahon said, "Rarely has there been a more
transparent settlement negotiation. It could serve as a prototype
for the resolution of securities-related class actions, especially
those that are adjunctive to bankruptcies."
Lead plaintiffs counsel Barbara Hart of Lowey Dannenberg said the
fee cut amounts to more than $1 million, leaving about $39 million
for attorney fees. The judge approved all of the expenses.
Ms. Hart said the judge "clearly understood the hard work and
dedication" that drove the result and "her compliments in calling
it amazing and a prototype are very gratifying."
The New York Attorney General's Office did not return a call for
comment.
The case is In re: J.P. Jeanneret Associates, 1:09-cv-03907.
KEYCORP: N.D. Ohio Judge Affirms Termination of ERISA Lawsuit
-------------------------------------------------------------
The United States District Court for the Northern District of Ohio
denied a motion to set aside a final judgment that terminated a
suit by participants in KeyCorp's 401(k) Savings Plan.
KeyCorp stated in its 10-Q filing with the Securities and Exchange
Commission for the quarter ended March 31, 2013: "Two putative
class actions were filed on September 21, 2010 in the United
States District Court for the Northern District of Ohio. The
plaintiffs in these cases sought to represent a class of all
participants in our 401(k) Savings Plan and alleged that the
defendants in the lawsuit breached fiduciary duties owed to them
under ERISA."
These two putative class action lawsuits were substantively
consolidated with each other in a proceeding styled Thomas Metyk,
et al. v. KeyCorp, et al. ("Metyk"). A substantially similar class
action, Taylor v. KeyCorp, et al., was dismissed from the Northern
District of Ohio on August 12, 2010. This dismissal was affirmed
by the United States Court of Appeals for the Sixth Circuit on
May 25, 2012.
On January 29, 2013, the Northern District of Ohio entered its
order granting the defendants' motion to dismiss the plaintiffs'
consolidated complaint for failure to state a claim and entered
its final judgment terminating the Metyk proceeding. On February
19, 2013, plaintiffs filed a motion to set aside the final
judgment and to permit the plaintiffs to file an amended
complaint. On April 30, 2013, the court denied the motion to set
aside the final judgment.
LABOR READY: Arbitration Ruling in Wage and Hour Suit Reversed
--------------------------------------------------------------
The Court of Appeals of California for the Second District
reversed a trial court order compelling arbitration in ALLEN v.
LABOR READY SOUTHWEST, INC.
Mr. Allen brought his class, representative and Private Attorneys
General Act action against Labor Ready on April 30, 2009. The
Plaintiff alleged that he and other similarly situated employees
were paid:
-- on an hourly basis and worked more than 40 hours a week
and more than 8 hours a day without overtime compensation in
violation of California law and the Fair Labor Standards Act;
-- wages due with a check that failed to conform to section
212 and then were required to pay money to the Defendant to
receive their pay in cash; and
-- with form checks which did not contain a California
address making it difficult to negotiate the pay checks without a
fee or hold placed on the check.
The Plaintiff further alleged that the Defendant had a practice of
making the employees report to the branch offices and wait up to
several hours to be assigned to work at a company.
On September 28, 2011, the Defendant moved to compel arbitration
on the grounds that the Plaintiff executed a valid arbitration
agreement enforceable under the Federal Arbitration Act, and the
arbitration agreement had a valid and enforcement class action
waiver and any claims to the contrary were preempted by federal
law. The trial court granted the petition to compel arbitration
and denied it in part. Citing Brown v. Superior Court, supra, 197
Cal.App.4th at page 502, the trial court severed the claim under
the Private Attorneys General Act. The Defendant filed a timely
notice of appeal from the order partially denying an order to
compel arbitration and the Plaintiff filed a timely cross-appeal.
The Plaintiff's cross-appeal asserts the arbitration agreement was
unconscionable under general contract principles or that the
Defendant waived the right to compel arbitration.
On May 13, 2013, the California Appeals Court reversed the trial
court order compelling arbitration saying the Defendant waived the
right to compel arbitration as a matter of law. Accordingly, the
Defendant's appeal is moot.
Mr. Allen is awarded his costs on appeal from Labor Ready, the
Appeals Court further ruled.
The case is JEFFREY LEE ALLEN, Plaintiff and Appellant, v. LABOR
READY SOUTHWEST, INC., Defendant and Appellant, No. B237673.
Mark R. Thierman, Esq., and Jason J. Kuller, Esq., of Thierman Law
Firm, P.C.; Shaun Setareh, Esq., of the Law Offices of Shaun
Setareh; and Louis Benowitz, Esq., of the Law Offices of Louis
Benowitz represented the Plaintiff and Appellant.
David R. Ongaro, Esq. -- David.Ongaro@tklaw.com -- Kyann C. Kalin,
Esq., and Amelia D. Winchester -- Amelia.Winchester@tklaw.com --
of Thompson & Knight LLP, formerly Ongaro Burtt & Louderback,
represented the Defendant and Appellant.
A copy of the Appeals Court's May 13, 2013 Decision is available
at http://is.gd/ka8Nhdfrom Leagle.com.
LUMBER LIQUIDATORS: Still Defends "Prusak" Suit in Illinois
-----------------------------------------------------------
On August 30, 2012, Jaroslaw Prusak, a purported customer
("Prusak"), filed a putative class action lawsuit, which was
subsequently amended, against Lumber Liquidators Holdings, Inc.,
in the United States District Court for the Northern District of
Illinois. Prusak alleges that the Company willfully violated the
Fair and Accurate Credit Transactions Act ("FACTA") amendment to
the Fair Credit Reporting Act in connection with printed credit
card receipts provided to the Company's customers. Prusak, for
himself and the putative class, seeks statutory damages of no less
than $100 and no more than $1,000 per violation, punitive damages,
attorney's fees and costs, and other relief. The Company says it
intends to defend this matter vigorously. Given the uncertainty
of litigation, the early stage of the case and the legal standards
that must be met for, among other things, class certification and
success on the merits, no outcome can be predicted at this time.
Based upon the current status of the matter and information
available, the Company does not, at this time, expect the outcome
of this proceeding to have a material adverse effect on the
Company's results of operations, financial position or cash flows.
No further updates were reported in the Company's April 24, 2013,
Form 10-Q filing with the U.S. Securities and Exchange Commission
for the quarter ended March 31, 2013.
Lumber Liquidators Holdings, Inc. --
http://www.lumberliquidators.com/-- is a multi-channel specialty
retailer of hardwood flooring, and hardwood flooring enhancements
and accessories, operating as a single business segment. The
Toano, Virginia-based Company offers an extensive assortment of
exotic and domestic hardwood species, engineered hardwoods and
laminates direct to the consumer.
MA LABORATORIES: Judge Strikes Down Arbitration Agreement
---------------------------------------------------------
Vanessa Blum, writing for The Recorder, reports that it's gotten
awfully hard for lawyers to wriggle out of arbitration agreements
in the wake of AT&T Mobility v. Concepcion.
But it's not impossible, as evidenced by a blistering order handed
down by U.S. District Judge William Alsup, siding with class
action lawyers at Sanford Heisler in an employment case against
San Jose computer company Ma Laboratories Inc.
Judge Alsup struck down an arbitration agreement the company
instructed the lead plaintiff to sign on the day she was fired,
finding it unconscionable under state law. Judge Alsup blasted Ma
Laboratories for slipping arbitration language into the contract
without mention and giving plaintiff Michelle Lou the impression
that she would only receive her final paycheck upon signing.
"On the sliding scale, this case is beyond the pale," Judge Alsup
wrote in the seven-page order. "The procedural unfairness was
severe and the substantive one-sidedness was heavy-handed. The
provision is unenforceable."
To be deemed invalid under the doctrine of unconscionability, an
arbitration agreement must include both substantive and procedural
inequity, for example by relying on unequal bargaining power and
also resulting in one-sided benefits. The doctrine, called into
question but not killed in Concepcion, the U.S. Supreme Court's
landmark 2011 decision, remains good law in the U.S. Court of
Appeals for the Ninth Circuit, Judge Alsup asserted.
Ma Laboratories lawyers Christine Long of Berliner Cohen and San
Jose solo Craig Hansen said Lou was fired due to substandard
performance and was under no pressure to sign the agreement.
"Lou's employment certainly was not conditioned upon execution
since the agreement was presented on her termination," the lawyers
wrote in a court filing.
But Judge Alsup posed the question of whether Lou received any
benefit at all for signing the agreement "given that she signed
only moments before she was ushered out the door."
Judge Alsup will separately evaluate an arbitration agreement
signed in 2010 by opt-in plaintiff Xueou Feng. That ruling could
have broader consequences for the class action because it was
presented to all salespeople in the ordinary course of business.
In an email, Mr. Hansen said Ma Laboratories disagrees with Judge
Alsup's ruling and is evaluating options for appeal. He added:
"The company denies plaintiffs' claims and allegations as being
without merit and will continue to vigorously defend itself
against them."
Ma Laboratories retained Long and Hansen earlier this year,
replacing a legal team from Littler Mendelson. Randall Creech of
Creech Liebow & Kraus in San Jose represents three individual
defendants.
Plaintiffs counsel Janette Wipper, San Francisco managing partner
of Sanford Heisler, could not be reached for comment. She was
part of the team that settled a gender discrimination suit against
Novartis Pharmaceuticals Corp. for $175 million and has a pending
discrimination case in the Northern District against Japanese
drugmaker Daiichi Sankyo.
In a filing, Ms. Wipper said Ma Laboratories sprang the
arbitration clause on Lou "as she was being marched out the door,
without any consideration or informed consent."
"Depriving the potential class of a named plaintiff would
effectively preclude absent class members from vindicating their
rights," Ms. Wipper wrote.
Ma Laboratories is a privately owned distributor of computer
components, with annual sales of roughly $2 billion and 1,000 U.S.
employees, according to the complaint in Lou v. Ma Laboratories,
12-5409.
The suit accuses the company of "blatant disregard" for state
labor laws and refusing to pay overtime wages to low-level sales
workers, who were instructed to clock out at 5:30 p.m. even when
they worked later.
In his order striking down the arbitration agreement, Judge Alsup
noted that Lou signed several employment contracts with Ma
Laboratories while working as a sales rep from 2006 to 2009, each
providing that legal disputes could be tried in federal or state
court. In those contracts, Lou also agreed in advance to sign a
one-page termination certification at the end of her employment.
The sample termination certification provided to her made no
mention of arbitration, Judge Alsup stated.
On the day she was fired, Lou was asked to sign a document that
bore the same heading but contained a new provision agreeing to
binding arbitration. In his order, Judge Alsup said the agreement
was presented "on a take-it-or-leave-it basis" and "deceptively
resembled" the earlier agreed-on version. Therefore, he ruled, it
was incumbent on Ma Laboratories to draw Lou's attention to the
drastic change in contract terms.
"The certification had the correct title. But it did not have the
correct content," Judge Alsup wrote, adding, "In those upsetting
circumstances she could not be expected to process all information
and documents in a cool and detached manner."
MADISON COUNTY, IL: Tax Buyers Seek Dismissal of Class Action
-------------------------------------------------------------
Sanford J. Schmidt, writing for The Telegraph, reports that some
tax buyers named as defendants in a recent class action lawsuit
are asking that the suit be dismissed on the grounds the statute
of limitations has come into play and that the plaintiff has not
alleged any illegal action, among other claims.
The case is one of three class actions that cover much of the
ground that has been laid out by federal authorities in their
criminal case against former Madison County Treasurer Fred Bathon,
a Democrat, who pleaded guilty to one count of violating the
Sherman Antitrust Act.
Both the federal government and the lawsuit state Mr. Bathon
conspired with certain tax buyers to rig bids in the county's
annual auction of tax deeds.
The proposed class action suits name Mr. Bathon, Madison County
and a number of the tax buyers as defendants.
The auction allows the buyer to acquire the debt and collect it,
plus an interest penalty. The low bidder gets the debts and pays
the county the amount of taxes owed.
The tax buyer can collect the debt, plus the penalty. Under the
illegal scheme, the favored buyers could collect the statutory
maximum 18 percent interest, resulting in huge profits. Even
greater returns were possible if the debtor were unable to pay,
including the chance to foreclose on the property.
The favored buyers allegedly had their bids of 18 percent in most
cases recognized without giving others a chance to bid lower.
Contributors to Mr. Bathon's campaign allegedly were given
preferential seating. Most delinquent tax debtors then would be
stuck with an 18 percent debt.
In the most recent auction conducted by Treasurer Kurt Prenzler, a
Republican, the average interest rate was 3.7 percent.
In a proposed class action filed by attorney Nelson L. Mitten of
St. Louis, tax buyers Dennis D. Ballinger Jr., Empire Tax Corp.
and Vista Securities moved to dismiss the case on the grounds that
the tax buyers, themselves, acted according to law. The law
expressly permits bids up to 18 percent, the motion states.
"Because the tax purchasers, including the moving defendants, had
a legal right to demand that property owners pay a penalty to
redeem their properties and to bid up to 18 percent to purchase
the (tax debt), plaintiff cannot maintain a cause of action for
money had and received," the tax buyers' motion claims.
The class actions were brought under the Sherman Anti-Trust Act,
but the motion claims that activities of a unit of local
government and its employees and officers are excluded from the
act.
Because the sale arises out of activities of a local government,
the plaintiff cannot make any claims, the motions allege.
The motion to dismiss also claims there was no conspiracy as
defined by law. It claims there was no price-fixing among the
various competing tax buyers; therefore, there was no conspiracy
as required by law.
The class action does not name any competing tax buyer that was
excluded from participating in the tax sales. The class action
specifies sales between the years 2005 and 2008, the last four
years Mr. Bathon was in office.
The motion to dismiss also claims that the suit, itself, is
entirely barred because there is a statute of limitations of four
or five years.
The named plaintiff, Geralynn Lindow, accrued delinquent taxes in
2007, but the suit was not filed until 2013.
Another motion to dismiss also was filed by John Vassen, Joe
Vassen and V.I. Inc. They also are claiming the suit is barred by
the statute of limitations.
Prairie State Securities also has filed a motion to dismiss.
Their claim is that there is no allegation by the plaintiff that
any specific action was taken by the defendants to conceal their
activities. Prairie State also cites the statute of limitations.
Defendant Robert Luken also has filed a petition to stay any
further proceedings in the case until after the federal criminal
case is completed.
Federal prosecutors have said that the case involving Mr. Bathon
remains under investigation and that Mr. Bathon is expected to
cooperate.
NEW YORK, NY: Defends Massive Use of Stop-and-Frisk Policy
----------------------------------------------------------
Mark Hamblett, writing for New York Journal, reports that a lawyer
for New York City insisted on May 20 that plaintiffs have
thoroughly failed to prove that New York City police violate the
U.S. Constitution on a massive scale by stopping, questioning and
frisking young men of color without reasonable suspicion they have
committed or are about to commit a crime.
Heidi Grossman, deputy chief of the city Law Department's Special
Federal Litigation Division, began closing arguments in the
grinding, 10-week bench trial before Southern District Judge Shira
Scheindlin by questioning the plaintiffs' claims with regard to
each and every one of the 19 stops described from the witness
stand by name plaintiffs or their witnesses.
Their testimony, Ms. Grossman said, was vague, inconsistent,
unreliable and did nothing to advance the plaintiffs' claim that
the police are engaged in a top-down policy of violating the
Fourth Amendment. Instead, she said the evidence showed that
police practices comported with the Constitution, were in sync
with the crime rate and demographics of individual neighborhoods,
and are dedicated to keeping the city safe -- "especially in
minority neighborhoods."
And the testimony of 12 plaintiff witnesses who made up 19 stops
out of some 4.3 million stops between 2004 and 2012, Ms. Grossman
said, showed that all 19 were made, "I might add, with no racial
motivation whatsoever."
"They've failed to show a single constitutional violation much
less a widespread pattern or practice," Ms. Grossman said.
When it came time for the plaintiffs argument, attorney Gretchen
Hoff Varner of Covington & Burling told Judge Scheindlin that the
individual witnesses had proven their point -- "that the NYPD has
laid siege to black and Latino neighborhoods in the city --
tossing the requirements of the Fourth and Fourteenth amendments
out the window, leaving people afraid to leave their homes."
Ms. Hoff Varner said police officers were using "race as a proxy
for reasonable suspicion" in making stops.
Ms. Grossman had gone after the plaintiffs' insistence that the
NYPD has a quota system for stop-and-frisks, arguing that the
department has performance goals, not quotas, and rightly so.
But Ms. Hoff Varner countered that the NYPD "pressures officers to
make stops and assumes that if a black person is stopped in a high
crime area that's a legitimate stop."
In a case where there is sharp disagreement over the meaning of
statistical evidence over stop, question and frisk, both sides
emphasized the importance of individual cases.
At one point, Judge Scheindlin said to Ms. Hoff Varner, "If all of
these stops are good, you're going to have a problem."
"All 19 of these stops have constitutional problems," Ms. Hoff
Varner responded.
Judge Scheindlin also heard from both sides on possible remedies
should she find the city liable under the Fourth or Fourteenth
Amendment in Floyd v. City of New York, 08 Civ. 01034.
Role of Monitor Discussed
The central argument is over the plaintiffs' request for a court-
appointed monitor to oversee reform of city practices. The
plaintiffs want a monitor in part because they allege the city
failed to live up to its promises in the settlement of a 1999 case
on NYPD practices, Daniels v. City of New York.
Ms. Grossman said the police have complied with Daniels by, among
other things, adopting an anti-racial profiling policy,
documenting stops on special forms, regularly auditing those
forms, and being responsive to community concerns.
A monitor, she said, was "utterly unnecessary" as it would
interfere with management of the NYPD, hurt morale and require
even more paperwork from officers.
Judge Scheindlin gave some indication of her thinking when she
asked, "What if there was an expert who focused solely on the
issues faced here, not somebody who would look at the whole police
department?"
Later in the exchange, Judge Scheindlin said that, despite "the
list of horribles you just gave me" maybe Ms. Grossman's
opposition to a monitor was based on the assumption that a monitor
couldn't have a more limited role.
Ms. Grossman also directly addressed a piece of evidence the
plaintiffs claim is a smoking gun -- the taped statement of Deputy
Inspector Christopher McCormack to Officer Pedro Serrano in the
Bronx that he needs to stop and frisk "the right people, at the
right time, at the right location." When Mr. Serrano asks
McCormack for more specifics, Mr. McCormack responds, "I told you
at roll call, and I have no problem telling you this, male blacks
14 to 20, 21."
Ms. Grossman reminded the judge that Mr. McCormack explained at
trial that his comment was referring to limited resources and the
crime conditions that he found on the ground.
"What you heard was McCormack telling the officer" exactly what to
do, Ms. Grossman said, and it was "not because law abiding blacks
are more suspicious generally but because robberies and grand
larcenies in Mott Haven were reportedly being committed by black
males ages 14-21."
When Ms. Grossman said none of the witnesses claimed officers used
racial slurs or race-based language, Judge Scheindlin said, "Are
you saying that when an officer doesn't use racial slurs or race-
based words, there can't be an inference that the stop was based
on race?"
Ms. Grossman said that was correct, and the statistics cannot be
used to impute improper motives to the NYPD.
The legal team from the New York City Law Department representing
the NYPD are: David Dehay, paralegal; Kenneth Azar, paralegal; and
attorneys Lisa Richardson, Suzanna Publicker and Judson Vickers.
Also on the team are attorneys Joseph Marutollo, Brenda Cooke,
Heidi Grossman and Morgan Kunz. Also on the team is Linda
Donahue.
The members of the legal team for stop-and-frisk plaintiffs are:
Baher Azmy, legal director, Center for Constitutional Rights;
Sunita Patel, Center for Constitutional Rights; Eric Hellerman,
Covington & Burling; Gretchen Hoff Varner, Covington; Kasey
Martini, Covington; Bruce Corey, Covington; Jonathan Moore,
Beldock Levine & Hoffman; Jenn Rolnick Borchetta, Beldock Levine;
Chauniqua Young, Center for Constitutional Rights; Theresa Lin,
paralegal, Covington & Burling; Ian Hea, paralegal, Center for
Constitutional Rights; and Darius Charney, senior staff attorney,
Center for Constitutional Rights.
Statistical Evidence
This answer set up later arguments by Senior Counsel Brenda Cooke
of the Law Department and Darius Charney, senior staff attorney of
the Center for Constitutional Rights, over the statistical
evidence offered by plaintiff's expert, Professor Jeffrey Fagan of
Columbia Law School.
Ms. Cooke said Mr. Fagan's conclusion that NYPD policies have a
disparate impact on blacks and Hispanics was inherently flawed
because he used the percentage of people by race in New York City
and crime statistics, but didn't include data on suspect
descriptions.
"Race is an element that should be included in the benchmark,"
Ms. Cooke said. "But Fagan didn't include suspect race data in
his analysis. In fact, he absolutely refused to consider it."
But Mr. Charney said crime suspect data was not reliable as a
benchmark because the data is incomplete -- on 40 percent of crime
reports a suspect's race is not listed.
Mr. Charney said Ms. Fagan, using data on population and crime
rates, disproved the city's contention that blacks and Hispanics
are stopped at a rate commensurate with the numbers of crimes
committed by people in those two groups.
He said "the problem is that 90 percent of the people stopped are
not engaged in illegal activity."
"If you look at how this plays out in the streets of New York
City," he said, and look at crime patterns and look at
demographics, "You, are, in fact, profiling."
Mr. Charney also focused on the "low hit rate" for the recovery of
weapons by police during the stops -- under 1 percent of all stops
result in the recovery of a weapon, and a gun is recovered in only
.14 percent of the stops.
The two sides took issue with the testimony of State Senator Eric
Adams, D-Brooklyn, a former NYPD officer, who said that on two
occasions, in public, Police Commissioner Raymond Kelly said he
uses stop, question, and frisk to "instill fear" in young blacks
and Hispanics that, every time they leave their homes, they will
be stopped. Ms. Grossman said no other witnesses have ever
corroborated this "utterly implausible scenario."
Mr. Charney also said the evidence showed that the city was
"deliberately indifferent" in its failure to "adequately train,
monitor, supervise and, ultimately, discipline officers."
Closing for the plaintiffs, Jonathan Moore of Beldock Levine &
Hoffman, said the city has "turned a blind eye to the rising tide
of criticism" over stop-and-frisk and had failed to live up to its
obligations under the Daniels settlement to document stops.
The forms police use to document stops, he said, are insufficient
to determine whether a stop is based on reasonable suspicion, and
a recent change to link the forms to written accounts in officer
memo books is insufficient.
He also disagreed with Ms. Grossman's statement that the city had
complied with Daniels.
"What we were guilty of was trusting that the New York City Police
Department would address the problem on it's own," Mr. Moore said.
"That's powerful evidence of why an outside monitor should be
appointed in this case."
The city has suggested, Mr. Moore said, that adhering to the
Constitution will cost lives and that safety trumps all.
"What price?" Mr. Moore asked. "What price to the rule of law?
What price to a generation of blacks and Hispanics who see
themselves targeted by this practice, when they are just going
about their lives? We need to restore justice and the rule of
law."
Both sides will be submitting proposed findings of fact and trial
briefs.
The judge is expected to issue her ruling this summer.
NEW YORK, NY: Stop & Frisk Judge Appreciates Judicial Independence
------------------------------------------------------------------
Mark Hamblett, writing for New York Law Journal, reports that the
judge presiding over one of the most politically charged cases in
recent New York City history says her 20 years on the bench have
taught her to "appreciate more than ever the words 'judicial
independence.'"
Judge Shira Scheindlin, in a recent interview during the nine-week
bench trial over the constitutionality of the New York City Police
Department's anti-crime stop, question and frisk policies, said
there are too many judges who don't want to take chances and
deliver controversial rulings.
"They are fearful or they want a promotion or whatever it is, they
don't exercise the independence they should have. State court
judges of course face re-election, which is a terrible thing, but
federal judges, who are appointed for life, don't appreciate how
much independence they have -- many of them are a little cautious,
more cautious than they should be."
Few court observers would describe Judge Scheindlin as cautious
and the judge spoke freely when she sat down recently with the Law
Journal to discuss some of her prior decisions and her views on
being a federal judge. The only subject off the table was the
ongoing trial, expected to wrap up on May 20 with closing
arguments.
The judge, who already has made some rulings critical of the city
for stop-and-frisk, has not been reluctant to make controversial
decisions in the realm of civil liberties and constitutional law
that have drawn the ire of police and prosecutors.
"I do think judges have a duty to protect individual rights
because that's what the Bill of Rights is all about," she said.
"It's the responsibility of the judiciary to protect those rights
granted by our Founders. Now, does that make me an activist? No.
Some people have said I'm conservative because I go back to what
the Founders wrote and what they meant. I see it as abiding by my
constitutional duty and our oath."
Among her other matters, Judge Scheindlin has issued a series of
groundbreaking opinions on e-discovery in Zubulake v. UBS Warburg,
which she regards as her most significant case. She has presided
over multi-district litigation on conflicts of interest at
investment banks in initial public offerings, and has presided
over the trials of mobster John Gotti Jr. and Police Officer
Francis Livoti in the use of a deadly chokehold on Anthony Baez.
Judge Scheindlin has held parts of New York's anti-harassment
statute unconstitutional; found police in contempt for continuing
to enforce a law against loitering for the purposes of begging for
money or cruising for sex that had long been ruled
unconstitutional; held the National Football League was violating
the antitrust laws by preventing underclassman Maurice Clarett
from participating in the league draft (later reversed); and
compelled the Metropolitan Transportation Authority to reinstate
subway advertising that mocked Mayor Rudolph Giuliani.
"What I've learned is do what you think is right, follow the law,
do what you think you can do," she said. "Sometimes there is no
precedent that constrains you and you can really strike out and
write what you think is the right answer."
Judge Scheindlin, 66, has earned a reputation as a hard-working
judge and has kept up a full docket since taking senior status
last year. She takes an average of 15 new cases a month and has a
pending caseload of 132, not including related cases in
multidistrict litigation. Her workload is in the upper half of
senior judges in the district.
She sets a quick pace in her courtroom, with little tolerance for
lawyers who obfuscate or belabor a point. She often asks
questions herself when things slow down, although she said, "I
don't think I've committed the sin of taking over trials."
"She is a judge who runs a very, very strong courtroom and has a
clear idea of how she wants to do it," said one veteran Southern
District practitioner.
"I think sometimes people can be critical of her because she can
sometimes be sharp to litigants, put people down and be critical.
But from my experience, when she comes on the bench, she's
prepared, she has strong views and she has the courage of her
convictions," he added. "Her ideas can sometimes be
idiosyncratic. She's not afraid to think independently."
Judge Scheindlin "runs a very orderly courtroom, dignified, and as
a jurist she's not only smart but she's creative," said Robert
Swift of Kohn Swift & Graf in Philadelphia, who has appeared
before her. "She asks good questions and is polite to counsel,
but, by the same token, she doesn't let counsel argue silly
motions or make silly requests -- she's well in control of her
courtroom. She's certainly been reversed, but that's also
indicative of a judge being certain of what the law should be --
not just what it is."
Like other judges, Judge Scheindlin said she expects lawyers who
appear before her to be well prepared. "They need to be familiar
with the facts and the law on the spot and not say, 'Oh sorry, I
have to go look that up, or 'I'm sorry, I have to ask a
colleague,'" she said.
PA CHILD CARE: Judge Certifies Two Classes in Kids-for-Cash Suits
-----------------------------------------------------------------
Saranac Hale Spencer, writing for The Legal Intelligencer, reports
that a federal judge has certified two classes of juveniles and
their parents in a suit following the "kids-for-cash" scandal in
Luzerne County.
According to The Times Tribune, a federal judge on May 14 combined
a series of civil lawsuits filed in the wake of the Luzerne County
juvenile justice scandal into a unified class-action case.
Senior U.S. District Judge A. Richard Caputo's decision cleared a
path for resolving the cases, which have languished in the federal
court system for more than four years. Judge Caputo previously
scheduled jury selection in the cases for December 2013 and
January 2014, The Times Tribune discloses.
According to The Times Tribune, the civil-rights claims seek
damages from former judges Mark A. Ciavarella Jr. and Michael T.
Conahan, who are serving lengthy sentences for racketeering; PA
Child Care LLC, Western PA Child Care LLC and Mid-Atlantic Youth
Services Corp., which own and operate the centers in Pittston Twp.
and Butler County, and the former co-owner of those companies,
Robert J. Powell, a Drums attorney who paid the judges $770,000.
Judge Caputo, in his ruling, found that each of the lawsuits
involved a common set of facts and legal questions and that the
number of plaintiffs -- more than 4,000 -- made individual cases
and trials "impracticable."
Judge Caputo divided the plaintiffs into two groups, one of which
he subdivided.
Wealthy developer Robert K. Mericle, who paid $2.1 million to two
former Luzerne County judges who placed juveniles in two for-
profit detention centers built by his construction firm, is no
longer a defendant in the lawsuits. He won court approval last
year for a $17.75 million settlement with more than 1,000 former
offenders who appeared in the county juvenile court in 2004-
2008.Lawsuit classes
-- Class A: 2,421 juveniles who claimed Mr. Ciavarella violated
their right to an impartial hearing during the time of the scheme,
between 2003 and May 2008. Those convictions, known in juvenile
court as adjudications, were vacated, expunged and dismissed by
the state Supreme Court in two waves, in October 2009 and March
2010.
-- Subclass A1: Of those in Class A, 1,855 juveniles who said
they were adjudicated delinquent or sent to a detention facility
by Mr. Ciavarella without attorney representation and/or without
being told in court of their rights and the consequences of
waiving those rights.
-- Subclass A2: Of those in Class A, 1,442 juveniles who were
sent by Mr. Ciavarella to the PA Child Care or Western PA Child
Care detention facilities.
-- Class B: More than 2,400 juveniles and parents, according to
the plaintiffs' attorneys, who paid fees, costs, fines,
restitution or any other monetary charges associated with the
Ciavarella-ordered adjudications and placements.
PACKAGING CORPORATION: Still Faces Suit Over Containerboard Sale
----------------------------------------------------------------
During September and October 2010, Packaging Corporation of
America and eight other U.S. and Canadian containerboard producers
were named as defendants in five purported class action lawsuits
filed in the United States District Court for the Northern
District of Illinois, alleging violations of the Sherman Act.
The lawsuits have been consolidated in a single complaint under
the caption Kleen Products LLC v Packaging Corp. of America et al.
The consolidated complaint alleges that the defendants conspired
to limit the supply of containerboard, and that the purpose and
effect of the alleged conspiracy was to artificially increase
prices of containerboard products during the period of August 2005
to the time of filing of the complaint. The complaint was filed as
a purported class action suit on behalf of all purchasers of
containerboard products during such period.
The complaint seeks treble damages and costs, including attorney's
fees. The defendants' motions to dismiss the complaint were denied
by the court in April 2011.
PCA believes the allegations are without merit and is defending
this lawsuit vigorously.
PAIN THERAPEUTICS: Continues to Defend Securities Class Suit
------------------------------------------------------------
Pain Therapeutics, Inc. continues to defend securities class
action lawsuit in Texas, according to the Company's April 24,
2013, Form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarter ended March 31, 2013.
On December 2, 2011, a purported class action, captioned KB
Partners I, L.P., Individually and On Behalf of All Others
Similarly Situated v. Pain Therapeutics, Inc., Remi Barbier, Nadav
Friedmann and Peter S. Roddy, was filed against the Company and
its executive officers in the U.S. District Court for the Western
District of Texas. This complaint alleges, among other things,
violations of Section 10(b), Rule 10b-5, and Section 20(a) of the
Exchange Act arising out of allegedly untrue or misleading
statements of material facts made by the Company regarding
REMOXY's development and regulatory status during the purported
class period, February 3, 2011, through June 23, 2011. The
complaint states that monetary damages are being sought, but no
amounts are specified.
As with any litigation proceeding, the Company says it cannot
predict with certainty the eventual outcome of any outstanding
legal actions. The Company has incurred expenses in connection
with the defense of this lawsuit, and the Company may have to pay
damages or settlement costs in connection with any resolution
thereof. Any such expenses, damages or settlement costs may be
substantial. In addition, because of the number of shareholders
involved, the plaintiffs in class action lawsuits may claim
enormous monetary damages even if the alleged claim is small on a
per-shareholder basis. Any such expenses, damages or settlement
costs may be substantial. Although the Company has insurance
coverage against which it may claim recovery against some of these
expenses and costs, the amount of coverage may not be adequate to
cover the full amount or certain expenses and costs may be outside
the scope the policies the Company maintains. In the event of an
adverse outcome or outcomes, the Company's business could be
materially harmed from depletion of cash resources, negative
impact on the Company's reputation, or restrictions or changes to
the Company's governance or other processes that may result from
any final disposition of the lawsuit. Moreover, responding to and
defending pending litigation significantly diverts management's
attention from the Company's operations.
Headquartered in Austin, Texas, Pain Therapeutics, Inc., is a
biopharmaceutical company that develops novel drugs. The
Company's lead drug candidate is called REMOXY(R) (oxycodone)
Extended-Release Capsules CII, a strong painkiller with a unique
formulation designed to reduce potential risks of unintended use.
PDC ENERGY: May 2014 Jury Trial in C.D. Calif. Class Suit
---------------------------------------------------------
The U.S. District Court for the Central District of California has
approved a litigation schedule including a jury trial in May 2014
for the alleged class action filed regarding 2010 and 2011
partnership purchases of PDC Energy Inc.
On December 21, 2011 the Company and its wholly-owned merger
subsidiary were served with an alleged class action on behalf of
certain former partnership unit holders, related to its
partnership repurchases completed by mergers in 2010 and 2011. The
action was filed in U.S. District Court for the Central District
of California and is titled Schulein v. Petroleum Development
Corp.
The complaint primarily alleges that the disclosures in the proxy
statements issued in connection with the mergers were inadequate,
and a state law breach of fiduciary duty. On February 10, 2012,
the Company filed a motion to dismiss or in the alternative to
stay. On June 15, 2012, the Court denied the motion. The Court has
approved a litigation schedule including a jury trial in May 2014.
PHOENIX COS: Final Hearing on "Curran" Suit Deal on May 28
----------------------------------------------------------
A hearing to seek final approval of a settlement of the class
action lawsuit filed by Carol Curran, et al., is scheduled for May
28, 2013, according to The Phoenix Companies, Inc.'s Form 8-K
filing with the U.S. Securities and Exchange Commission.
In September 2009, Carol Curran, et al., filed a putative class
action complaint against certain subsidiaries of the Company,
including AGL Life Assurance Company and Phoenix Equity Planning
Corporation, as well as an officer of such subsidiaries, and two
unrelated parties (Agile Group, LLC and Neal Greenberg), in the
District Court (state court), Boulder County, Colorado (Case
Number 2009CV907). The Plaintiffs asserted claims for relief
arising under Colorado statutory and common law and sought to
recover damages, including punitive and treble damages, attorneys'
fees and a declaratory judgment. While the case was pending, the
Company sold the subsidiaries named in the action and agreed to
indemnify such subsidiaries and the officer in the action. This
case was settled in the first quarter of 2013 and is subject to
court approval. Pursuant to the settlement, the Company has made
a payment of $3,000,000 of the settlement amount on behalf of PFG
and its affiliates, which is subject to court approval.
A hearing to seek final approval of the settlement is scheduled
for May 28, 2013. The Company says there can be no assurances
that the settlement will be approved.
The Phoenix Companies, Inc. -- http://www.phoenixwm.com/-- is a
holding company incorporated in Delaware and headquartered in
Hartford, Connecticut. The Company's operating subsidiaries
provide life insurance and annuity products through independent
agents and financial advisors.
PHOENIX COS: Faces "Strougo" Securities Suit in Connecticut
-----------------------------------------------------------
The Phoenix Companies, Inc., is facing a class action lawsuit
initiated by Robert Strougo, et al., according to the Company's
Form 8-K filing with the U.S. Securities and Exchange Commission.
On April 17, 2013, Robert Strougo, et al., filed a complaint
against the Company, James D. Wehr and Peter A. Hofmann in the
United States District Court for the District of Connecticut (Case
No. 13-CV-547-RNC) (the "Strougo Litigation"). The complaint is
styled as a class action consisting of all persons (other than the
defendants) who purchased or otherwise acquired the Company's
securities between May 5, 2009, and November 6, 2012, and arises
out of the Company's announced intent to restate previously filed
financial statements. The plaintiff alleges that, throughout the
class period, the Company made materially false and misleading
statements regarding the Company's business, operational and
compliance policies. The plaintiff is seeking damages and
attorneys' fees. The Company believes it has meritorious defenses
against the lawsuit and it intends to vigorously defend against
these claims. The outcome of this litigation is uncertain and any
potential losses cannot be reasonably estimated.
The Phoenix Companies, Inc. -- http://www.phoenixwm.com/-- is a
holding company incorporated in Delaware and headquartered in
Hartford, Connecticut. The Company's operating subsidiaries
provide life insurance and annuity products through independent
agents and financial advisors.
PORTLAND GENERAL: Ordered Once Again to Provide Customer Refunds
----------------------------------------------------------------
The Oregon Court of Appeals issued an opinion that upheld a 2008
regulatory order for Portland General Electric Company to provide
refunds, including interest from September 30, 2000, to customers
who received service from the Company during the period from
October 1, 2000 to September 30, 2001. Plaintiffs filed for
reconsideration of the decision.
In two separate legal proceedings, lawsuits were filed in Marion
County Circuit Court against PGE in 2003 on behalf of two classes
of electric service customers. The class action lawsuits seek
damages totaling $260 million, plus interest, as a result of the
Company's inclusion, in prices charged to customers, of a return
on its investment in Trojan.
In 1993, PGE closed the Trojan nuclear power plant (Trojan) and
sought full recovery of, and a rate of return on, its Trojan costs
in a general rate case filing with the Public Utility Commission
of Oregon (OPUC). In 1995, the OPUC issued a general rate order
that granted the Company recovery of, and a rate of return on, 87%
of its remaining investment in Trojan.
Numerous challenges and appeals were subsequently filed in various
state courts on the issue of the OPUC's authority under Oregon law
to grant recovery of, and a return on, the Trojan investment. In
1998, the Oregon Court of Appeals upheld the OPUC's order
authorizing PGE's recovery of the Trojan investment, but held that
the OPUC did not have the authority to allow the Company to
recover a return on the Trojan investment and remanded the case to
the OPUC for reconsideration.
In 2000, PGE entered into agreements to settle the litigation
related to recovery of, and return on, its investment in Trojan.
The settlement, which was approved by the OPUC, allowed PGE to
remove from its balance sheet the remaining investment in Trojan
as of September 30, 2000, along with several largely offsetting
regulatory liabilities. After offsetting the investment in Trojan
with these liabilities, the remaining Trojan regulatory asset
balance of approximately $5 million (after tax) was expensed. As a
result of the settlement, PGE's investment in Trojan was no longer
included in prices charged to customers, either through a return
of or a return on that investment. The Utility Reform Project
(URP) did not participate in the settlement and filed a complaint
with the OPUC challenging the settlement agreements. In 2002, the
OPUC issued an order (2002 Order) denying all of the URP's
challenges. In 2007, following several appeals by various parties,
the Oregon Court of Appeals issued an opinion that remanded the
2002 Order to the OPUC for reconsideration.
The OPUC then issued an order in 2008 (2008 Order) that required
PGE to provide refunds, including interest from September 30,
2000, to customers who received service from the Company during
the period from October 1, 2000 to September 30, 2001. The Company
recorded a charge of $33.1 million in 2008 related to the refund
and accrued additional interest expense on the liability until
refunds to customers were completed in the first quarter of 2010.
The URP and the plaintiffs in the class actions separately
appealed the 2008 Order to the Oregon Court of Appeals. On
February 6, 2013, the Oregon Court of Appeals issued an opinion
that upheld the 2008 Order. However, on April 3, 2013, the
plaintiffs filed for reconsideration of the Court of Appeals'
February 6, 2013 decision.
In 2006, the Oregon Supreme Court issued a ruling ordering the
abatement of the class action proceedings until the OPUC responded
to the 2002 Order. The Oregon Supreme Court concluded that the
OPUC has primary jurisdiction to determine what, if any, remedy
can be offered to PGE customers, through price reductions or
refunds, for any amount of return on the Trojan investment that
the Company collected in prices.
The Oregon Supreme Court further stated that if the OPUC
determined that it can provide a remedy to PGE's customers, then
the class action proceedings may become moot in whole or in part.
The Oregon Supreme Court added that, if the OPUC determined that
it cannot provide a remedy, the court system may have a role to
play. The Oregon Supreme Court also ruled that the plaintiffs
retain the right to return to the Marion County Circuit Court for
disposition of whatever issues remain unresolved from the remanded
OPUC proceedings. The Marion County Circuit Court subsequently
abated the class actions in response to the ruling of the Oregon
Supreme Court.
On February 6, 2013, the Oregon Court of Appeals issued an opinion
that upheld the 2008 Order. On April 3, 2013, the plaintiffs filed
for reconsideration of the Court of Appeals' February 6, 2013
decision. Because the plaintiffs' request for reconsideration, and
the class actions, remain pending, management believes that it is
reasonably possible that the regulatory proceedings and class
actions could result in a loss to the Company in excess of the
amounts previously recorded.
QUEST DIAGNOSTICS: Aware of Class Suits Over Billing Practices
--------------------------------------------------------------
Quest Diagnostics Incorporated disclosed in its April 24, 2013,
Form 10-Q filing with the U.S. Securities and Exchange Commission
for the quarter ended March 31, 2013, that it is aware of certain
pending individual or class action lawsuits related to billing
practices filed under the qui tam provisions of the Civil False
Claims Act.
The federal or state governments may bring claims based on new
theories as to the Company's practices which management believes
to be in compliance with law. In addition, certain federal and
state statutes, including the qui tam provisions of the federal
False Claims Act, allow private individuals to bring lawsuits
against healthcare companies on behalf of government or private
payers. The Company is aware of certain pending individual or
class action lawsuits, and has received several subpoenas, related
to billing practices filed under the qui tam provisions of the
Civil False Claims Act and/or other federal and state statutes,
regulations or other laws. The Company understands that there may
be other pending qui tam claims brought by former employees or
other "whistle blowers" as to which the Company cannot determine
the extent of any potential liability.
Management cannot predict the outcome of the matters. Although
management does not anticipate that the ultimate outcome of such
matters will have a material adverse effect on the Company's
financial condition, given the high degree of judgment involved in
establishing loss estimates related to these types of matters, the
outcome of such matters may be material to the Company's results
of operations or cash flows in the period in which the impact of
such matters is determined or paid.
Incorporated in Delaware in 1990 and headquartered in Madison, New
Jersey, Quest Diagnostics Incorporated --
http://www.QuestDiagnostics.com/-- is a provider of diagnostic
testing information services.
QUEST DIAGNOSTICS: Celera Acquisition Suit Remains Pending
----------------------------------------------------------
In March 2011, prior to Quest Diagnostics Incorporated's
acquisition of Celera Corporation, several putative class action
lawsuits were filed by shareholders of Celera against the Company,
Celera, and the directors of Celera in the Court of Chancery of
Delaware and in California. The lawsuits allege that Celera's
directors breached their fiduciary duties in connection with the
Company's proposed acquisition of Celera, and that the Company
aided and abetted those alleged breaches. The parties reached a
settlement, and the Court of Chancery of Delaware certified a
settlement class and approved the settlement over the objection of
a Celera shareholder, BVF Partners L.P. ("BVF"). The Plaintiffs
in two substantively similar lawsuits filed in the United States
District Court for the Northern District of California were not
party to the settlement agreement but the claims of those
plaintiffs were released pursuant to Court of Chancery's order.
On appeal of the Court of Chancery's decision, the Supreme Court
of the State of Delaware affirmed the certification of the
settlement class and approval of the settlement, but determined
that BVF should have been afforded the right to "opt out" of the
settlement and pursue its claims. The case has been remanded to
the Court of Chancery for further proceedings.
No further updates were reported in the Company's April 24, 2013,
Form 10-Q filing with the U.S. Securities and Exchange Commission
for the quarter ended March 31, 2013.
Management cannot predict the outcome of the matters. Although
management does not anticipate that the ultimate outcome of such
matters will have a material adverse effect on the Company's
financial condition, given the high degree of judgment involved in
establishing loss estimates related to these types of matters, the
outcome of such matters may be material to the Company's results
of operations or cash flows in the period in which the impact of
such matters is determined or paid.
Incorporated in Delaware in 1990 and headquartered in Madison, New
Jersey, Quest Diagnostics Incorporated --
http://www.QuestDiagnostics.com/-- is a provider of diagnostic
testing information services.
QUEST DIAGNOSTICS: Continues to Defend "Mt. Lookout" Class Suit
---------------------------------------------------------------
Quest Diagnostics Incorporated continues to defend itself against
a class action lawsuit commenced by Mt. Lookout Chiropractic
Center Inc., according to the Company's April 24, 2013, Form 10-Q
filing with the U.S. Securities and Exchange Commission for the
quarter ended March 31, 2013.
In July 2012, a putative class action entitled Mt. Lookout
Chiropractic Center Inc. v. Quest Diagnostics Incorporated, et al.
("Mt. Lookout") was filed in the United States District Court for
the District of New Jersey against the Company, two of its
subsidiaries and others. The complaint alleges that the
defendants violated the federal Telephone Consumer Protection Act
by sending fax advertisements without permission and without the
required opt-out notice, and seeks monetary damages and injunctive
relief.
Management cannot predict the outcome of the matter. Although
management does not anticipate that the ultimate outcome of such
matter will have a material adverse effect on the Company's
financial condition, given the high degree of judgment involved in
establishing loss estimates related to these types of matters, the
outcome of such matter may be material to the Company's results of
operations or cash flows in the period in which the impact of such
matter is determined or paid.
Quest Diagnostics Incorporated -- http://www.QuestDiagnostics.com/
-- is a provider of diagnostic testing information services.
Quest Diagnostics was incorporated in Delaware in 1990 and is
headquartered in Madison, New Jersey.
QUEST DIAGNOSTICS: Judgment Bid in "Seibert" Suit Partly Granted
----------------------------------------------------------------
Quest Diagnostics Incorporated's motion for summary judgment in
the class action lawsuit alleging violations of the New Jersey Law
Against Discrimination was granted in part and denied in part,
according to the Company's April 24, 2013, Form 10-Q filing with
the U.S. Securities and Exchange Commission for the quarter ended
March 31, 2013.
In November 2010, a putative class action entitled Seibert v.
Quest Diagnostics Incorporated, et al., was filed against the
Company and certain former officers of the Company in New Jersey
state court, on behalf of the Company's sales people nationwide
who were over forty years old and who either resigned or were
terminated after being placed on a performance improvement plan.
The complaint alleges that the defendants' conduct violates the
New Jersey Law Against Discrimination ("NJLAD"), and seeks, among
other things, unspecified damages. The defendants removed the
complaint to the United States District Court for the District of
New Jersey. The plaintiffs filed an amended complaint that adds
claims under the Employee Retirement Income Security Act of 1974
("ERISA"). The Company filed a motion seeking to limit the
application of the NJLAD to only those members of the purported
class who worked in New Jersey and to dismiss the individual
defendants. The motion was granted. The only remaining NJLAD
claim is that of the named plaintiff; the ERISA claim remains in
the case. Both parties have filed summary judgment motions. The
defendants' motion was granted in part and denied in part and the
plaintiff's motion was denied.
Management cannot predict the outcome of the matter. Although
management does not anticipate that the ultimate outcome of such
matter will have a material adverse effect on the Company's
financial condition, given the high degree of judgment involved in
establishing loss estimates related to these types of matters, the
outcome of such matter may be material to the Company's results of
operations or cash flows in the period in which the impact of such
matter is determined or paid.
Incorporated in Delaware in 1990 and headquartered in Madison, New
Jersey, Quest Diagnostics Incorporated --
http://www.QuestDiagnostics.com/-- is a provider of diagnostic
testing information services.
QUEST DIAGNOSTICS: Parties in Suit v. Celera Engaged in Discovery
-----------------------------------------------------------------
The parties in the class action entitled In re Celera Corp.
Securities Litigation are engaged in discovery, according to Quest
Diagnostics Incorporated's April 24, 2013, Form 10-Q filing with
the U.S. Securities and Exchange Commission for the quarter ended
March 31, 2013.
In 2010, a purported class action entitled In re Celera Corp.
Securities Litigation was filed in the United States District
Court for the Northern District of California against Celera
Corporation and certain of its directors and current and former
officers. An amended complaint filed in October 2010 alleges that
from April 2008 through July 22, 2009, the defendants made false
and misleading statements regarding Celera's business and
financial results with an intent to defraud investors. The
complaint was further amended in 2011 to add allegations regarding
a financial restatement. The complaint seeks unspecified damages
on behalf of an alleged class of purchasers of Celera's stock
during the period in which the alleged misrepresentations were
made. The Company's motion to dismiss the complaint was denied.
The parties are engaged in discovery.
Management cannot predict the outcome of the matter. Although
management does not anticipate that the ultimate outcome of such
matter will have a material adverse effect on the Company's
financial condition, given the high degree of judgment involved in
establishing loss estimates related to these types of matters, the
outcome of such matter may be material to the Company's results of
operations or cash flows in the period in which the impact of such
matter is determined or paid.
Incorporated in Delaware in 1990 and headquartered in Madison, New
Jersey, Quest Diagnostics Incorporated --
http://www.QuestDiagnostics.com/-- is a provider of diagnostic
testing information services.
QUEST DIAGNOSTICS: Bid to Dismiss Sales Rep. Suit Still Pending
---------------------------------------------------------------
In January 2012, a putative class action entitled Beery v. Quest
Diagnostics Incorporated was filed in the United States District
Court for the District of New Jersey against the Company and a
subsidiary, on behalf of all female sales representatives employed
by the defendants from February 17, 2010, to the present. The
amended complaint alleges that the defendants discriminate against
these female sales representatives on account of their gender, in
violation of the federal civil rights and equal pay acts, and
seeks, among other things, injunctive relief and monetary damages.
The Company has filed motions to dismiss the complaint, to strike
the class allegations and to compel arbitration with the named
plaintiffs.
No further updates were reported in the Company's April 24, 2013,
Form 10-Q filing with the U.S. Securities and Exchange Commission
for the quarter ended March 31, 2013.
Management cannot predict the outcome of the matter. Although
management does not anticipate that the ultimate outcome of such
matter will have a material adverse effect on the Company's
financial condition, given the high degree of judgment involved in
establishing loss estimates related to these types of matters, the
outcome of such matter may be material to the Company's results of
operations or cash flows in the period in which the impact of such
matter is determined or paid.
Incorporated in Delaware in 1990 and headquartered in Madison, New
Jersey, Quest Diagnostics Incorporated --
http://www.QuestDiagnostics.com/-- is a provider of diagnostic
testing information services.
SKYWORKS SOLUTIONS: July 26 Hearing on Suit Over AATI Acquisition
-----------------------------------------------------------------
A hearing on the pending demurrers related to a securities lawsuit
filed against Skyworks Solutions, Inc. over its acquisition of
Advanced Analogic Technologies Inc. (AATI) has been set for
July 26, 2013.
On June 6 and 7, 2011, two putative stockholder class action
lawsuits (Case No. 111CV202403 (the Bushansky action) and Case No.
111CV202501 (the Venette action), respectively) were filed in
California Superior Court in Santa Clara County naming AATI,
members of AATI's board of directors, Skyworks Solutions, Inc. and
PowerCo Acquisition Corp. as defendants.
The lawsuits related to conduct surrounding the Company's
[Skyworks'] acquisition of AATI. On July 26, 2011, the Court
issued an order consolidating the Bushansky action and Venette
action into a single, consolidated action captioned In re Advanced
Analogic Technologies Inc. Shareholder Litigation, Lead Case No.
111CV202403, and designating an amended complaint filed on July
14, 2011 in the Venette action as the operative complaint in the
litigation.
On November 30, 2011, following confidential arbitration
proceedings in the Delaware Court of Chancery, the Company
announced that it and AATI had amended their previously announced
merger agreement whereby the Company would acquire AATI at a
reduced price through a tender offer. The Company and AATI
completed the transaction on January 9, 2012. On March 2, 2012,
the Court stayed all discovery in the matter and ordered that
Plaintiffs file an amended complaint by April 20, 2012.
On April 20, 2012, Plaintiffs filed an amended complaint ("First
Amended Complaint") against each of the original defendants with
the exception of Merger Sub. The First Amended Complaint alleges,
among other things, that (1) members of AATI's board of directors
breached their fiduciary duties by (a) failing to take steps to
maximize the value of AATI to its public shareholders by failing
to adequately consider potential acquirers, (b) agreeing to the
merger for inadequate consideration on unfair terms; (c) causing
the filing of a materially misleading Schedule 14D-9 that failed
to (i) disclose a basis for the price reduction, (ii) describe the
arbitration proceedings, and (iii) include any financial valuation
or fairness opinion concerning whether the revised merger
consideration was fair; and (d) causing the issuance of amendments
to the Schedule 14D-9 that failed to respond adequately to the
SEC's disclosure directives; and (2) Skyworks and AATI allegedly
aided and abetted these purported breaches of fiduciary duties.
On March 4, 2013, Plaintiffs filed a Second Amended Complaint,
which asserts claims substantially similar to those in the First
Amended Complaint. On April 5, 2013, Defendants filed demurrers
against the Second Amended Complaint, calling for the case to be
dismissed with prejudice. A hearing on the pending demurrers has
been set for July 26, 2013.
SM ENERGY: Faces Suit Over Royalty Valuation; No Class Yet
----------------------------------------------------------
On January 27, 2011, Chieftain Royalty Company filed a Class
Action Petition against SM Energy Company in the District Court of
Beaver County, Oklahoma, claiming damages related to royalty
valuation on all of the Company'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.
SM Energy removed this lawsuit to the United States District Court
for the Western District of Oklahoma on February 22, 2011. The
Company has responded to the petition and denied the allegations.
The court has not yet ruled on Chieftain's motion to certify the
putative class, and has stayed all proceedings until the United
States Court of Appeals for the Tenth Circuit issues its ruling on
class certification in two similar royalty class action lawsuits.
The opinion from the Tenth Circuit is expected during 2013.
This case involves complex legal issues and uncertainties; a
potentially large class of plaintiffs, and a large number of
related producing properties, lease agreements and wells; and an
alleged class period commencing in 1988 and spanning the entire
producing life of the wells. Because the proceedings are in the
early stages, with substantive discovery yet to be conducted, the
Company is unable to estimate what impact, if any, the action will
have on its financial condition, results of operations or cash
flows. The Company is still evaluating the claims, but believes
that it has properly paid royalties under Oklahoma law and has and
will continue to vigorously defend this case.
TELLABS INC: Faces Consolidated Securities Lawsuit in Illinois
--------------------------------------------------------------
Beginning on January 23, 2013, two purported stockholder class
action lawsuits were filed in the United States District Court for
the Northern District of Illinois, against Tellabs, Inc. and
certain of its current or former officers alleging violations of
the federal securities laws.
The two stockholder class action lawsuits, which have been
consolidated, purport to bring claims on behalf of those who
purchased the Company's publicly traded securities between October
26, 2010, and April 26, 2011.
Plaintiffs allege that defendants made false and misleading
statements regarding the Company's revenues and prospects, and
seek unspecified compensatory damages and other relief. The
Company believes these claims are without merit and intends to
defend the actions vigorously.
TOYOTA MOTOR: Sudden Acceleration Settlement Faces Objections
-------------------------------------------------------------
Amanda Bronstad, writing for The National Law Journal, reports
that potential class members in the sudden acceleration litigation
against Toyota Motor Corp. have filed objections to the proposed
$1.6 billion settlement reached on behalf of consumers asserting
claims for economic damages.
In documents and letters filed with the court, more than a dozen
objectors raised various problems with the deal, including a
proposed $30 million cy press award for automotive accident
research; the $200 million in attorney fees sought; and the
potential release of claims in companion litigation over anti-lock
braking system defects in Prius vehicles.
The deadline to object to the settlement was on May 13. U.S.
District Judge James Selna in Santa Ana, Calif., has scheduled a
final approval hearing for June 14.
The settlement, announced on December 26, has a total estimated
value of $1.63 billion, according to plaintiffs' attorneys. It
includes $757 million in cash, of which $250 million would go to
consumers whose vehicles lost value and $250 million to consumers
whose vehicles are not eligible for installation of a brake
override system, intended to correct potential sudden acceleration
problems.
"These are excellent recoveries in any litigation and a truly
exceptional recovery in a class action fraught with as much risk
as this one," Steve Berman, managing partner of Seattle's Hagens
Berman Sobol Shapiro, and Marc Seltzer, of Susman Godfrey in Los
Angeles, co-lead counsel of the economic loss cases on the
plaintiffs steering committee, wrote in the final approval motion.
The rest of the settlement's $875 million value is based on the
estimated costs of installing brake override systems in a
projected 3.5 million vehicles, and a customer-support program
that would provide repairs and adjustments in a predicted 16
million vehicles. The claims deadline is July 29.
"They're far fewer than we thought they were going to be,"
Mr. Berman said of the number of objections. "Given the cottage
industry of professional objectors out there, we thought we'd see
more of them."
Several objectors took aim at the cy pres award the deal would
channel to five universities for research associated with
automotive safety and related issues. A cy pres distribution is
established from unclaimed money remaining after class members
have been paid.
"As the specific allegations of the complaint demonstrate, this
lawsuit is not about defective drivers or driver error caused
[unintended acceleration]," wrote Mark Chavez of Chavez & Gertler
in Mill Valley, Calif., an attorney for two Maryland class members
who filed an objection on May 10. "Indeed, driver error is
Toyota's defense to responsibility for the defects in its
vehicles. "Such components, he wrote, "would be an inappropriate
use of cy pres funds, and should be rejected by the Court."
In a May 13 objection, attorney Paul Kiesel of Kiesel + Larson in
Beverly Hills, Calif., interim liaison counsel for the plaintiffs
in separate litigation against Toyota over anti-lock braking
system defects in Priuses, said the settlement could improperly
release Toyota from claims in his case.
Mr. Kiesel acknowledged that plaintiffs in the Prius ABS
multidistrict litigation pending before U.S. District Judge Cormac
Carney in Santa Ana assert distinctly different defects, but said
the case involves the same Prius model years affected by sudden
acceleration: 2004 through 2009. The underlying complaint in the
sudden acceleration case also mentioned brake defects in Prius
vehicles.
"It's not our intention to derail this settlement in any way shape
or form; it's merely to have a clear statement from Judge Selna
and/or the litigants themselves that the scope of the release is
not intended to and does not resolve the claims we've asserted in
our litigation," he wrote.
Carney is scheduled to hear class certification arguments in that
case on June 17, Mr. Kiesel said.
Many class members complained that the amount they would receive
pales in comparison to the costs they incurred, particularly if
they experienced sudden acceleration. Others objected to the
attorney fees. One Pennsylvania couple said the fee request
reminded them of John Grisham's novel The Litigators. "As a class
member there is little else of value to me -- the pool of 'Finley,
Figg & Zinc-type' legal firms appear to be suckling at the bar on
this case, leaving just crumbs for the class," Henry Senatore
wrote on behalf of himself and his wife in a March 19 letter to
the court. "It's quite distasteful to need to be a member of the
class in this obvious attempt to milk Toyota."
Messrs. Berman and Seltzer argued that the fee request represents
12.3 percent of the estimated value of the deal. The leading
firms, whose attorneys billed $150 to $950 per hour, spent more
than $100 million litigating the case.
The class action, they underscored, was "fraught with risk." The
U.S. National Highway Traffic Safety Administration, for example,
had identified no electronic defect in Toyota vehicles, and
plaintiffs' software experts had been unable to replicate a sudden
acceleration incident. Furthermore, had plaintiffs lost two
interlocutory appeals before the Ninth Circuit, the case would
have been "gutted," they wrote.
Messrs. Berman and Seltzer acknowledged that 45 objections and
1,085 requests for exclusion have been filed. But the case, they
added, consists of more than 22.6 million class members.
Mr. Berman defended the cy pres portion of the settlement. "The
cy pres issue is the hot button issue right now in many circuits,"
he said. "And so it's ripe grounds for people to try to say they
don't think the cy pres is closely enough aligned."
As to Mr. Kiesel's concerns regarding the Prius ABS claims, Mr.
Berman said: "Just to be clear, I don't think there's going to be
any issue."
TOYOTA MOTOR: Plaintiffs' Lawyers May Get Access to Source Code
---------------------------------------------------------------
Amanda Bronstad, writing for The National Law Journal, reports
that additional plaintiffs' lawyers in the sudden acceleration
cases against Toyota could win access to Toyota's coveted source
code software following a federal judge's orders on May 8.
U.S. District Judge James Selna in Santa Ana, Calif., granted
access to attorneys at seven law firms with most of the cases
pending against Toyota Motor Corp. Toyota has said the source
code represents a trade secret it must keep out of the hands of
its competitors, while plaintiffs' lawyers insist the code will
provide evidence that defects in the electronic throttle control
system caused sudden acceleration in Toyota vehicles.
Outside of Toyota's counsel, access to the source code has been
restricted to a handful of lawyers with bellwether trials coming
up this year and to members of the steering committee in the
multidistrict litigation before Judge Selna.
Judge Selna restricted source code access to one individual from
each firm; the plaintiffs' steering committee had asked that each
entire firm have access.
"The sensitivity of the information requires direct personal
accountability," Judge Selna said during a hearing on the matter.
He said he was not prepared to "open it up to firms as opposed to
individuals."
Toyota spokeswoman Celeste Migliore issued a statement following
the hearing: "We are pleased that the Court has confirmed that
access should only be given to specifically named individuals
approved by the Court, not entire firms, given the highly
sensitive and proprietary nature of Toyota's source code."
The seven firms are handling 24 of the 26 bellwether cases
proposed by the steering committee and in 114 of the 476 federal
and state court cases pending against Toyota, according to the
steering committee. They are: San Francisco's Lieff Cabraser
Heiman &Bernstein; Bailey & Glasser in Charleston, W.Va.; Beasley,
Allen, Crow, Methvin, Portis & Miles in Montgomery, Ala.; New
York's Rheingold, Valet, Rheingold, McCartney & Giuffra; The
Lanier Law Firm in Houston; Colson Hicks Eidson in Coral Gables,
Fla.; and Napoli Bern Ripka Shkolnik LLP in New York.
Lieff Cabraser partner Elizabeth Cabraser is co-lead counsel for
the personal injury and wrongful death cases in the multidistrict
litigation. Eric Snyder, a partner at Bailey & Glasser, and R.
Graham Esdale, a shareholder at Beasley Allen, have individual
cases scheduled for trial against Toyota in Michigan and Oklahoma
this year. Terrence McCartney, a partner at Rheingold, is
plaintiffs' liaison counsel in cases pending before a New York
state trial court. And W. Mark Lanier of The Lanier Law Firm is
handling the first bellwether trial in the MDL, scheduled for
November 4.
Judge Selna said that plaintiffs' attorneys who want to join the
steering committee may apply to do so, pending a hearing on
June 26. The committee had asked to add Snyder, McCartney, Lanier
and Cale Conley to its membership. Mr. Conley, of Conley Griggs
Partin in Atlanta, is handling the first bellwether trial in the
MDL along with Lanier.
Judge Selna cautioned that too many committee members could
"become unwieldy."
"The question is, 'When does the committee become too big?'" he
said.
Judge Selna tentatively granted the steering committee's motion to
set up a common benefit fund that would receive an 8 percent "hold
back" of all future judgments and settlements of personal injury
and wrongful death cases. The fund would pay fees and discovery
costs incurred by committee members.
None of the cases remaining against Toyota involve claims by
consumers for economic damages. On December 26, Toyota settled
those cases in a deal that plaintiffs' lawyers estimated to be
worth $1.3 billion.
* * *
In an earlier report, National Law Journal's Ms. Bronstad noted
that Toyota, facing hundreds of cases alleging defects that caused
its vehicles to suddenly accelerate, has kept a tight lid on
discovery during three years of litigation, primarily through
protective orders requiring that certain documents be redacted,
sealed or approved by its Japan headquarters before anyone can get
access to them.
From Toyota's perspective, the code represents a trade secret that
it must keep out of the hands of its competitors. Plaintiffs'
lawyers insist it will provide evidence that defects in the
electronic throttle control system caused sudden acceleration in
Toyota vehicles.
Outside of Toyota's counsel, access to the heavily guarded
facility where the code is being stored has been restricted to a
handful of lawyers with bellwether trials coming up this year --
mostly members of the plaintiffs' steering committee in the
federal multidistrict litigation before U.S. District Judge James
Selna in Santa Ana, Calif. Lawyers with cases against Toyota,
primarily in state courts across the country, now want a peek.
"Disclosure of these materials will increase the knowledge and
safety of the public and, to my knowledge, Toyota has not
demonstrated compelling reasons for the sealing of these materials
forever," Terrence McCartney, a partner at Rheingold, Valet,
Rheingold, McCartney & Giuffra, plaintiffs' liaison counsel in
cases pending before a New York state trial court, wrote in a
March 19 filing. "Toyota should not be able to control the entire
country's trial calendars by keeping the key evidence sealed."
Attorneys for Toyota have agreed to work with plaintiffs' lawyers
on revising protective orders, but they remain committed to
limiting access to a handful of people. Judge Selna ordered both
sides to come back to resolve the growing tension over Toyota's
most confidential materials. That hearing was scheduled for
May 8.
Toyota's 'Baby'
The debate accelerated after the first bellwether case in the MDL
abruptly settled in January, about a month before trial. The
terms are confidential, but lawyers with pending personal injury
and wrongful death cases against Toyota argue that key documents,
particularly those related to the source code, were among the
sealed material.
The case was brought by family members of Paul Van Alfen, who with
a passenger was killed when his Camry crashed into a wall after
accelerating down a Utah highway. Two other passengers were
injured in the 2010 accident.
"Van Alfen settled, and everybody wanted to make sure they could
get the information gathered in Van Alfen," said R. Graham Esdale,
a shareholder at Beasley, Allen, Crow, Methvin, Portis & Miles in
Montgomery, Ala., who is preparing for an October 7 trial against
Toyota in Oklahoma County, Okla., District Court.
In the past month, lawyers with cases against Toyota who aren't on
the plaintiffs' steering committee began filing court papers
requesting access to documents in the Van Alfen settlement.
Scott West of The West Law Firm in Sugar Land, Texas, said
plaintiffs' attorneys in Texas state courts, where cases have been
coordinated before Harris County, Texas, District Judge Robert
Schaffer in Houston, have been hampered by lack of access to the
Van Alfen documents, including expert testimony and summary
judgment motions, according to a March 28 court filing.
"The truth is the truth -- it ain't always pretty, but it's always
the truth. Said another way, 'Sometimes the baby's ugly, but it's
still your baby,'" Mr. West wrote. "Toyota's truth and baby are
ugly. Toyota seeks to keep its baby out of the public's eye --
and the eyes, ears, lips and Court records of the hundreds of
families affected by the defective Toyota vehicles. Why else
would Toyota fight so hard to seal and sequester so many facts and
so much information?"
Mr. West did not return a call for comment.
Mr. McCartney wrote that he and other lawyers had been "looking
forward to the Van Alfen bellwether trial," which featured "key
documents and testimony" about Toyota's sudden acceleration
problems.
"The public also has a compelling interest in being given access
to the information," he wrote. "If Toyota is permitted to keep
the key evidence sealed while quietly settling cases with the PSC
lawyers, who are the only ones with access to the necessary
information, those of us without access cannot zealously or fairly
represent our clients."
Mr. McCartney did not return a call for comment.
To be sure, some lawyers have obtained access to source code
materials. On March 18, Judge Selna granted access to Mr. Esdale
and Eric Snyder, a partner at Bailey & Glasser in Charleston,
W.Va., who is preparing for an August 27 trial in state court in
Flint, Mich., against Toyota. Snyder did not return a call for
comment.
Mr. Esdale said he needed access to the source code to gain a
better understanding of what some of the experts in the Van Alfen
case were looking at. Soon after being granted access, Mr. Esdale
said, he spent a day at a highly secured facility in Columbia,
Md., that contains the source code. "There are actual security
personnel there to make sure you are who you're supposed to be and
everything's done in accordance," he said. "Those documents are
very, very confidential. You don't just walk around with them in
your briefcase."
Elizabeth Cabraser, co-lead counsel in the personal injury and
wrongful death cases in the MDL and a member of the plaintiffs
committee, acknowledged the concerns.
"This blocking of access to common discovery and dispositive
motions is antithetical to the efficiency that both the MDL and
state coordinated proceedings originally intended," Cabraser, of
San Francisco's Lieff Cabraser Heimann & Bernstein, wrote in a
March 28 filing. "Plaintiffs are informed that this situation is
causing mounting concern to state court plaintiffs, whose claims
have been pending in some cases for over three years."
'A Lot of Information'
Mr. Cabraser and other members of the committee were working on
revisions to the existing protective orders in the case.
"Plaintiffs have received Toyota's suggested revisions and are
working on their own edits for Toyota's consideration," she wrote
in a May 1 filing.
She also suggested that the seven law firms whose cases are
identified for potential bellwether trials -- her own firm, Lieff
Cabraser; Bailey & Glasser; Beasley Allen; and Rheingold, Valet,
Rheingold, McCartney & Giuffra -- be granted access to the source
code and related materials "so that these firms can properly
participate in expert discovery and trial of their cases. The
system of only allowing one individual attorney from a handful of
law firms to access the broad and crucial body of information
self-defined by Toyota as 'source code-related material' is no
longer fair or reasonable."
Additionally, she asked Judge Selna to add four more lawyers --
McCartney, Snyder and Cale Conley and W. Mark Lanier -- to the
committee. Mr. Conley, of Conley Griggs Partin in Atlanta, and
Lanier, of The Lanier Law Firm in Houston, are handling the first
bellwether trial in the MDL, scheduled for November 4.
As for the Van Alfen materials, she said, lawyers have agreed on
many redactions "but they are awaiting responses from the Toyota
Japanese parent corporation on a number of points that are still
outstanding." About a dozen of the 245 exhibits in the case are
still being worked on, she added.
Mark Robinson, senior partner of Robinson Calcagnie Robinson
Shapiro Davis in Newport Beach, Calif., who represents Van Alfen's
family members, told Selna during an April 4 hearing that Toyota's
lawyers "did a good job of forcing us to put to paper basically
everything we can think of about Toyota unintended acceleration."
Mr. Robinson, who is co-lead counsel on the personal injury and
wrongful death cases, told the judge that his team combed through
its expert reports for certain source code materials. "As the
Court knows, those documents and those briefs will really inform
the lawyers that are handling these cases about this case," he
said. "There is a lot of information there for these lawyers."
'Extremely limited'
Asked to address the debate, Toyota spokeswoman Carly Schaffner
wrote in an email to The National Law Journal: "Counsel need only
sign the Court's protective order to access discovery and sealed
pleadings containing highly confidential material, which has been
the established protocol for nearly three years," she wrote.
"Access to Toyota's source code, including certain sealed filings
that contain source code or source code-related material, requires
separate consideration by the Court, pursuant to its orders, given
the highly sensitive nature of this proprietary asset. Bottom
line, all individuals who are entitled to have access to materials
covered by the Court's orders will have access."
During the recent hearing, Judge Selna acknowledged Toyota's
concerns.
"I think what people need to understand is that dissemination of
material under the source code protective order is extremely
limited," he said.
Toyota attorney Vincent Galvin, managing partner of the San Jose,
Calif., office of Bowman and Brooke, disputed that Toyota was
holding up access to those materials. "It's a process that both
sides have been engaged in," he said during the hearing.
He noted that Mr. Robinson's court filing responding to Toyota's
partial summary judgment motion in the Van Alfen case contained
four banker's boxes worth of exhibits and acknowledged that the
vetting process was time-consuming. "We understand the need to
get that completed and done so that people can see it."
In a May 3 statement filed with the court, Galvin wrote that
Toyota had proposed revised protective orders to plaintiffs'
attorneys on April 12.
He also put the brakes on the idea that the seven law firms
identified by the committee should be granted unfettered access to
source code materials. "Given the highly sensitive and
proprietary nature of Toyota's source code, Toyota does not agree
that entire firms should be allowed access, as opposed to
specifically named individuals (which is the process contemplated
in the source code protective order); likewise, Toyota does not
agree that counsel for non-bellwether cases should be allowed
access at this time."
UNION PACIFIC: Latham Fights Trial Counsel Disqualification Bid
---------------------------------------------------------------
Zoe Tillman, writing for The National Law Journal, reports that
Latham & Watkins is fighting an attempt to disqualify the firm as
lead trial counsel for Union Pacific Railroad, a defendant in
multidistrict litigation over freight rail fuel surcharges.
The dispute pitted the firm against former clients who are
plaintiffs in the fuel surcharge class action. The clients,
resources producer Oxbow Carbon LLC and its subsidiaries, argued
that Latham violated its duty of care by agreeing to represent
Union Pacific. Oxbow is an unnamed class member in the multi-
district litigation and is pursuing a separate, but related,
lawsuit against Union Pacific.
Latham, in a brief filed May 17 in Washington federal district
court, said Oxbow had dropped many of its arguments for
disqualification after facing pushback from the firm. "Moving to
disqualify a law firm is a serious matter, and it is unacceptable
that Oxbow did so with a set of arguments so weak that
substantially all of them had to be abandoned after Latham's
opposition," the firm argued.
An Oxbow spokesman declined to comment. Oxbow's lead attorney,
John Gerstein of Troutman Sanders, could not be reached. Lead
counsel for Latham, firm partner Daniel Wall in San Francisco, who
practices in antitrust, declined to comment.
The Oxbow companies were among thousands of plaintiffs that
shipped products through the four largest freight rail companies
in the United States, a group that included Union Pacific. The
plaintiffs accused the rail companies of violating federal
antitrust laws by working together to increase rates through
"aggressive" fuel surcharges. The rail companies denied
wrongdoing.
In a separate lawsuit Oxbow filed against Union Pacific and BSNF
Railway Co. -- also a defendant in the multidistrict litigation --
Oxbow claimed its related business paid more than $30 million in
allegedly unlawful fuel surcharges.
According to Oxbow, Latham represented its related companies
beginning in 2004, earning more than $4.6 million in fees. Oxbow
said firm attorneys had access to "sensitive and confidential
information."
Latham began representing Union Pacific -- another longtime
client, according to briefs -- in the multidistrict litigation in
October 2012, joining Covington & Burling and Jones Day as lead
counsel. In February, Oxbow moved to disqualify Latham, arguing
the firm's representation of Union Pacific was "directly adverse"
to Oxbow.
Oxbow cited sections of the D.C. Rules of Professional Conduct
barring lawyers from taking on certain new clients if it would be
"adverse" to another client or significantly affect its interests,
without consent from the affected clients.
Latham argued the firm had to withdraw only if there were a
conflict with a named plaintiff, a group that didn't include
Oxbow; the firm declined to represent Union Pacific against
Oxbow's separate lawsuit because of the conflict. It would be
"practically impossible" for law firms to defend antitrust class
actions if they had to check for conflicts with all class members,
the firm said.
Latham also disputed that firm attorneys had access to
confidential information that would be relevant to Union Pacific's
defense and accused Oxbow of failing to offer specific examples,
except for future projections about shipping activity.
"This motion is just a parting shot to punish Latham for perceived
disloyalty to Oxbow's business interests," the firm argued.
Latham added that it is Union Pacific's lead trial counsel, and
that it would be unfair to force the rail company to hire a
replacement at this point.
Oxbow countered that it wasn't "some nameless, faceless, passive
class member." The company agreed it would be "virtually
impossible" for law firms to check for conflicts with all unnamed
class members. However, Oxbow said, its position was different
because of its separate lawsuit against Union Pacific and
participation in the class action. Latham knew what Oxbow was
doing, Oxbow said, and nonetheless agreed to help Union Pacific
develop a defense strategy.
"Here, before Latham entered its appearance in this Court, it knew
about Oxbow's claims against [Union Pacific], and it knew that
Oxbow was a client," the company argued.
In its latest filing, Latham accused Oxbow of making up rules,
saying it was "settled law" that a firm could represent a class
action defendant when another client was an unnamed plaintiff,
barring other ethical concerns. Under the case law, the firm
said, it didn't matter if Latham knew Oxbow was an unnamed class
member. The firm also argued Oxbow's separate lawsuit against
Union Pacific couldn't create a conflict because it differed in
meaningful ways from the class action.
Latham claimed Oxbow conceded several points, including that
Latham didn't have access to relevant confidential information;
Oxbow said in its reply that because Latham's role as Union
Pacific's counsel was adverse to Oxbow, the court didn't need to
address the confidential information issue.
The dispute is before U.S. District Magistrate Judge John
Facciola.
WELLPOINT INC: Awaits Ruling in One Demutualization-Related Suit
----------------------------------------------------------------
WellPoint, Inc., is awaiting a court decision on its motion for
summary judgment in one of the two lawsuits arising from the 2001
demutualization of Anthem Insurance Companies, Inc., according to
the Company's April 24, 2013, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended
March 31, 2013.
The Company is defending a certified class action filed as a
result of the 2001 demutualization of Anthem Insurance Companies,
Inc., or AICI. The lawsuit names AICI as well as Anthem, Inc., or
Anthem, n/k/a WellPoint, Inc., and is captioned Ronald Gold, et
al. v. Anthem, Inc. et al. AICI's 2001 Plan of Conversion, or the
Plan, provided for the conversion of AICI from a mutual insurance
company into a stock insurance company pursuant to Indiana law.
Under the Plan, AICI distributed the fair value of the company at
the time of conversion to its Eligible Statutory Members, or ESMs,
in the form of cash or Anthem common stock in exchange for their
membership interests in the mutual company. Plaintiffs in Gold
allege that AICI distributed value to the wrong ESMs. Cross
motions for summary judgment were granted in part and denied in
part on July 26, 2006, with regard to the issue of sovereign
immunity asserted by co-defendant, the state of Connecticut, or
the State. The court also denied the Company's motion for summary
judgment as to plaintiffs' claims on January 10, 2005. The State
appealed the denial of its motion to the Connecticut Supreme
Court. The Company filed a cross-appeal on the sovereign immunity
issue. On May 11, 2010, the Court reversed the judgment of the
trial court denying the State's motion to dismiss the plaintiff's
claims under sovereign immunity and dismissed the Company's cross-
appeal. The case was remanded to the trial court for further
proceedings. The Plaintiffs' motion for class certification was
granted on December 15, 2011.
The Company and the plaintiffs filed renewed cross-motions for
summary judgment on January 24, 2013. Argument on the renewed
motions was held on April 19, 2013. The Company says it intends
to vigorously defend the Gold lawsuit; however, its ultimate
outcome cannot be presently determined.
The Company settled a separate lawsuit captioned Mary E. Ormond,
et al. v. Anthem, Inc., et al., also filed as a result of the 2001
demutualization of AICI. The Ormond case involves a certified
class that consists of all ESMs residing in Ohio, Indiana,
Kentucky or Connecticut who received cash compensation in
connection with the demutualization. On July 1, 2011, the Court
held that the Company was entitled to judgment on all of
plaintiffs' claims except those tort claims in connection with the
pricing and sizing of the Anthem, Inc. IPO. The parties have
reached an agreement to resolve the Ormond lawsuit. On June 15,
2012, the plaintiffs filed an unopposed motion for preliminary
approval of a $90 million cash settlement, including any amounts
to be awarded for attorneys' fees and expenses and other costs to
administer the settlement. As a result, during the six months
ended June 30, 2012, the Company recorded selling, general and
administrative expense of $90 million, or $0.27 per diluted share,
associated with this settlement, which was non-deductible for tax
purposes. The Court granted the plaintiffs' motion and entered
preliminary approval of the settlement on June 18, 2012. As a
result, the trial that had been set for June 18, 2012, was
vacated. The cash settlement was paid on July 3, 2012, into an
escrow account. A final fairness hearing on the settlement was
held on October 25, 2012. On November 16, 2012, the Court granted
the plaintiffs' motion and entered an amended final order
approving the settlement. An award of attorneys' fees was issued
on November 20, 2012, together with a final judgment dismissing
all of plaintiffs' claims.
Two appeals of the court's final orders have been taken by
objectors to the United States Court of Appeals for the Seventh
Circuit. The appeals involve challenges to (i) the amount of
attorneys' fees awarded to plaintiffs' counsel out of the
settlement fund and (ii) the provision of the Court's order
granting final approval of the settlement that requires any
residual settlement funds remaining after two rounds of
distributions to class members to be paid to the Eskanazi Health
Foundation as a cy pres award.
Indianapolis, Indiana-based WellPoint, Inc., is one of the largest
health benefits companies in the United States of America, serving
more than 36 million medical members through its affiliated health
plans. The Company is an independent licensee of the Blue Cross
and Blue Shield Association, and is licensed to conduct insurance
operations in all 50 states through its subsidiaries.
WELLPOINT INC: Still Awaits Ruling on Bid to Dismiss OON MDL
------------------------------------------------------------
WellPoint, Inc. is still awaiting a court decision on its motion
to dismiss the fourth amended complaint in the multidistrict
litigation captioned In re WellPoint, Inc. Out-of-Network "UCR"
Rates Litigation, according to the Company's April 24, 2013, Form
10-Q filing with the U.S. Securities and Exchange Commission for
the quarter ended March 31, 2013.
The Company is currently a defendant in eleven putative class
actions relating to out-of-network, or OON, reimbursement that
were consolidated into a single multi-district lawsuit called In
re WellPoint, Inc. Out-of-Network "UCR" Rates Litigation that is
pending in the United States District Court for the Central
District of California. The lawsuits were filed in 2009. The
plaintiffs include current and former members on behalf of a
putative class of members who received OON services for which the
defendants paid less than billed charges, the American Medical
Association, four state medical associations, OON physicians,
chiropractors, clinical psychologists, podiatrists,
psychotherapists, the American Podiatric Association, California
Chiropractic Association and the California Psychological
Association on behalf of a putative class of all physicians and
all non-physician health care providers, and an OON surgical
center. In the consolidated complaint, the plaintiffs allege that
the defendants violated the Racketeer Influenced and Corrupt
Organizations Act, or RICO, the Sherman Antitrust Act, Employee
Retirement Income Security Act of 1974, or ERISA, federal
regulations, and state law by relying on databases provided by
Ingenix in determining OON reimbursement. A consolidated amended
complaint was filed to add allegations in the lawsuit that OON
reimbursement was calculated improperly by methodologies other
than the Ingenix databases.
The Company filed a motion to dismiss the amended consolidated
complaint. The motion was granted in part and denied in part.
The court gave the plaintiffs permission to replead many of those
claims that were dismissed. The plaintiffs then filed a third
amended consolidated complaint repleading some of the claims that
had been dismissed without prejudice and adding additional
statements in an attempt to bolster other claims. The Company
filed a motion to dismiss the third amended consolidated
complaint, which was granted in part and denied in part. The
plaintiffs filed a fourth amended consolidated complaint on
November 5, 2012. The Company filed a motion to dismiss most of
the claims asserted in the fourth amended consolidated complaint.
The plaintiffs filed a response and the Company filed a reply.
The motion to dismiss is now fully briefed and pending. The OON
surgical center voluntarily dismissed their claims. Fact
discovery is complete.
At the end of 2009, the Company filed a motion in the United
States District Court for the Southern District of Florida, or the
Florida Court, to enjoin the claims brought by the medical doctors
and doctors of osteopathy and certain medical associations based
on prior litigation releases, which was granted in 2011, and that
court ordered the plaintiffs to dismiss their claims that are
barred by the release. The plaintiffs then filed a petition for
declaratory judgment asking the court to find that these claims
are not barred by the releases from the prior litigation. The
Company filed a motion to dismiss the declaratory judgment action,
which was granted. The plaintiffs appealed the dismissal of the
declaratory judgment to the United States Court of Appeals for the
Eleventh Circuit, but the dismissal was upheld. The enjoined
physicians have not yet dismissed their claims. The Florida Court
found the enjoined physicians in contempt and sanctioned them on
July 25, 2012. The barred physicians are paying the sanctions.
The Company says it intends to vigorously defend these lawsuits;
however, their ultimate outcome cannot be presently determined.
Indianapolis, Indiana-based WellPoint, Inc., is one of the largest
health benefits companies in the United States of America, serving
more than 36 million medical members through its affiliated health
plans. The Company is an independent licensee of the Blue Cross
and Blue Shield Association, and is licensed to conduct insurance
operations in all 50 states through its subsidiaries.
WHIRLPOOL CORP: Awaits OK of $30-Mil. Settlement in Embraco Suit
----------------------------------------------------------------
Whirlpool Corporation is awaiting court approval of its
subsidiary's $30 million settlement of "indirect" purchasers'
lawsuits that were combined in one proceeding in Michigan,
according to the Company's April 24, 2013, Form 10-Q filing with
the U.S. Securities and Exchange Commission for the quarter ended
March 31, 2013.
Beginning in February 2009, the Company's compressor business
headquartered in Brazil ("Embraco") was notified of investigations
of the global compressor industry by government authorities in
various jurisdictions. In 2012, Embraco sales represented
approximately 8% of the Company's global net sales.
Government authorities in Brazil, Europe, the United States, and
other jurisdictions have entered into agreements with Embraco and
concluded their investigations of the Company. In connection with
these agreements, Embraco has acknowledged violations of antitrust
law with respect to the sale of compressors at various times from
2004 through 2007 and agreed to pay fines or settlement payments.
Since the government investigations commenced in February 2009,
Embraco has been named as a defendant in related antitrust
lawsuits in various jurisdictions seeking damages in connection
with the pricing of compressors from 1996 to 2009. Several other
compressor manufacturers who are the subject of the government
investigations have also been named as defendants in the antitrust
lawsuits. United States federal lawsuits instituted on behalf of
purported "direct" and "indirect" purchasers and containing class
action allegations have been combined in one proceeding in the
United States District Court for the Eastern District of Michigan
("Michigan Lawsuit"). Other lawsuits are also pending and
additional lawsuits may be filed by purported purchasers.
On February 12, 2013, Embraco entered into a settlement agreement
with plaintiffs representing a proposed settlement class of direct
purchasers of compressors in the Michigan Lawsuit. The settlement
agreement, which is subject to court approval, provides for, among
other things, the payment by Embraco of up to $30 million in
exchange for a release by all settlement class members. The
settlement agreement, which was accrued for as of December 31,
2012, does not cover any claims by direct purchasers which opt out
of the proposed settlement class and the settlement amount will be
reduced if there are opt-outs. The settlement agreement does not
cover claims by "indirect purchaser" plaintiffs in the Michigan
Lawsuit, which remain pending.
In connection with these agreements and other Embraco antitrust
matters, the Company has incurred, in the aggregate, charges of
approximately $360 million, including fines, defense costs and
other expenses. These charges have been recorded within interest
and sundry income (expense). At March 31, 2013, $111 million
remains accrued, with installment payments of $74 million, plus
interest, remaining to be made to government authorities at
various times through 2015.
The Company continues to work toward resolution of ongoing
government actions in other jurisdictions, to defend the related
antitrust lawsuits and to take other steps to minimize the
Company's potential exposure. The final outcome and impact of
these matters, and any related claims and investigations that may
be brought in the future are subject to many variables, and cannot
be predicted. The Company establishes accruals only for those
matters where the Company determines that a loss is probable and
the amount of loss can be reasonably estimated. While it is
currently not possible to reasonably estimate the aggregate amount
of costs which the Company may incur in connection with these
matters, such costs could have a material adverse effect on its
financial position, liquidity, or results of operations.
Whirlpool Corporation -- http://www.whirlpoolcorp.com/-- is a
global manufacturer of major home appliances. The Company was
incorporated in Delaware and is headquartered in Benton Harbor,
Michigan.
WHIRLPOOL CORP: Continues to Defend Product Liability Suits
-----------------------------------------------------------
Whirlpool Corporation continues to defend itself from class action
lawsuits alleging product liability claims, according to the
Company's April 24, 2013, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended
March 31, 2013
The Company is currently defending a number of lawsuits in federal
and state courts in the United States related to the manufacturing
and sale of its products which include class action allegations.
These lawsuits allege claims which include breach of contract,
breach of warranty, product defect, fraud, violation of federal
and state consumer protection acts and negligence. The Company
does not have insurance coverage for class action lawsuits. The
Company is also involved in various other legal actions arising in
the normal course of business, for which insurance coverage may or
may not be available depending on the nature of the action. The
Company disputes the merits of these lawsuits and actions, and
intends to vigorously defend them. Management believes, based
upon its current knowledge, after taking into consideration legal
counsel's evaluation of such lawsuits and actions, and after
taking into account current litigation accruals, that the outcome
of these matters currently pending against Whirlpool should not
have a material adverse effect, if any, on its Consolidated
Condensed Financial Statements.
Whirlpool Corporation -- http://www.whirlpoolcorp.com/-- is a
global manufacturer of major home appliances. The Company was
incorporated in Delaware and is headquartered in Benton Harbor,
Michigan.
WHIRLPOOL CORP: Defends Suits Over Front Load Washing Machines
--------------------------------------------------------------
Whirlpool Corporation is defending itself against class action
lawsuits pending in the United States of America and Canada
relating to certain of its front load washing machines, according
to the Company's April 24, 2013, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended
March 31, 2013.
The Company is currently defending against numerous lawsuits
pending in federal and state courts in the United States and
various jurisdictions in Canada relating to certain of its front
load washing machines. Some of these lawsuits have been certified
for treatment as class actions. The complaints in these lawsuits
generally allege violations of state consumer fraud acts, unjust
enrichment and breach of warranty. The complaints generally seek
unspecified compensatory, consequential and punitive damages. The
Company believes these lawsuits are without merit and is
vigorously defending them. Given the preliminary stage of these
proceedings, the Company cannot reasonably estimate a possible
range of loss, if any, at this time. The resolution of one or
more of these matters could have a material adverse effect on the
Company's Consolidated Condensed Financial Statements.
Whirlpool Corporation -- http://www.whirlpoolcorp.com/-- is a
global manufacturer of major home appliances. The Company was
incorporated in Delaware and is headquartered in Benton Harbor,
Michigan.
YOUTUBE LLC: Judge Denies Class Certification in Copyright Suit
---------------------------------------------------------------
Jan Wolfe, writing for The Litigation Daily, reports that
copyright owners from around the world, including American music
publishers and a U.K. soccer league, banded together with much
fanfare in 2007 to bring a class action lawsuit against YouTube
LLC and its parent Google Inc. One of the plaintiffs' lawyers at
Proskauer Rose told Law360 at the time that the case was "an
answer to Google's imperialistic quest to take this infringement
machine from the U.S. and into other countries. Other countries
are saying no, that they're going to stop it."
Proskauer and its co-counsel Bernstein Litowitz Berger & Grossmann
obviously failed to stop Youtube, which is now the third most
popular Web site in the world. And thanks to a ruling that came
down on May 15, their hopes of collecting much in the way of
statutory or punitive damages are looking mighty slim too.
In a 13-page order, U.S. District Judge Louis Stanton in Manhattan
denied class certification in the case, ruling that the copyright
claims against YouTube are far too individualized to be resolved
on a class-wide basis. Noting that YouTube's site traffic now
exceeds 1 billion daily views, Judge Stanton wrote that "[t]he
suggestion that a class action of these dimensions can be managed
with judicial resourcefulness is flattering, but unrealistic."
Judge Stanton's negativity toward the case didn't come as a
surprise. He tossed it on summary judgment in 2010, along with a
parallel $1 billion case brought solely by Viacom Inc., which owns
the copyrights to TV shows like South Park and The Daily Show.
Because YouTube complied with requests to take down infringing
content, it can seek refuge in the "safe harbor" provisions of the
Digital Millennium Copyright Act, he ruled at the time.
The U.S. Court of Appeals for the Second Circuit revived both the
class action and the Viacom case in April 2012. The appellate
court ruled that Judge Stanton didn't properly consider whether
YouTube's leader turned a blind eye to infringing conduct on the
part of its users. Still, Judge Stanton dismissed Viacom's case
once again on April 18, prompting us to name Google lawyers Andrew
Schapiro of Quinn Emanuel Urquhart & Sullivan and David Kramer of
Wilson Sonsini Goodrich & Rosati our Litigators of the Week.
The parallel class action now seems headed for a similar fate.
Proskauer and Bernstein Litowitz sought to represent two classes:
copyright holders whose works were repeatedly infringed even after
YouTube complied with a takedown notice (the so-called "repeat
infringement class"), and music publishers whose compositions were
monetized by YouTube (the so-called "music publisher class").
Stanton refused to certify both classes on May 15, noting that
"generally speaking, copyright claims are poor candidates for
class action treatment."
The lead plaintiffs, which include the Football Association
Premier League Ltd and Bourne Co. Music Publishers, can still
pursue claims against YouTube in an individual capacity.
Proskauer's Charles Sims told us that he expects those individual
claims to be stayed while Viacom appeals Judge Stanton's dismissal
of its claims back up to the Second Circuit. Mr. Sims declined to
comment further, except to say that his clients are disappointed
with the class cert ruling and reviewing their options.
The Litigation Daily didn't immediately hear back from YouTube
counsel Andrew Schapiro of Quinn Emanuel.
In related news, on May 14 U.S. District Judge William Pauley III
in Manhattan revived part of a copyright case that Capitol Records
LLC, EMI Virgin Songs Inc., and other record labels and music
publishers brought against the digital music service MP3Tunes Inc.
and its former CEO. In an earlier decision, Judge Pauley had
ruled that under the DMCA, MP3Tunes can't be liable for songs for
which it never received take-down notices. Judge Pauley reversed
himself on May 14, citing the Second Circuit's 2012 ruling in the
YouTube cases. Jenner & Block and Pryor Cashman represent the
plaintiffs. Former MP3Tunes CEO Michael Robertson has Ackerman
Senterfitt.
* Entrepreneurs Want Suits Over Internet ADA Infractions Curbed
---------------------------------------------------------------
According to Washington Examiner, Congress must stop President
Obama's Justice Department from opening up the Internet to junk
lawsuits. Filing such cynical litigation is a way of life for
legions of class-action trial lawyers who specialize in the
Americans with Disabilities Act. They travel from small business
to small business looking for even the tiniest of infractions of
the ADA, then file suits knowing their best chance for making
money is in accepting settlement payments in return for dropping
the litigation. That's exactly what happens most of the time.
These nuisance suits are a huge cost to small businesses across
the country. Entrepreneurs have advocated amending the ADA to
require a disabled person to talk with a business about an access
problem before going to court. But so far the trial lawyer lobby
has prevented any changes to their ADA lawsuit gravy train. The
problem stems for Title III of the ADA, which empowers differently
abled individuals to sue in federal court any "public
accommodation" in violation of even one of the literally thousands
of federally created guidelines. These regulations minutely
dictate the layout and amenities of our nation's stores, eateries
and movie theaters. Bathrooms alone are subject to at least 95
different access standards.
As big a headache as these suits are to brick-and-mortar
businesses, the Obama Justice Department is now moving to bring
the same problems online. For the first two decades of the ADAs
existence, the law was only applied to physical locations because
websites aren't public accommodations. But several recent
decisions could change that. Target, for example, was forced to
pay $6 million to blind customers who had trouble shopping on the
retailer's website. Netflix was forced to provide captions for
every entertainment item it offers to the public.
Now the Obama Justice Department is about to issue new ADA
accessibility guidelines for the Internet that will empower class-
action shysters to sue. Websites may be required to include audio
descriptions of photos and text boxes for the blind, as well as
captions or transcripts of videos for the deaf. "It's what I call
'eat your spinach' litigation," National Federation of the Blind
lawyer Daniel Goldstein told The Wall Street Journal. "The market
share you gain is more than the costs of making your site
accessible."
But if meeting these new Internet ADA guidelines was beneficial to
consumers, then no federal regulations would be necessary. Web
development consultants estimate new ADA regulations could
increase web production costs 10 percent. And what about news
sites that post audio and videos of breaking news? Providing
transcriptions of every news item with an audio component would
likely be cost prohibitive for all but the largest of these
organizations.
The Internet is among the great engines of American economic
growth and ingenuity. The fact that the Internet is also among
the least regulated spaces is no coincidence. Enabling the same
junk lawsuits that terrorize small businesses in the physical
world to proliferate on the Internet is a bad idea. Congress
should move quickly to make clear the ADA does not apply to the
Internet.
* Survey Outlines Strategies to Reduce Class Action Costs
---------------------------------------------------------
Catherine Dunn, writing for Corporate Counsel, reports that in-
house counsel tackled an increased number of class-action lawsuits
last year, but managed to tamp down legal spend by an average of
$100,000 per matter, according to the 2013 Carlton Fields Class
Action Survey.
The second annual survey polled 368 legal executives from 342
companies with median annual revenues of $3.8 billion. About half
of the respondents said they deal with class action lawsuits.
Among those who do handle class actions, they saw their load
increase from an average of 4.4 class actions in 2011 to 5.1 class
actions in 2012. Accordingly, their overall spending on class
actions increased by $300,000 on average, from $2.91 million to
$3.19 million.
Yet, at the same time, legal departments achieved a 13.6 percent
reduction in costs per suit, from $776,500 in 2011 to $671,100 in
2012. In last year's survey, respondents said they were aiming
for a 17 percent reduction in class action spend for 2012.
"Per class action, they're spending less -- and that is exactly in
line with what they said they were hoping to do when we surveyed
them last year," says Chris Coutroulis, who chairs the firm's
litigation council.
So how did legal departments get proactive on their class action
spend? Three key strategies can make a big difference on cost
control:
1. Use alternative fee arrangements
"Nearly one-third of companies rely on these arrangements, a 35
percent increase from 2011," according to the survey. Fixed fees
were the most popular form of alternative fee arrangement (AFA),
the preference of 63 percent of the companies that use AFAs.
In-house counsel appear to favor AFAs for a certain category of
case: "Only 15 percent of all class action spending takes place
under an [AFA], indicating that AFAs tend to be used on smaller,
more routine class actions than on more complex or high risk
matters," the report finds.
2. Change how matters are staffed
Legal departments devoted more in-house hours to class action
matters -- from six hours per suit per week in 2011, to 10 hours
per suit per week in 2012. "Corporate counsel are relying more
heavily on internal resources in an effort to drive value, reduce
risk, and adopt an increasingly pragmatic approach," the report
says.
Law departments also consolidated the number of outside firms they
use to handle class action suits -- from 4.6 firms on average in
2011, to three firms on average in 2012.
3. Conduct early, rigorous case assessments
In this year's survey, one third of companies said they evaluated
suits and calculated their potential financial exposure, compared
to 23.7 percent last year. The exercise allows legal departments
to better manage a case and strategize an objective from the
outset, explains Coutroulis, which ends up saving them substantial
sums down the line.
"Companies that employ this strategy end up spending 38 percent
less per class action and 42 percent less on outside counsel than
companies that do not conduct a rigorous assessment," the report
says.
* U.S. Employers See Increase in Number of Wage-and-Hour Lawsuits
-----------------------------------------------------------------
Catherine Dunn, writing for Corporate Counsel, reports that for
the fifth year in a row, U.S. employers have seen an increase in
the number of wage-and-hour lawsuits filed against them in federal
court, according to calculations by the Federal Judicial Center.
Plaintiffs brought 7,764 suits between April 1, 2012, and March
31, 2013, about a 10 percent jump since 2012, as illustrated in a
graphic published by Seyfarth Shaw.
While it may be a record year for the litigation that involves
disputes over the amount of pay that is owed to an employee, labor
and employment lawyers say the figure represents part of a
continuing trend.
A decade ago, "this was described as a claim that was a flavor of
the month," says Seyfarth partner Noah Finkel, co-editor of the
book Wage & Hour Collective and Class Litigation. But the numbers
since then suggest that "these claims are here to stay," he adds.
The first major spike in cases occurred in 2003, when the number
of such suits nearly doubled from 2,035 to 4,055. They shot up
again in 2007, to 6,786 suits.
Though the number of actions dropped off the following year, to
5,302 in 2008, they have been climbing steadily ever since.
The wage-and-hour cases, brought under the Fair Labor Standards
Act, typically fall under three categories, Mr. Finkel explains:
1) salaried employees who believe they are owed overtime pay; 2)
hourly workers who contend they weren't paid for all hours worked;
and 3) restaurant workers who claim they are owed additional pay
under the FLSA's "tip credit" provision.
Mr. Finkel has seen an uptick in the latter group of cases, he
tells CorpCounsel.com. Department of Labor investigators have
also been focusing on the hospitality industry, including
restaurants, he says.
Other types of companies run into compliance challenges as the
workplace modernizes, with employees dispersed geographically and
work-related email being exchanged at all hours, according to
Mr. Finkel. But the FLSA was designed in the 1930s. "So many
regulations under the FLSA were written to cover an economy that
we just don't live in anymore," he says, "and complying with that
is hard."
For start-up companies, compliance issues can be particularly
acute. "The younger a company, the less robust their wage-and-
hour compliance," says Mr. Finkel, "and that makes them more
susceptible to lawsuits."
The firm offers a few possible explanations for the uptick. One is
that plaintiff's lawyers who didn't used to bring wage-and-hour
cases are doing so because they've seen other attorneys sue
successfully.
And the models are not just within the same state, but apparently
across state lines as well. California and Florida typically see
more wage-and-hour litigation, but now New York, Missouri, and
Georgia are experiencing upticks, according to Mr. Finkel. "It
seems to be spreading to a lot more geographies," he says.
As the economy improves from where it was in 2008, higher
corporate earnings are also a factor. "I think there are more
companies that are attractive targets," Mr. Finkel says. "They're
not teetering on the edge of bankruptcy." And with a growing
workforce, the more employees there are, the more possibilities
there are for such suits, he adds.
Connectivity plays a part, too. Employees have more access to
information about what a non-compliant practice is, and more
channels to discuss those practices with each other.
"Plaintiff's lawyers are more sensitized to these issues.
Employees are more sensitized to these issues," Mr. Finkel says.
"And they're all able to communicate with one another."
How can companies keep up? That essentially boils down to
conducting an audit or assessment of your wage-and-hour practices,
Mr. Finkel recommends. One popular course of action is to
identify which employees are "appropriately classified as exempt
from overtime," he says. Another is to analyze time records to
make sure employees are being properly paid for all time worked,
and to pinpoint any potential system-wide compensation problems.
*********
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, Valerie Udtuhan, 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
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.
Information contained herein is obtained from sources believed to
be reliable, but is not guaranteed.
The CAR subscription rate is $775 for six months delivered via
e-mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact
Peter A. Chapman at 215-945-7000 or Nina Novak at 202-241-8200.
* * * End of Transmission * * *